CONSUMER BUYER BEHAVIOUR

Sub Code - 724

Developed by
Ashish V. Hathi
B.Com., MMM.,D.G.M., (International Marketing & Export
Management), Masters in Marketing Management.

On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)

Board Members
1. Prof. Dr. Uday Salunkhe 2. Dr. B.P. Sabale 3. Prof. Dr. Vijay Khole 4. Prof. Anuradha Deshmukh
Group Director Chancellor, D.Y. Patil University, Former Vice-Chancellor Former Director
Welingkar Institute of Navi Mumbai (Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)

Program Design and Advisory Team

Prof. B.N. Chatterjee Mr. Manish Pitke

Dean – Marketing Faculty – Travel and Tourism
Welingkar Institute of Management, Mumbai Management Consultant

Prof. Kanu Doshi Prof. B.N. Chatterjee

Dean – Finance Dean – Marketing
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai

Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Dean – Management Development Programs Faculty – Media and Advertising
Welingkar Institute of Management, Mumbai Founder of EVALUENZ

Prof. B.N. Chatterjee Prof. Vineel Bhurke

Dean – Marketing Faculty – Rural Management
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai

Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Director – Intraspect Development Faculty – Healthcare Management
Manager Medical – Air India Ltd.

Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Dean – IT/Business Design Faculty – Hospitality
Welingkar Institute of Management, Mumbai Former Manager-Catering Services – Air India Ltd.

Prof. Sandeep Kelkar Mr. Anuj Pandey

Faculty – IT Publisher
Welingkar Institute of Management, Mumbai Management Books Publishing, Mumbai

Prof. Dr. Swapna Pradhan Course Editor

Faculty – Retail Prof. Dr. P.S. Rao
Welingkar Institute of Management, Mumbai Dean – Quality Systems
Welingkar Institute of Management, Mumbai

Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Dean – Banking Dean – Marketing
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai

Mr. P.M. Bendre Course Coordinators

Faculty – Operations Prof. Dr. Rajesh Aparnath
Former Quality Chief – Bosch Ltd. Head – PGDM (HB)
Welingkar Institute of Management, Mumbai

Mr. Ajay Prabhu Ms. Kirti Sampat

Faculty – International Business Manager – PGDM (HB)
Corporate Consultant Welingkar Institute of Management, Mumbai

Mr. A.S. Pillai Mr. Kishor Tamhankar

Faculty – Services Excellence Manager (Diploma Division)
Ex Senior V.P. (Sify) Welingkar Institute of Management, Mumbai

COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

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NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.

1st Edition, May 2021

 CONTENTS

Contents

Chapter No. Chapter Name Page No.

1 Consumer Behaviour Knowledge – Introduction, 4-24

Nature, Scope and its Applications
2 Market Segmentation 25-57
3 Consumer Research 58-104
4 Consumer Needs and Motivation 105-132
5 Personality, Psychographics, Perception and 133-183
Consumer Behaviour
6 Learning and Consumer Involvement 184-225
7 The Nature of Consumer Attitudes and Change 226-249
8 Communication and Persuasion 250-309
9 Influences Shaping Consumer Buyer Behaviour 310-362
10 Diffusion and Adoption of New Products 363-389
11 Consumer Decision Making 390-417
12 Consumer protection in India 418-460
13 Consumer Buyer Behaviour in Different Marketing 461-479
Domains

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

Chapter 1
Consumer Behaviour Knowledge –
Introduction, Nature, Scope and Its
Applications
Objectives

By the end of this chapter, you should be able:

• To understand what is consumer behaviour
• To understand the nature and classification of consumer behaviour
• To understand the importance of consumer behaviour
• To understand the forces that drive change in consumer behaviour
• To understand the application of consumer behaviour principles to
strategic marketing
• To understand consumer behaviour in an online environment
• To take an overview of the consumer behaviour scene in India

Structure:
1.1 Introduction
1.2 Importance of Consumer Behaviour
1.3 Forces that Drive the Change in Consumer Behaviour
1.4 The Application of Consumer Buying Behaviour Principles to Strategic
Marketing
1.5 The Role of Consumer Behaviour on Strategic Planning
1.6 Consumer Behaviour in an Online Environment
1.7 Consumer Scene in India
1.8 What have you Learnt – A Summary
1.9 Self Assessment Questions
1.10 Multiple Choice Questions (MCQ)

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

1.1 INTRODUCTION

This chapter introduces the reader to the subject of consumer behaviour as

an interdisciplinary science that investigates the decision making activities
of individuals in their consumption roles. It describes the reasons for the
development of consumer behaviour as an academic discipline and an
applied science essential from the marketers’ perspective.

Consumer behaviour represents the behavioural context in which

consumers operate while searching for, purchasing, using, evaluating and
disposing of products and services that they expect will satisfy their needs.
It covers both aspects such as to buy or not to buy, to use or not to use in
their behavioural reference to context. Consumer behaviour study looks
into the way individuals decide, how individuals make decisions to spend
their available scarce resources like money, time and energy on their
chosen item for consumption. If we take an example of our daily need
items like toothpaste, then consumer behaviour will study what kind of
consumers buy it, what do they buy, why they buy it, how they buy it,
when they buy it, from where they buy it and how often they buy it. It will
reveal that teens buy it for freshness for closeness, elders buy for cavity
protection with other information like do they brush once or twice a day, do
they have different toothpastes for each family member in their house,
how long does it last, from where do they buy it and more. Such insights
help marketers to develop a new product, position it correctly and develop
appropriate promotional strategies.

During consumer behaviour understanding, marketers try to find an

answer to the following questions.

If we take another example of rice for better understanding, then

consumer behaviour study will explore to find, what kind of consumers buy
only ordinary rice, ordinary plus premium rice for few occasions, only
premium rice. Later, it will try to find what they buy, i.e., kind of normal
rice they consume, kind of premium rice like basmati they consume, why
they buy specific type of rice, i.e., nature, branded vis-a-vis unbranded,
how they buy it, when they buy it, from where they buy it and how often
they buy it.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

Steps Nature of question Example

1 What kind of consumers buys it? Teens, middle-aged, elderly

2 What products/services Do they prefer paste or gel

consumers buy? toothpaste?

3 What makes customers buy Cavity protection, freshness, ailment

them?

4 When are these bought? Say 1st week of every month

5 From where do they buy it? Medical store, provision store,

departmental store

6 How often are they used? Daily once, daily twice

7 At what frequency do they buy Fortnightly, monthly, bi-monthly

it?

We can also consider a similar example for one of the consumer durable
items namely printer. Here complexities need to be understood thus you
need to know buying aspects like what kind of consumers buy it (home/
office)? What features do they look for? How much are they willing to pay
for it? What are the considerations during purchase about its recurring
cost? How many will buy now? How is their sensitivity to prices of the
printers? Answers to such information either through secondary sources or
primary consumer research will help manufacturers to plan their product
portfolio, production scheduling, feature modifications, launch strategy and
promotional strategy.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

Fig. 1.1: Variation in Consumer Behaviour

Activity A

List questions which will be explored under consumer buyer behaviour

while purchasing a smart phone?
.........................................................................................................
......................................……………………………………………………………………………
…………………………………………………………………………………………………………………………

Here we need to pause and understand aspects like nature of consumers

and its classifications.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

Nature of Consumers

As a consumer, you buy goods for self, family, friends and relatives or you
also buy for running your business or as a responsible manager of an
organization who sources equipment, raw materials and consumables for
the organisation. Thus, we have one nature of consumers known as
‘Personal Consumers’ where individuals are final consumers. The other
nature of consumers is known as ‘Organisational Consumers’ where goods
are purchased to run the organisation and covers profit and non-profit
enterprises, government bodies (local, regional, state and national) and
institutions (school, trusts). This book covers the personal consumers’, i.e.,
individual consumer’s behaviour only. This understanding is comprehensive
enough as it involves all types of consumer behaviour covering all ages,
covers different ages and backgrounds and role played either as a user,
buyer or both.

Classifications of Consumers

A buyer is not always the end user or the only user of a product purchased,
e.g., a toy purchased by the parent is for the kid but a toothpaste
purchased is for more than one family member. Family here will be a joint
user. Interestingly, one who goes to buy the product may be buying what
has been told to him/her, e.g., mother buying a beauty cream suggested
by her teenage daughter. In certain cases, users and buyers are influenced
by another person known as influencer. e.g., father took household fire
insurance based on recommendation of his friend. Thus to summarise,
marketers must understand three natures of consumers namely user,
buyer and influencer. Marketers must decide at whom to direct their
promotional efforts – the user, buyer or the influencer. It will enable you to
direct your marketing efforts in the right direction, e.g., toy manufacturer
has a choice to advertise on children’s magazine or parents specific
magazine or both. Clarity regarding who is the buyer will enable you to
channelize your efforts towards say children’s magazine. Different school of
thoughts are prevalent regarding directing your marketing efforts towards
user, buyer or influencers. What is important for marketers to know is the
personal attachment with a product your consumer has – more personal
the product in nature, it’s the user who decides, e.g., mobile phones –
iPhone or Samsung; Desktop for son as a student may get decided by the
father as a buyer depending on his financial capabilities; which LED TV to

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

buy may get decided based on the influence being played either from
existing owners or store salesman.

Activity B

Identify 3 products each for Personal Consumers, Organisational

Consumers.
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…………………………………………………………………………………………………………………………

1.2 IMPORTANCE OF CONSUMER BEHAVIOUR

This subject has developed immense interest among students, consumers

and marketers as insights help each one to gain through it.

As students of consumer behaviour, it is fascinating to learn the logic

behind consumption-related decision and motivation that drives their
specific final decision. It is more exciting as consumer behaviour itself is an
interdisciplinary science involving psychology, sociology, social psychology,
cultural anthropology and economics.

As consumers when you get insights in your own consumption-related

behaviour, it makes you wiser. It helps us to get aware about the subtle
influences that compel us to make the product or service choices we
finalise.

For marketers it was of paramount importance to know consumer

behaviour especially when buyers in consumer markets were exhibiting
diversified preferences and less predictable purchases behaviour. Marketers
were keen to know consumer behaviour so that they can influence the
same in their favour. Also, understanding of consumer behaviour gave
them clarity that despite overriding similarities, consumers were not all
alike. Each of the consumers chose a product that met their special need,
psychological needs, personality and lifestyle’s reflection. Marketers, thus,
evolved a concept of market segmentation, which offered them an
opportunity to divide their total potential customer base into smaller,
homogeneous segments attracted towards them by designing product and
promotional campaigns and gain entry in the minds of their customers

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

through appropriate positioning. Later, industrialisation and technological

explosion led to rapid development of new products needing better
understanding about consumers’ buying behaviour. Besides this, following
other factors contributed to the development of consumer behaviour as a
marketing discipline:

a. Shorter Product Life Cycles: Fast pace of new product developments,

regular need for modifications in the existing product, competitive
pressure and development of substitutes has necessarily made the
product life cycles of various products shorter. To meet this challenge,
marketers need to generate new product ideas, need understanding
only possible through a research on consumer behaviour.

b. Environmental Concerns: Through consumer behaviour research it

was revealed that a large section of consumers is environment
conscious and thus, moving away from the products known to be
causing environmental damage. This has compelled marketers to
develop and market environment friendly products, e.g., detergents,
air-conditioners, biodegradable papers, plastics bottles and more.

c. Increased Interest in Consumer Protection: Consumers are driven

by offers and incentives given to try or repeat purchase your product. It
is thus obvious that some marketers knowingly deceive their customers
and many unknowingly deceive their customers. Consumer advocates
have highlighted through extensive research how consumers’ buying
behaviour gets impacted and have highlighted appeals which are
deceiving in nature, which led to modification of specific legislation.

d. Public Policy Concerns: Intensive competition, mass advertising and

promotions was not only impacting consumers in general but the society
at large. Advertising was considered as a social change metaphor and
thus needed monitoring. As a result, self-regulated bodies like
Advertising Association of India (AAAI) laid down ASCI code for
advertisement. Besides, various legislations were enacted such as
children-related advertisement, prohibited goods advertisement, e.g.,
cigarettes.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

e. Growth of Service Marketing: As Indian economy turned service

centric, it became essential for marketers to focus on services led
marketing. Conventional products like automobiles also needed service
marketing support. Services like mobile connectivity have characteristics
like intangibility; inseparability, perishability and no ownership transfer
itself have their own marketing imperatives which needed consumer
behaviour understanding to translate it into an opportunity.

f. Growth of Non-profit Marketing: Organisations in the public and

private non-profit sectors began to recognise the need to use marketing
strategies to bring their services to the attention of their relevant
publics. This called for better understanding of their public, i.e.,
consumers.

g. Growth of International Marketing: Most governments encourage

globalisation of trade. They allow sellers to market globally. However,
general lack of familiarity with the needs, preferences and consumption
habits of consumers in foreign markets limit the entrepreneurs to tap
global markets. Marketers have realised the need for understanding
consumer behaviour globally to help them develop their market entry
and penetration strategies.

h. Computer and Statistical Techniques: Technological breakthrough in

IT and telecommunication enables storage, retrieval and analysis of
large data, data scanning and collation of collected data from various
touch points enables better understanding of consumer behaviour,
develop better profiling, segmentation and targeting approach which
allows development of specific consumer groups led marketing and
promotions for better results.

Activity C

Identify one situation each where buyer is a final user, buyer is not a final
user and buyer needs to be influenced for purchasing a specific product.
.........................................................................................................
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…………………………………………………………………………………………………………………………

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

1.3 FORCES THAT DRIVE THE CHANGE IN CONSUMER

BEHAVIOUR

Consumer behaviour is not constant and it undergoes changes as

individuals enter different life stages such as adolescence, graduate,
matured married man/woman, mid-age, old age. Not only that but within
each life stage they undergo changes due to incidences, experiences which
are self driven changes or changes induced/altered by third party through
communication, sharing, demonstration and peer/societal pressure.

Four forces are identified that drive the changes in consumer behaviour.
Diagrammatically represented as follows;

Fig. 1.2: Factors Affecting Change in Consumer Behaviour

First of all, economic prosperity due to environmental changes such as

increased per capita income, rising disposable income, friendly finance
lending making purchases easy and rising rural purchasing power have
boosted demand. Social and cultural factors affect consumer behaviour.
Kearney identifies four sub-factors here – globalisation, nuclear families,
urbanisation and dual-income households. Corporate organisations offer a
greater and better variety of products which they promote through diverse
media. Media options too have increased especially under the digital era.
Media software and IT connectivity have made media more consumer-

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

oriented. However, all these are external factors influencing consumer

behaviour.

1.4 THE APPLICATION OF CONSUMER BUYING BEHAVIOUR

PRINCIPLES TO STRATEGIC MARKETING

It is essential to have explicit understanding rather than implicit

understanding of the factors that encourage consumers to buy in the world
of marketing. Marketers have to know why consumers buy specific
products, what needs are they trying to satisfy and what external
influences affect their product choices in order to design persuasive and
impactful marketing strategies.

Evolution of the Marketing Concept

The onset of industrialisation post World War II, large migration of

individuals from villages, semi-urban towns to cities created need among
marketers to advertise to reach mass of individuals. However, success of
advertising created a scenario in which produced materials were scare as
compared to demand created for the same. This is a situation any
manufacturer would wish to have and as a result production orientation set
in. Marketing objective was to just produce economic, efficient production
and intensive distribution to reach individuals. On the other hand,
consumers started accepting whatever is available rather than exercising
their choice such as buying a grey coloured car instead of booked red
coloured car. In short, when demand exceeds supply, a production
orientation can work.

Later, competition started intensifying, compelling manufacturers to move

to product orientation. The assumption underlying the product orientation
is that consumers will buy the product that offers them the highest quality,
the best performance, and the most features. To remain in product
orientation, a company must strive constantly to improve the quality of its
product thus moving away from the essence of making what is needed by
the consumers.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

Later, when consumer started exercising selectivity in their choice of

products, companies moved to a selling orientation. In this approach, they
changed their focus to selling rather than products to meet consumers’
need. The main assumption in the selling orientation is that consumers are
unlikely to buy a product unless they are aggressively persuaded to do so.
The only problem with this orientation is that it does not take consumer
satisfaction into account. Impact of post-purchase buyer behaviour is
ignored at the cost of repeat or referral purchases from the same customer.

At this juncture, few marketers started realising that it is easy to sell more
goods, if they produce only those goods that they had predetermined that
consumers would buy. This consumer-oriented marketing approach,
popularised by General Electric in the early 1950s, is recognised as the
marketing concept. The underlying principle in this orientation is that, to be
successful, a company must determine the needs and wants of specific
target markets and deliver the desired satisfaction better than the
competition.

The widespread adoption of the marketing concept provided the impetus

for the study of consumer behaviour. Next phase was an eye-opener for
the marketers. Extensive marketing research revealed that consumers
were highly complex individuals, subject to a variety of psychological and
social needs and priorities of different consumer segments differed
dramatically. Marketers also discovered that in order to design new
products and marketing strategies that would fulfil consumer needs; they
had to study consumers and their consumption behaviour in depth. Thus,
market segmentation and the marketing concept laid the groundwork for
the application of consumer behaviour principles to marketing strategy.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

1.5 THE ROLE OF CONSUMER BEHAVIOUR ON STRATEGIC

PLANNING

Strategic planning is a management approach, the purpose of which is to

develop a long-range plan to ensure the company’s survival, its
profitability, its growth and its perpetuity. Companies which practice
strategic marketing approach integrate their marketing plans into their
firms’ overall strategic plans. Consumer behaviour principles can be
included in each step of the strategic market planning process.

Step 1: Define The Firm’s Business Domain – The definition of the firm’s
business domain must be market-oriented (i.e., it should be related with
satisfying consumer needs). In other words, it should be consumer-
oriented.

Step 2: Environmental Scanning (Opportunities and Threats Analysis) –

Companies regularly scanning the environment can gain if they integrate
close monitoring of evolving lifestyles, needs and trends to gauge changing
consumer needs, and can respond promptly with new or revised products
or promotional programs. Companies can convert environmental ‘threats’
into marketing opportunities, if they can diagnose them in time.

Step 3: Establish Goals and Objectives Aligned with Image – Company

objectives should be based on a realistic appraisal of company resources –
man, materials and money. Consumers constantly evaluate companies’
marketing communication and build an image. Understanding of consumer
behaviour specific to your company’s image in their mind can help you to
set goals consistent with the company’s image. For e.g., sales penetration
objective for TIDE Detergent from P&G against SURF EXCEL was
approached by dropping price. However, it did not work and kept TIDE as a
challenger brand. Both were considered equally quality conscious and TIDE
got accepted also very well. But the price drop was looked upon like the
company may not be producing quality on par with the competition.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

Step 4: Analyse The Company’s Existing Product Portfolio – Constant

connect with consumers through consumer behaviour research and sales
trend analysis will help marketers to determine which product still satisfies
consumer needs, which product needs redesign, which needs to be
repositioned and which product must be discontinued from the product
line. It will also help the company to determine whether to introduce a new
brand; do brand extension through brand depth/width modifications.

Step 5: Develop a New Business Plan – Analysis and understanding of

changing lifestyles and emerging consumer needs will enable a company to
develop new product concepts. This new product aligned with changing
consumer preferences will garner better turnover and profitability not
earlier visualised. Leading examples that convey how it changed fortunes
of companies are – Home test kits for BP, sugar, pregnancy or adult
diapers, cordless telephones, android mobile handsets.

Step 6: Develop a Marketing Strategy Harmonious with the Firm’s

Strategic Plan - Firm’s strategic plan is a macro level plan, the success of
which depends on the marketing plans of different SBUs of the firm. A
marketing plan based on known opportunities emerging from the consumer
buying behaviour, emerging trends and unfulfilled needs would get good
market acceptance. The positioning strategy derived post understanding
consumers’ mind, need-gap will find many buyers. The firm should develop
a positioning strategy harmonious with its marketing objectives and
operationalize it through its marketing mix will achieve results in line with
the firm’s strategic plan.

Step 7: Measuring Market Performance – The company should

continuously monitor actual consumer behaviour in the market to measure
the performance, evaluated either as success or failure of its marketing
strategy and modify or change the marketing strategy as needed.
Consumer behaviour affects marketing strategy. Consumer behaviour
should therefore get reflected in your marketing strategy. Timely
understanding will help you to make necessary adjustments to achieve set
performance goals.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

1.6 CONSUMER BEHAVIOUR IN AN ONLINE ENVIRONMENT

In an online context, consumer responses are no longer dependent on the

physical environment while at the same time entirely new factors come
into play such as the device through which consumers interact, and the
way products and services are sold and presented online which often
differs significantly from traditional offline marketing strategies.

Consumers in an online environment give more focus on aspects related to

the relationships. As their relationship development continues, other
aspects related to the relationship such as the attitudes, beliefs and
feelings starts forming for the brand. Online consumer behaviour is no
longer complementary to traditional consumer behaviour. Consumers
develop distinct behaviour when it comes to the online environment.
However, there is still a divide between interaction ready and interaction
shy consumers. With the technology backing, personalization of consumer
behaviour is not only surrounding consumers but makes an intense impact
on their psyche.

As it gets revealed, consumers are less brand savvy, the brand position is
of less relevance, brand loyalty is difficult to acquire and brand equity is a
distinct perspective. However, most leading brands have now oriented to
also develop their brand, positioning, and loyalty among online consumers.

1.7 CONSUMER SCENE IN INDIA

India is and will remain as a country of great diversity. India as a country

has evolved and so does the Indian consumer. For enlightening my
readers, I wish to put up a contrast in front of them – In the 80s there
were only 2 personal telephone connections in our society of 67 flats and 2
FIAT cars in contrast to current situations in which most flats have landline,
two mobile phones per member and two cars per flat!!! How did this
change happen?

Right from the beginning of its independence, the country has pursued
self-reliance as its motto. Various landmarks were achieved on the
industrialisation front. However, industrialisation was strictly regulated by
government. As a result competition was limited. India saw an era of public
sector running the industrialisation revolution. However, citizens had
limited choices. Not only was there a clear urban/rural divide that affected

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

spread of market for any goods or service; India was also turning out to be
a service-oriented country from the earlier agrarian focus.

Early 90s onwards, India opened itself to the world economy and
liberalised itself to allow foreign investments in our country. As a result,
manufacturing in private sector started and rapidly caught on. Consumers
now had a choice. Thus marketers moved their focus from production-
orientation to selling-orientation and finally consumer-orientation.

Modernisation, improved road connectivity, telecommunication revolution

gave reach and started changing consumer behaviour, so critical for
marketers to understand for their success. Family set up started changing
from joint family to nuclear and neo-nuclear family, households moved
from single income to double income; all this brought about a significant
change in the NextGen individuals. NextGen is found to be more confident,
practical, risk taking, lifestyle conscious, impulsive and with more such
traits shaping their buying behaviour. Regardless of dynamic changes
happening across India, what differentiate Indian consumers are the four
core values namely Family Orientation (being nuclear does not mean being
divided), Value Seeking (not just the price but price-quality combinations),
Progress Orientation (knows he can conquer the world but his world comes
first), Class Consciousness (accepts where he belongs and then strives to
move upward).

Four core values of Indian consumers can be represented as follows;

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

Fig. 1.3: Indian Consumer Values

Amidst aggression by China, regular border infiltration allowed by

neighbouring countries, the wave of Covid19 across India followed by
Ladakh stand-off with China, India has emerged as a dependable country.
India has not only contained the Covid19 spread but developed vaccine
besides taking an aggressive stance and taking counteraction by banning
Chinese APPS, banning large contracts given to Chinese companies,
restricting their investment in Indian companies, promoting ease of doing
business, India managed to attract companies like APPLE to start
manufacturing mobile phones at India. The country has shown to the world
that India is a worthwhile business partner. Post-Covid19 unlocking and V-
shape market recovery certainly convey that India will bounce back soon
and India will be a major economic power in the world. Needless to say,
this new India is making news all over the world today. As the equation of
world economy changes in favour of India and China, the world’s attention
is turning sharply toward these markets. India and China look attractive for
their potential. A closer look will reveal that they are not easy to crack.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

Marketers of the other world must consider it as a new market, and that
the consumers here think and behave very differently. Today, it offers the
biggest challenges to marketers to understand the cultural transformation
going on and offer products and services based on an understanding of this
new, emerging and changing India and Indian consumers. Consumer buyer
behaviour will play a critical role in the success of many new ventures
entering India.

1.8 WHAT HAVE YOU LEARNT – A SUMMARY

Consumer behaviour represents the behavioural context in which

consumers operate while searching for, purchasing, using, evaluating and
disposing of products and services that they expect will satisfy their needs.
Consumer behaviour study looks into the way individuals decide, how
individuals make decisions to spend their available scarce resources like
money, time and energy on their chosen item for consumption.

Consumer research is an integral part of understanding consumer

behaviour. Consumer research takes place at every phase of the
consumption process – before the purchase, during the purchase and after
the purchase.

There are two natures of consumers – Personal consumers who buy goods
for their own use or for family and organisational consumers, who buy
products, equipment, and raw materials to run their organisation. It is also
important to understand the consumer’s classification as user, buyer and
influencer.

The subject of consumer behaviour is of importance to students,

consumers and marketers. Marketers use knowledge of consumer
behaviour to segment the market, position the product and understand
other factors that shape consumer behaviour such as shorter product life
cycle, environmental concerns and more.

Consumer behaviour got recognised as an essential marketing discipline

when consumer-orientation was adopted by organisations. Consumer
behaviour has thus, become an integral part of strategic market planning.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

In India, consumers earlier had limited choices due to regulation based

production. India being a land of diversity with urban, semi-urban and
village economy each running on distinctive principles started converging
to mass marketing; today brands have reached villages and what was
earlier a luxury started becoming a necessity. Post liberalisation beyond
1990, Indian consumers have become more explorative and demanding.
The challenge for marketers is to understand the distinct mindset of urban
consumers and rural consumers to gain acceptance and competitive
advantage.

1.9 SELF ASSESSMENT QUESTIONS

1. What is consumer behaviour?
2. List down nature of insights about the consumer that understanding of
consumer behaviour tries to answer.
3. Describe with example different natures and classifications of
consumers.
4. Provide a list of factors that contributes to the development of consumer
behaviour.
5. Identify the forces that drive the change in consumer behaviour.
6. Highlight the role of consumer behaviour in strategic planning.

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

1.10 MULTIPLE CHOICE QUESTIONS

1. Consumer behaviour represents the emotional context in which

consumers operate while searching for, purchasing, using, evaluating
and disposing of products and services that they expect will satisfy their
needs.
a. True
b. False. Consumer behaviour represents behavioural context...
c. False. Consumer behaviour represents psychological context...
d. False. Consumer behaviour represents behavioural and emotional
context...

2. If a consumer buys goods for self, family, friends and relatives, he is

known as ______________, where individuals are final consumers. Fill
in the blank.
a. user consumer
b. buyer consumer
c. personal consumer
d. direct consumer

3. If a father buys a CROSS PEN as suggested by his teenage son, he is

classified as ______________. Fill in the blank.
a. buyer
b. user
c. consumer
d. influencer

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

4. When environmental changes such as increased per capita income,

rising disposable income, friendly finance lending making purchases
easy and rising rural purchasing power start impacting consumers, it is
recognised as ______________ one of the four forces that drives the
change in consumer behaviour. Fill in the blank.
a. media boom
b. sociocultural
c. corporate activity
d. economic prosperity

5. Indian consumers are different and they are driven by four core values
namely family orientation, value seeking, progress orientation
and______________. Fill in the blank.
a. prosperity consciousness
b. equality consciousness
c. class consciousness
d. income consciousness

Answers:

1. (b), 2.(c), 3.(a), 4.(d), 5.(c)

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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION,NATURE, SCOPE AND ITS APPLICATIONS

REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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 MARKET SEGMENTATION

Chapter 2
Market Segmentation
Objectives

• By the end of this chapter, you should be able:

• To understand what is the meaning of market segmentation
• To understand what are the benefits and limitations of market
segmentation
• To understand what demographic segmentation stands for
• To understand the concept of Family Life Cycle

Structure:
2.1 Introduction
2.2 Market Segmentation
2.3 Benefits of Segmentation
2.4 Limitations of Segmentation
2.5 Bases for Segmentation
2.6 Criteria for Effective Targeting of Market Segments
2.7 Implementing Segmentation Strategies
2.8 What have you Learnt – A Summary
2.9 Self Assessment Questions
2.10 Multiple Choice Questions (MCQ)

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 MARKET SEGMENTATION

2.1 INTRODUCTION

During our visits to shoes selling retailer’s shop, we have seen so many
different natures of shoes on display – their structure is different, designs
are different, usages are different, and prices are also different. Similarly,
you notice a wide range of items when you visit a spectacles shop,
automobile distributor’s showroom, and consumer durables showroom. This
information is shared so that you can later appreciate the concept of
market segmentation. Marketers use consumer research not only to
determine their segmentation but develop effective segmentation
strategies – discover meaningful ways to divide their markets, design
products to meet segmentation needs, and prepare segment-specific
promotion plans.

To understand market segmentation, we need to first understand the

concept of a market. It starts with determining a need for the product,
later we need to evaluate whether those who have expressed the need are
going to buy such a product, subsequently, we need to determine the
willingness to buy, and do they have money. The following diagram
illustrates this concept.

Fig. 2.1: What is a Market?

We can understand the above diagram with an example of Sony LED

Television.

India’s total population = 125 crores, felt need for television is say 12
crores, interested in Sony say 25% of those who felt the need; that equals
to 3 crores. But Sony LED costs almost 1.4 times the normal next best
television, thus say only 10% of them have so much money to buy, thus it
comes to 30 lacs. But at any given point of time say only 10% are willing
to spend on television purchase, especially Sony’s, thus the number will be
3.00 lacs. It can be concluded that Sony’s LED market in India is to the
tune of 3.00 lacs units per annum.

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 MARKET SEGMENTATION

2.2 MARKET SEGMENTATION

Market segmentation is defined as ‘the process of dividing a potential

market into a distinct subset of consumers with common needs or
characteristics and selecting one or more segments to target with a distinct
marketing mix. In other words, segmentation is considered as a process of
splitting a large heterogeneous market into smaller groups of people or
organisations which depict similar needs, desire and or characteristics like
caste, creed, religion, education, and experience thus culminating into
similar purchase behaviour.

Fig. 2.2: Slice of Homogeneous Group into Identifiable Clusters with

Similarities

There are two alternatives available to a marketer – either treat the whole
market as an entity or split them into different homogenous groups with
distinct characteristics. When the whole market is served as one single
entity, it is identified as an undifferentiated marketing strategy or mass
marketing. When you split them and serve them separately, you have
adopted market segmentation.

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 MARKET SEGMENTATION

Undifferentiated marketing could be appropriate where all consumers are

alike with the same needs, wants, and desires and the same backgrounds
as education, and experience. It would cost less – one advertising
campaign for all markets, one marketing strategy and one standardised
product being promoted. Here the organisation depends upon mass
production, mass distribution and mass promotion to reap the benefits of
the economies of scale.

The major drawback of an undifferentiated marketing strategy is that you

are trying to sell the same product to every prospect by portraying your
product as a means of satisfying a common need and often end up
appealing to no one. You make only one single size washing machine with
10 kgs capacity!

It is natural as well as evident that the market today has great diversity
and individuals aspire to meet specific needs, wants, and desires. As a
result, marketers today thus split one homogenous market into two or
more sub-markets based on their varying needs for targeting and effective
covering. Out of sub-groups evolved from the large total market,
marketers may be keen to pursue a few of them only through specific
marketing programs. Such chosen groups are known as target segments of
the total market after which the advertiser has decided to go. It is also
known as the target audience.

Market differentiation is thus a segmentation strategy. It allows marketers

to differentiate themselves in the market by differentiating their offerings
either based on price or other aspects like styling, packaging, promotional
appeal, and methods of distribution.

In the marketplace, if marketers plan to cater to two or more segments, it

is known as multi-segment strategy such as mobile handset
manufacturers. If a marketer chooses only one group as a target, then it is
known as concentration strategy. As compared to a multi-segment
strategy, concentration strategy is economical to implement.

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 MARKET SEGMENTATION

Fig. 2.3: Alternative Marketing Strategies Based on Segmentation

An example of a concentration strategy may be that of an umbrella

manufacturer who manufactures only one size semi-automatic umbrella to
cater to office going individuals. On the other end, if marketers decided to
cater to exclusive customers by offering them a custom-made product, it is
known as a customisation strategy, e.g., making a heat roller only for
paper making industry.

Approaches to Segmentation

Overall, there are two approaches to market segmentation – 1) divide the

total market into homogeneous sub-groups as segments. As explained
earlier, you split your total market into small sub-groups identified based
on common characteristics shown having almost identical needs. 2) In this
second approach, you start with individual customers and profile them.
Potential customers are later identified based on the similarity of
characteristics identified from previously compiled profiles of customers.
Collectively, when enough potential customers are identified then you
decide to target identified segment/s.

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 MARKET SEGMENTATION

Segmentation in Marketing – An end in itself?

We have seen that marketing starts with segmentation thus it’s the first
step in a three-phase marketing strategy and not an end. After segmenting
the market into homogeneous clusters, the marketer must then select one
or more segments to target with a specific product or promotional appeal.
The third and final step is to position the product so that it is perceived by
each target market as satisfying its needs better than the competitive
offerings. In marketing, it is also known as S-T-P (segmentation-targeting-
positioning) approach to marketing.

Uses of Market Segmentation

Market segmentation is being practised by most marketers today, be it

consumer goods, industrial goods, service industry or NGOs.

Biscuit manufacturers have since long just focused on children and their
health, linking ‘glucose and health nutrients’ with ‘being good for kids’. Real
growth came when they developed segments and understood their taste
and reason to eat biscuits such as a family with nuts and dry fruits, calorie-
conscious with diet biscuits, young generation with chocolate cream. Later
they even introduced cookies to corner more market and stop users to try
other kinds of snacks.

In industrial goods also segmentation is useful. Electrical motor

manufacturers produce motors with different horsepower and different
nature of castings and flameproof motors to cater to different needs of
different industries. Pumps, valves are also produced with different
specifications to cater to the specific needs of their end-user industries. It
can be also on other parameters such as price-focused, service-focused,
quality-focused and partnership focused.

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 MARKET SEGMENTATION

Fig. 2.4: Segmentation in Industrial Goods

The service industry also uses segmentation. You have a laundry service
provider who renders basic service vis-a-vis others who may be providing
value-added services like hanged clothes delivery, clothes folded post
ironing in a non-wrinkle paper, dry cleaning and more to target upmarket
families needing such support. The hotel industry also offers different kinds
of rooms to cater to different segments of their visitors such as economy,
deluxe, luxury rooms and suites, A/C – Non A/C rooms.

Activity A

Identify one industry or product and list their market segmentations.

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

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 MARKET SEGMENTATION

How Marketers Use Segmentation

Marketers use segmentation to determine their way forward and can cover
numerous areas like:

Uses of Segmentation Uses of Segmentation Uses of Segmentation

Advertising appeal Brand extension strategy Media channel/Media plan
development
Product needs/ Promotion cues Exhibition participation
modifications
Price sensitivity Cross sale/Up sale Sponsorship
determination
Positioning/Repositioning Likes/Dislikes Relationship building

Understanding segments and their characteristics, needs and other

characteristics help marketers to develop new products or modify existing
products. An advertising agency can develop an advertising appeal and
creative strategy. Marketers will be able to determine price sensitivity and
thus develop effective pricing strategy besides promotion strategy relevant
for respective segments, promotion mix determination, brand extension
strategy and more which eventually helps them to get planned positioning
and brand preference developed resulting in higher sales, revenues and
better profitability which eventually helps all the stakeholders.

2.3 BENEFITS OF SEGMENTATION

Marketers segment markets to utilise it for opportunities they can grab on

account of the needs and characteristics of a specific segment. Not only
that, but it also helps them to serve better. In other words, it conveys the
way it faces competition – competitive differentiation and positioning.
Thus, market segmentation has benefits as listed below:

a. Market segmentation defines the market based on customer needs,

wants and desires similarity.

32
 MARKET SEGMENTATION

Fig. 2.5: Market Segmentation Based on Customer Needs, Wants and

Desires

b. The product, promotion, price and place are all aligned to consumer
needs. Thus it is more impactful.

c. Marketing becomes more responsive to the changing market as

marketers need to remain aligned to changing consumer needs.

d. Marketing mix and promotion mix is aligned to meet expectations of a

specific segment; thus more impactful.

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 MARKET SEGMENTATION

Fig. 2.6: Marketing Mix Aligned to Specific Segments

e. The communication mix is specially prepared for a specific segment. The

campaign becomes more effective. The media can be chosen to match
the segments chosen.

f. Competitive differentiation is critical for success. By knowing segments,

we get to know the competition, their positioning stance and strategy.
Thus, we can develop our competitive differentiation and competitive
positioning better, which will create the desired impact and brand
preference.

g. Marketing objectives and strategies will be aligned to utilise emerging

opportunities and defend against visualised threats.

h. Marketing efforts will be concentrated on a few chosen segments thus it

will have synergy and impact. The performance also can be measured
based on set objectives to determine the return on efforts and
investments.

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 MARKET SEGMENTATION

2.4 LIMITATIONS OF SEGMENTATION

a. It ignores individual differences as it is developed on similarities of

profiling characteristics. However, we have seen that two individuals
with the same income, age, education can show different buying
behaviour depending on their psychological mindset.

b. Global influence and exposure have brought so much diversity in every

individual, hence the clusters of groups profiled on similar
characteristics are becoming smaller in number. As a result, it is
becoming difficult to handle multiple cluster groups to get threshold
business level.

c. Segmentation is an expensive marketing exercise.

d. Segmentation needs more resources as you need to design distinct

marketing strategies for each segment, commit resources, devise
marketing, advertising, and communication strategies, each needing
more money than what you could achieve with mass marketing.

e. Segmentation is a consumer research-based activity and thus requires

management support and committed resources besides sufficient funds
to carry out necessary research projects.

f. Segmentation itself is not a solution for success and can’t bring success
unless an organisation is aligned to serve its consumers as per their
needs.

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 MARKET SEGMENTATION

2.5 BASES FOR SEGMENTATION

The primary step in evolving a segmentation strategy is to select the most

appropriate base(s), criteria on which you can segment the market. There
are FOUR major categories of consumer characteristics on which market
segmentation can be considered. There are other TWO relative
segmentation approaches. The FOUR bases are – geographic factors,
demographic factors, psychological factors, and user behaviour factors.
Other approaches are geodemographic factors and benefit segmentation.
We will be covering geographic factors, demographic factors, psychological
factors, and user behaviour factors in detail. Subsequently, other
segmentation bases are explained in brief.

Fig. 2.7: Basis for Segmentation

(1) Geographic Segmentation

In geographic segmentation, the market is divided by location. The single

logic behind this theory is that people who live in the same area have
similar needs and wants and that these needs and wants to differ from
those of people living in other areas e.g. In South India, cotton clothes and
lungis are more preferred vis-a-vis the West where trendy clothes are
preferred. Western culture is different from Eastern culture.

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 MARKET SEGMENTATION

Table 2.1

Geographic Segmentation Variables with Examples

Variables Examples
Geographic Segmentation
Region North, South, East, West, Central India
City size Urban, Semi-urban, Towns
Density area Urban, Suburban, Rural
Climate Hot, Humid, Cold

Geographic segmentation may also cover some regional differences due to

the climate. What is viable to market in South & West, hot and humid
areas may not be viable/acceptable to people of Himachal Pradesh / J&K
due to colder climatic conditions there. Geographic segmentation allows
segmenting the market based on the density of population, literacy etc
such as Urban and Rural. E.g., expensive original jewellery gets sold within
cities, but artificial jewellery sells in rural India.

Geographic segmentation is preferred as it is easy to articulate. Media has

evolved to cater to the local population thus offering you a ready reach the
media channel, and communication can be modified to incorporate local
marketing conditions and cues to be effective.

(2) Demographic Segmentation

Demographic characteristics like age, sex, marital status, income,

occupation, and education are used for demographic segmentation. These
characteristics are considered demographic as their statistical information
is available and they are easy to locate. Thus, demographic information is
the most available, accessible, and cost-effective way to identify a target
market. Demographic variables help you to measure effectiveness as they
are measurable. However, in most cases, they alone do not help a segment
stand out and it needs to be represented along with the psychographic and
socio-cultural characteristics to make one identifiable segment.

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 MARKET SEGMENTATION

Most population and media readership and viewership data are expressed
in demographic forms. Most media develop their profile using demographic
characteristics to attract advertisers looking to influence certain
demographic strata of society.
Table 2.2

Demographic Segmentation Variables with Examples

Variables Examples
Demographic
Segmentation
Age Under 5, 5 to 11, 12 to 18, 19 to 25, 26 to 40, 41 to 55 and
more
Sex Female, Male
Marital Status Single, married, divorced, widowed, live-in
Family size 2 members, 3 to 4, 5 to 6, 7 and above
Income P.A under 5 lacs, 5 to 20, 20 to 30, 30 to 50, above 50 lacs
Occupation Professionals, blue-collared, white-collared, self-employed
Education Primary, High school, Matriculation, HSC, Graduate,
Postgraduate
Religion Hindu, Muslim, Parsi, Sikh, Christian and more

Although demographic segmentation is very widely used, it has its

limitations. A major drawback is that it is dimensional, and brands are not
differentiated. It may tell you that there are 40 lacs college-going students
who can be a segment for promoting a Deo spray. But it can’t tell you who
uses it i.e., their behavioural or psychographic differences can’t be
revealed. Demographic characteristics are often combined with other
segmentation variable characteristics like psychographic or socio-cultural
characteristics to develop one identifiable segment.

However, there is one strong utility of demographic segmentation. When

compared, it can reveal ongoing trends such as shifts in age and income
distribution that may signal new business opportunities to alert marketers.
For example, large numbers of Indians are now in 60 years plus and
therefore term plan is introduced by insurance companies.

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 MARKET SEGMENTATION

Some of the other major variables on which demographic segmentation is

carried out in India are age, life cycle stage, occupation, religion, either as
single characteristics or combined with the other characteristics.

Activity B

Identify a product and develop its demographic segmentation based on the

variable of your choice.
.........................................................................................................
......................................……………………………………………………………………………
…………………………………………………………………………………………………………………………

(3) Psychological Segmentation

Psychological characteristics refer to the inherent qualities of the individual

consumers. Such qualities are often used as segmentation variables.
Essentially, it has only two characteristics but they are very powerful,
namely Personality and Psychographics. Additionally, social class is also
considered.
Table 2.3

Psychological Segmentation Variables with Examples

Variables Examples
Psychological
Segmentation
Personality Introvert, extrovert, aggressive, compliant
Psychographic Swingers, straights, conservatives, status seekers
Social class Lower class, middle class, upper class

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 MARKET SEGMENTATION

Personality Variables: Personality is a collective representation of

individual traits in one person. Marketers have through research found
some correlation between personality and product choice. However,
marketers were keener to link brands with personality but were unable to
correlate. Personality variables like independent, impulsive, macho, ready
to change, confident, introvert, and extrovert, aggressive, compliant
besides social, self-reliant, or assertive are also considered. Individually
they have no meaning as a brand can be connected to a personality when
a specific picture of the person can emerge. Advertising appeals are made
to a person depicting/representing the identified personality. It can work
differently also during the advertisement. You connect a brand with a
prominent personality who not only fits into collective individual traits but
can also act as a role model. Additionally, personality can also be based on
animals (XUV 500 from Mahindra was portrayed like a panther in their first
advertisement) or geometrical shapes like boxes, triangles. Characteristics
of each shape are determined and matched with consumer traits/
personality.

A brand like Charms cigarettes in India has used this approach. Besides
this, Thumps Up has introduced the macho aspect by bringing in Salman
Khan. Other products for which buyers are going to exercise personal
choice can use this approach e.g., beauty products, liquor, clothing tend to
use this approach.

Since it is difficult to try and tie a specific personality trait to the purchase
of a specific brand, marketers turned to psychographics (lifestyle
segmentation)

Lifestyle Segmentation: Psychographic (lifestyle) segmentation helps

marketers to connect a brand well with the people who represent a specific
psychographic profile/lifestyle. Lifestyle is a mode of living and helps
marketers to understand those who are in the market in terms of their
behaviour. A Deo set (pack of three for just Rs. 100) could be alright for
people with lower-class psychographic traits like conservative outlook yet
wish to be aligned with trends around, not necessarily brand-conscious vis-
a-vis internationally famous AXE Deo that is aligned with the young
segment, full of life, higher disposable cash, spendthrift, looking for every
opportunity to impress. Besides this, there are Deo’s / perfumes like BOSS
costing over Rs. 3000 per 100 ml that are aimed at people who are brand
conscious, status-conscious and have an international lifestyle.

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 MARKET SEGMENTATION

To arrive at this segmentation, data compilation needed under overall

aggregates is linked with psychographics such as Activities, Interest, and
Opinions (recognised as AIO inventories) in addition to demographics.
Let’s consider following example:

Activities Interest Opinions Demographics

Work Job Values Age

Likes Food Motto/Principles Sex

Entertainment Media Community Marital Status

Family Sports Cultural Income

Social Grooming Society Education

Cultural Health Bureaucratic Occupation

The researcher derives these aspects by probing AIO statements and then
uses statistical techniques to group consumers into similar cluster/s. It can
also be differently derived like – users / non-users cluster characteristics/
traits. E.g., for age-miracles cream, we can have a psychographic profile as
‘Dynamically involved women, living life fully, self-conscious but open and
bold, socially oriented, educated, focused on health and grooming, married
with the self-expression of themselves’.

(e) Sociocultural Segmentation

Socio-cultural (anthropological) variables such as culture, subculture,

cross-culture besides social class and Family Life Cycle also enables
marketers to classify their segmentation where product preference does
have some cultural context.

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 MARKET SEGMENTATION

Table 2.4

Sociocultural Segmentation Variables with Examples

Variables Examples
Sociocultural
Segmentation
Culture Asian, Hindu, Jainism, Muslim, Christianity
Subculture
Religion Hindus, Sikhs, Jains, Christians, Muslims (Indicative
and not complete)
Race Brahmins, Sikhs, Gorkhas (Indicative and not
complete)
Social class Lower, Middle, Higher middle, Upper
Family Life Cycle (FLC) - Students, Bachelors, Young married, Empty nesters
Societal
Family Life Cycle (FLC) - Young single, Young married with no children, With
Marital children

Cultural, subculture and cross-culture: Since members of the same

society tend to share the same values, beliefs and customs, marketers use
this segmentation approach. Marketers use widely held cultural values that
they hope will be identified by the consumer to their advantage. E.g., In
India, holding head high is so strongly entrenched in our social belief, that
even an older person needs to plan his life in such a way that he will not
have to depend on his children for money at least. HDFC LIFE’s first
campaign “Sar Uthake Jiyo” got this so well that it remained their brand
motto for a very long

If products are sold internationally, they may often require changes to suit
that segment. E.g., Nestle alters the coffee taste to suit different markets
in different continents. Culturally distinct segments may be prospects for
the same product but may need different communication and promotional
appeals. E.g., Bicycles are a poor man’s transport in India, but it is a
symbol of environment-conscious individuals across the UK.

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 MARKET SEGMENTATION

Manufacturers of retail clothing brands need to be conscious about cross

cultural issues. While black is considered as inauspicious by Hindus, it is a
common colour in the Muslim community. Indians are still fond of pista,
almonds and kesar; foreigners are fond of chocolate, hazel nuts and more.

Social Class: It represents an individual’s relative status in the community

and indicates several aspects such as income, living conditions, likes,
dislikes and standards of living. Common divisions of social class are lower,
middle, higher middle and upper class. Companies use these classifications
for handling the marketing mix. Product development e.g., Make a simple
TV without remote and other features for the lower class, one with more
features for middle / higher middle class, SMART TV with Wi-Fi, and all
other features for the upper class. Even their physical distribution channels
are aligned with the class such as retailers, general shops, paan wala for
lower-class items and exclusive stores, malls for the upper class.

Consumers in different social classes vary in terms of values, preferences

and buying habits. Thus, marketers who can understand and exploit this
classification segmentation opportunity may stand to gain.

Family Life Cycle: We will put an effort to understand this in detail, this
being a very important segmentation approach.

People go through different life stages. Family Life Cycle (FLC) exactly
represents the specific life state in which a specific class of individuals is
living and thus they have similar needs and wants. FLC describes the
process of family formation and dissolution.

There are several ways in which a person’s life state can be illustrated.
From a society perspective, there is a classification as students, bachelors,
young married and empty nesters. Empty nesters mean people whose kids
have left them and settled elsewhere. Students naturally do not have self-
income but do have numerous needs such as personal, educational, peer
pressure linked needs. They need items which get procured by someone
else – school bag, uniforms and say sports items. The Buyer here is
someone else. However, today students are so expressive that they compel
the buyer i.e., their parents to buy what they want, brands which they like
and more. Bachelors have higher disposable income as they earn but
contribute limited to household expenditure. This is a stage when they

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 MARKET SEGMENTATION

want to explore life, try new things, use trendy materials, and be brand
conscious. They are the buyer as well as the consumer.

FLC is also evolved around a marital status to gain a better understanding

of this cluster. It can be explained as below:

Fig. 2.8: Family Life Cycle State Segmentation

i. Young and single bachelor stage – Income has just started, free of
burden and full of life, willing to explore, develop own taste and
personalities, be with friends, spend on lifestyle items like bikes,
clothing, entertainment, travel & tourism, give parties and gifts. He is a
buyer and consumer both.

ii. Newly married couples – formative days of life, wants to enjoy the
most together but focus on building their nest, thus go through
expenditure phase in life. Buys consumer durables and household
consumables more, outing, travel and on self and partner.

iii. Young married with children – Life’s focus shifts towards the child
and his wellbeing. Buys kids dresses, games, baby foods and care
items, and nourishments.

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 MARKET SEGMENTATION

iv. Older married with children – have a stable income, spends on

education and wellbeing of kids and themselves. Food, clothing,
entertainment, and travel are the areas they spend most on.

v. Older married with dependent children – They have higher income,

stature but look after getting ready for fulfilling matured children’s
responsibilities like their marriage etc. They do mostly rational
purchases, repetitive.

vi. Older married with no children – Post realisation they get into
enjoying life and self-development. They look for learning, savings,
hobbies development, luxury in life, health products, social network
development, travel, and tourism and more.

vii.Old single and retired – Not able to earn thus they look for
sustenance. They live an economical life, mostly repeat purchases, scale
down preferences from luxury to basic, health, medicines and living a
basic life.

Nowadays, FLC classification also includes the income component, thus the
new FLC covers Single income with the kid, double income with the kid and
double income with double kids.

Financial products, insurance and biscuit manufacturers tend to use this

approach for segmentation. E.g., Biscuit manufacturers have jelly-filled
biscuits, cream biscuits for kids, nutritional biscuits for teenagers, biscuits
as snacks for adults, rice bran biscuits for health-conscious, Marie like
biscuits for old people.

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 MARKET SEGMENTATION

(4) User Behaviour Segmentation

We would have noticed that many times a specific occasion determines our
selection. We stretch beyond our general means to get the item of our
choice. Thus, marketers often select user behaviour as a segmentation
variable. Other aspects of user behaviour that have been proved effective
include usage rate, user status and degree of brand loyalty.

Table 2.5:

User Behaviour Segmentation Variables with Examples

Variables Examples
User Behaviour
Segmentation
Usage Situation Home, vacation, gift, weekend
Time constraints Advance booking, needed in immediate future,
urgently needed
Usage Rate Heavy, medium, light, non users
Usage Status Unaware, aware, interested, enthusiastic
Brand Loyalty None, medium, strong
Buyer Readiness Exploratory stage, contemplation stage, almost
ready, ready
Attitude Early adaptors, enthusiastic, neutral, cautious
and value seekers

We like to travel in a specific mode, specific class, gift specific items, we

prefer a specific chain of hotels when we are on a business trip, but we
prefer another chain when we are with the family. We may gift a bouquet
to our parents from a nearby flower shop, but we gift a bouquet to a
girlfriend/wife from flowercart.com known for luxurious bouquets. Our
behaviour is thus in context to a particular usage situation. Marketers thus
tap this behaviour by displaying their product as most suitable for the
given usage occasion. Alternatively, marketers can change specific
customer habits/behaviour. I-Pill’s mother-daughter conversation
advertisement tried to shift the behaviour of today’s mom and teenage

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daughter to taking preventive steps rather than wondering about how such
an incidence could take place etc. Nescafe used it to make people drink
coffee at night to increase their consumption per day. Romantic Colgate
Gel’s fresh breath advertisement brought a shift within every house where
teenagers started asking for their toothpaste.

The pressure of time is one of the components of the usage situation. A

consumer hard-pressed for professional time, really can’t spend time to
search and buy gift items. Also, such things come to mind when the event
is just around the corner. Amazon.com, Flipkart.com are all attracting
consumers with next day delivery assurance for which they charge extra!
Airlines charge you less when you book well in advance but charge you a
heavy price when you book just a few days before your travel.

Rate of usage is another differentiating approach. The market is

segmented into heavy users, medium users, and light users. Marketers
later focus their efforts on attracting and retaining heavy users.

User status is also considered by marketers in selecting their target. User

status initially may not be very attractive, but it holds the possibility of
being developed in future. E.g., Banks issue credit cards to any and
everyone. This is primarily done to create a large base that remains with
them. Gradually when the person grows in life, his income will grow, the
capacity to spend will grow and thus his credit card usage will grow. Such
customers can later be tapped for converting them to Gold card or
Platinum card.

Brand loyalty is another approach to segmentation. It’s important to

know whether you can generate more sales through loyal customers with
lower acquisition cost. Understanding the profile of brand-loyal customers
will help you to find non-brand loyal customers by using loyal customers
profile and targeting them.

Buyer readiness is another segmentation approach. The basic premise

here is that people at a given point in time are in different stages of
readiness to buy a product. Based on their awareness and information level
their interest gets developed. For some their need continues to remain as a
desire while for few others it gets converted into an intention. Depending
on marketers’ understanding of this quantum, marketing communication

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and promotion mix can be used to turn more being ready customers into
actual customers.

Attitude is another segmentation approach to buyer behaviour. People

with attitudes like early adaptors, enthusiastic, neutral, cautious and value
seekers form a significant group to be tapped by any marketer. Early
adaptors can be influenced by Geodemographic Segmentation.

This segmentation approach believes in the notion that people who live
next to one another have similar financial stature, taste, means,
preferences, lifestyles, and consumption habits e.g., residents of high-
income individuals under their stature, will display similar consumption
habits such as individual high-end sedan car per member, high-end home
theatre system, club membership. Marketers that understand their needs,
wants and desires can source/provide products liked by them and can
easily access this segment due to their known location of cluster say
through postal pin codes (Zip Codes). Such segmentation thus helps in
marketing items of personal interest, marketed on a one-on-one basis, and
delivered where required. Direct marketers also often use this
segmentation to target specific segmentation cluster known to have
specific geodemographic characteristics.

(5) User Behaviour Segmentation

We would have noticed that many times a specific occasion determines our
selection. We stretch beyond our general means to get the item of our
choice. Thus, marketers often select user behaviour as a segmentation
variable. Other aspects of user behaviour that have been proved effective
include usage rate, the user status and degree of brand loyalty.

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Table 2.5: User Behaviour Segmentation Variables with Examples

Variables Examples
User Behaviour
Segmentation
Usage Situation Home, vacation, gift, weekend
Time constraints Booking, needed in immediate future, urgently needed
Usage Rate Heavy, medium, light, nonusers
Usage Status Unaware, aware, interested, enthusiastic
Brand Loyalty None, medium, strong
Buyer Readiness Exploratory stage, contemplation stage, almost ready,
ready
Attitude Early adaptors, enthusiastic, neutral, cautious and value
seekers

We like to travel in a specific mode, we prefer a specific chain of hotels

when we are on a business trip, but we prefer another chain when we are
with the family. Our behaviour is thus in context to a particular usage
situation. Marketers thus tap this behaviour by displaying their product as
most suitable for the given usage occasion. Alternatively, marketers can
change specific customer habits/behaviour. Nescafe used it to make people
drink coffee at night to increase their consumption per day. Many products
categories can be promoted using this segmentation approach like greeting
cards, flowers, jewellery, and watches as graduation gifts.

(6) Benefit Segmentation

Post knowing their consumers deeply, marketers have effectively

segmented their homogenous markets by clustering consumers into
segments according to specific benefits sought. What is beneficial to
target segments depends on their evolving need and changing lifestyle.
Housewives hard-pressed for time, with a changing lifestyle compelling
them to manage house and office responsibilities, quickly accepted
microwave oven as it offered them an opportunity of multi-tasking – watch
TV while cooking is undergoing. Tata Salt LITE offered the benefit of eating
a meal with salt without worrying about salt-induced hypertension fear.

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MOOV ointment became successful by emphasising ‘smudge free backache

removal’, and FOGG Deo promoted more spray instead of more gas.
Different brands can be introduced within the same product category such
as Colgate with complete care against cavity and Colgate Gel for freshness.

Performance can be converted to benefit segmentation - Jet Airways

started announcing after a few months, their 99% departure accuracy rate
assuring flyers of timely arrival at the destination.

The following table will open readers’ eyes to the potency of benefit
segmentation.
Table 2.6

Benefit Segmentation of Toothpaste Market

Benefit Demographic Behavioural Psychographic Favoured

Sought Characteristic Characteristic Characteristic Brand
Low price Male Heavy users Price-conscious Babool

Anti-decay Big families Heavy users Health- Pepsodent

conscious
Brightness Teenagers Smokers Outgoing, fun Colgate,
loving Promise
Flavour Children Mint Lovers Active self Colgate
involved
Mouthwash Youngsters Want intimacy Self-involved Close-up gel

Gentle nature Children below Loves to taste Fun, dependent Just for kids
5 years on mother

Adapted from Russel J. Haley, Journal of Marketing, July’63

Due to its potency, benefits segmentation will continue to be the favourite

among marketers. This can be a stand-alone segmentation approach that
independently can help you target and capture your market.

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Activity C

Write down the benefits you are looking for while consuming following
personal and household goods.

Soap, Cosmetics, Mobile phone, Air conditioner, Sun-film on window glass

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

2.6 CRITERIA FOR EFFECTIVE TARGETING OF MARKET

SEGMENTS

We have studied different segmentation approaches. Marketers have now

been able to address their first challenge to determine ways in which they
can cluster their homogeneous market. Marketers’ next challenge is to
select one or more segments to target with an appropriate marketing mix.
To be an effective target, market segmentation should be 1) identifiable 2)
sufficient in terms of volume 3) stable 4) reachable in terms of media and
cost. Let’s examine each aspect.

Fig. 2.9: Pre-targeting Stages of Marketing

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Identification: Dividing the market into separate segments based on a

common need or characteristic that is relevant to the product or service.
Later, marketers must be able to identify and measure the relevant
characteristic. The identification of the target audience is the process of
determining the market to tap the market potential. The common
description of the target audience in terms of geographic (location),
demographics (age, gender, occupation) is easily identifiable, thus helps
you to target. For the Scooty market, you may say your segmentation is of
those young women in urban and semi-urban India willing to be on the
move to balance work and life looking for mobility solutions. From this, you
can target major metros, A class towns and within those areas where you
are likely to get such enterprising women. However, in psychographic,
behavioural and benefits segmentation, it is a little difficult to identify the
target market.

Sufficiency: For any organisation to tailor product development to meet

specific needs and incur marketing spend, it is essential to know that the
segment targeted is worthwhile i.e., enough prospective customers are
available to obtain the required sales volume. Thus, marketers use
secondary and demographic data such as Social Economic data of the
Indian population, a number associated with various demographic slices of
the population to derive their total market.

Stability: While organisations invest in a specific targeted market, they

are not merely keen to know sufficiency but the stability of the market to
gauge their return on investment and expected life span of getting the
most out of this targeted market. Most marketers prefer to target
consumer segments that are not only stable but also likely to grow larger
over time. Thus, beyond sufficiency, the longevity of tapping the market is
essential. Marketers often try to understand whether this is a genuine need
or just a fad.

Accessibility: The fourth requirement by marketers is to reach the market

segment/s they have identified for tapping the market potential in a way
that optimises the resources at an economical cost. Marketers wish to
reach and frequently represent themselves in front of their target audience
using available media channels, vehicles. However, in this age of digital
technology explosion, it has become complex to make a media plan that
strikes a balance between reach and frequency, minimises wastage and

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breaks the clutter. Media innovation is a continuous process and one who
uses it when available reaches the target market very well.

2.7 IMPLEMENTING SEGMENTATION STRATEGIES

After segmenting the market and determining target segments, a firm can
either pursue a concentrated marketing strategy or a differentiated
marketing strategy. Marketers may deploy a counter-segmentation
strategy.

Concentrated Marketing Strategy: Post identifying the most promising

segments to target, marketers must decide their final strategic aspect,
namely, to implement the concentrated strategy or differentiated strategy.
A basic assumption in marketing is that each targeted segment receives a
specially designed marketing mix: that is, a specially tailored product, or
price or distribution network or promotional mix. Targeting just one
segment with a unique marketing mix is called concentrated marketing.

Differentiated Marketing Strategy: When marketers decide to target

several segments using an individual marketing mix, it is called a
differentiated marketing strategy.

Organisations strong in marketing but limited in other resources can gain

by adopting a concentrated marketing strategy. They can expand a
segment identified by them and create a strong preference and entry
barrier. Differentiated marketing strategy is essential for highly competitive
fields with each organisation fighting for increasing their market share,
pumping millions of rupees behind market development and expansion
through brand extensions.

Counter-segmentation Marketing Strategy: Companies implementing

differentiated marketing strategy often face situations wherein they need
to reconsider differentiated segments in terms of exclusivity, sufficiency,
stability and/or accessibility. This may be either due to segment volume
contracting, or stability is not likely, or accessibility is not at the optimal
level. As a result, they do not warrant an individual marketing mix. E.g.,
MBA schools must constantly evaluate their courses’ preference among
industries. On finding that a particular course has lost the required appeal,
they can use counter-segmentation marketing to recombine it with another
ongoing course, which will make the ongoing course more meaningful.

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2.8 WHAT HAVE YOU LEARNT – A SUMMARY

Before the widespread application of the marketing concepts, mass

marketing was the most widely used strategy – offer the same product or
marketing mix to everyone. Consumer research revealed that consumers
buy products due to their different needs or specific consumer
characteristics. Marketing segmentation followed as a more logical way to
meet consumer needs. Segmentation is defined as the process of dividing a
potential market into distinct subsets of consumers with a common need or
consumer characteristics and selecting one or more segments to target
with a distinct marketing mix. In other words, the large homogeneous
market is divided into smaller groups of people who show similar needs
and or characteristics thus resulting in similar purchase behaviour.

Seven major classes of consumer characteristics serve as the most

common bases for market segmentation. These include geographic
variables, demographic variables, geodemographic variables, psychological
variables, sociocultural variables, user behaviour variables and benefits
sought. We have additionally examined the Family Life Cycle (FLC)
segmentation strategy under Socio-culture variables. Important criteria for
targeting market segments include identification, sufficiency, stability, and
accessibility. Once an organisation has identified promising target markets,
it must decide whether to pursue several segments (differentiated
marketing) or just one segment (concentrated marketing). At a certain
time, marketers may need to follow a counter-segmentation strategy.

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2.9 SELF ASSESSMENT QUESTIONS

1. What do you understand by the term “Market Segmentation”?
2. What are the benefits of market segmentation?
3. Explain the role of demographic segmentation in segmenting a market.
4. Elaborate the concept of Family Life Cycle.

2.10 MULTIPLE CHOICE QUESTIONS

1. Segmentation is the process of splitting a large homogeneous market

into smaller groups of people or organisations that show similar needs
and or characteristics thus resulting in similar purchase behaviour.
(a) True
(b) False. It is the splitting of identical market...
(c) False. It is the splitting of heterogeneous market...
(d) False. It is the splitting of large market...

2. A marketer who considers the whole market as one entity and prepares
his marketing plan accordingly has known to have adopted
_____________ strategy. Fill in the blank.
(a) unclassified marketing
(b) undifferentiated marketing
(c) classified marketing
(d) differentiated marketing

3. One fruit juice marketer has identified three sub-groups in one

homogenous market identified as a) for thirst-quenching b) for health-
conscious and c) for occasion celebrations. They have prepared a
separate marketing mix for targeting each of these segments. Which
marketing strategy have they adopted?
(a) unclassified marketing
(b) undifferentiated marketing
(c) classified marketing
(d) differentiated marketing

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4. Segmenting your market on a variable such as a young married couple

with a child is known as _____________ segmentation under a socio-
cultural approach to segmentation. Fill in the blank.
(a) geodemographic segmentation
(b) psychological segmentation
(c) family life cycle segmentation
(d) behavioural segmentation

5. Post identifying the most promising segments to target, when a

marketer decides to target just one segment with a unique marketing
mix, it is called __________ marketing. Fill in the blank.
(a) prime segment
(b) counter segmentation
(c) concentrated segmentation
(d) unique segment

Answers:

1. (a), 2. (b), 3. (d), 4. (c), 5. (c)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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Chapter 3
Consumer Research
Objectives

By the end of this chapter, you should be able:

• To understand the consumer buying decision making and consumption
using consumer research as a tool
• To understand the consumer research process
• To understand consumer research objectives
• To understand the research methodologies involved in gathering primary
and secondary data for consumer research both quantitative and
qualitative research including psychological and motivational aspects.

Structure:

3.1 Introduction
3.2 Consumer Research Process
3.3 Conducting Segmentation Research Study
3.4 Development of Motivational Research
3.5 Methods in Psychology (For Motivation and Other Psychological
Aspects to be Probed)
3.6 What have you Learnt – A Summary
3.7 Self-Assessment Questions
3.8 Multiple Choice Questions (MCQ)

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3.1 INTRODUCTION

The fundamental of marketing as a discipline lies in identifying consumer

needs. Products are later developed to satisfy those needs. Consumer
research is the set of methods used to identify such needs for which the
tool of marketing research is used. Marketing research is defined as ‘to
manage a business well is to manage its future and to manage the
future is to manage information – MARION HARPER’. Word
information as a context here also included consumer information covering
needs (felt and latent), identify who they are, how they perceive your
product and brand, from where do they prefer to buy such products, their
attitudes, motivational cues, appeals that influence them the most, their
media habits and measuring marketing communication program
performance and more. Marketing research is thus considered a useful tool
to find solutions to any problem of marketing. As mentioned by Luck Wales
and Taylor, marketing research is ‘the application of the scientific method
to the solution of marketing problems. Scientific methods include different
survey techniques, experiments, methods and observation techniques. In
simple terms, marketing research helps the researcher to meet the limited
number of the target audience from the large base of the target population
to understand the specific marketing problem and later generalize the
findings applicable to the entire target population. Marketing research
covers quantitative data, qualitative aspects; it also uses projective
techniques to unearth psychological and behavioural aspects, in-depth
interviews to have the psychological perspective to their buying behaviour.

Consumer research is relevant to each variable in the marketing mix –

product, price, promotion and distribution. It begins with ‘need’
understanding while developing a new product/service concept to satisfy
targeted consumers’ evolving needs. It allows an understanding of the
price consumers is willing to pay. Consumer research helps an agency to
determine the persuasive promotional appeal and to identify appropriate
media choices to reach the selected target markets. It helps you to
determine places from where consumers prefer to purchase such products/
services to develop their distribution strategy.

In a nutshell, consumer research facilitates the formation of marketing

strategies including promotional strategies.

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3.2 CONSUMER RESEARCH PROCESS

The main process steps in any consumer research process include (1)
Identifying the Marketing PROBLEM (2) Defining the research OBJECTIVE
(3) Collecting and evaluating SECONDARY DATA (4) Research plan
CONSTRUCTION (5) Collecting the INFORMATION (6) Information
ANALYSIS (7) Presenting the FINDINGS.

In other words, it’s a systematic research design, involving the collection of

data, analyzing the collected data, report findings, relevant to a specific
marketing situation/problem.

Fig. 3.1: Process Model of the Consumer Research (Marketing Research)

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1. Identify the Marketing Problem: First and foremost aspect would be

to determine the marketing problem. Also, it needs to be defined in a
way that the research firm gets an idea about the answer to which
problem are you looking at. In other words, it should be very precisely
defined; highlighting a cause-and-effect relationship between the
problem and your search need; thus, it conveys your ultimate need for
doing consumer research. E.g., for your falling beauty cream sale, the
problem could be that either your product is not liked now, or people
have better choices. If you write the research problem as “Identify the
reason for declining sale” then it is very generic. Instead, if the research
problem is defined as ‘Identify the consumer preference towards specific
beauty creams, especially substitutes available and preferred by them”,
it gives the consumer research firm clarity regarding aspects to probe
during the research.

