Consumer Behavior Notes

Unit – 1

Chapter 1: Consumer Behaviour- Intro, Scope, Trends, Factors

Chapter 2: Consumer Behaviour and Communication

Chapter 3: Consumer Behaviour and Marketing: Market Segmentation

Chapter 4: Persuasion

Unit – 2

Chapter 5: Perception

Chapter 6: Learning

Unit – 3:

Chapter 7: Personality

Chapter 8: Attitude

Unit – 4:

Chapter 9: Social and Cultural Aspects and Impact on Consumer Behaviour

Chapter 10: Consumer Decision Making

Chapter 11 Diffusion and Adoption

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Chapter 1 Consumer Behavior – Intro, Scope, Trends
INTRODUCTION

All of us are consumers. We consume things of daily use. We also consume and buy these
products according to our needs, preferences and buying power. These can be consumable goods,
durable goods, specialty goods or, industrial goods. What we buy, how we buy, where and when
we buy, in how much quantity we buy depends on our perception, self concept, social and
cultural background and our age and family cycle, our attitudes, beliefs values, motivation,
personality, social class and many other factors that are both internal and external to us. While
buying, we also consider whether to buy or not to buy and, from which source or seller to buy. In
some societies there is a lot of affluence and, these societies can afford to buy in greater
quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest
needs. To know the buyer, his buying motives and buying habits, to understand not only his
needs and desires, but also his fancies, foibles and eccentricities, has throughout been a
fundamental necessity for the marketing man. But there is no unified, well defined, tested and
universally established theory of buyer behavior established. All researches and studies have
contributed to a vast assortment of information on buyer behavior. The marketers therefore try to
understand the needs of different consumers and having understood his different behaviors,
which require an in-depth study of their internal and external environment, they formulate their
plans for marketing. Consumer behavior can be defined as the decision-making process and
physical activity involved in acquiring, evaluating, using and disposing of goods and services.
This definition clearly brings out that it is not just the buying of goods / services that receives
attention in consumer behavior, but the process starts much before the goods have been acquired
or bought. A process of buying starts in the minds of the consumer, which leads to the finding of
alternatives between products that can be acquired with their relative advantages and
disadvantages. This leads to internal and external research. Then follows a process of decision-
making for purchase and using the goods, and then the post purchase behavior which is also very
important, because it gives a clue to the marketers whether his product has been a success or not.

 What motivates the buyer?

 What induces him to buy?
 Why does he buy a specific brand from a particular shop?
 Why does he shift his preferences from one shop to another or from one brand to
another?
 How does he react to a new product introduced in the market or a piece of information
addressed to him?
 What are the stages he travels through before he makes the decision to buy?

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  These are some of the questions that are of perennial interest to the marketing man.
Though there are no succinct and precise answers to these questions, or, rather around the
answers to these questions that the product strategies and promotion strategies of the
marketing man ultimately revolve. To understand the likes and dislikes of the consumer,
extensive consumer research studies are being conducted. These researches try to find
out:
 What the consumer thinks of the company's products and those of its competitors?
 How can the product be improved in their opinion?
 How the customers use the product?
 What is the customer's attitude towards the product and it’s advertising?
 What is the role of the customer in his family?

Consumer behavior is a complex, dynamic, multidimensional process, and all marketing

decisions are based on assumptions about consumer behavior. Marketing strategy is the game
plan that the firms must adhere to, in order to outdo the competitor or the plans to achieve the
desired objective. In formulating the marketing strategy, to sell the product effectively, cost-
benefit analysis must be undertaken.

There can be many benefits of a product, for example, for owning a motorbike one can be
looking for ease of transportation, status, pleasure, comfort and feeling of ownership. The cost is
the amount of money paid for the bike, the cost of maintenance, gasoline, parking, risk of injury
in case of an accident, pollution and frustration such as traffic jams. The difference between this
total benefit and total cost constitutes the customer value. The idea is to provide superior
customer value and this requires the formulation of a marketing strategy. The entire process
consists of market analysis, which leads to target market selection, and then to the formulation of
strategy by juggling the product, price, promotion and distribution, so that a total product (a set
of entire characteristics) is offered. The total product creates an image in the mind of the
consumer, who undergoes a decision process that leads to the outcome in terms of satisfaction or
dissatisfaction, which reflects on the sales and image of the product or brand. Figure below gives
in detail the shaping of consumer behavior, which leads a consumer to react in certain ways and
he makes a decision, keeping the situations in mind. The process of decision-making varies with
the value of the product, the involvement of the buyer and the risk that is involved in deciding
the product / service. The figure shows the consumer life style in the center of the circle. The
consumer and his life style are influenced by a number of factors shown all around the consumer.
These are culture, subculture, values, demographic factors, social status, reference groups,
household and also the internal make up of the consumer, which are a consumers' emotions,
personality motives of buying, perception and learning. Consumer is also influenced by the
marketing activities and efforts of the marketer. All these factors lead to the formation of
attitudes and needs of the consumer. Then follows the process of decision-making, (as shown in
the rectangle) which consists of the problem recognition, information search (which is both
internal and external) then the evaluation and selection procedure, and finally the purchase. After

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the purchase and use of the product the customer may be satisfied or dissatisfied with the
product. This is known as post-purchase behavior. The existing situations also play an important
role in the decision-making process. The dotted lines show the feedback.

Factors Influencing Consumer Behavior

 The factors that influence consumer behavior can be classified into internal factors or
(individual determinants) and, external environmental factors. External factors do not
affect the decision process directly, but percolate or filter through the individual
determinants, to influence the decision process as shown in Figure below. The arrow
shows how the external influences are filtered towards the individual determinants to
affect the decision process The individual determinants that effect consumer behavior
are:
 Motivation and involvement
 Attitudes
 Personality and self concept
 Learning and memory
 Information processing
 The external influences or factors are:
 Cultural influences
 Sub-cultural influences
 Social class influences
 Group influences
 Family influences
 Personal influences
 Other influences

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A. Individual Determinants

1. Motivation and Involvement: In a society, different consumers exhibit different consumer

behavior because they are unique and have unique sets of needs. Motivation is that internal force
that activates some needs and provides direction of behavior towards fulfillment of these needs.
Involvement refers to the personal relevance or importance of a product or a service that a
consumer perceives in a given situation. Depending on the value and personal interest, a
consumer can have a high or low involvement. For a professional tennis player, the choice of a
tennis racket is made with great car. He sees the weight, size, grip and tension of the strings, etc.
The racket is his most important professional tool. Similarly, a professional photographer has to
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buy a camera with the right specifications and attributes. For another person, a tennis racket may
only be a means of entertainment or in the case of a camera, the recording of family and other
events by a camera, which is convenient and handy.

2. Attitudes: These are our learned predispositions towards people, objects and events. Attitudes
are responsible for our responses and are not inborn but are learnt from people around us. They
influence our purchase decisions and consumer behavior. A person having a carefree attitude will
buy an object without much involvement. People, who want to play safe and avoid risk taking,
will go for a safe investment. People who want convenience and are short of domestic help, will
have positive attitudes towards canned and frozen foods.

3. Personality and Self Concept: It is the sum total of our mental, physical and moral qualities
and characteristics that makes us what we are. Consumers try to buy the products that match
their personality. People wanting to look-manly will buy products with a macho appeal, which
would enhance their image and personality. People, who give emphasis on comfort and care, will
purchase comfort products and so on. If one wants to emulate a film star his choice will be
different from others.

4. Learning and Memory: Every day we are exposed to a wide range of information, but retain
only a small portion of it. We tend to remember the information that we are interested in or, that
is important to us. Different members of the family are interested in different types of
information, which they individually retain. Mothers retain information regarding household
items. Father retains information regarding his interest in cars, motorcycles and other objects.
Children are interested in objects of their interest like amusement parks, joy rides, Barbie dolls,
etc. Our motives, attitudes, personality filters the information. Keeping only relevant information
in our minds and, keeping the others out. This is known as selective retention. We retain in our
memory only selective information that is of interest to us.

5. Information Processing: All consumers analyze and process the information they receive.
These are activities that a consumer engages in, while gathering, assimilating and evaluating
information. Consumers assimilate and evaluate selective information and this reflects on their
motives, attitudes and personality and self-concept. Different individuals can evaluate same
information in a different manner. The most common example is a glass half filled with a liquid.
It can be interpreted as "half empty" or half full. The first is a pessimistic view and the other is an
optimistic view of processing the information.

B. External Environmental

1. Cultural Influences: It is defined as a complex sum total of knowledge, belief, traditions,

customs, art, moral law or any other habit acquired by people as members of a society. Our
consumer behavior, that is the things we buy are influenced by our background or culture.
Different emphasis is given by different cultures for the buying, use, and disposing of products.
People in South India have a certain style of consumption of food, clothing, savings, etc. This

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differs from the people in the North of India. Different cultures and habits are predominant in
different parts of the world. Japanese have a different culture from that of USA, England or
Arabian countries. Therefore, in consumer behavior culture plays a very important part.