Fig. 3.2: Marketing Problem to Marketing Solution

2. Define Research Objectives: Research objective/s would be a

derivative of your marketing problem. E.g., from the above example of a
beauty cream’s marketing problem, the research objective would be to
understand and identify consumer preference towards different beauty
creams and determine various substitutes available and shift towards
such substitutes. The right objective setting helps in developing the
right research design. Thus, it’s important for the marketing manager
and research agency to agree on objectives and thus the logical
outcome angle to be finalized, before developing a research design.
Based on the carefully defined objective, one can derive a conclusion
regarding the quantitative or qualitative nature of research; research
tools like survey, in-depth interview, sampling and more can be
appropriately developed to meet research objectives. Generally, if
objectives set to require the outcome in quantified terms like estimated
demand or the likely percentage shift towards a new product category

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then quantitative research is done and if objective requires

psychographic understanding or behavioural insights then qualitative
research is done. Based on clarity of objectives and nature of research
required, few other aspects also get cleared like data collection
techniques, i.e., survey or Focus Group Discussion (FGD), sample size,
sampling methods like random sampling or convenience sampling.

RESEARCH OBJECTIVES
• The OBJECTIVES of a research project summaries what is to be achieved
by the study.
• Objectives should be closely related to the statement of the problem. For
example, if the problem identified is low utilization of child welfare clinics,
the general objective of the study could be to identify the reasons for this
low utilization, in order to find solutions.
• The general objective of a study states what researchers expect to
achieve by the study in general terms.
• It is possible (and advisable) to break down a general objective into smaller,
logically connected parts. These are normally referred to as specific
objectives.
• Specific objectives should systematically address the various aspects of the
problem as defined under 'Statement of the Problem' and the key factors
that are assumed to influence or use the problem. They should specify what
you will do in your study, where and for what purpose.
Fig. 3.3: Salient Aspects of Research Objectives

3. Collect Secondary Data: Post objective finalization, a search for

secondary information is any data originally generated for some purpose
– research finding by outside organizations available in the public
domain or in-house data generated through earlier similar research or
inquiries, invoices, financials and more. Locating such available data is
known as secondary research. Secondary research is done always
before the primary research. Many times, it offers sufficient insights into
the problem at hand so that you do not need to conduct any primary
research. Secondary data can be obtained through internal sources,
government sources like Census of India, Readership Survey, Retail

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Audit Surveys, and Industry Analysis or through associations giving an

overall idea about the industry or a print publication carrying an
industry review, expert review or internet on which reports are
published as well as professional report publishing houses or syndicated
research firms.

Fig. 3.4: Indicative Sources of Secondary Data

Post collection of secondary data, it needs to be scanned for

exhaustiveness to meet our need, relevance and analyzed to check
whether any concluding decision can be taken to get an answer for the
specific marketing problem on hand. If it is incomplete, then the
organization may need to commence primary research. Refer fig. 3.5 for
clear understanding.

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4. Design Primary Research: The selection of a research design is based

on numerous aspects like research problem, research objective and
nature of information thus needed at the end of the research. If
descriptive and quantifiable information is needed, then quantitative
research could be right but if the marketer is seeking ideas,
psychological causes, buyer behaviour then qualitative research could
be right. As the approach for both are distinct, the same will be
discussed separately.

Fig. 3.5: How to Extract Meaning Out of Secondary Data

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(i) Quantitative Research Design

There are three alternative ways to conduct quantitative research to obtain

p r i m a r y d a t a – O b s e r va t i o n m e t h o d ( O b s e r v i n g b e h a v i o u r ) ,
experimentation (Like a laboratory experiment, you do it in the market), or
survey method (Using a questionnaire to question people).

a. Observational Research: Marketers have recognised that the best

way to gain an in-depth understanding of the relationship between
people and products is by watching them in the REAL PROCESS of
buying and using products. Under this process, observations are made/
recorded regarding the behaviour of people, objects and events rather
than asking consumers for information. Thus, instead of asking about
the brands they purchase, it is more appropriate to observe them live in
any store.

Observational research techniques can be classified in the following five

ways:

• Natural v/s Contrived: Under natural observation, the behaviour of an

individual is observed as it takes place, normally in the natural
environment such as observing a female shopping for a beauty product in
a cosmetic shop. As against this, contrived observation is done under an
artificial environment and observing the behaviour patterns exhibited by
a person such as creating a dummy cosmetic shop and asking a lady to
get in to buy a cosmetic product.

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Fig. 3.6: Classification of Observational Techniques

• Disguised v/s Undisguised: Under this technique, the role of an

observer is either known or not known to the respondent. If it is not
known, it is a disguised technique and if it is known, it is an undisguised
technique. The disguised technique is used where it is known that
respondents will behave differently if it is known to them that they are
being observed, such as very personal products in nature like ageing
cream, condoms. Various set-ups like two-way mirrors, hidden cameras
and observer dressed as a salesman can be used for the disguised
technique.

• Structured v/s Unstructured: Structured technique is used when the

decision problem is clearly defined, and the specification of information
needs a clear identification of the behaviour patterns to be observed and
measured. Structured observation technique is appropriate for conclusive
research studies. Unstructured observation technique is appropriate in
situations where the decision problem is yet to be formulated and a great
deal of flexibility is needed during observation. Thus, the unstructured
observation technique is preferred for exploratory studies.

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• Direct v/s Indirect: Under direct observation, you observe behaviour

as it occurs. Indirect observation refers to observing some record of past
behaviour. In indirect observation, effects of behaviour are observed
rather than the behaviour itself. Under the direct observation technique,
you will observe what pack size of shampoo is most purchased but under
the indirect observation technique, you will check the garbage yard to
determine the shampoo bottle pack size most preferred.

• Human v/s Mechanical: In certain product-related behaviour

understanding, it may be appropriate to supplement or additionally have
some form of a mechanical observer. Advantages of it could be better
accuracy, lower cost or special measurement requirements. Devices that
can facilitate mechanical observations are (1) motion picture cameras (2)
eye camera (3) audiometer and many others. A motion picture camera
allows you to capture the natural purchase behaviour in a store, an
audiometer captures conversation, linked to TV/Radio to monitor
channels surfed, eye camera captures the eye movement useful to know
brands referred on the shelf; it refers to instructions, offers, posters, etc.
Each such mechanical measurement has basic stimuli that are under
observation and based on working analysis of the mechanical device,
objective evaluation can be drawn regarding attraction towards stimuli,
i.e., whether it is strong or weak.

The observation method has several advantages. First, it does not rely
on the respondent’s willingness to provide the desired data. Secondly,
bias is reduced or eliminated. Last but not the least, observation method
allows capturing behaviour most naturally, thus more realistic and
helpful.

However, this method has basic limitations like its inability to capture
psychographic insights like awareness, beliefs, preferences and more
besides its inability to observe intimate details. Additionally, it can
capture observations at a specific location under specific conditions,
results of which can’t apply to the larger population. It’s a costly method,
thus can be done for a limited period and thus, it may be suitable only
for a limited product range.

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b. Experimentation Research: It is one of the alternative methods of

observational research. Sales is a result of many marketing variables
such as brand logo, packaging design, prices, promotional offer or copy/
theme or advertising appeal and more. Through carefully designed
experiments, in which one variable is manipulated at a time, while other
elements are kept constant, it is possible to test and measure the
relative sales appeal of each variable and determine the most appealing
variable that can fetch you higher sales. Under this research, one
variable says packaging design will be changed and introduced
simultaneously within the same market at the different outlets and sales
performance will be monitored to determine effective packaging design.
It is most useful during test marketing or concept testing.

The experimentation method is ranked high concerning data accuracy

since the ability to control the variables of interest tends to produce
relatively error-free data. One of the limitations of this technique is that
it can study current behaviour. Consumer’s current behaviour is the
result of past experiences and may not remain the same as per his
current behaviour. It is also costly, complex and time-consuming.

c. Survey Research: It is one of the alternative methods of observational

research. If you wish to ask an identified target to sample few questions
in a specific order with an expected pattern of answers that enables you
to apply statistical techniques to analyse and derive quantitative
evaluation, then the survey technique is used. The form in which data
gets filled is known as a questionnaire. A survey can be either done in
person, by mail or by telephone. Each of these methods has certain
advantages and disadvantages which need to be evaluated to decide the
appropriate method.

Reasons for popularity of the survey technique:

• It can help in getting quantitative and qualitative information
• It’s the only method that helps in measuring attitude and motivations
• It is quite flexible in terms of the types of data to be assembled, the
method of collection or the timing of research
• The versatility of the survey method, its speed, and its relatively lower
cost are its selling points when it is compared with the observation
method.

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The survey technique can be effectively used for numerous marketing

problems. Few of them are (i) planning product features (ii) demand
forecasting (iii) new product acceptance (iv) advertisement appeal (v)
service feedback (vi) customer satisfaction survey (vii) channel survey and
more.

Activity A

List three alternative ways to do quantitative research and identify one

example in terms of product/service for which such alternative ways of
conducting consumer research are possible for which the nature of specific
issues/opportunities/aspects is to be understood.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

The survey can be conducted either in person, through mail or over the
phone. Nowadays surveys can be conducted using the Internet also.

Personal Interview: Here a respondent is contacted face-to-face for

conducting an interview. The respondent is aware of the purpose of the
meeting and has devoted time for the same. It offers a sense of
participation to the respondent and a better understanding of questions
before answering. Doubts can be clarified before answering; thus, answers
are more accurate. Different nature questions can be asked like structured,
close-ended, open-ended and descriptive. An in-depth interview is also
possible. It allows verification of actual respondent, matching of sampling
criteria and other demographic facts essential for analysis. Various tools
such as exhibits, advertisements, pictures and cue cards are used to
enable the respondents to understand the question correctly and answer
correctly. Un-aided and aided probing is also possible, e.g., the respondent
can be first asked names of deodorants used by him and his answers are
noted. This is an un-aided recall of brands by the respondent. Later, a list is
provided, and he is asked to mention deodorants used by him. This is aided
recall of brands by the respondent. For a brand, un-aided recall is more
important. This approach is useful to cover both illiterate and literate
respondents besides gathering views, opinions and attitude measurement.

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The Mail Survey: In this method, respondents are approached through

the mail. Post making a detailed list of likely respondents, they are sent a
questionnaire along with a covering letter to generate interest and
motivate them to send a prompt reply. Along with this, a stamped reply-
paid envelope is also provided. Respondents are given incentives to get co-
operation and for a timely reply. Many times, follow-up calls are needed to
get maximum respondents and timely reply.

Mail survey is a very effective and cheap method of conducting a survey. It

can cover wider geographical areas. Few drawbacks must be considered
such as postal delivery time lag affecting the schedule, actual respondents
not filling the form, he/she may not understand questions thus it is filled
without understanding, the uncertainty of meeting the response number
targeted and impact on accuracy as respondents may not fill all questions
asked.

However, in this digital age, this method has lost its significance and is not
used much.

Telephone Survey: In areas where telephonic connectivity is there, we

can conduct surveys using a telephone. This is mostly possible in urban
areas. It allows you to reach out to a large number of likely respondents in
lesser time and cover the required numbers of respondents. It allows the
explanation of questions and obtains answers. It is ideal for capturing
feedback of live programs, like Radio/TV. It can be scheduled as per the
convenience of respondents.

Internet Survey: In urban and semi-urban areas where Internet

connectivity is available, this method is possible. It is possible to use this
method among professionals and working-class individuals. Here the
identified respondent gets a link on his email along with an email note
explaining what the survey is all about, purpose, time frame and incentive
for timely reply. When he clicks on the link, he is taken to a micro-site
where a form gets opened. The form has easy to answer options. When the
entire form is completed, the respondent can submit the form. He gets a
thank you note. Google Doc, Survey Monkey and other such online solution
providers make the implementation of such methodology possible.

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Advantages and disadvantages of market survey techniques

Table 3.1

Advantages and Disadvantages of Different Research Techniques

Survey Technique Advantages Disadvantages

Personal interview Most reliable method Most costly method for
because of personal primary data collection
contact
The personal bias of
Questions can be of any individuals can affect
nature, there is a scope quality and findings
to explain and use aids
like show card Reliability depends on the
integrity and skill of
A full questionnaire can interviewers
be covered, and logical
fallacy can be probed The personal bias of the
interviewer also can seep
The quality of the sample in as he tries to facilitate
is controllable an answer

No time lag can start The total period required

soon is longer
Telephone interview A quicker, convenient Not suitable for obtaining
method of obtaining data detailed answers,
in the shortest possible answers to difficult
time questions

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Productivity and output All sampling methods not

can be managed, e.g., applicable such as
more operators to do random sampling
collection in a short
timeframe You need to call much
more than required
Respondent can be people
contacted when he
wants, can be reminded Inability to explain
and pursued clarifications questions, show cards
and probe the answer
Good to reach people in given
inaccessible areas
Mail interview A questionnaire can be Complex or not
filled out at per the professionally written
convenience of the questionnaire will not get
respondents attended

The problem of the The questionnaire may

interviewer’s bias is be answered by another
eliminated person, thus non-
representative
Good to reach people in
inaccessible areas Needs additional
incentive to ensure a
Low cost for covering response, adding to cost
widely scattered and
small groups Not possible to follow up,
explain questions and
probe the given answer

Sampling Plan: Further to understanding quantitative research design,

nature of research design and data collection instruments, the next step in
designing primary research is to prepare a sampling plan. It provides us
with information such as who can be a respondent (the sampling unit),
how many such respondents do we need to survey (the sample size), and
how to select them (the sampling procedure).

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a. The Sampling Unit: The researcher must define a profile of a person

who can be considered as a sample unit (e.g., a working manager with
at least 5 years of work experience). This profile is considered as a
barometer for selecting a respondent. If a willing respondent does not
meet these criteria, he will not be eligible to answer the questionnaire.

b. Sample Size: Size of the sample means the number of respondents out
of the total target population that needs to be covered to gain insights
that can be later applied to the total target population. As it is not
possible to meet all individuals who qualify to be a part of your target
population, small representative numbers of individuals are met during
the survey. This is known as sample size. The size needs to be decided
first as it impacts the budget and degree of confidence which marketers
expect from the findings. Whether it is a large sample size or a small
sample size, the finding of the study gets impacted more by the
accuracy with which the sampling procedure is followed. Sample size
number is a matter of statistical formula.

c. Sample Procedure: This aspect defines how a specific sample will be

selected. In simple words, either probability or non-probability-based
sampling and under them either randomly or conveniently? One
approach will be to use one of the probability sampling techniques and
the other will be to use one of the non-probability sampling techniques.

Students are also requested to get a comprehensive understanding of the

same aspects being handled under qualitative research design for primary
data collection.

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Table 3.2

Sampling Methods
Probability Sample Explanation
Simple random sample Every member of the population has a known and
equal chance of selection.
Stratified random sample The population is divided into mutually exclusive
groups (such as income groups), and random
samples are drawn from each group.
Cluster (area) sample The population is divided into mutually exclusive
groups (such as pin codes), and the researcher
draws a sample group to interview.
Non-probability
Sample
Convenience sample The researcher selects the most accessible
population members from whom to obtain
information.
Judgment sample The researcher uses his or her judgment to select
population members who are good sources for
accurate information.
Quota sample The researcher interviews a prescribed number of
people in each of several categories.

Data Collection Instruments: As a part of our understanding of the

development of quantitative research design, we need to also cover data
collection instruments. Earlier, we have covered what is quantitative
research technique.

For quantitative research, the primary data collection instrument is the

questionnaire. There are two options to this – questionnaires or
inventories.

Questionnaires: It’s a form with a series of questions listed in

chronological order to pull out the desired information from the respondent
in the most logical manner. A questionnaire should be simple, not very
lengthy, interesting, without any ambiguity and easy to answer. It must

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include only relevant questions helping you with either the purpose of the
study or the analysis point of view (like demographic questions).

The format of the questionnaire, the way questions are asked needs to be
tested and debugged to ensure that the answers are finally obtained the
way it will help you to analyse the outcome. A smooth questionnaire helps
you to get a better response rate and accurate answers.

There are different formats for questions laid out – close-ended questions
or open-ended questions. In a close-ended question, you expect a specific
answer, thus the same is mentioned and the respondent needs to raise
those alternatives in front of the respondents and get a specific reply only.
In an open-ended question, you allow respondents to express freely
whatever comes to their mind that’s relevant to the question asked. Close-
ended questions are relatively simple to tabulate and analyse and give an
outcome that can facilitate an inference or conclusion. As against this,
open-ended questions get more insightful information but are difficult to
code, tabulate and analyse, thus tricky to infer or conclude. However, it is
not as irrelevant as it sounds here. As we move forward, we will gain
insights into the way it gets analyzed and inferences are drawn.

Inventories: Sometimes, instead of questions, a series of statements are

asked in which respondents are asked to indicate their degree of
agreement or disagreement. It is known as inventories. Here the
respondents will be presented with a list of product attribute specific
statements to which they are asked to indicate their relative feelings or
evaluations in the form of the degree of impact/expectation/experience.
The instruments most frequently used to capture this evaluative data
include Likert Scales, Semantic Differential Scales and Rank-order Scales.

a. The Likert Scale: It’s the most popular form of attitude measurement
scale in which the respondent is presented with a statement. The
respondent needs to give his agreement or disagreement. However,
they are spread over 5 different points to have the degree aspect
included – 1 = Strongly Agree, 2 = Agree, 3 = Neither / Nor, 4 =
Disagree, 5 = Strongly Disagree. There is an equal degree of
agreement/disagreement from a neutral point. To uncover consumer
views on different aspects, several questions can be asked. Not only
this, but questions can also be asked differently to uncover the
consumers’ mind e.g. – ‘I like Westside mall’ or ‘Westside mall is not a

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mall to be liked’. In both cases, a respondent needs to give the degree

of agreement or disagreement but the way this statement is framed can
bring out deeper aspects. Each statement can be separately evaluated,
or few statements collectively may mean a specific aspect, thus they
can be collectively evaluated to derive the output towards this specific
aspect.
Table 3.3

Likert Scale Application

Instruction
Please place the number which best describes how strongly you agree or
disagrees with each of the following statements about your experiences of
shopping at the Phoenix Mall, Lower Parel, Mumbai. Write the number in the
space provided on the left side of the statement.
Number Understanding
Agree strongly
Agree
Neither Agree nor Disagree
Disagree
Disagree Strongly
Statements
_________ a. It is fun to shop at the Phoenix Mall.
_________ b. Products at Phoenix often cost more than they are worth.
_________ c. It is a good place to meet friends and neighbours.
_________ d. Most branded products are available at the Phoenix Mall.
_________ e. Parking is very difficult to find.
_________ f. You get goods for all age groups at the Phoenix Mall

b. The Semantic Differential Scale: Same as on the lines of the Likert

scale, it follows bipolar adjectives route (namely good/bad, liked/
disliked) and allows deeper depth as it can be made as 5-point, 7 points
or a 10-point scale. The limitation of depth in the Likert scale is
overcome by the inclusion of stretching the depth as per the need of the
project (7, 10 points). Here instead of a statement, attributes are asked
with two extreme options either on a 5-point, 7 points or a 10-point
scale for respondents to answer. Because of this structural design, this
approach can also include competitive evaluation, product evaluation,
service evaluation and more.

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Table 3.4

Semantic Differential Scale Application

Instruction
Please place the number which best describes how strongly you feel about each
attribute about your experiences of shopping at the Phoenix Mall-Lower Parel,
Infinity Mall-Goregaon and R-Mall-Ghatkopar. Write the number at the space
provided on the left side of the statement.
Attribute Scale Understanding
Very Moderat Slightly Neither/ Slightly Moderat Very
ely Nor ely
7 6 5 4 3 2 1
Attributes
Phoenix Infinity R-Mall
Courteous 6 4 5
Salespeople
Helpful 5 4 4
Salespeople
Comfortable 7 4 5
Walkways
Widest 7 6 4
Brand
Range
Competitive 3 4 5
Prices
High-Quality 6 6 5
Products
Quality Food 7 7 4
Outlets

When the above ratings are plotted on a graph, it gives a comparative picture of
each attribute.

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c. Rank-order Scale: In this scale, the respondents are asked to rank

items such as product, service, and attributes in order of preference in
terms of given criteria such as quality, preference, price and more. It
can unearth brand preferences; attribute preferences features
preferences and more. It also allows competitive information probing
besides probing of improvement areas or determining product
positioning.

Table 3.5: Rank-order Scale Application

Instruction
Rank the following brands in terms of your preference. (However, the same
could be done for quality, functionality, features, user-friendliness, etc.)
Rank the following SMART TV brands in order of your preference to own the
same.
National - ____
LG - ____
Sony - ____
Toshiba - ____
Sharp - ____

5. Collect Primary Data: It’s the 5th step in the continuation of our
understanding of the research process. A quantitative study generally
requires field staff that can either be recruited and trained directly by
the researcher or contracted from a company that specializes in
conducting research interviews. In either case, it is necessary to
supervise the field staff and to verify whether the interviews have taken
place. Completed questionnaires should be reviewed regularly to ensure
that the responses are clear, complete, and legible.

Students are also requested to get a comprehensive understanding of

the same aspect being handled under qualitative research design for
primary data collection.

6. Analyze Data: In qualitative research, the moderator or test

administrator usually analyzes the responses received. The researcher
usually supervises the analysis of quantitative data. Open-ended
responses must be coded and quantified (i.e., converted into numerical
scores); then all of the responses must be tabulated and analyzed.
Many surveys are frequently computer-analyzed using analytical

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techniques. The computer can process multiple correlations and cluster

the data by selected demographic characteristics.

Students are also requested to get a comprehensive understanding of

the same aspect being handled under qualitative research design for
primary data collection.

7. Prepare Report: In both qualitative and quantitative research, the

research report includes a brief executive summary of the findings.
Depending on the assignment from marketing management, it may or
may not include recommendations for marketing action. The body of the
report should present a full description of the methodology and, for
quantitative research, including tables and graphics supporting the
findings. A sample of the questionnaire should be included in the
appendix to permit review in conjunction with an evaluation of the
objectivity of the findings.

Students are also requested to get a comprehensive understanding of

the same aspect being handled under qualitative research design for
primary data collection. The same is covered below, however, the first
three process steps being common, have not been explained.

(ii) Qualitative Research Design

Here we will not cover steps a), b) and c) covered earlier while
understanding the research process. We are trying to understand designing
our primary research and the second technique under it, namely qualitative
research design. Under qualitative research design, the data can be
collected through in-depth interviews, focus groups and various projective
techniques. The questionnaire consists of open-ended, free-to-express
nature of probing questions to encourage the respondents to reveal their
innermost thinking and beliefs.

a. In-depth interviews: Such interviews are non-structured

conversations between the respondent and a highly trained interviewer.
Respondents are given the freedom to articulate freely about their
activities, interest, likes, beliefs and opinions. They can reveal what they
feel – their attitudes. The conversation is not restricted thus to the
brand or the product category under research. Marketers gather
valuable data which can guide them in product decisions.

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In-depth interviews are designed to uncover basic predispositions –

unconscious feelings, needs, conflicts and the like. To achieve this result,
respondents are offered a completely permissive atmosphere, in which
the subject is free to express himself without the fear of disapproval,
admonition, or dispute and any advice from the interviewer. In-depth
interviews can involve one respondent and one interviewer, or they may
involve a small group of respondents and a single interviewer. The
former category is termed as a dividable in-depth interview or just in-
depth interview and the latter is called a focus group interview.

Such in-depth interviews may be described as less structured and more

intensive than a standardized questionnaire-based interview. There are
three broad types of individual in-depth interviews:

• True In-depth or Clinical Interview that corresponds to the

psychotherapeutic interview and requires far longer than a single session
and thus, it is outside the scope of marketing research and rarely used
by marketers.

• Non-directive Interview is where the interviewer retains the initiative

and control during the interview; the respondent is given maximum
freedom to respond in the manner he wishes, however within reasonable
bounds of relevance.

• Semi-structured or Focused Interview where the interviewer is

required to cover a specific list of points and a much tighter control is
exercised by the interviewer to maximize the collection of relevant data;
the respondent is allowed to respond freely.

• Individual in-depth interviews require great skill and considerable

time. It is difficult to establish the right degree of confidence and eliciting
answers. Besides this, interpreting the qualitative information provided is
very subjective. The technique is expensive and in practice. Thus, focus
group interviews rather than individual interviews are the more common
interview technique used.

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b. Focus Group Interview: A variation of the in-depth interview is the

focus group interview. Several individuals (usually 6 to 12) are brought
together rather than being interviewed one at a time. Each group is
designed to reflect the characteristics of a particular market segment of
interest. The interaction among the group members is only loosely
directed by the group interviewer, called the moderator. The moderator
attempts to develop three clear stages in the group interview: (i)
Establishing rapport with the group, structuring the rules of group
interaction, and setting objectives; (ii) Provoking intense discussion in
the relevant areas; and (iii) Summarizing the group’s responses to
determine the extent of agreement. The moderator requires to perform
the difficult task of guiding the discussion into relevant areas while
exerting minimum influence on the content of the discussion.

Focus group interviews are currently one of the most frequently used
techniques in marketing research. They have been applied to; (i)
Generate ideas of new products; (ii) Explore consumer reaction to new
product concepts; (iii) Explore consumer response to both the
advertising concepts and finished advertisements; (iv) Explore consumer
response to package design and labelling.

There are several advantages of focus group interviews over individual in-
depth interviews:
• Each respondent can expand and refine his or her opinion in the
interaction with other members. Thus, the interaction process provides
more detailed and accurate information.
• Collective opinion occurs when a comment, perhaps random, by one
member triggers an idea or similar feelings in others.
• A group interview situation is generally more exciting and offers more
stimulation to the participants.
• The heightened interest and excitement make more meaningful
comments likely.
• The security of being in a crowd encourages some members to speak out
when they otherwise would not have.
• Because any question raised by the moderator is to the group as a whole
rather than to an individual, the answers contain a degree of spontaneity
not produced by other techniques.

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• Last but not the least, individuals are not under any pressure to ‘make
up’ answers to questions.

Table 3.6: A GOOD FOCUS GROUP

Essence:
• ‘Focus groups’ consisting of sample criteria qualified with the ability to
communicate, express.
• A focus group should not include ‘professional’ respondents, or respondents
belonging to the industry being researched.
• The right number of respondents, pre-verified to be correct for FG must be
gathered.

Arrangements:
• A focus group should be seated comfortably at the right venue with an
opportunity for the moderator to face them and communicate by maintaining
eye contact, with videography friendly arrangements and lighting.
• Videography facilities should be properly set up – either known or unknown to
respondents depending on the agreed methodology.

Dos & Don’ts:

• A moderator should strike a rapport and inform about the purpose.
• He should be sensitive to body language and group dynamics.
• He should be able to make everyone talk naturally, without undue
interruptions.
• A moderator must allow respondents to talk more than him.
• A moderator should avoid distracting behaviour, hitting tables, making noise.
• The group discussion should be properly structured. Justice should be done to
everything included in the study, e.g., product needs, attitude exploration,
purchase processes, brand positioning, feedback to an advertisement.
• The participation should include all respondents. A dominant member should
not hijack the Focus Group Discussion (FGD).
• A group must provide good consumer insights. That is the very purpose of
Qualitative Research.

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However, there are several disadvantages as well;

• Both non-participative and non-responsive members can be serious
sources of error.
• Focus groups are expensive as they require a pre-qualifier round and
expenses are incurred during the FGD.
• Without a sensitive and effective moderator, some participants will
dominate the discussion.
• Participants may react negatively towards the dominant member and this
may have a ‘halo’ effect on attitudes toward the concept or the topic of
discussion.

c. Projective Techniques: Such techniques help reveal the underlying

motives of an individual despite his attempt to rationalize them
unconsciously or conceal them consciously. They may consist of
sentence completion tests, word-association tests, inkblot tests and
picture tests. E.g., in a Thematic Appreciation Test (TAT), a picture is
shown, and the thoughts projected are likely to reveal the underlying
needs, wants, fears, motives and aspirations. They expose their feelings
without being aware of them.

Sampling Plan: Further to understanding the sampling plan under

quantitative research design, we will understand the exceptions under
the following three heads covering the sampling plan.

• The Sampling Unit: The researcher must define a profile of a person

who can be considered as a sample unit for FGD (e.g., an auto-rickshaw
driver with his license and vehicle, self-driving since last 5 years at
least). In FGD sampling units, there may be more conditions to qualify a
person as the right respondent.

• Sample Size: The size of the sample here either means the number of
respondents out of the total target population that needs to be covered
to gain an in-depth insight or the number of groups to be covered
consisting of several respondents in each group. This may be a size
whose findings may not be applicable later to the total target population.

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• Sample Procedure: This aspect defines how a specific sample will be

selected. For an in-depth interview, either convenience sampling or
judgement sampling methods are practised. For FGD, you can either use
cluster, convenience or judgement sampling procedure. E.g., if I am
doing an FGD among the auto-rickshaw drivers in Hyderabad, I can do
cluster sampling to pre-select them from different parts of Hyderabad
city.

Activity B

Prepare a sampling plan for conducting a quantitative research design for

the package ‘Branded’ basmati rice across India. Cover all three aspects
such as defining the sampling unit, sample size and sample procedure.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

Data Collection Instruments: As a part of our understanding of the

development of qualitative research design, we need to also cover data
collection instruments. Earlier, we have covered the same aspect under
quantitative research technique, thus students are requested to have that
knowledge with additional inputs shared as an exception to data collection
instruments under quantitative research.

For qualitative research, there are two options– an in-depth interview

questionnaire and checklist.

In-depth Interview Questionnaire: It’s a form with a series of open-

ended questions (questions are simply listed w/o any expected answer or
the format) listed in chronological order to pull out the desired information
from the respondent in the most logical manner. The questionnaire may lay
down questions in the most logical manner, but the interviewer needs to be
smart enough and trained to cover them logically by establishing continuity
to what has been just answered by the respondent. This will ensure the
interest of respondents in the in-depth interview. However, the interviewer
must ensure that all questions are covered.

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Checklist: This is a list of points that needs to be probed during the

ongoing FGD. They may or may not have been represented as questions. It
is a reference checklist for the moderator to know what needs to be
covered and ensure that the conversation flows in the right direction and
not to allow it to go astray. Moderator has the option to jump to any part of
the checklist to have the group’s engagement or exploit the current
conversation to probe other aspects. However, a checklist allows him to
ensure that at the end of the FGD, he has covered all that was expected
from him.

Collect Primary Data: A qualitative study generally requires a different

approach to collect primary data. In-depth interviews can happen in person
or through the web, and rarely through telephone. For FGD, shortlisted
respondents need to be invited to come on a specific date at a specific
venue at a specific time. Generally, they need to be reminded a day or two
before the FGD date. Also, more willing respondents are shortlisted to
ensure getting requisite numbers on the date of your FGD. Primary data is
collected in the form of a focused group discussion taking place.

Analyze Data: In qualitative research, the data is analyzed differently. It

requires psychographic/psychological evaluation, thus experts are roped in.
They either read through all in-depth interview questionnaires or go
through video recording/audio tapes of FGDs taken place and make their
notes, evaluations and analysis. The qualitative research analysis is
subjective and thus requires a professional for the analysis who can not
only understand what is being said but also read their body language/
poise, eye movements, to interpret what has been said.

Prepare Report: Each report summarizes the findings as to the executive

summary. The main body of the report consists of the background study,
research problem, research objectives, research design used, and findings.
The data in the form of physiological/psychographic models and plotting
are appended to the research report. The in-depth interview questionnaire
and/or FGD checklist administered are also appended to the report.

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Activity C

List three alternative ways to do quantitative research and identify one

example in terms of product/service for which such alternative ways of
conducting consumer research are possible for which the nature of specific
issues/opportunities/aspects is to be understood.

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

3.3 CONDUCTING A SEGMENTATION RESEARCH Study

The researcher adopts the research process described in the sections

above to the special needs of the study. For example, if the researcher,
together with the marketing manager, decides that the purpose of the
study is to develop a segmentation strategy for toothpaste, they would first
collect secondary data. Then together they could specify the boundaries of
the toothpaste market they want to consider (e.g., include or exclude all
paste, gel, herbal, non-herbal, taste, flavoured toothpaste users). They
might then decide to conduct a qualitative study to gather ideas about
consumer needs, motivations, perceptions, benefits sought, and attitudes
towards coffee drinking in general and specific brands. They might decide
to do so by conducting a series of focus groups in several areas of the
country. This phase of research should result in tentative generalizations
about the product qualities consumers prefer.

The marketing manager might then want the researcher to conduct a

quantitative study to confirm and attach “hard” numbers for informed
decisions to the findings that emerged from the focus groups. The first-
phase study should have provided sufficient insights to develop a research
design and to launch directly into a large-scale survey. If, however, there is
still doubt about any element of the research design, such as question
wording or format, they might first want to do a small-scale exploratory
study of representative consumers. After refining the questionnaire and
any other needed elements of the design, they would launch a full-scale
quantitative survey, using a probability sample that would allow them to
project the findings to the total population of coffee drinkers (as originally
defined). The analysis should cluster consumers into segments based on
relevant socio-cultural or lifestyle characteristics and by media habits,

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attitudes, perceptions, and geo-demographic characteristics. After

reviewing the report, the marketing manager would then evaluate each
segment against the four criteria for effective targeting (identification,
sufficiency, stability and accessibility), and depending on the resources of
the company, select one or more segments to target with a unique
marketing mix.

3.4 DEVELOPMENT OF MOTIVATIONAL RESEARCH

Marketing research up to this time had focused on what consumers did

(i.e., quantitative, descriptive studies) rather than on why they did it.
Marketers were quickly fascinated by the glib, entertaining, and usually
surprising explanations offered for consumer behaviour, especially since
many of these explanations were rooted in sex – Cigarette considered the
ultimate symbol of male personality being cool and sexy. The same applied
to perfumes and Deos and more such personal products.

Methodology and Analysis: Motivational researchers use clinical

psychological methods (discussed subsequently in this chapter) to pull out
emotional feelings because they are not easily or accurately revealed by
consumers on direct questioning. Psychological methods such as the non-
directive (depth) interview and projective techniques, e.g., word
association tests, sentence completion tests, figure drawings, picture-
sorting studies, inkblot and cartoon tests, and other-person
characterizations (as described in Table 3.7) are used for such research.

Table 3.7: Explanations with Examples of Various Projective Techniques

WORD ASSOCIATION TEST

Respondents are presented with a series of words or phrases and are asked to
answer quickly with the first word that comes to their mind.

Researching to name new luxury bath soap, respondents are presented with
words like face, glow, charm, beauty and asked to give a spontaneous response
with the word coming to their mind. This enables the researcher to propose a
proper brand name.

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SENTENCE COMPLETION TEST

The beginning of a sentence is read to the respondent, who has to later

complete the statement with the first thought that comes to his mind.

I love Cadbury chocolate because ..............................................It helps to

unravel the hidden reasons why respondents like Cadbury chocolate.

THE THIRD PERSON TEST

Respondents will be asked to describe a third person (his likely behaviour,

reason etc.) when they are given some information.

Ashok is asked a question – ‘Why do you think your friend Sameer must be
using a deodorant every time he goes to a party? Here Ashok is asked to inform
reasons about Sameer, which he will more willingly answer. But in reality, he
answers reasons from his subconscious mind about him. Ashok will not correctly
answer this question if it pertains to him.

THEMATIC APPRECIATION TEST

Respondents are asked to interpret one or more pictures or cartoons relating to

the product or topic under study.

There can be one picture or a series of pictures. Respondents are asked to give
their interpretation at the end. Series of pictures may have a dialogue as well
and at the end, respondents will be asked to complete the last dialogue box.

Same pictures can be shown to different sets of individuals with variables in it

altered eg: one set of people will be asked to evaluate pictures if that product is
available at Rs 100/- and another set of people will be asked to evaluate
pictures if that product is available at Rs 15/-.

Careful analysis of the data generated by these techniques provides

insights into the underlying reasons why consumers buy or do not buy the
product. For example, in trying to discover why women bought traditional
roach sprays rather than a brand of roach killer sold in little plastic trays,
researchers asked women to draw pictures of cockroaches and write stories
about their sketches. They found that for many of their respondents,
cockroaches symbolized men who had left them feeling poor and
powerless. “Killing” the cockroaches with a spray and watching them turn

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upward and die allowed the women to express their hostility towards men
and have greater control over the cockroaches.

Table 3.8

Selective Product Personality Profiles Uncovered by Motivational

Research

Baking Baking evokes pleasant, nostalgic memories of the odours

spreading in the house while the mother is baking. A woman is
subconsciously and symbolically going through the act of giving
birth when baking a cake, and the most fertile moment occurs
when the baked product is pulled out of the oven.

Power tools Power tools are a symbol of manliness. They represent a

masculine personality and competence. They are often bought
more for their symbolic value than for using it. Ownership of a
good power tool provides a man with feelings of omnipotence.

Beer For most people, beer is an active, sensuous beverage that

provides the drinker with a feeling of bonding and bringing people
together. People generally describe the beer they like as “alive”,
“foamy”, and with “sparkle” and disliked brands as “flat” or “stale”.

Motivational research analyses often provide new ways for marketers to

present their products to the target audience. For example, in using figure
sketches to determine consumers’ differing perceptions of one of India’s
private bank’s Gold card and Silver cardholders, researchers found that the
Gold card user was perceived as a broad-shouldered man standing in an
active position while the silver card user was perceived as a “couch potato”.
Based on this and other research, the bank has decided to market the Gold
card as “a symbol of position for people who have control over their lives
and finances”.

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Limitations of Motivational Research

Motivational research does have its drawbacks. Because of the intensive

nature of qualitative research, samples were small in number; thus, there
was a concern about generalizing the findings to the total market. Also, the
analysis of projective tests and in-depth interviews was highly subjective.
The same data given to three different analysts could produce three
different reports, each offering its explanation of the consumer behaviour
examined. Critics noted that many of the projective tests that were used
had originally been developed for clinical purposes, rather than for studies
of marketing or consumer behaviour.

Motivational Research Today

Despite these limitations, motivational research is still being used by

marketers who want to gain deeper insights into the whys of consumer
behaviour than conventional marketing research techniques can yield.
There is new and compelling evidence that the unconscious is the site of a
far larger portion of mental life than even what Freud envisioned. Research
studies show that the unconscious mind may understand and respond to
nonverbal symbols, form emotional responses, and guide actions largely
independent of conscious awareness. The failure of many product
variations under the existing world-famous brands compelled marketers to
pay closer attention to consumers’ emotional ties to products and brands.
They use motivational research techniques to try to understand the
conscious and subconscious meanings of non-verbal symbols to
consumers.

Since motivational research often reveals unsuspected consumer

motivations concerning the product or brand usage, its principal use is in
the development of new ideas for promotional campaigns; ideas that can
penetrate the consumer’s conscious awareness by appealing to
unrecognized needs. Thus, manufacturers of house paint were able to
convince consumers about the harmful effects of chemicals in competitors’
paints thereby lifting the self-image as consumer’s health-conscious brand,
thus destabilizing the age-old brands from the minds of consumers.

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Motivational research also provides marketers with a basic orientation for

new-product categories and enables them to explore consumer reactions to
ideas and advertising copy at an early stage so that costly errors can be
avoided. Besides this, motivational research provides marketers with basic
cues for more structured, quantitative marketing research studies as
explained earlier which will allow them to generalize the findings over the
total population.

3.5 METHODS IN PSYCHOLOGY (FOR MOTIVATION AND

OTHER PSYCHOLOGICAL ASPECTS TO BE PROBED)
RESEARCH

Fig. 3.7: Various Methods in Psychology

Students are requested to follow the above table for understanding the
following section.

(I)Statistical Method

Correlation: This method is a procedure for studying human behaviour.

It’s the same statistical tool but the aim here is to understand human
beings’ psychological variables differently.

A variable is anything that can change and can be measured as well. For
example, emotional quotient is a variable as it can be measured, and
individuals differ in their levels of emotional quotient.

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The GOAL of correlation is to predict behaviour and understand mental

processes. However, it does not mean causation; it does not reveal the
direction of causality. A third factor could be responsible for influencing the
result. In conclusion, it is a method of summarizing the relationship
between two sets of statistical data.

(II) Descriptive

The descriptive method has two approaches possible 1) Interview 2)

Introspection.

1. Interview Method: We have studied the Interview aspect earlier;

hence it is not covered here.

2. Introspection: It is self-observation, focusing attention on one’s

feelings, motives, likes and reporting these to the researcher.

It is of three types:

a. Casual: Not used in research. The person just happens to notice how
he is feeling. There is no deliberate attempt to focus on him.
Daydreaming, having fantasies are examples. Then we begin to
remember the details of the daydream.

b. Experimental: Respondents are put through an experimental set up

where the observer has the option to manipulate one variable from the
set of possible variables. Respondents are trained to attend to their
reactions, feelings, motives, etc., and describe them. It is a method of
psychology.

c. Titchener: Perfected this method, when a subject is undergoing an

experience (in a lab), he would ask him to introspect and report what he
has been experiencing. For example, look at a bulb for ½ min and then
a white wall. He sees its image on the wall. This is what he reports
when he introspects.

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Disadvantages of Introspection
• The person may make his spontaneous judgments.
• It is subjective as you can’t check whether it is true or false.
• It May differ from person to person – people with the same experience
may give different versions.
• May give contradictory results – what is true for one may not be true for
the other.
• Emotions and deeper feelings may cloud your introspection. “May come
in the way of being scientific and objective”.

Advantages of Introspection
• Findings of introspection can lead to further research.
• The only source of knowledge of sensations, feelings and motives and so
it can be used where a scientific method is not possible.
• When there is a general agreement on the reports, we may rely on its
results.

(III) Experimental

It is the observations that take place under conditions controlled by the

experimenter/investigator/researcher.
• A subject is a person on whom the experiment is done.
• The experimenter is the person who conducts the experiment.
• Variable is any factor that varies or changes qualitatively or
quantitatively.

Three Types of Variables: Ideally, a variable is something that can be

quantified and measured but, in most cases, it may be merely the
presence or absence of the condition, i.e., only two levels, e.g., the effect
of alcohol on handwriting.

Independent Variable (IV): It is a condition created or selected by the

experimenter. The investigator manipulates this variable to study its effect
on another variable. E.g., Price

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Dependent Variable (DV): It is the measure of the behaviour of the

subject which occurs due to the independent variable. It is called
dependent because its value changes or depends on the value or changes
of the independent variable. Usually, the hypothesis is formulated about
the effect of one variable (IV) on another variable (DV). E.g., Demand, i.e.,
the effect of price on demand.

Confounding/Relevant/Extraneous/Intervening Variable: These are

other factors that are likely to affect the dependent variable. For example,
age, gender, IQ, etc. These variables must be controlled or kept constant.

Example: Effect of Price (IV) on Demand (DV), Hypothesis: ‘More the

price, less will be the demand’. The first group is given IV and the other is
not. The first group has more of 20-year-old and the second has 50 years
old. The first group may not be affected more but that could be because of
age and higher disposable money available to them. Gender also may be a
confounding variable, e.g., a woman’s reaction to SALE offer may be
emotional but men could be practical.

Disadvantages of Experimental Method

• All relevant variables in an experiment can never be controlled. Thus,
through this method, the outcome on only the possible controllable
variables can be obtained.
• Since the experiment is conducted in a lab under controlled conditions,
the environment is artificial, subjects know that they are being studied
and observed.
• The experimental situation may interfere with the results because of the
subject’s attitude or motivation. The subject does what he believes is
expected of him. He formulates his hypothesis and behaves accordingly.
Therefore, the results may be distorted.
• Investigator’s handling may also affect the results. He may unconsciously
question the subject expectedly. This distortion of experimental results
by the investigator’s tendency to see wished-for results in the data is
called EXPERIMENTAL BIAS.
The experimental method has limitations as it cannot be used in all
situations.

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Advantages of Experimental Method

• Since extraneous variables are controlled, there is greater confidence in
the results and greater precision. This method is therefore EMPIRICAL
and SCIENTIFIC.
• Through this method, hypotheses can be tested. A hypothesis is an
assumption of the effect of the independent variables (IV) on the
dependent variables (DV). Thus, cause-effect relationships can be
established.
• Repeatability - If all relevant conditions are controlled, the experiment
can be replicated by other investigators to verify the results.

There are 4 types of experimental methods that exist, as follows:

1. Clinical Case Study: This method studies the behaviour of one person
at a time. It is widely used by clinical psychologists (also by counselling
and personality psychologists).

The steps involved are:

- Case History: Find out about their background, childhood, school
performance, also through interviews with other people.
- Administering Psychological Test: Of intelligence, personality and
aptitude.
- Diagnosis: With the above-administered test and DSM (Diagnostic
and Statistical Manual).
- Therapy or Treatment: Treated by psychotherapy, psychoanalysis.

Disadvantages of Clinical Case Study

• While getting information for case history, interviewing others may get
you faulty information; their loss of memory, private life incidences and
fear may obstruct them.
• It is subjective, not scientific.

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Advantages of Clinical Case Study

• Helps overcome childhood problems, illnesses of the client – not relevant
to marketers.
• Get in-depth information about the client.
• It suggests more ideas to study by other methods.

The data corrected may throw light on general problems of psychology.

2. Survey Method: Survey research studies the population by selecting

small samples from it. A population is made up of all the persons,
objects, events to be studied. The survey method is used in social and
community psychology. It is used to discover the relative incidence,
distribution and interrelation of variables. The study of public opinion,
the effect of advertising on purchases and the factors involved in
success at work are some of its uses. Terman used this for determining
the causes of happy marriage. His investigation of 792 couples showed
that happy marriages depend upon how well-matched the couples are in
their sex drive.

The sample should be large enough and it should be representative, i.e.,

it should contain the same proportion of different types of people that
the population contains.

Example: With regards to a survey in FYJC B. Com, there must be

representatives from the Maths, Accounts and Economics with language
variables such as Hindi and English subjects. In a class, there will be
more boys than girls etc. To find out the attitudes of students towards
‘Price Elasticity’, the sample must consist of 55% boys and 45% girls as
this is the relative proportion of the population divided into Male: Female
in India.

It is important in a survey for the questions to be properly framed, in

the language of the respondent, generally avoiding awkward or personal
questions.

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Types of Questions
1. Poll type (Yes / No) for quantitative analysis
2. Open-ended type
(where the person has to write) for qualitative analysis
3. Close-ended type

Disadvantages of Survey Method

• It may give superficial information sometimes.
• Time-consuming and full of sampling errors.

Advantages of Survey Method

• It has a wide scope and can gather a lot of information from large
groups.
• It is economical compared to other methods.

3. Developmental Method: In this method, behaviour is observed at

different stages in the process of growth. The observer needs to be
trained and impartial. The value of this method depends on this
example. Parents’ observations of the behaviour in their children are
often unreliable as: (1) parents are not trained observers and (2) they
are likely to notice favourable points and ignore unfavourable ones.

Different Kinds of Studies

a. Cross-sectional method: Here, people of different ages are assessed
on one occasion. It tells us about the differences in development among
different age groups.
b. Longitudinal studies: The researcher measures the same people more
than once to see changes in development over time.
c. Sequential studies: Here, people in a cross-sectional sample are
tested more than once. It is a combination of (a) and (b).

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Disadvantages of Developmental Method

• For studies done on one person, it is not possible to generalize.
• It usually takes a long time and is laborious.
• To study the same groups for 5-10 years is difficult.
• Information obtained could be misleading and inaccurate.

Advantages of Developmental Method

• Gives useful information about development and growth, the impact of

time-lapse, life state etc.

4. Method of Systematic Observation (FIELD Study Method): It

consists of the systematic observation of naturally occurring behaviours.
Here, the researcher neither manipulates a variable nor does he control
all relevant variables. There is no cause-effect link.

It is different from casual observation. The observer is trained and

knows what to look for and he has to ensure that his opinions do not
affect his observations.

Time sampling is taking samples of the number of expressions of

behaviour in the form of acts that occur in a given period. Research can
use video cameras, one-way mirrors, so people can be observed without
their knowledge. If people know that they are being studied, they will
behave to be in a favourable light. E.g. – If you want to study the hair
colour selection pattern, it is better to study without the customer
knowing about it else he may pull his bias to not allow us to read him
correctly.

This method is especially useful because we can’t manipulate all

variables and because there may be ethical reasons against doing so.
For example, we can’t deliberately place an infant in an orphanage to
find out how his behaviour is affected by the environment in an
orphanage.

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Disadvantages of Observation Method

• It does not give us information about cause and effect and can’t test
hypotheses.
• There are less control and less precision (accuracy).
Advantages of Observation Method
• It is realistic as it studies the naturally occurring behaviours in natural
settings.
• It can give insights into areas that can later be experimentally studied.
• Important variables that cannot be studied in the laboratory can be
studied with this method.
• It can be used to study children and animals.

Students must first understand the 7 steps in the consumer research

process. They must then understand the different approaches to
quantitative and qualitative research processes, especially from step 4, i.e.,
design primary research, till step 7, i.e., prepares report. The aspect of
motivational research is separately dealt with where the methodology is
dealt with but not the seven processes.

Activity D

Differentiate the different methods of motivational research in psychology.

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

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3.6 WHAT HAVE YOU LEARNT – A SUMMARY

The consumer research stream of market research deals with

understanding consumer behaviour for the benefit of marketers - assess
the consumers’ needs, motives, appeals and buying behaviours under
different circumstances. It covers the scope of its usefulness from the pre-
product development stage to advertisement appeal development. It helps
marketers to make informed decisions by also including psychological
aspects in individuals. Consumer research is of two types (1) Quantitative
and (2) Qualitative. There are primarily 7 process steps that need to be
dealt with to complete any consumer research assignment successfully.
These steps are (1) Identify the marketing problem (2) Define research
objectives (3) Collect secondary data and evaluate its sufficiency (4)
Design primary research if needed. Primary research design covers
methodology, sample plan and data collection instruments (5) Later you
collect primary data as per primary research design (6) Analyze data
collected, infer and derive conclusions (7) Prepare report. Quantitative data
collection methods are observation method, experimental method and
survey method. Qualitative data collection methods are in-depth
interviews, focus group discussions and projective techniques. We have
also studied psychological methods to unearth aspects like motivation,
personality, perception, attitude and such individual-centric aspects.
Psychological methods are the statistical methods, two descriptive methods
and four experimental methods. The statistical method is a correlation.
Descriptive methods are interview and introspection. Experimental
methods are clinical case study, observation, survey and developmental.

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3.7 SELF ASSESSMENT QUESTIONS

1. Explain how consumer research can be effective as a marketing tool and
its utility to marketers?
2. How do you conduct a consumer research process? Explain the steps in
brief.
3. Explain two different primary research designs. Elaborate different
research approaches under them.
4. What is a quantitative research design? Additionally, explain sample
plan preparation under the same.
5. What is qualitative research design? Additionally, explain sample plan
preparation under the same.
6. Identify different research methods under quantitative and qualitative
research design. Include different tools available under each one of
them and explain them briefly.
7. What is the meaning of data collection instruments in consumer
research? Identify the same under quantitative research and qualitative
research design.
8. Explain what motivational research is and list the different approaches
possible to conduct such research.

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3.8 MULTIPLE CHOICE QUESTIONS

1. Consumer research process consists of _____________ processes. Fill

in the blank.
(a) 6
(b) 7
(c) 8
(d) 9

2. While you are constructing your primary research, plan based on the
nature of information you are seeking, you need to undertake the
development of a specific research design. Identify two types of
research designs.
(a) Primary and secondary
(b) Objective and subjective
(c) Quantitative and qualitative
(d) None of the above

3. There are three research approaches under the quantitative primary

research design, namely (a) observational research (b) survey research
and (c) _____________ research. Fill in the blank.
(a) experiential
(b) introspection
(c) in-depth
(d) statistical

4. There are three research approaches under the qualitative primary

research design, namely (a) in-depth research (b) focus group
discussion and (c) _____________ based research. Fill in the blank.
(a) experiential
(b) projective technique
(c) survey
(d) experiment

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5. Motivational research uses _____________ for understanding what

motivates a consumer to buy a specific product to satisfy a specific
need. Fill in the blank.
(a) methods in experimentations
(b) methods in sociology
(c) methods in physiology
(d) methods in psychology

Answers: (b), 2. (c), 3. (a), 4. (b), 5. (d)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

Video Lecture - Part 3

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Chapter 4
Consumer Needs and Motivation
Objectives

By the end of this chapter, you should be able:

• To understand the meaning of motivation and the need
• To understand what are the needs and wants of consumers
• To understand goals and motivation in consumer behaviour
• To understand the interrelationship between needs and goals
• To understand different personal motives’ arousal routes
• To understand different types and system of needs

Structure:
4.1 Introduction
4.2 Constantly Evolving Needs and Goals
4.3 Arousal of Motives
4.4 Types and System of Needs
4.5 What Have You Learnt – A Summary
4.6 Self Assessment Questions
4.7 Multiple Choice Questions (MCQ)

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4.1 INTRODUCTION

We all are witness to a phenomenon where we have seen that we utilize

our resources differently (scarce time utilized differently for work, pleasure,
friends), spend differently (clothing, entertainment, touring) and utilize
what is available to us differently (at Mumbai, when we go to an
amusement park, some prefer rides, and some prefer the pool).

On the face of it, we believe that each human being is different because
that is what we see. However, we overlook the fact that people are very
much alike due to the diversity of behaviours happening in front of our
eyes. Psychologists have established that most people experience the same
kind of needs and motives but the way they fulfil them is different. Long
back marketers realized that understanding human motives is very
important as it enables them to understand and anticipate human
behaviour in the marketplace.

The science of marketing emerged on the essence of understanding

consumer needs. Success in marketing came to those organizations that
could identify and satisfy unfulfilled consumer needs better and sooner
than the competition. Marketing is all about trying to satisfy consumer
needs by offering what consumers need, the place at which they need and
the price at which they need. Marketers can make consumers aware of
their unfelt, latent needs – before beauty soaps came in, women may not
have been as conscious about looking more beautiful, but marketing did
make women realize that they can look even more beautiful. Needs and
motivation cues are constantly changing, thus requiring the marketers to
constantly be in touch with their consumers to be able to capture them in
time and translate it into an opportunity for the organization.

We need to thus understand motivation and need.

Motivation: Motivation is described as the driving force within individuals

that impels them to action. Driving force as a state of tension exists as the
result of an unfilled need. Individuals will therefore, strive to reduce this
tension either consciously or subconsciously through an action/behaviour
that they anticipate will fulfil and relieve them of the stress they feel. Here
it is important to note that the specific need fulfilment goals they select
and the behavioural pattern they display while they take action to achieve
their goals are the result of individual thinking and learning.

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Fig. 4.1: Motivation Process

In this model of the motivation process, motivation is represented as a

state of need-induced tension. Tension drives individuals for action or
engages them in behaviour that gratifies their need and reduces tension
within.

At this stage, it is very vital to note that the specific goals being pursued
and the specific course of action that a consumer takes, are based on their
thinking processes and previous learning. Why? Marketers who understand
motivational cues attempt to influence the consumers' thinking process.

Needs: As an individual, we have our own needs. All individuals have their
specific needs – some are innate, and others are acquired. Innate needs
are physiological (more to do with the biological body); they include the
needs for food, water, and air, for shelter, for clothing and sex. As these
needs are necessary to be fulfilled for survival they are considered as
primary needs.

Innate

Needs
Acquired

Generic

Goals
Product Specific

Rational
Motives

Emotional

Fig. 4.2: Classification of Needs, Goals and Motives

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Acquired needs are needs that we absorb in response to our culture or

environment we observe and experience. Love, affection, status, progress
and power besides self-esteem and prestige are needs acquired by most
individuals. The need for security, friendship, education, dating and
marriage has been acquired by an individual by observing and his
experience environment. Because acquired needs are psychological (more
to do with mind and feeling) they are considered as secondary needs.

The primary need gets evolved depending upon exposure and stature. For
someone, a room in a chawl could be a primary need but for some other
individual, a flat in the upmarket south Mumbai could be a primary need.
Also, many times fulfilment of primary needs concurrently fulfils the
secondary needs – A flat in the upmarket south Mumbai also satisfies
secondary needs like prestige and stature.

Goals: Goals are the expressed pursuit that will result in the need for
satisfaction. Expressed pursuit is the result of MOTIVATED BEHAVIOUR. If
thirst-quenching is our need, the goal could be to buy a bottle of mineral
water or maybe buy a soft drink or maybe buy juice. In these few listed
goals to quench thirst, having water is a generic goal (i.e., the most
general goal that can satisfy consumers’ basic need – here it is water).
However, if the consumer considers buying an Aquafina mineral water
bottle or buying Thumps Up or buying a Tropicana fruit juice then such
goals are classified as product-specific goals (i.e., choosing specifically
branded product).

a. The Selection of Goals: For any specific need, there are several goals.
The goals selected by individuals depend on their personal experience,
physical capacity, prevailing cultural norms and values and goals’
accessibility in the physical and social environment. When thirsty, the
poor will approach any public tap and drink water, the salesman may
pull out his Tupperware bottle and drink water, occasional field visitors
may buy a small mineral water bottle, a collegian may buy Thums Up,
and a housewife may buy a fruity juice.

Finally, an individual’s perception of himself also influences his selection

of specific goals. Marketers are fully aware that the products which an
individual owns, desire to own and would not like to own are closely
reflected in the person’s self-image. Thus, a product that is aligned to
meet the specific need related to the self-image of a person has a

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greater chance of being selected than the one that is not. Rayban for
wealthy image-conscious individuals.

b. Interdependence of Needs and Goals: Needs and goals are

interdependent; neither exists without the other. However, people are
often not as aware of their needs as they are of their goals. A woman
may not be aware of her psychological need, but she continues to buy
anti-ageing lotions.

Individuals are often aware of their physiological needs than they are of
their social or psychological needs. We will know our goals when we
need food and water. Subconsciously, however, our behaviour leads us to
satisfy our acquired needs. This behavioural trait is exploited by
marketers. They appeal to our subconscious and drive our goals to
satisfy unfilled needs, which consciously we were not aware of.
Consciously we may not want to take a householder policy, but
subconscious led to fear of losing a prime property depicted in an
insurance company’s advertisement compels us to finally take one
policy.

Positive and Negative Motivation: Motivation can either drive us

towards something or drive us away from something. The motivation that
drives us towards some object is positive. The motivation that drives us
away from some object is negative. We have driven away from
motorcycles due to factors such as bike accidents or the reported
increasing number of road deaths due to motorcycles. Positive drives are
referred to as needs, wants and desires. Negative drives are referred to as
fear or aversions. As both natures of drive initiate and sustain human
behaviour, they are considered as needs, wants and desires.

Rational versus Emotional Motives: All consumers are supposed to

behave rationally while they are exercising their choices based on objective
criteria such as price, size, mileage, or value besides a few other factors.
They choose what gives them the greatest utility (i.e., satisfaction), thus,
they are considered rational motives. Emotional motives imply the
selection of goals according to personal or subjective criteria (e.g., desire
for self-image, pride, affection, prestige, status). Between rational and
emotional motives, it is said that consumers always attempt to select
alternatives that in their view, serve to maximize the satisfaction for

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themselves. The marketers’ focus is to understand and utilize their

knowledge about consumers’ buying motives.

4.2 CONSTANTLY EVOLVING NEEDS AND GOALS

Needs and goals keep changing in response to an individual’s linkage with

his life state, physical state, interactions, environment, and experiences.
Human being continues to be driven by need as he is never able to come
out of it and thus goals keep changing, due to the following reasons:

(a)Needs are never fully satisfied: There are biological needs that we
need to continuously satisfy such as hunger and thirst besides
emotional needs like love, security, and self-satisfaction. While you are
hungry, food should be sufficient, but even there we need variety. There
are other kinds of needs more psychological in nature. E.g., a person
living in a hutment will desire to get a small one-room house under SRA
(Slum Rehabilitation Scheme). It is therefore concluded that needs are
never fully satisfied.

(b)New needs emerge as old needs get satisfied: As per the hierarchy
of needs theory, new, higher-order needs to develop as basic, lower-
level needs to get satisfied. Once our lower-level needs are regularly
satisfied, we look for the next level of needs and accordingly shape our
goals. A person who consecutively won two assembly elections wants to
contest the state-level election to be a member of parliament and later
Chief Minister. This aspect of emerging needs must compel marketers to
keep a watch on emerging needs linked with their product. If they do
not align with emerging needs, they may fail to remain with their
prospects! Not only that, but a person also has alternatives available to
satisfy higher needs. It may not be your product. Marketers need to
align their advertising appeal to match their emerging needs and remain
in their prospective buyers’ consideration set.

(c)Success and Failure Influence Goals: Success and failure of set

primary goals influence our levels of aspiration. One who achieves
95% in SSC will aspire for a higher goal to be a doctor. This is because
he becomes confident about himself. One who does not reach the set
level of min 95% to get into a good science college, will change his
higher goal to next lower-level goals, i.e., maybe he/she will think of
doing B.Pharm.

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An individual’s behaviour to persistently follow his set primary goals is

often a derivative of his expectations of success or failure. Those
expectations, in turn, are often based on past experiences. Marketers
thus need to keep in mind that their advertisement should promise
attainable higher goals, expectations. Else, the consumer will start drifting
away from your brand.

When an individual can’t attain his primary goals despite trying them again
and again, he may get directed towards a substitute goal. Moving towards
a substitute goal is a defence mechanism not leading to frustration at the
cost of being satisfied with what you can get.

Activity A

Determine one example from your side about the above three points
connected with needs, namely (a) Needs are never fully satisfied (b) New
needs emerge as old needs get satisfied (c) Success and failure influence
goals.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

When we fail to achieve a goal, we get frustrated. It may be due to

personal, environmental, or social reasons. People with adaptive nature will
find their way to beat the frustration differently or move towards subsidiary
or substitute goals. Some experience stress and anxiety. Such individuals
may show either aggression or rationalization as a defence mechanism.
A polished lady, wanting to get one dress designed by a leading fashion
designer, gets frustrated by either not getting his time or by not being able
to afford the price. As a result, aggressive behaviour may compel her to
shoot a complaint to him or write derogatory remarks about him on social
media. Rational behaviour will make her look for another leading fashion
designer and get her wish fulfilled. There are other defence mechanisms
namely autism, regression, withdrawal, projection, repression, and
identification. Autism is all about dreaming and fantasizing (hogging
calorie-rich food if you are a heart patient), regression displays childish and
immature behaviour (fighting with a doctor not allowing you to eat rich
food), withdrawal means retreating from the frustrating situation
(reconciling with self and concluding that rich food is not good for a heart
patient), projecting means redefining the frustrating situation by blaming

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others (a heart patient may blame the doctor for not getting him cured fast
and compare him with others who allow their patients to start eating a
normal diet within three months of treatment), repression means
forgetting the needs that can’t be satisfied. Identification means resolving
frustration by subconsciously identifying with other persons or situations
they consider relevant. This defence mechanism is widely used by
marketers to create a slice-of-life advertising appeal in which a person
experiences frustration out of using a specific product and does not get the
desired satisfaction and is later shown as overcoming his frustration by
using the advertised product.

Such unfulfilled needs can be sublimated in a socially acceptable way. It

protects the consumer’s self-worth from anxieties resulting from conscious
awareness. Advertising appeals are chosen to keep in mind how frustration
can be handled.

Activity B

Write your example for each of the frustration states such as aggression,
rationalization, autism, regression, immature behaviour, and withdrawal.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

d. Multiplicity of Needs: Consumers often behave in a particular way to

satisfy more than one need. They do this by selecting a specific goal
that may fulfil several needs. Branded clothes are worn by individuals to
satisfy their basic need as well as reveal their status. Among the several
needs, a dominant need initiates the behaviour. It is also known as pre-
potent need.

e. Needs and Goals Vary among Individuals: You can’t precisely infer
motives from behaviour. People with the same needs may seek
fulfilment through the same/different goals. It is a challenging situation
for marketers to influence people with the same needs but seeking
fulfilment through different goals.

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4.3 AROUSAL OF MOTIVES

Most of the specific needs of any individual remain dormant for much of
the time till any specific internal stimuli found in the individual’s
physiological condition, emotional or thinking process (cognitive), trigger it,
or any external stimuli in the outside environment may trigger it. This
understanding helps marketers to explore where the stimuli for their
product lie in the psyche of the consumers and how they can trigger the
same. There are three personal arousal routes identified by the consumer
behaviour specialists.

Fig. 4.3: Arousal of Motives

a. Physiological Arousal: Bodily needs are rooted in an individual’s

physiological condition at that moment – dry throat means water and
more such conditions, arousing the needs. Most of these physiological
cues are involuntary; however, they arouse related needs that cause
uncomfortable tension until they are satisfied. Marketers show
commercials in which tension building situation and product solution is
demonstrated. It will enable your recall when faced with a similar
tension.

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b. Emotional Arousal: Many times, our daydreaming or thinking results

in the arousal of latent needs. People genuinely wanting to satisfy their
needs, wants will get arousal on watching an emotional, slice-of-life kind
of appeal. People who face unsatisfied needs face some form of
frustration which will come out in various ways. For example, you loved
cricket so much in your young days, that you start using shaving cream
endorsed by your favourite cricketer. Advertisers manipulate emotional
arousal as it is likely to have the strongest impact on many individuals.

c. Cognitive Arousal: Random thoughts of a person, situation or an

incidence or personal achievement/success can lead to a cognitive
awareness of needs. If you notice an advertisement selling retirement
plans, you may think of calling your father and mother to check their
wellbeing and you may discuss retirement plan purchase.

The fourth and independent arousal route is environmental arousal.

d. Environmental Arousal: There are a certain set of needs that require

environmental cues to get aroused. Else, they will remain dormant. E.g.,
you see an ice cream ad post-dinner and you may suddenly get a kick to
have ice cream. If it is not at home, either you will order it or you will
take your family out.

Marketers use this approach very well. Why? Because the most potent
form of a situational cue is the goal object itself. In our personal lives,
we have noticed that when we see our neighbour buying a new washing
machine, suddenly our washing machine looks older to us, or when you
pass by window display items, you realize a need that you have for such
an item. Advertiser looks at triggering cues by offering environmental
arousal. Environmental cues trigger a dormant need and thus it has its
negative side – unwarranted expenditure gets incurred or lower strata of
society get frustrated and it comes out either as aggression or resorting
to unfair means to reduce the tension of satisfying desired needs.

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There are two philosophies concerned with the arousal of human motives.
The behaviourist school considers motivation to be mechanical as it is
seen as a response to a stimulus. Elements of conscious thoughts are
ignored. Window shopping is the best example as the person gets carried
away so much by stimuli on display that he buys the item even if he does
not have an immediate need, disregarding his conscious thoughts, i.e.,
cognitive controls. The cognitive school believes that all behaviour is
directed at goal achievement. Through our experience, reaction to need
fulfilment, we reason our behaviour, categorize it, and transform it into
attitudes and beliefs that act as predispositions to behaviour. These
predispositions determine the direction that he or she takes to achieve the
satisfaction he is looking at.

4.4 TYPES AND SYSTEM OF NEEDS

Collectively, there are numerous needs and motives which are universally
characterized under either physiological, social, and psychological needs or
motives. Way back in 1923, Daniel Starch had prepared a list of numerous
44 advertising appeals for adults such as hunger, respect, love, safety,
sympathy, affection and covers appeals like curiosity, hospitality, and more.

Later in 1938, Henry Murray, a veteran psychologist, prepared a list of 28

psychogenic needs that helped in basic constructs for many widely used
personality tests. The basic premise was that everyone has the same basic
sets of needs, but that individuals differ in their priority ranking of these
needs – needs associating with inanimate objects, inhibition, ambition,
affection, power, social interactions, and masochistic needs. Many motives
such as acquisition, achievement, recognition, and exhibition play an
important role in consumer behaviour.

With each model development, a lengthy list of motives emerged. It was of

little help to marketers. It is thus necessary to classify needs into distinct
categories signifying generic needs which take care of the detailed human
needs.

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Theory of Hierarchy of Needs: In the earlier theory, we saw that

consumers prioritize their needs but very rarely this concept was used. Dr
Abraham Maslow, a psychologist, understood the design behind this
prioritization. He was able to integrate the motivational aspect with this
prioritization. He developed a theory known as the hierarchy of needs in
which he dwelled upon five basic levels of human needs, which were
ranked in order of importance from low-level (biogenic) needs to higher-
level (psychogenic) needs.

In his theory of the hierarchy of needs, Maslow has highlighted three core
propositions about human behaviour:
a. Needs of human beings are unlimited. As soon as one need is satisfied,
another appears in its place. In other words, as soon as lower-level
needs are satisfied, higher-level needs appear. Many times, individuals
cannot get to higher-level needs as they face renewed deprivation of
their lower-level needs.
b. A satisfied need can never be a motivator of behaviour. Only unsatisfied
needs can motivate individuals. It can also lead to frustration and
triggers self-defensive actions such as aggression, aversion, etc.
c. Needs to develop in sequential order, i.e., from base to the top as
represented in the diagram below. This hierarchical order has associated
motivation triggers that marketers need to find out. The lowest level of
need that remains largely unsatisfied is always a prime motivator.

Let us examine each level of needs.

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Maslow’s Hierarchy of NeedsFig. 4.4: Maslow’s Hierarchy of Needs

Also known as Egoistic needs

Also known as
Social needs

a. Physiological Needs: Physiological needs such as hunger, thirst, sex

are at the lowest level of the hierarchy and the same is required to
sustain biological life (thus referred to as biogenic). When the
physiological needs remain unsatisfied, there remains a dominant or
prime motivator. If a man remains hungry for more than one day, his
physiological need to have food becomes the prime motivator and he
will intensify his search to get food. At this stage, higher-level needs like
prestige will be pushed into the background. It needs to be understood
that such needs are independent of each other and occur frequently.

b. Safety and Security Needs: Post regularity in satisfaction of

physiological needs, the next level of needs emerges to motivate an
individual. The individual looks for safety and security needs. Such
needs are protection, stability, order, cover, and certainty. The moment
an individual finds his physiological needs getting regularly satisfied, he
wants to protect against uncertainty – earlier your hunger and shelter

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needs were getting satisfied due to work, thus emerged the formation of
unions to protect workers against whims and fancies and exploitation
from the owner. Later the individual realized that the life of his family
members depends on him and thus the evolution of the insurance
business followed.

Security needs can influence an individual either consciously or

subconsciously. Marketers need to strike a balance between conscious
and subconscious needs while developing a communication trigger.

c. Social Needs: The third level of the hierarchy of needs includes aspects
like love, acceptance, belonging and affection. Because of the
importance of social motives in our society, advertisers use this trigger
effectively especially in beauty products and home care products,
wherein they create an impact that reflects either group acceptance or
group influence on an individual.

d. Egoistic Needs: This is the fourth level in Maslow’s hierarchy of needs

in which egoistic needs are covered such as prestige, success, self-
respect, achievement, power, extension, independence and more These
needs can take either an inward or an outward orientation or both.
Inwardly directed ego needs are individual-centric such as self-
acceptance, self-esteem, success, etc. Outwardly directed ego needs
compel him to get recognized by others which he tries to obtain with
prestige, recognition, and similar other ways.

e. Self-actualization Needs: Final stage in the needs hierarchy, is a need

for self-fulfilment, i.e., self-actualization. This need is linked with an
individual’s desire to fulfil his full potential – to become what he or she
is capable of becoming. Individuals try to satisfy these needs in many
different ways and thus, difficult to pinpoint a motivating force. Some
pursue this need at a young stage of their life e.g., athletes who want to
win an Olympic gold medal will work for years to gain those capabilities.
Many senses the emergence of such needs much later in their life when
they realize that they have achieved what they wanted in the previous
hierarchy stages. Found to be a useful appeal for students aspiring to
study management, new graduate recruitment drive, and hotel industry
etc.

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Activity C

Write your example for each of the hierarchy states specified in Maslow’s
theory.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

An Evaluation of the Needs Hierarchy: The five levels of needs covered

by the hierarchy are sufficiently generic to encompass most lists of
individual needs. However, Maslow’s theory also faced some criticism,
which can also be considered as its limitations. It is said that the hierarchy
concept is too generic because to say that hunger and self-esteem are
similar because both are needs – here you are disregarding the fact that
hunger is the urgent, involuntary nature of demand while self-esteem is
more voluntary out of conscious mind. Thus, hunger is a natural
phenomenon, but self-esteem is a need. Also, the hierarchy of needs
theory believes in sequential emergence which is not always true. Many
times, physiological needs and safety needs go hand in hand. It is also not
possible to measure empirically the need satisfaction level post which the
higher needs emerge. Need hierarchy theory seems to be appropriate for
developed countries like the USA but may not be true for developing and
underdeveloped countries.

However, the hierarchy of needs theory offers conclusive support to

marketers’ the world over. It offers a useful, comprehensive framework for
developing appropriate advertising appeals for their products. It is useful in
two ways – (1) It enables marketers to focus their advertising appeals on a
need level that is likely to be shared by a large segment of the prospective
target audience and (2) It facilitates product positioning.

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a. Segmentation Application: The need hierarchy is used as a basis for

market segmentation. Advertising appeal needs motivation trigger to
make individuals know that it can satisfy their specific unfulfilled need/s.
In this theory, both aspects are available – Needs and Motivational
aspects. The theory integrates the motivational aspect with the need
prioritization process. E.g., retirement plans are sold as safety needs,
consumer products are sold on egoistic needs like love, care, etc.

Fig. 4.5: Example of Segmentation Appeal Based on Needs

b. Positioning Application: The needs hierarchy can also be used to

derive your effective product positioning, i.e., how you want your
product to be perceived by your target prospects. The key to positioning
is to find a differentiating stand in your prospect’s mind. This application
of need hierarchy relies on the presumption that no need is ever
completely satisfied and thus for the advertiser that is something that
will always allow them to find that space, thus motivating. E.g.,
Individuals never feel secure, and they continue to make themselves
more secure e.g., video camera doorbells.

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Versatility (Or Usefulness) of Need Hierarchy: The need hierarchy

understanding often allows you to design your appeal for any level of need
hierarchy while you are developing your creativity. To bring this out really,
maybe we can take one product and explore developing an appeal for most
hierarchy need levels. We can consider a home exercise unit for the same.
To develop physiological needs-based appeal, we would show how the unit
can improve body tone and health. A safety appeal would establish how
safe the equipment is for home use. A social appeal would show how you
can impress the opposite sex with a toned body. Self-esteem can be
conveyed through an appeal wherein you can show him winning a 100%
attendance record in his company. Finally, for self-actualization appeal, we
would suggest that you deserve the convenience of home exercise after a
long and challenging hectic day.

A Trio of Needs: Psychologists have also identified the existence of a trio

of basic needs: the need for power, affiliation and achievement. These
needs can each be included within Maslow’s need hierarchy; considered
individually, however, they each have unique relevance to consumer
motivation.

(Need For Power) (Need For (Need For

Affiliation) Achievement)
High High
Desires Control of Demands blind loyalty High
Everyone and and harmony. Does not Must win at any cost.
Everything. tolerate disagreement. Must be on top and
Exaggerates own receive credit.
position and resources.

Low Low Low

Depend/subordinate Remains aloof. Fears Failure
Minimizes own position Maintain social Avoids Responsibility
and resources. distance.

Fig. 4.6: A Trio of Needs

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a. Power Needs: The power need is relevant to an individual’s desire to

control his environment, person and things possessed. The power need
triggers the individuals’ experience of self-enhancement when they
possess things that have power or superiority for users. Several
products thus promise power for users e.g. – automobile showing
speed, realty advertisement with a notification that says, ‘By Invitation
Only’ and likewise. This corresponds to the ego needs of Maslow’s
theory.

b. Affiliation Needs: Individuals are highly influenced by the desire for

friendship, acceptance, for belonging. People with high affiliation needs
tend to have a strong social dependence on others and often adapt their
purchase behaviour to the norms and standards of their reference
groups. They often select goods they feel will meet the approval of their
friends. This corresponds to the social needs of Maslow’s theory.

c. Achievement Needs: Individuals who regard personal accomplishment

as an end in itself are ones with a strong need for achievement. This
need is closely related to the egoistic need, in that satisfaction with a
job well done enhances the individual’s self-esteem. The achievement
need is also equal to the self-actualization need under Maslow’s theory.
People with a high need for achievement have certain traits that make
them open to relevant appeals.

To sum up, we can say that individuals with specific psychological needs
tend to be receptive to advertising appeals directed at those needs. They
are receptive to certain kinds of products as well. For marketers,
awareness of such needs provides additional bases on which to segment
their markets or position their products.

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4.5 WHAT HAVE YOU LEARNT – A SUMMARY

Marketers have always strived to understand one of the key aspects of

human behaviour, namely its driving force behind any buying behaviour or
in other words, motivation. It compels us to action due to the tension it
builds to satisfy unfulfilled needs. We all have and will always have some
unfulfilled needs, wants and desires. It’s the individual’s conscious or
subconscious drive to reduce need-induced tension that results in
behaviour that he anticipates will satisfy needs and bring him to a
comfortable state.

All behaviour is goal-oriented thus the form of direction that behaviour

takes is a result of thinking and previous learning. Goals are either generic
in nature or product-specific.

Our needs are either innate (biogenic or physiological) or acquired needs

(psychological or psychogenic). For any given need (thirst), there are many
different and appropriate goals (water bottle, soft drink, juice). Specific
goals are selected based on multiple factors ranging from experience to the
goal’s accessibility. Needs and goals are interdependent.

Failure to achieve a goal often results in frustration which each human

being deals with differently.

Motives can’t be easily inferred from consumer behaviour. People with

different needs may fulfil them by selecting the same goals or vice versa.

Amidst different opinions about need priorities, Maslow’s hierarchy of needs

proposes five levels of human needs namely physiological, safety, social,
egoistic and self-actualization needs. A trio of other needs widely used in
consumer appeals is the needs for power, affiliation, and achievement.
Marketers use this knowledge to develop their advertising and promotional
appeals.

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4.6 SELF ASSESSMENT QUESTIONS

1. Distinguish between positive and negative motivations.
2. What are the needs and wants of consumers?
3. List different defence mechanisms used by an individual who is
frustrated due to the un-fulfilment of a need. Later give at least three
examples.
4. Describe the various arousal routes available to marketers.
5. Describe Maslow’s Hierarchy of Needs and give at least two attributes
for each level and one example for each level.
6. What are the applications of the hierarchy of needs understanding by
marketers?
7. Describe a trio of needs concept in brief.

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4.7 MULTIPLE CHOICE QUESTIONS

1. Motivation is described as _______________ within individual that

impels them to action. Fill in the blank.
(a) the major force
(b) the prime force
(c) the decisive force
(d) the driving forces

2. As an individual, we have our own needs. All individuals have their

specific needs – some are innate, and others are essential.
(a) True
(b) False as some are required needs
(c) False as some are acquired
(d) False as some are physical needs

3. There are three personal arousal routes identified by consumer

behaviour specialists, namely emotional arousal, physiological arousal
and _______________ arousal. Fill in the blank.
(a) cognitive arousal
(b) curative arousal
(c) psychological arousal
(d) none of the above

4. Maslow’s Hierarchy of Needs covers five levels of needs namely

physiological needs, safety needs, social needs, _______________ and
self-actualization needs. Fill in the blank.
(a) egoistic needs
(b) self-fulfilment needs
(c) primary needs
(d) innate needs

5. Hierarchy of needs theory offers a useful, comprehensive framework for

developing appropriate advertising appeals for the advertiser’s product.
It is useful in two ways – (1) _______________ and (2) positioning
application. Fill in the blank.
(a) goal completion application
(b) segmentation application
(c) motivation appeal development
(d) cluster development

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Answers:

1. (d), 2. (c), 3. (a), 4. (a), 5. (b)

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APPENDIX 1

Theme and Buying Motives for Different Products

Product Brand Theme Buying Motives

Cooking range Sunflame Have quick Convenience and

cooking on four speed
burners. Grill
fishes and
poultries.

Shaving foam Gillette Foam for new age Pleasant

smooth shaving sensation,
freshness, attract
the opposite sex

LED TV SONY Bravia 4X Illuminous The sharpness of

display image, colour
reality and
brightness

APPENDIX 2

Emotions

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Emotion is, in everyday speech, a person's state of feeling in the sense of

an affect. Scientific discourse has drifted to other meanings and there is no
consensus on a definition. Emotion is often intertwined with mood,
temperament, personality, disposition, and motivation. In some theories,
cognition is an important aspect of emotion. Those acting primarily on
emotion may seem as if they are not thinking, but mental processes are
still essential, particularly in the interpretation of events. For example, the
realization of danger and subsequent arousal of the nervous system (e.g.,
rapid heartbeat and breathing, sweating, muscle tension) is integral to the
experience of fear. Other theories, however, claim that emotion is separate
from and can precede cognition.

Emotions are complex. According to some theories, they are a state of

feeling that results in physical and psychological changes that influence our
behaviour.

Definition

An affective state of consciousness in which joy, sorrow, fear, hate, or the

like, is experienced, as distinguished from cognitive and volitional states of
consciousness. In other words, any strong agitation of the feelings
actuated by experiencing love, hate, fear etc., and usually accompanied by
certain psychological changes as increased heartbeat or respiration, and
often overt manifestation, as crying or shaking.

Differentiation

Emotion can be differentiated from several similar constructs within the

field of affective neuroscience:

Feelings are best understood as a subjective representation of emotions,

private to the individual experiencing them.

• Moods are diffused affective states that generally last for much longer
durations than emotions and are also usually less intense than emotions.

• Affect is an encompassing term, used to describe the topics of emotion,

feelings, and moods together, even though it is commonly used
interchangeably with emotion.

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Also, relationships exist between emotions, such as having positive or

negative influences, with direct opposites existing. These concepts are
described in contrast and categorization of emotions. Graham differentiates
emotions as functional or dysfunctional and argues all functional emotions
have benefits.

Components

In Scherer's components processing model of emotion, five crucial

elements of emotion are said to exist. From the component processing
perspective, emotion experience is said to require that all of these
processes become coordinated and synchronized for a short time, driven
by appraisal processes. Although the inclusion of cognitive appraisal as one
of the elements is slightly controversial, since some theorists assume that
emotion and cognition are separate but interacting systems, the
component processing model provides a sequence of events that effectively
describes the coordination involved during an emotional episode.

• Cognitive appraisal Provides an evaluation of events and objects.

• Bodily symptoms: The physiological component of emotional
experience.
• Action tendencies: A motivational component for the preparation and
direction of motor responses.
• Expression: Facial and vocal expression almost always accompanies an
emotional state to communicate reaction and intention of actions.
• Feelings: The subjective experience of emotional state once it has
occurred.

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Components of Emotional Experience

Physiological/Physical component
The physical component of emotion is psychological arousal that usually
accompanies the emotion the body is feeling. If the body did not
experience this arousal, the intensity of this emotion would be greatly
decreased. During the arousal, the body experiences a surge of powerful
feelings known as emotions. People who can detect changes in their
arousal level experience their emotions much more intensely than those
who cannot detect the changes in their arousal level.

Behavioural component
This component has been called the outward expression of our emotions.
Body gestures, posture, facial expressions, and our tone of voice display
what emotions we are feeling. Many of our facial expressions are universal.
For instance, if somebody has a mad look on their face, it doesn't matter
what language they speak or where they are from, chances are... they're
mad. However, some emotional expressions are influenced by our cultures
and society's rules for displaying emotions. For example, the guards
outside of Buckingham Palace are not allowed to display any emotion on
their face. Some people have described them as looking mad when in
reality they are not.

Cognitive component
The cognitive component is how we interpret certain situations or
stimulations. This determines which emotion our body will feel. For
example; if you are alone, sitting in the dark, watching a scary movie, and
you hear a loud noise, you may become scared... Fearing that there is an
immediate threat or that you are in danger. This emotional response to this
imaginary threat is just as powerful as it would be to a real threat.
Our perception of the imaginary threat is what makes it feel real to us and
causes emotion in our body.

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McDougall divided "Emotions" into three types:

1. Primary: Simple emotions as fear, happiness, anger, disgust etc.
2. Secondary: Mixture of various instincts as curiosity, escape, etc.
3. Derived: Learn through experiences such as sadness, boredom, etc.
• Have you ever thought about why your heart pounds and you burst
into tears on hearing dreadful news?
• Why people become afraid of seeing the snake?
• Why heart beats at an extremely high speed while you do jog exercise?
• Why people face reddened on hearing the good news

Role of Emotions in Everyday Life

Emotions make our life bright and enlightened because, without the
experience of emotions, our Life would be dull, uninteresting, gloomy and
without any purpose

Psychologists identified the number of functions of emotions that have a

vital role in our daily life.

They are:

Stirred up for the fight or flight action After seeing a snake or after an
unusual incident as a Natural disaster; the body is prepared to stir up our
bodies to face and deal with them.

Modifying the future responses and behaviour Learning takes place

after the emotional state that Prepares us to manifest appropriate
behaviours in future, i.e., strategies should be adapted to minimize the
aftermath of disasters and avoid us to face the snake.

Social interactions are enhanced As emotions are both verbal and non-
verbal, so they help people to better understand the responses whether
they are being expressed or not.

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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Chapter 5
Personality, Psychographics, Perception
and Consumer Behaviour
Objectives

By the end of this chapter, you should be able:

• To understand what are the characteristics of personality
• To understand personality theories
• To understand what is brand personality
• To understand what is a psychographic analysis
• To understand the various applications of psychographic analysis
• To understand what is consumer perception and its salient aspects
• To understand the importance of stimuli in perception
• To understand the entire perceptual mechanism

Structure:

5.1 Introduction to Personality

5.2 Purpose Behind Understanding Personality
5.3 Personality Characteristics
5.4 Personality Theories
5.5 Personality and Consumer Behaviour
5.6 Brand Personality
5.7 Introduction to Psychographics
5.8 Understanding Psychographics
5.9 Application of Psychographics Analysis
5.10 Psychographic Consumer Segmentation Research: Sri VALS Program
5.11 Consumer Perception
5.12 Perceptual Mechanism
5.13 Store Image
5.14 What have you Learnt – A Summary
5.15 Self-Assessment Questions
5.16 Multiple Choice Questions (MCQ)

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5.1 INTRODUCTION TO PERSONALITY

Marketers always want to evolve in different ways to segment their market

to create competitive differentiation. One such distinct approach popular
among the marketers is segmentation based on PERSONALITY. Not only
that, as marketers went deeper to understand their consumers, deeper
aspects needed to be known. This needed PSYCHOGRAPHIC profiling of
consumers. Despite being aware of the personality and psychographic of
their consumers, the biggest challenge is to ‘FAVOURABLY FIT INTO’ the
PERCEPTION of their consumers, so that they not only find acceptance
but also get sound bonding.

In this chapter, we will study three very important consumer behaviour

centric three powerful aspects of an individual, that will change your way of
understanding your consumers.

5.2 PURPOSE BEHIND UNDERSTANDING PERSONALITY

It is believed that consumers’ purchase decisions reflect their unique

personalities. It will be interesting for marketers to know:
• What personality traits distinguish those car buyers who opt for Indian
origin sedan cars?
• What personality traits distinguish those mall buyers vis-a-vis local shops
buyers?

Fig. 5.1: Personality Traits

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Thus, it has become essential for marketers to know the relationship

between personality and specific purchase decisions. One needs to know
different consumer personalities and how it interrelates with other
consumer behaviour concepts. Personality can be defined as ‘those inner
psychological characteristics that both determine and reflect how a person
responds to his or her environment. Inner characteristics mean specific
qualities, attributes, traits, factors, and mannerisms that distinguish one
individual from others. A person choosing a specific product, location, price
sensitivity, promotional offer are all linked to one of these inner
characteristics. Appeal to his personality trait triggers his buying a specific
product, a specific brand, from a specific store for a specific purpose.
Personality also affects the way the consumer responds to a firm’s
communication efforts; it has significant relevance to marketers. It can be
thus concluded that the identification of specific personality characteristics
associated with consumer behaviour may be incredibly useful in the
development of a firm’s market segmentation strategies.

5.3 PERSONALITY CHARACTERISTICS

An individual’s personality has three distinct characteristics such as (1)

personality reflects individual differences (2) personality is consistent and
enduring and (3) personality can change.

1. Personality reflects individual differences: Each individual has a set

of unique inner characteristics. In every individual, there is one
dominant characteristic that describes him. For instance, we do say he
is very lovable, or she is very dynamic. Such comments are based on
one dominant characteristic which we notice in any individual that
becomes his main personality trait. Personality is thus a useful
consumer behaviour concept because it enables us to categorize people
into different groups based on a single trait or a few traits. This allows
marketers to develop products/services with the appropriate marketing
mix to attract them.

2. Personality is consistent and enduring: An individual’s personality is

considered consistent and enduring over a long time. As a result,
marketers should evolve their product, appeal, communication in such a
way that it touches the specific trait of their consumer to get the desired
response.

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3. Personality can change: Enduring nature of personality traits can also

change when one encounters significantly impacting circumstances in
life. An individual’s personality changes not only in response to abrupt
events (heartbreak, death of beloved) or moment of truth (becoming a
father) but also as a result of the gradual maturing process (mid-age,
senior citizen).

Activity A

Identify the following characteristics of your personality within you.

Single trait that defines your personality___________

Your personality trait that has changed & reason________

5.4 PERSONALITY THEORIES

There are three theories related to personality (a) Freudian Theory (b)
Jungian (non-Freudian Theory and (c) Trait Theory. There are other
theories also which bring out the relationship between consumer behaviour
and personality.

(a) Freudian Theory

The psychoanalytic theory of personality is considered the catalyst of

modern psychology. This theory was promoted by Sigmund Freud. This
theory propagates that unconscious needs or drives, especially biological
and sexual drives, are at the heart of human motivation and personality.
This theory is evolved after elaborate coverage of patients’ recollection of
early childhood experiences, analysis of their dreams and specific nature of
the mental and physical adjustment problems faced by them.

As per this theory, human personalities are the construction of three

interacting systems – the Id, Superego and Ego.

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Fig. 5.2: A Representative of the Interrelationship among the Id, Ego and
Super-ego

Id: This aspect covers primitive and impulsive drives; it consists of basic
physiological needs like thirst, hunger, and sex. The individual will resort to
any means to satisfy such needs and such behaviour is more animalistic as
it is unrestrained. It is restrained by a second system called super-ego.
Products like perfumes, herbal tonic and condoms use such basic instinct
trigger to get the desired action.

Ego: Here an individual’s behaviour is governed by his conscious control. It

functions as an internal monitor that attempts to balance the impulsive
demand of Id and the socio-cultural constraints of the super-ego.

Super-Ego: The super-ego is like a ‘brake’ that imposes restraints on

impulsive forces of Id. The super-ego aspects convey that the individual
satisfies his needs in a socially acceptable fashion. It also brings morality
into perspective in any individual’s behaviour. It covers the traditional
values and system built by society – thus dialogue is considered as a way
to resolve conflict, and not violence.

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Fig. 5.3: Brief Explanation of Interrelationship among the Id, Ego and
Super-ego

Stages of Personality Development: In addition to specifying the

personality structure, Freud emphasized that an individual’s personality
gets formed at distinct stages of growth from being an infant to childhood
development. Freud titled these stages of development to conform to the
area of the body where a child’s sexual instincts are focused on the time –
oral, anal, phallic, latent, and genital stages.

i. Oral stage: The infant first starts sucking milk and eating through the
mouth. That is his first experience of social contact with the world. This
is applicable also to bottle feed babies. A crisis develops at the end of
this stage when the child is deprived of this due to the parents’
perceived need to develop a better habit.

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ii. Anal stage: A child’s primary source of pleasure is the process of body
waste elimination. A second crisis develops when parents try to toilet
train the child.

iii. Phallic stage: A child gets the pleasure of discovering his genitals/sex
organs. A third crisis occurs when the child experiences sexual desire
from the opposite sex. How the child resolves this crisis later affects his
relationships with persons of the opposite sex.

iv. Latency stage: It was believed by Freud that the sexual instincts of the
child lie dormant from the age of five until the beginning of adolescence
and that no important personality changes occur during this time.

v. Genital stage: At adolescence, the individual develops a sexual interest

in persons of the opposite sex, beyond self-oriented love and love for
parents. If this crisis is adequately resolved, the individual’s personality
enters the genital stage.

Freud believed that an adult’s behaviour is largely affected by how he

coped with crises during the above stages. The first three stages
particularly greatly impact the development of personality. This implies that
a person whose oral needs are not adequately satisfied becomes fixated at
this stage and develops tobacco chewing or smoking habits. An adult
fixated at the anal stage shows an excessive need for neatness. This is
explained to help you know that marketers need to be aware of the basis
of specific personality trait development to help them develop an
appropriate trigger.

Application of Freudian Theory to Consumer Behaviour: Consumer

research has established that human drives are largely unconscious. Thus,
consumers are not consciously aware of their true motives. Marketers must
work their ways through motivational research to discover the underlying
motivations for specific consumer behaviour. To uncover consumers’
unconscious motives and personality, various consumer research
techniques are used such as observation, projective techniques, focus
group discussion and in-depth interviews.

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Motivational researchers while applying the personality theory tend to

focus on the consumer’s purchases as a reflection and extension of the
consumer’s personality. To put it in simple terms, what we wear and the
image we display often reflect our personality.

Such understanding also helps in developing other brand aspects like

colour combinations, packaging, developing offers and appeals and more.

Activity B

Identify your unconscious motivation (motive) behind the purchase of

items like Deo, mouthwash, goggles.

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

Consumers assign various descriptive traits or characteristics – the

ingredients of brand personalities, to different brands in a variety of
product categories. When brands undertake Brand Personality research,
such traits may come out e.g., Oil of Olay is considered as ‘gentle’,
‘sophisticated’, ‘mature’, ‘exotic’, and ‘mysterious’. Marketers can also pre-
visualize what kind of brand personality, if projected, would benefit the
brand, e.g., Mahindra projected the XUV500 vehicle as a panther and it
was so well accepted that the demand for the product shot up even while
the automobile industry was facing a recession.

Consumers thus not only assign personality traits to products or services,

but they also tend to associate personality factors with specific colours,
animals, shapes and more.

(b) Jungian (Neo-Freudian) Personality Theory

Neo-Freudian countered the instinctive and sexual part of Freud’s

personality theory. According to Neo-Freudians, social relationship impacts
a great deal of personality development. Adler (person behind the Neo-
Freudian theory) talks in terms of style of life to realize rational goals.
Adler also emphasized how an individual tries to overcome a feeling of
inferiority by striving to excel. Another researcher Sullivan writes about the
individual’s action to forge social relationships with others and reduce the

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anxiety which causes tension. Horney, a lady researcher, puts an individual

into three personality groups as follows:

Compliant: He is the one who desires to have love, be loved, and wants
appreciation to be in harmony with societal decorum and code of conduct.
He thus prefers brand names, brushes twice a day, uses mouthwash and
likewise.

Aggressive: He likes to excel and thus competes with others on almost

any challenge and counters what is not acceptable and is open to
challenges. He likes to use more cologne and aftershave lotions; he uses
traditional brands like Old Spice or Will’s Filter cigarettes.

Detached: He likes to be looked upon as independent and self-sufficient

and thus is either not brand-focused or prefers to try new products and
brands.

Although the Neo-Freudian theory of personality is less popular, marketers

have time again used it. E.g., products that are positioned on a rebellious
personality seem to be guided by Horney’s ‘Detached Individual’s’
character.

(c) Trait Theory

The Trait Theory is quantitative as against the earlier two theories.

Empirical experimentation measurement techniques are used to measure
personality characteristics or traits. Fundamentally, this theory believes
that a personality consists of a set of traits or factors; however, some
dominant traits are common making it one group and some traits are
individualistic. As a result, traits are measured against personality scales.
In other words, single trait personality tests measure just one trait, e.g.,
Leadership quality. This understanding helps us to know how consumers
make their choices, under the overall product category consumption traits.
The personality of an air-conditioner user rather than the personality of a
Voltas air conditioner user forms the foundation of such studies.

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Marketing Focus on Specific Personality Traits

Marketing people are keen to know and influence specific personality traits
in individual groups. We can examine some specific personality traits and
their relevance in marketing.

Consumers can be dogmatic or innovator. Dogmatic consumers are slow

adopters. This rigidity prevents them from adopting new products.
Marketers need to find how to crack that rigidity to get an entry in their
mind. Innovative consumers often look at a new product to absorb first.
During the launch phase, such consumers are often targeted.

Mr David Reisman has classified the consumers based on social

character. As per this theory, consumers either follow ‘ways of behaviour’
or ‘conform to the culture and society or vice-a-versa. Three major types of
social characters are (1) tradition-directed individuals who are slow to
adopt any change. (2) inner-directed individuals who are self-movers and
take decisions based on interpreting their changing needs and product
conformity to satisfy their need e.g., people moving from a traditional
shaving razor blade to twin shaving razor blades. The third classification is
(3) other-directed individuals are those who are directed by others,
especially society. If they find social mobility towards a specific product or
service, they will adopt it. Marketers need to understand whom to attract
and how to attract. Marketers can address the ‘inner-directed’ individuals
by providing them with enough information and cues to enable them to
self-evaluate and adopt a product. Today’s digital age is making many of us
inner-directed individuals by making information for evaluation and word of
mouth possible, and that’s the result we see the surge of online e-retailers.
For ‘other directed’ individuals, maybe through promotions, you need to
create an appropriate social setting. E.g., If an opinion maker in a specific
social set up starts using the product or service, others will gradually
follow.

In addition to innovativeness and social characterization, another important

trait is consumer susceptibility to interpersonal influence. Consumer
behaviour researchers can measure this susceptibility to show how social
influence stimulates or depresses the acceptance of new products.

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Personality traits also can influence the selection of outlets from where
consumers purchase their products. Self-confident consumers are open to
exploring outlets such as off-price stores, shops selling trendy outfits and
more. As against this, a less self-confident shopper may just prefer to buy
from the same old shop, and more traditional and neighbourhood stores.
Based on the nature of the products you sell, the target audience you have
and their personality trait, you can choose your channel development
strategy.

Knowing the above nature of personalities, marketers must know the

personality that accounts for the largest portion of their target segments.
Not only this, but it also gives them additional insights into how such
things affect the various stages of buying behaviour. As a result, marketers
can determine how their prospects will choose their products/services. It
also enables the advertising agency and the media planner to address and
deliver their message to the specific personality type.

5.5 PERSONALITY AND CONSUMER BEHAVIOUR

In an intense automobile market, Mahindra continued to make a difference

when it identified the personality of its vehicle as rugged and masculine
which was in sync with its prospects as well when they researched owners
and their buyer behaviour. Not only that but most car makers today are
also using personality traits linked to research extensively to identify whom
to target which product model. Likewise, there are distinct traits between
smokers – nonsmokers, drinkers – nondrinkers. Banks are today evaluating
the feasibility of using personality-based appeal in the otherwise set
banking industry norms in which banks are compelled to work within
government specified guidelines. In other words, personality is a much
sought-after insight today by marketers.

Personality has two tangents – (1) Consumer as a self (2) Brand as a

personality. It is essential to strike the right balance between the two.

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1. Consumer as a self

Human personality is like multilayered individuals whose certain aspects

are visible to the outside world and certain aspects are unknown to the
world, but it is inherent to him. It’s these unknown aspects that shape his
behaviour and thus of interest to marketers. Thus, in consumer behaviour,
it is recognized that there are two aspects linked to one individual namely
SELF and SELF-IMAGE. The innermost natural being is SELF. The concept of
SELF-IMAGE is defined as the perception of ‘self’ or how one reflects
himself in front of others. We consciously or sub-consciously buy products/
services, use brands, use seller, and refer to media with the image that
corresponds to our self-image. Products, brands, distribution, and media
thus put efforts to get aligned with the self-image or they develop
consistency to get an acceptance by our self-image. This is also known as
congruence. Congruence compels us to remain with a specific product,
brand and seller and use specific media and more. Non-congruence leads
to avoidance of such products, brands, sellers, or media.

This is the reason why marketers are keen to understand the personalities
of their consumers. However, more understanding of four kinds of self-
image is essentially needed. This is explained below:

How do I see myself? How I would like to see myself?

(Actual Self-image) (Ideal Self-image)

How do others see me? How I would like others to see me?
(Social Self-image) (Ideal Social Self-image)
Fig. 5.6: Self-image Model
(a) Actual self-image – It indicates what the consumers are
(b) Ideal self-image – Ideally what they like to be
(c) Social self-image – It’s the perception others have about you
(d) Ideal social self-image – Is your desired perception by others

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However, these four images deal with the current state and do not take
into consideration the future. Rather than what is the current state of an
individual in terms of his image, it’s the expected self-image at a future
date that is more interesting for the marketers. This is because, it’s the
expected self-image in which a consumer builds his dream to be someone
as expected by him, which generates needs, wants, desires and pursuit for
its fulfilment. This is useful in developing a new product, modifying an
existing product, building a brand position, and developing an appeal and
change the appeal in due course to be in sync with him for retaining the
bond established.

Self-image set and product nature have a direct correlation in terms of

satisfying a specific kind of self-image – we prefer to have our daily needs
based on our actual self-image; for luxury products, we are governed by
social self-image. However, we continue to aspire to own things which will
help us get the ideal social self-image or ideal self-image.

Self-image understanding helps marketers to either segment the market

appropriately or to position the product in a way that satisfies a specific
kind of self-image to not only get an entry but to differentiate from the
competition.

Activity C

Identify product/service/initiatives you will undertake to establish your

actual self-image, ideal self-image, social self-image, and ideal social self-
image.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

2. Extended Self
Once we understand self-image, it will be interesting to know that our
possessions have a direct relationship with our self-image. Our possessions
either confirm or extend our self-image. A person owning an iPhone
smartphone is considered as status, thus giving its owner a social self-
image. Individuals are used to establishing an emotional attachment to
their possessions.

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3. Self-alteration
Within the realm of being ‘self’, we like to improve it for the better. Within
the realm of the actual self, we are open to alteration to better it for
ourselves. This feeling is at the base level of every individual – creating a
new self-image while maintaining the existing image. Products like fashion
accessories, cosmetics, contact lenses, clothes help us alter the self for the
better. Only when we either evolve our self-better, we subsequently wish to
extend the self. Once you alter yourself with a specific product/brand, you
then continue to move upward and that is what marketers like and exploit
to their advantage by introducing products with better features, look and
style.

5.6 BRAND PERSONALITY

A brand does have its personality like human beings do. Brand personality
consists of a set of characteristics for which it is recognized and recalled.
This gives it feasibility to enter the human mind in the form of a specific
brand position (students must however be conscious that brand position is
a much wider subject in itself). Specific brand personality attracts a specific
mass of the market and thus marketers are very careful about developing
and maintaining a specific brand personality. If Raymond is for the
complete man, i.e., a man who has arrived in life means prestige. On the
other hand, brand Cambridge has a professional appeal for the common
man, thus preferred by junior and middle-level individuals to remain in
sync with the ongoing corporate wear trends.

Fig. 5.4: Apple’s Personality (Indicative Example)

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Brand personality generally remains the same for many years as it has its
advantage such as enabling positioning to get stronger and stronger,
gaining new prospects from the target audience and more. Lux soap is a
beauty soap of film stars for decades, Raymond for the impeccably dressed
complete man.

Based on personality traits liked by the consumers, prospects, he/she build

a brand personality and relate it either in human terms, or animal terms,
or in terms of shapes and more. It’s here that marketers can identify those
traits liked by the consumers and how they build a picture of personality in
their mind. After this identification, marketers can create communication
that presents a personality as envisaged by the target audience to get that
click within the minds of consumers, such as Mahindra – it could
understand the personality trait of an SUV and thus presented its next SUV,
XUV 500, as a panther and got instant acceptance and market especially
when other automobile companies’ sales were declining.

In short, from the marketers’ perspective, a well-established brand must

have a clear brand personality regardless of it being stated or not stated.
Well-positioned brands acquire distinct personalities as a result of the
target audience’s continuous exposure to the product, consistency of
experience, packaging, service, and integrated marketing communications
(IMC). Exposure should happen in such a way that it makes your brand
closer to the envisaged ideal self-image of future customers. To extend
memorability and help consumers retain the brand personality in their
minds, marketers need to facilitate repeat exposure and use other props.

While you are developing your brand personality, certain elements of your
communication, be it visual or audio, become synonymous with your
recognition. This is known as brand property – Parle biscuit’s girl picture,
Amul butter girl’s picture, Asian Paints’ painter recognized as Gattu, Nirma
detergent’s dancing girl or Britannia biscuits’ tune ‘ting ting Tiring’. One
look at it or the moment you hear it, it summarizes the entire brand
personality in your mind.

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Activity D

Attempt to write the brand personality of brands like DHL, Mercedes Benz,
and Flipkart.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

Measuring Brand Personality

The marketers need to determine their brand’s personality and monitor the
shift in the same, if any, over some time.

Over the decades, researchers have identified five personality factors

popularly known as BIG FIVE – sincerity, excitement, competence,
sophistication, and ruggedness. Each of these factors can be further
extended by a set of additional traits.

Fig. 5.5: Big Five Brand Personality Scale

We can further elaborate on additional traits as shown in fig. 5.9.

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Fig. 5.6: Brand Personality Scale with Traits

As you can see, under sincerity is truthful, transparent, and more. The
traits under excitement could be colourful, stylish, fun-loving and more. By
using the appropriate survey technique, such aspects can be unearthed
and brand, personality can evolve. This scale is useful to measure other
aspects like attitude towards the brand etc. It is essential to consider the
traits diligently as it should not only apply to a brand but also the brand’s
product category, e.g., ruggedness could be essential for Bolero as well as
utility vehicle category in general, but it can’t be covered if you are
measuring a fashion brand’s personality. While measuring personality
traits, it will measure both positive connotations and negative
connotations. The derivative of this will be one emerging brand personality.

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Advantages of Brand Personality

a. We can guess their attitude towards our brand. We can take the
required initiatives to either capitalize on the positive attitude or
neutralize the negative attitude.
b. Brand personality helps to differentiate your brand from the
competition.
c. Brand personality can support or enhance your positioning.
d. Brands have an expressional value, thus enabling individuals to
showcase their social self-image and aspire to elevate themselves to
express their ideal social self-image.
e. Maintaining the same brand personality over the long term helps you to
attract customers in the future too – a person who got inspired to own
you with specific personality traits being demonstrated by your brand.
f. A brand with a distinct personality helps you to make your personality
statement. This is true especially in the case of daily clothing, and
fashion accessories used by individuals.
g. Brand personality helps marketers to forge a relationship with
individuals. When the relationship continues over a period of time, it
brings repeat purchase, helps in loyalty-building; thus, relationship and
referral marketing become possible besides cross-sale and up-sale.
Close-Up freshness not only gets you new young customers, but they
continue to have repeat purchases and also recommend it to their
friends.
h. Many times, the product may be the same but users with the same
socio-economic characteristics can have different kinds of relationship
with the brand, e.g., one young college student may have a relationship
of security with the Close-Up toothpaste while other may have a
romantic relationship as he is looking forward to getting close to a
girlfriend in college.
i. Brand personality also helps you to choose the appropriate medium for
communication. A brand that is known to have a hi-end/status-oriented
personality needs to choose hi-end media popular among status-
conscious target audience to avoid being looked down upon if they start
featuring in a common medium.

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j. Brand personality also helps you to choose ways to promote – premium

brands will have value-added sale instead of a general sale, can sponsor
appropriate and relevant events e.g., Skoda India generally sponsors
numerous golf-events across India.
k. Brand personality can help you develop loyalty among the chosen
segments. A personality that can communicate care is likely to get more
accepted and admired.
l. It is difficult to copy brand personality. Product features can be copied.
As a result, if you develop a brand personality complementing the
product attribute/s, it will still stand out and continue to appeal to its
identified target audience.

Brand Personality and User Imagery

Human beings consciously or subconsciously depict certain characteristics

while they use multiple brands covering their different needs. A person
using a Nike product demonstrates his freedom which is aligned with the
brand’s core message ‘Just Do It’. A guy wearing a HUBLOT watch
demonstrates his knack for precision and an authoritative attitude. A
marketer’s job is to synchronize a brand’s personality with user imagery.
Marketers can play smart to expand the market retaining the same
personality – e.g., Jeans users’ characteristics were initially that of a young
boy/girl in their teenage but later one of the leading jeans brands launched
a campaign ‘My Smart Daddy’ in which even the daddy is shown using
jeans with a subtle design, thus looking smart. Through this campaign,
they not only emotionally touched their existing users but added a huge
target segment of mid-aged men by toning down too much of the trendy
look and design used for appealing to the teenage segment.

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5.7 INTRODUCTION TO PSYCHOGRAPHICS

Companies in a highly competitive marketplace continue to isolate

profitable market segments. Psychographic insights-based isolation (or
segmentation) is the next frontier being pursued by marketers. Many
marketers of products/services do conduct psychographic research to
capture insights and create profiles of the consumers they determine are
identifiable and profitable for them to target.

In the chapter on market segmentation (Chapter 2), we briefly covered

psychographic-based segmentation. However, in this chapter more insights
are offered such as identifying different forms of psychographics and
exploring its different applications as one of the segmentation tools.

Fig. 5.7: Psychographic of an Individual

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5.8 UNDERSTANDING PSYCHOGRAPHICS

Psychographic insights-based isolation (or segmentation) is the next

frontier being pursued by marketers.

Psychographics, or lifestyle analysis, is a form of research in which a

battery of statements is probed to capture the various aspects of a
consumer’s personality, buying motives, interests, aptitudes, beliefs, and
values. It can be product-specific or behaviour specific. In product specific
form of psychographic research, consumers’ response to selective
statements about products, services, brands, or specific consumption
situations is probed. In behaviour specific form of psychographic research,
consumers’ conscious and subconscious aspects of brand selection, buying
behaviour are probed.

Types of Psychographic Variables

Psychographic variables cover the aspects of consumers’ activities

involvement (i.e., how a consumer spends time with self/family), interests
(i.e., a consumer’s or family’s preference and priorities such as home,
fashion, food), and opinions (i.e., how a consumer feels about a wide
variety of events and issues – societal, political, environmental,
educational, economical, international).

Conducting a Psychographic Research Study

A psychographic research study is done to unearth what’s really in the

minds of target consumers – most of the time what they say and do are
distinctly different, thus revealing that there is some other force that is
guiding their behaviour either consciously or subconsciously.

Thus, in psychographic studies, consumers are usually asked to reveal their

personal or their family’s reactions to a variety of statements. If India’s
famous digital camera manufacturer Nikon India decided to conduct
consumer psychographic research, it may cover two different sets of
statements – separate for individuals and family. They might ask the
following statements to capture their predispositions to picture-taking and
instant photography:

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Personal statement:
• I love to watch nature very closely.
• I always carry a picture in my mind regarding the happy moments I have
enjoyed.
• I love to describe past incidences elaborately to everyone.
• I get immersed in looking at my old family pictures.
• I wish I could have a better camera
Family statement:
• We make a good happy family picture
• We love to travel with family at least once in two years
• We use pictures to decorate our house, table and make other items using
family pictures
• We would love to own a good camera
• Family pictures can come alive if you have a better camera

Respondents would be asked to evaluate such and similar such statements

in terms of their degree of agreement (e.g.: strongly agree, agree,
disagree, strongly disagree) or degree of importance (e.g.: very important,
slightly important, unimportant). Scale can be 3 points to 7 points or more.

Such a study can also include either general or product-specific aspects.

Similar such elaborate probing of statements brings out the psychological
mind frame of individuals

Psychographic research can also cover the amount of time spent by an

individual (or his family) on various activities of their desire, interests.

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5.9 APPLICATION OF PSYCHOGRAPHIC ANALYSIS

After understanding the essence of psychographic analysis, we need to

understand its applications in marketing. It contributes to the development
of two specific areas under marketing strategy (1) market segmentation
and (2) development of specific promotional campaigns.

1. Market Segmentation
Psychographic consumer research provides useful insights enabling
marketers to segment the market differently. Not only that, but it can also
provide clues to promotional appeals to users and which advertising media
might be the best to reach prospects.

As an example, say a leading bank wanting to expand its credit card

business develops the segmentation post psychographic research as 1)
Future protector 2) Life enjoyer 3) Status pro 4) Strugglers. A further
psychographic profile can be listed as - Future protector: Family-focused,
wants to live a secured life.

2. Development of Promotional Campaign

Any promotional campaign, especially advertising campaigns seek to know
questions like ‘Who are we targeting?’, ‘What are we supposed to say?’ and
‘Where do we say it? For advertisers and media planners, this third
question is very important. Due to this, many media themselves carry out
psychographic and demographic research to bring out detailed audience
profiles. By offering both demographic and psychographic profiles of their
readers to media buyers, they make it convenient for advertisers as well as
media buyers to select media that can deliver the message to the target
audience identified.

You must have noticed that advertisements nowadays no longer depict a

product and its USP/core benefit. Instead, they show a picture that reflects
the identified target audience’s lifestyle aspects to draw their attention.
HDFC Life’s ‘Sar Uthake Jiyo’ is another example of using psychographic
segmentation.

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5.10 PSYCHOGRAPHIC CONSUMER SEGMENTATION

RESEARCH: SRI VALS PROGRAM

Drawing on Maslow’s need hierarchy and concept of social character,

researchers at SRI led by Arnold Mitchell, developed a generalized
segmentation scheme of the American population (Even useful otherwise)
known as the Values and Lifestyle (VALS) program.

What is VALS?

VALS™ is a marketing and consulting tool that helps businesses worldwide

to develop and execute more effective strategies. The system identifies
current and future opportunities by segmenting the consumer
marketplace based on personality traits that drive consumer behaviour.
VALS applies in all phases of the marketing process, from new-
product development and entry-stage targeting to communications
strategy and advertising.

The basic tenet of VALS is that people express their personalities

through their behaviours. VALS specifically defines consumer segments
based on those personality traits that affect behaviour in the marketplace.
VALS uses psychology to segment people according to their distinct
personality traits. The personality traits are the motivation—the cause.
Buying behaviour becomes the effect—the observable, external behaviour
prompted by an internal driver.

Why do we need VALS?

VALS reflects a real-world pattern that explains the relationship

between personality traits and consumer behaviour. VALS uses
psychology to analyze the dynamics underlying consumer preferences and
choices. VALS not only distinguishes differences in motivation but also
captures the psychological and material constraints on consumer
behaviour.

We will take an overview of both VALS modules for our better

understanding of how psychographic segmentation helps in segmenting the
market better for new age products and new-age consumers who live far
beyond their means.

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SRI VALS 1 (Original Module)

Fig. 5.8: VALS 1 Segmentation Approach

VALS 1

The VALS 1 typology classified the American population into four general
consumer groups and then subdivided these categories into a total of nine
distinct subgroups or segments. Four major groups are a) the need-driven
(the poor and uneducated), b) the outer-directed (middle and upper-
middle-class consumers whose lifestyle is directed by external criteria) and
c) the inner-directed (people who often are more motivated by personal
needs than by the expectations of others). The fourth segment called
integrated (individuals who have been able to combine the best of both
outer-directed and inner-directed values) represents individuals who
achieve success as well as are societally conscious.

From the marketer’s perspective, it provides two distinct sets of data if

marketers gather information – (1) Demographic profile of each VALS 1
type and (2) General attitude of each VALS 1 type. This makes it a lethal
combo to get insights about the customers and direct your efforts and
resources accordingly to capture the maximum market.

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VALS 2

By using psychology to analyze and predict consumer preferences and

choices, the current VALS system creates an explicit link between
personality traits and purchase behaviour.

VALS 2 typology classifies the American population into three general

consumer groups and then subdivides these major categories into a total of
eight distinctive subgroups or segments.

Fig. 5.9: VALS 2 Segmentation Approach

(Source: Courtesy – SRI VALS from SRI Consulting Business Intelligence)

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The main dimensions of the segmentation framework are primary

motivation (the horizontal dimension) and resources (the vertical
dimension).

Primary Motivation: Ideals, Achievement, and Self-expression

The concept of primary motivation explains consumer attitudes and

anticipates behaviour. VALS includes three primary motivations that matter
for understanding consumer behaviour: ideals, achievement, and self-
expression. Consumers who are primarily motivated by ideals are guided
by knowledge and principles. Consumers who are primarily motivated by
achievement look for products and services that demonstrate success to
their peers. Consumers who are primarily motivated by self-expression
desire social or physical activity, variety, and risk. These motivations
provide the necessary basis for communication with the VALS types and a
variety of strategic applications.

Resources

A person's tendency to consume goods and services extends beyond age,

income, and education. Energy, self-confidence, intellectualism, novelty-
seeking, innovativeness, impulsiveness, leadership, and vanity play a
critical role. These psychological traits in conjunction with key
demographics determine an individual's resources. Various levels of
resources enhance or constrain a person's expression of his or her primary
motivation.

Now let’s understand the segmentation approach under VALS 2;

The main dimensions of the VALS framework are primary motivation (the
horizontal dimension) and resources (the vertical dimension). The vertical
dimension segments people based on the degree to which they
are innovative and have resources such as income, education, self-
confidence, intelligence, leadership skills, and energy. The horizontal
dimension represents the primary motivations and includes three distinct
types:

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• Consumers driven by knowledge and principles are motivated primarily

by ideals. These consumers include groups called Thinkers and
Believers.
• Consumers driven by demonstrating success to their peers are motivated
primarily by achievement. These consumers include groups referred to as
Achievers and Strivers.
• Consumers are driven by a desire for social or physical activity, variety,
and risk-taking are motivated primarily by self-expression. These
consumers include groups known as Experiencers and Makers.

At the top of the rectangle are the Innovators, who have such high
resources that they could have any of the three primary motivations. At
the bottom of the rectangle are the Survivors, who live complacently and
within their means without a strong primary motivation of the types listed
above. The VALS Framework gives more details about each of the groups.

Resources under VALS 2 help you to develop a demographic/socio-

economic profile. Post profiling, you develop the segments description. You
must also realize that each of these eight segments differs in some
important ways. For instance, Believers tend to buy goods produced by
domestic manufacturers, thus slow to create a behavioural shift. This
knowledge can thus be utilized by marketers to segment and target their
marketing activities.

Significance of psychographic variables to marketers

Psychographic understanding could provide dramatic insights into

motivational research. Psychographic profiles are complementary to
traditional demographic profiles. Demographic variables help marketers to
‘locate’ their target markets, psychographic variables help them to acquire
a picture of the ‘inner consumer’, that is, they provide insights into what
the consumers are feeling and what should be stressed in the firm’s
promotional campaign.

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5.11 CONSUMER PERCEPTION

Perception can be explained as being an awareness of something through

the senses. It’s how something is regarded, understood, or interpreted.
Perception is the neurophysiological processes, including memory, by which
an organism becomes aware of and interprets external stimuli. We keep
receiving messages through sights, sounds, smell, taste, and sensations.
All these are known as stimuli. Thus, perception is defined as the process
by which an individual selects, organizes, and interprets stimuli into a
meaningful and coherent picture of the world. It will be interesting to note
that people can view the same event at the same time, and each will
report in total honesty a story different from all the others (Refer to the
picture below and decide what you saw).

Fig. 5.10: Do you see a girl or a musician?

A stimulus is any unit of input to any of the senses. Stimuli can be a

product, brand, logo, advertisements. Sensory receptors are any one of
the human organs capable of receiving sensory inputs. Stimuli need to be
developed, offered, sent, and developed to get noticed by one of the
sensory receptors or a combination of them. Our mind dynamically
processes various stimuli received and based on experiences; individuals
build a perception. The sender is trying to influence your perception in a
particular manner, but it is not necessary that the recipient decodes the
message and builds perception as you expect him to. Thus, it is said that
your perception in the minds of others is what matters and not what you
think it is.

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Sensation

Sensation refers to the process of sensing our environment through

touch, taste, sight, sound, and smell. This information is sent to our brains
in raw form where perception comes into play. Perception is the way we
interpret these sensations and therefore make sense of everything
around us.

Although intimately related, sensation and perception play two

complimentary but different roles in how we interpret our world. It is
interesting to know how our senses work and how this information is
organized and interpreted.
• Sensation depends upon how we distinguish the inputs. (As in Figure 6.4,
some will see the girl’s face, and a few may see the musician).
• If the environment around us remains unchanged, it provides little or no
sensation, irrespective of the strength of the input – if we are used to the
noise around us (those staying close to railway tracks), we will not get
disturbed by other noise in our vicinity.
• With the decrease in multiple sensory inputs, our ability to distinguish
the slightest of change increases – If you are locked in your living room,
with lights off, you may find that you can hear the tick-tock sound of
your table-top watch.
• Sensation leads to perception as per organized information available with
us and we arrange it in a meaningful manner – If someone tells us that a
cylinder blast killed 2 people, we will visualize a blast due to our
exposure to films.

The above points are narrated to emphasize that we are not overwhelmed
by random sensation, but our cognitive structure allows a meaningful
interpretation.

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Threshold

Although God has given us five different sensory receptors, we may not be
able to sense everything around us. It depends on the strength of our
receptors and the level. We only sense things that we can, since we don’t
have the sense of smell like a bloodhound or the sense of sight like a
hawk; our thresholds are different from these animals and often even from
each other. The threshold is thus a level.

Absolute Threshold

The absolute threshold is the point where something becomes noticeable to

our senses. It is the softest sound we can hear or the slightest touch we
can feel. Anything less than this goes unnoticed. The absolute threshold is
therefore the point at which a stimulus goes from undetectable to
detectable to our senses.

When there is constant stimulation, the absolute threshold rises, indicating

the numbness of the senses. Those staying within Dharavi (Asia’s largest
slum), may not get disturbed by bad odours as they live in an unclean area
with bad odours.

This is the biggest problem being faced by advertisers. Around the highest
TRP program, many ads compete with each other, along with the
interesting twist in the episode itself. If they continue to repeat the same
advertisement, the audience ignores it due to the seen-before attitude.
Thus, they must consider whether the same ad can be presented with a
new idea, or they need a new campaign periodically? This is the primary
reason why media innovation is considered essential – larger space ad,
gatefold, and partial fold are how the limitations of the absolute threshold
can be minimized and changed stimuli will help your communication in
getting noticed.

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Difference Threshold or Just Noticeable Difference (JND)

Once a stimulus becomes detectable to us, how do we recognize if this

stimulus changes? When we notice the sound of the radio in the other
room, how do we notice when it becomes louder. It’s conceivable that
someone could be turning it up so slightly that the difference is
undetectable. The difference threshold is the amount of change needed for
us to recognize that a change has occurred. This change is referred to as
the Just Noticeable Difference (JND).

Marketers can use this knowledge to their advantage. They need to

understand the JND and thereby determine their level beyond which only
they can look for behavioural change, be it in the area of the product,
price, place, or promotions. To be effective, the level of change shall be
higher than the JND – discount offers lower than previously given discount
may get unnoticed. For different product categories and brands, this level
could be different.

Subliminal Perception

Subliminal is a two-part word consisting of the prefix sub- and the root
word limen (Latin origin). Sub- means below and limen means threshold.
Thus, subliminal comes to mean below the threshold. But what is a
threshold? In other words, people perceive stimuli without being aware of
them consciously. Even weak and brief stimuli may be perceived by us.
This is called subliminal perception. It is that perception where the stimulus
is under the threshold or limen of awareness but is certainly not under the
absolute threshold of the receptor cells involved.

Can words flashed quickly on a screen make you want to purchase a

product? Can a hidden image persuade you to spend your hard-earned
cash on something you don't need? Those who believe in the power
of subliminal advertising would argue that if you'd seen those words
flashed at you for a fraction of a second, without your conscious awareness
that you ever saw them, you'll be more likely to do as they say. The claim
is that our brain has picked up the message even if we haven't.

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Advertising can manipulate our emotions, with or without making the

process hidden. To balance out the tremendous power of advertising, a
person can aim to consider and question how the company is trying to
position the product and then weigh whether he needs what is being sold.

5.12 PERCEPTUAL MECHANISM

The perceptual mechanism is impacted by two kinds of factors: (i) external

factors, related to the stimuli and the environment, and (ii) internal
factors, related to the perceiver, in the form of demographic, socio-cultural
and psychographic factors. People perceive things differently because of
the perceptual mechanism that differs between people.

The perceptual mechanism requires greater discussion owing to a great

deal of complexity and dynamism that goes into play. The three sub-
processes viz., perceptual selection, organization and interpretation are
discussed in subsequent sections.

1. Perceptual Selection
We are flooded with countless stimuli every moment. We recognize some
but ignore many; we comprehend few but forget many! We select what we
want; we ignore what we do not want to have. Thus, we need to
understand a few salient aspects of stimuli.

Size: The larger the size of the stimulus, the more likely it is to be
perceived. E.g., published headlines in the newspaper printed brand name
on the packaging of a product.

Contrast: Any stimulus that stands out from the rest of the environment is
more likely to be noticed. E.g., capital, and bold letters, a black and white
advertisement amongst coloured ads on TV.

Familiarity and Novelty: A new stimulus in a familiar setting or a familiar

stimulus in a new setting increases the chances of perceptual selectivity.
E.g., substantive variation in advertisements, where the message content
changes, while the background or the models or the jingle remains the
same; Or cosmetic variation, where the model changes, but the message
remains the same.

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Expectation: We only see what we want to see. The expectation is based

on previous experience. A product is perceived according to our
expectations. Some products conform to our expectations and most conflict
with our expectations.

Besides the above-mentioned stimuli, there are few others like intensity,
motion, and repetition which attract our attention.

Advertisers like to use such relevant stimuli, provide the same in their
marketing communication to get them recognized, interpreted, and
retained in memory. The following aspects of perception, therefore, need
closer examination.

a. Selective exposure: While people are exposed to various stimuli, they

avoid messages and block themselves from messages that they find
unpleasant, are uncomfortable with, and are contrary to their beliefs
and expectations. This is called selective exposure. For example, a
vegetarian will avoid an advertisement like “Sunday ho ya Monday, Roz
khaaye ande” from the National Egg Coordination Committee (NECC).

b. Selective attention: Many stimuli that people are exposed to - people

are attracted to those stimuli that they consider to be relevant in terms
of a match with their needs. They are attentive to those stimuli that
match their needs and avoid those that are irrelevant. People are also
selective about the message and the channel through which this
information would be transmitted. This phenomenon of being selective
towards the input based on our needs and desires is called selective
attention.

c. Selective Distortion: Sometimes people may select stimuli which they

later find as psychologically threatening, uncomfortable or contrary to
their views. In such cases, they tend to filter out those stimuli, although
the initial exposure has taken place. The threatening stimuli are
consciously filtered away. This is called perceptual defence or selective
distortion. Often people may also distort the stimuli as per their desire
and give meaning to their advantage.

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d. Selective Retention: Individuals tend to remember only the positive

features of a brand chosen by them. We tend to pretend to forget/
disregard other stimuli. We retain information because it conforms to
our values and decision.

e. Perceptual blocking: When exposed to a large number of stimuli

simultaneously, people may often block the various stimuli, as they get
stressed out. This is because the body cannot cope up with so many
stimuli at the same time. The people thus, block out the various stimuli
from their conscious awareness. This is called perceptual blocking. For
example, we all tend to “mute” the TV when the channels bombard us
with so many advertisements.

Activity B

Considering your life as an example, list at least 2 examples of selective

exposure, selective attention, selective distortion, selective retention,
perceptual blocking being experienced as your behaviour by you.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

2. Perceptual Organization

The next sub-process in the perceptual process is referred to as a

perceptual organization. After the input has been received from the
selection stage and given attention to, the input/cue or the information is
organized into a coherent form, to be able to extract the meaning out of it
in the next stage. Thus, the perceptual organization deals with what
happens in the perceptual mechanism once the information from the
environment is received.

While exposed to various stimuli, human beings do not select them as

separate and unrelated identities, but group them and perceive them as “a
unified whole.” This organization of the stimuli is based on certain
principles, which were first proposed by the Gestalt school of psychology,
and hence the name “Gestalt principles”. The marketer should aim at
making the principles of the Gestalt philosophy work in the product's
favour.

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There are four basic principles of perceptual organization, viz., figure and
ground, grouping, closure and simplification. Each of these is discussed
below.

a. Figure and ground: The figure and ground principle states that any
stimulus that stands apart from its environment, and contrasts against,
is more likely to be noticed and treated as a unified whole. It would
appear as a well-defined figure, in the forefront, clearly contrasted
against the ground. In other words, the figure stands clearly against the
background, or in contrast to the background, hence the term ‘figure
and ground’.

How a figure is seen as separate from the ground and is given

prominence (instead of the ground getting prominence) depends on two
kinds of factors, i.e., factors external and related to the stimuli as well
as factors internal and related to the perceiver. Learning needs and
motivation, personality makeup, attitudes etc. – all of these have a role
to play in the manner in which a person decides which stimuli are to be
perceived as a figure and which as ground.

Fig. 5.11: Perception through Foreground and Ground

(Black stands out as a figure, like a vase. When white (ground) is

considered, then it is a profile of two faces)

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The implication that a marketer needs to draw from the principle is that:

- While placing their brands in a store, the packaging should be such that
the brand stands out against the many others which should recede to the
background.

- While designing advertisements, it is essential that footage is given to

the product and/or the brand rather than the spokesperson (model,
celebrity, expert etc.). The marketing stimulus (for example, the product
and its image as well as the message) must be seen as the figure and
not the ground.

b. Grouping: As per the grouping principle, people tend to group the

various stimuli so that they are seen as a unified picture or a unified
whole; the basis for such grouping is i) similarity amongst stimuli, and
ii) proximity of the stimuli. The grouping of the discrete and distinct
pieces of stimuli is done to facilitate storage in memory and easy recall.

- Similarity amongst stimuli: In marketing terms, people rushing

together to a store that announces a discount, can be grouped as
price-sensitive and deal-prone. Or products with similar packaging are
perceived to be the same. This accounts for the success of “me-too”
(imitation) products.

- Proximity of the stimuli: The stimulus in an advertisement comprises

a number of things, like for example, the advertisement for Raymond’s,
the complete man. The stimuli comprise a party, a celebration, a
couple, a luxurious ambience, and the man wearing a suit. He is shown
as being handsome, caring, and special. The proximity of the man in a
suit to his surroundings impacts consumer perception in a manner that
assumes some kind of an association or a relationship between the
usage of the product (here suiting) and a similar reaction or outcome
(looking handsome, caring, and feeling special).

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The implication that a marketer needs to draw from the principle is that:

- Consumers perceive that products that are similar to each other in

appearance and use are related to each other. Me-Too product/spurious
product

- When marketers launch new brands, they should try and brand it as the
blanket family name or go for a corporate name combined with individual
product names and have the brand logo. The benefits associated with the
original product get translated to the newer product as well.

- Marketers should design their promotion messages in a manner that uses

cues and stimuli close to the product. The result is that the positive
feelings generated by one or few stimuli can be translated to the rest in
totality, to generate a positive outcome.
- Consumers relate the various stimuli that lie in proximity to each other. A
product is perceived in the same way as the other stimuli are perceived
in the proximate surroundings. If the mood generated by the surrounding
stimuli is regal and royal, the product tends to get related to
sophistication and style. So, the marketer must be careful in using
stimuli that blend perfectly with the product.

c. Closure: This principle of Gestalt psychology, emphasizes an

individual’s need for completion. The closure principle states that in
cases where an object is identified as incomplete by sensation, our
perceptual processes give it a complete form. The closure is said to
occur when the human mind perceives it as a “complete whole”
although the object is incomplete, and some elements are missing. They
add to the incomplete stimuli to which they are exposed according to
their learning, motives, expectation, beliefs, and attitudes etc.

In marketing terms, for example, consumers watch an advertisement on

TV. When they hear the audio on TV, and hear the jingle, in their need
for completion, they can form mental images and replay the
advertisement as is shown on TV.

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The implication that a marketer needs to draw from the principle is that:

- The principle of closure can be applied by a marketer to encourage

audience participation, which increases the chances of people attending
to the message. Teaser elements may be used in advertisements, and
the consumers may be asked to fill up the gaps. This generates
consumer attention and involvement, interest, and excitement.

d. Simplification: As the name implies, the principle of simplification

states that human beings tend to simplify things to make them more
understandable. The principal emphasizes the simplification of
association between elements, for better comprehension and
understanding. When people are exposed to too many stimuli or
information, they subtract or delete the less relevant ones and give
importance to the more important ones. This is done so that they can
lessen the load on their cognitive processes.

The implication that a marketer needs to draw from the principle is that:

- The marketer should avoid the clutter of information. The information

that he needs to provide should be short, crisp, and precise.

- The important inputs that the marketer wants to provide to the

consumers must be highlighted in size, font and colour.

3. Perceptual Interpretation

The final sub-process in the perceptual process is referred to as perceptual

interpretation. After the input has been given attention to and has been
organized into a coherent form, a meaning is extracted out of it. This is
referred to as a perceptual interpretation. The process is individual, based
on a person’s demographics, socio-cultural influences, and psychographic
influences. People interpret stimuli (i.e., they give meaning to them)
subjectively in accordance with their needs, expectations, and experiences.
That is why perception varies from person to person.

Similar to selection and organization, perceptual interpretation is also

influenced by the forces external and related to the stimuli, as well as
forces internal and related to the perceiver. It is also affected by the
situation under which the perception takes place.

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Often people commit perceptual errors due to a number of influences. Such

influences are called distorting influences, and these are discussed as
follows:

a. Physical appearance: People often judge others (or the stimuli) based
on physical appearance and looks.

Example: Just because a car is good in looks, aesthetically designed and

appealing, does not essentially imply that it gives good mileage, and it is
technically sound.

Marketers take advantage of physical appearance as an influencing

factor to their advantage. They not only design their cars aesthetically
but also design the advertisements accordingly to attract buyers.

Marketers use attractive models as their spokespersons. Attractive

models are regarded to be more persuasive than average looking
models, as people relate the good looks of the models with pleasurable
outcomes after usage of the product.

Example: The very fact that a “me-too” product resembles an original

product does not imply that the former would function as well as the
latter.

b. Stereotypes: People judge another person (or the stimuli) based on

the characteristics of the group to which he belongs. It is a tendency to
perceive another as belonging to the same group or category as the
former.

People tend to generalize; they create expectations of what a stimulus

(person, object, thing etc.) would be like based on the group to which
he/she belongs. Example: German goods are considered as an
engineering marvel and Chinese goods are considered as a short-term
utility.

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c. Irrelevant cues: When people make interpretations based on

irrelevant and unmeaningful stimuli, they are said to have made a
perceptual error based on irrelevant cues. The perceptual judgment in
such cases is made on irrelevant cues.

Example: While purchasing a car, people get carried away by looks,

aesthetics, and appeal. Rather than thinking about the mechanical
aspects and the technology used.

d. First impression: People often make judgments based on the first

impression. This may not always be true and could be erroneous. If
erroneous, it would be known as a perceptual error based on the first
impression. The first impression as a principle has implications for a
marketer. A new product should never be introduced in the market
before it has been market-tested. In case it is not tested and launched,
and subsequently fails, it could be disastrous for the company. All
subsequent attempts to satisfy the customer would fail as the first
impression is long-lasting.

e. Jumping to the conclusion: People often tend to conclude even before

having gone through the entire stimuli or information. This is referred to
as jumping to the conclusion.

f. Inference: The tendency to draw out a conclusion and making

judgments about the stimuli (person, place, thing, etc.) based on
incomplete or limited information is called inference.

Example: When a consumer assesses the quality of a product to be

good, just because it is priced very high, he is said to be drawing
inference and may be an error.

g. Halo effect: When a stimulus (person, place, thing, etc.) is perceived

based on a single trait, it is referred to as a Halo effect. In case the
assessment is based on something good and desirable, it is referred to
as a Halo effect or a positive Halo effect, and in case the assessment is
based on something bad and undesirable, it is called a reverse Halo
effect.

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Example: Proctor and Gamble have roped in Kajol (and other heroines)
as their brand ambassador for Oil of Olay. When consumers perceive the
Oil of Olay to be a good lotion, just because it is being endorsed by a
successful actress like Kajol, the Halo effect would come into play.
Kajol’s presence overrides all other qualities present in Oil of Olay or its
company, Proctor and Gamble.

Another example: iPod has had a positive impact on perceptions of other

products from Apple. With the success of the iPod, the benefits have got
translated to other products made by Apple Inc.

Under the perceptual organization, we need to also study ‘Perceptual

Mapping’.

Perceptual Mapping

Branding or brand management has two conversation parts (1) verbal part
more between buyers and the seller (you will go to a retail store and ask
for Cadbury Crackle; and (2) Between seller and the buyer - it is more
psychological part (as the seller needs to gain an entry in the minds of
target customers). Your brand will gain an entry into the minds of
consumers only if it has relevance, differentiation and recall ability. Thus,
the emphasis is on the brand occupying a preferential space of mind. This
is known as ‘Brand Positioning’ in simple terms. Preferential space resides
in the ‘CONSUMER’S PERCEPTUAL SPACE’. Perceptual space is a
COLLECTIVE COLLAGE OF PERCEPTIONS - What comes to your mind when
you hear razor v/s trimmer? What comes to your mind when you hear cold
cream v/s beauty cream? In our mind, a perceptual map is formed which is
a collective representation of two attributes on which a brand is measured
for two extreme values:

• Quick-Slow/Expensive-Inexpensive (SPEED:COST)

• Low Price-High price/Limited features-More features (PRICE:FEATURES)

A Perceptual map compares different brands on such selected two

extremes. Let’s select Chocolate as an example. Chocolates can be
compared to two extreme points – Quality and Price. The following
perceptual map emerges:

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Fig. 5.12: Perceptual Mapping of International Chocolates

(Indicative only for learning purpose)

You can see from the above perceptual map that Lindt is world-famous due
to its quality and price, followed by Green & Black’s with high quality but
available at a moderate price. Then comes Ferrero Rocher, more favourable
on the price front than quality, and likewise we can examine other brands
like Cadbury, Kit-Kat, Mars, and M&Ms.

A Perceptual map helps you to know which products are close to you on
which attributes, and better or lower than you on which attributes. This
helps the marketer to constantly determine the validity of their positioning
stance, the available mind space to occupy, by introducing product
extension or brand extension, new product development etc. Ultimately
this is a result of the perception which customers have built for your and
other brands on various conjoint points (Price: Quality).

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Activity C

Attempt to plot a perceptual map of any four-car companies’ hatch-back

category of car model, using two extreme variables namely, Features:
Price.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

5.13 STORE IMAGE

Retail stores project an indented image of the organization they represent.

As a result, the consumer walks in with the assurance of the perceived
quality of the product and the service they will get. You, therefore, see
organizations insisting on specific uniform identity standards being
implemented before they issue the certificate of commencement. However,
in the market, you are not alone. Thus, researchers use semantic
differential to obtain an image of a store.

Fig. 5.13: Two Retail Stores’ Semantic Differential Scale

(Credit - slideplayer.com)

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From the above Semantic Differential Scale, it can be concluded that K-

Mart scores in terms of being a modern store, though with high prices, but
has friendly staff, a wide product range and a sophisticated customer base
that visits the store to buy goods.