2. Sub-Cultural Influences: Within a culture, there are many groups or segments of people
with distinct customs, traditions and behavior. In the Indian culture itself, we have many
subcultures, the culture of the South, the North, East and the West. Hindu culture, Muslim
culture. Hindus of the South differ in culture from the Hindus of the North and so on. Products
are designed to suit a target group of customers that have similar cultural backgrounds and are
homogeneous in many respects.

3. Social Class: By social class we refer to the group of people who share equal positions in a
society. Social class is defined by parameters like income, education, occupation, etc. Within a
social class, people share the same values and beliefs and tend to purchase similar kinds of
products. Their choice of residence, type of holiday, entertainment, leisure all seem to be alike.
The knowledge of social class and their consumer behavior is of great value to a marketer. 4.
Group Influences

A group is a collection of individuals who share some consumer relationship, attitudes and have
the same interest. Such groups are prevalent in societies. These groups could be primary where
interaction takes place frequently and, consists of family groups. These groups have a lot of
interaction amongst themselves and are well knit. Secondary groups are a collection of
individuals where relationship is more formal and less personal in nature. These could be
political groups, work group and study groups, service organizations like the Lions, Rotary, etc.
Other member of the group influences the behavior of a group. An individual can be a member
of various groups and can have varied influences by different members of groups in his
consumption behavior. An individual can be an executive in a company and a member of a
political party; he may be a member of a service organization and of entertainment clubs and
study circles. These exert different influences on his consumption.

5. Family Influence: As has already been said, the family is the most important of the primary
group and is the strongest source of influence on consumer behavior. Children learn the family
tradition and customs, and they imbibe many behavioral patterns from their family members,
both consciously and unconsciously. These behavior patterns become a part of children's lives. In
a joint family, many decision are jointly made which also leave an impression on the members of
the family. These days the structure of the family is changing and people are going in more for
nucleus families, which consists of parent and dependent children. The other type of family is the
joint family where mother, father, grandparents and relatives are also living together.

6. Personal Influences: Each individual processes the information received in different ways
and evaluates the products in his own personal way. This is irrespective of the influence of the
family, social class, cultural heritage, etc. His own personality ultimately influences his decision.

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He can have his personal reasons for likes, dislikes, price, convenience or status. Some
individuals may lay greater emphasis on price, others on quality, still others on status, symbol,
convenience of the product, etc. Personal influences go a long way in the purchase of a product.

7. Other Influences: Consumers are also influenced by national or regional events, which could
be like the Asiad, the Olympics, cricket test matches, World Cup, the war or a calamity. These
leave permanent or temporary impressions on the mind of the consumer and affect his behavior.
In these events, products are advertised and sometimes the use of a product like drugs, etc. is
discouraged. People are urged to adopt family planning methods. Situation variables such as
product display, price reduction, free gifts and attractive offers also influence consumer
behavior. External factors cannot affect the decision process directly but these are also
instrumental and exert an influence on consumer behavior.

Factors affecting consumers can also be studied by dividing the factors into four groups as
shown below. This can be done under four broad headings, which can have sub headings as
shown

Factors influencing consumer behavior (Classification in four broad categories)

Problems in Buyer Behavior

1) The buyer-a riddle- Buyer is a highly complex entity. His needs and desires are innumerable
and they vary from security needs to aesthetic needs. The buyer has his own ways and means of
meeting these needs.

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2) The buyer is exposed to a great deal of information -The buyer is exposed today to a world of
information-about new products, new services, new uses for existing products, new ideas and
new styles. Generally he accepts that information and retains it only what he would normally like
to perceive and retain.

3) The buyer is not bound by rigid rules while taking the buying decisions. -Sometimes the
decisions are taken on the spot while sometime he may decide after a long search, after
evaluating the various alternatives available and reassuring himself with the experience of those
who have already purchased the product. Buyer behaviour is a specific aspect of general human
behaviour and it is only natural that it is as complex as general human behaviour.

Uses of Consumer Behavior

Knowledge of consumer behaviour is useful for helping both to set and to implement marketing
strategies. For setting strategies, it helps in:

 Selecting and segmenting markets

 Planning marketing strategies.
 Evaluating strategies.
 Assessing consumer trends that will affect strategies in the future.
 Understanding fully the sources of any market-response problems.
 Gauging response to prospective product, price, promotion and distribution changes.
 Planning the marketing program.
 Evaluating the marketing program.

Consumer Behavior As An Interdisciplinary Science

Since the behavior of the consumer is dependent upon physiological, psychological, cultural,
social, economic, language, regional, religious, political and other factors, it is an
interdisciplinary science. If one wants to study properly and scientifically the behavior of
consumers one is required to study various facts of life about thinking of consumer, his
decisions, perceptions and all factors which influence his thinking and decision like his
education, culture, income, climate, social status, society, physiology, psychology, region to
which he belongs, his religion, and the like.

To undertake research one has to use research tools specially sampling, drafting of questionnaire,
tabulation and arriving at results and then interpret it properly and accurately so that the results
may be utilized for strategic policy decisions All this require use of statistics and econometrics,
and proper understanding of economics, and other factors so that one may reach at correct,
meaningful, fruitful and useful results.

1. Psychology: Study of consumer psychology is most important part of consumer behavior

research, because it helps to know the attitude of consumers, his level of learning, knowledge,

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perceptions, personality, his motivation of buying a particular product or service. It helps to
understand psychology of different types of consumers based on their age, sex, income level,
education, their rural or urban background. For instance a person living in Mumbai or Delhi
thinks differently than person living in remote rural area of Orissa, Bihar, Jharkhand, or
Chatisgarh, their psychology is different, their thinking about product and services are different
and their needs and perceptions are different than urban elite. The study of their psychology
helps marketer to segment the market and produce goods according to their requirement rather
than thrusting same product on all. For instance psychology, of rural population of older
generation is to wear only dhoti, they will not buy trousers whatever efforts are made. Similarly
large percentage of them does not wear shoes or chappals. Similarly they do not use toothpaste
for cleaning their teeth. Many of them do not clean their teeth at all while others depend largely
on Neem or Babul stick (datun) for cleaning teeth and some use tooth powder Why they have
thinking and practice as they have can be understood only by studying their psychology and
there after draw a sales promotion or marketing strategy accordingly. If this is not done
marketing efforts will go waste and will not give results expected from advertisement and other
sales promotion efforts

The study of consumer psychology will make us to understand "how do we make the market
place work better so that consumers can make better decisions about what to buy" If for social
purpose of India has to reduce consumption of liquor one has to find out through research why
people drink When in our country number of states prohibited drinking from time to time it was
utter failure because prohibition was imposed without studying the psychology of drinkers.
However, in case of cigarettes when it was told that smoking is injurious to health and can cause
cancer, it had some impact and the absolute consumption of cigarettes has started declining. If
prohibition was implemented after studying how often and what problems are faced by
discontinuing drinking alcohol and what have been their responses to their problems and their
solutions might have been found, the result would have been more encouraging. Children arc
psychologically vulnerable to specific advertisements but before making such advertisements,
their psychology will have to be studied first to market products and service needed by them and
secondly by the state to protect them against misuse of their psychology. Keeping the
vulnerability of children they are prohibited under the Factories Act to work in night hours In
order to protect them against the use of smoking and drinking sale of some of these products is
prohibited to minors The psychology is formed through combination of region, religion, sex,
education, culture, social structure, beliefs, faiths etc. The study of psychology of consumers has
become most important part of study of consumer behavior and at one go one even study the
needs, perceptions of consumers Therefore it is most important tool for researcher and if one
does not have resources to go in depth research, study of consumer psychology can help to a
great extent in arriving at fairly accurate conclusions about marketing strategy For example the,
psychology of rural masses in India is to like bright colors specially red, black and yellow
Therefore one will have to supply fabrics of these colors and use labels of these colors on their
products In rural India psychology is to like strong tea, hence in these areas strong tea will have

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to be marketed But at the same time psychology is to try a product which is advertised because
TV has reached to every corner of the country in remote villages too It seems that villagers are as
much concerned for commercials as urban dwellers Therefore in Northern India many milk
vendors have purchased motor bike for vending milk Farmers have adopted tractors for
cultivation but as yet by and large they have not adopted to life insurance Why not is a
psychological question to be studied by researchers and insurance marketers.

2. Psychographics: Psychographics is another discipline which has to be used for study of

consumer behavior Psychographics research-studies life style of consumers to find out market
for certain products like items of personal health care, cosmetics, items of family consumption
like TV, car, drawing room furniture In psychographics research consumers are requested to tell
their and their household reaction about a particular product or service. The psychographics
research studies the life style of an individual or family to find out how he spreads his time in
working, recreation, games, vacations It also studies the preferences of individual or household,
his priorities and preferences on food, home, fashion, outing, recreation, games and his opinions
regarding various economic, social, political, cultural, educational and other issues In order to
arrive conclusions through psychographics research individuals are asked their reactions and
questions are put to them and their family members They are given statements which they are
asked to evaluate as strongly agree, strongly disagree, agree, don't agree They may also be asked
degree of importance about a product or service like very important, unimportant, important,
product Specific questions are also asked whether he likes a product or service or not Sometimes
opinion are sought on political and social issues like whether after Tehelka revelation this
government should continue or not Opinions are also asked to find out which party they would
like to vote which is the basis of opinion poll and projection of election results.