A consumer may buy his routine suiting from a normal store, but for his
wedding suit, he will prefer to choose Raymond’s store.

Company Image

The same technique of semantic differential can be used to gauge your

company’s image in the eyes of your stakeholders. This will bring out your
standing vis-a-vis other companies, including competition. Your company’s
favourable image increases the chances of product quality trust, and the
chances of a new product being accepted with trust, service assurance and
brand equity.

Promotions and CSR initiatives play a vital role in building a company’s

image. The perception of the organization leads us to their store;
Perception of the store leads us to buy from there, repeatedly. Perceived
quality of the organization and the store allows a price premium that is
acceptable to target customers!

What is the Semantic Differential Scale?

The semantic differential is a type of rating scale designed to measure

the attitude of a respondent towards objects, events, and concepts. This is
done by using a simple scale with two bipolar adjectives along a 7-point
scale. This is different from the Likert scale because, unlike the Likert
scale, where each item in the scale has words associated with it, only the
extreme opposites are listed for the Semantic Differential scale.

The outcome of this scale is a snake chart. It brings out the attributes/
factors on which you score better over the competition. However, it is
difficult to develop and get deep insights as it does not get into reasoning.

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5.14 WHAT HAVE YOU LEARNT – A SUMMARY

Personality represents the inner psychological characteristics as a response

to the environment around, wherein an individual wants to convey a
specific self-image. There are three main theories of personality, namely
Freudian (psychoanalytic) theory, Non-Freudian theory and trait theory.
Additionally, an unconventional theory is known as the Jungian Personality
theory also was covered.

Personality has two tangents – (1) Consumer as a self (2) Brand as a

personality. Under the consumer as a self, it explains how an individual
does get driven to express specific facets of his personality and how
marketers can use this aspect to their advantage. As against this,
personality theory also suggests that even brands have their personality.
Brand personality can be measured using five identified personality factors
popularly known as the big five – sincerity, excitement, competence,
sophistication, and ruggedness. There are numerous advantages of brand
personality to marketers.

Psychographics captures the relevant aspects of a consumer’s personality,

buying motives, interests, attitudes, beliefs, and values. Psychographic
profiles are complementary to traditional demographic profiles, thus
offering better consumer insights.

In constructing psychographic inventories, researchers strive to capture

activities (how a consumer or a family spends time), interests (how a
consumer’s or a family’s preferences and priorities are determined), and
opinions (how a consumer feels about a wide variety of events or things).

Perception is the process by which individuals select, organize, and

interpret stimuli into a meaningful and coherent picture of the world. The
lowest level at which an individual can perceive a specific stimulus is called
the absolute threshold.

The perceptual mechanism has three sub-processes viz., perceptual

selection, organization, and interpretation (discussed in subsequent
sections).

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Consumers select the stimuli from the environment, which meet their
expectations and motives. This aspect of selection includes variations like –
selective exposure, selective attention, selective distortion, selective
retention, and perceptual blocking.

The next sub-process in the perceptual mechanism is referred to as a

perceptual organization. After the input has been received from the
selection stage and given attention to, the input/cue or the information is
organized into a coherent form, to be able to extract the meaning out of it
in the next stage.

The final sub-process in the perceptual mechanism is referred to as

perceptual interpretation. After the input has been given attention to and
has been organized into a coherent form, a meaning is extracted out of it.
This is referred to as a perceptual interpretation. Influences that tend to
distort objective interpretation include physical appearances, stereotypes,
halo effects, irrelevant cues, first impressions and the tendency to jump to
conclusions.

Products, brands, and organizations including stores have their images for
which we studied perceptual mapping and use of the semantic differential
scale.

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5.15 SELF ASSESSMENT QUESTIONS

1. Define personality and list the various characteristics of personality.

2. What do you understand by Freudian theory? Please explain.

3. How are personality and consumer behaviour related?

4. What is brand personality?

5. Explain the theory of psychographic consumer segmentation using SRI

VALSTM current prevailing model.

6. What is consumer perception? Also, highlight its salient aspects.

7. What do you understand by the term perceptual selection? Highlight the

significance of Expectation under it.

8. Explain the concept of perceptual mapping under the perceptual

organization. Suggest the utility of it for marketers.

9. Highlight the significance of perception in a store and the organization

image. Which tool is generally used to determine a specific image?

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5.16 MULTIPLE CHOICE QUESTIONS

1. As per the Freudian personality theory, human personalities are

construction of three interacting systems – the Id, ____________
and Ego. Fill in the blank.
(a) Superior ego
(b) Super ego
(c) Superficial ego
(d) Superlative ego

2. Researchers have identified five personality factors popularly known as

BIG FIVE – sincerity, excitement, ____________, sophistication and
ruggedness. Fill in the blank.
(a) connections
(b) competence
(c) communications
(d) commitment

3. Drawing on Maslow’s need hierarchy and concept of social character,

researchers at SRI led by Arnold Mitchell, developed a generalized
segmentation scheme of the American population (Even useful
otherwise) known as ______________ (VALS) program. Fill in the
blank.
(a) Versatility and Lifestyle
(b) Variety and Lifestyle
(c) Values and Lifestyle
(d) None of the above

4. We are flooded with countless stimuli every moment. We recognize

some but ignore many, we select what we want, and we ignore what we
do not want to have. Under perception mechanism it is known as
______________. Fill in the blank.
(a) perceptual selection
(b) perceptual organization
(c) perceptual interpretation
(d) perceptual mapping

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5. There are four basic principles of perceptual organization viz.,

______________, grouping, closure and simplification. Fill in the blank.
(a) Foreground and background
(b) Figure and ground
(c) Selective retention
(d) Selective rejection

6. During the final sub-process in the perceptual mechanism, individuals

after receiving the input give the attention and organize it into a
coherent form, to extract meaning out of it. This is referred to as
______________. Fill in the blank.
(a) perceptual selection
(b) perceptual organization
(c) perceptual interpretation
(d) perceptual mapping

Answers:

1. (b), 2. (a), 3. (b), 4. (c), 5. (a), 6. (b), 7. (c)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

Video Lecture - Part 3

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Chapter 6
Learning and Consumer Involvement

Objectives
By the end of this chapter, you should be able:
• To understand what is consumer behaviour
• To understand the nature and classification of consumer behaviour
• To understand the importance of consumer behaviour
• To understand the forces that drive change in consumer behaviour
• To understand the application of consumer behaviour principles to
strategic marketing
• To take an overview of the consumer behaviour scene in India
Structure:
6.1 Introduction
6.2 What is learning?
6.3 Behavioural Learning Theories
6.4 Storage, Retention and Retrieval of Information
6.5 Involvement Theory
6.6 Advertising Effect
6.7 Learning in an online environment
6.8 What have you Learnt – A Summary
6.9 Self-Assessment Questions
6.10 Multiple Choice Questions (MCQ)

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6.1 INTRODUCTION

It is accepted that learning is a result of the stimuli and responses we have

gone through in our experiences. Thus, how individuals learn is a subject of
immense importance to marketers. This is because marketers’ desire that
they can make consumers learn about goods and services offered and new
ways of behaviour that will satisfy not only the consumers’ needs but the
marketer’s objectives as well.

Consumer behavioural researchers have developed two general categories

of learning theory – behavioural theory and cognitive theory. Each theory
offers insights to marketers on how to shape their messages towards
consumers to bring about the desired purchase behaviour. This makes it
essential for us to understand information processing and the dynamic and
new involvement theory.

6.2 WHAT IS LEARNING?

Learning is the act of acquiring new, or modifying and reinforcing existing

knowledge, behaviours, skills, values, or preferences and may involve
synthesizing different types of information. It is a relatively permanent
process or a change in behaviour that occurs as a result of experience or
practice.

In simple words, learning is ‘A process by which individuals acquire the

purchase and consumption knowledge and experience that they apply to
future related behaviour’.

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Learning is also defined as a lasting change in behaviours or beliefs that

results from experience. The ability to learn provides every living organism
with the ability to adapt to a changing environment. Learning is an
inevitable consequence of living – if we could not learn, we would die.

Learning is acquired either:

Intentionally

• learning acquired as a result of a careful search for information

OR

Incidentally

• learning acquired by accident or without much effort

A lot of our learning occurs randomly throughout life, from new

experiences, gaining information and from our perceptions, for example:
reading a newspaper or watching a news broadcast, talking with a friend or
colleague, chance meetings and unexpected experiences.

Many experiences in life provide us with learning opportunities

from which we can choose whether or not to learn. This type
of experiential learning is in contrast to more formal approaches to learning
such as training, mentoring, coaching, and teaching, all of which have
some type of structure in that they are a form of planned learning involving
a facilitator.

Teaching, training, and other structured learning opportunities are activities

that one person does for another, while learning is something, we can only
do for ourselves.

Learning involves far more than thinking: it involves the whole

personality - senses, feelings, intuition, beliefs, values and will. If
we do not have the will to learn, we will not learn and if we have learned,
we are changed in some way. If the learning makes no difference it can
have very little significance beyond being random ideas that float through
our consciousness.

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Learning needs to meet some personal need and recognizing and

identifying such needs enables us to evaluate whether the learning has
been worthwhile and successful.

The three elements involved in learning are:

Fig. 6.1: Elements of Learning

The characteristics of learning are;

Yoakman and Simpson have described the following nine important

characteristics of learning.

1. Learning is growth: The individual grows through living and learning.

Thus, growth and learning are inter-related and even synonymous.

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Learning occurs when we can:

• Gain a mental or physical grasp of the subject.
• Make sense of a subject, event or feeling by interpreting it into our own
words or actions.
• Use our newly acquired ability or knowledge in conjunction with the
skills and understanding we already possess.
• Do something with the new knowledge or skill and take ownership of it.

2. Learning is an adjustment: Learning enables the individual to adjust

himself properly to new situations. The individual faces new problems
and new situations throughout his life and learning help him to solve the
problems encountered by him. It is through learning that one could
achieve the ability to adjust adequately to all situations of life.

3. Learning is purposeful: All kinds of learning are goal-oriented. The

individual acts with some purpose. He learns through activities. He gets
himself interested when he is aware of his objectives to be realized
through these activities. Therefore, all learning is purposeful in nature.

4. Learning is experience: The individual learns through experiences.

Human life is full of experiences. All these experiences provide new
knowledge, understanding, skills and attitudes. Learning is also the
reorganization of experiences or the synthesis of old experiences with
the new.

5. Learning is intelligent: Mere cramming without proper understanding

does not make learning. Thus, meaningless efforts do not produce
permanent results. Any work done mechanically cannot yield
satisfactory learning outcomes. Learning, therefore, must be intelligent.

6. Learning is active: Learning is given more importance than teaching.

It implies the self-activity of the learning. Without adequate motivation,
a person cannot work wholeheartedly, and motivation is therefore at the
root of self-activity.

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7. Learning is both individual and social: Although learning is an

individual activity, it is social also. An individual’s mind is consciously or
unconsciously affected by group activities. He is influenced by his peers,
friends, relatives, parents, and classmates and learns their ideas,
feelings, and attitudes in some way or the other. Social agencies like
family, church, markets, and clubs exert immense influence on
individuals’ minds. As such, learning becomes both individuals as well as
social.

8. Learning is a product of the environment: The individual lives in

society. Particularly, the environment plays an important part in the
growth and development of an individual. The physical, social,
intellectual, and emotional development of the child is moulded and
remoulded by the objects and individuals in his environment.

9. Learning affects the conduct of the learner: Learning is called the

modification of behaviour. It affects the learner's behaviour and conduct.
Every learning experience brings about changes in the mental structure
of the learner. Therefore, attempts are made to provide such learning
experiences which can mould the desired conduct and habits in the
learners.

Characteristics of a Learner

Learning by the consumer is a direct result of the characteristics of

individuals, like:

1. Prior Experience: All our prior experiences determine our learning

ability. It depends on whether prior learning facilitates behaviour change
for the better or inhibits change. Bad prior experience will inhibit
behavioural change.

2. Confidence: It’s an individual’s sheer mindset that allows him to act on

his own. We find many individuals who decide things on their own while
we also see many who depend on others, including their needing
someone to accompany them during their shopping.

3. Heredity: Hereditary characteristics also affect a learner’s performance.

Decision making, risk-taking, and similar qualities come through
heredity.

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4. Ability: People have certain abilities (technical knowledge) and

inabilities (to read), which greatly affect a learner’s performance.

5. Personality: Introvert or extrovert, lifestyle conscious vis-a-vis not so

conscious and similar such personality traits affect the learners’
performance.
Characteristics of
the learner that
affect
performance

Fig. 6.2: Characteristics of the Learner

The above characteristics are fundamentally the criteria essential for

anyone to be qualified as a learner. There are different characteristics
required wherein learning is given to shift the behaviour. This is covered
later separately.

The PACT Learning Cycle

Many attempts have been made by academicians and others to map and
explain the learning processes. It is generally recognized that learning
takes place in a repetitive cycle - an ongoing series of processes.

The diagram below represents a generic learning cycle and uses the
acronym PACT. The cycle is relevant to all types of learning.

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The PACT learning cycle stages are:

• Procure. New knowledge (theory) or ability (skill) is acquired.
• Apply. The new knowledge or skill is then practised in some way.
• Consider. The results of the practice are evaluated and/or assessed.
• Transform. The original knowledge or ability is modified accordingly

The cycle then continues and repeats.

The PACT cycle should help to demonstrate that learning is an

iterative process: Our learning evolves as we develop, and we utilize
early knowledge for later understanding. There are many examples of
these processes in action - usually we learn the basics of a subject or skill
before progressing to intermediate, advanced and ultimately expert levels.
At each stage we build on the knowledge and experience we have already
acquired, gaining further knowledge, experience, or techniques, and
repeating the learning cycle.

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Basic Principles of Learning

Different types of learning exist – from simple learning to higher learning,

and consumer researchers have explained it through different models.
However, for learning to occur, certain basic elements must be present,
namely motivation, cues, response, and reinforcement. It is essential to
understand them for enabling us to understand the complete meaning of
learning and different theories thereafter.

Motivation: Motivation popularly is thought to be essential for learning.

(A)MOTIVATION AND PERFORMANCE

Learning was defined above as a change in behavioural potentiality.

Realization of such potential seems to be related to the learner’s level
of motivation. A pupil who has learned the names of all members of the
Indian World Cup-winning cricket team would be expected to recite them
with particular energy under some sort of incentive (reward or
punishment). The incentive is said to raise his level of motivation.

Incentives do seem to invigorate the performance up to a point; however,

when motivation seems particularly intense, some studies show the
performance to deteriorate. From such data some theorists conclude that
the effect of drive intensity on performance follows a U-shaped course, first
helping and later hindering.

Greatly increased motivation also may change performance qualitatively by

introducing new inefficient modes of behaviour. A student may be so rigidly
driven to do well in an examination that his tension, fear of failure, and his
visceral and muscular discomfort interfere with performance.

(B) MOTIVATION AND LEARNING

To show that motivation affects the performance of what has been learned
is not the same as demonstrating its effect on the process of learning itself.
This would require that individuals learn under various levels of motivation
and be tested under the same incentive levels. (This is to control the
effects of motivation on performance alone.) And indeed, the best-
controlled experiments of this design indicate learning effects to be the
same under different levels of motivation.

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Cue: From the marketing perspective, a stimulus or cue is the various

advertisements anyone reads watches or hears. Needs/Motives get
direction due to the presence of cues. Thus, in the marketplace, the
product look, price, styling, packaging, advertisements, and window
displays serve as cues that will fulfil consumers’ needs/motives.

Cues serve to direct the consumer drive when they are consistent with
consumer expectations. Marketers must ensure that cues continue to meet
expectations. High-end consumer products must ensure that they are
stylized well, advertised in an exclusive manner, sold through exclusive
outlets, represented through recognized brand ambassadors and likewise.
Each aspect of the marketing mix must reinforce the others if cues are to
serve as the stimuli that guide consumer actions in the direction desired by
the marketer.

Response: Individuals’ reaction to a cue in a particular manner is

considered a response. Learning can occur even if responses are not overt.
In other words, though there are cues, they may not result in a purchase.
A favourable image in the minds of consumers is conducive to its selection
when the consumer is ready to purchase.

A response is not tied to a need in relative terms. A need or motive may

evoke a whole variety of responses. For example, there may be many ways
to respond to the need for hunger such as simple food, south Indian food,
fast food and more. At this stage, cues provide some direction, but many
cues are competing for the consumer’s attention. Which response he
makes depends heavily on the previous learning. That, in turn, may
depend on which responses were reinforced in the past. Any housewives’
preference for GITS’ ready to make mixes will be favourably reinforced in
the past due to the good appreciation she got; thus, her next response will
be more in favour of GITS.

Reinforcement: Objectively reinforcement refers to the use of stimuli that

have been found to facilitate learning. Under appropriate conditions, these
include praise, food, water, opportunity to explore, sexual stimuli, money,
and direct brain stimulation.

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More theoretically, the term reinforcement expresses various theoretical

hunches about some specialized subjective quality all such stimuli might
share. From the marketers’ perspective, a housewife will choose first to
buy a Morphy Richardson food processor. Why? Because she has MR’s
mixer running so well since last so many years, and their advertisement
continues to bank on their quality claim; that quality is reinforced in her
mind as a stimulus, thus next time when she needs a quality kitchen
product, she will think about MR first. Reinforcement increases the
likelihood that a specific response will occur in future as a result of
particular cues or stimuli.

Activity A

Explain what is learning, various characteristics of learning and list the

basic principle of learners.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

6.3 BEHAVIOURAL LEARNING THEORIES

There are two types of learning theories.

The first perspective argues that learning can be studied by observation

and manipulation of stimulus-response associations. This is known as
the behaviourist perspective because of its strict adherence to the study of
observable behaviours.

This perspective was first articulated in 1913 by John Watson, who argued
that psychology should be the study of observable phenomena, not the
study of consciousness or the mind. Watson believed that objective
measurement of observable phenomena was the only way to advance the
science of psychology.

The second type of learning theory argues that intervening variables are
appropriate and necessary components for understanding the processes of
learning. This perspective falls under the broad rubric of cognitive
learning theory, and it was first articulated by Wilhelm Wundt, the
acknowledged "father of psychology." He used introspection as a means of
studying thought processes.

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Although proponents of these two perspectives differ in their view of how

learning can be studied, both schools of thought agree that there are three
major assumptions of learning theory: (1) behaviour is influenced by
experience, (2) learning is adaptive for the individual and the species, and
(3) learning is a process governed by natural laws that can be tested and
studied.

Behaviour Learning Theory

Behaviourist theories identified processes of learning that could be

understood in terms of the relationships between the stimuli that impinge
on organisms and the way organisms respond, a view that came to be
referred to as S-R theories (Stimulus-Response). A central process in S-R
theories is equipotentiality. Equipotential learning means that learning
processes are the same for all animals, both human and nonhuman. By
studying learning in nonhuman animals, the early behaviourists believed
they were identifying the basic processes that are important in human
learning. They also believed that learning could only be studied by
observing events in the environment and measuring the responses to those
events. For behaviourists, a behaviour change is the only appropriate
indicator that learning has occurred. According to this view, all organisms
come into the world with a blank mind, or, more formally, a tabula
rasa (blank slate), on which the environment writes the history of learning
for that organism. Learning, from the behaviourist perspective, is what
happens to an organism as a result of its experiences.

Fig. 6.3: Stimulus-Response in Listening

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Types of Behavioural Learning

There are two main types of learning in the behaviourist tradition. The first
is classical conditioning, which is associated with the work of Ivan Pavlov
(1849–1936), a Russian physiologist who studied the digestive processes
of dogs. Pavlov noticed that dogs salivated in the absence of food if a
particular stimulus was present that had previously been paired with the
presentation of food. Pavlov investigated how an association between a
neutral stimulus (e.g., a lab technician who fed the dogs), an
unconditioned stimulus (food), and an unconditioned reflex (salivation) was
made. Pavlov's classic experiment involved the conditioning of salivation to
the ringing of a bell and other stimuli that were not likely to make a dog
salivate without a previously learned association with food.

Fig. 6.4: Classical Conditioning

In the initial stages of the classical conditioning paradigm, an

unconditioned response (UCR; in this case, salivation) is elicited by the
presentation of an unconditioned stimulus (UCS; in this case, food). If a
neutral stimulus (one that does not elicit the UCR, such as a bell) is paired
with the presentation of the UCS over a series of trials, it will come to elicit
a conditioned response (CR; also, salivation in this example), even when

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the UCS (food) is absent. In the paradigm of classical conditioning, the

previously neutral stimulus (bell) becomes a conditioned stimulus (CS),
which produces the conditioned response (CR) of salivation. In other
words, the animal in the experiment learns to associate the bell with the
opportunity to eat and begins to salivate to the bell in the absence of food.
It is as though the animal came to think of the bell as "mouth-watering,"
although behaviourists never would have used terms like think of because
thinking is not a directly observable behaviour.

Fig. 6.5: Pictorial Representation of Classical Conditioning

Even though the original work on classical conditioning was performed

using nonhuman animals, this type of learning applies to humans as well.
Learned taste aversions and the development of specific phobias are
examples of classical conditioning in humans. For example, the first time a
person hears a drill at a dentist's clinic; it probably will not cause the palms
to sweat and the heart rate to quicken. However, through the pairing of the
sound with the unpleasant sensation of having a cavity drilled, the sound
itself may come to elicit symptoms of fear and anxiety, even if one is not in
the dentist's chair. Feelings of fear and anxiety may get generalized so that
the same fear response is elicited by the sight of the dentist's lab coat or
the dental chair.

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Classical Conditioning in Brief

It is given by a Russian psychologist – IVAN PAVLOV. He was not a

psychologist. However, his experimentation has established that classical
conditioning involves learning that takes place between a neutral stimulus
and a response.

Some of the concepts that explain the experiment:

1.THE US
It is the unconditional stimulus that is capable of eliciting a reflex-like
response on its own, e.g., food. It is certain to arouse a response.

2.UR
It is the unconditional response, i.e., a response to the US, spontaneous,
natural, and unlearned.
For example, salivation by a dog

3.CS
It is the conditional stimulus.
It is neutral.
It is the learnt response in the experiment.

4.CR
This is the conditional response to the CS
It is learnt, e.g., salivation
Implications of Classical Conditioning
1. Led to numerous RESEARCH in the field of learning.
2. Most of our responses are the result of CONDITIONING.
3. PHOBIAS and milder forms of NEUROSIS are also the results of
conditioning.
4. Most of our likes and dislikes that relate to PEOPLE, PLACES, and
EVENTS OR THINGS are the result of conditioning. For example, an
exam evokes fear and also that of evaluation, of exam-failure.

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Repetition: Increases the strength of the association between a

conditioned stimulus and an unconditioned stimulus (learning). It is used
by advertisers when scheduling media exposure for an advertising
campaign. Too much repetition can lead to advertising wear out.
Consumers may become annoyed with repetitive ads and develop a
negative image of the product as a result.

In the advertising world, repetition is represented as the frequency of an

advertisement. More the frequency better can be the response. However,
the ideal number of repetitions (or frequency) of an ad is a subject matter
of contemplation. However, a dominant brand may need less frequency and
vice-versa. Frequency is also derived from the Share of Voice (SOV) which
a brand needs to maintain.

Stimulus Generalization: Learning relies not only on repetition but also

on peoples’ ability to generalize, that is, respond in the same way to
slightly different stimuli. This explains why some manufacturers try to
make their generic/store brands similar in appearance to the ‘name’
brands.

Marketers use this principle to take advantage of a well-known and trusted

brand in many ways:
• Product line extension
• Product form extension
• Product category extension
• Referred to as the halo effect

Stimulus Discrimination: Opposite of stimulus generalization. Here the

action results in the selection of a specific stimulus from among similar
stimuli. It forms the basis for marketers’ positioning strategy. It allows
marketers to differentiate their product from competitors (e.g., different
features, colours, ingredients, etc.). Positioning strategy is based on the
consumer’s ability to discriminate amongst the given stimuli. The market
leader will aim for target customers to discriminate between given stimuli.
If a leading brand has been able to establish its differentiation, consumers
will select a brand based on stimulus discrimination.

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Critical Evaluation of Classical Conditioning Theory

This theory is not sufficient to explain the entire learning process although
it is extensively used in advertising, brand management and marketing.
This theory assumes consumers as passive beings. This theory considers
consumers as information seekers. It only touches on one aspect of
influencing consumer behaviour by exposure and thus frequencies of ads
are considered essential. However, it does not account for other purchase
behaviour which evaluates different products’ alternatives. As per this
theory, product evaluation is based on our rewards after using the product
which means the theory of instrumental conditioning.

Second Type of Learning - Instrumental Conditioning

The second type of learning that is categorized in the behaviourist tradition

is instrumental operant, conditioning. The main difference between
instrumental conditioning and classical conditioning is that the emphasis is
on voluntary behaviour (emitted), not reflexive (elicited). The target
behaviour (e.g., a peck at a lever if one is studying birds) comes before the
conditioning stimulus (e.g., food), as opposed to the classical model, which
presents the conditioning stimulus (e.g., bell) before the target behaviour
(e.g., salivation).

In the instrumental paradigm, behaviours are learned as a result of their

consequences. Edward Thorndike (1874–1949) was a pioneer in
instrumental conditioning, although he resisted the label of a
behaviourist. In his view, the consequences of behaving in particular way-
controlled learning. Behaviour was instrumental in obtaining a goal, and
the consequences of the behaviour were responsible for the tendency to
exhibit (and repeat) a behaviour. Thorndike named this principle of
instrumental conditioning the law of effect. He argued that if behaviour had
a positive consequence or led to a satisfying state of being, the response
(behaviour) would be strengthened. If, on the other hand, behaviour had a
negative consequence, the response would be weakened. Thorndike
developed the principles of instrumental conditioning using a puzzle box
that required that an animal exhibits certain behaviour (push a latch) to
obtain a goal (open a door for access to food). The animal was given the
opportunity, through trial and error, to discover the required behaviour, and
the behaviour was reinforced through the opening of the door and access
to food. With practice, the animal decreased the time that it needed to

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open the door. In the instrumental paradigm, the animal learned an

association between a given situation and the response required to obtain
a goal.

Fig. 6.6: Model of Instrumental Conditioning

Operant conditioning and reinforcement: B. F. Skinner (1904–1990) is

credited with the development of the operant-conditioning paradigm.
Similar to instrumental conditioning, operant conditioning requires that an
organism operates on the environment to achieve a goal. Behaviour is
learned as a function of the consequences of the behaviour, according to a
schedule of reinforcement or punishment. Unlike Thorndike, who used the
concept of reward and satisfying states, Skinner emphasized the influence
of reinforcers. Reinforcers are events that follow a response and increase
the likelihood that the response will be repeated, but they do not suggest
the operation of a cognitive component such as reward (or pleasure).
Learning is influenced according to the schedules of reinforcement in the
operant paradigm. Skinner tested the operant theory by carefully
controlling the environment to study behaviour and the effects of
reinforcement.

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Reinforcement

According to Skinner, operant conditioning has two laws. The first is

the law of conditioning, which states that reinforcement strengthens the
behaviour that precedes it, which makes it more likely that the behaviour
will be repeated. The second is the law of extinction, which states that a
lack of reinforcement for behaviour, will make that behaviour less likely to
reoccur. The reinforcement consists of two types of events, those that are
positive, which means that when they are presented (e.g., present tasty
food), the probability of a behaviour occurring is increased (e.g., press a
lever to get the tasty food), and those that are negative, which means that
when they are removed (e.g., stop a loud sound or painful shock), the
probability of a behaviour occurring is increased (e.g., press a lever to stop
a loud sound or painful shock). Punishment is defined as an event that
weakens the tendency to make a response. Punishment could involve
presenting an aversive stimulus (e.g., presenting a loud sound or painful
shock), or it could involve removing access to a positive stimulus (e.g.,
removing a tasty food when a lever is pressed).

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Skinner also experimented with different reinforcement schedules, and he

found that different schedules produced different patterns of responding.
Continuous schedules of reinforcement deliver a reinforcer every time the
target behaviour is exhibited. These schedules are effective in establishing
the target behaviour, but the behaviour disappears quickly if the
contingency is not met. Intermittent schedules of reinforcement deliver the
reinforcer on a ratio schedule. For example, an experimenter may decide to
reinforce every fourth response that an animal makes, or a reinforcer may
be presented after a fixed or random time interval. The two types of
intermittent schedules that maintain a high rate of responding and are very
resistant to extinction are variable-ratio and variable-interval schedules.

Strict adherence to the behaviourist tradition excluded analysis of mental

or internal events. However, Skinner acknowledged the role of thought. He
maintained that thought was caused by events in the environment, and
therefore a theory of learning that was concerned with the influence of the
environment was appropriate. Like Pavlov and Thorndike, Skinner's work
was primarily conducted with nonhuman animals, but the principles of
operant conditioning can be applied to humans as well, and they are widely
used in behaviour therapy and education.

Modifying Operant Behaviour: Reinforcement and Shaping

Reinforcement and punishment are the core tools through which operant
behaviour is modified. These terms are defined by their effect on
behaviour. It may either be positive or negative, as described below.

1. Positive Reinforcement and Negative Reinforcement increase the

probability of behaviour while Positive Punishment and Negative
Punishment reduce the probability of a behaviour that it follows.

There is an additional procedure:

1. Extinction occurs when a previously reinforced behaviour is no longer

reinforced with either positive or negative reinforcement. During
extinction, the behaviour becomes less probable.

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Operant Conditioning

Skinner is regarded as the father of Operant Conditioning, but his work

was based on Thorndike’s Law of Effect. Skinner introduced a new term
into the Law of Effect - Reinforcement. Behaviour that is reinforced
tends to be repeated (i.e., strengthened); behaviour that is not
reinforced tends to die out-or be extinguished (i.e., weakened).

Skinner (1948) studied operant conditioning by conducting experiments

using animals which he placed in a 'Skinner Box' which was similar to
Thorndike’s puzzle box.

Experiment

• The box contained a lever on the side and as the rat moved about the
box it would accidentally knock the lever. When it did so, immediately
a food pellet would drop into a container next to the lever. The rats
quickly learned to go straight to the lever after a few times of being
put in the box. The consequence of receiving food if they pressed the
lever ensured that they would keep repeating the action.

• Skinner showed how positive reinforcement worked by placing a

hungry rat in his Skinner box.

• Later the rat was subjected to an unpleasant electric current which

caused it some discomfort. As the rat moved about the box it would
accidentally knock the lever. When it did so, immediately the electric
current would be switched off. The rats quickly learned to go straight
to the lever after a few times of being put in the box. The
consequence of escaping the electric current ensured that they would
keep repeating the action.

• Skinner showed how negative reinforcement worked by conducting

the above experiment.

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Thus, there are a total of five basic consequences -

1. Positive reinforcement (reinforcement): This occurs when the

behaviour (response) is followed by a stimulus that is appetitive
or rewarding, increasing the frequency of that behaviour. For example, if
a rat in a Skinner box gets food when it presses a lever, its rate of
pressing will go up. This procedure is usually simply
called reinforcement.

2. Negative reinforcement (escape): This occurs when the behaviour

(response) is followed by the removal of an aversive stimulus, thereby
increasing that behaviour’s frequency. In the Skinner box experiment,
the aversive stimulus might be a loud noise continuously sounding
inside the box; negative reinforcement would happen when the rat
presses a lever, turning off the noise.

3. Positive punishment: This occurs when the behaviour (response) is

followed by a stimulus, such as a shock or loud noise, which results in a
decrease in that behaviour. Positive punishment is a rather confusing
term, and usually the procedure is simply called "punishment."

4. Negative punishment (penalty) (also called "Punishment by

contingent withdrawal"): This occurs when the behaviour (response)
is followed by the removal of a stimulus, such as taking away a child's
toy following an undesired behaviour, resulting in a decrease in that
behaviour.

5. Extinction: This occurs when the behaviour (response) that had

previously been reinforced is no longer effective. For example, a rat is
first given food many times for lever presses. Then, in "extinction", no
food is given. Typically, the rat continues to press more and more slowly
and eventually stops, at which time the lever pressing is said to be
"extinguished."

It is important to note that actors (e.g., rat) are not spoken of as being
reinforced, punished, or extinguished; it is the actions (e.g., lever press)
that are reinforced, punished, or extinguished. Also, reinforcement,
punishment, and extinction are not terming whose use is restricted to the
laboratory. Naturally occurring consequences can also reinforce, punish, or
extinguish behaviour and are not always planned or delivered by people.

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Factors that alter the effectiveness of reinforcement and

punishment

The effectiveness of reinforcement and punishment can be changed in

various ways.
1. Satiation/Deprivation: The effectiveness of a positive or "appetitive"
stimulus will be reduced if the individual has received enough of that
stimulus to satisfy its appetite. The opposite effect will occur if the
individual becomes deprived of that stimulus: the effectiveness of a
consequence will then increase. If someone is not hungry, food will not
be an effective reinforcer for behaviour.
2. Immediacy: An immediate consequence is more effective than a
delayed consequence. If one gives a dog a treat for "sitting" right away,
the dog will learn faster than if the treat is given later.
3. Contingency: To be most effective, reinforcement should occur
consistently after responses and not at other times. Learning may be
slower if reinforcement is intermittent, that is, following only some
instances of the same response, but responses reinforced intermittently
are usually much slower to extinguish than are responses that have
always been reinforced.
4. Size: The size, or amount, of a stimulus, often affects its potency as a
reinforcer. Humans and animals engage in a sort of "cost-benefit"
analysis. A tiny amount of food may not "be worth" an effortful lever
press for a rat. A pile of quarters from a slot machine may keep a
gambler pulling the lever longer than a single quarter.

Most of these factors serve as biological functions. For example, the

process of satiation helps the organism to maintain a stable internal
environment (homeostasis). When an organism has been deprived of
sugar, for example, the taste of sugar is a highly effective reinforcer.
However, when the organism's blood sugar reaches or exceeds an optimum
level the taste of sugar becomes less effective, perhaps even aversive.

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Shaping

Shaping is a conditioning method much used in animal training and in

teaching non-verbal humans. It depends on operant variability and
reinforcement, as described above. The trainer starts by identifying the
desired final (or "target") behaviour. Next, the trainer chooses behaviour
that the animal or person already emits with some probability. The form of
this behaviour is then gradually changed across successive trials by
reinforcing behaviours that approximate the target behaviour more and
more closely. When the target behaviour is finally emitted, it may be
strengthened and maintained by the use of a schedule of reinforcement.

Massed and Distributed Learning

When studying an educational process, the area of practice and how it is

performed is often a topic of interest. In technical education, the
instructors are invariably trying to find more efficient and successful
methods of teaching machine tool skills to their students to improve
learning, performance, and retention that are occurring. These methods of
teaching will always involve some form of practicals, and dummy
component making projects for the students. Specifically, in physical
education, two types of practice are important: massed and distributed.

The classical definition of massed practice is continuous practice with few

or no pauses for rest even of short duration relative to the work interval.

The common and accepted definition of distributed practice is “a practice

schedule in which the amount of rest between practice trials is long relative
to the trial length” (Schmidt, 1988). Schmidt (1991) further adds that “the
amount of rest between the trials equals or exceeds the amount of time in
a trial” when the practice is distributed. Thus, it seems that the defining
detail of distributed practice is that rest must be accompanied by the
practice; that is, rest is “distributed” during the trials.

Use of this by marketers is during their media planning. A high pitch dose
of advertising is necessary to educate the customers about the new
product being launched or counter a market share threatening
advertisement by your competitor. As against this, for established products
expected to be bought repeatedly, we have a distributed advertising

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schedule. In an intensely competitive market, even a combination of

concentrated and distributed scheduling is used.

Evaluation of Instrumental Learning

The theory establishes that as a consequence of repeated rewards for

some specific response or behaviour, habits get formed. It is useful in
marketing, brand management and channel management. However, on this
point, critics argue that learning happens even without any reinforcement.
Many times, we continuously learn through observations – an executive
doesn't need to determine how inconvenient it must be for factory workers
to work during summer, as he sees them often with excessive perspiration,
clothes stuck to their skin, etc., Children learn everything without any
expectation of reward.

Thus, instrumental learning applies to products that have no personal

relevance.

Cognitive Learning Theory

The difference between human beings and animals is that humans can
think through acquired knowledge. Humans learn by solving problems they
face or by observation or by the knowledge they have. We have often seen
that some solutions come to our mind instantly whereas some problems
need careful collection and evaluation of information to make decisions and
some issues haunt us as we are unable to resolve them. We have also
observed that we do not get into solving every problem we have, we do
not observe what is not relevant to us and we do not know everything
(doctors require a professional financial planner to manage their money). It
is therefore believed that learning is thus a function of exerting the mind.
This is called cognitive learning. A consumer buys and continues to buy a
specific brand as through his past experiences he has realized that it works
the way he wants. He buys it again and again as this brand continues to
satisfy his expectations. For him thus, changing the brand may be difficult
because he visualizes a risk in strange things.

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6.4 Storage, Retention and Retrieval of Information

In psychology, memory is the process in which information is encoded,

stored, and retrieved. Encoding allows information from the outside world
to be sensed in the form of chemical and physical stimuli. In the first stage,
the information must be changed so that it may be put into the encoding
process. Storage is the second memory stage or process. This entails that
the information is maintained over short periods. Finally, the third process
is the retrieval of information that has been stored. Such information must
be located and returned to consciousness. Some retrieval attempts may be
effortless due to the type of information, and other attempts to remember
stored information may be more demanding for various reasons.

Memory has three components – a sensory store where the information is

kept temporarily, a short-term store where it is held for a brief period, and
a long-term store where it is held for a relatively long period.

Sensory memory holds sensory information less than one second after an
item is perceived. The ability to look at an item and remember what it
looked like with just a split second of observation, or memorization, is an
example of sensory memory. E.g.: When we see Amitabh Bacchhan
anchoring a show and enact something, we remember that enactment lives
in our memory, for a split second.

Short-term memory is also known as working memory. Short-term

memory allows recall for a period of several seconds to a minute without
rehearsal. Its capacity is also extremely limited. When someone gives you
a password to his computer and you do not type without remembering it,
thinking you will be able to recall it, but you fail to recall after a few
minutes when you try to open it.

The storage in sensory memory and short-term memory generally has a

strictly limited capacity and duration, which means that the information is
not retained indefinitely. By contrast, long-term memory can store much
larger quantities of information for potentially unlimited duration
(sometimes a whole life span). Its capacity is immeasurably large. For
example, if we are given a random seven-digit number, we may remember
it for only a few seconds before forgetting, suggesting it was stored in our
short-term memory. On the other hand, we can remember telephone

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numbers for many years through repetition. This information is said to be

stored in long-term memory.

The following schematic diagram explains the components of human

memory:

Fig. 6.7: Components of Human Memory

From the information processing perspective there are three main stages in
the formation and retrieval of memory:
• Encoding or registration: receiving, processing, and combining of
received information.
• Storage: Creation of a permanent record of the encoded information in
the short term or long-term memory, and
• Retrieval recall or recollection: calling back the stored information in
response to some cue for use in a process or activity.

The loss of memory is described as forgetfulness. Distortions can affect all

these three stages. The term rehearsal refers to the process by which
items are kept at the centre of attention by repeating them either loudly or
silently. The more the rehearsal, the more are the chances of the
information getting into long-term memory. It is called maintenance
rehearsal. But when the material to be remembered is organized to make it
meaningful and then repeated, it is called elaborative rehearsal.

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Level of Processing

Information is processed at the following three levels:

• First level: Superficial processing. Only awareness of the environment is
created. This is called perception.
• Second Level: Structural features of the inputs are analyzed. E.g.: what
it looks like or sounds like or is familiar to.
• Third level: Deeper analysis, meaning and associations of inputs are
studied.
Marketing Implications of Learning Theories
• The primary implication is to emphasize the importance of providing
information to consumers
• Providing information can be a promotional strategy as well
• Marketers draw on both cognitive and operant conditioning theories
• Providing information about a product (e.g., eggs are OK to eat) draws
on cognitive theory
• Providing rewards (e.g., frequent flyer miles, coupons, etc.) draws on
classical conditioning theory

Limited and Extensive Information Processing

Consumers pass through several stages while buying a product –

awareness, preference, purchase and adoption or rejection. We have dealt
with this topic elaborately as the consumer adoption process (See Chapter
15). The sequential processing was thus assumed for all purchases.
However, it was later realized that all purchases do not follow the same
sequence.

This is because some products like salt, matchsticks, candles are

purchased as and when needed, without any extensive search and
processing of information. These products are low in terms of personal
relevance, thus do not get high involvement from an individual. As against
this, while buying a mobile or a Tab for ourselves, we do extensive search
and thus individuals get involved extensively. In both cases, it is the level
of involvement that matters. Thus, there is a birth of another theory
namely, the involvement theory.

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Activity B

Explain different conditioning and information Processing in learning.

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

6.5 INVOLVEMENT THEORY

This is a continuation of behavioural learning theories.

This theory has got more to do with the functioning of the brain and how
learning happens. The human brain has two hemispheres – the left and the
right and each has unique information processing capabilities. This theory
is therefore also called (1) Hemispheral Lateralization or (2) Split Brain
Theory.

The basic premise of the split-brain theory is that the Right and Left
hemispheres of the brain specialize in the kinds of information they
process. The Left hemisphere is primarily responsible for cognitive
activities such as reading, speaking and attributional information
processing.

Individuals exposed to verbal information cognitively analyze the

information through Left-brain processing and form mental images. The
Right hemisphere of the brain is concerned with nonverbal, timeless,
pictorial, and holistic information.

Put another way, the left side of the brain is supposed to be rational,
active, and realistic; the right side of the brain is emotional, metaphoric,
impulsive, and intuitive.

Low involvement media: Individuals passively process and store

information in their right brain i.e., non-verbal pictorial information that is
without active involvement. Since TV is primarily a pictorial medium, TV
viewing is considered as a right-brain activity and the TV itself is regarded
as a low involvement medium. According to this theory, passive learning
occurs through repeated exposures to a TV commercial and produces a
change in consumer behaviour (e.g.: a product purchase) before a change
in the consumers’ attitude towards the product.

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High involvement media: To extend this line of thought, print media are
high involvement media (newspapers and magazine) because cognitive
(verbal) information is processed by the left side of the brain. According to
this theory, print advertising is processed in the complex sequence of
cognitive stages as follows:

Tri--Component Model

COGNITIVE (the process of obtaining knowledge through thought,

experience, and the senses) -> AFFECTIVE (relating to moods, feelings,
and attitudes) -> CONATIVE (the mental facility of purpose, desire, or the
will to act). Related to this are different communication models such as
AIDA and others.

Social Judgement Theory

The key point of the Social Judgment Theory is that attitude change
(persuasion) is mediated by judgmental processes and effects. Put
differently, persuasion occurs at the end of the process where a person
understands a message, then compares the position it advocates his
position on that issue. A person's position on an issue is dependent on
1. the person's most preferred position (their anchor point),
2. the person's judgment of the various alternatives (spread across their
latitudes of acceptance, rejection, and non-commitment), and
3. The person's level of ego-involvement with the issue.

Consider the course choices available to you in the next term. For the sake
of argument, let's say you have four required courses to finish but have
one course needing a science background in which you are weak. What
courses open to you would you not enrol in, no matter what? Those
courses fall in your Latitude of Rejection. Do you think anyone could
persuade you to take a class that falls in that latitude? Not likely. And the
more ego-involved you are in the decision to enrol in your course (the
more you care about that decision) the larger your Latitude of Rejection
will be. Persuasive messages that advocate positions in your Latitude of
Rejection will be contrasted by you. That is, they will appear to be further
away from your anchor point than they are. That's not good news for the
would-be persuader.

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Now consider the courses that you don't have an opinion about, that you
don't have positive or negative feelings toward. Those courses fall in your
Latitude of Non-commitment. It's possible that someone could persuade
you to enrol in one of those courses, but you'd have to learn more about
the course first, at least enough until you have an opinion or judgment
about it.

Now, consider all those courses you would consider enrolling in. Those
courses fall in your Latitude of Acceptance. A person with good arguments
might be able to persuade you to take one of those courses, especially if, in
your judgment, the course is similar to your anchor point course.
Persuasive messages that advocate positions in your Latitude of
Acceptance will be assimilated by you. That is, they will appear to be closer
to your anchor point than they are. That's good news for the would-be
persuader.

If you are persuaded, then the further a message's position is away from
your anchor point, the larger your attitude change will be. But remember
that it is very unlikely that you will be persuaded out of your Latitude of
Rejection. So, once a message enters that region and moves away from
your anchor point, the amount of your attitude change decreases.

Evolution of Involvement Theory

Involvement is difficult to measure. Involvement is linked to a person,

product, and situation, and in a few cases ego as well. Depending on the
involvement, individuals get into information searching – the higher the
search for the product information, the higher the involvement and vice-a-
versa. However, some also advocate that there is a difference between the
product and brand-specific involvement. What is important to know is that
it is an important construct of consumer behaviour. The degree of
involvement impacts the decision-time taken. Involvement is therefore not
a dichotomous construct; say just high and low involvement. It is a
continuum. Though there are semantic problems, the involvement theory
goes a long way in formulating our communication strategy.

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Thorndike’s Law of Effect

Edward Thorndike put forward a “Law of effect” which stated that any
behaviour that is followed by pleasant consequences is likely to be
repeated, and any behaviour followed by unpleasant consequences is likely
to be stopped.

This is thus linked to learning through reinforcement, which could be

positive or negative. This proposition is based on Thorndike’s Law of Effect:
i. Other things remaining equal, of several responses made to the same
situation which are accompanied by satisfaction to the animal will be
more rigidly connected with the situation so that when it recurs, they
will be more likely to recur.
ii. Those who are accompanied or closely followed by discomfort to the
animal will have their connections with that situation weakened so that
when it recurs; they will be less likely to occur.
iii. The greater the satisfaction or discomfort, the greater the strengthening
or weakening of the bond, respectively.

In marketing parlance, it means that a satisfied consumer is likely to

repeat the purchase of the same brand and vice versa.

Decision Process

We have earlier studied that consumers go through 5 stages of the

decision-making process (1) Need recognition, (2) Information search, (3)
Evaluation, (4) Purchase, (5) Post-purchase evaluation. During every
stage, he is subjecting himself to learning, starting from realizing that he
has a problem for which he needs to find a solution, which leads him to the
product being found, then brand evaluation followed by finalization and
post-purchase, knowing whether it satisfied his need as expected or not.
With this base, we have also understood the concept and importance of
information processing.

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6.6 ADVERTISING EFFECT

Indian advertisers spend collectively over ` 5000 cores per annum on

advertising for their products. However, there is always a debate raging
about the effectiveness of advertising on sales. One fundamental reason is
two schools of thought, namely, an advertisement is either seen as a
medium for communication or a medium for sale. On the other side, from
the learning theory perspective, we consider an advertisement as a
stimulus and the ability to recall, its effect. There is a positive correlation
between the number of advertisement repetitions and the increase in
brand recall. The following graph will show how the frequency of
advertising messages affects recall.

Fig. 6.8: Frequency of Ad Messages Affecting Recall

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As you can see four different frequencies here – 1, 2, 6, and 10 repetitions

of an ad copy. In all four conditions, there is a decline in recall or forgetting
has increased. Also, we can see that the higher the frequency, the higher
the recall because of increased reinforcements. Thus, one conclusion
emerges that advertisements must get repeated subject to the frequency
threshold determined. However, the frequency threshold will vary
depending on product categories (daily consumer goods will need higher v/
s durable goods) and the brand’s market share (it must match if not higher
than your planned market share. It also depends on whether you are a
new entrant or it’s a new product. Last but not the least; it also depends
on the PLC stage of the brand.

6.7 LEARNING IN AN ONLINE ENVIRONMENT

Consumer learning in an online environment is an offbeat subject. It is

because a) Rationally, no new theory exists and b) Learning happens but in
a different manner.

What we studied in an earlier section about the different learning theories

continue to remain in delivering and imparting learning to every learner in
off-line and well as the online environment. What has changed is how
learning is happening. We will learn this aspect in this section.

The different manner in which learning happens in an online

environment

(a)Pro-active information-sourcing – Due to its nature, digital media

and tools facilitate on-demand information availability to the consumers.
Consumers have a choice to either inform the organization they need to
‘Know More’. Alternatively, an interactive website or chat box facilitates
providing requisite information, or a choice to download a content or QR
code scanning or send an email to get the requisite information. It helps
an organization to provide requisite information to their prospective
customers who are in the state of ‘information searching’ in their buying
cycle.

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(b)Inducing an interaction – Due to the video and audio power of the

digital media, it is easy for the advertisers to not only get the attention
but also induce the consumer to start the interaction. Sponsored ads,
demonstration videos when ‘Know More’ is clicked or eye-catching
banner ads, all enable the advertiser to drive traffic towards a digital
property (microsites) that creates interaction, which eventually may get
converted into a final sale.

(c)Tap the voice of the customers – Digital media has various platforms
and creative feasibility to tap the voice of the customers. Social media
offers your reach and viral promotion possibility, and creativity will
compel people to not only engage but also share inputs (like, reforward,
ranking). From the learning point of view, it is easy for prospective
customers to believe what other customers or others are conveying
about the product/brand rather than what the company has to say.

(d)Community development – Various online media offers you an

opportunity to develop a community of product/brand enthusiasts.
Organizations can utilize this feasibility to create, build an appropriate
idea centric platform wherein a lot of information, and ideas get
exchanged. This creates buzz, develops brand relevance, and brand
loyalty which helps you in the long run.

(e)Content marketing – In the online environment, the power of the

brand’s voice is in the hands of the consumers rather than the
marketers. However, marketers can use this hindrance to their
advantage. They may tap the opinion leaders, bloggers, affiliate
marketers to write about your product, brand, features and build the
story to induce consumers to get information, see features, get the
comparison, direct traffic to your site/microsite and other digital
platforms of your brand/organization.

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6.8 WHAT HAVE YOU LEARNT – A SUMMARY

Consumer learning is a psychological process through which individuals

acquire purchase and consumption knowledge. Post knowledge and first
experience, individuals will apply what they have learnt, to future related
behaviour. Whether the learning is acquired intentionally or incidentally,
there are four basic elements, namely motivation, cues, response, and
reinforcement that contribute to an understanding of learning.

An individual’s response to a drive or stimulus (cue) often depends on

previous learning, which in turn is often the result of the type and degree
of reinforcement received. Reinforcement increases the likelihood of a
specific response occurring again as a result of particular cues. The specific
response however depends on positive or negative reinforcement
experienced by the consumer.

There are two widely divergent theories of how individuals learn:

behavioural theories and cognitive theories. Both contribute to making us
understand how consumers learn and how their behaviour gets impacted.
Traditional behavioural theories include classical conditioning and
instrumental conditioning. Three principles provide the impetus to
marketers, namely repetition, stimulus generalization and stimulus
discrimination. Instrumental learning theory informs us that learning
occurs through the trial-and-error process. If the outcome is positive,
repetition will occur. Interestingly, it is found that both positive and
negative reinforcement can be used to encourage the desired behaviour.
We have also learned about memory, especially massed and distributed
learning.

Cognitive learning theory holds that humans learn through problem-

solving. Problem-solving involves mental processes rather than the purely
behavioural components of learning. Cognitive theory is concerned with
how information is processed by the human mind. A simple model of the
structure and operation of memory suggests the existence of three
separate storage units: a sensory store, a short-term store, and a long-
term store. The process of memory includes rehearsal, encoding, storage,
and retrieval.

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Involvement theory suggests that people engage in limited information

processing in situations of low importance or relevance to them. And they
engage in extensive information processing in situations of high
involvement due to its high relevance.

Intermittently, we have also seen how this theoretical knowledge can be

useful to marketers and finally, we have learnt its relevance with
understanding the advertising recall effect due to the frequency of
exposures.

The different manner in which learning happens in an online environment

such as Proactive information sourcing, inducing an interaction, Tap the
voice of the customers, Community development and Content marketing.

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6.9 SELF ASSESSMENT QUESTIONS

1. Explain the concept of ‘learning’.
2. Explain the ‘PACT’ learning cycle.
3. Highlight the different manner in which learning happens in an online
environment.
4. Explain in simple terms what behavioural theories are.
5. What are the principles and methods of learning?
6. Explain the classical conditioning theory.
7. Explain the instrumental conditioning theory.
8. Explain the cognitive learning theory.
9. Explain different other methods of learning.
10.Explain the involvement theory.
11.How would you evaluate the effect of advertising on learning?

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6.10 MULTIPLE CHOICE QUESTIONS

1. Learning is a process by which individuals acquire the purchase and

consumption knowledge and experience that they apply to
______________. Fill in the blank.
(a) predicted brand behaviour
(b) future related behaviour
(c) future predictable outcome
(d) none of the above

2. The three elements involved in learning are (1) _____________ (2) it

involves practice (3) it’s a continuous process. Fill in the blank.
(a) a change in behaviour
(b) acquiring information
(c) knowledge
(d) problem recognition

3. There are two types of learning theories. The first perspective argues
that learning can be studied by observation and manipulation of
______________. The second type of learning theory argues that
intervening variables are appropriate and necessary components for
understanding the processes of learning. This perspective falls under the
broad rubric of cognitive learning theory. Fill in the blank.
(a) cue-reinforcement association
(b) learner-knowledge association
(c) practice-experience association
(d) stimulus-response association

4. Under classical conditioning there are three principles that provide

impetus to marketers, namely repetition, stimulus generalization and
______________. Fill in the blank.
(a) cue
(b) reinforcement
(c) stimulus discrimination
(d) none of the above

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5. There are three components of human memory – sensory store,

______________ and long-term store. Fill in the blank.
(a) working memory
(b) transfer store
(c) retention store
(d) temporary store

Answers:

1. (b), 2. (a), 3. (d), 4. (c), 5. (a)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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Chapter 7
The Nature of Consumer Attitudes and
Change
Objectives

By the end of this chapter, you should be able:

• To understand what is an object
• To understand what is a learned predisposition attitude
• To understand what is the multi-attribute model
• To understand what is the learning process
• To understand what are changes in basic motivation
• To understand what is communication content
• To understand more about attitude change

Structure:
7.1 Introduction
7.2 What are Attitudes?
7.3 Components of Attitude
7.4 Learning Process
7.5 What have you Learnt – A Summary
7.6 Self-Assessment Questions
7.7 Multiple Choice Questions (MCQ)

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7.1 INTRODUCTION

Whenever consumers are asked whether they like or dislike a product

(Kissan Ketchup), a service (Vodafone RED Family plan), an advertising
theme (Buss do minute – Maggi Noodles) or a particular retailer, they are
being asked to express their attitudes. Within the realm of consumer
behaviour, attitude research is commonly undertaken to ascertain the
likelihood that consumers will accept a proposed new-product idea, to
gauge why a firm’s target audience has not reacted more favourably to its
revised promotional theme.

Fig. 7.1: Attitude is Everything

We need to discuss the reasons why attitude research has had such a
pervasive impact on consumer behaviour. We will also discuss the
properties that have made attitudes so attractive to consumer researchers,
and several important models depicting the structure and composition of
attitudes. Finally, we will review the approaches frequently employed to
measure consumer attitudes.

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7.2 WHAT ARE ATTITUDES?

Attitudes are an expression of inner feelings that reflect whether a person

is favourably or unfavourably predisposed to some “object” (e.g., a brand,
a service, a retail establishment). It’s an outcome of psychological
processes, and thus attitudes are not directly observable but must be
inferred from what people say or from their behaviour. Consumer
researchers, therefore, tend to assess attitudes by asking questions or
making inferences from behaviour. For example, if a researcher determined
from questioning a consumer that the individual has consistently bought
SONY products and recommends them to friends, the researcher would be
likely to infer a positive attitude toward SONY products.

A whole universe of consumer behaviours – consistent purchase,

recommendations to others, top rankings, beliefs, evaluations, and
intentions – are related to attitudes. What, then, are attitudes? In a
consumer behaviour context, an attitude is a learned predisposition to
behave in a consistently favourable or unfavourable way with respect to a
given object. Each part of this definition describes an important property of
an attitude and is critical to understanding the role of attitudes in
consumer behaviour. The same is explained below elaborately.

The Attitude “Object”

Attitude research is object specific. When we want to determine the

attitude towards online shopping, our ‘object’ might be Flipkart, Snapdeal,
Amazon, Shopclues, Local Baniya and similar online shopping sites.

The word object in our definition of attitude should be interpreted broadly.

In its place, we could substitute any one of many more specific concepts,
such as issues, actions, behaviour, practices, persons, or events. In
examining consumer behaviour, it is appropriate to substitute specific
consumer or marketing-related concepts, such as product category, brand,
service, advertisement, price, or retailer.

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Attitudes are a Learned Predisposition

Among the consumer research community, it is considered that attitudes

are learned. This means that attitudes relevant to purchase behaviour are
formed as a result of direct experience with the product, information
acquired from others, and exposure to mass media (e.g., advertising). It is
important to remember that attitudes are not synonymous with behaviour
but reflect either a favourable or an unfavourable evaluation of the attitude
object. As a predisposition, attitudes have a motivational quality, that is,
they might propel the consumer towards a particular behaviour.

Attitudes have Consistency

Another characteristic of an attitude is that it is relatively consistent with

the behaviour that it reflects. However, we should avoid confusing
consistency with permanence. Attitudes are not necessarily permanent;
they do change.

Attitudes Occur within a Situation

It is not immediately evident from our definition that attitudes occur within
and are affected by the situation. Situations are events or circumstances
that, at a point in time, influence the relationship between attitudes and
behaviour. A situation can cause consumers to behave in a manner
seemingly inconsistent with their attitudes. For instance, let us assume
that a consumer purchases a different brand of coffee each time his
inventory runs low. Although his brand switching may seem to reflect a
negative attitude or dissatisfaction, it actually may have been influenced by
a specific situation – for example, the need to economize. Although the
consumer may have a strong preference for Nescafe coffee, a tight budget
may influence him to purchase whatever brand is on “special discount” at
the supermarket.

Similarly, individuals can have different attitudes towards a particular

behaviour, each corresponding to a particular situation. A man may feel it
is suitable to eat lunch at any South Indian restaurant but may not
consider it appropriate for dinner. In this case, a South Indian restaurant
has its “time and place”, which functions as a boundary surrounding those
situations when such restaurants are acceptable. However, if the individual
is coming home late one night, feels exhausted and hungry, and spots a

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South Indian restaurant, he may just decide to have “dinner” there. Why?
Because it is late, he is tired and hungry, and a South Indian restaurant is
convenient. Has he changed his attitude? Probably not.

You may not like ‘Protinex’ like biscuits, but you continue to buy them due
to medical advice.

It is important to understand how consumer attitudes vary from situation

to situation. For instance, it is useful to know whether consumer
preferences for different burger chains (e.g., Burger King and McDonald’s)
vary in terms of eating situations (i.e., lunch or snack, the evening meal
when, rushed for time, an evening meal with family when not rushed for
time). Consumer preferences for the various burger restaurants might
depend on the anticipated eating situation. McDonald’s, for example, might
be favoured by consumers who seek a place to have dinner with their
families. This suggests that McDonald’s might emphasize increasing
consumer acceptance as a nice place to take the family for a leisurely (and
not so expensive) dinner.

It is important, when measuring attitudes, to consider the situation in

which the behaviour takes place, or we can misinterpret the relationship
between attitudes and behaviour.

Salience

Under different conditions, our attitude does not hold the same relevance
or salience for the product or an individual. Our negative attitude towards
the public display of affection (PDA), may not bother us much when we see
actor and actresses do the same in a movie. This is because our negative
attitude towards the PDA has no relevance when we have gone to watch a
movie.

What comes out from this understanding is that attitudes towards products
and brands are not salient to the average consumer. There is some
preference towards a specific brand. There may or may not be some
attitude. Even if there is some attitude, it is not relevant all the time – eg.,
we may not like Pepsi for its sweet taste but when you are with the family
for a weekend dinner where all want to have some soft drink at the end of
the meal and your choice of soft drink is not available, you may allow Pepsi
and you may also drink with other family members.

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One of the consumer behavioural specialists Robertson considers attitude

towards a product or a brand as a result of several attitudes towards
different attributes of the product such as price, safety, performance and
utility. All these have varying salience based on the product category. Thus,
the fragrance is highly salient for perfume but not for medicine. Price may
be highly salient for fast food products but not for trivial items like a
scratch guard. Styling is valued at the time of occasion-specific dresses but
not for daily wear.

Activity A

Identify four properties of attitude and give one example for each.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

7.3 COMPONENTS OF ATTITUDES

Now that we have defined attitudes and elaborated on their basic

properties, it is appropriate to examine several important attitude models:
the tri-component attitude model, single-component attitude model, multi-
attribute attitude models, and attitude-towards-the-ad model. Each of
these models provides a somewhat different perspective on the number of
parts of an attitude, and how those parts are arranged or interrelated.

Motivated by a desire to understand the relationship between attitudes and

behaviour, the focus has been on specifying more precisely the composition
of an attitude to better explain or predict behaviour.

Tri-component Attitude Model

According to the tri-component attitude model, attitudes are portrayed as

consisting of three major components: a cognitive component, an affective
component, and a conative component.

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Fig. 7.2: Three Components of Attitude

The Cognitive Component The first component of the tri-component

attitude model consists of a person’s cognition; that is, the knowledge and
perceptions that are acquired by a combination of direct experience with
the attitude-object and related information from various sources. This
knowledge and resulting perceptions frequently take the form of beliefs;
that is, the consumer believes that the attitude-object possesses various
attributes, and that specific behaviour will lead to specific outcomes.

Figure 7.3 illustrates just how complex a consumer’s belief system can be.
Though it captures only a part of a consumer’s belief system towards two
brands of mouthwash, it is interesting that, except for the attribute
“dentist”, the same basic attributes for both brands are included in the
consumer’s belief system. However, the beliefs about several of the
attributes are different. For instance, the consumer regards ‘Scope’ as
tasting “sweet like a soft drink”, whereas ‘Listerine’ is perceived as tasting
“like medicine”. Also, the consumer does not necessarily evaluate the same
basic belief similarly for each brand. For example, concerning long-lasting
quality, Scope is evaluated positively, while Listerine is evaluated
negatively.

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Product Mouthwash

Brand Scope Listerine

Attitude Dentist Breath Taste Strength Taste Breath Strength

Beliefs Dentist Fights Tastes Long Tastes Fights Long

recomm bad Sweet – refreshing like bad refreshing
ended it breath Soft feeling medicine breath feeling
drink

Evaluation (+ + + ) (+ + + ) (+ +) (+) (- -) (+ + + ) (- -)

Fig. 7.3: A Consumer’s Belief System for Two Brands of Mouthwash

Such insights are useful in positioning a particular brand against competing

brands.

The Affective Component - A consumer’s emotions or feelings about a

particular product or brand constitute the affective component of an
attitude. These emotions and feelings are primarily evaluative. They
capture an individual’s overall assessment of the attitude-object, that is,
the extent to which the individual rates the attitude-object as favourable or
unfavourable.

Since the affective component assesses the overall feelings about the
attitude object, it is frequently considered the essential aspect of an
attitude. Indeed, as we will discuss later, some researchers treat the
affective component as the attitude itself, with the two other components
serving related or supportive functions.

The Conative Component - Conation, the final component of the tri-

component attitude model, is concerned with the likelihood or tendency
that an individual will undertake a specific action or behave in a particular
way with regard to the attitude-object. According to some interpretations,
the conative component may include the actual behaviour itself.

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Fig. 7.4: Diagrammatic Representation of Three Components Model

In marketing and consumer research, the conative component is frequently

treated as an expression of the consumer’s intention to buy. Buyer
intention scales are employed to assess the likelihood of a consumer
purchasing a product or behaving in a certain way. Table 8.1 provides
several examples of common intention-to-buy scales.

Table 7.1

Conative Component Probing

How likely is it that you will buy a HUBLOT Which of the following statements best
watch in the next 3 months? describes the chance that you will buy a
HUBLOT watch in the next 3 months?
• Very likely • I will buy it definitely
• Likely • I will probably buy it
• Unlikely • I am not sure whether I will buy it
• Very unlikely • I will not buy it, definitely

The above three components can be better illustrated using the following
example.

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Fig. 7.5: Example of Three Components View

Single-component Attitude Model

As a kind of ‘reduction’ of the tri-component attitude model, this model

believes that an attitude consists entirely of the affective component or
overall assessment of the attitude-object.

Fig 7.6: Single Component Attitude Model

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Following this model, a consumer’s attitude towards several competing

insurance companies would be equal to the individual’s overall reaction to
the comparative merit (e.g., good versus bad, positive versus negative,
favourable versus unfavourable) of the insurance companies being
considered (i.e., the consumer’s evoked set).

The single-component unit fails to provide useful insights as to the ‘why’

behind an attitude. Two consumers may either have a positive attitude or a
negative attitude affecting their overall assessment of an attitude object
but their reason (why?) for the same could be different.

Modified Single-Component Attitude Model

The birth of this model is in compromised understanding to scale down the

broadly considered tri-component attitude model and the narrowly
focussed single-component model. Thus, the resulting modified single-
component attitude model still considers the overall effect to be the
attitude but includes cognition and conation as interrelated and important
factors that influence the affective component. In a sense, the modified
model is a rearrangement of the tri-component model – with the affective
component treated as the attitude, and the two other components
downgraded to supporting roles.

Fig. 7.7: A Modified Simple-component Attitude Model

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Multi-attribute attitude models appeal to both consumer researchers

and marketing practitioners because they examine attitudes in terms of
selected product attributes or beliefs. While there are many variations of
this type of attitude model, those proposed by Martin Fishbein and his
associates have stimulated the greatest amount of research interest. We
have selected three Fishbein models to consider here; the attitude-
towards-object model, the attitude-towards-behaviour model, and the
theory of reasoned action model.

The Attitude-towards-object Model The attitude-towards-object model

is especially suitable for measuring attitudes towards a product or specific
brands (i.e., the object). According to this model, a consumer’s attitude is
defined as a function of the presence (or absence) and evaluation of
several product-specific beliefs or product attributes possessed by a
product or specific brands of a product. In other words, consumers have
generally favourable attitudes towards those brands they assess as having
an adequate level of positive attributes, and unfavourable attitudes
towards those brands that they feel have an inadequate level of desired
attributes or too many negative attributes. Different belief systems for
Twining Mint teas (one favourable and the other unfavourable) for two
different consumers are listed below:

Table 7.2

Two Hypothetical Belief Systems Concerning Twining Mint Teas

Consumer 1 (mainly favourable)

“Twining Mint teas are worth the few additional pennies”.
“Twining Mint teas are an adventure”.
“Twining Mint teas are never boring”.
“Twining Mint teas receive great comments from my guests”.
Consumer 2 (mainly unfavourable)
“Twining Mint is the best tea”.
“I sometimes drink regular Twining Mint”.
“Twining Mint teas sound too fancy for my pocketbook”.
“Anyway, I don’t drink much tea. I’m a coffee person”.

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Activity B

Write two hypothetical belief systems concerning Dove Soap.

…………………………………………………………………………………………………………………………
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The Fishbein attitude-towards-object model is usually depicted in the form

of the following equation:

where Attitudeo is a separately assessed overall measure of effect for or

against the attitude-object (e.g., a product, brand, service, retail
establishment); bi is the strength of the belief that the attitude-object
contains the ith attribute (e.g., the likelihood that Duncan Hines cake mix
tastes “home-made”); ei is the evaluative dimension associated with the
ith attribute (e.g., how good or bad is the quality of being “homemade”);
and indicates that there are n salient attributes over which the bi and ei
combinations are summated.

The Attitude-towards-behaviour Model The focus of Fishbein’s

attitude-towards-behaviour model is the individual’s attitude towards
behaving or acting concerning an object, rather than the attitude towards
the object itself.

The appeal of the attitude-towards-behaviour model is that it seems to

correspond more closely to actual behaviour than does the attitude-
towards-object model. For instance, knowing a consumer’s attitude about
the act of purchasing a Rs 2.00 crores BMW car (i.e., the attitude towards
the behaviour) reveals more about the potential act of purchasing than
does simply knowing the consumer’s attitude towards the car (i.e., the
attitude towards the object). This seems logical, for a consumer might
have a positive attitude toward the Rs 2.00 crores car, but a negative
attitude as to the prospect of purchasing such an expensive automobile.

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The attitude-towards-behaviour model is depicted by the following

equation.

where Attitude(beh) is a separately assessed overall measure of effect for

or against carrying out a specific action or behaviour (e.g., buying,
preparing, or serving a Taj Birdy’s cake); bi is the strength of the belief
that an ith specific action will lead to a specific outcome (e.g., the
preparation of a Taj Birdy’s cake will indeed taste “homemade”); ei is the
evaluation of the ith outcome (e.g., the “favorableness” of a cake’s tasting
homemade); and indicates that there are n salient outcomes over which
the bi and ei combinations are summated.

Theory-of-reasoned-action Model

It improves upon Fishbein’s research. It is integrative since it takes the

cognitive, affective and conative components into consideration.

Behaviour can be traced back to intention to act which itself results from
the consumer’s attitude towards the behaviour and subjective norm.
Diagrammatically, it can be represented as follows:

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Fig. 7.8: Reasoned-action Model

Attitude towards behaviour represents the overall favourability towards the

purchase. Subjective norm influences an individual’s intention to act.
Subjective norm has two components – favourable or unfavourable
thinking of contemplated action by family, friends and colleagues and
motivation to comply with their thinking. Thus, while purchasing a bike like
Bajaj’s Pulsar, we shall certainly consider what our parents think about it or
whether our classmates approve such a purchase.

We can see all these elements have interconnection. Actual behaviour is

preceded by intention which in turn is preceded by attitudes and subjective
norms. We also learn that an intention predicts behaviour better than an
attitude.

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Attitude-towards-the-ad Model

Advertising influences consumer attitudes towards brands and products.

The following figure outlines the attitude-towards-the-ad model.

Fig. 7.9: Attitude-towards-the-Ad Model

The consumer comes to acquire various feelings and judgement about the
ad after exposure. This influences the attitude to the ad and the beliefs
about the brand. This consequently affects the attitude towards these
brands.

Consumer attitudes towards the ad must be distinguished into cognitive

and affective aspects.

Affective responses describe what we feel after seeing the ad, e.g.,
amused, sad, inspired, joyous, etc. Cognitive evaluations describe our
judgement regarding the ad, e.g., humorous, interesting, believable,
horrible, etc. Both affective and cognitive responses can be measured on a
five-point scale.

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The favourable attitude is shown towards a brand after exposure is likely to

wear off as we move away in time from the exposure. It is, however, true
that a favourable attitude towards the ad does not save a poor brand, and
an unfavourable attitude does not preclude the selection of a superior
brand. Attitudes towards the ad affect brand attitudes far more in the case
of innovations. Ad exposure leading to beliefs determines brand attitudes
much more for familiar products. There could be both positive and negative
feelings towards the ad simultaneously. Both these influence the attitude.

Attitude Formation

We know by now that people hold attitudes towards objects. We have

attitudes towards garments like jeans, soft drinks like Coke, and mineral
water like Kinley. What factors influence these attitudes? Are we influenced
by celebrities endorsing certain products? What effect do mass media like
TV and newspapers have on attitudes? Do friends and family members
affect us? Some attitudes last for a long time. Some keep on changing.
Why so? Marketers must understand the formation of attitudes, to affect
these in the desired manner.

Essentially, attitude formation is a learning process. Secondly, there are

some sources of influence on attitude formation. Lastly, personality affects
attitude formation. We shall cover these three aspects one by one in the
following section.

7.4 LEARNING PROCESS

We can shift attitudes favourably towards an object when there is a

condition of no attitude towards an object in question. Learning is a
medium that can cause this shift or attitude formation.

Cognitive learning theory is related to attitude formation. A brand name

that is favourably viewed is associated with say an innovation. We tend to
purchase it then. At the start, the attitude towards the brand is neutral.
Once we start using it, it provides repeated satisfaction. It creates a
favourable attitude. This attitude influences our acceptance of the new
product. In terms of learning theory, an unconditioned stimulus (brand
name) leads to an unconditioned response (favourable attitude) by
repetition and positive reinforcement. Celebrities bring about a positive
association between them and the neutral new product. Celebrities enjoy

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goodwill and prestige (positive attitude). This is transferred to the product.

The customer thus develops a positive attitude towards the product.

Instrumental conditioning is observed when the experience of using a

product towards which we have no attitude leads to some attitude on
getting satisfied.

Cognitive learning theory is seen in situations when a consumer forms

attitudes while seeking information for problem-solving for need
satisfaction. The attitudes formed may be positive or negative. The basis is
information collected and our cognition – knowledge and beliefs.

Fig. 7.10: Sources of Influence

Attitude formation is highly influenced by family, peer and groups, personal

experience, direct marketing and mass media.

Family Influence: One of the most prominent influences in anyone’s life –

be it positive or negative. There is a direct correlation between the
attitudes of the parents and children. Our moral values, social values,
etiquettes and mannerism, preferences for foods, social hygiene, and other
behavioural traits are all acquired through family exposure. Family gives us
many basic values and a whole variety of less central beliefs.

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Peer and Group Influence: We interact without friends, relatives,

colleagues and we are part of various groups. We have respect for some
individuals whom we admire. They influence us in attitude formation. An
individual belongs to groups or aspires to belong to them. A group has its
norms. We conform to these norms. Even highly learned professionals like
lawyers, doctors get carried away by their peer pressure in terms of what
to advise, prescribe, etc.

Though peers and groups affect our attitudes, it is also true that we make
friends with those peers or join such a group that has a value system
similar to our own. Larger groups like social classes, ethnic groups and
entire cultures also influence our beliefs and attitudes. ‘Namaste as a
gesture is acceptable among Hindus but may not be in other religions.

Experience: Direct experience with products through trial and repeat

purchases affect our attitudes. Incentives are often given to try the
products.

Direct Marketing: A specialized segment is targeted thereby increasing

the chances of influencing the attitudes favourably.

Mass Media: There is a proliferation of print, electronic and digital media.

We are exposed to new ideas and product innovations. We come to know
what others think. We come across several advertising messages. Mass
media does have a profound effect on our attitudes.

Personality Influence: Human beings cannot be programmed to act as

per instructions. Human beings, though influenced by others, have their
personality. Attitude formation has affected the personality. Open-minded
individuals and closed-minded individuals differ in their overall attitudes. A
closed-minded individual is dogmatic, not ready to listen to the viewpoint
of others. Several personality traits like aggressiveness, conservatism,
introversion and extroversion influence the attitudes of a person. A high
need for cognition or information makes us appreciate information-packed
ads. A low need for cognition makes us like ads using presentable models
or renowned celebrities. An attitude towards product innovation is also
influenced by the personality of the individuals concerned such as Bill
Gates.

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Activity C

Identify attitude influencing sources and list your experiences for some of
those influencing factors.

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

Attitude Change

A change in attitude is also influenced, like attitude formation, by learning,

sources of information and personality. In marketing, the leading brands
wish to retain the positive attitudes of their consumers towards them,
whereas the market followers and others want to change the attitude of
the customers of the market leader. Several strategies are adopted to bring
about a change in attitude. Ad agencies exist primarily for attitude change.
Consider several thousand crores of rupees being spent on advertising in
India. Attitude change is thus an area of major concern.

7.5 WHAT HAVE YOU LEARNT – A SUMMARY

Attitudes are an expression of inner feelings that reflect whether a person

is favourably or unfavourably predisposed to some “object” (e.g., a brand,
a service, a retail establishment). We as consumers have attitudes towards
products and services, organizations, promotions and issues. Attitudes are
the most basic constructs leading to the behaviour. It’s an outcome of
psychological processes, and thus attitudes are not directly observable but
must be inferred from what people say or from their behaviour. Consumer
researchers, therefore, tend to assess attitudes by asking questions or
making inferences from behaviour.

Attitudes have bigger properties like (a) Attitudes are a learned

predisposition (b) Attitudes have consistency (c) Attitudes occur within a
situation (d) Salience.

It is appropriate to examine several important attitude models: the tri-

component attitude model, single-component attitude model, multi-
attribute attitude models, and attitude-towards-the-ad model. Each of

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these models provides a somewhat different perspective on the number of

parts of an attitude, and how those parts are arranged or interrelated.

These models help us to understand the relationship between attitudes and

behaviour; the focus has been on specifying more precisely the
composition of an attitude to better explain or predict behaviour.

According to the tri-component attitude model, attitudes are portrayed as

consisting of three major components: a cognitive component, an affective
component, and a conative component. The Cognitive Component of the
tri-component attitude model consists of a person’s cognitions, that is, the
knowledge and perceptions that are acquired by a combination of direct
experiences with the attitude-object and related information from various
sources. The affective component focuses on a consumer’s emotions or
feelings concerning a particular product or service. Evaluative in nature,
the affective component ascertains an individual’s overall assessment of
the attitude-object in terms of some kind of rating of favourableness. The
Conative Component is concerned with the likelihood or tendency that an
individual will undertake a specific action or behave in a particular way
concerning the attitude-object. In marketing and consumer behaviour, the
conative component is frequently treated as an expression of a consumer’s
intention to buy.

The single-component attitude model depicts an attitude as consisting of

just one overall affective (feeling) component. In this case, the cognitive
and conative components either are ignored or, as in the modified-single-
component attitude model, multi-attribute attitude models (i.e., attitude-
towards-object, attitude-towards-behaviour, and the theory of reasoned
action) have received much attention from consumer researchers. As a
group, these models examine consumer beliefs about specific product
attributes (e.g., product or brand features or benefits). The attitude-
towards-the-ad model examines the influence of advertisements on the
consumer’s attitude towards a brand.

Under the learning process, we have learnt that we can shift attitudes
favourably towards an object when there is a condition of no attitude
towards an object in question. Learning is a medium that can cause this
shift or attitude formation. We have learnt different sources of influences
such as family, peer & group, experiences, direct marketing, mass media
and personality influence.

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A change in attitude is also influenced, like attitude formation, by learning,

sources of information and personality.

7.6 SELF ASSESSMENT QUESTIONS

1. What is an attitude? Explain the perspective behind attitude.
2. What is the attitude-object?
3. What are the different properties of attitude?
4. Briefly enumerate any three attitude models.
5. What is the multi-attribute model?
6. What is the learning process?
7. What are changes in basic motivation?

7.7 MULTIPLE CHOICE QUESTIONS

1. Whenever consumers are asked whether they like or dislike a product

(Kissan Ketchup), a service (Vodafone RED Family plan), an advertising
theme (Buss do minute – Maggi Noodles) or a particular retailer, they
are being asked to express______________. Fill in the blank.
(a) brand Personality
(b) their Attitude
(c) their Perception
(d) their Evaluation

2. In a consumer behaviour context, an attitude is ______________ to

behave in a consistently favourable or unfavourable way concerning a
given object. Fill in the blank.
(a) information led approach
(b) our influenced way
(c) a learned predisposition
(d) none of the above

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3. According to the tri-component attitude model, attitudes are portrayed

as consisting of three major components: a cognitive component, an
affective component, and a ______________ component. Fill in the
blank.
(a) compelling
(b) common
(c) consistent
(d) conative

4. The ______________ model is especially suitable for measuring

attitudes towards a product or a specific brand (i.e., the object). Fill in
the blank.
(a) attitude towards object model
(b) attitude towards behaviour model
(c) theory of reasoned action model
(d) attitude towards an ad model

5. We can shift attitudes favourably towards an object when there is a

condition of no attitude towards an object in question. ______________
is a medium which can cause this shift or attitude formation. Fill in the
blank.
(a) Communication
(b) Learning
(c) Exposure
(d) Experimentation

Answers:

(b), 2. (c), 3. (d), 4. (a), 5. (b)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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Chapter 8
Communication and Persuasion
Objectives
By the end of this chapter, you should be able:
• To understand the importance and role of marketing communication
• To understand the relationship between advertising and personal selling,
sales promotion and publicity
• To understand what is a communication model
• To understand the objective and purpose of advertising
• To understand the meaning of advertising appeal
• To understand what is behind any buying motive
• To understand the meaning of appeals – direct and indirect – and the
advertising message

Structure:
8.1 Introduction
8.2 What is Communication?
8.3 The Communication Process and its Structure
8.4 Role of Marketing Communication
8.5 Marketing Communication
8.6 Different Marketing Communication Mix
8.7 Communication Model
8.8 Role of Marketing Communication
8.9 Advertising Objectives and Advertising Purpose
8.10 Advertising Appeals
8.11 What have you Learnt – A Summary
8.12 Self Assessment Questions
8.13 Multiple Choice Questions (MCQ)

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8.1 INTRODUCTION

Earlier, we have learnt about individual consumers – what motivates them,

how they perceive and learn, how their personality and attitudes influence
their buying choices, and how these attitudes can sometimes be modified
by persuasive marketing information. In this chapter, we will explore how
the consumer receives and is getting influenced by such marketing
information. We will understand the salient aspects of the structure and
process of communication, the effects of communication sources on
consumer buying decisions, and the types of marketing messages that tend
to be most persuasive.

8.2 WHAT IS COMMUNICATION?

We understand what communication is, yet we all may define it differently.

A considerably basic definition of communication is the transmission of a
message from a sender to a receiver through a signal of some sort sent
through a channel of some sort. It can be represented as below;

Fig. 8.1: Wilbur Schramm’s Basic Model of Communication

However, this model leaves us with many open and unanswered questions.
Thus, we need to first understand the communication process.

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8.3 THE COMMUNICATION PROCESS AND ITS STRUCTURE

Wilbur Schramm gave us the ‘Basic Model of Communication’ in which the

process of communication delivery is explained. Communication is merely
more than sending a message. Here, the sender (the initiator of a
message) encodes a message (a brand message to convey intended
meaning and elicit a certain type of response) for the receiver (anyone who
is exposed to a message) who later decodes (interpreting what a message
means). After decoding the message, the customer responds (feedback) in
some way. Actions reveal a lot about the message. However, the
environment in which the communication process happens along with other
ongoing things like other brand messages, distractions, and thoughts
within the minds of the consumer, distracts his attention and thus it is
known as (noise).

Fig. 8.2: Comprehensive Communication Process

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The sender is the originator of the message. It puts the message in a

symbolic form, say a radio or TV advertising copy. It is called ‘encoding’.
The message is carried by the media, say the postal department or TV or
newspapers. The message is received by the receiver who shows a
particular response which is communicated back to the sender.

The message must accomplish three tasks to be effective:

a. It must gain the attention of the receiver.
b. It must be understood.
c. It must stimulate the needs of the receiver and suggest appropriate
methods to satisfy these needs.

Senders must be aware of the receivers or audiences they want to reach

and the responses they want. Since the sender wants the receiver to
understand the message, the sender must know as much as possible about
the receiver before the message is designed. The sender puts the message
through efficient media that reach the audience. The response of the
audience is known by developing the feedback channels. In this process,
noise may distort the effectiveness of communication. Noise includes poor
message planning, busy audience members or careless feedback of
response.

Elements in the Communication Process

The Source and Encoding

The sender starts marketing communication by sending a message having
a brand name. The message is a derivative of the brand position and target
audience. However, encoding depends on the vehicle chosen – TV, Radio,
Print, etc. During encoding, the agency must be clear that the target
audience understands words, pictures and other cues used in messages.

Brand Messages
A brand message is defined as “All the information and experiences that
impact how customers and other stakeholders perceive a brand”. Brand
messages need to engage the customer and build a better brand
positioning.

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The brand message’s role is to introduce a new product, create awareness,

build brand image, make promotional offers, develop equity and build the
relationship.

Media Channels
It’s the method/mode by which the communication travels from the sender
to the receiver. Media channels link companies to their customers through
newspapers, magazines, TV, Radio including innovative mediums like In-
cinema, digital, etc. Word of mouth and packaging also play the role of a
media channel.

Noise
The environment with distractions all around in which communication takes
place is considered as NOISE. Noise can be at the encoding stage or even
the decoding stage. Throughout the communication process, the message
is subject to extraneous factors that can distort transmission or reception.
It is essential in advertising to look at the noise as CLUTTER. Due to clutter,
a particular brand message has a threat to get lost, not noticed. It is
important to note that competition clutter needs to be understood – what
they are saying, when and where they are saying, noticeability, etc.

The Receiver and Decoding

The intended receiver is the target audience. The sender and media
channel can only ensure that a message reaches the receiver. It’s the
receiver who decodes the message. Thus, it is the receiver who interprets
what the source is trying to communicate. If he understands, he decides to
act. A pre-test is, therefore, very essential and critical.

Feedback
Feedback is defined as “Receiver’s set of reactions to a marketing
message”, known as a response. Marketers are very keen on feedback. It
allows the sender to monitor how the intended message is being decoded
and received. Feedback also gives a chance to know how the noise is being
handled during the delivery process. The call of action also gives feedback
to the advertiser. Marketers also need to use other feedback determination
methods. Depending on feedback, success or failure in marketing
communication is concluded. Successful marketing communication is
accomplished when the marketers select an appropriate source, develop an
effective message, encode the message properly, select the channel to
reach the target audience and ensure delivery and decoding.

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Activity A

List the communication process followed by DOVE SOAP including Noise

and Feedback. List it below.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

8.4 ROLE OF MARKETING COMMUNICATION

Modern marketing is about communicating with the present and potential

customers, stakeholders as well as internally. Modern marketing companies
manage a complex marketing communication system to communicate with
all stakeholders. However, the key issue is to know what to say, where, to
whom and when. The primary role is to engage audiences and promote the
organization and offerings.

Marketing communication efforts include understanding the consumers,

establishing an identity of the company, using cost-effective advertising,
publications and publicity to generate awareness, building interest and
relationships in the community and among key influencers. The function of
all the elements of marketing communication tools is to communicate.

Organization (advertiser) sends communications and messages in a variety

of ways – advertising, brand names, logos, graphics, websites, package
designs and more.

In addition to the above, there are media in which time and space can be
bought to deliver messages to target audiences. An appropriate mix of
available tools needs to be utilized to reach out to different audiences.

Essentially in the consumer markets, advertising is used to build brands,

sales promotion is used to encourage customer action, public relations to
generate goodwill and interest, personal selling to promote brands in
various trade channels, direct marketing is to get sales on a one-on-one
basis. Availability of internet and mobile connectivity has changed the
platform and new forms of communication channels are now available.

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Communication has been defined as “the passing of information, exchange

of ideas or the process of establishing a commonness or oneness of
thought between a sender and a receiver”. The success of the
communication process depends on the nature of the message, the
audience’s interpretation capabilities, and the environment in which it is
received. The receiver’s perception of the source & the medium also
matters.

Defining Marketing Communication

Marketing communication or promotion is one of the elements of the

marketing mix which is responsible for putting the marketing offer to the
target market. Marketing communication is defined as “All the promotional
elements of the marketing mix which involve the communication between
an organization and its target audiences on all matters that affect the
marketing performance”. It is also defined as “Persuasive communication
designed to send marketing-related messages to a selective target
audience”. Target audience is defined as “Those individuals or groups that
are identified as having a direct or indirect effect on business performance
and are selected to receive marketing communication”.

There are several reasons to communicate with markets and audiences –

Inform, Persuade, Image creation, Reinforcement.

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8.5 MARKETING COMMUNICATION

Modern marketing is the management of the Seven ‘P’s but continues to

rely heavily on the four ‘P’s – product, price, promotion and place and
distribution channel. In a sense, the entire marketing process has a large
content of the communication. For instance, the product communicates a
distinctive image such as youthfulness, glamour or prestige. The brand
name communicates the physical and psychological attributes of the
product, e.g., Lux – The Beauty Soap of Film Stars. The package
communicates to the consumer what the manufacturer thinks of his
convenience and sense of beauty. The price communicates the quality of
the product. There is communication between buyers and sellers, i.e., the
distribution channel. Thus, each element of the marketing mix either helps
or hinders communication and ultimately the sales effort. Marketing
communication is thus a broader term than promotional strategy. However,
the most important element of marketing communication is the planned
promotional communication.

The marketing communication mix (MCM) is also known as Promotional Mix

(PM) and consists of five elements namely advertising, sales promotion,
public relations, direct marketing, and personal selling. In addition to these
elements of communication, there are the media or how marketing
communication messages are conveyed. With the Internet and digital
technologies, INTERACTIVE forms of communication became possible.
Thus, the promotional mix nowadays is direct and targeted. It is also
known as Below-the-line communication (BTL).

The five major modes (elements) of MCM/PM are personal selling, direct
and interactive marketing, advertising, sales promotion, publicity and
public relations.

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Fig. 8.3: Marketing Communication Mix or Promotional Mix

• Personal Selling: For making a sale, a salesman interacts orally with

the buyer or buyers in the form of a sales discussion, presentation and/or
demonstration.
• Direct marketing: It means using DIRECT MEDIA to reach the target
audience by creating and sustaining personal communication with
customers/prospects.
• Advertising: Any paid form of non-personal communication of ideas,
products and services by an identified sponsor.
• Sales Promotion: Short-term direct inducements to encourage sales of
products and services.
• Publicity: Non-personal stimulation of demand for a product/service or
business organization as a whole by putting commercially significant

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news in media to create a favourable image. It is not paid for by the

sponsor.
• Public Relations: Marketers engage in public relations to develop a
favourable image of their organization in the eyes of various
stakeholders.

The Process of Marketing Communication

Let’s diagrammatically understand the marketing communication process

as applied to any promotional strategy:

Fig. 8.4: Comprehensive Communication Process

Source: Duncan 2005, B2B Whiteboard

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The marketing manager or the organization is the sender of the message.

The message is encoded as advertising copy, publicity material, sales
promotional displays or sales presentation by salespeople. The media for
delivering the message may be the print media like press and magazines
or the electronic media like TV, radio and films or a salesman who makes a
presentation. The decoding step involves the consumer’s interpretation of
the message. This is often the most challenging aspect of marketing
communication as consumers may not always interpret the message the
way the sender wants them to interpret. As seen previously, the
fundamental difficulty in the communication process occurs during
encoding and decoding. This may happen because the meanings attached
to various words and symbols may differ, depending upon the frames of
reference and the field of experience between the sender and the receiver.

Fig. 8.5: Communication and Field of Reference

This is explained in the above figure, the overlapping of the field of

experience and frame of reference makes communication possible. If there
is no overlap, communication may be bad or impossible. The consumer or
audience response is known by undertaking a market research study or by
analyzing the sales reports. The noise element is in the form of competitive
promotional messages. There may be a random noise factor like people
fast-forwarding a video cassette when advertisements are shown.

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Communication errors may be minimized by knowing the relevant market

dimensions, the needs and attitudes of potential buyers.

In total, corporate communication and marketing communication are the

most important parts. Advertising as we have seen is a part of marketing
communication. Advertising as a tool of communication has certain
important characteristics which distinguish it from other tools of marketing
communication like personal selling, sales promotion, publicity and public
relations.

8.6 DIFFERENT MARKETING COMMUNICATION MIX

We have seen earlier that marketing communication mix or promotional

mix consists of different elements namely personal selling, direct
marketing, advertising, sales promotions, publicity and public relations. In
the following section, we will understand one which involves
communication with the stakeholders – personal selling, advertising, sales
promotions, publicity and public relations.

Personal Selling
It’s a one-to-one approach to have two-way communications, facilitate a
demo and maintain and establish a long-term relationship. The only tool in
which there is a possibility of feedback and evaluation. Here the
salesperson can adapt the message according to the type of customer he is
dealing with. In personal selling chances of misunderstandings are minimal
and negotiation is possible. The salesman also gets feedback which enables
him to redefine his approach or offer as the case may be. Thus, it is also
possible to measure the effectiveness of advertising. However, personal
selling incurs higher cost and has a higher turnaround. Also, reach and
frequency is lower due to higher cost.

Advertising
Advertising is a non-personal form of communication. The prime objective
is to build/maintain awareness of a product/organization. It helps you to
develop a competitive advantage. It is a widely used marketing
communication tool to inform, persuade, strengthen the brand image and
reinforce buyer loyalty. Advertising helps you to reach your target
audience. All advertising requires a message and a carrier to deliver the
message to the receiver. It is a one-way process with no feedback
mechanism except the increase in sales. However, today various digital

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marketing tools help you to get some feedback in the form of website hits,
social media likes, practice direct marketing and more.

Advertising is communication with many consumers of products and

services. To communicate with such a large group, we put the advertising
message through mass media like press, magazine and TV. Advertising is
thus one form of mass communication. Here communication with the buyer
is only through a media interface. It is difficult to measure the
effectiveness of advertising.

Sales Promotion
Sales promotion complements advertising and delivers a call to action. It
works in the short-term to create sales as against advertising which seeks
to work over the long-term to create awareness. Sales promotion takes
over at a point where advertisement leaves its footprint. It makes the
consumer take a favourable purchase decision by providing one or other
kind of direct inducement e.g., discount, price off, coupons, etc. Sales
promotions cost much lower than advertising.

The key characteristic of sales promotion is that it causes an immediate

response and is effective as a ‘PUSH’ strategy @ trade.

Public Relations and Publicity

PR is responsible for the management of relationships between
organizations and their stakeholders. PR influences opinions about the
company. Thus, it needs to work towards closing the gap between how its
key public sees the organization and how the organization would like to be
seen by its key public. PR is responsible for the long-term goodwill. PR is
also responsible to guide the company through crises without too much
damage to its reputation. PR is relatively cost-effective as it gives free
coverage among the masses. However, PR has little control over media –
they may publish what they find and not what PR gives to them.

PR is supposed to perform two tasks:

• Publicity – Seeks to inform readers, listeners or viewers, and to be

effective must-have news value, called ‘news angle’

• Promotion – aims to inform, thus more akin to advertising; exists

mainly to project the benefits of a programme or product (Promotional

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articles are difficult to place in news media due to lack of a strong ‘news
angle.’)

Activity B

List different marketing communication mixes being practised by the

manufacturer of the KENT RO water purifier. Do not merely list but give
reference to context with actual initiatives being noticed by you.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

Corporate Communications
Corporate Communications is an integrated communication structure
linking stakeholders to the organizations.
Corporate Communications encompasses different communications –
• Management Communication
• Marketing Communication
• Organizational Communication

In today’s world of communication, people are getting lost in information.

It is believed – “Tomorrow every organization will be evaluated by its
stakeholders, i.e., customers, shareholders, employees, members of
society in which the company operates, by its reputation in the market.”

The objective of building, maintaining and protecting the reputation of an

organization is the Core of Corporate Communication. It requires an
emphasis on external image improvement and internally directed activities
to stimulate all employees to work together to support companies’ overall
objectives.

Thus, Corporate Communication is a set of activities involved in managing

and harmonizing all internal and external communication with key external
groups and individuals that have a direct relationship with an enterprise
like the employees, media, suppliers, investors and channels partners.

Today, it has emerged as a distinct management Function and includes

advertising, marketing communication, marketing and public relations
besides dealing with media, crisis management etc. as its scope of work.

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8.7 COMMUNICATION MODEL

An important aspect of developing effective communication programs

involves understanding the response process the ‘receiver’ may go through
in moving towards a specific behaviour and how the promotional efforts of
the marketer influence consumer responses.

Marketers may need to achieve objectives like create awareness, trigger

interest in the product, grab lucrative offers, convey detailed information to
change consumers’ attitudes and/or change behaviour.

Several models depict the stages a consumer may pass through in moving
from the state of not being aware to actual purchase. However, in this
chapter, we will only cover the most popular model, known as the AIDA
model.

AIDA Model

The AIDA model represents the Personal Selling model in which a salesman
needs to take his customers through attention, interest, desire and action.
It starts with engagement with an advertisement. The Advertisement must
be attention-grabbing to gain interest in the product. Interest needs to be
first established post which customers must desire the product enough to
take the action desired. Interest can be crafted through a product demo,
information and advertisements. The message must be persuasive to build
desire. Lastly, make the customer take the expected call to action through
promotions, discounts and calling out of features or benefits.

We can now examine the 4 components of the AIDA model in more detail.
We examine this by considering the MOVE OINTMENT advertisement,
expressed briefly as follows. Here, husband and wife are shown in a very
playful mood and suddenly the wife gets a backache. Husband is shown
worried but quickly brings MOVE OINTMENT and is shown lovingly applying
it to wife’s affected area. The wife is shown enjoying his caring touch and is
relieved from back pain. Husband tries to get close to her and a kid moves
in, and the ad ends with the entire family being shown in a happy mood.

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• Family melodrama – Attention

• Loving care by husband – Interest
• Face with relieving expression - Desire
• Punch line “App ke ghar mein Kamar dard rehta hai ya MOVE?” - Action

Fig. 8.6: AIDA Model in Brief

What does AIDA stand for?

• Awareness: Creating brand awareness or affiliation with your product or
service.
• Interest: Generating interest in the benefits of your product or service,
and sufficient interest to encourage the buyer to start researching
further.
• Desire: For your product or service through an 'emotional connection',
showing your brand personality. Move the consumer from 'liking it’ to
'wanting it'.
• Action: CTA - Move the buyer to interact with your company and taking
the next step, i.e., downloading a brochure, making the phone call,
joining your newsletter, or engaging in live chat, etc.

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Attention: The attention portion of the marketing message occurs at the

beginning and is designed to give the prospects a reason to take notice.
Presenting a shocking fact or statistic that identifies a problem that can be
solved by the product or service is one common method of gaining
attention. Other methods can include asking a thought-provoking question
or using the element of surprise. The purpose is to give the prospects a
reason for wanting to learn more.

The layout is the most important factor that directs attention to an

advertisement. In the MOVE advertisement, the jovial playing scenario is
attention-grabbing.

Interest: Once you've gained the prospects' attention, the next step is to
maintain interest in your product or service to keep the recipients engaged.
Explain to the recipients how the problem you've identified in the attention
step is adversely affecting their lives. A demonstration or illustration can
help the recipients to further identify with the problem and want to actively
seek possible solutions. By personalizing the problem, you're making it hit
closer to home.

As the belief goes – An ad seen does not mean an ad read. Thus, the
creative needs to focus on illustrations, and headlines to induce further
reading of the copy which also needs to be crisp, meaningful and self-
understanding or easy to decode.

In the MOVE advertisement, the sudden back pain with a freezing moment
induces interest as to what will happen next. In print advertising, it is the
headline, sub-title, etc., that can do this task. Copy allows interest
building.

Desire: In the desired stage, your objective is to show the prospects how
your product or service can solve their problem. Explain the features of the
product or service and the related benefits and demonstrate how the
benefits fulfil the need. A common advertising process is the "before and
after" technique, such as when a cleaning product makes a soiled item look
brand new. If done effectively, the prospects should now have the desire to
make a purchase.

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In the MOVE advertisement, the facial expression of being relieved and

enjoying the loving care from her husband generates desire in any husband
to buy the MOVE ointment for his wife.

Action: Now that you've created the desire to make a purchase, the final
step is to persuade the prospects to take immediate action. In a one-on-
one sales process, this is the time to ask for the sale. In the advertising
world, techniques involve creating a sense of urgency by extending an offer
for a limited time or including a bonus or special gift to those who act
within a specific time frame. Without a specific call to action, the prospect
may simply forget about your offer and move on.

In the MOVE advertisement, the closing line compels individuals to buy one
Move ointment immediately.

It could be referred to as a communication model rather than a decision-

making model, as it help's the companies identify how and when to
communicate during each of the stages as consumers will be using
different platforms, engaging at different touch points and requiring
different information throughout the stages from various sources.

So, using this to help plan your tailored and targeted communication
campaign may be a start.

Ask yourself some key questions throughout the stages:

• Awareness: How do we make buyers aware of our products or services?
What is our outreach strategy? What is our brand awareness campaign?
Which tools or platforms do we use? What should the messages be?
• Interest: How will we gain their interest? What is our content strategy?
What is the social proof available to back up our reputation? How do we
make this information available and where i.e., on the website, via
videos, customer ratings?
• Desire: What makes our product or service desirable? How do we
interact personally to make an emotional connection? Online chat?
Immediate response to Twitter feed? Share tips and advice?
• Action: What are the calls to action and where do we place them? Is it
easy for consumers to connect and where would they expect to find it?
Think about which marketing channel/platform you are using and how to

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engage, i.e., across emails, website, landing pages, inbound phone calls,
etc.

The AIDA Model identifies cognitive stages an individual goes through

during the buying process for a product or service. It's a purchasing funnel
where buyers go to and fro at each stage, to support them in making the
final purchase. The interest and desire stages are the affective stages that
affect the attitudes and bring about an intention to buy. The final action
stage is the behaviour stage. In practice, all the ad copies do not lead the
consumer through awareness to purchase. AIDA model suggests only the
desirable qualities in an advertising copy as a communication tool.

Promotional Tools and Consumer Response

AIDA model has four stages and at times found to be not complete to
accommodate consumer response and during promotional planning. Thus,
a six-step model known as ‘Hierarchy of Effects’ was developed by Robert
Lavidge and Grey Steiner in 1961, found to be effective in setting and
measuring advertising/communication objectives. It highlights six steps
from noticing an advertisement to a product purchase. Consumer passes
through a series of steps sequentially. It is known as ‘hierarchy’ because
the number of consumers moving from one stage to the next reduces.
AIDA and Hierarchy of Effects are interrelated with the concept of three
psychological stages namely – Cognitive, Affective and Behavioural.

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Outcome Satisfaction Satisfaction

Level Level
Fig. 9.7: Relationship of Response Models

Advertisers must try their utmost to get customers from conviction to

complete the final stage of purchase. The six steps are:
• Awareness
• Knowledge
• Liking
• Preference
• Conviction
• Purchase

Advertising makes consumers aware. Prospect’s start gaining knowledge;

thus, your product information is made easily available. Later, you need to
ensure that customer likes the product. They must disconnect from the
competition and develop a preference for your brand. This is possible by
highlighting the USP and benefits. The next step is conviction, by creating
a desire to purchase. Test drive, sampling are some methods through
which this step can be achieved. Finally, it is expected that consumer will

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buy the product. Advertisers do all these as they expect consumers to

finally buy the product.

The basic premise of this model is that advertising effects occur over some
time. Advertising communication may not lead to immediate behavioural
response; series of effects must occur; each step needs to be fulfilled
sequentially.

Fig. 8.8: Effect of Promotional Tools on Consumer Response

Advertising is good for higher awareness and interest; however, in its

ability to trigger a response from the consumer, it is not effective. Personal
selling is good in developing desire through demonstration and effective in
action through the power of negotiations. Sales promotion can induce
prompt action. PR and publicity can get you awareness and some level of
interest in your products.

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Interpersonal vs. Mass Communication

Marketing deals with two nature of communication - interpersonal and

mass communication. Personal selling makes use of interpersonal
communication whereas advertising, sales promotion and public relations
are mass communication techniques. The following Table summarises the
merits and demerits of both these modes.

Table 8.1

Comparison Between Interpersonal and Mass Communication

Factors Interpersonal Mass Communication
Communication
The speed with which a Slow Fast
large audience is reached
Cost of reaching a large High Low
audience
Attention-arresting High Low
capability
Content clarity High Moderate to low
Accuracy of Message Low High
Message flow traffic Two-way One-way
Feedback High Low

Mass communication takes the message to a large audience with great

speed. Advertising is mass communication. A sales presentation of a
salesman is interpersonal communication. Each time a salesman can adapt
the message to his prospective buyer which is not possible in mass
communication. Mass communication is cost-effective as cost per reach is
exceptionally low. However, it is one-way communication. The feedback is
not reliable many a time. Interpersonal communication provides immediate
and accurate feedback. A buyer can ask questions and raise objections. He
gets an immediate response from the salesperson. It is much more
effective than mass communication. But this communication is painfully
slow when a large number of customers are to be contacted. It is awfully
expensive as well to maintain a large pool of sales personnel.

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8.8 ROLE OF MARKETING COMMUNICATION

Marketing communication plays a specific role for the specific stakeholder.

We can understand it better in terms of marketer-buyer communication,
marketer-market communication and communication by non-profit and
social organizations.

Marketer-Buyer Dyad

Marketing communication brings a marketer and a buyer close to each

other. A marketer has certain goals to achieve. Similarly, the buyer has his
own goals – keep himself well informed about his choices, better
consumption and a desire to have a better quality of life. The common
thread between these two is the need for satisfaction exercise through
mutual efforts. A product is a medium through which the duality of goals
must be satisfied. A product is bought since it has need-satisfying
attributes. Products are offered because the marketer has to achieve his
own goals through them.

Marketing communication allows sharing of the organization’s product

offering with the consumers to help them realize their own goals, while at
the same time move the organization closer to its own goals. The following
diagram illustrates this.

Fig. 8.9: Role of Marketing Communication

Over and above goal compatibility, marketing communication has to

inform, remind and persuade the actual and potential buyers for the
marketer’s offerings.

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Marketer-Market Dyad
Marketing communication is not restricted to buyers alone. It also
addresses itself to business intermediaries, suppliers and other institutions.
It also gets directed to opinion leaders and pressure groups. Each of these
needs a different message. The distributors are not interested in the looks
of the product. They are more concerned about the dealer’s schemes, the
margins available, and how the products fare with the competitive
products. Thus business-to-business communication is an important branch
of marketing communication.

Communication from Non-profit or Social Organizations

Organizations like Greenpeace, NanhiKali of M&M and similar such NGOs
and Non-profit organizations also communicate with their clients,
stakeholders to achieve their objectives. They need funding to run their
services. The government has given them exemptions under the Income
Tax rule due to which a person donating to such an organization can claim
a tax rebate.

Integrated Marketing Communication (IMC)

Integrated Marketing Communication (IMC) is the application of consistent
b ra n d m e s s a g i n g a c r o s s b o t h t ra d i t i o n a l a n d n o n - t ra d i t i o n a l
marketing channels and using different promotional methods to reinforce
each other.

As defined by the American Association of Advertising Agencies, IMC is "an

approach to achieving the objectives of a marketing campaign through a
well-coordinated use of different promotional methods that are intended to
reinforce each other." The definition of IMC recognizes the strategic roles of
various communication disciplines (advertising, public relations, sales
promotions, etc.) to provide clarity, consistency, and increased impact
when combined within a comprehensive communications plan. It is the
application of consistent brand messaging across both traditional and non-
traditional marketing channels.

A more contemporary definition states, "True IMC is the development of

marketing strategies and creative campaigns that weave together multiple
marketing disciplines (paid advertising, public relations, promotion, owned
assets, and social media) that are selected and then executed to suit the
particular goals of the brand. " Instead of simply using various media to
help tell a brand's overall story, with IMC the marketing leverages each

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communication channel's intrinsic strengths to achieve a greater impact

together than each channel could achieve individually. It requires the
marketer to understand each medium's limitation, including the audience's
ability/willingness to absorb messaging from that medium. This
understanding is integrated into a campaign's strategic plan from the very
beginning of planning - so that the brand no longer simply speaks with
consistency but speaks with planned efficacy. This concept inherently
provides added benefits that include: a singular/synchronized brand voice
and experience, cost efficiencies generated through creativity and
production, and opportunities for added value and bonus.

Earlier, Sales used to speak with distributors and end consumers something
different from what marketing used to communicate. PR would have its
take and would speak with media in a way they thought would make a
newsworthy proposition for channels, etc. As a result, the message used to
get tweaked/cracked and thus, not uniform. Under IMC, they need to come
together to deliver one unified message.
Printing and
Packing
Sign and Display
Event Solutions
Management
Advertising

Interiors
PR Internet Marketing
Solutions

Fig. 8.10: Integrated Marketing Communication (IMC)

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Harmony between different media channels/promotional mix is essential to

deliver one message IMPACTFULLY. Overall, under IMC, all the messages
from the organization tell the same story. Under IMC, advertising can be
used for building awareness, sales promotions to generate inquiries, direct
mail for providing info/knowledge sharing and personal selling to complete
the transaction through a synergy that creates competitive advantage,
boost inquiries and sale. A unified message has more impact and can cut
through the noise of thousands of messages across several communication
tools.

However, IMC limits creativity needs different promotional mix to do

specific tasks, thus needs more budget; it is cross-functional, thus the
speed of response is slower – the ownership and responsibility trap.

Integrated Communications and Marketing

We have understood what IMC is, but this section highlights the role of
marketing under the IMC era. As we understand, IMC strives to promote
one central idea as a message; thus, marketing must do things in such a
way that various initiatives/options available to them are used not only to
deliver this central message but also to grow the idea bigger for better
impact. If we consider the launch of Kajal Pencil for black linings around
eyes by Lakme, we can notice the popular and extremely attractive heroine
Kareena Kapoor used for advertising in which she establishes how practical
it is to look beautiful. Lakme also did more to take this further by launching
an online contest allowing beautiful girls to share their picture with Lakme
Kajal being used, sponsored fashion shows within the city, participated in
college fests, direct marketing to connect with loyal customers, publicity in
which Lakme’s female grooming initiatives were covered and likewise,
more initiatives possible under marketing were utilised to grow the idea
rather than speak the same idea. Thus, the impact of it was much higher
than what any other approaches would have created.

Agencies have realised the importance of this aspect and the critical
dependence of marketing on the agency. They have oriented themselves to
tap the opportunity by launching various divisions supporting their mainline
functions such as direct marketing, event management, activation,
celebrity management and financial advertisement divisions and more.

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Fig. 8.11: Growing the Idea Bigger Using IMC

The credibility of the Source

Communication gets decoded by the receiver, who most likely is your

target group. The receiver is in the process to determine the validity of the
communication received. Thus, the first thing he looks at is the source
credibility – news of more deaths due to water-borne diseases coming as a
newspaper report is more believed than an advertisement by water purifier
manufacturers. Thus, the honesty and objectivity of the sender greatly
influence the receiver to believe the message. The intention of the source
behind sending the message also impacts its acceptance. Competence and
knowledge of the source greatly impact the belief in the message sent.
Informal sources, groups also psychologically exercise greater influence on
us. Media selected; distribution channel utilised also shapes the belief in
your message.

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DAGMAR Approach

DAGMAR (Defining Advertising Goals for Measured Advertising Result) is a

concept pioneered by Russell H. Colley (1861). DAGMAR helps in
establishing a measurable link between advertising goals and advertising
results; it monitors and evaluates promotional campaigns. There are 52
distinguished advertising goals listed in DAGMAR, which can be used for a
single advertisement or a year-long campaign for a product. Goals may
pertain to sales, image, attitude etc.

According to the DAGMAR approach, the communication task of the brand

is to gain (a) awareness (b) comprehension (c) conviction (d) image (e)
action. Advertising goals should be consistent with these communication
tasks. Performance on these counts and projected goals are compared to
evaluate the effectiveness of the campaign. DAGMAR model has three
parts (1) define advertising goals for effectiveness measurement (2)
understand four sequential paths through which customers pass –
awareness, comprehension, conviction and action, and (3) measure
advertising result.

1. Define Advertising Goals

Characteristics of good advertising goals include them being written and
measurable, involving a starting point, a defined audience and a time limit.
You must know the current state before the start of advertising. Possible
through a survey, you measure the current awareness, comprehension and
conviction. You now set an advertising goal that improves the identified
attribute’s status – Increase product awareness from 10% to 30%.

2. Awareness, Comprehension, Conviction and Action

The first step in four sequential paths through which customers pass is
awareness, wherein you make your target audience aware of your product,
a new product. Later, you make customers understand what the product
will do for them (comprehension), its features and benefits. Post
comprehension, it is essential to build a positive attitude towards the
product which should induce customers to take the expected action which
is a step towards buying. The expected action at the customers ends only
generates revenue for you.

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3. Measure Advertising Effectiveness

Effectiveness can be measured post evaluating results vis-à-vis
expectations as actual results can be compared with goals set. However,
you need to know the state before the campaign. This may require another
survey if criteria are subjective – awareness, comprehension, etc.

DAGMAR has utilities like its help in improvements in the advertising and
promotional planning process by providing a better understanding of goals
and objectives. Planners’ efforts are directed towards collective objectives.
It focuses advertisers’ attention on the value of using communication-
based rather than sales-based objectives to measure advertising
effectiveness. It helps in less subjectivity and leads to better
communication and relationship between the client and agency.

8.9 ADVERTISING OBJECTIVES AND ADVERTISING

PURPOSE

Advertisements are done with SMART business objectives in mind, namely

specific, measurable, achievable, realistic and time-sensitive, e.g., increase
sales by 10% in six months through a 20-week long product awareness
campaign held in six target cities. Advertising goals and tactics follow from
marketing strategies and objectives. However, there are two debatable
schools of thoughts regarding advertising objectives - Is it marketing? Or is
it communication? In other words, is it to generate a sale or prepare
customers to buy?

Importance of Promotional Objectives

It is important to have objectives for effective advertising. Objectives are

standards against which performance can be measured. Advertising and
Promotional objectives are needed considering the functions they serve in
communications, planning and decision making, measurement and
evaluation etc.

(a) Objectives serve as a communication and coordination device

Objectives facilitate the coordination of various groups working on a
campaign. Organizational teams, as well as support agencies, should know
what the company hopes to accomplish through its marketing
communications program.

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(b) Objectives provide a criterion for decision making

All phases of promotional strategy are based on the established objectives.
Meaningful objectives can also be a useful guide for decision making.
Promotional planner faces challenges like creative ideas shortlisting,
choosing the promotional mix, etc. The promotional objective helps in
matching a particular strategy.

(c) Evaluation of advertising effectiveness

Objectives provide a benchmark against which the success of a campaign
can be measured. Good objectives are measurable, and you can justify the
return on investment.

Types of Advertising Objectives

Promotional objectives evolve from the company’s marketing plan and are
rooted in the firm’s marketing objectives and have statements of what is to
be accomplished by the overall marketing program. Advertising objectives
are the various communication tasks required to deliver the message.
However, two schools of thoughts operate here - usually to communicate or
usually to increase sales or market share. Clarity regarding which side of
thought you wish to pursue must come.

Should it be sales objectives?

Many believe that the only objective of advertising is sales, but lack of
sales can be due to any of the other marketing mix elements or due to
factors like competition, price, quality, changing taste, etc. Advertising can
make consumers aware and interested. But all the marketing elements
must be synchronized together to make a brand successful. Additionally,
the effect of advertising happens over some time post multiple exposures.
The sales objective approach can be used either when advertising plays a
dominant role and other factors are relatively stable or when the advertiser
is looking for immediate results such as sales promotions, DM, retail
promotions or festival sale.

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Should it be communications objectives?

One school of thought believes that the objective of a promotional program

is to communicate as it is done to achieve goals like building awareness,
brand image and purchase intention. For achieving such objectives,
consumers must be given information and a favourable bias towards the
brand must be created even before the purchase behaviour occurs as
consumers pass through successive stages of the Response Hierarchy
theory. Before they move closer to purchase, the purpose of advertising is
to help move them through the different stages.

However, not all marketing and advertising professionals accept

communications objectives, as it is seen as being of value only if it results
in sales.

Advertising Strategy

An advertising strategy is a plan to reach and persuade a customer to

buy a product or a service.

An advertising strategy should support the marketing plan, which in turn

supports the company’s business plan.

There are two parts to any advertising strategy:

Part 1 - Assessment - What's going on?

Determine what's going on in the market. What's the history, the major
trends and the current situation? And what are the risks and opportunities?
Also, what does the future look like? With the product, with competitors,
with consumer attitudes.

Part 2 - Action - What should we do about it?

Determine what your client should do about the most significant

opportunities and problems revealed in the assessment.

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What action should you take regarding the competition, technological and
media trends? Specifically, how can you address those issues with
advertising and related tools? For example, what, if anything, should you
do with the brand, with direct marketing, and on social media platforms?

The advertising strategy covers:

1. Setting your promotional objectives and deciding whether to advertise.
2. Deciding the mix
3. Determining your promotional budget.
4. Deciding where and when to advertise.
5. Deciding purpose for advertising
6. Measuring the effectiveness of your advertising campaign.

1. Your objectives

Before deciding whether to use advertising, clarify what you are trying to
achieve.

1.1 You may need to create awareness of something or change customer

attitudes.

Creating a reputation as the market leader may allow you to increase your
prices and win long-term contracts. Building brand awareness for a product
makes the product easier to sell. It also makes it easier to launch new
products. Making consumers feel good about your company can boost
sales.

1.2 You may need to convey a specific one-off message to your market.

For example, informing people of a special offer, or a particular benefit of

your product.

1.3 You may need to prompt a specific action, such as the customer
visiting your premises.

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If you are building up a database of leads, your objective might be to

gather the contact details of potential customers. If your product is
suitable, your objective may be to create sales there and then.

1.4 You may need to address your existing customers, rather than win new
ones.

Keeping upfront of mind awareness encourages customers to consider you

first when they place their next orders. Be specific about who you are
trying to communicate with.

1.5 Typical media uses

Based on your profession and whom you wish to target and serve,
advertise in a local newspaper if you are a local plumber or estate agent.
You may use your website to advertise special offers and events in your
restaurant. Advertise for your accountancy firm in a local online directory -
Just Dial.

2. Determining the mix

Consider whether advertising is the most cost-effective way of achieving

your objective, or whether other forms of promotion would be more
effective.

2.1 Who are you trying to reach?

What common characteristics define your target market? For example,
consumers in the same geographical area or individuals from the same
socio-economic background. Also, decide if you want to reach end-users or
intermediaries. Be clear about who makes the buying decision.

2.2 Which media will best reach your target market?

Advertising is only cost-effective if it reaches a readership that significantly
overlaps with your target audience.

2.3 Could advertising carry the right message?

In general, advertisements work best when they carry a concise message.
The form of the advertisement may physically limit what you can say. For
example, web advertising works best if your message can be boiled down

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to three or four words. Your advertisement, and the media in which you
advertise, must suit your image.

2.4 Would advertising work within your timescales?

Preparing an advertisement for publishing or broadcasting can take time. It
should be ready when you wish to have an impact. Each advertising
medium has its own production lead time.

2.5 Are their cost-effective alternatives?

For example:
• Direct mail with a mailing list that more closely matches your target
market.
• Personal selling to build relationships with high-value customers.
• PR for building your reputation over the longer term.
• Trade exhibitions and conferences.

3. The budget

Deciding how much you should spend is not an exact science.

3.1 How much do you normally spend?

How much did you spend last year, and how effective was it, with your
business objectives?

3.2 What are your competitors doing?

If your competitors are advertising heavily, you may need to match their
activities. If a new competing product has been launched, you may need to
fight off the competitive threat.

3.3 How far are you from achieving your objectives?

If you are launching a new product into a new market, you may need to
spend heavily to achieve customer awareness. If your product is already
well established, you may only need a few advertisements to keep upfront
of mind awareness.

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3.4 What is your advertising worth to you?

What sales margins do you make and how much repeat business can you
expect? What is the lifetime value of a new customer? Are you considering
a brand-building investment? Are you planning a short-term sales drive or
longer-term awareness? How effective do you expect your advertising to
be?

Check that your budget is realistic. How many extra sales do you need to
generate to justify your spending?

3.5 What media can you afford to consider?

The cost of media does not always equate to its potential power - A simple
entry in an online directory can generate a lot of enquiries.

4. Media selection
Identify your segment of the market and decide which media would best
reach your target audience.

4.1 The choice of media is vast.

You will likely be needed to advertise in more than one type of media to be
effective. Observe where your competitors advertise. Consider using more
than one type of media and marketing method.

Search online to see how easy it is for your customers to find your website.
The Internet is generally the first place customers go to.

Ask a selection of people from your target market what they read, watch,
listen to and which websites they visit.

Consider the use of a specialist media buying agency to help you.

4.2 Choose the media that match your needs. Ask yourself some key
questions:

How many members of your target group read a particular publication or

visit a certain website and how often? Does the publication or site have the
right image for your advertisement?

How much will your ad cost to produce? How much will the ad cost run?

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Look for circulation figures audited by the Audit Bureau of Circulations. Ask
for a readership profile, analyzing characteristics and spending habits of
readers, including the proportions in socio-economic groups A, B, C1, C2, D
and E.

Examine advertising rates for different sizes and types of advertisements

and different positions.

4.3 Investigate the scope for negotiation.

You might get a discount for taking unsold ad space at the last minute. You
might be able to have a larger ad or a better position for the same price.
Extra discounts may be available for repeat advertising.

The cost of your internet advertising could be based on clicks or sales.

Smaller media (e.g., local papers and trade press) are usually more open
to negotiation.

5. What and when

What you are trying to achieve is central to your strategy.

5.1 Your advertising campaign is just one part of your marketing strategy.
Make sure it is suitable for your product or service.

For example, ads to generate immediate sales are not effective for
products that require demonstrating, or that need special skills or
knowledge to operate.

5.2 Your strategy should be based on promoting a single, solid benefit.

It is not enough to say, 'the best or 'free'. You must know what motivates
your target audience to buy.

Make your message stand out and keep it simple.

5.3 Consider the timing of your campaign.

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When are your target customers likely to be most receptive to your ad?
Plan well in advance. Some media gets booked up many months ahead.

When do you want your targets to respond and what is the likely lead time
from advertisement to action?

Will you be able to handle the response? Make sure your response is
professional and carefully planned.

6. Measuring the effectiveness

Measure the effectiveness of your advertising in terms of your objectives.

If your strategic objective is to raise the profile of the company, you will
probably have to carry out market research to find out about customers'
attitudes. If you aim to create sales, you should be able to measure
response easily and cheaply.

6.1 Most of your sales advertising can be monitored simply and directly.

Always ask new enquirers how they heard about you. Use coded
advertisements. Ask enquirers to quote the code when they respond to
your ad. You will be able to trace which had generated the response.

Use reply coupons in print adverts. You will be able to trace the source of
the coupon, as well as obtaining information on the potential customer.

Make use of the readers' reply services in trade journals.

Use a dedicated toll-free telephone number for each campaign. Toll-free

numbers are a decisive factor in increasing call volumes and can be
obtained and pointed at your normal phone line for free. The call statistics
will show you which advertisement is performing the best.

6.2 Calculate the total costs of your campaign and weigh them against the
response.

Your advertising will not be effective if it is not backed up with trained staff,
brochures, adequate stock levels and the ability to live up to the promise of
the advertisement.

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Make sure you have allowed for all the likely costs. For example:
• The cost of buying advertising space.
• Design costs, including print preparation.
• Brochures and other literature.
• The fulfilment cost (goods, postage, delivery, employee costs and so on).

6.3 Some ads may generate many responses but convert a few into sales.
If your conversion rate is poor, something is wrong.

Review your brochure or follow-up literature. It may not provide enough

information or live up to the promises made in the advertisement.
Check the employees who are handling the response. Telephone staff may
not be sufficiently trained in the right areas.

Re-examine your price structure. The price you are offering may be
unsuitable for your target market.

Advertising which leads to a large number of enquiries that do not convert

into sales will work out expensive per sale.

Thus, advertising strategy is comprehensive coverage of the above-

mentioned aspects which not only covers pre-development but also the
post-release issues.

Message Presentation

Keeping the objective of communication and audience in mind, messages

are to be structured. A message can either have a centrality or
complementary approach. The central approach takes the direct route to
persuade customers. It’s an ad with requisite information being furnished
such as technical info, features or comparison as the case may be. This
kind of centrality approach provokes active cognitive information
processing.

The complementary presentation uses the relevant association, scenic

backgrounds and mood etc., enabling favourable inferences about the
product.

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An appeal is an important formative aspect of message presentation, which

we will study subsequently.

Advertising Message Structure

Advertising communication effectiveness not only depends on the message

content but on its structure as well. The important ways in which a
message can be structured are – drawing conclusions, repetition, one-
versus-two-sided arguments, and the order of presentation. We need to
understand them briefly.

1. Drawing Conclusion: While structuring the advertisement, there is

always a dilemma whether definite conclusions should be drawn for the
audience in the ad for their quick understanding or should be left to
them.

General learning is that it is best to allow conclusions to be drawn by the

receiver rather than forcing a conclusion on him. Consumers have a
general feeling that ads which conclude are over-aggressive and forcibly
trying to change their frame of mind. Also, conclusion drawing just helps
in easy comprehension of facts but loses out on attitudinal influence. An
intelligent audience likes to make their conclusions. Also, who is
presenting the conclusion is equally important. If the presenter is not
found to be qualified to conclude, the receiver will reject the conclusion.

A product that falls under the personal use/care category also needs
proper handling – you can’t conclude anything against their belief
system, religious roots, caste and social outlook. You can conclude on
their ignorance, latent needs – e.g., pregnancy kit.

2. Repetition: Repetition of an ad message gives continuity to your

communication. It improves message comprehension and conclusion.
Everything else being the same, repetition of ads increases awareness,
facilitates recall, improves knowledge and creates favourable
predisposition.

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3. One-versus-two-sided Communication: Advertisers often have a

dilemma to publish only the key USP or also cover shortcomings of the
product in their communication. The entire base of advertisement is on
talking about one key factor or emotional aspect to influence favourable
action by your customers. In one-sided communication, you will just
mention the core features or proposition in front of your customers. In
two-sided communication, you will also give certain shortcomings of
your product and an explanation as to how it doesn’t affect the
consumer. Two-sided communication gets attention and finds meaning
when overall customers believe the originator for its credibility. Two-
sided communication will find acceptance among the educated and
intellectual audience, capable of sound reasoning. Two-sided
communication helps when counter-propaganda is resorted by the
competition. Two-sided communication helps in shifting attitude.

4. Comparative Advantage: Here direct comparison with the competition

is done on different parameters, features, technology to bring out your
product’s superiority. As the competition grows, many times you are
compelled to do such a comparison. A direct comparison is considered a
derogatory approach, indirect comparisons are common. The
manufacturer does show how their products are better, e.g., Tata Salt
Pure test in which they carried full TV commercial to show their salt
dissolves completely in the water while other salts (unorganized sector
and marginally cheaper) leave un-dissolved sediments, which are
harmful to your body. You also see sanitary pads, diapers ads in which
each one tries to show how their product has better absorption
capabilities. Comparative ads are done to create differentiation and
establish product superiority.

Message Format

The word format means the setting, organization, structure and style of the
ad message. The message format takes care of how the message content
and structure strategy are implemented. It is characterised by the type of
media vehicle in which the message is delivered. In a print ad, the
message format elements are headline, body copy, illustration and colour,
whereas in radio advertising it is words, voice modulation and dialogue
(conversation). Your format makes your advertising appeal stand out.

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Message Development

There are so many media that carry the ad campaign for the same product.
In other words, there are so many products that get advertised on the
same media by different companies. Your target population receives
communication from all directions – direct, indirect, horizontal, zigzag and
more. This leads to communication and thus we need to understand the
concept of clutter. Clutter is a form of noise in the communication process
which prevents your message from being delivered to your target
customers. Your message format and message development along with the
advertising appeal chosen for communicating your message are vital for its
success.

8.10 ADVERTISING APPEALS

Advertisements are made to influence the buying behaviour of consumers.

Advertisement creates influence through either rational or emotional
appeals. For doing so, they need to know the customer’s current needs,
why is he desiring to fulfil his needs; to fulfil his needs, what are his wants,
his current state of mind and your desired state of mind towards your
product/brand. Your appeal can be either product-oriented or consumer-
oriented. It would be therefore helpful to devise a framework for classifying
advertising appeals.

The first aspect in this framework is to understand human needs as a basis

for appeal, followed by buying motives and finally get a bird’s eye view of
few advertising appeals.

Human Needs as Basis for Appeals

The emergence of marketing is based on understanding consumer needs.

Products are developed for specific consumer needs. Most of the time
needs are upfront but certain needs remain as latent needs. Needs can be
physical or physiological including psychological which dwells in an
emotional area. Different psychologists have given their viewpoints on
what constitutes a set of basic human needs – Be it Daniel Starch’s 44
Human Motives theory or Murray’s List of Psychogenic Needs or Maslow’s
Hierarchy of Needs. The most popular among advertisers is Maslow’s
Hierarchy of needs.

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In Chapter four of this textbook on ‘Consumer Needs and Motivation’, we

have studied in detail the above theories of needs. Students are advised to
refer to Maslow’s theory of needs once before proceeding further in this
section.

In addition to the above Maslow’s theory, one additional theory is of

significance from an advertisement perspective, namely Berelson and
Steiner’s primary and secondary human needs theory. As per them,
primary needs are physiological ones based on the biological functioning of
every human being. The secondary needs are those which are acquired or
learnt and are not necessary for the basic biological functioning of an
individual.

The primary needs as per Berelson and Steiner’s theory include:

a. Supply Motives: Hunger and thirst
b. Avoidance Motives: Avoidance of pain, fear, harm and other negative
consequences
c. Species-maintaining Motives: Reproduction, mating and nutritive
motives

The secondary needs include:

a. Acquired or Learned: It is believed that secondary needs are learned
because of the satisfaction of primary needs. One learns that one can
better satisfy one’s hunger-and-thirst need by acquiring possessions of
immense value or by going to better places.
b. Recognition Needs: One’s constant pursuit for self-recognition
c. Affiliation Needs: One’s fundamental need to be in a relationship for
satisfying the mental need for love and care

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Fig. 8.12: Human Needs as Expressed by Berelson and Steiner’s theory

The following conclusions may now be drawn:
a. Unsatisfied needs are motivators of behaviour and satisfying needs are
not
b. Much of human behaviour is motivated by unconscious and
subconscious needs. These are needs we do not or can’t consciously
admit to ourselves. Thus, you see in most male suiting and shirting’s
advertisement, a woman will be shown accompanying a male model. A
male always has a fantasy of exhibiting himself as a ‘He’ man.
c. Generally, several needs operate simultaneously to cause a given
behaviour response but only some needs are more important in
behaviour than others. These ‘key’ needs should be identified and
appealed to for getting the desired action by your target customers.

Buying Motives
We have just concluded that unfulfilled needs motivate us. When we get
motivated, our buying motive may differ from other person’s buying
motive, e.g., one may buy a flat to move out from chawl living but
someone has bought a flat next to you as an investment.

Thus ‘buying motives’ is defined as ‘the combination of facts and the

emotional state of a person that generates a feeling within them that they
need to purchase an item, as well as the factors that influence their
eventual choice of a particular product. The marketing team of a business
will often strategically consider the key buying motives within a target
consumer group to enhance sales of their product’.

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Meaning of Buying Motives of Consumers

There are different kinds of consumers. So, their wants and needs are also
different. They buy goods or services to satisfy their needs. The causes and
factors which stimulate consumers to buy certain goods or services are
called buying motives. The motivating factor to direct consumer behaviour
is buying motives.

Identifying buying motives of the consumer is a difficult task for business

entrepreneurs. There are various factors to induce consumers to buy any
product. Profit, fear, dignity, pride, fashion, entertainment, love, health,
facility, curiosity, habit, security, utility etc. led people to buy products.
Among these, profit, fear and pride are the three major motivating factors.
Such motives may be different from person to person. However, all factors
are important.

Classification of Buying Motives

Different authors have classified buying motives in different ways.

According to Malvin S. Hatrick, there are two classifications.

a. Primary buying motives: Primary buying motives are related to the

basic needs of human beings such as hunger, thirst, sleep, sex, etc. Due
to these needs, people get motivated to purchase the goods.

b. Secondary buying motives: Secondary buying motives are those

which are influenced by the society where a person is born and lives. It
is created after fulfilling the basic needs. These motives are curiosity,
comfort, security, love and affection.

It can be further classified under three main headings:

1. Emotional Buying Motive

The emotional buying motive depends on the emotion, feeling and attitude
of the consumers. This type of motive is purely a psychological aspect of a
person. This type of buying motive may be different from person to person.

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It includes:
a. Love and affection: It is an important buying motive that induces
buyers to purchase the goods. Due to love and affection towards
children, we buy toys, dresses, biscuits, etc. A husband may buy saris
and cosmetics for his wife due to love and affection.
b. Curiosity: Curiosity is the desire for a new experience that motivates
people to buy specific goods. Thus, to get a new experience, customers
purchase the goods.
c. Fashion: It is an important motive that can change the mind of the
customers. Generally, customers try to copy particularly the movie
stars, sportsmen and athletes etc. So, all the producers advertise their
products with the help of these popular personalities.
d. Pride and Prestige: Due to pride and prestige in society, customers
purchase expensive and luxury goods to maintain their status. They
purchase a Toyota car, Karizma motorcycle, fifty-nine-inch colour
television, etc., to get a high position in society.
e. Sex and Romance: Sex and romance is another important emotional
buying motive that induces customers to purchase the goods. Due to
sex and romance, they purchase a fancy dress, cosmetic items,
perfumes, shaving lotions etc.
f. Fear: People are generally afraid of losing their health, wealth and life.
Thus, it motivates them to purchase goods such as insurance policy,
hiring lockers in bank and membership of health club, etc. These goods
or services help them to avoid their fear.

2. Rational Buying Motive

All consumers do not buy any goods or services with an emotional motive.
They become thoughtful, and carefully consider their needs, priorities,
financial capacity etc. They study and analyze the necessity, utility, price,
etc., of the goods or services. Then they make the final decision to buy or
not. Consumers become logical, rational, apt and knowledgeable. Such
quality can be seen in their buying decision. The customers buy goods or
services considering cheapness, health and security, utility, comfort, etc.

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a. Economy: Under this motive, customers prefer products that are more
economical or cheap. To get more profit and discount, customers
purchase such goods. These elements attract and encourage the
customers to buy such goods in large quantities.
b. Utility: Customers want to purchase those goods which have more or
higher utility. Utility satisfies the wants of the customers.
c. Comfort and Convenience: Every person has the desire to live in
comfort and in a convenient way. As a result, they get motivated to
purchase such goods which provide comfort and convenience.
Customers purchase a T.V., DVD, motorcycle, washing machine, heater,
cooler, sofa set, etc., for their pleasure and comfort.
d. Durability: This is another element of a rational buying motive. Due to
the durability of the products, customers are motivated to purchase the
goods; for example, a Toyota car, Pulsar motorcycle, Sony TV, etc., are
purchased due to their durability.
e. Security: It is important to people. People are not feeling secure from
floods, earthquakes, theft, dacoits, etc., in society. So, they purchase
key lockers, open a bank A/c, keep a watchman, etc., to feel secured.

3. Prestige Motive

Prestige motive is related to the want of consumers for promotion of self-

image and protection of their ego. Under this, vanity and pride are the
motives of consumers.

a. Vanity and Pride: Consumers buy certain products of a specific brand

because possession of the same gives them a distinct identity and thus
increases their self-importance.

4. Patronage Motive

Patronage motive describes why certain customers buy specific brand

goods, but not other brands and always buy necessary goods only from a
particular shop. So, under this motive, brand loyalty and store loyalty get
included.

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a. Service Motive: Service is an important motive that inspires customers

to purchase goods. Customers purchase the goods to get services such
as credit facility, home delivery facility, free installation, free repair and
maintenance services.
b. Quality: Due to the quality of goods, customers are motivated to
purchase certain goods or services. If products assure quality, the
customers are even ready to pay a higher price for such goods.
c. Location: Location also affects the purchase of goods. Customers
prefer to buy those goods which are easily available near their home or
locality.
d. Store loyalty: Store loyalty is another important element that plays a
significant role in buying motive. We purchase different goods due to
loyalty to a store which could be due to factors such as attractive
appearances, trust in weight, quality, price etc.
e. Friendliness behaviour: Friendly behaviour of salesmen also affects
the customers to purchase goods from the same suppliers, which is also
discussed under the patronage buying motives.
In this way, consumers buy goods or services due to emotional motive,
rational motive, prestige motive and/or patronage motive. This and such
lists can’t be considered exhaustive.

Appeals and Buying Motives

Appeals make us realise our unfulfilled needs and thus it cues our
attention. Appeals provide us with the buying motives; thus, they lead to
action. Lower-priced Wheel detergent has the price appeal, but it
incorporates economic motives.

Appeals and Advertising Message

Deciding an appeal that will convert your ‘Big Creative Idea’ is to determine
the advertising appeal i.e., what the advertising message should
communicate which has linkage with consumers’ buying motives.

This stage determines how the message will be executed/constructed. The

appeal has a direct connotation with effectiveness. It’s an approach to
attract the attention of consumers and to influence their feeling towards

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the brand. Appeal forms the core message and execution is how that
content is presented.
Following are the four approaches to develop advertising appeals:
• Informational/Rational Appeals
• Emotional Appeals
• Transformational Appeals
• Combining Rational and Emotional Appeals

1. Informational/Rational Appeals

They are informative and present a rational picture. It shows how a

product meets the consumer need. It conveys in concrete terms what
problem is solved, need fulfilled or cost-benefit derived – Horlicks for
‘Nutrition’ and Colgate for ‘Cavity Protection

Informational/Rational appeal approach can be considered to handle many

rational motives – comfort, convenience, economy, health, touch, taste,
smell, quality, dependability, durability, efficiency and performance.

There are various natures of informational and rational appeals.

a. Feature Appeal: Feature appeal is focused on core feature/s of the

product thus informative in nature. It informs how rational it is to use
only this brand with feature/s that can be used and benefit consumers.
B2B, technological and high involvement products often use this appeal
- E.g., Electric Motor, Bearings, and Laptop.

b. Competitive Advantage Appeal: Competitive advantage appeal

brings out your edge over the competition. It is focused on bringing out
your edge on the product/service features vis-a-vis competition.

You use this competitive advantage directly or indirectly. Use of such

appeal is more popular among consumer durables, appliances,
equipment, gadgets and machinery - Washing machines, AC, etc.
However, it can be used for any other product as well – toothpaste
claiming how effective its herbal properties are over other chemically
made toothpaste.

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c. Favorable Price Appeal: The price of your product is considered the

dominant appeal. Used during the sale, promotions, new product
launches, off-season in variety of products - FMCG, gadgets, durables,
eatables, soaps, detergents, mobiles - E.g., Surf Excel ab 99 ke badle
79 mein.

d. News Appeal: This kind of appeal can be used when your product has
some newsworthy point, or the company has that appeal in its
development. It is not released as news, but advertisement
communicates in the form of a newsworthy appeal. Many product
categories invariably try this appeal - E.g., Nayi Wheel Tikiya, or
Breakthrough Ceramic Technology Bearings now in India.

e. Product Popularity Appeal: The popularity of the brand is used as the

highlight of the message. It emphasizes the increasing numbers of
customers who have switched, or you are the first one to reach that
mark - E.g., the only SUV to touch a 10 lakhs customer base - Scorpio.

f. High Quality and Performance Appeal: Some products are just

preferred for their high quality or performance. Such products’
advertisements to take an advantage of this appeal - E.g., Dettol – The
trusted name in anti-septic lotion v/s Savlon, Sony Bravia LED, etc.

g. Economy and Low-Price Appeal: Many people prefer economically

priced goods or savings while operating the product. To target such
individuals, value for money is highlighted as an appeal - E.g., Saalana
10000 ki bachat, Zero Maintenance.

h. Long Life Appeal: Many consumers prefer long-lasting products having

minimal trouble. Product durability is thus a very dominant appeal.
People are willing to pay the premium too for long-lasting quality
products - E.g., BOSE Headphones v/s ordinary, Dura Cell, Amaron car
batteries.

i. Scarcity Appeal: When there is a limited supply of a product, the value

of that product increases. Scarcity appeal urges consumers to buy a
particular product soon. Scarcity can be created also! - E.g., Mahindra
XUV 500 opened bookings for the car on becoming popular post-launch.