3. Physiological Factors: Physiological factors relate to the service of the properties and
functions of living of being in normal conditions Thus a physiologist studies the state of human
being in its various phases like babies, child, adults and elderly people, men and women There
are special needs of pregnant women for nourishment and after birth for self and newly born
There are also handicap persons with deficiency in hearing, eyesight, hands, legs, rib or other
part of bodies The requirement of human being at different stages of life and in different
conditions have great impact on consumer behavior Therefore, they have to be researched
separately The requirement of small babies for body and health care are different than for adults
Therefore some companies like, Johnson have introduced baby soap, baby powder, baby oil
There are also many companies who are producing baby food though doctors advocate breast
feeding The manufacturers have produced many products for this class of population There are
also separate medical practitioners for them who specialize in treatment of tender children

There are special products for handicapped like hearing aids for persons hard of hearing
spectacles for persons with weak eyesight Special aids for persons with handicapped legs or
hands are made to meet their requirements to help them to live less handicapped life School
going children require different products like school bags, school dress, books, note books,
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pencils, socks and lot of other products This is separate segment of consumer, one has to study
their numbers and their consumption needs which again have to be divided according to age
group and market has to be developed and products have to be produced The consumption
requirement of adults differ widely from babies and school going children, depending upon
nature of their occupation, physical development, social status, consumer researcher has to study
this segment of the population separately to assess their needs and accordingly produce goods
and services Further, each class has to be again subdivided into various segments depending
upon their culture, level of income etc In countries like India where there are vast differences in
culture, income status, habits etc the number of sub-segment will be larger than in Europe. USA,
Canada, Japan or Australia Then there are elderly persons who have special demand They have
to be protected from danger of adverse age They have to be protected from themselves and from
predations according to various studies in USA by Wodell, Phillips and Stermithal, Schiffman
and many more The findings are that they use lesser information, spend more time watching
television, have decreased perpetual dis-crimination and are likely to complain less about
consumer problem However so far in India very little research has been conducted by marketers
or others on physiological aspects of consumer behavior In developed countries special attention
is paid to protect children, elderly and women consumers but in India as yet there is no such
separate legislation expect in case of labor laws for child and women labor and in income tax,
railway tickets for senior citizens They are being given concession in income tax and railway
fare.

4. Demography: Demography "refers to the vital and measurable statistics of a population" It

relates to total population of a country, state, region, town or villages The distribution of
population is done by age group, sex, mental status, education, level of income, occupation Most
of the countries collect information in their census In India census is conducted every ten years,
the latest of which relates to information as on 1st March 2001 Indian census has collected
information on all above aspects, the full data of which will be available after quite sometime.
The data is available on all aspects upto village level. It is an important, very useful, effective
and cheap source to get information from published records and from the office of Census
Commission. So far it is known that Indian population on 1st March 2001 was 102.7 crores
which is over 16% of world population. This was 181 million more than population of March
1991. But the rate of growth declined by 2.5%. It is possible to project macro demand from this
data. The structure data of population is also available according to which size of market in
various states can be gauged and strategy for marketing can be made. The sex ratio is in favor of
males i.e. there are 933 females for every 1000 males, which is some improvement over last one
decade. With long series of data one can project long-term male female ratio and can estimate
demand and consumption of various products for males and females. As this data is available not
only statewise but also town and village wise it is possible to segment the population according
to sex at every level not only to estimate the demand but also to formulate marketing strategy. In
consumer behavior the literacy and level of education plays an important role; it is very useful
for consumer researchers. This information is also available upto village level. During last

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decade the percentage of literate population has increased and for the first time since
independence the absolute number of illiterates have shown a significant decline. This
information is available age group wise at the lowest level and is an important tool for consumer
researcher to find out demand of products by different segments of literate population. The data
is also available about the level of education below high school, higher secondary, graduate, post
graduate, technical etc. All this is very important data for consumer behavior study and research.
The one who is interested to undertake research must consult all this data. The demographic
information is also available on marital status, level of income, housing, occupation.

5. Geographic Segmentation: In a big country like India, China, USA etc. the location is very
important factor in determining the consumption. In countries like India or USA where climate
differs widely from location to location this factor becomes extremely important in deciding the
consumer needs, motivation and behavior. For instance, in India there are hilly areas of Jammu
and Kashmir, Himachal Pradesh, North Eastern States, and Ladakh where temperature is much
lower than states of Southern India like Kerala, Karnataka, Tamil Nadu and Andhra Pradesh.
While in northern states heavy woolens are needed in winter and light woolens in rest part of the
year in Southern states only light cotton clothes are needed throughout the year. There are areas
of very heavy rains in places like Cheerapunji, the highest in the world and very low rain in
desert of Rajasthan. These climatic changes have made big regional differences in consumption
pattern. The vegetation crops also depend upon climate and so eating habits also differ. In states
like West Bengal, Orissa and Southern states where rice is major crop, population is basically
rice eater as against Northern States of Punjab, Haryana, Rajasthan, Madhya Pradesh, Uttar
Pradesh where wheat is main item of staple food. In states like Gujrat, Maharastra and Rajasthan
where groundnut is produced in substantial quantity the main oil used is groundnut oil. In Kerala,
Tamil Nadu and Karnataka and Andhra Pradesh where coconuts are produced in plenty coconut
oil is main media of cooking. In U.P, Punjab, Haryana and West Bengal mustard oil is preferred
because of availability. The differences in consumption are not only due to climate but also due
to wide differences in languages. Though as per Article 343 of Indian constitution the official
language of India is Hindi in Devnagari Script. But besides Hindi and English there are other 17
languages in Eighth Schedule that are spoken in one or more states. Besides official languages
there are local dialect. All these language differences have impact on producers and advertisers.
For instance the market of books has been restricted according to the language used in schools,
colleges, government offices and courts. Because of language books of Bengali or Marathi or
other language has market in the state where that language is spoken and the behavior of
consumers is not uniform for many things and this aspect has to be kept in mind by marketers.
The advertisement and labeling of packing has to be adjusted according to the language of the
region. The selection of words also require great care because sometimes the word in one
language has quite different meaning in the other language and in case of certain words the
meaning is so different that it can create disaster, this has happened in many cases and because of
use of wrong word from one language it is quite different sometime offensive in an other
language. As a result one can loose the entire market.

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6. Culture: The culture of different regions is different Bengali culture is quite different than
that of Punjabi or South Indian culture. There are difference not only in speech but also in dress,
fashions, thinking, expectations and behavior based on the region Many Bengali wear dhotis, on
the festival of Durga, Kali or Saraswati and the ladies prefer to wear cotton sarees and are
conservative in their attitude towards their daughters. The liking of music is also much different
than in South or North. The festival of Kerala, Tamil Nadu and other states are not same, nor
their food preferences are similar Because of language differences films are required to be
produced and exhibited in local language. The taste of people also differ widely from region to
region Punjabis like gaudy, bright color clothes, milk and lassi, maize bread and sarso ka sag and
paratha South prefers tea and coffee, idli, dosa and bara. Actually in India there are so many
cultures, habits, preferences that without indepth study of them one cannot optimize sales
Therefore indepth study of regional differences is essential for research of consumer behavior,
within the state also a many times it is required to describe upon differences in their behaviors.

7. Religion: In a country of the size of India with different religions behavior differs according
to his faith and religion In India major religions are Hindus, Muslims, Christians, Sikhs,
Buddhists and Jains besides sub religions in many castes If Hindus do not eat cows meat
Muslims do not eat pig meat. Mostly the male Sikhs wear turban but it is not compulsory in any
other religion In Jainism non vegetarian food is strictly prohibited but Christians and Muslims
have no inhibition In Hindus there are both veg and non-veg population. Jains especially elderly
people do not eat many vegetables specially those produced underground. The dress for worship
and articles used for worship have been prescribed in Jainism and Hinduism, but Christians and
Sikhs have not prescribed dresses for worship, but in most of the religions head should be
covered while worshiping by turban, dhoti, cap or handkerchief, dupatta. Worship on festival
occasions also have difference at the time of festival affecting consumption and creating demand
of certain products in festival times. For example during certain festivals demand of fruits and
vegetables goes up because during this period many devotees do not take food grains. Similarly
at the time of most festivals demand of sweets go up All these factors have impact on consumer
behavior and so on the demand of various products.

8. Sociology: Social classes in India are based on two different criteria and there are two types of
social class. First based on level of income and the other on castes, religion and region etc

In India on the basis of income there are four classes First below the poverty line (BPL) who are
not able to consume minimum requirement and therefore they are not able to buy most of the
things.