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j. Other Rational Appeals

• Purity – Tata Salt
• More profits
• Time-saving – Video downloads 43% faster
• Multi-function, limited space requirement etc.

2. Emotional Appeals

Emotional appeal is designed to persuade using emotional cues. It has

better consumer connect and captures attention, develops brand loyalty -
E.g., LIC – Zindagi ke Saath Bhi, Zindagi ke Baad Bhi

a. Positive Emotional Appeals: Positive emotions like – Humor, love,

care, pride, joys are weaved into advertisements to induce consumers
to opt for it - E.g., Johnson & Johnson’s Baby Soap.

b. Negative Emotional Appeals:

Fear: Response to a threat that expresses some sort of danger.

Consumers want to take steps to protect against the threat – E.g.,
Pimples. Fear of loss/damage is bigger than gain. Thus, it is useful for
insurance, awareness, injury prevention kind of appeal - E.g., Burnol,
Ceasefire Fire extinguishers.

Anxiety: You have anxiety about certain deficiencies you face.

Consumers want to take steps to overcome anxiety – mouthwash to
overcome the anxiety of bad breath while you are with friends. Anxiety
makes you not do things, while advertisers show that their products
make it happen – Colgate Gel, closeness with a girlfriend. Other
examples are Axe Deo, LIC Retire Rich, etc.

Sex: Since the time of Adam – Eve, there is a sensuous relationship

between a male and a female. They wish to express their best always.
Sexual self-expression is gratifying, and it impacts your subconscious
mind - E.g., Successfully used by condom manufacturers, vitalisers.
However, it was unsuccessful for products like MR Coffee, Tuff Shoes.

Humour: Humor makes someone laugh at it. Humour may help

consumers to remember a brand or easily forget it. It’s a tricky appeal to

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use - E.g., Successfully used by Mentos (Dimag ki batti jalaade) but was
unsuccessful when used for Happydent chewing gum.

c. Transformational appeals: The reason for using emotional appeals is

to influence consumers’ interpretations of their product usage
experience. It is intended to create a shift in belief/attitude essential so
that they try your product. Such ads create feelings, images, meanings
and beliefs about the product that may be activated when consumers
use it - E.g., Flavored condoms, pregnancy pill, and stabilizer.

d. Combination of Rational and Emotional Appeals: Used when

products are used for rational reasons, but an emotional appeal may tilt
preference towards your brand – Washing detergent advertisement
where one mother looks at his kid’s dull shirt v/s another student with a
white shirt and showing his mother in an immensely proud moment,
etc. Weightage regarding the rational aspect or emotional aspect in
consumers psyche could be different.

e. Moral Appeals: Directed at the consumer’s sense of what is right and

proper. Often used to encourage people to support social and ethical
causes – cleanliness, environment - E.g., Mahindra Duro scooter on
launch showed an ad in which a couple chases a car driver who has
thrown a water bottle out of the car on the road.

f. Teaser Advertising: This approach helps advertisers to build curiosity

by just sharing partial info. It just builds curiosity, interest, and
excitement among the target audience by partially providing certain
information or a picture, in a way that compels the viewer to be curious
enough to know more.

g. Musical Appeal: The use of tunes and jingles plays an important role
to capture the attention of listeners – Britannia ting tiding, Airtel’s
signature tune.

h. Comparison Appeal: A brand’s ability to satisfy consumers is

demonstrated by comparing features with that of competitive brands –
Tide & Surf.

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Direct and Indirect Appeals

Direct and Indirect Appeals are another way of classifying ad appeal based
on its being linked directly or indirectly with consumer needs. Sometimes
advertisers are explicit about the need to which they are appealing,
whereas at other times, appeals are veiled or purposely kept ambiguous,
and the consumer has to determine the relevance of the appeal to him.

Direct Appeals
Direct appeals are those that communicate with the consumers about a
given need, followed by a message that extols the advertised brand as a
product that satisfies that need. In Industrial advertising, some ads may
have a direct appeal, satisfying the customer's technical need; but in
consumer advertising, the direct appeal plays an extremely limited role.
Examples of direct appeal ads for consumer products are rare – Snickers
Chocolate writes “Hungry Kya?”

Indirect Appeals
Indirect appeals are those that do not emphasize a human need but allude
to a need. Because advertisers understand the influence of needs upon
selective perception, they leave some ambiguity in the message so that the
consumers may be free to interpret it and the need to which the advertiser
is appealing. Since this interpretation of the consumer is not difficult, there
is no risk involved in keeping the ambiguity in the message.

Indirect appeals are either product-oriented or consumer-oriented or

maybe a combination of the two. We shall now discuss each one of these
indirect appeals in detail.

Product-oriented Indirect Appeals: They are grouped into three

classifications:

i. Feature-oriented Appeals: The basic message is about product

features, characteristics and attributes. Examples: Instant Shine, Cherry
shoe polish, ''Promise'' - the unique toothpaste with the time-tested
clove oil.

ii. User-oriented Appeals: The basic message emphasizes specific in-

operation and/or post-operation advantages of the brand advertised.
Examples: Anne French hair remover ad: "How many cruelties can a
woman's skin bear?" The headline is a searching question. The- ad

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message discards other methods of hair removal - they are shaving,

waxing, and threading. Then it goes on to inform you how gently hair is
removed with Anne French. Another example is Stayfree beltless
napkins by Johnson & Johnson. It highlights the fact that there is no
need for belts or strings or pins. How ‘convenient it is, taking away all
botheration of women!

iii. Product Comparison Appeals: The basic message emphasizes the

differences between the advertised brand and the competing brands.
The advertised brand, of course, has a net advantage over those with
which it is compared; otherwise, the whole exercise becomes futile.
Think of those ads of electric fans, when the product features of various
brands are compared in the ad in a tabulated form - such features as
the number of poles of the motor, number of bearings, price, warranty
period offered, etc. A refrigerator advertisement compares the types of
compressors used, whether high speed or low speed, electricity
consumption, noise level, the quality of the white enamelled body, extra
tray, etc.

Consumer-oriented Indirect Appeals: They are further divided as follows:

i. Attitude-oriented Appeals: The basic message is in line with the

consumer's attitude - his value - belief structure. Example: The ad
series by Shriram group, namely: "Indian Corporate Evolution. The
Shriram Experience." In one of the ads, it says: ‘‘We are Indians. We
must remember our roots." Then it goes on to state the group's belief in
Indian traditions and the advantages it shares with the country. This
message refers indirectly to Maslow's esteem need.

ii. Significant Group-oriented Appeals: The basic message emphasizes

the kind of group that uses or approves of the advertised brand. The
group may be a reference group, a social group, or a peer group, or any
other group that is significant for the consumer target. The ad says:
"Some possessions define a character. Some distinguish it. A cigarette
so distinguished, it's by appointment to your Majesty."

iii. Lifestyle-oriented Appeals: The basic message emphasizes an

identifiable lifestyle relevant to a defined target market. Example: An ad
of Charminar cigarette appealing with its strong taste. For some hard

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smokers, only a "strong" cigarette can give relaxation, particularly after

a day's hard work. One needs a Charminar.

iv. Subconscious-oriented Appeals: The basic message is distinguished

and is directed at the consumer's subconscious (or unconscious) need.
These messages are aimed at the buyer's dream world but are veiled in
some manner by messages appealing to the buyer's conscious mind.
Example: 'Petals' brassieres of VIP are advertised with a dreamy
message: "As you flower into a woman, you discover the epitome of
international fashion. Discover Petals."

v. Image-oriented Appeals: Although all advertising appeals create a

brand image in the minds of consumers, the image-oriented approach is
distinct in the sense that here the advertiser, consciously and
purposefully, tries to mould a brand image. There is an intention to
create a specific brand image. One strategy is to create a brand image
that "fits" either the self-image or self-ideal image of the target market.

Essentials of an Advertisement Appeal

• It must be thematically sound.
• It must be communicative.
• It must be interesting.
• It must have credibility.
• It must have finality and be complete.
• It must contain “truthful” information.

Selling Points and Appeals

Selling points are those product attributes that are listed in the
advertisement copy to impress upon the consumer the significance of a
product to him. These could be specifications, quality statements,
composition statements, descriptive or narrative or performance
statements. Some selling points are primary selling points, and the rest are
subsidiary selling points. Selling points to be effective must have the force
to appeal to a particular buying motive. So, selling points successfully
touch upon the buying motives. Thumbs Up soft drink’s selling appeal is
Aaj Kuch Toofani Karte Hain, which in a way affects your buying motives of
having great fun. Mountain Dew says Darr Ke Aagey Jeet Hai which appeals
to our buying motives of enjoying adventurous moments with the team.

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Activity C

List at least 5 appeals possible for promoting a new age motorbike.

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

Advertising Execution Style

Execution follows finalization of appeal/s. Execution means how an

advertising appeal is carried out/presented.

The appeal can be executed in a variety of ways:

1. Straight Sell/Factual Message: Straight forward presentation of

information is carried out. It is useful where the focus of the message is
the brand and its specific attributes and benefits. It is often useful while
conveying a rational appeal.
2. Scientific/Technical Evidence: Here, evidence is presented in the
advertisement – Water Purifiers. You present either scientific, technical,
laboratory or research findings for making your claim believable. Lizol
floor cleaner mein payi gayi 99% kitanuon ka khatmaa karney ki shakti.
3. Demonstration: Key advantage of the brand is presented in the ad by
showing actual demonstration – Tata Salt Purity.
4. Comparison: Comparison as execution is mostly linked to comparison
as an appeal. Creatively, comparisons can be shown in numerous ways
– Sprite, Detergent brands, detergent soaps, and shampoo for dandruff
removal.
5. Testimonials or Endorsement: Individuals are shown praising the
products based on personal experience. Expert endorsement or
Celebrity endorsement is shown in the advertisement. E.g., Expert
endorsement – Suffola using a doctor; shampoo with hairstylist;
Celebrity – Hritik for Macroman, Shahrukh for Nerolac.
This happens because of aspiration, prestige enhancement and role
model effects
6. Slice of Life: Real-life problem is shown to be solved by the brand –
bad breath.

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7. Animation: It’s an execution-style in which animated characters are

used – Vodafone Zoozoos.
8. Personality Symbol: Execution involves developing a central character
or personality symbol that delivers an advertising message and with
which a brand can be identified – Asian Paint’s Gattu character.
9. Fantasy: It’s a style where a product becomes the central part of the
fantasies-based situation created by the advertisers – Cosmetic ads.
10.Dramatization: This style focuses on telling a short story with the
product as the star. It uses more excitement and suspense in
dramatizing the situation, thus different from a slice of lifestyle.
Expected to draw attention and compel action.
11.Humor: Despite its drawback of remembering the brand, humour can
still be a powerful style – Humor has worked well for Sprite, Fevikwik,
but it did not work for Happydent.
12.Combination: It is used for more than one execution-style
complementing specific tasks. There are other appeal execution styles
like Kids led, Culture-based, subliminal and so on.

8.11 WHAT HAVE YOU LEARNT – A SUMMARY

The result of the communication process is the understanding of a

message. The message is transmitted through media or certain channels.
The message must accomplish three tasks to be effective: (a) it must gain
the attention of the receiver, (b) it must be understood and (c) it must
stimulate the needs of the receiver and suggest an appropriate method to
satisfy these needs. Modern marketing is the management of the four “P” s
– product, price promotion and place or distribution channel. In a sense,
the entire marketing process has a large content of the communication.
The brand name communicates the physical and psychological attributes of
the product. There is communication between buyers and sellers, i.e., the
distribution channel. Thus, each element of the marketing mix either helps
or hinders communication and ultimately the sale effort. The marketing
communication mix consists of the following major tools: Advertising, Sales
Promotion, Publicity, Personal Selling and Public Relations. Advertising is
communication with many consumers of products and services. We
communicate with the buyers through media. Advertising aims at a group
while personal selling is individual communication, Advertising as a mass
communication tool is a must for modern marketers. It is difficult to

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measure the effectiveness of either, but the marketing manager decides a

judicious mix of both.

This chapter on Communication and Persuasion covers all the tools/topics

mentioned above in addition to (i) Uncontrolled communication, (ii)
Corporate communication, (iii) Communication model, (iv) Promotional
tools and Consumer response, (v) Interpersonal v/s mass communication,
and (vi) Role of marketing communication.

8.12 SELF ASSESSMENT QUESTIONS

1. Explain what role does marketing communication play in consumer
persuasion and its importance thereof.
2. Explain the role of Advertising, Personal Selling, Sales Promotion and
Publicity in marketing communication.
3. Describe one popular communication model.
4. What are the objectives and purpose of advertising?
5. What do you understand by advertising appeals?
6. What is the meaning of direct and indirect appeal in an advertising
message?
7. What is the meaning of advertising execution style? Explain any two.

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8.13 MULTIPLE CHOICE QUESTIONS

1. After decoding the message, a customer gives _____________ in some

way. Fill in the blank.
(a) an order
(b) an enquiry
(c) references
(d) feedback

2. _____________ is one of the elements of the marketing mix which is

responsible for putting the marketing offer to the target market. Fill in
the blank.
(a) Marketing communication
(b) Personal selling
(c) Advertising
(d) None of the above

3. Select one of the elements of marketing communication from the

following.
(a) Advertising format
(b) Buying motive
(c) Advertising
(d) Advertising appeal

4. One of the communication models is AIDA. What does D stand for in

this model?
(a) Decoding
(b) Development
(c) Demand
(d) Desire

5. _____________ is a concept pioneered by Russell H. Colley (1961),

which helps in establishing a measurable link between advertising goals
and advertising results, and in monitoring and evaluating promotion
campaigns. Fill in the blank.
(a) AGMARK
(b) AIDA
(c) DAGMAR
(d) None of the above

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Answers:

1. (d), 2. (a), 3. (c), 4. (d), 5. (d)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

Video Lecture - Part 3

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Chapter 9
Influences Shaping Consumer Buyer
Behaviour
Objectives

By the end of this chapter, you should be able:

• To understand the importance of groups and types of different groups
• To understand what is family and family life cycle
• To understand what is social class and the different categories of social
classes
• To understand what is culture
• To understand what are the different categories of social classes
• To understand the influence of groups, the family, social class and culture
on consumer buyer behaviour
• To understand what are the marketing applications in the context of
reference groups

Structure:

9.1 Introduction
9.2 Understanding Group and Types of Groups
9.3 Marketing Applications of Reference Groups
9.4 Functions of the Family
9.5 Family Life Cycle
9.6 Understanding Social Class
9.7 Social Class Categories
9.8 The Measurement of Social Class
9.9 Understanding Culture
9.10 Characteristics of Culture
9.11 Advertising & Cultural Values
9.12 Measuring Culture
9.13 India’s Core Cultural Values
9.14 What is opinion leadership?
9.15 Dynamics of the opinion leadership process
9.16 Measuring Oinion Leadership
9.17 What Have You Learnt – A Summary
9.18 Self-Assessment Questions
9.19 Multiple Choice Questions (MCQ)

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9.1 INTRODUCTION

Most individuals tend to be involved with other people continually.

However, in previous chapters, we have considered only the individual
factors influencing a consumer. Like almost all human behaviour, an
individual’s social behaviour and social relationships are often motivated by
the expectation that they will help satisfy specific needs – E.g., a person
attends the ‘Yoga by the Bay’ program just to make others believe in his
health consciousness. In short, an individual interacts with others, say his
family or living group, his school or college-mates, his workgroup, his
neighbours and a host of strangers. As a result, he gets influenced more by
what people around him, feel about him, notice about him, what is he
recognized for and more. In consumer buyer behaviour it is considered that
an individual’s decisions also get influenced by his social involvement and
group dynamics. There is a special emphasis on the role that reference
groups play in directly and indirectly influencing consumer behaviour.

The family commonly provides the opportunity for product exposure and
trial and imparts consumption values to its members. As a major
consumption unit, the family is also a prime target for the marketing of
many products and services.

Social factors based on differentiation and evaluation, go a long way in

explaining consumer behaviour.

Culture is essentially a fabric of society in which we live. Culture plays an

influencing role in consumer behaviour.

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9.2 UNDERSTANDING GROUP AND TYPES OF GROUPS

A group is defined as two or more people who interact to accomplish

either individual or mutual goals. Few ladies of your neighbourhood, often
going together for shopping – it’s a social group. In the first case, ladies
are engaged for a common purpose, but their buying gets influenced by
what others tell them; what to buy and what not to buy.

Each group has a unique ideology. It distinguishes it from other groups. We

come across religious groups, networking groups, commercial groups, fan
clubs, friendship circles, professional groups, and political groups.

There are various ways in which groups can be classified – say based on
several criteria like the structure of the group, hierarchy in the group,
membership or size. In consumer behaviour, we deal with small groups
because these very groups affect the buying behaviour of their members.

Primary versus Secondary Groups: A primary group is one in which a

person interacts regularly with other members, e.g., a family, and
colleagues. A secondary group is one with which a person interacts
occasionally and thus may have limited influence on him about what others
feel or the way others behave.

Formal versus Informal Groups: A formal group is one where the group
purpose is defined, the structure of the group is hierarchical, and the roles
and responsibilities of individuals are clear – A housing cooperative society
or employees’ union is a formal group. A loosely defined group is called an
informal group, e.g., a group of past school friends.

Membership versus Symbolic Groups: Membership groups, like an

association of automobile distributor, shows that a member belongs to,
based on eligibility criteria. A symbolic group does not offer formal
membership, though a person acts like a member by accepting its norms.
To an amateur golfer, professional golf club members are like a symbolic
group.

To summarize, it can be said that small, informal, primary membership

groups are of the greatest interest to marketers because they exert the
greatest potential influence on a consumer’s purchase decision.

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Activity A

Identify the following specific groups in your life.

Primary Groups
- ......................................................................................................
Secondary Groups
- ......................................................................................................
Formal Groups
- .....................................................................................................
Informal Groups
- .....................................................................................................
Membership Groups
- ......................................................................................................
Symbolic Groups
- .....................................................................................................

Consumer-relevant Groups

As the name suggests, these groups’ classification is based on the

relevance and influence of specific groups on consumers and their buying
behaviour. There are five basic consumer-relevant groups – the family,
friendship groups, formal social groups, shopping groups, and workgroups.
Every individual is a member of such groups and collective experiential
sharing, the influence of members among each other affects the consumer
buying behaviour. Individuals’ values, attitudes and behaviour gets shaped
and influenced by people surrounding them. We know very well that these
attributes influence consumer buyer behaviour.

Following are the group characteristics;

Structure and Function

Irrespective of its formation nature, a group continues to exist if it fulfils
some important functions for the individuals present in the group. This
leads to the necessity of belonging to several groups. Each group
influences our behaviour in its way. A family is an involuntary group and
the first group in the process of socialization. More so, we have neighbours,
society members, and how we intermingle with them affects our social
outlook and the free exchange of information, opinions; thus, it shapes our
views as well.

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Conformity to the Group

A group always exercises pressure on an individual so that he falls in line
with the group norms. In several studies, it has been observed that groups
influence consumption – use of Tupperware bottles and boxes in the office.

Reference Groups

The concept of a reference group was put forward by Herbert Hyman. A

reference group, as the name itself suggests, is that group which a man
uses as a point of reference to arrive at his judgement preferences and
beliefs.

A reference group generally is a group that serves as a point of comparison

or reference for an individual to form his attitudes and behaviour. At times,
the reference group is a large aggregate of persons like a community
group.

The concept is valuable because it improves our understanding of how an

individual is influenced by other people as far as his consumption beliefs,
attitudes and behaviour are concerned.

This concept has three dimensions – it is a point of comparison. It

determines our status, which depends on the group used for comparison.

Normative Reference Groups: These reference groups influence our

broadly defined general values and behaviour. A family is thus a normative
reference group for the child. It has a role in our food habits, dressing
habits and shopping habits. It shapes what we call ‘good’ values.

Comparative Reference Groups: These are benchmarks for narrowly

defined or specific attitudes or behaviour. We like to do the furnishing of
our home just like our neighbour whom we admire. We may choose our
clothing, upholstery and other household items just like them.

Broadening the Reference Group Concept: Over some time, the

concept of reference group has been broadened to accommodate both the
groups with which an individual interacts directly and indirectly. Cinema
stars, sports celebrities, political heroes, TV stars are some such groups
with which we do not have direct face-to-face contact.

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A person uses a new broadening variety of referents from a single

individual to a family to a social class to a nation or culture. The following
diagram illustrates this.

Fig. 9.1: Referents for a Consumer

Positive and Negative Reference Groups

A positive reference group inspires the members to behave in a manner

congruent with its values. It has a positive influence on its members. A
negative reference group inspires an individual to behave exactly opposite
to its values. A reader of a political newspaper may despise its writing and
may vote exactly opposite to what the editorial material recommends.

It is thus clear that two variables namely (1) nature of influence and (2)
membership, determine the nature of groups you belong to and their
influence on you. The same is plotted on a two x two matrix table below for
your better understanding.

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Table 9.1

Types of Reference Groups

MEMBERSHIP GROUP NON-MEMBERSHIP
GROUP
POSITIVE INFLUENCE Contractual group Aspirational group
NEGATIVE INFLUENCE Disclaimant group Avoidance group

A contractual group is a positive reference group in which we have face-

to-face contact and whose ideology we approve.

An aspirational positive reference group does not provide face-to-face

contact but inspires us to adopt its norms.

A disclaimant group is a negative reference group where there is face-to-

face contact but disapproval of group ideology.

An avoidance group is a negative reference group where we neither have

face-to-face contact nor we endorse their ideology.

Factors Affecting Reference Group Influence

Both, the individual and the product determine the influence of the
reference group on buyer behaviour. So does the specific social factors. We
need to understand how and why some of these factors operate to
influence consumer behaviour.

Information and Experience: Individuals who are well-informed about

the product or who have experienced the product are less likely to be
influenced by the reference group. We seek information, advice,
suggestions from the reference group for the product/areas we are not
aware of.

Credibility, Attractiveness and Power of the Reference Group: Our

perception of the reference group in terms of its credibility, attractiveness
and power also influences our behaviour.

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We wear formal clothes in the office, but informal jeans and T-shirts at
parties. We may wear jeans and a t-shirt when we go to a temple, but we
wear dhoti and kurta when we go for post-death rituals of a close family
member.

The conspicuousness of the product: Certain types of products witness

a high level of influence of the reference groups. Cigarettes, beers, and
cars are chosen under the influence of reference groups, as claimed by
Bourne. Clothing, furniture, magazines, and fridges as products are not
chosen under the influence of the reference groups. But in these
categories, brands do get chosen under the influence of the reference
groups. Neither products nor the brands are chosen under the influence of
the reference groups in the case of soaps, canned juices and radios.

Different reference groups work on us at different points of time and for

different situations and can influence our choice favourably or unfavourably
by exerting pressure on our self-perception and self-projection which we
wish to furnish.

Reference Groups and Consumer Conformity

Marketers have realised the ability of reference groups to change consumer

attitudes and behaviour; specifically, its power to encourage conformity.
They have evaluated what reference groups must do, to be capable of such
influence and the same is reproduced below:
1. Inform or make the individual aware of a specific product or brand.
2. Provide the individual with the opportunity to compare his or her
thinking with the attitudes and behaviour of the group.
3. Influence the individual to adopt attitudes and behaviour that are
consistent with the norms of the group.
4. Legitimize an individual’s decision to use the same products as the
group.

Group membership’s impact on brand choices often depends on the specific

product category (e.g., fast-food, shaving gel, clothing, suiting), the type
of social relationship (friends or colleagues) and the social structure of the
group (extent of personal ties between group members).

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9.3 MARKETING APPLICATIONS OF REFERENCE GROUPS

Group situations, or an individual with whom a segment of the audience

can identify, are used to promote goods and services by subtly inducing the
prospective consumers to identify with the pictured users of the product.
It’s up to marketers to induce the prospects with admiration (e.g., role
model, sportsman), or with aspiration (of a celebrity way of life), or with
empathy (with a person or situation), or on recognition (of a person-real or
stereotypical-or a situation). Minds of prospective consumers will start
thinking ‘If he uses it, it must be good, ‘If I use it, I will be like her’.
Prospective consumers try to determine whether they found a solution in
what is communicated.

We make use of the reference group concept in the promotion of goods and
services. Either individuals or groups are used with whom the audience can
relate. The consumers are moved by the admiration they have for the
individuals, say Sachin Tendulkar and Pepsi, or by aspiration, say Kareena
Kapoor - an actress and Lux soap, or by the recognition the person has,
say an architect and cement.

There are four major types of reference group appeals in common

marketing usage – use of celebrities, use of an expert, use of a common
man and use of an executive.

(a)Celebrities

Celebrities, particularly movie stars (Shahrukh Khan, Salman Khan), TV

personalities and sports stars (Kapil Dev, Sachin Tendulkar), and celebrity
models-cum-actresses (Sushmita Sen and Aishwarya Rai) or living legends
(Amitabh Bachchan) or political leaders (Narendra Modi) provide a
particular type of reference group appeal to their loyal followers i.e., high
recognition value. For followers, they represent an idealization of life that
most people would love to live. Their fame reaches far and wide. People
consider them as their ideals; and they would like to adopt many things
these celebrities use, do or recommend. People react favourably and
positively to the association of a celebrity with a product. There’s a definite
identification of a product associated with a celebrity. The brand’s
personality gets evolved out of using the right celebrity.

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How Celebrities Are Used?

Celebrity power can be used in any one of the following ways;

1. Testimonials: Celebrities who have used the product personally may

give testimonials verifying the quality of the product and confirm its
benefits. Priyanka Chopra endorses TAG Heuer watch. Celebrities mostly
endorse the products. Lux is an incredibly famous example of this type
of copy. This soap came in the 30s and still is a powerful brand. It is
presented as soap for film actresses by getting the most popular actress
to vouch for it. The message is clear – a clear complexion and beauty
care. Film actresses made it sound credible. There is complete product –
personality synchronization.

2. Endorsement: Celebrities who may or may not be experts about a

particular product or services are often asked to lend their names to the
advertisement for such products.

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3. Actor: A celebrity sometimes only acts as a character in the

commercial. He does not either testify or endorses it. Amir Khan and
Aishwarya have acted in a Pepsi commercial. Shahrukh Khan acts in a
Santro commercial. The brand and the product must be balanced in
terms of image.

4. Spokesperson: Celebrities can become a spokesperson for the brand.

These days, they are made ambassadors of the brand. The brand and
the personality are associated. Deepika Padukone has been made the
brand ambassador for Axis Bank. A real-life example can be Amitabh
Bachchan assuring the common public about the new packaging quality
being ‘Don’t worry, be happy’ type, post raging controversy that was
faced by Cadbury’s when the fungus was found by a customer in a
purchased Cadbury chocolate from a shop.

The credibility of the celebrity is important. How far the celebrity is

reliable? Do people feel that the celebrity honestly speaks about the
product or brand? What is the expertise of this celebrity to talk about
the brand? Credibility goes down if a celebrity endorses competitive
brands and a variety of products. Money motivation becomes too
obvious.

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The Expert

An expert has some special training or is an outstanding professional or is

highly experienced. He facilitates our understanding of the product. We
come across ads featuring nurses, doctors, architects, dentists and
scientists. Some ads combine both, a celebrity and an expert.

Common Man

A common man is ubiquitous. He can be any ordinary male or female

consumer. He endorses a product with which he is satisfied. Dove soap
uses this approach. Common housewives are shown applying DOVE soap
on half of their face and share their experience after washing. HUL’s Wheel
detergent bar has shown problems that common housewives face (skin
burning) when they use other low-cost detergent powder, and then shows
the other housewife using Wheel detergent bar showing no skin burning
problem – one common man shows solution to other common men.

When real-life situations are presented, it is called a slice of life approach.

These are the situations with which we can identify. Ujala liquid brings
shine and whiteness to clothes after they are dipped in water mixed with
three or four drops of Ujala.

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Executives

Top executives are well-known. They can be effective influencers. MDH

Masala advertisement in India or the Country Club advertisement in which
their CMD Mr Rajeev Reddy always appears with a thumbs up pose. A top
executive inspires confidence in consumers. Instead, we can use a
spokesperson of the company, say an employee, who tells us how they
built a great product or a great company – Infosys has used this approach
in their HR advertisements.

Other Reference Points

When a product is featured in reputed media, it influences our behaviour. A

reputed store can also influence us by stocking a particular brand. Cartoon
characters also serve as endorsers. Seals of approvals by professional
associations, objective product ratings, consumer reports – all these serve
as frames of references.

Merits of Reference Group Appeal

It has two-fold advantages. It increases the awareness of the brand and

reduces the perceived risk in purchasing a specific product.

Increased Brand Awareness: Reference group appeals get greater

attention among prospective customers, especially the celebrity form.
Products are differentiated by using reference group appeals and they get
a competitive advantage.

Reduced Perceived Risk: An advertiser can overcome the risk perceived

by bringing in a celebrity, an expert or a common man in such a manner
that their testimony, the endorsement will make other prospective
customers believe in your product and unwarranted apprehension is
overcome.

Activity B

Identify your one example each for marketing application of reference

groups considering all possible avenues.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

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9.4 FUNCTIONS OF THE FAMILY

Four basic functions offered by the family structure are particularly relevant
to marketers as it influences consumer behaviour and the same is covered
as under:

Economic Well-being
Inherent structural provision of financial means to its dependents is the
most primary family function. Structurally, there is/are bread earners and
dependents. Young working male (husband)/female (wife) maybe a bread
earner while children and parents are dependents.

Emotional Support
By its structure, the provision of emotional support to its members is an
important function of the family. Here encouragement, inspiration,
motivation, skill development, education, hobby nurturing, etc., are
supposed to be so interwoven that each individual’s emotional and mental
support needs are taken care of.

Suitable Family Lifestyles

Based on numerous factors including financial capabilities, a family weaves
its lifestyle which gets applicable to all members. Lifestyle covers
upbringing, schooling, outing, dining, utility purchase and consumption,
joint interaction, pursuing goals and ambitions, and more; thus, becomes
another important function of the unit called the family.

Marketers capable of foreseeing these changes can develop products to

meet such families’ lifestyle needs and get quick acceptance and
competitive differentiation.

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Family Member Socialisation

A family fulfils several functions. However, the most important central

function from the consumer behaviour point of view that a family performs
is that of socialization.

In the process of socialization, children receive their basic values (moral &
behavioural) and code of conduct in keeping with their culture. Our
grooming starts with the teaching of religious practices and interpersonal
skills. We also learn how to dress well, groom ourselves, good etiquette
(dining etiquette and more) and manners. We decide what our career
would be and how to grow up as responsible citizens. Socialisation is both
direct and indirect. Direct instruction comes from the parents. Indirectly,
we learn by observing the behaviour of our parents and other siblings.
Socialisation is the foundation on which the later experiences in life are
placed one by one. Marketers target parents often to influence
socialization.

Consumer socialization is of special relevance to marketers. It is the

process by which children get equipped with the skills and knowledge and
wear attitudes necessary to act as consumers. Children pattern their
consumption after their parents. Parents often act as their role models.
Later as adolescents and teenagers, we tend to accept our friends as
models of acceptable behaviour.

Consumer socialization can be causally related to consumption. At times, it

is indirectly related to consumption, e.g., a teenager in periods is
motivated to use sanitary napkins. Indirect socialization has more
relevance to marketers as it leads to the understanding of the why of
consumer behaviour. Direct socialization is of academic interest.

Socialisation is a continuous process, and it extends to our entire life.

Socialisation is a two-way process – between a young person and the

family members, and friends. He is influenced and also influences those
who are socializing him. It indicates why children are targeted by
advertisers to influence their parents.

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Activity C

List the name of all your family members and identify at least two
functions being handled by each one of them as per the above
understanding.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

After recognizing the family as the basic decision-making unit, marketers

most frequently examine the attitudes and behaviour of the one family
member whom they believe to be the major decision-maker. What later
emerged was a duality in the role – one who uses it may not buy it.
Personal care products for teenage daughter are often purchased by
mothers.

Family Role
Each member of a family performs some tasks either alone or together
with others. Traditionally each member’s roles and responsibilities were
defined within the societal context. However, in this 21st century, new roles
are being performed, shared by every member of the household. As a
result, marketers must be sensitive to the fact that how this shifting role
pattern may affect their markets. So, let’s first understand key family
roles.

Key Family Consumption Role - In the matter of consumption, we come

across the following types of roles in a family, each signifying the type of
interactions at the time of consumption decision.
• Influencers: This family member provides the information inputs and
influences the buying decision.
• Gatekeepers: This family member controls the flow of information about
consumption items into the family.
• Deciders: This family member takes the ultimate decision of buying,
consuming and disposing of the consumption items.
• Buyers: This family member buys the consumption items.
• Preparers: This family member converts the consumption items into a
form suitable for use.

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• Users: This family member either uses or consumes the item.

• Maintainers: This family member maintains the product in a functional
condition.
• Disposers: This family member either initiates or carries out the
disposal or discontinuation of a product or service.

Which role will be performed by whom, is a matter that varies from family
to family. A single-family member may perform several roles. A single role
may be performed by more than one family member. Some products are
used by several family members, e.g., Amul butter or Dove soap. Some
products are meant for the whole family, e.g., furniture in the living room
or a common TV set in the hall.

Influencing Spouses and Resolving Consumer Conflict: In routine

life, husband-wife take several joint decisions about consumption. For
certain consumption decisions, one of them may get dominant. In some
decisions, they exert equal influence whereas some decisions are
unilateral. In most middle-income families, this joint decision making is
common.

While deciding jointly, the husband and wife team generally attempts to
influence each other to arrive at what they perceive to be the best
decision. There are six influence strategies that we come across.
• Expert: One of the spouses assumes an expert’s role to influence the
other spouse.
• Legitimacy: The decision is legitimized based on position in the family.
• Bargaining: Influence exerted by a spouse at present which will be
exchanged with the other spouse in future.
• Reward: A reward is offered to the other spouse to influence the
decision.
• Emotional: Emotionally charged response affects the other spouse.
• Impression: Persuasive approach to influence the behaviour of the
other spouse.

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These strategies are adopted when there are conflicts and disagreements
with the other spouse. We know how different family members have
different preferences for the car to be purchased.

The relative influence of husband and wife is product related. To begin

with, the purchase of a car is husband-dominated. Purchases of food
products are wife-dominated. These days’ women consumers decide about
a second car for their personal use.

In the decision-making model, we see distinct stages of problem

recognition, search for information and final decisions. There are variations
in the roles of the husband and wife at these different stages of decision-
making.

Children’s Influence

Children put forward their demands as soon as they acquire talking skills.
They need all kinds of toys, crayons, chocolates and toffees. As they grow,
they start participating directly in the consumption process. They influence
the purchase decisions of a home PC, a music system, a video game and a
holiday destination. When parents purchase according to the bidding of
their children, they have a sense of fulfilment.

Children love TV commercials. They recite ad jingles. Nursery kids develop

an ability to distinguish between commercials and TV programme. TV
commercials of adult products also affect children. Girls get favourably
disposed to products like lipsticks.

As children grow, they develop the capacity to understand the symbolism

in advertising.

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9.5 FAMILY LIFE CYCLE

Concept of Family Life Cycle

Conventionally, a family was considered a single unit throughout the

lifetime of an individual. However, this assumption is not true these days.
There are families due to second marriages, with a legacy of children from
previous marriages. There are deserted wives. There are divorcees. Several
families are single-parent family, where the parent could be either a father
or a mother. Again, the ubiquitous working woman makes the traditional
FLC model invalid.

Let us consider the following dimensions of Indian families in the 21st

century.

Fig. 9.2: An Extended Family Lifecycle that Accounts for Alternative

Consumer Lifestyle Realities

Source: Patrick E. Murphy and William A Staples, “A Modernised Family Life

Cycle”, Journal of Consumer Research, 6th June 1979, 17 Picture Credit: 2003
McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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Young, Married, with Child and Dual Income: Here both the husband
and the wife work, and get dual income for their household. The pace of
life is faster and there is less time for children and also for one another.
The consumption pattern, therefore, shows a preference for convenience
goods like washing machines, grinder-mixers, rice cookers, roti maker, etc.
Women manage on two fronts – domestic chores and work. Husbands
share the responsibilities of running the house to some extent. Instant
foods, crèches, etc., appeal to such families. To compensate for the time
babies, miss with parents, there is a tendency to buy costly garments for
kids, games for kids, prams, etc. as well as take them out during the
weekend.

Single Parent Families: The single-parent family needs security and buys
all the products that offer physical, psychological and financial securities–
e.g., door video, toys, insurance, government schemes, etc. When the child
grows, he may be put in a boarding school/public school so a single parent
can look after generating economic resource.

Divorced: They buy from places where money can be saved, stay in the
lease or rental housing, childcare, time-saving appliances, instant foods.
They are short of cash.

Older people Married or Single: They are age-wise older, still single or
married, thus dependent on others, not with sufficient cash, and health-
conscious. They essentially need security. They also need recreation to
spend their time.

The family life cycle concept as conventionally understood, does not

consider a large number of marriage terminations, single-parent families
and married couples without children. To compensate for these lacunae, a
modern family life cycle has been framed. Few categories vis-à-vis what is
present in Fig. 9.2 is explained to help you understand the marketing and
consumer buyer behaviour association.

How any marketers can develop a strategy based on FLC stages is

illustrated in the table given below:

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Table 9.2

Segmentation Strategy based on FLC

Product Segment
(i) Cosmetics Young single and young married women who are cash-rich are
a potential segment for beauty products like face creams,
moisturizers, compacts, foundation make up, etc.
(ii) Vacations Middle-aged families need facials, sauna baths and such
related products. Newly married couples are sold vacations at
the time of marriage in the form of honeymoon packages.
Middle-aged couples with no responsibility for children are the
most attractive segment to sell vacations in the form of
packaged tours. They are cash-rich and free from
encumbrances.
(iii) Housing Young, married with children need starter housing.
Middle-aged couples need housing – two-bedroom flats, etc.
Bachelors need liberal and professional education. They are
career-minded. They can be sold courses like private
secretary, computers, etc.
(iv) Education Middle-aged children buy education for their children - home
tuitions, coaching classes, public schools, etc.
They buy education for themselves also to improve their
career – e.g., distance education programmes of IGNOU

Activity D

Highlight segmentation for the electronic diary using the FLC concept.
…………………………………………………………………………………………………………………………
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9.6 UNDERSTANDING SOCIAL CLASS

We fail to understand consumer behaviour purely based on economic

criteria as far as choices of products and services go. Social factors based
on differentiation and evaluation, go a long way in explaining consumer
behaviour. The most primitive societies also had some differentiation
between different individuals. Even today in a society, a doctor is valued
much more than a scavenger. All occupations do not carry the same
prestige. We all are conscious of the class differences. Later, we started
differentiating based on wealth, power and prestige. In marketing, we
consider status concerning household income, occupational choice and
academic achievements.

Social classes are open-ended, and people from one social class can aspire
to move to a higher social class. As opposed to this, the caste system
prevalent in India is closed-ended. Marketers can make use of social
classes in segmenting the market. Each social class has certain shared
values and attitudes and shows certain characteristic preferences. This
helps marketers to understand consumer behaviour.

Thus, social class can be thought of as a continuum – a range of social

positions – on which each member of the society can be placed.
Researchers have preferred to divide the continuum into a small number of
specific social classes, or strata. Within this framework, the concept of
social class is used to assign individuals or families to a social class
category. Consistent with this practice, social class is defined as the
division of members of a society into a hierarchy of distinct status classes,
so that members of each class have relatively the same status and
members of all other classes have either more or less similar status.

To understand the complexities of social class, we will briefly consider

several underlying concepts pertinent to our definition.

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Social Class and Social Status

Social classes are often measured in terms of social status – i.e., the
amount of status the members of a specific class have in comparison with
members of other social classes. Status has evolved considering three
factors like wealth, power, and prestige.

However, when it comes to consumer behaviour and marketing research,

status is most often defined in terms of one or more of the convenient
demographics (socioeconomic) variables such as family income,
occupational status, and educational attainment.

The other salient aspects of social class are as given below:

Social class is hierarchical: Social-class categories are usually ranked in

a hierarchy ranging from low to high status.

This hierarchical aspect of social class is important to marketers.

Consumers may purchase certain products because they symbolise them
having wealth, power or prestige. What they possess is not possible for the
lower classes to possess.

Social class and market segmentation: The various social-class strata

provide a natural basis for market segmentation for many products and
services. The entire marketing mix can be evolved around social strata as a
segment.

Social class and behavioural factors: Classification of social classes has

enabled researchers to note the existence of shared values, attitudes, and
behavioural patterns among members within each social class. Not only
that – even between social classes, different values, attitudes and
behaviours were noticed.

Marketers have often used these behavioural factors to their advantage.

Social class as a frame of reference: Social class membership serves

consumers as a frame of reference (i.e., reference group) for the
development of their attitudes and behaviour. In the context of reference
groups, we might expect members of a specific social class to turn most

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often to other members of the same class for clues related to appropriate
behaviour.

Marketers have often exploited this behavioural need of a specific class to

align with its reference group, by seeking clues to their advantage.

9.7 SOCIAL CLASS CATEGORIES

Warner has classified society into six classes. This classification has been
most preferred. The following table summarises his categorization.
However, there is little agreement among sociologists on how many distinct
class divisions are necessary. We will later cover variations brought in by
classifying social classes differently.

Table 9.3

Six Classification of Social Class

No. Class Description

1 Upper-Upper Microscopic. Elite. Wealth inherited. Gracious living. Value
family reputation. Believe in pedigree. Socially responsible.
2 Lower-Upper 2 per cent of the population. The wealth of first-generation,
Neo-rich. A shade less than upper-upper. Choose good
schools for children like Doon School and Mayo College.
Future generations have chances to move to the top-class.
Class of top corporate executives, successful professionals
and proprietors of large businesses. Emulate etiquettes of
the top-class.
3 Upper-Middle Larger than the above two classes. Well-off financially.
Income above average. Moderately successful professionals
and businessmen. Emulate the upper classes. The degree
of success puts a dividing line between them and the two
upper classes.
4 Lower-Middle A large class. Supervisors, non-managerial staff, traders,
clerical staff, salespeople. Respectable living. Value
education.
5 Upper-Lower Largest class. Wage-earners. Working-class. Strive for
respectability.

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6 Lower-Lower Lowest income, unemployed. Underdevelopment.

Uneducated. Daily wage earners. Low occupations.

In the above classification, based on our understanding of how you wish to

view the social class system, some variations are possible. In India, we can
modify and extend the above social class system to 7 classes by adding
‘middle class’ as the same is a large population group present in India. If
we compress sr. nos. 1 & 2, 3 & 4, 5 & 6, then we get only three classes.

We can look at classes differently based on their working hierarchy –

White-collar, Blue-collar and Grey-collar individuals based on their nature
of occupation and hierarchical level.

Yet another way to classify could be top class, middle class and a lower
class based on their income level.

9.8 THE MEASUREMENT OF SOCIAL CLASS

Social class-based classification is well accepted as an essential way to

divide the population. There is no specific approach through which one can
measure it.

Systematic approaches for measuring social classes fall into the following
broad categories – subjective measures, reputational measures and
objective measures. We can briefly understand them, as covered in the
following paragraphs.

Subjective Measures

In this approach to measuring a social class, individuals are asked to

estimate their social-class position from the given alternatives such as the
lower class, the lower middle class, the upper-middle class, and the upper
class. Thus, the resulting classification of social class membership is based
on personal self-perception.

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Reputational Measures

The reputational approach for measuring a social class takes the help of
informants to make judgements concerning the social class membership of
others within the community, rather than themselves.

Objective Measures

In this approach, selected demographic or socio-economic variables

concerning the individuals under study are chosen for the evaluation of
their social class. These measures are measured through a questionnaire-
based probing in which respondents are asked to answer several factual
questions about themselves, their families, or other places of residence.
Variables chosen could be occupation, income, education, etc. Any other
variables can be added to make your understanding better and to
determine one homogeneous group more objectively.

Objective measures of social classes get further divided into two basic
categories – Single variable indexes and Composite variable indexes.

Single Variable Indexes: A single variable index uses just one socio-
economic variable to evaluate social-class membership. Some of the most
popular variables are Education, Income, Employment, Ownership, and Net
worth. Interestingly, when two individual variables are matched and plotted
differently, one composite matrix can emerge such as Occupation and
Income. When these two variables are combined, it can give an interesting
and powerful index.

Composite Variable Indexes: Composite indexes systematically combine

several socio-economic factors to form one overall measure of social class
standing. Such indexes are of interest to marketers because they may
better reflect the complexity of social classes than single variable indexes.
Post capturing the required single variables, a composite variable index can
be developed as needed for the classification of your consumers, e.g.,
Index of status characteristics can be a result of occupation, income,
nature of house owned and area of the house. Specific weightage can also
be given to each variable.

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Indian Context: It was found necessary to have socio-economic

categorisation for India. As mentioned in marketing, demand is created
only when a person with wants, has money and shows an intention to
acquire the goods that he desires. In context to this, even during the
evolving cultural transformation, wherein many houses have got double-
income couples (giving them more money at their disposal), yet they do
not buy certain lifestyle/luxury items. This is psychologically linked to their
general inhibition linked to the social class to which they belong, namely
middle-class.

Thus, for Indian marketers, one composite index was developed, known as
SOCIO-ECONOMIC CATEGORISATION (SEC), in which occupation of
the individual and income are considered. This was developed by the
Market Research Society of India (MRSI). This is considered a traditional
classification and in the recent past, new SEC classification has also been
evolved in which their education is considered along with their ownership of
durables. There is also a classification available for rural India based on the
nature of house owned by them, and education. As per the traditional
classification, SEC A represents white-collar people, and SEC B represents
affluent but not white-collared people. Same being self-explanatory, it is
reproduced below:

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Table 9.4

NEW SEC Classification of India

Chief Earner: Education (Q2)
No. of Illitera Literate but School- 5 SSC/ Some Graduate/ Graduate/
Durable te no formal to 9 HSC College Post- Post-
s schooling/ years (incl graduate: graduate:
(Transf School-Upto Diploma) General Professiona
er but not l
Grad

Here it is assumed that consumer behaviour will be different among

different classifications but similar within the classification. However,
marketers have gone on to either dissect these classifications further or
develop other surrogate classifications. More variables are also considered
such as branded goods usage, children education standard, and more.
More elaborate composite classification evolved and used by marketers
consists of income, academic classifications and lifestyle variables as it is
more relevant to predict preferences.

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Table 9.5

SEC Classification of India - Rural

Socio-economic Class (SEC) - Rural
Education Type of House
Pucca Semi Pucca Kuchha
Illiterate R4 R4 R4
Literate but no R3 R4 R4
formal school
Up to 4th standard R3 R3 R4
5th to 9th R3 R3 R4
standard
S.S.C./H.S.C. R2 R3 R3
Some College but R1 R2 R3
not Graduate
Graduate/ R1 R2 R3
Postgraduate
(General)
Graduate/ R1 R2 R3
Postgraduate
(Professional)

Note: Four Socioeconomic Classes have been labelled as R1, R2, R3, and
R4.
R1: Uppermost Class.
R4: Lowest Class

Source: Market Research Society of India.

Data may be reproduced for research, analysis, survey, review, studies and
such other academic purposes with due acknowledgement.

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Classes and their influence on purchasing – Marketers are finally keen

to know whether persons with a desire can purchase or not. A person’s
ability to spend depends on his income. Thus, based on the income of the
family, social classes, namely higher class, middle class and lower class
have been evolved. You may further expand this by reclassifying it as a
higher class, higher middle, middle-middle, lower-middle, lower class and
likewise.

As per one estimate, when India’s total population was 1.30 billion, India’s
middle-class number was at 300 to 350 million (estimated) (urban and
rural included) by 2017. There is significant income inequality within India,
as it is simultaneously home to some of the world's richest people. For
many years, companies considered this as a homogeneous class and
designed their marketing programs accordingly. Later, with more use of
consumer buyer behaviour, it was discovered that within this class,
consumer behaviour depended on their income level. Not only that, besides
income level, it is the purchasing propensity that is important – those
having the same income may show a different propensity to buy and thus
the difference in their purchasing potential. Purchasing propensity also gets
driven by other factors like social, cultural and regional.

9.9 UNDERSTANDING CULTURE

Culture is essentially a fabric of society in which we live. Culture plays an

influencing role in consumer behaviour and thus marketers are keen to
understand it before they venture into any new overseas market. We need
to understand specific dimensions of culture that act as a powerful force in
regulating human behaviour. There are various measurement approaches
to understand the impact of culture on consumer behaviour.

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Fig. 9.3: Culture is a Fabric of any Society

Source: Isha Foundation (www.ishafoundation.org)

In very simple terms, culture is a society’s personality. To understand this

personality and its impact on consumer buyer behaviour, it requires
examination of characteristics of the society by covering factors like
language, caste, creed, religion, customs, values, beliefs, knowledge, laws,
food habits, works culture, living methods, entertainment, art, technology
absorption and other factors that give any society its distinct flavour called
culture.

Since we wish to understand its impact on consumer behaviour, culture is

defined as the total of learned beliefs, values, customs, and attitude
besides other factors that serve to direct the consumer behaviour of
members of a particular society for generations.

The belief and value components covered in our definition refer to past
knowledge and experience led feelings and thus priorities that individuals
have about ‘things’. Belief refers to knowledge-based conclusive realization
either hidden in mind or expressed verbally (as I believe.... statements)
about something (person, a store, a product, a brand). Values are also
beliefs. What differentiates values vis-a-vis beliefs are criteria such as 1.
they are limited in numbers, 2. they are enduring, 3. widely accepted, 4.
free from any bonding 5. and guide culturally appropriate behaviour.

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From a consumer buyer behaviour perspective, values and beliefs are

mental images that influence an individual’s specific attitudes, which
determine the way a person is likely to respond in a specific situation such
as evaluating two brands of cars like Scorpio and Duster. The person’s
eventual decision regarding these brands gets influenced by his values
(e.g., what he knows about the quality, workmanship) and specific beliefs
(e.g., particular perceptions about Mahindra’s quality, workmanship vis-a-
vis Renault’s quality and workmanship).

We need to also understand what is a custom. Customs are obvious

modes of consumer behaviour that constitute culturally approved or
acceptable ways of behaving in specific situations. Customs can be so
varied that one needs to give due attention from the marketing
perspective. In India, especially if one needs to understand customs, we
can illustrate examples such as daily prayer. Some customs are fading
away and new customs are getting added, such as immediately checking
the mobile phone to see messages received, weekend outing for food and
more. Briefly, beliefs and values are guides for behaviour; customs are
usual and acceptable ways of behaving.

From the above discussion, we can conclude how an understanding of the

beliefs, values, and customs of society helps marketers to predict
consumer acceptance of their products.

9.10 CHARACTERISTICS OF CULTURE

Culture has various underlying characteristics. To understand the scope

and complexity of a culture more fully, it is essential to understand it fully.

The Invisible Hands of Culture

Many times, culture has so naturally impacted us that we are not even
aware. We just follow as we see others doing it that way. Often when such
behaviours are questioned, the answer would be ‘because it’s the right
thing to do and most others do it that way. In certain cultures, it is
essential to take a bath every day but in other cultures, it is not likewise.
Only when you know more about the other culture, you will come to know
what impacted your seemingly routine behaviour.

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Culture Satisfies Needs

Cultural behavioural influences have come to us either in the form of order,

or direction and guidance. They have originated to satisfy the needs of
people when they were faced with human problems and evolved as a ‘tried
and tested method to give assurance psychologically to its followers. It’s a
unifying thread that binds individuals with family and the society at large.
Because culture defines our habits so naturally, we continue to follow them
without question. Thus, for many marketers, the challenge is not their
competition but the change of habits whose foundation is rooted in the
culture – e.g., Indian culture does not consider drinking carbonated drinks
in the morning or for that matter even during eating lunch or dinner. Thus,
for any soft drink manufacturer, it is more important to change this culture
to open a market rather than fighting with the competition.

Marketers do so by exposing society to evolving new trends and standards

thus, making individuals believe that the current culture no longer satisfies
their needs and thus they evolve themselves.

Culture is Learned

Our physical characteristics are the result of our biological DNA (skin
colour, eye colour, hair colour, intelligence, etc.). However, culture is not,
and it is acquired through learning. Right from birth, we begin to acquire
our set of beliefs, values and customs that give us our culture.

Culture is learned through formal learning (from family members), informal

learning (friends, peers) and technical learning (from teachers, priests).

Marketers take the advantage of these aspects and develop their

advertisement that either hits them at following old habits or evolve to
embrace new habits. However, they mostly focus on influencing the
informal learning curve. Recent emphasis on sanitary.

Enculturation – The learning of one’s own culture is known as

Enculturation. Your culture is considered as home culture or native culture
and it is a foundation of socialization.

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Acculturation – The learning of a new or foreign culture is known as

Acculturation. The culture which you learn is considered a foreign culture.
Cultural norms are effective when they become internalized by an
individual. Acculturation can be thus used to influence a shift in the current
behaviour based on old culture or communicate in such a way that you get
accepted well. Marketers marketing their brands internationally must know
about acculturation and its use to influence consumer behaviour.

Language and Symbols – Language is a hindrance as well as a tool. To

be able to understand different cultures, people of two different cultures
must be able to communicate with each other. To communicate with each
other, there should be one common language. A common language will
facilitate shared meaning to have true communication take place.

Fig. 9.4: The Moment of Cultural Meaning

Source: Brant McCracken, ‘Culture and Consumption, Journal of Consumer

Research 13 (June 1986), 72

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Because the human mind can process symbols, it is possible for a person
to ‘experience’ an advertisement for a product and conclude the desired
meaning. Marketers have used this opportunity both positively as well as
negatively, such as for surrogate advertisement of liquor.

However, it is also essential to keep in mind that symbols have many

alternatives besides just a logo, a picture or a line drawing. Retailer’s
decor, price of your product, trained personnel and other aspects are also
considered by consumers when they look at symbols, and by looking at
them, they interpret your product, your brand and thus the value for
themselves.

Rituals – A ritual is a type of symbolic activity consisting of a series of

steps (multiple behaviours) occurring in a fixed sequence and repeated
over time. The human life cycle is linked to various rituals starting with a
naming ceremony, schooling, thread ceremony, marriage and more. Rituals
can either be personal, public, religious or civil. From a preparation point of
view, it could be elaborate or non-elaborate.

From the marketers’ perspective, rituals are considered incomplete without

the ritual artefacts e.g., X’Mas tree during Christmas celebrations. Now it is
up to them to capitalise on existing artefacts’ usage or add more and more
artefacts to vie for to make them accept it as an essential ritual and
consider buying them. E.g., earlier except for the groom, it was alright if
his family male members only wore kurta, etc. Intense advertisement, the
impact of films, etc., led them to also start buying a 3-piece suit for
themselves, thereby opening and increasing the market for players like
Raymond’s and Siyaram, as it became a ritual later.

As we know, a ritual is just a practice. Ritualised behaviour is behaviour

that is patterned on a ritual. Again, it is up to marketers to develop a
ritualized behaviour such as the use of DEO, which was not there as a
ritual a decade ago.

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Culture is Shared

A particular belief, value or practice must be shared by a significant portion

of the society to be considered as a cultural characteristic. What is
practised by a group as a customer provides for a cultural linkage. A
common language enables value, experience and custom sharing. Culture
sharing gets magnified when practised by family, school, colleges, places of
worship as well as mass media and it supports its transfer.

Culture is Dynamic

Culture must evolve continuously to remain acceptable within the confined

limits in the best interest of society. Earlier women were not allowed to
work outside the home and now they are freely allowed to have a second
income to come into the household in this tough economic environment.
For this reason, a marketer must carefully monitor the sociocultural
environment to market an existing product more effectively or to develop a
promising new product. Products that were in the dominant male territory
also now see women being represented. One of Airtel’s TV advertisements
in which a woman is shown as a boss turns out to be a wife who manages
both responsibilities (office and household) so well.

9.11 ADVERTISING AND CULTURAL VALUES

Today, culture is shared rapidly thus it is getting influenced also relatively

fast. India’s cultural scene is rapidly changing. First, it was disco, then pop,
and now the Jazz culture sweeping the mindset of the Indian youth. We
have been adopting western styles in our daily and party wear. We have
made Chinese food delicacies a part of our life. In contrast to this,
foreigners are found to be learning Hinduism. This symbolizes that we give
and take cultures. This is our universal characteristic. Advertising has
utilized these cultural vibes which Indians have shown to their advantage.
However, those who did not understand this aspect of India have realised
painfully that the Indian with whom they are dealing is a conservative
Indian who believes in traditional values.

As an Indian, we have several cultural values such as family bonding, being

religious, friendly, hardworking, and seeking happiness from the external
environment, open to adopting trends and projecting youthfulness and
more.

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Indian advertising has understood such aspects very well – the HDFC Life
‘Sar Utha Ke Jiyo’ advertisement in which it is shown that when you retire,
you will not have to be dependent on anyone, diamonds are gifted by
parents to their children, emotional marriage cantered ads, Dabur
Chyavanprash ad ‘Saanth Saal ke Budhey Ya Saanth Saal ke Javaan’ are all
a reflection of strong cultural values we have regarding certain aspects of
our life.

Indians as cultural groups can still be influenced by traditional items with

the conventional look and feel like ‘sarees’, ornaments, bindis, nutrients
etc.

On the other side, Indians have been lured by adventurous ads (Mountain
Dew), Healthy hair (Parachute Advance), Youthful bank (Deepika Padukone
in Axis bank ads).

Also, we feel like changing ourselves when we see ads like Levi’s denim;
Marks & Spencer’s clothing line, etc.

What advertisers have realised is that advertisements can influence

subsidiary cultural values but not the core cultural values.

Activity E

List how advertisements are linked to culture. List one advertisement which
has a strong cultural connotation and explains why you think it does.
…………………………………………………………………………………………………………………………
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9.12 MEASURING CULTURE

Culture being the subject matter of consumer buyer behaviour, it needs to

be measured to obtain insights, understand it and notice shifts, if any.
Although basic research techniques can be applied, there are three specific
measurement approaches available to measure culture, namely – content
analysis, consumer fieldwork, and value measurement instruments.

Content Analysis

Using this approach, efforts are made to analyse the content presented in
verbal, written and pictorial messages either in print, audio or video
format, covering a long past period to derive conclusions about society or
specific aspects of society. Lux soaps advertisements of yesteryears using
heroin were not as glamorous as today, thus symbolizing the changing
importance of glamour in Indian culture. It can cover specific aspects like
changing the role of women or changing the family structure or it can cover
various aspects collectively.

Consumer Fieldwork

In this approach, trained researchers select a small sample of people,

family and carefully observe and study their behaviour. Based on their
observations, they then conclude the values, beliefs and customs of the
society under investigation.

Here fieldwork may be for a particular habit, say a selection of sanitary

napkins or profile buyers from the initiator, gatekeeper to an influencer to
the purchaser, end-user category.

It has advantages and limitations as covered under consumer research for

observation study.

Value Measurement Survey Instruments

Initially, values were monitored through observations over a longer period.

Now due to the need for measuring values directly, the value measurement
survey technique is used directly. Researchers use a data collection
instrument called a valuable instrument to ask people how they feel about
basic personal and social concepts such as religion, caste system, national

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security, politicians, unity, diversity, freedom of expression, harmony,

peace and more such aspects as deemed fit.

However, such a survey just indicates trends but its relationship between
people’s values and their actions as consumers is still in its infancy. There
are various instruments within this approach available.

9.13 INDIA’S CORE CULTURAL VALUES

India has its core cultural values which affect and reflect its character. India
encompasses several subcultures, each having its cultural values. Indian
society is evolving to the world environment and embracing cultural
transformation. Its transformational alignment creates contradictions such
as, in India nuclear family is now considered as normal but at the heart of
its family value is still strong. Indians want to adopt foreign products and
services but still want to retain their original choice as it is.

Core values of any society can be selected based on three criteria like
value being pervasive, enduring and must be consumer-related.

Some of the core cultural values identified for Indians are – family virtues,
respect for family hierarchy, bonding, religion, faith, caste-based
marriages, belief in karma (hard work), freedom-seeking, being liberal,
belief in monogamy, joint gathering, open to transition, spirituality, caste-
based culture, adoption of a wide array of products and services, tolerance
and patience, equal opportunities for all, philanthropic nature, freedom of
individuality, appreciation for skills, music and art.

Certain cultural aspects are taboo – like in nature, like punctuality, lack of
process centricity, casualness, lower tolerance to the stress level, low on
gratification, inequality, poor discipline, social values and more.

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Subculture

A subculture can be thought of as a distinct cultural group that exists as

an identifiable segment within a larger, more complex society. The
members of a specific subculture tend to possess beliefs, values, and
customs that set them apart from other members of the same society.
Additionally, they adhere to most of the dominant cultural beliefs, values
and behavioural patterns of the larger society.

India is such a country where there is unity in diversity. Within the same
society, we have different subsets of cultures that themselves have their
distinct cultural values, and beliefs and thus constitute what is known as a
subculture. These subcultures have been here for centuries and thus
shared values are transmitted from generations to generations. These
subculture sets conform to many norms of the dominant culture. When
these norms become incompatible, they deviate and form their subsets of
values and beliefs.

Subcultures are formed on dimensions such as nationality (Indian

subculture across the UK), religions like Sikhs, Catholics and Muslims’
subculture across India; then races as prevalent in the US (black race),
regions in India have a clear divide of a subculture like North Indians,
South Indians, East Indians. Caste continues to be the dominant criteria for
subcultures, such as Brahmins, Vaishya, etc. In India, even caste and
regions generate another subculture such as Vadnagar Brahmins,
Kokanastha Brahmins, so on and so forth. Other criteria for subculture
formations could be gender, age, social class, income disparity, etc.

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Table 9.6

Subcultural Categories
Subculture Category Examples
Nationality Indian, Bangladeshi, Pakistani
Religion Hindu, Sikh, Christians, Muslims,
Jewish
Geographic Region North, East, South, West
Race Jains, Kutchi, Patel’s
Age Elderly, Teenager, Adolescence, Child
Gender Female, Male
Occupation Doctor, Service, School teacher, Lawyer
Social class Lower, Middle, Higher

Each subculture offers a uniquely identifiable homogenous segment which

thus provides strong inclinations to marketers to utilize the same for their
advantage. Indian exporters of basmati rice can focus on a standardized
advertisement and still win a huge market volume by targeting Indians
across the US/UK/Europe. Similarly, age offers another major opportunity
to marketers, such as the adolescent age is the one in which a lot of
spends are done to try out new products, brands and by teenage, finalize
one’s brand. Besides this, baby boomers between the age group of 25 to
35 years offer strong market opportunities as that’s the time parents strive
to give their child the best. Also, elderly consumers, working-class
consumers offer a strong subculture-based marketing opportunity.

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Cross-cultural Consumer Behaviour

In the era of international marketing, the world is becoming a global

village, thus it’s becoming a common trading ground for many operators.
Multinationals are increasing their footprints the world over as well as
developing nations are spreading their wings due to ease of doing business
now. Thus, international marketers should know the similarities and
dissimilarities of consumers in different countries. It helps marketers to
decide the development of a marketing mix – universal, cluster or country-
specific. Maggi Noodles could understand that today’s Indian housewives
are hard-pressed for a time yet her traditional belief to offer hot snacks to
her kids being paramount, it positioned it as a ‘fast to cook, good to eat’
snack.

To determine whether and how to enter a foreign market, marketers should

conduct a cross-cultural consumer analysis. Cross-cultural consumer
analysis is defined as the effort to determine the extent to which the
consumers of two or more nations are similar or different.

9.14 WHAT IS OPINION LEADERSHIP?

It is our common experience that if we need to choose a product from the

complex choices, we immediately call our friend, father, mother or
colleague to seek their views; in other words, their opinion. We need to
examine the nature and dynamics of this influence called the opinion
leadership process, and personality and motivations of those who influence
(opinion leaders) and those who are influenced (opinion receivers).

Opinion leadership is a dynamism through which one person (the one

who has a strong opinion) informally influences the actions or attitudes of
others (who may not have any opinion or seeking an opinion). Here, the
one who has a strong opinion is regarded as the opinion leader and those
who are seeking an opinion are regarded as opinion seekers or
recipients. When such conversation happens between two individuals
regarding organisations, brands or product related aspects, it is known as
‘word-of-mouth’ communication. Such conversations are interpersonal in
nature, happen in an informal environment, and none of the parties to
communication represent a commercial selling source. One person can be
an opinion leader for a specific product category while for some other
product category he may be an opinion seeker.

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Consumer research dwells into knowing how opinion leaders influence the
consumption pattern of others. The understanding of personal influence
embraces the four areas of activity: 1. Fashion, 2. Movie-going, 3. Public
affairs (politics) and 4. Marketing, (which is basically related to brand
choice).

9.15 DYNAMICS OF THE OPINION LEADERSHIP PROCESS

The opinion leadership process is very dynamic, thus, we need to

understand what makes it such a powerful consumer force.

Credibility: Opinion leaders persuade others in choosing certain products

and services. They are able to influence as it is a common perception that
they are objective in their assessment and are doing simply a good thing
by offering advice. Their advice reduces the anxiety level of any new buyer.

Reliable Product Information: Opinion leaders in their elaborate

communication also express both, pros and cons of a product. We can,
therefore, decide which product/brand to use and avoid the brands and
products which attract negative comments.

Information and Advice: Opinion leaders often offer an advice regarding

buying or not buying. Interpersonal communication with an opinion leader
guides us regarding the choice of a brand, the usage of a product, the
place where we can shop for the product and the service level of a service
provider.

Opinion Leadership is Category Specific: We may seek a person’s

opinion while buying a paddle car for our toddler son. The person who acts
as an opinion leader regarding toy-choice may himself become an opinion
seeker while deciding about the future career of his son. Opinion leaders
are specialists in certain product categories. Opinion leadership is a
two-way process - One and the same person can be an opinion leader or
an opinion seeker, depending upon the situation.

Opinion Leaders are more Knowledgeable: They have greater

exposure to mass media. The communication flows from mass media to
opinion leaders, who spread it across horizontally.

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Opinion leaders belong to the same primary groups of families, friends and
co-workers. Opinion leaders are characterized by many interpersonal
contacts (gregariousness) and by an above normal exposure to media.

The Motivations behind Opinion Leadership

We have to consider what motivates both, the opinion leaders and opinion
receivers.

The Needs of Opinion Leaders: Opinion leaders seem to satisfy some

personal need of theirs, e.g., self-improvement, social acceptance, etc. He
just needs a reassurance for himself that he has made the right choice. An
opinion leader may be seeking attention towards him or may be trying to
impress on others how knowledgeable and aware he is. He may get the
satisfaction of having won others to his own view point. All this is self-
involvement.

Apart from self-involvement, an opinion leader may be motivated by

product involvement, message involvement and involvement for others.
Product involvement indicates a high degree of satisfaction or
dissatisfaction with a product which an opinion leader wants to share with
others, e.g., his preference for a particular brand of refrigerator. Message
involvement indicates the influence of ad messages. Ad slogans and
messages become pieces of everyday conversations. Thus, people talk
about ‘two minutes noodles’, ‘the complete man’ and ‘sardi mein bhi garmi
ka ehsaas’.

Fig. 9.5: An Opinion Leader

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The Need of Opinion Receivers: Opinion receivers satisfy various

personal needs by receiving information from the opinion leaders – reduced
anxiety, no need to undertake an extensive search. The choice of an
opinion leader is a matter of the sociocultural background of the opinion
receiver.

The following chart summaries the motivations of opinion leaders and

opinion receivers.
Table 9.7

List of Motivation Attributes for Opinion Leaders and Opinion Receivers

Motivation Opinion Leaders Opinion Receivers
Self-involvement • Minimise cognitive • Reduction of risk
dissonance • Reduction of search
• Invite attention time
• Impress knowledge
ability
• Satisfaction of having
converted
others
Product Involvement Express comprehension • Learn about
about the product and innovations
satisfaction with the • Learn about usage
same
Message Involvement An exciting ad is made a -
piece of conversation.
Involvement for Others Expression of friendliness Buy products which will
and neighbourliness meet the approval of
through product related others. A search for
discussions. acceptance.

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9.16 Measuring Opinion Leadership

What is the extent of influence of the opinion leaders? It is a question of

measuring opinion leadership. We shall consider four techniques of
measurement: 1. Self-designating method, 2. Socio-metric method, 3.
Objective method, and 4. Key-informant method.

Self-designating Method

Here, we ask others what role they have played in influencing the
consumption of others in recent past, (say six months). A straight question
could be:

In the past six months, have you been asked to advise or give your opinion
about ............... products? (Specify products in the blank).

The answer could be a ‘yes’ or ‘no’. It classifies them into leaders or non-
leaders. But such straightjacket compartmentalization does not reflect a
range of opinion leadership activity. The questions, therefore, can be
qualified by using time-denoting adverbs like ‘infrequently influencing
others’ or sometimes influencing or ‘frequently influencing’.

Sociometric Research

Here, a self-contained population is examined to verify consumer-related

conversations. To illustrate, we can study the inmates of a multi-apartment
society in terms of influencing others or getting influenced by others. A
wider sociometric study beyond a self-contained community is difficult to
manage as it involves tracing all those individuals who are named by the
primary group, irrespective of their location.

We can ask the Lokhandwala Society Inmates the following questions

related to a movie and assess them on two dimensions – providing
information to others and receiving the same from others.

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Providing Information

1. In the society, did you tell anyone about the movie Lagaan in the past
one week?
Yes …………………. No …………………..
If yes, then proceed.
2. Whom did you tell about it first? ……………………… (Name the person)
3. Who else from the society did you tell about it? ………………………. (Name
them)
4. Did you recommend them to see or not see the movie?
See ………… Not see …………… Other …………………

Receiving Information
1. Which first comment do you remember about Lagaan?
2. Do you remember who made this comment?
Yes ……………… No ……………………..
If yes, proceed.
3. Who made this comment? …………………….. (Name the person).
4. Is he a society resident?
Yes ……………… No ……………………..
5. Did he recommend you to see or not see the movie?
See …………… Not see …………… Other ……………………….
6. Did you talk with this person prior to seeing this movie or after seeing
it?
Prior ………… After ……………… Do not remember …………………….

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Key Informant Method

Instead of studying a sample or a whole self-contained community, we can

identify a key informant who will name the opinion leaders in a particular
group. To illustrate, a college professor may know which one or two or
several students are most likely to be the opinion leaders of a particular
class. A professor who identifies opinion leaders in a class is thus a key
informant. Salespeople may act as key informants to identify opinion
leaders which influence other customers. A purchase manager may act as a
key informant to pinpoint those who are likely to influence a purchase
decision.

Objective Method

It is a type of controlled experimentation. Here, new products are placed in

the hands of a chosen group, and then interpersonal communication is
examined. Natural opinion leaders influence others to fall in line with them.
Non-leaders are ineffective in doing so. In the objective method, opinion
leaders are artificially placed to act as such, and the results of their efforts
are measured.

It is possible to make use of opinion leaders strategically for promotion.

Product-specific opinion leaders can be created and their enthusiasm for
products can be availed of. This chapter describes the above mentioned
and more features about opinion leaders and personal influence.

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9.17 WHAT HAVE YOU LEARNT – A SUMMARY

The consumer is influenced by the exposure he receives. Consumers live

within various groups and interact with individuals within the groups.
Family in which he lives strongly influences his mindset and behaviour.
Under demographics within which he belongs, his social class is
determined. Social class does shape buyer behaviour as well. Your culture
and culture of the society you stay within shapes your mindset and it has a
strong influence on your buying behaviour.

There are various ways in which groups can be classified such as Primary
versus Secondary Groups, Formal versus Informal Groups and Membership
versus Symbolic Groups. Every consumer-relevant groups have specific
characteristics. A reference group generally is a group that serves as a
point of comparison or reference for an individual to form his attitudes and
behaviour. Group situations, or an individual with whom a segment of the
audience can identify, are used to promote goods and services by subtly
inducing the prospective consumers to identify with the pictured users of
the product. There are four major types of reference group appeals in
common marketing usage – use of celebrities, use of an expert, use of a
common man and use of an executive.

A family is a place where a person’s upbringing happens. Family’s functions

are many such as economic wellbeing, economic support, family lifestyle
and more. We have also understood the concept of the family life cycle.
Under the family life cycle stage, different family formations happen such
as Young, Married, with Child and Dual Income, Single Parent Families,
Divorced and more. Each family structure has its own need and therefore
influences the buyer behaviour.

Social factors based on differentiation and evaluation, go a long way in

explaining consumer behaviour. Earlier individuals were socially classified
based on occupations they are in. We later started differentiating based on
wealth, power and prestige. In marketing, we consider status concerning
household income, occupational choice and academic achievements. The
social classification covers six strata like Upper-Upper, Upper-Middle and
more. To measure social class on a wider scale and to bring common
understanding for marketers, one composite index has been developed,
known as SOCIO-ECONOMIC CATEGORISATION (SEC). This classification is
available for urban and rural India.

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Culture is essentially a fabric of society in which we live. Culture plays an

influencing role in consumer behaviour and thus marketers are keen to
understand it before they venture into any new overseas market. Culture
covers learned beliefs, values, customs, and attitude among other factors
that serve to direct the consumer behaviour of members of a particular
society for generations.

Advertising has utilized cultural vibes which Indians have absorbed from
different cultures.

9.18 SELF ASSESSMENT QUESTIONS

1. Explain the significance of groups to marketers.
2. What is a reference group? What are their marketing applications?
3. Explain the functions of a family.
4. Explain the term "family life cycle”.
5. Explain the social class categories development for marketing.
6. Explain the concept of social class measurement.
7. Explain how advertising and cultural values are linked.

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9.19 MULTIPLE CHOICE QUESTIONS

1. A ______________ is one where the structure of the group together

with the roles of members and their goals are well defined. Fill in the
blank.
(a) primary group
(b) formal group
(c) secondary group
(d) advance group

2. When a marketing communication on group influence represents a real-

life situation, it is considered as ______________ approach. Fill in the
blank.
(a) life drama
(b) slice of life drama
(c) slice of life
(d) none of the above
3. Inherent structural provision of financial means to its dependents is the
most primary family function. Identify one of these functions of the
family.
(a) Emotional support
(b) Suitable family lifestyle
(c) Economic well-being
(d) Family member socialization

4. ______________ refers to the series of life stages through which

individuals proceed over a period of time. Fill in the blank.
(a) Family Life Cycle
(b) Family Legacy Cycle
(c) Family Wealth Cycle
(d) Family Liberty Cycle

5. Overall spending habits are not driven by the income of households but
by the class to which they belong. Thus, it became essential to develop
a composite variable index for India namely_______________. Fill in
the blank.
(a) Societal Ergonomic Classification
(b) Sophistication Evolution Classification
(c) Socio-economic Classification
(d) Socio-earnings Classification

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6. In a specific method of the survey in which people are asked how they
feel about such basic personal and social concepts such as religion,
caste system, national security, politicians, unity, diversity, freedom of
expression, harmony, peace, it is known as _______________ survey
method. Fill in the blank.
(a) content analysis
(b) value measurement
(c) customer filed work
(d) perception

Answers:

1. (b), 2. (c), 3. (c), 4. (a), 5. (c), 6. (b)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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Chapter 10
Diffusion and Adoption of New Products

Objectives

By the end of this chapter, you should be able:

• To understand the meaning of diffusion

• To understand what is innovation and its different interpretations
• To understand the evolution of the market for a product over the four
stages of the product life cycle
• To understand the process a consumer passes through before accepting a
new product
• To understand what are the characteristics of innovation affecting the
adoption role

Structure:
10.1 Introduction
10.2 The Diffusion Process
10.3 The Adoption Process
10.4 The Diffusion and Adoption in the Digital Era
10.5 What have You learnt – A Summary
10.6 Self-Assessment Questions
10.7 Multiple Choice Questions (MCQ)

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10.1 INTRODUCTION

Diffusion as a word stands for dispersal, dispersion, dissemination,

distribution, circulation, and transmission. In the context of a new product,
the spread of innovations within the market represents diffusion. Diffusion
leads to acceptance of the innovation. Acceptance occurs due to the ability
of self-evaluation which depends on the availability of sufficient
information. Sufficient information has been reached to target prospects
using a communication process that impacts the social system over some
time.

The introduction of a new product is vital to both, consumers, and

marketers – for the consumer, new products represent an increased
opportunity for better satisfaction of personal, social, and environmental
needs. For the marketer, new products provide an important mechanism
for keeping the firm competitive and profitable.

Any discussion on the diffusion of innovations involves two closely related

processes – the diffusion process and adoption process. From a different
perspective, diffusion is a process concerned with the spread of a new
product from its source to the public who would like to consume it.
Adoption is a process that focuses on the stages through which an
individual consumer passes in deciding to accept or reject a new product.

Also, in every market, some enthusiastic consumers are always eager to

grab any new products that enter the market and are known as consumer
innovators. The marketer needs to know the profile of such individuals as
the success of new product introductions largely depends on identifying
them and reaching them.

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Fig. 10.1: Six Categories of Innovative Products

Innovation is open to different interpretations. Booze, Allen, and Hamilton

(BAH) have given the following six categories of innovative products.

1. Technological Breakthroughs: Unusual breakthrough helps you to

offer a unique product – Microchip was a technological breakthrough as
it not only made computers much smaller in size but dramatically
increased their processing capacity.
2. Significant Improvements: Existing product or product category that
offers significant improvements over the existing products e.g., hand-
held vacuum cleaner over bulky floor-based cleaner. They not only have
a higher perceived value but a ready market available for creating a
shift.
3. Modified Products: This is like adding a new variant in the existing
product range e.g., new flavours, new ingredients, etc.
4. Products New to the Company: These products are available in the
market from other manufacturers. However, it is a new product for the
company. It may be in harmony with the existing product range or an
unrelated product category. E.g., Samsung introducing Blue Ray Disk

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player is a harmonious category but Samsung introducing automatic

shaving razor is an example of an unrelated product category.
5. Repositioning: When you target new markets or market segment with
the existing product in your basket.
6. Cost Reduction: With re-engineering a successful product, you can
reduce cost and re-launch it as one of the models. E.g., earlier, the
inside part of a washing machine used to have a stainless-steel tumbler,
which was later replaced by engineering plastics – the cost reduced, and
the market expanded.

10.2 THE DIFFUSION PROCESS

The diffusion process understanding covers how innovations spread within

a market. Diffusion is thus a process by which the acceptance of an
innovation (a new product, new service, new idea) is spread by the
company (an innovator) to the society as a social system (a target market)
by using communication channels (mass media, salespeople, promotions)
over some time. In other words, the diffusion process has four basic
elements – (1) the innovation (2) the social system (3) the channels of
communication and (4) time.

Let’s understand them one by one:

The Innovation

The word innovation as such has no specific definition. However, there are
various approaches to classify a new product as firm-oriented, product-
oriented, market-oriented, and consumer-oriented.

Firm-oriented Definition: Here the product is considered as new from

the perspective of the firm introducing it, but it is not a new product for the
market. Based on market acceptance of the product already in the market,
the firm may obtain the necessary technology from other technology
provider and introduce the product. This is done to capture the growing
acceptance of the product in the market.

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Product-oriented Definition: Here focus is on the features inherent in

the product itself, and the effects these features are likely to have on
consumers’ established usage patterns. There are various types of product-
innovations namely, continuous, dynamically continuous, and
discontinuous.

1. continuous innovation has the least disruptive influence on

established patterns of behaviour. This is because only the modified
existing product is introduced and not a new product completely. E.g.,
Introducing a dual SIM card, Wi-Fi, Multi-focus camera.

Fig. 10.2: Various Types of Product Innovations

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2. A Dynamically Continuous innovation is somewhat more disruptive

than a continuous innovation, but still does not alter established
behaviour patterns. It may involve the creation of a new product or
modification of an existing product. E.g., MP3 disk player, Camera in a
cellphone.

3. A Discontinuous innovation requires consumers to adopt new

behaviour patterns. E.g.: Tab, Self-help medical kits.

Market-oriented Definition: Here the newness of a product is judged in

terms of how much exposure consumers have to the new product. There
are two different definitions of product innovation that have been rendered
extensively in consumer research:

1. A product is considered new if it has been purchased by only a relatively

small % age of the potential market.

2. A product is considered new if it has been in the market for a relatively

short period.

Consumer-oriented Definition: While previous approaches have been

evolved for consumer research, it is suggested that one must take a
consumer-oriented approach in which a ‘new’ product is any product that a
potential consumer judges to be new. Thus, this approach believes and
deals with the perception of the consumer rather than self-styled
classifications.

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Fig. 10.3: Ten Types of Innovations

Activity A

List your two examples each for the different innovation orientations listed
above.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

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Product Characteristics that Influence Diffusion

All new products may not have an equal probability of consumer

acceptance. Some get fast acceptance (Maggi noodles), some take time
(Rice bran oil).

Marketers cannot use astrology predictions to determine their success, but

diffusion researchers have helped them by giving five characteristics that
seem to influence consumer acceptance of new products – (1) relative
advantage (2) compatibility (3) complexity (4) trialability and (5)
observability.

Relative advantage: A product towards which consumers develop a

perceived notion that it is better than the existing product. Colgate Total is
considered better than the simple Colgate.

Compatibility: Here the product can make potential consumers feel that a
new product is consistent with their present needs, values, and practices.
Instead of a permanent razor, men felt easy to adopt new disposable
razors.

Complexity: deals with the degree to which a new product is difficult to

understand or use. Smart LED TV is difficult to comprehend and use.

Trialability: deals with the degree to which a new product is capable of

being tried on a limited basis. The greater the feasibility of a product trial,
the easier it is for consumers to evaluate it. However, it is noticed that trial
is more feasible in household consumables, perishable products but not for
consumer durables - You can try a new shampoo sachet, but you can’t try
a refrigerator.

Observability: It is the ease with which a product’s benefits or attributes

can be observed, imagined, or described to potential consumers. Products
that have a high degree of social visibility, such as mobiles, accessories are
easily diffused than products that are used in private such as
undergarments, mouthwash, etc.

We need to simultaneously understand that the above-mentioned points

are valid from consumers’ perception point of view.

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Resistance to Innovation

We have seen that some products become an instant success on launch,

and some take a long to establish. E.g., the Mahindra Logan car was not
successful but XUV500 was an overnight success. Diffusion researchers
have developed a model of innovation resistance to provide further insights
into adoption and diffusion processes. The product characteristics of
innovation help to determine the extent of resistance, which manifolds
with:
1. Low perceived relative advantage

2. Low perceived compatibility

3. Low trialability

4. Low communicability

5. High complexity

Figure 10.4 highlights a model of innovation resistance covering cultural,

situational, and social factors. The model presents you with factors that
can affect resistance.

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Fig. 10.4: A Model of Innovation Resistance

In simple terms, there are 4 sources of consumer resistance namely –

usage barrier, value barrier, risk barrier, and psychological barrier.

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1. Usage Resistance 2. Value Resistance

Innovation which is not compatible Price Vs. Performance measure of the
with the existing habits of Consumers, innovation as compared to exiting
2. E.g., Electric Cars substitutes E.g., CORFAM by

3. Risk Resistance 4. Social Resistance

If product innovation is lst Gen with This is psychological or individual
high cost, there is uncertainty for the resistance.
consumer to wait longer for a stable E.g., to buy a home in south Delhi or
product or buy E.g. iPad anywhere?

Fig. 10.5: Four Sources of Consumer Resistance

Marketers’ task doesn’t end at knowing the factors for resistance. They
need to develop strategies to overcome known factors from known sources
of resistance.

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Table 10.1
A Classification of Marketing Strategies to Overcome Consumer
Resistance to Innovation
Source of
Marketing Strategy
Resistance

Product Communicati Pricing Market Coping

(Barriers)
Strategy on Strategy Strategy Strategy Strategy

Functional Barriers

Usage Barrier Develop a Mandate

systems usage (market
perspective development)
(e.g.,
packaging).
Integrate
innovation
with the
preceding
activity
(packaging).

Value Barrier Improve Reduce the

product price by
performance lowering
(modification costs.
and
development).
Improve
product
positioning.

Risk Barrier Use a well- Elicit Facilitate trial

known brand endorsements (increase
name. and market
testimonials. exposure)

Psychological Barriers

Tradition Educate Understand

barrier customers. and respect
Use change traditions.
agents.

Image Barrier Borrow a good Make fun of

image (brand the negative
name) image. Create
a unique
image.

Source: S. Ram and Jagdish N. Sheth, “Consumer Resistance to Innovations: The

Marketing Problem and Its Solutions.” Journal of Consumer Marketing, 6 (Spring
1989), 10

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The Channels of Communication

The success of diffusion lies in its ability to spread through the entire
market, which in turn depends on the communication between the
marketers and consumers and also communication among consumers,
especially in this digital age. Thus, in consumer buyer behaviour it is
essential to attend transmission of product-related information through
various communication channels, and to the impact of both, messages and
channels on the adoption or rejection of new products. Communication
sources are categorized as impersonal sources (e.g., advertisement,
publicity) and interpersonal sources (personal selling, opinion leaders).

In this digital era, a variety of new channels of communication have

opened, including social media which allows consumers to participate
rather than remain only as recipients. This may include customized ideas,
kiosks for point of purchase engagement, Facebook, Snapchat, etc.

It is a fact that certain types of information sources have early versus later
adoption of new products. The following findings from various diffusion
research indicate those early adopters:

1. Have more change-agent contact (e.g., with salespeople)

2. Have greater exposure to mass-media communication channels
3. Seek information about innovations more frequently
4. Have greater knowledge of innovations
5. Have a higher degree of opinion leadership

Now it is up to marketers to use the available insights to ensure more and

more people come in the category of early adopters, by doing activities,
campaigns that will create one of the above connections for the prospective
consumers.

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The Social System

Individuals to whom you wish to have exposure to your diffusion initiatives

are part of a social setting known as the social system.

The social system has its orientation and special values which affect the
acceptance and rejection of new products. The traditional system does not
easily and immediately absorb innovation vis-a-vis the modern system.

As mentioned earlier, the social system can be national in scope and

influence the entire society. It may also exist at a local level within the
confinement of religion, community and thus, affects only those who
belong to that specific social system.

Time

Time is the foundation of the diffusion process and covers three distinct but
interrelated ways: (1) purchase time (2) the identification of adopter
categories and (3) the rate of adoption.

1. Purchase time: It’s the amount of time that elapses between the
consumer’s initial awareness of a new product and the point at which he
or she purchases or rejects it. Purchase time is the result of being
aware, the depth of his involvement needed, and how complex it is for
him to get information, evaluate it and decide to adopt it or reject it.

An indication regarding the purchase time allows marketers to shorten

the time lag as well as predict the demand correctly.

Also, as the time lag increases, the innovator category products evolve
into a need for other consumers.

2. Adopter Categories: To understand the new product adopters, we

need to classify consumers into different categories based on the time
they take to adopt any new product. We have seen that some people
grab on to the new product the moment it is launched while others take
longer, and few never adopt any new product.

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Adopters are classified into 5 categories – innovators, early adopters,

early majority, late majority, and laggards. The graph below
describes each of these adopter categories and estimates their relative
proportions within the total population that eventually adopts the new
product. This graph is also known as Roger’s Adoption/Innovation curve.

Fig. 10.6: New Product Adopters Classification Curve

As we can see, the graph indicates that the adopter categories are
generally depicted as taking on the characteristics of a normal distribution
(a bell-shaped curve) that describes the total population that ultimately
adopts a product. Let us briefly understand the classification.

Innovators: They are the ones who take on the risk and venture into
adopting a new product. Profile wise they are generally younger, with a
broad and open outlook, high on social status, love to take on any new
idea with the risk involved, and for them, it’s like a venture worth the effort
when they buy a new product.

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Early Adopters: They adopt new ideas early but post careful
consideration. People respect their viewpoints and follow them. Thus, they
are also ‘change agents’. Their opinion matters and thus this category has
the most opinion leaders.

Early majority: It’s not a group that takes unwarranted risk nor does it
have a followers’ base to be considered as opinion leaders. However, they
are conscious about adopting an innovative product much before the
average mass consumers do. It’s a group that’s a notch above the average
masses but they are not leaders.

Late majority: They adopt a new product out of necessity and their
adoption goes un-noticed. It is thus also considered as a skeptical group
that adopts a new product out of social pressure or necessity. Before they
adopt, so many others have owned this new product already.

Laggards: They are the last streams of the population to adopt a new
product. They are believed to be always careful and not risk their
investment in trying a new product. They continue to use old products that
either serve their current needs or they do not have a strong urge to
satisfy the current needs differently. Thus, this group is also considered a
tradition-bound group. In many cases, their acceptance cycle begins when
the innovator category has discarded the idea and they have moved on to
another new product. Profile wise they are relatively older, coming from the
lower end of social strata, or do not have an independent means of
earning.

The above understanding not only helps marketers to use their marketing
mix appropriately but allows them to understand their media habits and
tap the same appropriately.

Also, it is so critical to understand that this classification does not apply to

the same individuals for all product categories. A person may be a laggard
in accepting changing fashion but may be an early adopter for consumer
durables.

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3. Rate of adoption: This refers to the time it takes for a new product to
be adopted by members of a social system – that is, how quickly a new
product is accepted by those who will ultimately adopt it.

Generally, it has been noticed that the higher the hindrances in

communication channel longer will be the rate of adoption and vice
versa. In other words, the rate of adoption will be longer if it is difficult
to reach your customers and vice versa.

In India, when black and white TV was introduced, the rate of diffusion
was slower and remained more or less steady, but the moment it was
announced that ASIAD Games will be telecast in colour, its diffusion was
much faster. Thus, it suggests that instead of the time it takes to adopt
a new product, it is essential to track the extent of evaluation.

The rate of adoption also depends on the organization’s objective. Some

organizations wish to cover the market fast and gain a higher market
share before the competition comes in. In such a case, they resort to
penetration policy by introducing the new product at a lower
introductory price, designed to achieve higher sales growth and
discourage competition from moving in.

In contrast to this, a company at times may decide to recover their

development cost faster and thus, may go in for skimming the market
pricing policy in which a product is made available at a higher price
and allow early adopters to go for it, and later, gradually drop the prices
for others to adopt the popular and successful product.

Thus, based on time and the extent of adoption, four different categories
of adopters are identified.

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Fig 10.7: Four-Way Categorization of Adopter Categories

Reprinted from Gary J. Bamossy, ‘Measurement of Innovative Behaviour in

Business Markets: Diffusion of High-Techs in the Lowlands,’ in Gary Frazier
et al, eds, 1988 AMA Educators’ proceedings (Chicago: A.M.A, 1988), 99

10.3 THE ADOPTION PROCESS

Adoption is the second major process in the cyclic process of diffusion of

innovations. The focus here is on the process through which adoption by
consumers takes place, i.e., the stages through which an individual
consumer passes in deciding to try or not to try an available new product.
These steps are different from the adopter categories explained earlier.

Stages in the Adoption Process

It is found post research that a consumer moves through five stages in

deciding to purchase or reject a new product, namely (1) Awareness (2)
Interest (3) Evaluation (4) Trial, and (5) Adoption (or rejection). These
stages have been covered in the following section:

1. Awareness: This is the first stage in which consumers are exposed to

the availability of innovation. Consumers at this stage remain neutral as
they are neither sufficiently inclined nor search for additional product
information.

2. Interest: Only when consumers become interested in the product

category or the product, they search for information about how the
innovation can benefit them. This stage coincides with the consumer
involvement theory which suggests that for some products limited
information search is more likely and vice versa.

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3. Evaluation: Post availability of the required product information, the

consumer will evaluate the product and conclude the innovation. He
may need more information which he will search for. He then evaluates
the product in his mind, wherein he tries to figure out its utility vis-a-vis
the benefits to him. If his mental evaluation is satisfactory, he will try
your product innovation. If the mental evaluation is unsatisfactory, then
the innovation product will be rejected.

4. Trial: Post mental confirmation of the innovative product’s utility, the

consumer looks for trial. He preferably doesn’t want to buy it but wishes
to use it for a limited time. He, therefore, looks for the best opportunity
which may be available at a dealership if they are either showing a
demonstration or give it for trial. Else, he will explore the possibility of
checking it out from someone who has it. It is essential to note that
their experience unravels that critical information they needed to decide
about adopting or rejecting a new product.

5. Adoption: Based on their trial stage experiential evaluation, consumers

either will decide to own one and use it for themselves or reject the
adoption.

When the TAB was launched in India, it was touted as ‘Phone Bhi, aur
Laptop Bhi’. People were made aware of it through advertisements and
other communication channels. It generated interest and compelled many
to search for information on the net. On finding information that gave them
the perspective about its utility for them, many wanted to see the product,
thus they went to showrooms and enquired about it. Showrooms willingly
gave them live demonstrations and allowed them to touch and feel the
product and try for themselves, which led to final adoption by many
(although it was more from the perspective of a handy computer and not
necessarily a phone).

Regular research on the adoption process indicated the need for adding
two additional stages between trial and adoption. The trial provides direct
experience and the consequences of that experience serve to confirm the
product evaluation, leading to subsequent rejection or adoption. Thus, the
adoption process now will have seven steps – (1) Awareness (2) Interest
(3) Evaluation (4) Trial, and (5) Direct Product Experience (6) Product
Evaluation and (7) Adoption (or rejection).

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The adoption of some products may have minimal consequences on the

lifestyle of society, while some products greatly impact the society –
automobiles gave mobility and freedom, TV first united families but later
post satellite channels intrusion, divided the family as each individual had
his/her choice, so separate installations for them were given, LED allowed
seeing sporting events together with relatives, friends at clubs and
restaurants.

It was also found which sources influence consumers’ access at their

different stages of adoption. Mass media plays a major role during
awareness and interest building but as consumers go ahead, more
informal, or interpersonal channels work wonders such as sharing with
salesperson, friends, groups, and others.

Limitations of the Adoption Process

• Consumer researchers have identified the following limitations of the
adoption process:
• It tends to ignore the problem recognition stage that precedes the
awareness stage.
• It does not adequately provide for the rejection of a product after its
trial.
• It considers that five stages do not necessarily happen in the same
sequence.
• Finally, it assumes that evaluation happens only at the time of the
evaluation stage; thus, ignores the practical side that evaluation is a
continuous process by the customers.
• It also ignores the post-purchase stage at which the commitment either
get strengthened or discontinuation occurs.

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The Innovation Decision Process

Consumer researchers felt a need to thus develop an all-inclusive model to

overcome the limitations of the traditional adoption proces.s. The
innovation-decision process was evolved with five stages of the revised
adoption process model as follows:
1. Knowledge: Consumers are made aware of the innovative product’s
existence, information on its functionality and benefits.
2. Persuasion: Consumers develop either favourable or unfavourable
attitudes towards the innovation.
3. Decision: Consumers engage in activities that lead to a choice to adopt
or reject the innovation.
4. Implementation: Consumers accept innovation and put it to personal
use.
5. Confirmation: Consumers look for confirmation regarding their
decision. They are at the stage that despite their adopting an
innovation, they can still reject it mentally based on experiences,
conflicting reports, and adverse word of mouth.

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The innovation-decision process model is more comprehensive than the

earlier adoption process models and overcomes their limitations. As it is
close to reality, it’s friendlier to marketers and consumer researchers.

10.4 DIFFUSION and ADOPTION IN THE DIGITAL ERA

The Digital era is changing various things around us. Our dealing with
individuals, the way we collect information, how we decide about the
product or a brand, what do we check to determine product or brand’s
utility and more. The Digital era has also impacted consumer buyer
behaviour in many ways.

You will study in detail about consumer buyer behaviour process in the
next chapter on ‘Consumer Decision Making’. In brief, consumer decision
making has stages like 1) Problem recognition 2) Information search 3)
Evolution of alternatives 4) Making a purchase decision and 5) Post-
purchase evaluation. On the other end, you have marketing
communications simplest model namely AIDA (Attention, Interest, Desire
and Action). Basic principles of innovation diffusion remain the same.
However, the digital medium offers you innovative ways to trigger
innovation acceptance, and speed in reaching innovation adopters. With its
versatility and features, digital mediums enable grabbing the attention,
generate interest (visuals, animation, video and more), develop the desire
(know more, webinar, download, free trial) and facilitate action. With
various digital media and channels website, email, social media, it is
possible to help consumer recognize the problem he has, provide
information to enable evaluation, generate buzz around your brand/
product, help in making a purchase decision by offering convenience,
money back, free trial period and handle post-purchase stage in an
appropriate manner that gives your brand positive traction. The single
most advantage of digital era mediums and channels is that you can
facilitate diffusion of information and adoption process almost concurrently.
The utility of the digital era is that your concurrent initiatives will not clash
and aid widespread customer reach and yet remain mutually exclusive
because the customer will look for what he needs, based on his state and
stage in buying cycle – innovator will look for what is new coming in,
followers will study reviews and ratings, opinion and then decide.

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10.5 WHAT HAVE YOU LEARNT – A SUMMARY

Consumer researchers have helped marketers by providing the concept of

the diffusion process and the adoption process. They are two closely
related concepts concerned with the acceptance of new products by
consumers. Being distinct processes, it needs to be understood well as
both have different deliverables. The diffusion process is a general process
that enables marketers to know about the spread of innovation from its
source to the consuming public. As against this, the adoption process is a
specific process that examines the stages through which an individual
consumer passes in deciding to accept or reject a new product.

Innovations have different orientations and thus they can be either firm-
oriented (product new to the firm), product-oriented (a continuous
innovation, a dynamically continuous innovation, or a discontinuous
innovation), market-oriented (by how long the product has been in the
market or by the % age of the potential target market that has purchased
it), and consumer-oriented (new to the consumer).

Five product characteristics influence the consumer’s acceptance of a new

product: relative advantage, compatibility, complexity, trialability and
observability (or communicability).

Diffusion is concerned with two aspects of communication – the channel

through which word of a new product is spread to the consuming public
and the types of messages that influence the adoption or rejection of new
products. Diffusion is always examined in the context of a specific social
system, such as the target market, a community, a region or even a
nation.

It is essential to minimize the purchase time taken to adopt an innovation

or reject any innovation. Rate of adoption is the next challenge to be
handled. Five adopters’ categories identified are innovators, early adopters,
early majority, late majority, and laggards.

The traditional adoption-process model lists five stages through which an

individual consumer passes in deciding to adopt or reject a new product –
awareness, interest, evaluation, trial, and adoption. The new innovation-
decision-process model is a more general decision-making model that

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focuses on the five stages of adoption – knowledge, persuasion, decision,

implementation, and confirmation.

Marketers are keen to identify and influence consumer innovators so that

they can direct their promotional campaigns to the people who are most
likely to try new products, adopt them, and influence others. Consumer
innovators have distinct personality traits from non-innovators. This
knowledge helps in segmenting the market appropriately and better
targeting the marketing initiatives

10.6 SELF ASSESSMENT QUESTIONS

1. What is diffusion and adoption? Explain.
2. Explain the different interpretations of innovation.
3. Explain the different approaches to classify innovation.
4. List the product characteristics which allow diffusion.
5. Explain the classification of adopters in relation to the product life cycle?
6. Explain the traditional adoption process.
7. Explain the Innovation decision process.

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10.7 MULTIPLE CHOICE QUESTIONS

1. Spread of innovation within the market represents ______________ Fill

in the blank.
(a) market development
(b) market maturity
(c) market diffusion
(d) none of the above

2. In the five stages of adoption when a consumer obtains information and

studies the merits of the new product mentally, it is known as
______________ Fill in the blank.
(a) confirmation
(b) evaluation
(c) contemplation
(d) none of the above

3. The adopter category which is a deliberate group that accepts an

innovation before the average person does so is known as
______________. Fill in the blank.
(a) innovator
(b) early adopter
(c) early majority
(d) laggards

4. There are few characteristics of an innovation that affect its adoption

rate. One character in which the degree to which a new product scores
over the old product and has a greater advantage is known as
______________ . Identify the characteristic. Fill in the blank.
(a) relative advantage
(b) compatibility
(c) complexity
(d) trialability

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5. As compared to the traditional adoption process, a new process was

developed, known as ______________. in which five stages are
covered like knowledge, persuasion, decision, implementation, and
confirmation. Fill in the blank.
(a) Rodger’s adoption process
(b) Innovation resistance model
(c) Modified Rodgers adoption process
(d) Innovation decision process

Answers:

1. (c), 2. (b), 3. (c), 4. (a), 5. (d)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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Chapter 11
Consumer Decision Making
Objectives
By the end of this chapter, you should be able:
• To understand the consumer decision-making process
• To understand what are the different types of purchase decision
behaviours of consumers
• To understand what is the model of buyer behaviour
• To understand the post-purchase behaviour of consumers
• To understand the concept and meaning of relationship marketing

Structure:
11.1 Introduction
11.2 Four Views of Consumer Decision Making
11.3 The Consumer Decision Making Process
11.4 Types of Purchase Decision Behaviours
11.5 Model of Buyer Behaviour
11.6 Post Purchase Behaviour
11.7 Relationship Marketing
11.8 What have You learnt – A Summary
11.9 Self-Assessment Questions
11.10 Multiple Choice Questions (MCQ)

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11.1 INTRODUCTION

What is a Decision?

Daily, we have to take so many decisions concerning every aspect of our

daily lives such as from the time we wake up to the time we retire for the
night, we have to choose between several brands of toothpaste for
brushing our teeth. It continues like this when it comes to our lunch or
dinner, our means of entertainment, our cosmetics, our sanitary products,
health care products, books, magazines and periodicals and the academic
courses and institutions. Thus, a decision is the selection of an action from
two or more choices. We have to decide for ourselves, and others. We
advise others and receive advice from others. We generally make these
decisions without stopping to think about how we make them, about what
is involved in the decision making itself. It is necessary to decide whether
to buy or not to buy and if we want to buy, which product or brand to buy.
If there is no choice, then it is called Hobson’s choice. The freedom to
choose is an essential value of Indian society. The following table
summarizes the types of purchase decisions we regularly take:

Table 11.1

Decision Category and Types of Purchase Decisions We Take

Decision Category Alternative X Alternative Y

Basic Purchase Decision Whether to purchase Or not to purchase
Brand Purchase Purchase a specific brand Or purchase another
brand
Decisions Purchase your usual Or Purchase another
brand brand
Purchase a new brand Purchase an established
brand
Purchase a standard Purchase something
quantity more or less than this
quantity
Purchase a national Purchase a local brand
brand

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Purchase from a specific Purchase from some

store, say a departmental other retail outlet
store
Channel Purchase Purchase from a usual Purchase from another
outlet outlet
Decisions Purchase indoors Purchase outdoors
Purchase from Purchase from down-
neighbourhood store town or up-market store
giving local convenience
Payment Purchase Purchase cash Purchase on card
Decisions Outright purchase Purchase by instalments

11.2 FOUR VIEWS OF CONSUMER DECISION MAKING

We have seen above a simple model of how consumers make decisions. We

however need to consider several models of man that portray consumer
decision making in distinctly different ways. There are four consumer-
related models of man: 1. economic man, 2. passive man, 3. cognitive
man, and 4. emotional man.

Economic Man

In a perfect competition economic scenario, we visualize an economic man

who behaves rationally and takes rational decisions. An economic man
knows about all available products, has enough information to rank them
correctly in terms of merits and demerits, knows about their prices and
buys the best product that benefits him the most. But such assumptions
are impractical in the real world. The ability of individuals is limited.
Individuals have limited values and goals and all of us operate in an
imperfect world. Individuals will not be in a position to maximize the
decisions such as price-quantity or marginal utility or indifference curves.
Instead, individuals would settle down to satisfy themselves by buying
something that is simply good enough. The economic man model thus has
theoretical value and is not operative in the real world.

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Passive Man
In contrast with the economic man who is rational about his choices, a
passive man is the one who is subject to high-pressure selling, marketing
and promotional efforts of the organizations and yields to these passively.
He tends to be an irrational and impulsive purchaser. The conventional
attention-interest-desire-action (AIDA) model of selling presumes a passive
customer. It fails to recognize an important role any man plays in the
buying process.

Cognitive Man
A cognitive man as a consumer is considered as the one who seeks to solve
his problems by seeking products and services which satisfy his needs and
improve the quality of his life. His choices are governed by certain
processes such as seeking information, evaluating, and forming
preferences. As against the economic man, the cognitive man obtains only
sufficient information so that he can settle for a reasonably good product.
He may develop certain practical methods to arrive at a decision. He may
use certain decision rules. He thus falls in between a purely rational
economic man and a purely irrational passive man. Though he is not in a
position to make perfect decisions, he attempts to make satisfactory
decisions. His consumption decisions are based on the information thus
thought through in nature. He is thus well-informed. Consumer behaviour
literature equates a consumer with a cognitive problem-solving man.

Emotional Man
Man is naturally born with emotions within him. Emotions such as love,
happiness, hope, fear, fantasy, sexuality and even some out-of-the-world
experiences like magic. These influence our product choices a great deal.
We get emotionally involved with the products satisfying our needs. We do
not gift handkerchiefs, we may feel certain colours are lucky for us; we like
certain brands deeply without really knowing why do we get attracted to
these brands – Old Spice, Raymond’s. more.

Many of our purchases are driven emotionally without any information

seeking and alternative evaluation. Purchases are governed here by moods
and whims. This does not necessarily mean that an emotion-driven
purchase is not rational. The goal of emotional satisfaction is also a rational
decision. Brand choice is a matter of emotional preference and has little to
do with rationality. Manish Malhotra’s clothes are preferred because we feel

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better wearing them. Promotion is becoming more and more feeling-

oriented, emotions driven.

The mood is a state of mind, and it also affects our consumption. It is one
of the emotions and it prevails over us as a response to a particular
environment. It pre-exists when a consumer enters a retail outlet or is
face-to-face with a brand or a product. It influences shopping and therefore
a retailer tries to create a mood for shopping. A positive store image does
affect a shopper’s mood. Shopping ambience is also a big and effective
turn-on for consumers’ mood. A positive mood is a great help in a product
recall. However, it does not mean that such a mood created on the spot by
music and PoP (point of purchase) will influence brand choice unless some
previous evaluation has already occurred.

Activity A

List one product each that has been purchased by you while acting as an
economic man, passive man, cognitive man, an emotional man.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

11.3 THE CONSUMER DECISION-MAKING PROCESS

Consumer’s buying behaviour does not consist of discrete acts, but it is a
process. A man who joins a gymnasium first recognizes the need to reduce
his obesity or build a body. He then seeks information about various
methods of slimming down/bodybuilding and chooses the gymnasium route
as the best alternative for him. He starts visiting various gymnasiums in his
area and enters into detailed conversations to know more about them and
whether they will help him to meet his objective. He then decides in favour
of a particular gymnasium, considering the cost of the total plan, its
credibility and track record. After choosing the gymnasium, he may or may
not be satisfied with the results. All this is a part of the purchase decision
process. It is not just the decision but a whole series of decisions.
The following diagram shows a simplified model of the consumer purchase
decision process.

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Fig. 11.1: Consumer’s Buying Decision Process

The five stages in the buying decision process are:

1. Problem recognition
2. Information seeking
3. Evaluation of alternatives
4. Buying decision
5. Post-purchase evaluation.

It should be noted that the process starts much before the actual purchase
and continues beyond it.

Problem Recognition: Problem recognition is the beginning of the buying

process. This recognition is likely to occur when as a consumer we are
faced with the problem. It is a matter of gap perception. We realize what
we should ideally have and what we have at present. The decision to buy a
two-in-one music system is triggered by the gift amount received on the
occasion of the birthday. Mrs Smita may go in for a fridge because Mrs
Yogini has already got it. A perfume bottle of ‘Brut’ may be purchased
when one sees it in the window of a shop. We may decide to buy
toothpaste when the current one is on the point of running out. We may
even decide to try a new toothpaste brand this time. Problem recognition is
generally a slow process but can occur fast when purchases are made
impulsively.

Marketing efforts facilitate the problem recognition stage. Ads compel us to

buy many a thing, however, their role to help individuals realize the
problem they are facing, and the availability of some solution for the same
– mosquitoes and the use of coil, and later, electric repellents. Similarly, a
window display also acts as an incentive to buy. Personal selling makes us
realize what our unfulfilled needs and wants are. Psychological factors do
influence the problem recognition stage.

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Fig. 11.2 – Consumer’s Decision-Making Process with Example

Source: Pearson Education Canada Inc.

Information Seeking: This follows the problem recognition stage. While

advertisements are luring us, we feel we do not have complete information
and thus we feel an urge to obtain more information about the problem
that we have recognized and the alternatives available to solve them. The
search is mostly directed towards the products that are consistent with our
needs. A housewife buying an electric rice cooker might start visiting the
shops selling appliances and might start discussing the need with her
friends. She wishes to know how practical it is to use, the convenience or
inconvenience of using it, which brand they have and how much did they
pay for and from where did they buy, etc. She is also interested in knowing
which brands are on offer and their features.

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The amount and type of information that is collected are related to the
product in question, and the consumer’s personality. To buy consumer
durables like fridges and ACs, we need a great deal of information from
different sources. To buy daily consumables, we need limited information.
To buy petty items, there is hardly any need for information seeking,
except to know what size is available, and at what price. The essence of
brand marketing is that it makes the consumer loyal to the brands. These
consumers then continue to buy the same brands and do not seek any
information at all.

Information seeking starts with cognitive internal search – recalling

information stored in memory. This may give us an idea about the gaps in
the information available to us. We may thus make efforts to obtain the
required missing information. This may lead to further stages of the buying
decision process.

The major external sources are family members, peers, friends, colleagues,
and relatives on whom we rely on or consider as our opinion leaders.
Besides, we get information from different marketing communications,
media, distribution channels and consumers’ own experience handling a
similar product category, company, brand, etc.

Evaluation of Alternative: When the consumer seeks information, he

realizes the choices available to him and gets the background against
which these choices can be judged. The brands that a consumer considers
while making a purchase decision, form an evoked set, which is a small
proportion of the total available brands.

Each brand in the evoked set is evaluated against some chosen criteria. A
consumer buying an electric rice cooker, for example, considers the criteria
such as Brand name, Price, Functions performed, Appearance, Attachments
like a juicer, a chutney jar, Reputation of the company marketing it,
Warranty, Technical specifications and may be After-sales service available.

Each of the above criteria is assigned some weightage, which may differ
from consumer to consumer. After this, it is all a matter of perception. To
illustrate, the flavour of a soft drink may have equal importance for two
different consumers. But one feels Fanta orange has a particularly good
flavour whereas the other feels it is awful.

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Promotion, especially advertising, provides information to consumers,

enabling them to evaluate the different alternatives.

Buying Decision: After the choices are evaluated, the brands are ranked
mentally. The top-ranking brand may or may not be purchased as it
depends on how customers look at the value within each one of them. The
ultimate buying decision may change if the preferred brand is not available.
In such a situation, the second-ranked brand may be bought. The ultimate
buying occurs only when the consumer finds a suitable outlet where the
brand is available, and price negotiations are complete.

Post-purchase Evaluation: This is a stage after the actual product has

been bought and consumed. It is the stage for post-purchase evaluation.
The consumer may either be satisfied or dissatisfied. A satisfied consumer
stores the product information in his memory and uses it the next time, at
the time of the problem recognition stage. A dissatisfied consumer may go
in for another brand the next time he is out to buy. He will seek additional
information and will consider another set of brands. To illustrate, a
consumer dissatisfied with LG LED TV may consider other LED TV brands
like SONY BRAVIA, PANASONIC, PHILIPS, ONIDA, etc.

Activity B

List the stages you went through while purchasing the LED TV in your
house.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

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11.4 TYPES OF PURCHASE DECISION BEHAVIOURS

Consumer behaviour changes depending upon the nature or type of buying

– A Cross pen may be purchased without much fuss, but a SMART TV set
purchase takes time, a greater number of visits at different brands’ outlets
and deliberations within known groups. The types of purchases give rise to
three types of buyer behaviours as explained below:

Reutilised Response
(RR) Behaviour

Limited Problem Solving

Extended Problem
(LPS) Behaviour
Solving (EPS) Behaviour

Fig. 11.3: Types of Buyer Behaviours

RR occurs where there is low product selection involvement; the consumer

knows the brands available and criteria of choice, their preferred brand and
the stakes are not so high in terms of the price or loss, e.g., salt, juices,
soaps, butter etc. Here, the customer expects a consistent quality in the
products. New customers are drawn by sales promotion and product
improvements.

LPS occurs when the consumer knows the brands available, but still needs
additional information to make a correct choice, especially when a new or
unfamiliar brand or variant confronts him. Thus, new Dell or new HP
laptops must convince the customers that they are superior to conventional
laptops due to the presence of an upgraded Intel chip inside and so the
customer feels the necessity of searching for additional information. The
marketer here has introduced a new brand in a well-known product
category. The promotion here should explain the complete features of the
new brand and build up consumers’ confidence to facilitate the purchase
decision.

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EPS occurs when a new product category comes on the scene. Here,
extensive information is needed on both, the product category and the
brand being made available, e.g., super hybrid car from Maruti needs to
first explain the concept of a hybrid car vis-a-vis conventional cars, and
then sell Maruti’s hybrid car brand. Colour TVs as a product category, a
particular brand of TV (say Onida or Videocon) and a particular model (say
PIP: Picture-in-Picture or Surround Sound System) do need information at
three levels. Promotion should satisfy the needs of information at these
three levels, and especially, how the advertised brand has a unique set of
positive attributes. This concept is most applicable to new products, ones
that may be new to consumers. For typical rural India customers, even the
purchase of soaps may involve EPS, whereas for us it is just RR.

11.5 MODEL OF BUYER BEHAVIOUR

Consumer Buyer Behaviour researchers have developed various models to

explain the influences on buyer’s behaviour of purchase. The Howard–
Sheth model which has been developed by an Indian, Jagdish Sheth in
collaboration with ‘Howard’, explains the behaviour of an individual
consumer. There are separate models for group consumer behaviour and
organizational buying behaviour.

Howard-Sheth Model

The decision process is influenced by four major sets of variables, e.g., 1.

Inputs, 2. Perceptual and Learning Constructs, 3. Outputs, and 4. External
Variables.

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Fig. 11.4: Howard-Sheth Model: Simplified Adaptation

1. Inputs: These are stimuli to purchase decision. Significant stimuli are

tangible product characteristics provided by the marketer. Symbolic
stimuli are intangible or perceptual characteristics of the product, e.g.,
the overall quality. The actual price may be a significant stimulus, and
the price being on a higher or lower side for the bargain is a symbolic
stimulus. Social groups like the family, reference groups and social class
are the social stimuli.

2. Perceptual and Learning Constructs: These are psychological

variables, e.g., motivation, attitudes, and perceptions affecting the
buyer. The interpretations of the stimuli are influenced by stimulus
ambiguity and perceptual bias. The ambiguity of stimulus means the
consumer is not sure of the meaning of the stimulus and his response
thereto. Perceptual bias makes him distort the information received to
fit his previous experience and his established needs.

Interpretation of the stimuli results in brand comprehension. A high

rating builds up his confidence, resulting in the purchase decision.

3. Outputs: The purchase decision itself is an output. Product trial may

give him satisfaction. It reinforces his positive attitude. Then there is a
reinforcement of the purchase intent and the brand. He is favourably
inclined to receiving stimuli which further improves his brand

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comprehension. On getting dissatisfied with the product, he may

develop a negative attitude, insensitivity to stimuli, poor brand
comprehension and a negative intention to purchase.

Fig. 11.5: Output Model of Purchase Decision

4. External Variables: These are not part of the decision process in the
model but are improvements to the extent that they influence a buyer.
These differ from buyer to buyer and include status, the relevance of
the product, social class, personality traits, etc.

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11.6 POST PURCHASE BEHAVIOUR

Post-purchase consumer behaviour understanding by marketers reflects

‘true’ marketing orientation. It helps them to identify their consumers and
seeing things from their perspective. Purchases are purposive and
motivated. Post-purchase behaviour indicates to what extent these
purposes have been met and motives achieved. The post-purchase activity
indicates whether the customers are going to again patronize a firm in
future, and also whether they will be in a mood to recommend a product to
potential customers.

Formation of Satisfaction/Dissatisfaction

Post-purchase and after the experience with its use, a purchase may lead
either to satisfaction or dissatisfaction. Satisfaction is a result of the
expected outcome – when the product meets our expectations.
Dissatisfaction means it does not perform as per our expectations.
Dissatisfied customers may discontinue their association with the company,
may spread negative word-of-mouth, may send a formal complaint, or in
extreme cases, may sue the company. The communication strategy
depends upon the expectation performance disparity.

Disparity Communication Strategy

Minimized by adjusting perceived Overstate product claims
expectations with performance
Magnified Reasonably understate product claims
Negative feeling Consistent claims with performance
Minor disparities minimized State product claims above the actual
Major disparities magnified performance marginally but within the
overall acceptance range of the
consumer.

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Other tips for advertisers to avoid dissatisfaction:

1. State the facts. Execute the factual promotion creatively.
2. Help the consumer with product use by giving adequate instructions or
information.
3. Promotion should be solution-based rather than product-based.
Emphasize products’ performance.
4. Assure the customers even when the purchase is over. State in your ads
the facts – many have used the product and are satisfied. Write thank
you letters. Make the technical staff visit the customer’s residence to
assess his feelings.

The technical term for a very wide gap between expectations and actual
performance is post-purchase dissonance.

Schiffman-Kanuk Model of Consumer Decision Making

It takes care of the two types of individual consumers – cognitive or

problem solving, and emotional. It has three components – input, process,
and output. The following diagram illustrates this model.

The marketing mix and the perception it creates largely affect the buyers.
Apart from this, social class and culture affect a consumer’s evaluation, and
word-of-mouth publicity affects the ultimate adoption of the products. The
input is processed by the consumer while he takes the decisions. The
decision-making process is affected by psychological factors. Here, we
have to understand two key concepts – perceived risk and evoked set.
While buying products, consumers cannot anticipate the consequences of
their decision, and this is precisely the perceived risk.

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Fig. 11.6: Schiffman-Kanuk Model

The product may not function as expected (functional risk); the product
may harm us (physical risk); the product may embarrass us socially (social
risk); the product may affect ego adversely (psychological risk); the time
taken to buy may be wasted over a non-performing product (time risk).
Risk is perceived with respect to product categories, e.g., there is a higher
risk while buying a LED TV than buying a book. Shopping situation also
contributes to the perception of risk, e.g., some may not like to buy by
mail order. This perception may change by positive feedback. Perception of
risk differs from people to people, and so consumer research regarding the
risk behaviour of one country cannot be generalized.

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Consumers handle risk in a variety of ways. Their risk reduction strategies

consist of information search, brand loyalty, buying an established brand,
buying from a reputed retailer, buying the next expensive brand or model,
and seeking confirmation about a buy.

Evoked set consists of brands that a consumer considers while buying a

brand in a specific product category. On the shelf, there may be 30, 40
brands of shampoo or 20, 30 brands of toothpaste. But consumers do not
take the time to examine every possible choice. Rather, they reduce their
selection to a smaller set of options based on experienced exposure.
Through learning over time, consumers are efficient in terms of reducing
their transaction costs. In the 1960s, Jagdish Sheth and John Howard
developed the idea of evoked set to describe this process of selection.
Hoffman defines an evoked set as the brands in a product category that
the consumer remembers at the time of decision-making. The evoked set
hardly consists of a few brands, say three to five, or at the most seven.
The brands excluded from the evoked set are called inept set. The brands,
towards which a consumer is indifferent, as they offer no significant
advantage, form the inert set.

A consumer is familiar with some brands. Of these, some are acceptable.

Towards some, he is indifferent. Some he does not recall (overlooked
brands). Evoked set consists of familiar, remembered, and acceptable
brands.

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Fig. 11.7: Evoked Set

The results depend on how we sort out the products or possibilities into
categories. The way this information is recorded in memory can influence
consumers’ preferences for brands and whether the brand will be
considered for purchase. According to Dannon and Yoplait, if yoghurt is
arranged by brands first and then by flavour within the brand, consumers
tend to select their flavours from the same brand. On the other hand, if the
yoghurts are classified flavour wise first, say all strawberry yoghurts, and
then consumers would most likely choose which flavours they wanted first,
and then choose which brand name they would most like for that particular
flavour.

American supermarkets display meats sorted into types – beef, chicken,

pork, etc. The next division is by cuts. In Australia, meats are arranged by
the way they might be cooked, and stores use more descriptive labels – a
ten-minute herbed beef roast. The result is that Australians buy a greater
variety of meats.

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The classification of products changes our choices. The compensation of

the set of final possibilities can have a subtle influence on choice. Thus,
brand choices can be influenced (without changing the actual preference
for a brand per se) merely by changing the content of the consideration
set.

We have already considered the decision-making process; and the post-

purchase behaviour. We shall consider the consumer decision rules in the
evaluation of products. These rules make complex decisions simpler for the
consumer.

We have to appreciate that so far, we have concentrated only on brand

choice/product choice decisions. But consumer behaviour goes beyond this.
We have to consider the experience of consuming and the sense of
pleasure derived either from consuming or possessing. Possessions link us
to the past. Some objects are treasured memories. Gifts are not ordinary
and routine purchases. They have a symbolic meaning. Some acquisitions
are self-gifts. They are a result of certain circumstances. To illustrate, a
hefty bonus at Deepavali time may be an occasion to celebrate and may
lead to many purchases.

11.7 RELATIONSHIP MARKETING

The emphasis these days is to retain the existing customers against the
onslaught of competition. Such customers who are loyal to a company and
its brands are in effect more profitable to marketers than new customers.
Relationship marketing is thus building long-term relationship and trust
between an organization and its customers for mutual benefit. It enhances
the consumer retention index. Considering that it costs several times more
to acquire a new customer than retaining an existing one, companies are
making all efforts to please the existing customers. This relationship
extends to the members of the distribution channel and suppliers. These
relationships are based on high-quality products, fair pricing, and effective
servicing.

Relationship marketing has been informally practiced by many a

shopkeeper. We know how a local grocery store in a small town is the
meeting place for the customers, who contact socially at this place.

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In a marketing transaction, satisfaction is derived from the product and

service offered, and the relationship between the marketer and customer.
The values thus flow from two sources – offerings and relationships. The
ultimate satisfaction is a subjective experience. A customer seeks
relationship values while shopping over and above transactional values.
When most of the offerings are at par in terms of quality and performance,
a customer values the personal equation which becomes the deciding
factor in buying.

In mass marketing, the relationship perspective is often lost. To restore the

relationship perspective, it is necessary to concentrate on building a one-
to-one relationship with an individual customer. All customers may not
qualify for such a long-term relationship arrangement. It is necessary to
understand what the customers want. In relationship marketing, customers
are the basis for differentiation in terms of their unique needs, rather than
the products. Strategically, it pays more to gain more business out of
existing customers by understanding their requirements.

In relationship marketing, customers collaborate with the business to

generate new business by providing feedback and ideas. Frequent
interactions with customers guide the company about how they think, what
they prefer and why and how they rate the company. These days when
physical products are almost the same, the service factor differentiates a
caring organization, practicing relationship marketing. Though it is difficult
to maintain consistency in the quality of services, it is possible to rectify
the damage of deficient services by providing superior service the next
time.

The database of customers maintained by computer-based information

systems greatly helps relationship marketing by providing us with the
profiles and needs of our customers accurately.

Building brands that establish a relationship between the customer and the
marketer is one of the key elements in relationship marketing, along with
other elements. Cadbury has an online group which interacts among them
by sharing new recipes using chocolate; the organization provides new
ideas/recipes, creates competition, sharing and more to unify a small
group of customers who believe so strongly in the Cadbury chocolate; thus,
they stick to it no matter what competition has to offer.

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If a customer repeats buying our product for a lifetime, it makes up a tidy

sum. HTA research has shown that the lifetime value of one cigarette
smoker is 1.1 lakh over ten years. It amounts to 7000 times the value of a
cigarette pack approximately. In relationship marketing, retaining the
customers becomes important, and desertions are monitored, and the
reasons for these desertions are studied. A sale is not just the end of the
transaction. It is just the beginning of a long relationship. In conventional
marketing, communication is one-way through mass media. In relationship
marketing, it is one-to-one communication. It develops an interactive
relationship.

Relationship marketing is practiced in the consumer durables sector by

after-sales contact with the consumers through phone operators,
technicians, franchisees, and dealers. Relationship marketing addresses
itself to boost entry-level sales and replacement demand. In the case of
fast-moving consumer goods, relationship marketing focuses on the
delivery aspect of the product attributes. Besides, there is a need to cater
to market niches. The service industry has a greater need for relationship
marketing. It is especially important to have the right kind of sales staff
and the organization’s internal relations with them. The internal relations
reflect on external relationships.

Distinction Between Transaction Marketing and Relationship

Marketing

Transaction Marketing Relationship Marketing

l Emphasis on a single sale l Emphasis on customer retention
l Product-oriented l Customer-oriented
l Short-term l Long-term
l Limited customer services l High customer services
l Limited customer contact l Extensive customer contact
l Quality is production-driven l Quality is everybody’s concern.

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Relationship Marketing: Synopsis

It is an attempt at a long-term relationship and is an exercise in brand

building, with the interaction between the brand and the consumer. It goes
beyond conventional marketing and seeks to establish an enduring
relationship with the consumers. It is not just one transaction. It is an
antithesis of sales promotion which is a short-term exercise – a temporary
incentive for people to buy.

To institute relationship marketing, we have to start with the data on

consumers. Mattel Toys has been able to create a phenomenal demand for
its Barbie dolls worldwide by setting up kiddie clubs. It is an interactive
club where children can emulate the role model. The new members of the
Club write to Barbie and she replies to them. It is fun learning. For
children, involvement levels and attachment to the characters and products
are extremely high.

On launch, Mattel Toys has built a 21,000 – strong database. The Club has
12,000 active members between the ages of 6 – 12. Every year, around
5,000 new members join, though there is a subscription fee of Rs 95/-.
They have been successful at developing a cult for Barbie. The Club
members are hardcore Barbie fans, and they correspond regularly with the
company. The relationship marketing exercise has helped the company sell
1.5 million Barbie dolls so far.

Parle Agro has also formed Frooti Funtoon Club targeted at youngsters to
carry over the brand appeal to the second generation. These members will
be parents twenty years hence and will still have a fondness for the brand.
The club organizes plant visits; animation film shows and quiz contests.
Birthday cards are sent. The scheme aims at building up a solid database
plus a consumer segment.

Hawkins Cookers trains its 500-odd dealers to deal with consumers.

Incentives are offered from time to time to keep the dealers on their toes.
Salesman pays visits to families and demonstrates cooking. The company
builds up a database on the guarantee card counterfoil returns. Miniature
Hawkins for children has been introduced to train them to use the cooker
and help the mother brand.

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Companies may offer schemes to their regular customers during sales and
special offers.

Service industries like banks and hotels can also make effective use of
relationship marketing. Communication here is more focused and effective.
Relationship marketing opens a two-way communication channel with
consumers. It has the potential to win their loyalty.

Activity C

List one product/service which is trying to retain and develop you as a

customer using the relationship marketing approach. Also, a list of which
initiatives are taken by them has given you a feeling that they are trying to
maintain and build a relationship with you.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

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11.8 WHAT HAVE YOU LEARNT – A SUMMARY

As a consumer, we cannot avoid decision and the freedom to choose is

every individual’s birthright. In what looks like the simplest decision that
we take, there are a series of considerations that play in our mind, like
whether to buy or not to buy and what to buy and what not to buy. As a
consumer, we exhibit different patterns of individual behaviour like
Economic Man, Passive Man, Cognitive Man or Emotional Man and these
influence our choice. The consumer decision is a process. The five stages in
the buying decision process are Problem recognition, Information seeking,
Evaluation of alternatives, Buying decision and Post-purchase evaluation.
The way a consumer behaves changes depending upon the nature or type
of buying. Three types of buyer behaviours are RR (Routinised response
behaviour), LPS (Limited problem-solving behaviour) and EPS (Extended
problem-solving behaviour). Various models have been developed to
explain the influences on buyer’s behaviour of purchase, like the Howard-
Sheth Model. The Post-purchase behaviour indicates to what extent the
purposes for the purchases have been met and motives achieved. The
technical term for a very wide gap between expectations and actual
performance is ‘post-purchase dissonance’. Schiffman-Kanuk model of
Consumer decision making takes care of the two types of individual
consumers – cognitive or problem solving and emotional. It has three
components – input, process, and output. Consumers handle risk in a
variety of ways. Their risk reduction strategies consist of information
search, brand loyalty, buying an established brand, buying from a reputed
retailer, buying the next expensive brand or model. It takes care of the two
types of individual consumers – cognitive or problem solving and
emotional. It has three components – input, process, and output.
Consumers handle risk in a variety of ways. Their risk reduction strategies
consist of information search, brand loyalty, buying an established brand,
buying from a reputed retailer, buying the next expensive brand or model,
and seeking confirmation about a buy. The emphasis these days is to retain
the existing customers against the onslaught of competition, and this is
termed as “Relationship Marketing”. Relationship marketing opens a two-
way communication channel with consumers. It has the potential to win
their loyalty.

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11.9 SELF ASSESSMENT QUESTIONS

1. What is a decision? Explain briefly.
2. What are the steps involved in the consumer decision-making process?
3. What are the four views of consumers under consumer decision making?
4. Explain the different types of purchase decision behaviours of
consumers.
5. What are the various models developed to explain the influences on a
buyer’s behaviour of purchase?
6. What are the four major sets of variables as per the Howard-Sheth
Model? Explain them.
7. Explain the salient aspects of the Schiffman-Kanuk Model of Consumer
Decision Making.
8. What is the distinction between transaction marketing and relationship
marketing?

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11.10 MULTIPLE CHOICE QUESTIONS

1. _____________ is the selection of an action from two or more

alternative choices. Fill in the blank.
(a) An evaluation
(b) A decision
(c) Purchasing
(d) Buying decision

2. In perfect competition economic scenario, we visualize ____________

who behaves rationally and takes rational decisions. Fill in the blank.
(a) an emotional man
(b) a cognitive man
(c) a passive man
(d) an economic man

3. The five stages in the buying decision process are 1. Problem

recognition, 2. Information seeking, 3. _____________, 4. Buying
decision and 5. Post-purchase evaluation. Fill in the blank.
(a) Evaluating alternatives
(b) Short-listing alternatives
(c) Information Evaluation
(d) None of the above

4. _____________ occurs when a new product category comes on the

scene. Here, extensive information is needed on both the product
category and the brand being made available. Fill in the blank.
(a) Reutilised response behaviour
(b) Limited problem-solving behaviour
(c) Extended problem-solving behaviour
(d) None of the above

5. _____________ is thus building of long-term relationship and trust

between an organization and its customers for mutual benefit. Fill in the
blank.
(a) Loyalty marketing
(b) Response marketing
(c) Reference marketing
(d) Relationship marketing

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Answers:

1. (b), 2. (d), 3. (a), 4. (c), 5. (d)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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Chapter 12
Consumer Protection in India
Objectives
By the end of this chapter, you should be able:
• To understand why consumers, need protection
• To understand the role of the consumer guidance society of India
• To understand the advantages and limitations of the consumer
movement as well as the rights of consumers
• To understand the nature of business malpractices and legislative
regulations in force to protect consumers
Structure:
12.1 Introduction
12.2 Consumers Need Protection – Why?
12.3 Consumer Guidance Society of India (CGSI)
12.4 Rights of Consumers
12.5 Consumer Movement
12.6 Consumerism and Consumers’ Rights and Responsibilities
12.7 Business Malpractices
12.8 Legislative Regulations
12.9 Consumer Protection Councils and Consumer Education
12.10 What have you Learnt – A Summary
12.11 Self-Assessment Questions
12.12 Multiple Choice Questions (MCQ)

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12.1 INTRODUCTION

A consumer is defined as someone who acquires goods or services for

direct use or ownership rather than for resale or use in production and
manufacturing.

As almost all the commercial organizations are well managed and well
versed with the market conditions, so certainly they are in a better
dominating position and use it to exploit the consumer. There are
numerous ways in which organizations exploit consumers – poor quality of
content, use of harmful chemicals, incorrect weights and measures
practices, price cartel, poor packaging, mixing, lack of information and in
more ways which are unimaginable.

Thus, to prevent exploitation of consumers, it was felt necessary to have a

consumer protection movement in a democratic country like India to allow
happy and healthy households.

In this chapter, we will try to get an overview of how consumers are

protected in our country.

What is Consumer Protection?

Consumer protection is a group of laws and organizations designed to

ensure the rights of consumers as well as fair trade, competition, and
accurate information in the marketplace. The laws are designed to prevent
businesses that engage in fraud or specified unfair practices from gaining
an advantage over competitors. They may also provide additional
protection for those most vulnerable in society. Consumer protection laws
are a form of government regulation, which aim to protect the rights
of consumers. For example, a government may require businesses
to disclose detailed information about products — particularly in areas
where safety or public health is an issue, such as food. Consumer
protection is linked to the idea of consumer rights, and to the formation of
consumer organizations, which help consumers make better choices in the
marketplace and get help with consumer complaints.

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Other organizations that promote consumer protection include government

organizations and self-regulating business organizations such as consumer
protection agencies and organizations, namely The Central Consumer
Protection Council, The State Consumer Protection Councils, State
Consumer Disputes Redressal Commission (SCDRC), National Consumer
Disputes Redressal Commission (NCDRC) and last but not the least,
Consumers Guidance Society of India.

Consumer interests can also be protected by promoting competition in the

markets which directly and indirectly serve consumers, consistent with
economic efficiency.

Consumer protection can also be asserted via non-government

organizations and individuals as consumer activism.

12.2 CONSUMERS NEED PROTECTION – WHY?

1. Since independence, India has been striving to develop and strengthen

its industrial base. However, in this pursuit of “self-sufficiency,” the
consumer has endured the use of sub-standard products and services,
adulterated foods, short weights & measures, spurious and hazardous
drugs, exorbitant prices, endemic shortages leading to black marketing
and profiteering, unfulfilled manufacture guarantees, and a host of other
problems.

2. Consumer protection is important for protecting consumers and instilling

confidence in different institutions within the country.

3. The laws can guarantee the safety and quality of the products and
services the consumers use. A country can only experience growth in
economic activities when consumers have trust in the producers, so the
producers must work to provide the assurance required to win the trust
of consumers.

4. Inexperienced consumers are more vulnerable to being sold poor quality

products and to illegitimate sales. Consumer protection laws consider
the challenges faced by such consumers to ensure that they are
protected from fraudulent sellers and unsafe products.

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5. In the service industry, the consumers interact with the producers

regularly when hiring their services. In this type of situation, there must
be an assurance that the person a consumer is dealing with is
legitimate. This creates an opportunity for the existence of middlemen
to serve as a link of trust between the consumer and the producer.

6. Consumers need to be protected from cons, misleading advertisements,

poor services, and unsafe goods.

7. Illiterate and poor consumers in India have no power to protect their

interest; thus, the government needs to come into the picture to do so.

8. In our country, where religious faith is misused to exploit gullible

individuals, the need is to make the consumer more aware and protect
his interest.

9. Consumers need protection from monopolistic and restrictive trade

practices.

Activity A

List the occasions/ incidences/purchases post which you felt you should
have taken the manufacturers to task for indulging in malpractices with
you. List at least 5 such incidences.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

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12.3 CONSUMER GUIDANCE SOCIETY OF INDIA (CGSI)

In the 1960s, exploitation of consumers by manufacturers and service

providers was rampant in India. A few monopolistic business houses
controlled the industry. In one infamous case, forty persons suffered from
dropsy and glaucoma after consuming groundnut oil adulterated with toxic
argemone oil. The victims did not get any justice and the culprits escaped
without punishment. This outrage energized nine women to organize a
movement to fight for consumer rights.

To resist the silent suffering of consumers, an organized movement to

protect consumer rights was the need of the hour. They formed
the Consumer Guidance Society of India (CGSI) to resist consumer
exploitation of all forms in 1966.

The Consumer Guidance Society of India (CGSI) is the first and foremost
consumer body of the country. CGSI, which was founded in 1966, is
entering its Golden Jubilee Year in 2015.

The Maharashtra State Government has entrusted CGSI to establish and

manage the Maharashtra State Consumer Helpline - 1800 22 22 62.

CGSI has been actively championing the rights of consumers for more than
40 years. The Society was founded by women activists in the year 1966.
They aimed to protect the rights of consumers.

The efforts of CGSI and other Consumer Organisations of our country bore
fruit when the Consumer Protection Act was enacted in the year 1986 and
the Consumer Courts were set up.

CGSI has reached out to lakhs of consumers and conducted workshops and
seminars on consumer awareness topics like food adulteration and
consumer protection.

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Objective of CGSI
• Develop a resource center at the State level which will be networked with
the National Resource Centre
• Develop alternate consumer disputes redressal mechanisms at the State
level
• Resolve maximum number of disputes out of court
• Promote the active participation of companies and service providers in
resolving consumer disputes
• Early resolution of complaints
• Reach out to rural consumers
• Capacity building of State level voluntary consumer organizations
• Provide service in regional language in addition to the English language
Role of CGSI
• Provide democratic and peaceful means to fight unfair practices
• Provide and facilitate accurate and relevant information
• Regularly test the quality of products offered to consumers in their
laboratories
• Facilitate co-operation with state-level agencies
• Ensure compliance with consumer protection laws
• Educate consumers about their rights and responsibilities under the law
• Use mass media to educate consumers
• Bring out publications and online content to guide individual consumers

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Consumer Awareness

Consumer awareness is about making the consumer aware of his/her

rights. It is a marketing term that means that consumers are aware of
products or services, their characteristics and other marketing P’s (place
to buy, price, and promotion). Though the first consumer movement began
in England after the Second World War, a modern declaration about
consumers rights was first made in the United States of America in 1962,
where four basic consumer rights (choice, information, safety and to be
heard) were recognized. Ralph Nadar, a consumer activist, is considered
the father of the consumer movement. March 15 is now celebrated
as World Consumer Rights Day. The United Nations in 1985 adopted certain
guidelines to achieve the objectives of maintaining protection for
consumers and to establish high-level ethical conduct for those engaged in
the production and distribution of goods and services.