Second is low income group who are above the poverty line but are able to meet their minimum
needs Third is middle income group who besides basic needs can also consume certain other
products like television, coolers, refrigerators and ordinary furniture The last one is high income
group In this group there is further division of very high income group who account for nearly
ten percent of country's population and are able to consume anything they want The company

14
who produces or provides services must understand their needs, aspirations and expectations and
should segment the market. The second social class is based on community, castes, religion etc
These groupings are not only in places of their origin but also in places where they move A
South Indian or Bengali in metropolitan cities of Kolkatta, Delhi or Mumbai like to consume
some food items for which they are accustomed Even when they go abroad and become NRI
they want food of their liking As a result there are exports of Gujarati, Punjabi and South Indian
food products to places of their concentration abroad The food habits die very rarely and
therefore these classes will have to be catered wherever they settle or cluster Certain classes are
also based on community basis and they like certain products or services The food habits of
Sikhs, Muslims, Jains, Hindus are well settled and for this purpose they are social class Not only
food habits but type of garments required differs specially on the occasion of marriages,
festivals, religious functions. Some social classes are also based on rural - urban base People of
rural area even in the same region and of same religion have different demands than their urban
brothers Unless these aspects are studied, the research on consumer behavior is incomplete and
one cannot take full advantage of market.

9. Economics: Before the modern concept of consumer behavior was developed by marketer it
was part of economics Principle demand / price theory is based on consumer behavior that is as
more quantity will be offered the price will come down, the utility of additional unit will be less
than the previous one and therefore rate of increase in demand will fall with the satisfaction of
demand The economic theory further states that with the fall in price, demand should rise and
with rise in prices demand should fall However, marketer feels that with change in consumer
behavior this is not always true If a product is for show, prestige many people will buy high
priced goods If a product is cheap it is considered to be of poor quality and may not be in
demand Even in country like India the demand of motor bikes which are double the price of
scooters, is rising faster than that of scooters because of change in consumer preferences
According to economic theory with the rise in income the quantity demanded should go up but
marketers may change the preferences in favor of higher priced items and overall demand may
not go up. The consumer behavior studies by altering the consumer preferences can modify
economic theories but basic principles of economics of want, demand, prices, supplies, will have
to be studied by a marketer because it has important bearing on consumer behavior and thus they
are inter dependent upon each other. As economics has great bearing on consumer attitude,
behavior, perceptions study of economics is a must for researcher of consumer behavior. 10.
Statistics / Econometrics In order to study consumer behavior in various facets use of statistics
and econometrics for drawing a sample, carrying out surveys, processing the data and its
interpretation. High-level statistics and econometrics is required to be used for arriving at
conclusions, making models for projections etc. Thus for study of consumer behavior one is
required to use many services which have to be interdependent to arrive at any meaningful
conclusions. If they are studied in isolation from each other one may arrive at misleading
conclusions. It is because human behavior is not independent, it is hybrid of various factors

15
described above and therefore all services are equally important and essential for the study. Thus
they are interdependent and the real research requires a team with knowledge of all facets of life.

Chapter 2: Consumer Behavior And Communication

Communication is defined as the flow of information from a sender to a receiver with the latter
having a proper understanding of it. Marketing communication or consumer communication may
be defined as the flow of information about a product/service offering from a marketer to the
consumer. This could assume two forms, i) it could be personal via interpersonal communication
between the marketer and the salesperson or the dealer; or ii) it could be impersonal via a
channel or a media (print, audio-visual etc.). Marketers make use of his promotion or
communication mix, which comprises advertising, personal selling, sales promotion, publicity
and direct marketing to communicate with their consumers. They inform the consumers, both
current and potential about their product/service offering, as well as any changes brought about
in the marketing mix. They try to keep the consumers well informed about the product/service
offering, and the changes that are brought about. The consumers also on the other hand, keep
themselves informed both through the marketer’s efforts as well as through the informal
interpersonal communication that they have with their family, friends, peers etc through word-of-
mouth. Both the sources, formal (from the marketer), as well as the informal (through word-of-
mouth) have an important role to play in communication.

Definition And Meaning Of Consumer Communication:

There are three major components of the communication process, viz., sender, receiver and the
media. Apart from these, there are two sub-components, viz., feedback and noise. The message is
encoded by the sender, transmitted via a media, decoded by the receiver, who then provides a
feedback. At every stage, the communication process could get impacted by a disturbance, which
is referred to as “noise”; this noise isn’t essentially a loud sound, but these are disturbances that
could occur within the sender or the media or the receiver. These components can be elaborated
as follows:

16
Figure: Elements of the Communication Process

i) Sender: The purpose of communication, expressed as a message emanates from the sender. He
encodes the message by using words, pictures and gestures, and sends it via a media or a
channel. Thus, the message consists of the subject matter that the sender intends to transmit to
the receiver, and may take oral, written or gestural form.

ii) Media/channel: The media is the channel through which the information is transmitted.
Communication could be interpersonal as well as impersonal; it is interpersonal, when two
people interact with each other face to face by talking and listening, and the air and the sound
waves constitute the media; it is impersonal when the communication takes place via print
(newspapers, magazines, brochures etc) or broadcast audio-visual means (TV, radio, websites
etc).

It could also be communication that takes place between friends (customer and prospect) as
word-of-mouth. Impersonal media includes communication that takes place via print
(newspapers, magazines, brochures etc) or via broadcast audio-visual means (TV, radio, websites
etc). The message could be verbal, non-verbal, or a mix of two.

iii) Receiver: Once the message is transmitted through a media, it reaches the receiver, who
decodes the message, to extract meaning out of it. There could be two kinds of errors that may
take place here, i) amplification; ii) leveling. Amplification occurs, when a person adds up to the
message, and exaggerates it. Leveling is the opposite of amplification, and occurs when the
receiver deletes or erases part or whole of the message. After having decoded and comprehended
a message, the receiver reacts with a feedback.

17
In our context, the consumers comprise the receiver. While the message is actually meant for the
current and prospective consumers (the target audience), there are other elements who also get
exposed to the message, although the message is not meant for them.

Examples of audiences include channel members (wholesalers, retailers etc.) and professionals
(architects, doctors, professors, etc.). While the former are sent trade advertising and persuaded
to carry stocks of merchandise, the latter are provided with professional advertising and asked to
recommend their products/services to their customers. Examples of unintended audiences are
shareholders, bankers, suppliers, employees, and the public.

iv) Feedback: While the message moves forward from the sender to the receiver, feedback
moves backwards, from the receiver to the sender, and thereby constitutes a loop. Feedback
reflects as to whether the message has been appropriately understood by the receiver. It is also a
means by which the sender gets to know of the receivers’ reaction to his message. It is the acid
test to determine whether the communication has been effective or not, as it is through this
feedback, that the marketer gets to know whether the message has been correctly interpreted by
the consumer. It helps the marketer to add/delete/modify his message so that the message is
better understood. The customer can address issues of concern and seek clarifications from the
marketer.

Feedback is crucial in both interpersonal and impersonal communication. It is easier to read

customer reaction and obtain feedback in interpersonal communication, than it is in impersonal
communication. This is because in face-to-face interpersonal communication, the marketer gets
input from verbal and non-verbal cues, which is not the case in impersonal communication.
However, the marketer cannot afford to avoid customer feedback in impersonal communication.
Market researchers try to infer customer reactions to impersonal communication by their
action/inaction (whether they purchase or do not purchase).

The basic objective behind marketing communication is to inform a consumer (or a prospect)
and to make him aware about the product/service offering, and the mix; build a favorable attitude
towards the offering; and to encourage a purchase.

v) Noise: Noise can affect every stage in the communication process. It is anything that disturbs
and interferes with the communication process, and acts as a barrier to effective communication.
It could be internal as well as external. It is internal, when it concerns the sender or the receiver,
who are not able to pay much attention or are preoccupied with something else while encoding or
decoding, leading to erroneous communication. Noise could also be external, when there is a
disturbance in the environment (loud sound), or when there is a problem with the media (sound
waves, air, poor reception of signal etc.)

Marketing communication is defined as transmission of information from the marketer to the

consumer through a media. The basic objective behind marketing communication is to inform a

18
consumer (or a prospect) and to make him aware about the product/service offering, and the mix;
build a favorable attitude towards the offering; and to encourage a purchase.

#2: Concept of Credibility

•The credibility of the source (marketer/spokesperson) affects the way that the target audience
decodes the message. When the marketer holds some kind of expert power (he is an expert in his
field), or has some charisma (he possesses charismatic power), or holds legitimacy of position
(holds legitimate power), the influence that he is able to generate is much higher. He is able to
convey his message and convince the consumer much easily.

•The receiver (consumer) regards a source to be credible when he feels that the source provides
unbiased information. In other words, when the source is credible, honest, respected and held in
esteem, the probability of the message being believed by the target audience is much higher. The
opposite hold good too, i.e. in case when the credibility is low, the assimilation of the message
and the belief in the message is low.

•Credibility is important for both formal and informal sources. The issue of credibility assumes
importance in formal sources as the consumer rightly understands that the major objective of the
source (marketer) is to encourage a sale and earn profit.

•Other factors that affect the credibility of the message is the medium through which it is
expressed, as well as the spokesperson. The consumer's own experience with the product or the
retailer also affects the credibility of the message. The consumer basis his judgment on factors
like:

- the reputation of the company and its past performance

- the quality of its product/service offerings based on self-experience, hearsay, word- of-
mouth

- the other lines of business that they carry

- their corporate social responsibility

•Once a company gets reputed with a product line, it tries to transcend the benefits of the reputed
brand to the other product/service lines that it intends to offer. Thus, it comes up with the
concept of family branding (all product ranges in one frame), so as to get a ready acceptance
from the consumers. On the other hand, in case of informal sources, people rely on their family,
friends, peers and colleagues for information and advice. They regard such sources to be
credible. People take advice from informal sources as they feel that such sources have nothing to
gain and have no hidden agenda or ulterior motive.

•Opinion leaders also have a big role to play, and they take interest in providing information to
those who approach them. But they need to be careful, because in case they provide wrong
19
information and advice, they may lose their position/status as opinion leaders in the eyes of the
public.

-Credibility and the Medium: The reputation of the channel that carries the message also
affects the credibility of the message. In case of interpersonal channel, where communication
takes place between a salesperson/dealer and a customer, the honesty, integrity and sincerity of
the salesperson adds to credibility. In case of impersonal communication, messages are
channeled through print (newspapers, brochures) as well audio-visual broadcast (TV, radio).
However, messages channeled through neutral rating agencies, as well as articles in special
interest magazines and trade magazines are regarded as more credible than advertisements in
print and audio-visual; they are regarded as unbiased and objective. The reputation of the
spokesperson in the advertisement also adds to the credibility; this suggests the importance of
testimonials.

- Credibility and the Receiver: The credibility of the message gets impacted by how well it gets
comprehended by the receiver (target audience: the consumer). The message from the marketer
is decoded by the consumer. The comprehension and understanding of the message is based on i)
the message itself; ii) his personal characteristics and background; ii) his past experiences; iii) his
motivation, emotions and mood, involvement, attitude, personality and perception; iv) his ability
to process; and v) impact of social forces.

It is observed that receivers expose themselves selectively to media as well as to the messages.
This is referred to as selective exposure and selective attention. Consumers flip over pages in a
newspaper or in a magazine, thereby missing out on the advertisements/editorials/testimonials.
Similarly, they wander across channels on the TV and the radio, thus missing out on various
advertisements. They may change channels frequently to see what is coming elsewhere (known
as wandering), or may mute the TV when ads are played (known as zapping of commercials), or
may change a channel when an advertisement begin being played to see what programme is
being played elsewhere (surfing). Marketers try to overcome this problem, by playing their
respective advertisement simultaneously across many channels at the same time, so that the
consumer is exposed to the advertisement. This is referred to as roadblock-ins.

The decoding of the message can also be affected by what is referred to as “noise”. As been
mentioned above, “noise”, may be internal (to the sender and the receiver: they may be
overloaded or pre-occupied, and so the encoding and the decoding may be improper) or external
(a loud noise or a disturbance in the channel). The problem of “noise” can be overcome by
repeating the message several times. However, repetition can lead boredom and monotony,
leading to a loss of interest for both the marketer and the consumer. The marketer then has to
think of cosmetic and substantive variation in his advertisements. He could also use other
techniques like subverting and forcing to overcome problems of communication overload
monotony and boredom. Subverting refers to suddenly presenting something that is
pleasant/charming or unpleasant/ugly, so as to catch the consumer by surprise. Jolting refers to

20
introducing a “teaser” element in the advertisement, so as to hold the interest of the consumer
(eg, 10 days left…., 9 days left…. and so on, releasing the final advertisement after 10 days, thus
trying to hold the interest of the target).

The Sleeper Effect

The persuasiveness of information gradually decreases over a period of time. Often, this
information is associated with cues such as source credibility and morality. Some of these cues
are positive, while some are negative. Messages accompanied by positive cues are usually
readily accepted and believed by people, while those associated with negative cues are viewed
suspiciously and sometimes even dismissed.

However, it has been observed in many studies that despite the initial rejection of the message,
people tend to get persuaded over time, leading to an increase in the acceptance of that message.
This phenomenon of delayed persuasion is called the sleeper effect.

However, for the sleeper effect to manifest, three basic conditions must be met:

- The message itself should be persuasive

- The discounting cue must initially suppress attitude change

- The discounting cue must become dissociated from the message over time

It must be noted that the effect is seen to disappear if the audience is reminded of the source.

Sleeper Effect in the context of Credibility:

Though a high-credibility source is initially more influential, than a low-credibility source,

research suggests that both positive and negative effects tend to disappear after a period of six
weeks or so. Consumers exposed initially to a low credibility source develop opinions more
closely in line with the source as time passes. While the enhancing and depressing effects of high
& low credibility sources dissipate, the message content tends to stay back with the consumer.

21
Chapter 3 Market Segmentation
Introduction:

The traditional way of doing business was Mass Marketing which meant offering a standardize
product to all the consumers or the entire market. However, it was increasingly realized that
customers are varied and unique, with different needs, wants and preferences. Marketers
understood that they cannot satisfy the entire range of customers with the same product and
service offering. This led to Target marketing or STP i.e., Segmentation, Targeting and
Positioning. STP involves dividing the potential market into distinct sets and sub-sets of
consumers and then focusing on one or more segments that can be reached with a marketing mix.
The marketer first identifies like-minded clusters of groups that are homogenous within and
heterogeneous with other groups (segmentation); then, he selects the most viable segment(s)
(targeting); finally, a distinctive image of the product/service offering is created in the mind of
the consumer that helps the latter relate to the former (positioning).

Segments pre-exist a marketer; they already exist. The marketers task is to identify the most
lucrative and profitable one (s) and target them. He has to then create a unique marketing
program that would be most effective for that particular segment.

A ‘market segment’ may be defined as a group of customers who are similar to each other on
certain bases; they are expected to behave in a similar manner towards a product and service
offering and towards a single marketing program.

“Market segmentation” is the process of identifying distinct groups and or sub groups of
customers in the market, who have distinct needs, characteristics, preferences and/or behaviours,
and require separate product and service offerings and corresponding marketing mixes.

The marketer experiences a heterogeneous market, with varying customers with diverse needs,
preferences and behaviours. However, a certain degree of homogeneity within groups and/or sub
groups of customers on certain bases and dimensions may be identified. This leads to the
identification of a segment. A market segment exhibits homogeneity within the group and
heterogeneity outside. Further, each of the segments can be effectively served with a different
marketing mix.

Bases For Segmentation

1. The first step in developing a segmentation strategy is to select the most appropriate base(s)
on which to segment the market.

2. There are nine major categories of consumer characteristics on which to base market
segmentation.

22
 a) They include: geographic factors, demographic factors, psychological factors, psycho-
graphic (lifestyle) characteristics, sociocultural variables, use-related characteristics,
use-situation factors, benefits sought, and hybrid segmentation forms, such as
demographic/psychographic profiles, geodemographic factors, and values and lifestyles.

b) Hybrid segmentation formats each use a combination of several segmentation bases to

create rich and comprehensive profiles of particular consumer segments (e.g., a specific
age range, income, lifestyle, and profession).

Geographic Segmentation

1. In geographic segmentation, the market is divided by location.

a) The theory behind geographic segmentation is that people who live in the same area
have similar needs and wants, and these needs and wants differ from those of people
living in other areas.

2. Other marketers have, for a number of years, been moving in the opposite direction and
developing highly regionalized marketing strategies.

a) Working closely with regional retailers often produces micromarketing strategies, and
these strategies have generally won strong consumer support.

3. Marketers have observed divergent consumer purchasing patterns among urban, suburban,
and rural areas.

a) It is relatively easy to find geographically based differences for many products.

4. Geographic segments can be easily reached through the local media, including newspapers,
TV, radio, and through regional editions of magazines.

Demographic Segmentation

1. Demography refers to the vital and measurable statistics of a population.

2. Demographic characteristics, such as age, sex, marital status, income, occupation, and
education, are most often used as the basis for market segmentation.

3. Demographics help to locate a target market. It is the most accessible and cost effective way
to identify a target market. These characteristics are easy to measure.

4. Demographic variables reveal trends, such as shifts in age, gender, and income distributions
that signal business opportunities to alert marketers.

23
Age

1. Because product needs often vary with consumer age, age is a very useful demographic
variable for marketers.

2. The largest demographic segment in the U.S. population consists of Baby Boomers.

3. Many marketers have carved themselves a niche in the marketplace by concentrating on a

specific age segment.

a) Chronological age implies a number of underlying forces.

i) Age effects—occurrences due to age

ii) Cohort affects—occurrences due to being born at a certain time in a similar

environment

iii) Sex

1. Gender is frequently cited as a distinguishing segmentation variable.

2. More recently, some believe that gender is no longer an accurate way to distinguish
consumers in some product categories as sex roles blur.

a) Much of the change comes due to two-income households.

b) One consequence for marketers is that women are not as readily accessible through
traditional media as they once were.