Consumer Protection

Laws are designed to ensure fair trade competition and a free flow
of truthful information in the marketplace. The laws are designed to
prevent businesses that engage in frauds or specified unfair practices from
gaining an advantage over competitors and may provide additional
protection for the weak and those unable to take care of themselves.
Consumer Protection laws are a form of government regulation that aim to
protect consumers.

Concept of Consumer Protection

Consumer protection means safeguarding the interest and rights of

consumers. In other words, it refers to the measures adopted for the
protection of consumers from unscrupulous and unethical malpractices by
the business and to provide them with speedy redressal of
their grievances. The most common business malpractices leading
to consumer exploitation are: (a) Sale of adulterated goods, i.e., adding
something inferior to the product being sold, (b) Sale of spurious goods,
i.e., selling something of little value instead of the real product, (c) Sale of
sub-standard goods, i.e., sale of goods which do not conform to the
prescribed quality standards, (d) Sale of duplicate goods, (e) Use of false
weights and measures leading to underweight products, (f) Hoarding and
black-marketing leading to scarcity and rise in prices. Charging more than

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the Maximum Retail Price (MRP) fixed for the product, (h) Supply of
defective goods, (i) Misleading advertisements, i.e., advertisements falsely
claiming a product or service to be of superior quality, grade or standard,
(j) Supply of inferior services, i.e., quality of service lower than the quality
agreed upon.

12.4 RIGHTS OF CONSUMERS

To safeguard the consumer interest, six consumer rights were initially

envisioned by consumer rights activists, namely:
1. Right to Safety means safeguarding against goods that are hazardous
to life and properties.
2. Right to Information means that consumers have the right to be
informed regarding the price, quality, quantity, etc., of the products.
3. Right to Choose means that consumers should be provided with a wide
variety of goods to choose from.
4. Right to be Heard means the right of the consumer’s complaints to be
heard.
5. Right to Redress means that the consumers have the right to seek
redressal regarding their complaint in the forums.
6. Right to Consumer Education The right of the consumers to be
educated about their rights.

1. Right to Safety

According to the Consumer Protection Act, 1986, the consumer right is

referred to as the ‘right to be protected against marketing of goods and
services that are hazardous to life and property. It applies to specific areas
like health care, pharmaceuticals, and food processing. This right is spread
across the domain having a serious effect on the health of consumers or
their wellbeing, viz., automobiles, housing, domestic appliances, and travel
etc. It is estimated that every year thousands or millions of citizens of
India are killed or seriously injured by immoral practices by doctors,
hospitals, pharmacies, and the automobile industry. Still, the government
of India, known for its callousness, does not succeed in acknowledging this
fact or making a feeble effort for maintaining statistics of the mishaps.

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2. Right to Information
The right to information is defined as ‘the right to be informed about the
quality, quantity, potency, purity, standard and price of goods or services,
as the case may be to protect the consumer against unfair trade practices
in the Consumer Protection Act of 1986. In the marketplace of India,
consumers get information in two ways namely, advertising and word of
mouth, however, these sources are considered to be unreliable but still,
word of mouth is quite common here. Because of this, Indian consumers
hardly have complete information for assessing the true value, safety,
suitability, and reliability of any product. Usually, hidden costs, lack of
suitability, quality problems and safety hazards can be found only after the
purchase of the product.

There are other aspects about information that covers labelling, safe
practices, pricing, unit of measurement, harmful/side effects, where
consumers can contact for grievance redressal if any.

3. Right to Choose
The definition of Right to Choose as per the Consumer Protection Act 1986
is ‘the right to be assured, wherever possible, to have access to a variety
of goods and services at competitive prices. For regulating the
marketplace, there is just one factor required and that is competition. The
existence of cartels, oligopolies and monopolies prove to be
counterproductive to consumerism. Since the Indian consumers come from
a socialistic background, the tolerating of the monopolistic market is found
in their blood. It is seldom seen that people want to switch the power
company, in the times when they have a blackout at home. It is interesting
to know that even micro markets like fish vendors in some cities are known
to collude and discourage consumers’ bargaining power. No matter what
size or form, or span, but a collusion of various companies which sell a
similar kind of product is unethical or say less legal. It can be estimated
that India has to stride for about 20 more years for empowering its citizens
fully in this regard.

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4. Right to be Heard
As stated in the Consumer Protection Act, 1986, ‘the right to be heard and
to be assured that the consumer's interests will receive due consideration
at appropriate forums is the definition of the right to be heard. This right
helps to empower the consumers of India for putting forward their
complaints and concerns fearlessly and raising their voice against products
or even companies and ensure that their issues are taken into
consideration as well as handled expeditiously. However, to date, the
Indian government has not formed even one outlet for hearing the
consumers or their issues to be sorted out.

Various attempts are made by the government for empowering the citizens
with this right, and it is believed that about 10-15 years more are required
for the accomplishment of this goal.

5. Right to Redress
The right to seek redressal against unfair trade practices or restrictive
trade practices or unscrupulous exploitation of consumers is referred to as
the right to redressal according to the Consumer Protection Act, 1986. The
government of India has been a bit more successful concerning this right.
Consumer courts like District Consumer Disputes Redressal Forums at the
district level, State Consumer Disputes Redressal Commissions and
National Consumer Disputes Redressal Commissions have been
incorporated with the help of the Consumer Protection Act. These
consumer grievance redressal agencies have fiduciary as well as
geographical jurisdictions which address consumer cases between
businesses and consumers.

6. Right to Consumer Education

The right of every Indian citizen to have education on matters regarding
consumer protection as well as about her/his right is regarded as the last
right provided by the Consumer Protection Act, 1986. The right makes sure
that the consumers in the country have informational programs and
materials which are easily accessible and would enable them to make
purchasing decisions that are better than before. Consumer education
might refer to formal education through college and school curriculums as
well as consumer awareness campaigns being run by both, non-
governmental and governmental agencies. Consumer NGOs, having a little
endorsement from the government of India, basically undertake the task of
ensuring consumer rights throughout the country. India is found to be 20

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years away from giving this right that gives power to the common
consumer.

Activity B

1. For each of the consumers' rights mentioned above, indicate one

product/service in which you feel it may need to be used.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

12.5 CONSUMER MOVEMENT

The terms "consumer movement" and "consumerism" are used as

equivalent terms in much writing. Consumer movement refers to
advancing consumer protection and can include legislators passing
consumer protection laws, regulators policing these laws, educators who
teach consumer policy, product testers who measure the extent to which
products meet standards, cooperative organizations which supply products
and services mindfully of consumer interest, as well as the consumer
movement itself. The term "consumer movement" refers to only non-profit
advocacy groups and grassroots activism to promote consumer interest by
reforming the practices of corporations or policies of the government, so
the "consumer movement" is a subset of the discipline of “consumerism".

Mahatma Gandhi promoted the idea that businesses have the role of a
trustee in being responsible towards customers, workers, shareholders,
and their community. In particular, Gandhi said that "A customer is the
most important visitor on our premises. He is not dependent upon us. We
are dependent upon him. He is not an interruption in our work - he is the
purpose of it. We are not doing him a favour by serving him. He is doing us
a favour by allowing us to serve him". United States consumer
advocate Ralph Nader called Gandhi "the greatest consumer advocate the
world has seen" for advancing the concept that commercial enterprise
should serve the consumer and that the consumer should expect to be
served by businesses. Vinoba Bhave and Jayaprakash Narayan, two great
proponents of Gandhi's philosophy, and V. V. Giri and Lal Bahadur Shastri,
contemporary Indian president and prime minister, similarly expected the
business community to regulate itself as an expression of responsibility to
contribute to society. These ideas were developed by some business

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leaders. In July 1966, in Bombay, some people founded the Fair-Trade

Practice Association, which was later renamed the Council for Fair Business
Practice. This is now seen as a sincere effort towards promoting business
self-regulation, despite consumer activists' criticism that self-regulation
would not provide sufficient protection to consumers.

From the perspective of consumer activism, the Planning

Commission backed the foundation of the Indian Association of Consumers
in 1956 in Delhi to be a national base for consumer interests. For various
reasons, it was not effective in achieving its goals. Other organizations
were established in 1960 in various places in India, but none were effective
in achieving community organization. Leading on past failures, in Bombay
in 1966, nine female homemakers founded the Consumer Guidance Society
of India (CGSI) which remains one of India's most important consumer
organizations. The most powerful consumer organization in India is the
Consumer Education and Research Centre (CERC), founded in 1978
in Ahmedabad as part of the "social action litigation movement". At that
time in society, courts started recognizing social workers and public
interest groups as consultants on behalf of individuals or classes of people
whose rights had been violated but who could not easily speak for
themselves. Since its founding, CERC has become among the most
successful consumer organizations of the developing world in terms of its
achievements of litigating on behalf of consumers. The Consumer
Protection Act of 1986 was mostly a result of intensive lobbying by CERC
and CGSI.

In 1991, the economic liberalization in India radically changed the Indian

marketplace by opening India to foreign trade and foreign investment.

The basic objectives of consumer movement worldwide are as follows:

• To provide an opportunity to the consumers to buy intelligently
• Recognition of reasonable consumer requests
• Protection against fraud, misrepresentation, unsanitary and unjust
product
• Participation of consumer representatives in the management of aspects
affecting consumers
• Promoting consumers’ interests

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The basic reasons for the development of consumer movement in India are
different from those in the West. In western countries, the consumer
movement was the result of post-industrialization affluence - for more
information about the merits of competing products and to influence
producers, especially for new and more sophisticated products. In India,
the basic reasons for the consumer movement have been:
• Shortage of consumer products
• Inflation
• Adulteration
• Black Market
• Lack of product choices due to lack of development in technology

The thrust of consumer movement in India has been on availability, purity,

and prices. The factors which stimulated the consumer movement in recent
years are:
• Increasing consumer awareness
• Declining quality of goods and services
• Increasing consumer expectations because of consumer education
• Influence of the pioneers and leaders of the consumer movement
• Organized effort through consumer societies

Advantages of Consumer Movement

1. It helps consumers from being exploited through unfair, restrictive,

monopolistic other harmful trade practices.
2. Consumers feel protected and buy goods with the trust of not being
cheated.
3. Consumers become empowered to be a watchdog for their interest.
4. Stops multilayered middleman system and helps to get more benefits
directly to producers, especially Agri products.
5. Consumers are protected in adverse business conditions.
6. It makes the government also answerable to its citizens when their trust
gets broken.

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7. It’s a force to reckon with by business houses that make them think
twice before indulging in any malpractices.
8. It facilitates consumer education, so they become their protector
against any malpractices.
9. It creates public opinion against unfair practices.
10.It allows for the formation of consumer grievance handling cells,
consumer co-operatives, fair price shops, fair business councils,
distribution of consumer goods for self-services and self-helpers.

Limitations of Consumer Movement

Due to numerous reasons, consumer movement in India has remained

lukewarm. We highlight few limitations of this movement as follows:
1. Low level of literacy, general ignorance, and fear of being punished by
strong people keeps consumers away.
2. Poverty is another reason which results in helplessness and fear to
complain.
3. Awareness and action in rural areas are very low and poor.
4. Concerned authorities themselves are not free to deal with malpractices
due to various reasons.
5. Interferences from big corporate houses and political parties.
6. Consumers’ attitude has also been callous and indifferent towards their
rights and responsibilities.
7. Consumer movement not getting requisite resources, expertise, and
government support.
8. Poor and slow, dragging legal system of our country makes penalization
next to impossible.
9. Multi-agency hierarchy also makes coordination among them difficult.

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12.6 CONSUMERISM AND CONSUMERS’ RIGHTS and

RESPONSIBILITIES

What is consumerism?

Consumerism is a social as well as economic order which encourages the

buying of goods and services in ever-greater amounts. The newly emerging
middle class coming up at the threshold of the twentieth century is coming
to full fruition by the twentieth-century end through the globalization
process.

At some places, the term "consumerism" refers to the consumerists’

movement, consumer activism or consumer protection which seeks to
defend and inform consumers by having the required practices such as
honest advertising and packaging, product guarantees, and enhanced
standards of safety. In this regard, it is a movement or an array of policies
having a mission of regulating the products, methods, services and
standards of sellers, manufacturers, and advertisers in the buyers’
interests.

As per economics, consumerism means economic policies emphasizing

consumption. In a sense, it is believed that consumers are free to make
choices and should dictate society’s economic structure.

The term "consumerism" had been first used in the year 1915 and was
referred to as "advocacy of the rights and interests of consumers" defined
in the Oxford English Dictionary, but here in this article the term
"consumerism" means the sense which was first used in 1960, i.e.,
"emphasis on or preoccupation with the acquisition of consumer goods.

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Consumer Rights
a. It is referred to as the Right to Safety and Protection from hazardous
goods or services.
b. The Right to be Informed and Protected against deceitful, fraudulent or
information that misleads, and have access to correct information as
well as facts required to go for informed choices along with decisions.
c. The Right to Choose and have easy access to different types of products
and services offered at competitive and fair prices.
d. The Right to be Heard helps to express and represent the interests of
the consumer in the making of political and economic decisions.
e. The Right to Redress and getting compensation for misrepresentation,
unsatisfactory services or shoddy goods is important for consumers.
f. The Right to Consumer Education helps the consumer to become
informed and capable of functioning properly in the market.
g. The Right to a Healthy Environment enhances the quality of life and
gives protection from environmental issues for the present as well as
future generations.

Consumer Responsibilities
a. Consumer responsibilities refer to the responsibility of having awareness
of the quality and safety of goods and services while purchasing.
b. The responsibility to collect information available about a product or
service and to update oneself with changes or innovations taking place
in the market.
c. The responsibility to think as well as make choices independently and
consider the immediate needs and wants.
d. The responsibility to speak out, and to inform manufacturers and
governments of needs and wants.
e. The responsibility to complain or inform businesses along with other
people about discontentment with a product or service in an honest
way.
f. The responsibility of being an Ethical Consumer and be fair and not
engage in malpractices that make all consumers pay.

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12.7 BUSINESS MALPRACTICES

A business, also known as an enterprise or a firm, is an organization

involved in the provision of goods, services, or both to consumers.
Businesses are prevalent in capitalist economies, where most of them are
privately owned and provide goods and services to customers in exchange
for other goods, services, or money. In business, consumer satisfaction is
the overriding consideration and not the profit. Still, profit motivation not
checked by any other consideration leads to many malpractices. These
malpractices are harmful to their customers and the community at large.

Malpractice refers to negligence or misconduct by an organization to gain,

using unlawful actions, thus depriving the consumer the full value for
money paid and/or causing injury or health issues, inconvenience, mental
trauma and not offering support when needed. Business malpractices touch
on aspects like product quality/service standards, pricing of the product,
distribution and availability of the product, packaging of the product, and
truthful advertising. Other malpractices include wrongly charging applicable
taxes, tax evasion, violation of fiscal laws like Income Tax, FERA, hoarding,
adulteration, exploitation, unfair accounting standards and many more.

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Various malpractices mentioned above could be happening due to a

monopolistic situation, restrictive environment, and being unfair to
consumers. Eventually, the consumer pays the price for direct or indirect
malpractices.

We will discuss in brief the usual malpractices going on in any business:

Usual Malpractices

1. Adulteration: Adulteration is an addition of another substance to a

food item to increase the quantity of the food item in the raw form or
prepared form, which may result in the loss of the actual quality of the
food item. These substances may be other available food items or non-
food items. Among meat and meat products some of the items used to
adulterate are water or ice, carcasses, or carcasses of animals other
than the animal meant to be consumed.

Adulteration is done to reap more profits at the cost of consumers.

It is not difficult to detect adulteration in your food items. Many self-

detection tests can be performed by a consumer at home. However, lack
of knowledge, awareness, and initiative on the part of consumers are
allowing these to continue unabated which has crossed all limits, thereby
affecting the health of consumers – use of carcinogenic substances,
allergies, skin rashes, loss of sight, damage to organs and more.

Adulteration is also detectable in any laboratory. Under the Food

Adulteration Prevention Act, authorities have the rights to check the
quality of the goods sold but its implementation is poor – lack of
infrastructure, corruption, and judicial loopholes. Dealers are not fearful
as they know that this law has many loopholes and does not come under
criminal liability, thereby allowing manipulators to continue with such
malpractices.

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2. Lack of Safety Measures and Quality Control: We pay a specific

price, many times higher than other similar products just because we
want to get a good quality product that is safe to use. We expect that
we must get quality and safety as expecting anything else is cheating.
Quality is a result of a businessman’s attitude and the process he
follows. Conscious businessmen follow practices incorporating quality
right from the designing stage to acquiring raw materials,
manufacturing, process, packaging, distribution and storage, and
display at the retailer’s end (famous Cadbury Chocolate fungus case
leading to widespread adverse publicity thereby compelling the
organization to redesign their packaging and storage process at the
retailer’s end). Organisations thus are supposed to have proper quality
control. This is possible by implementing Quality Control Techniques and
Statistical Control Charts, testing the laboratory, increasing the intensity
of checking, followed by regular quality audits.

However, quality being a subjective term, the Bureau of India Standards

(BIS – Erstwhile ISI) has laid down the basic quality standards for any
manufacturer to follow to safeguard the interest of the common
consumer. All manufacturers must display that they comply with BIS
standards. Consumer awareness is essential for raising quality standards
of goods offered to them.

3. Short Weights and Measures: Consumers are often cheated on the

weight of the product being sold to them – they do not get what they
are supposed to get. Also, they are cheated in terms of units of
measurement, i.e., offering liquids in kgs (Oil), or under the pretext of
normal loss – cement loss due to jute bag, or gross or net weight, etc.

To provide a coherent scheme and uniform standards of Weights &

Measures, the first Act, namely Standards of W&M Act, 1956 was
enacted based on the metric system and the international system of
units. However, lack of awareness, a poor implementation by responsible
authorities and a lax judiciary system has allowed this malpractice to
continue.

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4. Misleading Advertising: There are advertisements at times making

very tall claims. This happens either in the financial sector – double
money in less time, or the medical field – cure for cancer or personal
care products – guaranteed fairness and likewise such as before and
after effect, fertility, hair growth for bald people. Most often they fail to
deliver the claims made. Thus, they sell their product by duping
customers.

5. Black Marketing and Profiteering: When goods are sold at a much

higher price (unofficial premium) for getting higher profit, providing a
product in a specific condition (cold drinks provided to you cold at a
premium), using an adverse business condition to one’s advantage
(scarcity of onion), or satisfying a wide unfulfilled demand (once upon a
time scooter were black marketed). Many times, a situation is created
for black marketing e.g.: hoarding to create scarcity, thereby charging
extra.

6. Illegal Trading: Doing business by contravening one or more legal

stipulation specific to a trade or country – gambling, smuggling, FERA,
COFEPOSA violations, FOREX manipulation, using tax haven countries
for money laundering etc. is considered as illegal trading.

Regulations of Malpractices

A businessman starts a business to earn from consumers. Somewhere

down the line, the lure for money makes him forget the customers and he
starts indulging in malpractices with them, forgetting that dissatisfied
customers will not come back to him.

He does the business using resources available for the masses, support of
labour and infrastructure made for the common man. Thus, a businessman
is not supposed to be anti-social but a generous social worker. He can be a
social worker by providing customers with genuine products, pay all taxes,
labour welfare, social welfare, return to stakeholders, payment to
suppliers, vendors, channel partners and more. Add to this, complexities
with issues like environmental protection, promotion of products with
harmful effects, etc.

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Business malpractices will lead to customers’ post-purchase dissatisfaction,

thus no-repeat purchase and bad word of mouth adversely impacting the
business.

Business malpractices also ruin consumers monetarily, physically, and

psychologically. It makes customers worse off thus how can you be better
off?

For such thoughtful reasons and the overall gain of the country and
economy, every businessman must stop doing business malpractices.

12.8 LEGISLATIVE REGULATIONS

In this section, we will take a snapshot of various legislations being

developed to protect consumers. These regulations operate either at the
trade level, at the consumer level or the government level. Government
ideally needs to be pro-active (formation of legislation to protect against
online trading) or be reactive but can’t be a silent spectator to ongoing
malpractices. The Indian government has formed various legislations to
protect the interest of Indian consumers. Important legislations of the
Indian government are given below in brief:

1. Weights and Measures Act, 1958 (as amended in 1967): To

provide a coherent scheme and uniform standards of Weights &
Measures, the first Act, namely Standards of W&M Act, 1956 was
enacted based on the metric system and the international system of
units. It has introduced uniform weights and measures in the country
(The Metric System). Wrong/short weights are now a punishable
offence. Inspectors visit the marketplace and check weights and
measures. Surprise checks are also done, offences are registered
against defaulters. This legislation needs vigorous implementation
efforts in India.

2. The Prevention of Food Adulteration Act (PFA), 1954: This Act was
developed to protect the health of the public by prohibiting adulteration
of foods. Food product companies must adhere to its provision to avoid
being considered as adulterating the food being sold by them. As per
this Act, no one is supposed to manufacture, sell, store, and distribute
any adulterated or misbranded foods. Violation of this law attracts both
civil and criminal liabilities. Salient aspects are covered below:

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Objectives:
• To protect the public from poisonous and harmful foods
• To prevent the sale of substandard foods
• To protect the interests of consumers by eliminating fraudulent practices

Meaning of Adulterant: Any material which is or could be employed for

adulteration.

Definition of Food: Any article used as food or drink for human

consumption other than drugs and water and includes:
• Any article which ordinarily enters into or is used in the composition or
preparation of human food,
• Any flavouring matter or condiments, and
• Any other article which the Central Government may have regarded to its
use, nature, substance, or quality, and is declared by notification in the
official gazette as food for this Act.

Concept of Adulteration

An article of food shall be deemed to be adulterated:

a. If the article sold by the vendor is not of nature, substance or quality
demanded by the purchaser.
b. If the article contains any other substance which affects the substance
or quality thereof. If any inferior or cheaper substance has been
substituted wholly or in part for the article to affect the nature,
substance, or quality of the product.
c. If any constituent of the article has been wholly/partly extracted to
affect the quality.
d. If the article has been prepared, packed, or kept under unsanitary
conditions whereby it has become contaminated or injurious to health.
e. If the article consists wholly or in part of any filthy, putrefied, rotten,
decomposed, or diseased animal or vegetable substance or is insect-
infested or is otherwise unfit for human consumption.
f. If the article is obtained from a diseased animal.

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g. If the article contains any substance which renders it injurious to health.

h. If the container of the article is composed, whether, wholly or in part of
any poisonous or deleterious substance which renders its contents
injurious to health.
i. If any colouring matter other than that prescribed in respect thereof is
present in the article or if the amounts of the prescribed colouring
matter which is present in the article are not within the prescribed
limits.
j. If the article contains any prohibited preservative or permitted
preservative over the prescribed limits.
k. If the quality or purity of the article falls below the prescribed limits of
variability which renders it injurious to health.
l. If the quality or purity of the article falls below the prescribed standard
or its constituents are present in quantities not within the prescribed
limits of variability which renders it injurious to health.

Sale of Certain Admixture Prohibited

Sale by himself or by his servant or agent is prohibited in case of:

a. Cream which has not been prepared exclusively from milk or which
contains less than 25% of milk fat
b. Milk which contains added water
c. Ghee which contains any added matter not exclusively derived from
milk fat
d. Selling skimmed milk as whole milk
e. Mixture of two or more edible oils as an edible oil
f. Vanaspati to which ghee or any other substance has been added
g. Any article of food which contains any artificial sweetener beyond the
prescribed limit
h. Turmeric containing any foreign substance
i. Mixture of coffee and other substance except for chicory
j. Dahi or curd not made out of milk

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k. Milk or milk products containing constituents other than that of milk

Certain other related legislations are:

(a) Drugs and Cosmetics Act, 1940
(b) Drugs and Magic Remedies Act, 1954
(c) Dangerous Drugs Act (DDA)
(d) Poisons Act, 1919
(e) Narcotic and Psychotropic Substances Act

3. The Drugs and Magic Remedies (Objectionable Advertisement)

Act, 1954: An Act to control the advertisement of drugs in certain
cases, to prohibit the advertisement for certain purposes of remedies
alleged to possess magical qualities and to provide for matters
connected therewith. No person shall take any part in the publication of
any advertisement referring to any drug that suggests or is calculated to
lead to the use of that drug for – a) the procurement of miscarriage in
women or prevention of conception in women; or b) the maintenance or
improvement of the capacity of human beings for sexual pleasure; or c)
the correction of menstrual disorder in women; or d) the diagnosis,
cure, mitigation, treatment or prevention of any disease such as
epilepsy, disorder or a condition specified in the schedule. It also
prohibits advertisements making false claims for the drug. It imposes
both civil and criminal liabilities for the contravention of its provisions.

4. The Legal Metrological Act 2009 (Erstwhile the Packaged

Commodities Order, 1975): An Act to establish and enforce standards
of weights and measures, regulate trade and commerce in weights,
measures and other goods which are sold or distributed by weight,
measure, or a number and for matters connected therewith or incidental
thereto. "Pre-packaged commodity" means a commodity which without
the purchaser being present is placed in a package of whatever nature,
whether sealed or not, so that the product contained therein has a pre-
determined quantity”. As per this legislation, it is illegal to manufacture,
pack, sell, import, distribute, deliver, offer, expose, or possess for sale
any pre-packaged commodity unless the package is in such standard
quantities or number and bears thereon such declarations and
particulars as prescribed in the Packaged Commodities Rules – product

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identity, importer/manufacturer/repackers identity, net weight, date of

packaging, date of expiry, MRP (incl of taxes). This also covers the
display of retail prices by retailers.

5. The Essential Commodities Act, 1955: The Essential Commodities

Laws are socio-economic penal legislations for the control over the
production, supply, distribution and trade and commerce therein. These
are basic necessity articles for survival and meaningful sustenance
which means and includes medicinal drugs, foodstuff, petroleum
products, fertilizers, hank yarn made from cotton, raw jute, and jute
textiles, etc., as are listed to schedule provided in section 2A of the
Essential Commodities Act, 1955, at present containing 15 items. The
Law relating to essential commodities controls the production, supply,
and distribution, etc., of the commodities, the paramount objective of
this being to secure equitable distribution and their availability at a fair
price and not being black marketed under any circumstances. Any
attempt to hamper the movement of such commodities also calls for
criminal proceedings.

6. The Monopolies and Restrictive Trade Practices (MRTP) Act

1969: An Act to provide that the operation of the economic system
does not result in the concentration of economic power to the common
detriment, for the control of monopolies, for the prohibition of
monopolistic and restrictive trade practices and matters connected
therewith or incidental thereto.

A monopolistic trade practice is one, which has or is likely to have the

effect of:
a. maintaining the prices of goods or charges for the services at an
unreasonable level by limiting, reducing, or otherwise controlling the
production, supply or distribution of goods or services;
b. unreasonably preventing or lessening competition in the
production, supply or distribution of any goods or services whether or
not by adopting unfair methods, or unfair or deceptive practices;
c. limiting technical development or capital investment to the
common detriment;
d. deteriorating the quality of any goods produced, supplied, or
distributed; and

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e. increasing unreasonably-
❖ The cost of production of any good; or
❖ Charges for the provision or maintenance of any services; or
❖ The prices for sale or resale of goods; or
❖ The profits derived from the production, supply or distribution of any
goods or services.

A monopolistic trade practise is deemed to be prejudicial towards public

interest unless it is expressly authorized under any law or the Central
Government permits to carry on any such practice. MRTP Commission
not only monitors monopolistic and restrictive trade practices but also
accepts consumer complaints in such matters.

7. ISI and AGMARK: ISI Certification Mark Act, 1952 is for ensuring
standards of products and AGMARK is standards for agricultural
products to help, guide and protect consumers. ISI is now known as the
Bureau of Indian Standards (BIS).

8. The Indian Sale of Goods Act, 1930: The Sale of Goods Act is a kind
of Indian Contract Act. It is a contract whereby the seller transfers or
agrees to transfer the property in the goods to the buyer for a price.
This legislation governs the transactions of sales and purchases. It
stimulates the formation of contract terms, effects of the contract,
performance of the contract, what is a breach of contract, rights of
unpaid sellers against the goods. A very important aspect of this is that
it divides the terms of sales into conditions and warranty. Conditions
mean essential aspects needed to be complied with. Warranty stipulates
what is entitled as damages. The act proclaims the principle of ‘Caveat
Emptor’ (Buyer Beware), which puts the onus of judicious selection on
the buyer. Overall, this act lays down the rules for the performance of
the contract of sale.

9. The Trade and Merchandise Marks Act, 1958: This act influences
the development of uniquely identifiable trademarks (logos, designs,
symbols) and defines what a deceptively similar trademark is. It thus
guides the product and advertising decisions of the company,
particularly about the trade and merchandise marks. Individuals/
organizations need to register their trademark under this Act. It allows

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its holder an exclusive right to use the trademark for a maximum period
of seven years. An infringement of the rights of the trademark holder
attracts injunctions, damages and more such penalties. The holder can
thus claim huge damages for the wrong use of his trademark.

10.Immoral Representation of Women in Advertising Act: This Act

prevents the portrayal of women in any advertisement or
communication in any immoral manner.

Over and above these, there are several other legislations formed to help
consumers by preventing malpractices.

Curbing of Unfair Practices

An unfair trade practise means a trade practice, which, to promote any

sale, use or supply of any goods or services, adopts unfair methods, or
unfair or deceptive practices.

Unfair practices may be categorized as under:

1. FALSE REPRESENTATION

The practice of making any oral or written statement or representation

which:
i. Falsely suggests that the goods are of a particular standard quality,
quantity, grade, composition, style, or model;
ii. Falsely suggests that the services are of a particular standard,
quantity, or grade;
iii. Falsely suggests any re-built, second-hand renovated, reconditioned,
or old goods as new goods;
iv. Represents that the goods or services have sponsorship, approval,
performance, characteristics, accessories, uses or benefits which they
do not have;
v. Represents that the seller or the supplier has a sponsorship or approval
or affiliation which he does not have;
vi. Makes a false or misleading representation concerning the need for, or
the usefulness of, any goods or services;

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vii.Gives any warranty or guarantee of the performance, efficacy, or

length of life of the goods, that is not based on an adequate or
proper test;
viii.Makes to the public a representation in the form that purports to be-
❖ a warranty or guarantee of the goods or services,

❖ a promise to replace, maintain or repair the goods until it has

achieved a specified result.

If such representation is materially misleading or there is no reasonable

prospect that such warranty, guarantee or promise will be fulfilled
❖ Materially misleads about the prices at which such goods or
services are available in the market; or
❖ Gives false or misleading facts disparaging the goods, services, or
trade of another person.

2. FALSE OFFER OF BARGAIN PRICE

Where an advertisement is published in a newspaper or otherwise,

whereby goods or services are offered at a bargain price when in fact there
is no intention that the same may be offered at that price, for a reasonable
period or reasonable quantity, it shall amount to an unfair trade practice.

The ‘bargain price’, for this purpose means–

a. The price stated in the advertisement in such a manner as suggests that
it is lesser than the ordinary price, or
b. The price which any person coming across the advertisement would
believe to be better than the price at which such goods are ordinarily
sold.

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3. FREE GIFTS OFFER AND PRIZE SCHEMES

The unfair trade practices under this category are:

a. Offering any gifts, prizes, or other items along with the goods when the
real intention is different, or
b. Creating the impression that something is being offered free along with
the goods, when in fact the price is wholly or partly covered by the price
of the article sold, or
c. Offering some prizes to the buyers by conducting any contest, lottery or
game of chance or skill, with the real intention to promote sales or
business.

4. NON-COMPLIANCE OF PRESCRIBED STANDARDS

Any sale or supply of goods, for use by consumers, knowing or having
reason to believe that the goods do not comply with the standards
prescribed by some competent authority, in relation to their performance,
composition, contents, design, construction, finishing or packing, as are
necessary to prevent or reduce the risk of injury to the person using such
goods, shall amount to an unfair trade practice.

5. HOARDING, DESTRUCTION, ETC.

Any practice that permits the hoarding or destruction of goods, or refusal
to sell the goods or provide any services, to raise the cost of those or other
similar goods or services, shall be an unfair trade practice.

6. INQUIRY INTO UNFAIR TRADE PRACTICES

The Commission may inquire into any unfair trade practice:

a. Upon receiving a complaint from any trade association, consumer, or a
registered consumer association, or upon a reference made to it by the
Central Government or State Government.
b. Upon an application to it by the Director-General or
c. Upon its knowledge or information.

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Restrictive Trade Practices

A restrictive trade practice is a trade practice that

a. Prevents, distorts, or restricts competition in any manner; or
b. Obstructs the flow of capital or resources into the stream of production;
or
c. Which tends to bring about manipulation of prices or conditions of
delivery or affects the flow of supplies in the market of any goods or
services, imposing on the consumers' unjustified cost or restrictions.

“Restrictive trade practice” means “any trade practise which requires a

consumer to buy, hire or avail of any goods, or as the case may be,
services, as a condition precedent for buying, hiring or availing of other
goods or services”.

An analysis of the above definition reveals that where the sale or purchase
of a product or service is made conditional on the sale or purchase of one
or more other products and services, it amounts to restrictive trade
practice.

Technically, this type of arrangement is called ‘tie-up sales’ or ‘tying

arrangement’. The effect of such an arrangement is that a purchaser is
forced to buy some goods or services which he may not require along with
the goods or services which he wants to buy. Thus, where a buyer agrees
to purchase product ‘X’ upon a condition that he will also purchase product
‘Y’ from the seller, the sale of product ‘Y’ (the tied product) is tied to the
sale of product ‘X’ (the tying product).

The buyer has to forego his free choice between competing products. This
results in neutralizing healthy competition in the ‘tied’ market.

Example: A gas distributor insists his customers buy a gas stove as a

condition to give gas connection. It was held that it was a restrictive trade
practice - Re. Anand Gas RTPE 43/1983 (MRTPC).

However, where there is no such precondition and the buyer is free to take
either product, no tying arrangement could be alleged even though the
seller may offer both the products as a single unit at a composite price.

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Example: A is a furniture dealer. He is selling Sofa at Rs. 20,000 and Bed

at Rs. 15,000. He has an offer that whoever buys the Sofa and the Bed
together, will be charged Rs. 30,000 only. Here the choice is open to the
customer to buy the products as single or composite. This is not a
restrictive trade practice.

Inquiry into Restrictive Practices

The Commission may inquire into any restrictive trade practice

1. Upon receiving a complaint from any trade association, consumer, or a
registered consumer association
2. Upon a reference made to it by the Central or State Government or
3. Upon its knowledge or information,

Some of the Restrictive Trade Practices

When there is less competition, the players in the market will be able to
dominate it and fix high prices for their goods and services. It works to the
company's advantage that there is no or very little competition. Where
there is competition the companies may act to get rid of rivals. They may
work among themselves to fix prices or divide the market among
themselves to keep out competitors.

Such movements are commonly referred to as restrictive trade practices.

Some of them are outlined below:

(a) CARTELS
This is where two or more companies producing the same product get
together to regulate prices for their benefit. With a cartel it will be possible
for the companies (as members of the cartel) to carry out the following:

Fix prices
The cartel will fix a price at which all members will sell their products. The
move is to prevent price-cutting, which is likely to happen when there is a
lack of demand and companies slash prices to get a slice of the market.

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Collusive tendering
With collusive tendering, those who are bidding for a tender have already
agreed among themselves who amongst them will get the tender.

This practice is inherently anti-competitive since it contravenes the very

purpose of inviting tenders, that is containing goods or services on the
most favourable prices and conditions.

Collusive tendering may take many forms, namely: agreement to submit

identical bids; agreement as to who shall submit the lowest bid; agreement
for the submission of cover bids (involuntary inflated bids); agreement not
to bid against each other; agreement to "squeeze out" outside bidders and
agreement designating bid winners in advance on a rotational basis. Such
agreements may provide for a system of compensation to unsuccessful
bidders based on a certain percentage of profits of successful bidders at
the end of a certain period.

Market allocation
These agreements are designed specially to strengthen the position of a
certain member by others agreeing not to compete in his designated
market. Since each is the only company in the allocated market the result
is that each can act as a monopolist in the designated market.

Production or sales quota

A cartel will restrict the members' production or sales when there is a
surplus capacity or where the objective is to raise prices. Under such
schemes, members frequently agree to limit supplies to a proportion of
their previous sales. To enforce the quota, a pooling arrangement is often
created whereby companies selling more than their quota are required to
make payment to the pool to compensate those selling below their quotas.

Boycotts
Boycotting is the refusal to purchase or supply certain goods and is one of
the most common means employed to coerce those who are not members
of the cartel to follow a prescribed course of action.

Group boycotts may be horizontal, that is, where cartel members agree to
among themselves not to sell to or buy from certain customers. Boycotts
may be vertical, that is, involving agreements at different levels of the
production and distribution stages, refusing to deal with a third party.

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(b) MARKET DOMINATION

Companies do not always have to form cartels to dominate the market;

those in a dominant position can control the market.

A dominant position of market power refers to the degree of the actual or

potential control of the market by a company. The control can be measured
based on market shares, total annual turnover, size of assets or number of
employees.

Where there are already laws on competition, they are likely to specify the
percentage of market share which the company must hold to be considered
to be in a dominant or monopolistic position. For example, a company with
more than a 30% share of the market may be considered to be in a
dominant market position.

A company dominating the market can be said to be carrying out acts that
are considered an abuse of its position when it does the following:

Predatory pricing
The aim is to drive the competitor out of business. The company sells
goods at below cost to attract customers away from its rival. Once the rival
is eliminated, it can raise its price.

Discriminatory pricing
This is closely related to predatory pricing. Discriminatory pricing is
unjustifiably differentiating prices (or even in terms of conditions) in the
supply or purchase of goods compared with the prices of similar goods sold
to favourable buyers.

Transfer pricing
This is where a parent company supplies goods to a subsidiary at very low
prices for the subsidiary to have very low production costs. Competitors of
the subsidiary will be supplied at excessively higher prices. As a result, the
subsidiary will be able to sell its goods cheaper — edging the competitor
out of business.

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Tied selling

Here the manufacturer forces the buyer to purchase other goods or

services from him. The "tied" products may be unrelated to the product
that the buyer wants, or it can be a product in a similar line.

Tying arrangements are normally imposed to promote the sale of slower-

moving products and especially those subject to greater competition from
substitute products.

The manufacturer can impose the concept of "tied selling" by his dominant
position in the market.

Exclusive Dealing

This is a practice whereby a company receives the exclusive rights to sell

or resell another company's goods or services, usually in a designated
area. As a condition for such exclusive rights, the buyer must not deal in
goods of the manufacturer's competitors. The main purpose of such
restrictions is to create a monopoly-type situation for the distribution and
sale of the particular goods, to make the entry of competitors difficult, thus
securing maximum prices for the goods.

Resale price maintenance

Fixing the resale price of goods usually by the manufacturer or wholesaler

is generally termed as resale price maintenance.

With such a practice, the retailer is prevented from fixing its profit margin.
Should he sell the goods at a discount, the manufacturer will refuse to
continue to supply him.

Market concentration

The concentration of market power is another source of restrictive business

practice. Such concentration may occur when the following takes place:

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Mergers, takeovers, and joint ventures

Whatever the method used, the result is the same. Integration of

competitors into a single unit leads to the growth of monopoly power.
When it happens between small companies, while it may not necessarily
adversely affect competition in the market, it may nonetheless create
conditions that can trigger further concentration of economic power and
lead to oligopoly.

Interlocking directorships

This is a situation where a person is a member of the board of directors of

two or more companies. Interlocking directorships can affect competition in
several ways. They can lead to administrative control whereby decisions
regarding investments and production are the result of common strategies
among companies on prices, market allocations and so forth. It can also
lead to reciprocal arrangements among the companies which agree not to
compete with each other. Interlocking directorships if not effectively
controlled can be used to get around laws on restrictive business practices.

Limitations of Restrictive Trade Practices

1. It necessarily does not offer protection to consumers against every

restrictive trade practice, and it is difficult to establish that a specific
practice is a restrictive trade practice; thus, the prosecution rate is very
low.

2. No protection to consumers against the misleading or false offer,

advertisement, promotion samples and more.

3. Public sector undertakings are exempted from the restrictive trade

practices legislation. They are the ones against whom most countrymen
have grievances.

4. Consumers are not in a position to determine whether someone has

formed a cartel or is indulging in malpractices. As a result, the very
institutions supposed to protect consumers’ interest go casual, thereby
jeopardizing the consumers’ rights.

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Activity C

As a consumer, it is expected that you need protection against business

malpractices. List down the type of protection you will look for.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

12.9 CONSUMER PROTECTION COUNCILS AND CONSUMER

EDUCATION

Consumer Protection Act, 1986 is an Act of the Parliament of

India enacted in 1986 to protect the interests of consumers in India. It
makes provisions for the establishment of consumer councils and other
authorities for the settlement of consumers' disputes and matters
connected therewith.

Consumer Protection Councils

Consumer Protection Councils are established at the national, state and

district levels to increase consumer awareness.

The Central Consumer Protection Council

It is established by the Central Government which consists of the following

members:

• The Minister of Consumer Affairs as Chairman

• Several other officials or non-official members representing such

interests may be prescribed.

Objectives of Central Council

The objectives of the Central Council are to promote and protect the rights
of consumers as we have learned earlier.

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State Consumer Protection Council

It is established by the State Government which consists of the following

members:
• The Minister in charge of consumer affairs in the State Government –
Chairman.
• Several numbers of other official or non-official members representing
such interests may be prescribed by the State Government.
• Several numbers of other official or non-official members, not exceeding
ten, may be nominated by the Central Government.

The State Council is required to meet as and when necessary but not less
than two meetings every year.

Objectives of the State Council

The objectives of every State Council shall be to promote and protect

within the State the rights of the consumers laid down in central council
objectives.

Consumer Dispute Redressal Agencies

District Consumer Disputes Redressal Forum (DCDRF): Also known as the

"District Forum" established by the State Government in each district of the
State. The State Government may establish more than one District Forum
in a district. It is a district-level court that deals with cases valuing up to `
2 million.

• State Consumer Disputes Redressal Commission (SCDRC): Also known as

the "State Commission" established by the State Government in the
State. It is a state-level court that takes up cases valuing less than ` 10
million.

• National Consumer Disputes Redressal Commission (NCDRC):

Established by the Central Government. It is a national level court that
works for the whole country and deals with amounts more than ` 10
million.

All the above agencies operate within their defined jurisdictions.

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Consumer Education in India

The legislation will be more useful if the common man knows about its
existence, norms, applicability, rights, and obligations and more such
aspects. Thus, the government needs to impart the requisite knowledge to
the common masses. Educated consumers will certainly fight malpractices
being carried out with them. Our existing system does not have any aspect
of consumer protection being covered as part of any syllabus; thus, this
education is needed and the same needs to be facilitated by the
Government of India.

Overall, the following approach is used to impart consumer education in

India.

Activity D

As a consumer activist, suggest how will you spread awareness about the
rights of consumers in India and how will you make them aware of their
responsibilities?
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………

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12.10 WHAT HAVE YOU LEARNT – A SUMMARY

All the commercial organizations are well managed and well versed with
the market conditions so certain that they are in a better dominating
position and use it to exploit the consumer. There are numerous ways in
which organizations exploit consumers – poor quality of content, use of
harmful chemicals, incorrect weights and measures practices, price cartel,
poor packaging, mixing, lack of information and in more ways which are
unimaginable.

Thus, to prevent exploitation of consumers, it was felt necessary to have a

consumer protection movement in a democratic country like India to allow
happy and healthy households.

Consumer protection is a group of laws and organizations designed to

ensure the rights of consumers as well as fair trade, competition, and
accurate information in the marketplace. Consumers in India needed
protection from being exploited. Thus, the Consumers Guidance Society of
India was formed. Consumer protection laws give various rights to
consumers (safety, be informed, choose, be heard, etc.).

We have also understood the consumerism and consumer movement. Later

we have seen various business malpractices being played with Indian
consumers (adulteration, weights, and measures). Numerous laws have
been developed to protect the interest of Indian consumers (Weights and
Measures Act, Prevention of Food Adulteration Act and more). We have also
understood various unfair and restrictive trade practices prevailing in India
and how consumer interest is protected. Finally, we have studied different
consumer protection councils and the role of consumer education in giving
a boost to the ongoing consumer movement.

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12.11 SELF ASSESSMENT QUESTIONS

1. Why does the Indian consumer need protection?
2. What is the Consumer Guidance Society of India into? Give the objective
with which it has been formed and the role it plays.
3. List down the rights of consumers in India and their responsibilities as
well.
4. What is consumerism and consumer movement? Give an overview of
the same.
5. How consumers’ interest is protected in India? List down the various
legislations very briefly.
6. Explain the monopolistic practices, unfair trade practices and restrictive
trade practices.
7. List down the different consumer protection councils and highlight their
role in protecting consumers’ interest and consumer education.

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12.12 MULTIPLE CHOICE QUESTIONS

1. To prevent exploitation of consumers, it was felt necessary to have

______________ in a democratic country like India to allow happy and
healthy households. Fill in the blank.
(a) consumer exploitation prevention
(b) consumer protection movement
(c) consumer rights awareness
(d) consumer Adalat

2. Formed by 9 women activists, CGSI (Also known as______________)

looks after protecting the interest of consumers in all forms and manner.
Fill in the blank.
(a) Consumer Grouping Society of India
(b) Consumer Groups Society of India
(c) Consumer Guidance Society of India
(d) Consumer Governance Society of India

3. As a consumer, when you consider buying any products and you wish to
know who manufactured it, the date of manufacturing, the contents
inside the pack, the price, the weight, and specifications, you are
exercising your right to______________. Fill in the blank.
(a) information
(b) choose
(c) be heard
(d) none of the above

4. ______________ refers to negligence or misconduct by an organization

to gain, employing unlawful actions thus depriving the consumer the full
value for money paid and/or causing injury or health issues,
inconvenience, mental trauma and not offering support when needed.
Fill in the blank.
(a) Manipulation
(b) Restrictive practices
(c) Unfair practices
(d) Malpractice

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5. There is a law that prohibits the publication of advertisement of

medicine that claims to cure ailments for which medical science has no
medicines and exploiting gullible consumers’ desire to get cured at any
cost. Identify the law.
(a) Weights and Measures Act
(b) The Prevention of Food Adulteration Act
(c) The Drugs and Magic Remedies Act
(d) None of the above

Answers:

1. (b), 2. (c), 3. (a), 4. (d), 5. (c)

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture

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 CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS

Chapter 13
Consumer Buyer Behaviour in Different
Marketing Domains
Objectives
By the end of this chapter, you should be able:
• To understand consumer buyer behaviour in service marketing
• To understand consumer buyer behaviour in business-to-business
association
Structure:
13.1 Introduction
13.2 Consumer Buyer Behaviour in Service Marketing
13.3 Consumer Buyer Behaviour in Business-to-Business Association
13.4 What have you Learnt – A Summary
13.5 Self-Assessment Questions
13.6 Multiple Choice Questions (MCQ)

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13.1 INTRODUCTION

As it was essential for us to understand the various concepts of consumer

buyer behaviour, we have covered them in the previous seventeen
chapters. While the content in those chapters was primarily focussed on
product/new product, the knowledge of consumer buyer behaviour can be
stretched and applied to other marketing areas as well, such as Service
Marketing, and within your B2B association.

In this chapter, we will briefly touch base on the use of consumer buyer
behaviour knowledge in the above-mentioned marketing domains.

13.2 CONSUMER BUYER BEHAVIOUR IN SERVICE

MARKETING

Service marketing is nothing but marketing of the intangible – something

which you can’t own but only feel e.g., a pleasant experience at a Kaya
Skin Clinic can only be felt but you can’t own it despite paying for it. From
the consumer’s perspective, it is a challenge for him to choose the best
service producer as unless he does not experience it, he can’t determine it.
Hence it is worthwhile to look at one of the characteristics of service
marketing - that it is produced and delivered at the same time, thus
making your employee a particularly important element in the entire chain;
one who can either make or break the consumer’s service experience.
Thus, it is said that from the consumer’s perspective, his evaluation of
service depends on his encounters with the service providers. The nature
of buyer behaviour and factors that influence customer evaluation in their
service encounter with the service providers is therefore critical.

SERVICE is a process that creates benefits by facilitating a change in

customers - a change in their physical possession or a change in their
intangible assets. Service is the non-material equivalent of a good. Service
is an economic activity that does not result in ownership and differentiates
it from providing physical goods. It’s a type of product that will not be
uniform and will vary according to who is performing, where it is performed
and on whom/what it is being performed.

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The first aspect of a service product lies in one’s ability to tangibalise the
intangible product level and coves it with an augmented product level.
Tangibalisation is a result of the unification of a basic product + expected
product as can be seen below in an example related to a mobile service
provider.

Fig. 13.1: Tangibalisation of Intangibles in Service Marketing

Solid products do not need to tangibalise anything due to the physical form
in which they are present. However, in-service it is more essential to
tangibalise your offering more clearly for enabling the consumer to feel the
same. This is known as the ‘Tangibility’ spectrum of service marketing.

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Fig. 13.2: ‘Tangibility’ Spectrum of Service Marketing

As you can see in the above chart, tangible products have high tangibility
but intangible products have low tangibility. Thus, they need to do things
that will tangibalise their service package, e.g., a laundry can offer cloth
care lessons, an automobile company can install a concept of an angry
horn (to be pressed by the customer who is not happy about the services
given)/a happy horn (to be pressed to express happiness).

When a consumer first hears about your service package, his natural
reaction will be to evaluate it. As there are no tangible elements present,
on what parameters will he evaluate? For the consumer, there will be
something that will be easy to evaluate and something difficult to evaluate,
especially if it is not tangible. He will resort to information search. The
more information he gets, the more clarity comes forth, and he may
become confident to use the product (but it is rare for any service), e.g.,
cloth merchant, jeweller’s selection. However, there are services about
which you only know through self-experience – e.g., meals, haircut.

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Fig. 13.3: Customer’s Way of Determining Product/Service Selection

Now consider a situation in which a person needs to get medical attention.

What will he do? Naturally, he will find information - speak to a few friends/
relatives to know their experience with a particular service provider
(medical practitioner). While he is doing that, he is just trying to determine
on whom he can place maximum trust? He does this based on the
credentials he has obtained. Thus, in-service selection, credentials of the
service provider also play an important role. We have understood the three
prominent aspects related to service selection as covered above.

Now let’s take a popular consumer decision-making process under

consumer buyer behaviour, represented below.

Fig. 13.4: Consumer Decision Making Process

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We can take the example of online retailers for a better

understanding.

1. Need recognition: As in the product, it is also essential for the service

provider to understand the needs/emerging needs of his target
customers. Today’s consumers are more multitasking, have more
responsibilities to fulfil, thus they have less time available, can’t trust
maids for quality, impossible to go for buying and also carrying goods
back home. Traditional retailers exploit the demand-supply condition
and increase prices, do not offer any value/offers, schemes, etc.

CUSTOMERS & ONLINE RETAILERS

1. Track order, 24 x 7 Customer Support
2. Specs, check availability, compare, add 2 cart, buy now
3. Review, wish list, Compare, seller, Ranking
4. Delivery, cash on delivery
5. Replacement guarantee
6. Accessories, Combos, other brands viewed
7. Value Added Service – Flipkart Plus, Offers Zone

As against this, online retailers need a buyer who looks for convenience,
quality, reliability besides free home delivery, buying at regular interval
etc. As most of these aspects meet the customers’ need, such service
will find good immediate acceptance e.g., Flipkart. You will be surprised
to know that even before Flipkart, there were online stores namely
crossword.com, rediff.com but perhaps they failed to understand the
evolving consumers and their changing needs.

2. Information Search: At this stage, the consumer wants more

information based on which he can compare two products – services. In
services, credentials being more important, he also desires to get the
existing users’ opinion. An online store offers him all these and more –
product information, feasibility to compare specs, get opinion through
testimonials, reviews, ranking and blogs. Besides this, online retailers
also offer suppliers information, replacement policy, payment policy,
combo offers, accessories offer besides other value-added services.

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3. Alternatives Evaluation: After completing the required information

search, the customer will want to evaluate the alternatives in front of
him. Following questions will come to his mind as a process of ‘Evoked
Set’.
(a) Which all players exist in the online retailing space?
(b) Do I know about all of them?
(c) How good are they?
(d) Are their prices better than the rest?
(e) Do they deliver in time?
(f) How is their customer/after-sales service?
(g) Replacement/Warranty/Guarantee Terms and Conditions
(h) Is it worth the risk?

A service provider can proactively help consumers to evaluate

alternatives for themselves using blogs, reviews, and ratings, online and
offline media presence, offering price guarantee, multi-touch points-
based customer service/after sales and testimonials from past
customers.

Also, this is the stage wherein he will come in contact with your
employee for the first time. Your employee can either make or break it.
It depends on how trained and seasoned your employees are, how much
do they understand a customer’s state of mind, can they determine what
will work and what will not work, whether he/she can help a customer
arrive at the right selection from the available alternatives, and last but
not the least, his/her relationship-building skills will determine whether
the customer decides to procure goods from you or not.

4. Service Consumption: This is a critical stage at which the consumer

needs to decide his final selection of service provider. However, it is not
as easy as mentioned. Also, the question arises - whether the service
provider can do anything about influencing the consumer’s buying
behaviour at this stage?

A service provider has to essentially understand the nature of customers

he surrounds himself with and the likely volume from them. Nature of
consumers can be classified as: (i) Trend addicts (ii) Explorer (iii) Fence
sitter (iv) Opportunist (v) Casual (vi) Shopoholic and (vii) Laggard.
Knowing their stimulus and buying triggers, a service provider can plan
his marketing tactics and offers; Some of them could be (i) new product

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launches (ii) best price offer (iii) deal of the day (iv) bonanza promotion
(v) combo and accessories offer (vi) offer zone and more.

This is also one of the crucial stages where his service encounter with
your employee will take place, maybe telephonically or through a
webchat. How well your employee deals with him, determines whether
the customer decides to utilize your service. How well your employee
can build trust and empathy will build customer confidence and that may
tilt the deal in your favour.

5. Post Purchase Evaluation: As we mentioned earlier, consumers’

evaluation of your services starts from the beginning and his perception
about you continues to shape based on every encounter he has with
you. It’s a never-ending cycle. Do you think after selling the service, the
service provider needs to worry about the post-purchase phase?

It has been proved beyond doubt that in-service marketing is all the
more important to be focussed on post-purchase evaluation. Service
delivery being intangible is a continuous process. On one hand, you want
your customers to keep coming back to you and also refer your service
to others and on the other hand, consumers expect not only the same
level of service but also expect you to make up for the service delivery
deficiencies pointed by them if any. This psychological perspective also
integrates post-purchase support.

A customer has numerous questions to be answered and he is looking

for a friendly resolution by you as his service provider. He is wondering
whether he will be able to know his order’s progress. Will it get delivered
in time? Will he get the right goods in the right condition? Will he get
product installation/set up support? Will he get any goods to return
support? Is there any replacement/warranty support?

Knowing well what kind of questions they will encounter, a service

provider can orient himself to provide the answers, and simultaneously
avoid many questions as well. One can do this by proactively providing
service support like online order tracking, 24 x 7 customer care,
information about installation and set up support, upfront information
about replacement and warranty, provide the packaging list when goods
are delivered, share reviews, ranking and update knowledge through a
blog. Last but not least is to have regular feedback and a service

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satisfaction survey being conducted to understand how your customer

does evaluate his post-purchase experience. Remember that it’s the
post-purchase evaluation that either encourages or discourages a
consumer to refer your services. However, in a dynamic scenario, where
service production – delivery is happening simultaneously, there may be
a possibility that the service delivery could not be getting handled
properly. As a result, there is a concept of ‘Service Recovery’ in service
marketing. Service recovery recognizes that there was an improper
delivery of service or misunderstanding and thus it tries to have a
dialogue with the customer to understand how he can be attended to so
that he feels he got something reconciled.

Service Marketing – Moment of Truth

Differentiation is the essence for every business to thrive. Differentiation is

needed and obtained in the mind of the consumer. Marketers have
embarked on developing an edge through service differentiation to sustain
and gain a bigger portion of the customer’s wallet.

A moment of truth is usually defined as an instance wherein the

customer and the organization come into contact with one another
in a manner that gives the customer an opportunity to either form
or changes an impression about the firm. Impression changing
interaction could occur through the product of the firm, its service offering
or both. Various instances which can bring small delights at regular
intervals could constitute a moment of truth – reception, furnishing
information, showing product/explaining services, such as greeting the
customer, handling customer queries or complaints, promoting special
offers or giving discounts and the closing of the interaction, post-purchase
support and more.

In today’s increasingly service driven and highly competitive markets,

moments of truth have become an important facet of customer interaction
as it determines a customer’s perception of, and reaction to a brand.
Moments of truth can make or break an organization’s relationship with its
customers. Perception and reactions are a subject matter of consumer
buyer behaviour.

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This is more so in the case of service providers since they are selling
intangibles by creating customer expectations. Services are often
differentiated in the minds of the customer by promises of what is to come.
Managing these expectations constitutes a critical component of creating
favourable moments of truth which in turn are critical for business success.

It is also important to note that moments of truth can be positive or

negative, which creates a specific perception. Repeated favourable
moments of truth will build a positive opinion and repeated negative
moments of truth will build a negative opinion, both of which are shared by
the consumers.

Delighting Customers by Knowing their Expectations

In today’s aggressively competitive business environment it is not enough
to meet customer expectations. To effectively differentiate themselves from
the competition, service providers need to orient themselves to exceed
customer expectations to create customer delight and create more loyal
customers. The service provider must consider the targeted customer base
and its needs and expectations. This will help in developing a service
design that will help the provider to effectively manage customer
expectations leading to customer delight.

Customer Needs and Expectations

Customer needs comprise the basic reason that makes it essential for a
customer to approach a service provider. For instance, a person visits a
specific car garage primarily for the quality of service it offers. That is the
customer’s need. However, the customer expects polite staff, attentive yet
non-intrusive service and a pleasant ambience. If these expectations are
not properly met, the guest would leave the garage still a bit dissatisfied
even if his basic requirement of a quality repair has been met. Thus,
knowing and understanding guest expectations is important for any service
provider.

Customer Satisfaction, Dissatisfaction and Delight

Based on the quality of the service experience, a customer will either be
satisfied, dissatisfied, or delighted. Knowing a customer’s expectation is
instrumental in developing a strategy for meeting and exceeding the
expectation.

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1. Customer Dissatisfaction: This is a situation when the service

delivery fails to match up to the customer’s expectations. The customer
does not perceive any value for money.

2. Customer Satisfaction: In this case, the service provider can match

the customer’s expectations and deliver a satisfactory experience.
However, such a customer is not strongly attached to the brand and
may easily shift to a competing brand for considerations of price or
discounts and freebies.

3. Customer Delight: This is an ideal situation where the service provider

can exceed the customer’s expectations creating a bond with the brand,
and thus, they become regular and loyal and will not easily shift to other
brands.

Meeting and Exceeding Customer Expectations

Exceeding customer expectations is all about creating that extra value for
the customer. Once upon a time, it was a prerogative of the hospitality
industry, specialized in creating customer delight. Indigo Airlines brought
many new service initiatives for Indian fliers and thus despite tough
competition; they have still maintained their presence and stature.

One example that often gets mentioned is about one 5-star hotel's chain
that used to maintain customer databases detailing room order choices of
their guests. So, if a guest has asked for say orange juice to be kept in the
mini bar in his room, the next time that he makes a reservation at the
hotel, the staffs ensure that the juice is already kept in the room. Such
small gestures go a long way in making the customers feel important,
thereby creating customer delight.

Another novel way of exceeding guest expectation is often demonstrated

by travel companies. Since they usually have details of their customers’
birthdays, they often send out an email greeting to their guests to wish
them. This not only makes an impact on the guest but also helps the
company acquire ‘top of the mind recall’ with the guest.

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Summarization

Customer service and delight is the sure key for organizations in service
marketing. Customer service design needs a service provider to understand
the expressed, latent, and unfulfilled needs of his customers for which
knowledge of customer psychographics is vital, understanding the stimulus
that triggers the desired action is essential. Knowledge of learning theories
also helps largely. For any marketers including service marketers what
starts with need and motivations understanding, leads them to understand
different consumer personalities and their different buying behaviours, how
attitude determines him being favourably poised for the nature of service
being offered. Later it deals with the customer’s perception management,
which gets reflected in their satisfaction. All these things happen in a social
set up and their upbringing within a family, influenced by groups he deals
with, besides the impact of an opinion leader by their selecting your
services. Thus, the knowledge of consumer buyer behaviour can equally
play a crucial role for any service marketer.

13.3 CONSUMER BUYER BEHAVIOR IN BUSINESS-TO-

BUSINESS ASSOCIATION

It is generally said about a business to a business transaction that a

decision is taken more rationally. However, ultimately it is the personal
relationship that matters the most. In the background of it, it can be said
that wherever there is a human being involved, behavioural aspects come
into play and a buyer in B2B association is also a consumer. Thus, the
knowledge and application of consumer buyer behaviour can certainly help.

The idea here is not to completely expose the entire B2B association and
the specifics of consumer behaviour but to give you glimpses about the
relevance of consumer buyer behaviour in the B2B association.

Consumer behaviour represents the behavioural context in which

consumers operate while searching for, purchasing, using, evaluating, and
disposing of products and services that they expect will satisfy their needs.
In B2B case it is an organization’s needs. However, the expression of need,
the search for a solution, purchasing, evaluation etc. happens by the
employees of the organization, working collectively to achieve common
objectives. The seller needs to also understand the buying process in which
the user is some department; information and sourcing are by the

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procurement department, there are gatekeepers and influencers

collectively making it a complex process.

Consumer behaviour study looks into the way individuals decide, how
individuals make decisions to spend their available scarce resources like
money, time, and energy on their chosen items for consumption.

During consumer behaviour understanding, marketers try to find an

answer to the following questions about their B2B association, for example,
a fireproof electric motor:

Steps Nature of question Example

1 What kinds of consumers buy Large, medium, small scale consumers
it? in fire-sensitive industries
2 What products/services Do they prefer a fireproof motor or an
consumers buy? alternative solution?
3 What makes the customers Protection from fire and loss
buy them? minimization
4 When are these bought? New companies coming up,
replacement
5 From where do they buy it? Direct purchase from the manufacturer,
their distributor
6 How often are they used? Used daily
7 At what frequency do they buy As and when they need it
it?

As you can see, unlike consumer goods, there is a compulsive requirement

to prevent fire and losses for which such motors are used. However, they
have an option to use it or use alternative ways to preventing fire which
may be caused due to sparks generated inside the motor. Demand may
originate from different sources; however, there will be a homogeneous
cluster of highly fire-prone industries like petroleum, petrochemicals,
lubricant manufacturers and more. Large quantities will be required, when
some new unit is coming up, else existing units require it as and when they
need to replace an old motor. If it’s a large quantity, they prefer to buy
directly from manufacturers for bulk discounts; else they buy from
companies’ authorized distributors.

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Due to globalization and the removal of as many trade barriers as possible,

it has become possible to look for suppliers beyond national boundaries
who can supply a better product at a reasonable price. This changes the
dynamics and thus, it has become all the more difficult to sell them.
Consumer behaviour will help you to find reasons due to which the buyer is
moving away, and how you can still retain him by serving him better.

In B2B industrial association, even though most transactions are on a

rational basis, segmentation can be planned to bring out the harmonious
characteristics of identified segments with similar buying traits.
Segmentation in B2B association would be more on benefits and
behavioural, besides geographic segmentation. It will not be on lifestyle or
demographics so to say. Your ability to create appropriate segmentation
will enable you to design your marketing mix correctly and thus, help you
to reach your target customers appropriately with a judicious combination
of product and/or service package.

Consumer buyer behaviour also makes us aware of motivation-needs-goals

and how are they interlinked. Even in the B2B association, where decisions
are rationally taken, buyers are emotionally connected with vendors. Do
you understand such aspects? Is it timely delivery, support during
installation or after-sales service or relationship management being better
that makes him emotionally connect better with one vendor vis-a-vis
another vendor? You can overcome your shortcoming to become the most
preferred vendor.

Purchases in the B2B environment are rational but handled by individuals.

The process of rationalization is complex where the user is someone and
buyer is someone else, and the influencer is another individual. Each
individual being different, it is like dealing with numerous personalities for
one transaction. Consumer behaviour helps you to understand the
personalities involved. It has a direct link with the motivation-needs-goals
aspect. It’s your ability in B2B association to manage both ends that help
you to get maximum business. On the other hand, the brand that you deal
in has its personality with certain favourable traits and certain unfavourable
traits. It needs your ground level smartness to minimize the impact of not
so favourable traits e.g., Crompton Greaves as a manufacturer of motors
may be good but they do not have a good service department. As their
authorized distributors, you can be smart to hire a trained mechanic as

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your employee and give better after-sales service rather than losing
customers.

Understanding the psychographic aspects of your consumers and their

perception about your agency, the brand you handle and the service you
render, will give you a different edge in your B2B association.

Besides this, your understanding of the consumer learning process,

attitude handling, importance of opinion leaders in influencing decisions,
plays a crucial role in developing your B2B association and making it
stronger and lifelong.

Understanding the consumer decision process as per consumer buyer

behaviour and mapping your B2B associates’ buying process will help you
to determine how you can help consumers with the information search
stage and evaluation of alternatives.

Last but not the least, the entire perspective on diffusion and adoption of a
new product will enable you to introduce new products among your B2B
associates successfully. You will be able to leverage new product launch
initiatives by your principle to capitalize gain for you, smartly and
effectively.

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13.4 WHAT HAVE YOU LEARNT – A SUMMARY

Service marketing being experiential, consumers start evaluating you since

their first ‘Service Encounter’ with you. In service marketing, it is essential
for you to tangibalise many intangibles to create a product (i.e., your
service package). For any new customer, your service offering will be the
first-ever encounter with your company/package in which he will determine
whether the service package offered meets his expectations. A solid
product does not need to tangibalise anything due to the physical form in
which it is present. However, in-service it is more essential to tangibalise
your offering more clearly for enabling the consumer to feel the same.
After hearing about your service, the consumer gets into its evaluation.
Pure services are difficult to evaluate and thus, your credentials play a
particularly important role.

We have considered different aspects of the consumer decision-making

process from a service marketing perspective and how consumer buyer
behaviour knowledge can help. We have understood how can you make
your customers ‘service encounters’ delightful by needs–understanding,
besides the use of psychographics, the stimulus for triggering the desired
action, how one can facilitate knowledge development, determining your
target customer’s personality and different buying behaviours for enabling
you to influence them, handling attitude and perception management, and
developing your long-term association by ensuring that your customers
remain satisfied. All these things happen in a social set up and their
upbringing within a family, influenced by the groups they deal with, besides
the impact of opinion leaders on their selecting your services. Thus, the
knowledge of consumer buyer behaviour can equally play a crucial role for
any service marketer.

We have also considered the domain of Business to Business (B2B)

marketing. We have covered that even in rational set up of goods/service
selection, how our knowledge of consumer buyer behaviour can help us as
ultimately every aspect of rational purchases is managed by individuals
and how can you favourably influence their dependency on you to develop
your business.

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13.5 SELF ASSESSMENT QUESTIONS

1. How does the knowledge of consumer buying behaviour help you in

service marketing?

2. How does the knowledge of consumer buying behaviour help you in your
B2B association?

3. Enumerate the different aspects of consumer buying behaviour that can

be applied during the consumer decision-making process.

13.6 MULTIPLE CHOICE QUESTIONS

1. Customer service design needs a service provider to understand the

expressed, latent, and unfulfilled needs of his customers for which the
knowledge of _____________ is vital. Fill in the blank.
(a) customer Satisfaction
(b) customer Psychographic
(c) customer Attitude
(d) customer Needs

2. Consumer’s final action is not a result of your advertising but your

ability to understand _____________ that triggers the desired action.
Fill in the blank.
(a) attitude
(b) behaviour
(c) learning
(d) stimulus

3. For any marketers including service marketers, what starts with need
and motivations understanding, leads them to understand different
consumer _____________ and their different buying behaviours. Fill in
the blank.
(a) profiles
(b) wants
(c) personalities
(d) influences

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4. Using the knowledge of consumer buyer behaviour, service marketers

can deal with customer ______________, which gets reflected in their
satisfaction. Fill in the blank.
(a) perception management
(b) gaps management
(c) delivery management
(d) attitude handling

5. In B2B association, a brand that you deal in has its _____________

with certain favourable traits and certain unfavourable traits. Fill in the
blank.
(a) image
(b) issues
(c) personality
(d) value

Answers:

1. (b), 2. (d), 3. (c), 4. (a), 5. ©

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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter

Summary

PPT

MCQ

Video Lecture - Part 1

Video Lecture - Part 2

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