3. Recent research has shown that men and women differ in terms of the way they look at their
Internet usage.

Marital Status

1. Traditionally the family has been the focus of most marketing efforts. The household
continues to be a relevant consuming unit.

2. Marketers are also interested in the demographic and media profiles of the household
decision-makers.

3. There are benefits to targeting specific marital status groups.

a) Singles consume differently than marrieds.

Income, Education, and Occupation

1. Income has long been an important variable for distinguishing between market segments.

24
2. Marketers commonly segment markets on the basis of income because they feel that it is a
strong indicator of the ability (or inability) to pay for a product or a specific model of the
product.

3. Marketers tend to group income with other variables to get a more complete and accurate
profile.

4. Income, education, and occupation tend to be closely related. There is almost a cause-effect
relationship.

Psychological Segmentation

1. Psychological characteristics refers to the inner or intrinsic qualities of the individual

consumer as a basis for segmentation.

2. Consumers can be segmented in terms of their needs and motivation, personality,

perceptions, learning, level of involvement, and attitudes.

Psychographic Segmentation

1. Psychographic research (segmenting based on personality and attitude measures) is closely

aligned with psychological research.

2. Commonly referred to as lifestyle analysis, psychographic segmentation has proven to be a

valuable marketing tool to help identify promising consumer segments that are likely to be
responsive to specific marketing messages.

3. Psychographic profiles of consumer segments can be thought of as being composed of a

composite of consumers’ measured activities, interests, and opinions (AIOs).

4. In their most common form, AIO-psychographic studies use a battery of statements (a

psychographic inventory) designed to identify relevant aspects of a consumer’s personality,
buying motives, interests, attitudes, beliefs, and values.

5. The results of psychographic segmentation efforts are frequently reflected in firms’

marketing messages.

Sociocultural Segmentation

1. Sociological (group) and anthropological (cultural) variables—that is, sociocultural

variables—provide further bases for market segmentation

25
2. Consumer markets have been subdivided into segments on the basis of stages in the family
life cycle, social class, core cultural values, subcultural memberships, and cross-cultural
affiliation.

Family Life Cycle

1. Family life cycle is based on the premise that many families pass through similar phases in
their formation, growth, and final dissolution.

2. It is a composite variable based explicitly on marital and family status and implicitly includes
relative age, income, and employment status.

3. The traditional stages are bachelorhood, honeymooners, parenthood, postparenthood, and

dissolution.

Social Class

1. Status (social class) is usually measured by a weighted index of several demographic

variables, such as education, occupation, and income.

2. Social class implies a hierarchy whereby individuals in the same class generally have the
same degree of status, although members of other classes have either higher or lower status.

a) Studies have shown that consumers in different social classes vary in terms of values,
product preferences, and buying habits.

Culture and Subculture

1. Cultural segmentation is useful for both domestic and international marketing.

2. It is useful because members of the same culture tend to share the same values, beliefs, and
customs.

a) Subgroups exist within the larger culture based on demographics such as race, religion,
ethnicity, age, or lifestyle characteristics.

3. Culturally distinct segments may be prospects for the same product but may be targeted more
effectively with different promotional appeals.

Lifestyle

Lifestyle is a concept more contemporary, more comprehensive and more useful. It provides a
rich view of the market and presents a more life-like portrait of the consumer. Today many
products are “lifestyle products”, which portray a style of life required by potential users.
“Lifestyle patterns” are influenced by several internal and external factors like income, age,
family size, social patterns, social attitude, changes, shifts in social views, legal changes,

26
background, and education. Hence, marketers try to strike relationship between lifestyle products
and lifestyle groups before designing their marketing strategies to reach the target market.

Lifestyle attempts to reflect the way in which products fit into a consumer’s pattern of living; and
it portrays the ‘whole person’ interacting with his or her environment. This is why; the concept
of “consumer lifestyle” has been defined in a variety of ways.

Consumer lifestyle has been defined simply as “how one lives. The term lifestyle can be used to
describe levels of aggregation of people or consumers. It has been used to describe individual as
well as larger groups of people, as lifestyle concerns with every social, economic, cultural
preferences and choices of the consumers.

Lifestyle and the Consumption Process

Therefore, the lifestyle concept has become the core of a special segment of research called
'psychographics'. The social aspect of lifestyle includes culture, social class, social performance,
reference groups, opinion leaders, the family-lifestyle, time and expenditures i.e. Activities. The
psychological aspect of lifestyle includes personality, attitudes i.e. Opinions, the level of class-
consciousness, motivation, perceived risk, innovativeness and the importance of a purchase.
Social and psychological factors overlap and complement each other; they are not independent or

Together, these areas are generally referred to as activities, interests and opinions or simply
AIOs. Socio-cultural factors or Lifestyle dimensions of consumer can be analyzed from several
activities, interests and opinion items. This Activities, Interests, and Opinions (AIO) analysis is a
set of dimensions or factors, these factors are used in formulation of clusters or categories of the
consumer population.

Activities, Interests, and Opinions are a measurable series of psychographic variables involving
the interests and beliefs of consumers. All such AlO-inventories are depend on consumer profile.
More recent measures include: attitudes, values, activities, interests, media-patterns, usage
characteristics, demographics and geographies.

Geo-profiling:

Geo-profiling allows the researcher to determine who consumers are, where they are, and study
their lifestyles based on their socio-economic and their cultural factors. This is also called
psychographics or clustering. Insight gained from these profiles is used to locate other areas with
similar profiles that are likely marketing targets. While the demographics of a group may be
similar, they are quite different in terms of activities, interests and opinions. The concept of birds
of a feather flock together is at work here; you identify geographies that have the largest
concentration of this target ‘flock’.

The following are some examples of geographic variables often used in segmentation.

27
• Region: - by continent, country, State, or even neighborhood

• Size of metropolitan area: - segmented according to size of population

• Population density: - often classified as urban, suburban, or rural

• Climate: - according to weather patterns common to certain geographic regions

Psychographic Segmentation:

Psychographic segmentation groups customers according to their lifestyle. Activities, interests,

and opinions (AIO) surveys are one tool for measuring lifestyle.

Some psychographic variables include:

• Activities

• Interests

Values

Psychographics Segmentation

• Opinions

• Attitudes

• Lifestyle

•Social class Personality

SRI'sVALS PROGRAM

VALS is acronym renown for ‘values and lifestyles’. The most widely popularized approaches to
lifestyle research for market segmentation is the values and lifestyles. This programme is the
categorization of people according to their way of living.

Simply, segmentation means breaking up of something into smaller pieces.

Marketing gurus define segmentation to be the process of dividing a potential market into
distinct subsets of consumers with distinct needs and characteristics and selecting one or more
segments to target with a distinct marketing mix. The necessary conditions for successful
segmentation are:

• a large population

28
• with sufficient money to spend

• sufficient diversity and to be capable of being partitioned

The basic belief behind VALS is that humans strive to improve themselves during their lifetime
This goal, in turn, strongly influences their values, lifestyles and many of the decisions they
make each day. The approach is holistic, drawing on insights from a number of perspectives and
many types of data to develop a comprehensive framework of characterizing the ways of life of
people.

29
Innovators Thinkers Believers Experiences
Take-charge Reflective Literal Trend setting
Sophisticated Informed Loyal Impulsive
Curious Content Moralistic Variety seeking

Survivors Achievers Strivers Makers

Nostalgic Goal oriented Contemporary Responsible
Constrained Brand conscious Imitative Practical
Cautious Conventional Style conscious Self-sufficient

The Segments

VALS is a segmentation research method that stands for “Values and Lifestyles.” VALS
classifies consumers into eight distinct segments based on resources available to consumer
(including financial, educational, and intellectual resources), as well as three primary
motivations (ideals motivation, achievement motivation, and self-expression motivation).

Innovators

Innovators are successful, sophisticated, take-charge people with high self-esteem. Because they
have such abundant resources, they exhibit all three primary motivations in varying degrees.
They are change leaders and are the most receptive to new ideas and technologies. Their
purchases reflect cultivated tastes for upscale, niche products and services. They put high
importance on their image. They are typically successful, sophisticated people who have high
self-esteem and are motivated by achievement, ideals as well as self expression.

Consumers in this group compared to the other seven groups have the highest resources and tend
to conduct the highest number of transactions in efforts to attain the “finer things in life”.
Because of this brands they would purchase are on the high end scale. Brands like Gucci, Fendi,
BMW, Audi, Versace and Balmain are a few examples of brands these consumers gravitate
towards. They are willing to make these large purchases because they place that importance on
their image and being associated with these brands give the image they want perceived to the
world. Although they might have the most spending power they only make up about 8% of the
population.

Thinkers Motivated by ideals; high resources

Thinkers are mature, satisfied, comfortable, knowledgeable, responsible and reflective. They
tend to be well educated and actively seek out information in the decision-making process. They
favor durability, functionality, and value in products.

They are well educated and actively seek out information in the decision-making process. They
are well informed about world and national events and are alert to opportunities to broaden their

30
knowledge. They are motivated by ideals. They have a moderate respect for the status-quo
institutions of authority and social decorum, but are open to consider new ideas. Although their
incomes allow them many choices, Thinkers are conservative, practical consumers, meaning,
they look for durability and functionality.

The Thinkers are smart consumers who are not going to buy some luxurious items just because
they have money. When choosing which car to buy, they tend to choose the ones that are not too
expensive, but reliable. For instance, Honda or Toyota. Thinkers know how most of the
consumers worldwide have driven these companies’ cars, and that they are proven to be the ones
with the best functionality.

Believers Motivated by ideals; low resources

Believers are strongly traditional and respect rules and authority. Because they are fundamentally
conservative, they are slow to change and technology averse. They choose familiar products and
established brands.

Believer consumers also motivated by ideals. Believers are conservative and mostly predictable
consumers who favor products with strong brand identity and established brands. Their lives are
centered on family, community, and the nation with modes way of living. They are ideal
consumers for traditional brands like Maruti, Tata

Achievers Motivated by achievement; high resources

Achievers have goal-oriented lifestyles that center on family and career. They avoid situations
that encourage a high degree of stimulation or change. They prefer premium products that
demonstrate success to their peers. The consumers in this category are people whose lives are
fulfilled by their achievements from their work and families. They are generally successful in
their jobs and are work-orientated. They uphold the status quo and receive motivation from
achievements. In their professional life, they are focused on their work and have full work
schedules. They are conscious of their peers’ perception of their image, are politically
conservative, and value authority. Achievers tend to prefer goods and services that are well-
known in order to display their success to others and devices that are useful for increasing work
efficiency.

According to this popular method of determining lifestyle segmentation, achievers have high
resources. They are also conscious of their public image and often choose to purchase products
that have prestige. They often buy products from a brand that demonstrated its dependability
over a certain period of time or is gaining in popularity. Some examples of brands that achievers
might purchase products include Apple, Tesla, and Cartier.

Strivers Motivated by achievement; low resources

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Strivers are trendy and fun loving. They have little discretionary income and tend to have narrow
interests. They favor stylish products that emulate the purchases of people with greater material
wealth. Strivers

Strivers are similar to that of achievers, in that they are achievement motivated and image
conscious, but have fewer resources than that available to achievers. These consumers are always
trendy and in-style, where money defines success for them. They often look to their peers
(achievers) for approval because they have narrow interests and are easily bored, with no
interests in health, nutrition, or politics.

These consumers strive to emulate the people they admire, especially the stylish products people
with greater material wealth purchase. Strivers are impulsive shoppers, as shopping is a way to
demonstrate to others their ability to buy. An example where a striver would shop at high street
stores would be Forever21, H&M because they have low-priced clothing and accessories, but are
always trendy and in-style, which would give these impulsive consumers approval from their
peers. Also when it comes to cars they would ideal consumers for second hand cars.

Experiencers Motivated by self-expression; high resources

go-pro

Experiencers appreciate the unconventional. They are active and impulsive, seeking stimulation
from the new, offbeat, and risky. They spend a comparatively high proportion of their income on
fashion, socializing, and entertainment. Experiencers are often categorized as “young, impulsive,
and enthusiastic” consumers. These are the type of consumers who are very interested in new
and unique products that are surrounded with anticipation, energy, and thrill. Some companies
who target this segment are Active sports, Apple, other extreme sporting companies. However,
Go Pro is the most applicable example of a company who markets to Experiencers. Go Pro is a
company that makes versatile cameras that capture incredible moments anywhere.

Makers Motivated by self-expression; low resources

Makers value practicality and self-sufficiency. They choose hands-on constructive activities and
spend leisure time with family and close friends. Because they prefer value to luxury, they buy
basic products. As consumers makers are similar to Experiencers in terms of the motivation in
self-expression, however, Makers fewer resources in comparison. You can often see Makers
participating in activities or working in the things they like to express themselves. Consumers in
this segment category tend to be very hands on in the work they do. They have the construction
capability and passion to help them be successful.

An example of a Maker would be YouTubers or Bloggers. YouTubers have all these ideas and
stories in their heads that they want to communicate to the audience through the usage of a visual
component, which are usually done in a 5 minute video. A lot of aspiring video makers or self-

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expressionists use YouTube as a platform because there are no limits to what they can post
(besides copyright material). YouTube is a social network platform for Makers to share their
original content and ideas to express themselves. There is a wide set of categories that a
YouTuber can post such as vlogs, arts and crafts, product reviews, talk shows, cooking recipes,
video shorts, etc. Most YouTubers have very low resources in making their content. While some
may have good expensive equipment for shooting, others tend to film their content with their
phone or even their webcam on their laptops to film. Products which are budget friendly but also
have some novelty about such as Hyundai i10 or Lenovo Laptops.

Survivors

Survivors lead narrowly focused lives. Because they have the fewest resources, they do not
exhibit a primary motivation and often feel powerless. They are primarily concerned about safety
and security, so they tend to be brand loyal and buy discounted merchandise. They are least like
to adopt to innovations and will likely think that those are not necessary. They are more focus on
the basic of living, like family, health and safety.

Survivors are most likely to be the elderly people. They don’t have a lot of resources and put
their effort on something else instead of finding excitement. Marketers who are targeting this
market segmentation should put their priority on the basic necessities of needs. For example,
there are many companies that provide home safety services. Senior consumers are more likely
to be interested in these types of products. The company called Home Safety Service is an
example. They install safety equipment like grab bars, stair lifts, and wheelchair ramps at
people’s house. Survivors will spend the money on the things they are concerned about and thing
that are necessary. Rather than owning a car, they would be using public transport.

Why V A L S?

VALS is a marketing and consulting tool that helps businesses worldwide develop and execute
more effective strategies. The system identifies current and future opportunities by segmenting
the consumer marketplace on the basis of the 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 view of VALS is that people express their personalities through their behaviours.
VALS specifically defines consumer segments on the basis of 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.

Today, most marketers in India use segmentation models based on demographics, geo-
demographics, secondary data benefits and usage. However, these models are still inadequate in
their description & analysis of a person since they generate only isolated fragments.

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This is where Values and Lifestyles segmentation plays such a pivotal role.

Because lifestyle characteristics and values provide a rich view of the market and a more lifelike
portrait of the consumer, they meet the demands of management practice for increasingly
sophisticated and actionable marketing information. The basic premise here is - the more you
know and understand about your customer the more effectively you can communicate and
market to him / her.

Conceptually, VALS represents a linkage between the personality orientation of psychographics

and the activities orientation of lifestyle research. Marketers used the VALS typology popularly
to segment markets for their products, services and to target their promotional efforts. Some of
the uses to which Values and Lifestyles segmentation has been put here. These are:

• To identify whom to target and find niche markets much more easily.

• To locate where concentrations of your target group lives.

• To gain insight into why the target group acts the way it does.

• To improve and introduce products that speaks to customers' values.

• To target marketing and advertising campaigns much more effectively and much more
accurately.

• To position products much more accurately in the marketplace.

Do VALS segments differ in their consumerism? It is worth taking a look at an illustration of

the discriminative capability of VALS to segment consumer markets. Table below summarizes
data on six consumer markets. VALS segments and consumer behavior

It can be seen that the imported wine market is highly segmented. Survivors virtually never buy
this product (they may instead drink domestic wines or not drink much wines at all) and the other
segments at the top of the list are also buying imported wines at rates much below the national
average. The segments towards the bottom of the list constitute the 'heavy users' of imported
wines. Since Belongers are by far the largest segment, marketers might in this case want to key
in on this group to gain increased sales in the future.

The second column indicates the way in which competition occurs within a general use category.
Notice that most segments buy cold cereals at about the national average, with Survivors and
Achievers being lower, and the huge Belonger segment providing a massive sales base as they
buy at higher than average rates. The media columns show that it is possible to use VALS to
segment markets according to their use of media. This is important in the context of planning
media campaigns and knowing where the best media outlets are to place commercial messages in
order to reach target markets. The example in the table shows how highly segmented the
audiences are for TV comedy shows. The same is also true of sports magazine readerships. The
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final two columns indicate that VALS has been used to segment individuals on the basis of their
activity and interest characteristics.

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Chapter 4 Persuasion
Common words have social meanings in the social sciences. Colloquially people use terms like
"persuasion," "influence," and "attitude" interchangeably and communicate effectively with
them. In consumer behavior, however each of the words have different meanings.

Influence is an umbrella term. Any time a source deliberately attempts to change a receiver's
thoughts, feelings, or behaviors, influence is said to have occurred. When a source deliberately
uses communication to try and change a receiver's attitude, then persuasion is said to have
occurred.

Both influence and persuasion concern deliberate change, but diverge because persuasion
requires communication (verbal and nonverbal messages) and persuasion seeks attitude change.
By contrast influence can proceed without communication and may achieve behavior (external)
change without gaining attitude (internal) change. Thus persuasion, not influence, seeks to
change attitudes. Where there is meaning, there is persuasion - Kenneth Burke Persuasion is the
process of social influence, which takes place on a continuum from the intimate and
interpersonal to the public. Persuasive messages are composed of two major components. One is
an internal structure of argument proof, strategy selection and so forth as adjusted to the
immediate audience and task at hand. The other is a social context of relationships and symbolic
ideals about personhood, power, and communication within which persuasive appeals are
negotiated. Traditional studies of persuasion have emphasized the former component and largely
ignored the communal situated (both within ongoing interpersonal relationships, and within
cultural systems) nature of the process. Persuasion is thus a perspective that frames a message as
an attempt to influence an audience, to induce the audience to take some actions or to accept
some information.

The basic design principles of persuasive communication that lie at the heart of advertising are
presented here.

A. Role of Images: In this view images and graphics are never simply a form of expression, they
are functional tools that are manipulated to achieve desired ends. The advertiser can use images
and graphics to create emphasis, to stimulate reader interest, guide the reader through the most
significant information, or enable the viewer to compare and contrast information. Consumers
often face endless rows of products which are at the least not very pleasing, nor tempting or
conducive to purchase. Not only do we need to give product information to consumers but we
also have to evoke a multi-sensorial experience that might be the pleasure of tasting chocolate or
the excitement of an exotic cruise. Just picturing a product is not enough; one of the most
effective ways of showing furniture is to suggest the presence of people without actually
showing them, this makes it easy for the reader to imagine himself in the picture The rhetorical

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intention behind a visual message is communicated by the implicit selection or view over
another, style, layout, color, and props.

B. The Utilization of Metaphors: In persuasive communication, metaphors (and other

rhetorical figures) can be used to attract attention. The metaphor form also seems more likely to
evoke an imaginary experience in which the topics identity is transformed, thus giving rise to an
emotional response. What is important is the inferences and associations that people draw from
the metaphors. McQuarrie showed that in advertising, rhetorical figures had these effects on
consumers; they lead to an increased elaboration and to a greater degree of pleasure.

C. Making an Appeal: An appeal is something that makes the product particularly attractive or
interesting to consumers. An appeal can be achieved for example, by visual messages that
provide challenging puzzles that consumers can solve for their edification and delight. Humor is
effective in arousing attention. An appeal can be emotional, an advertiser can persuade an
audience to go to an aquarium by defining their future experience as based on a friendly, intimate
relationship with animals, such as whales.

Advertising Appeals: Sometimes objective, factual appeals are more effective in persuading a
target audience, at other times emotional appeals are more effective It depends on the kind of
audience to be reached and their degree of involvement in the product category In general,
however, logical, reason-why appeals are more effective in persuading educated audiences, and
emotional appeals are more effective in persuading less-educated consumers. The following
section examines the effectiveness of several frequently used emotional appeals.

At a psychological level, what is it exactly that makes you choose one brand over the
competitor?

What might seem like a simple choice really has more to do with methods of persuasion used by
advertisers to make consumers feel a certain way about a product. In advertising, there are a wide
variety of ways to catch the attention of your audience. These appeals can be broken down into
emotional and rational approaches. It is up to the marketer to identify and know which type of
appeal will be most effective in leading the target audience to action (purchase).

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Emotional Rational

▪ Fear Safety
▪ Humor ▪ Durability
▪ Guilt ▪ Variety
▪ Anger ▪ Time
▪ Social ▪ Efficiency
Approval ▪ Value
▪ Sadness
▪ Disgust
▪ Empathy
▪ Sex
▪ Pride

Emotional Appeals: Appealing to the audience’s emotions can be achieved through strong
imagery, impactful text or powerful music. An emotional advertising appeal depends more on
feelings and perceptions than logic or reason to provoke action.

Emotions are central to advertising, emotions play an important role in decision making by
providing information on the emotional desirability of the options available thereby limiting
reasoning to only those that induce positive feelings. We make choices about which stimuli to
attend and this choice is governed to an extent by our arousal, and our level of interest. Images in
persuasion are typically meant to give rise to some emotional disposition toward a product.
Moreover, emotions induced from the interface can enhance the quality of the customers’
experience. The convincing portrayal of emotion is essential to the success of virtually every
form of persuasive communication.

a. Fear

Fear is an effective appeal often used in marketing communications. Some researchers have
found a negative relationship between the intensity of fear appeals and their ability to persuade,
so that strong fear appeals tend to be less effective than mild fear appeals. A number of
explanations have been offered for this phenomenon. Strong fear appeals concerning a highly
relevant topic (such as cigarette smoking) cause the individual to experience cognitive
dissonance, which is resolved either by rejecting the practice or by rejecting the unwelcome
information. Because giving up a comfortable habit is difficult, consumers more readily reject
the threat. This they do by a variety of techniques, including denial of its validity ("There still is
no real proof that smoking causes cancer"), the belief that they are immune to personal disaster
("It can't happen to me"), and a diffusing process that robs the claim of its true significance ("I
play it safe by smoking only filter cigarettes"). Therefore, marketers should use reasonable but
not extreme fear appeals and also recognize that fear appeals are not always appropriate. For
exam-ple, a study of warning information labels affixed to full-fat, reduced-fat, and non-fat
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products concluded that, for products with credible and familiar risks, information labels were
more effective than warning labels because they do not arouse psychological reactance. Another
study of adolescent responses to fear communications found that adolescents are more persuaded
to avoid drug use by messages that depict negative social consequences of drug use rather than
physical threats to their bodies. There is no single explanation of the relationship between fear
appeals and persuasiveness. One theory proposes that individuals cognitively appraise the
available information regarding the severity of the threat, then they appraise the likelihood that
the threat will occur; they evaluate whether coping behavior can eliminate the threat's danger,
and if so, whether they have the ability to perform the coping behavior. This theory is called the
Ordered Protection Motivation (OPM) model. The study also found that the personality variable
"sensation seeking" affected the processing of fear appeals. A high sensation seeker is more
likely to use drugs and also to react negatively to fear-focused anti-drug messages, feeling that he
or she is immortal. Marketers must also consider that the mention of possible detrimental effects
of using a product while proclaiming its benefits may result in negative attitudes toward the
product itself. For example, if a luxury automobile company features a new 24-hour emergency
hot line in a series of advertisements (as an "added value" product feature), some consumers may
be "turned off by even the suggestion that a brand-new, expensive car would experience roadside
mechanical problems—particularly late at night on a dark and lonely road.

b. Humor Many marketers use humorous appeals in the belief that humor will increase the
acceptance and persuasiveness of their advertising communications. By some estimates, up to 24
percent of TV ads in the United States use humor, but there are some risks associated with using
this appeal. For example, the effects of humorous ads vary by the audience's demographics, level
of involvement (humor is more effective for promoting low-involvement products), and attitudes
(humor is more effective when the audience already has positive attitudes toward the brand).
Summarized below are some research findings on the impact of humor on advertising.

Marketers believe that younger, better educated, upscale, and professional people tend to be
receptive audiences for humorous messages. A study of how humor actually works within ads
discovered that surprise is almost always needed to generate humor and that the effectiveness of
humorous ads is also influenced by such message elements as warmth and playfulness.

c. Sex in Advertising In our highly permissive society, sensual advertising seems to permeate
the print media and the airwaves. Advertisers are increasingly trying to provoke attention with
suggestive illustrations, crude language, and nudity in their efforts to appear "hip" and
contemporary. In today's advertising, there is a lot of explicit and daring sexual imagery,
extending far beyond the traditional product categories of fashion and fragrance into such
categories as shampoo, beer, cars, and home construction. There is little doubt that sexual themes
have attention-getting value, but studies show that they rarely encourage actual consumption
behavior. A widely quoted study that examined the effects of sexual advertising appeals on
cognitive processing and communications effectiveness found that sexual appeals interfere with
message comprehension, particularly when there is substantial information to be processed. It
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also found that more product-related thinking occurs in response to nonsexual appeals and that
visual sexual elements in an ad are more likely to be processed than its verbal content, drawing
cognitive processing away from product or message evaluation. Some researchers have
concluded that nudity may negatively impact the product message. These and other findings
support the theory that sexual advertising appeals often detract from the processing of message
content.

The type of interest that sexual-advertising evokes often stops exactly where it starts — with sex.
If a sexually suggestive or explicit illustration is not relevant to the product advertised, it has
little effect on consumers' buying intentions. This highlights the potential risk of sexually
oriented advertising: The advertiser may be giving up persuasiveness to achieve "stopping
power." When using sex to promote product, the advertiser must be sure that the product, the ad,
the target audience and the use of sexual themes and elements all work together. When sex is
relevant to the product, it can be an extremely potent copy theme. For example the advertisers of
Perrier Jouet champagne show a beautiful nude tattooed with the company’s logo and the single
word "Unforgettable" to suggest a romantic, exciting, and unforgettable evening drinking their
champagne.

d. Abrasive Advertising How effective can unpleasant or annoying ads be? Studies of the
sleeper effect, discussed earlier, suggest that the memory of an unpleasant commercial that
antagonizes listeners or viewers may dissipate over time, leaving only the brand name in the
minds of consumers. All of us have at one time or another been repelled by so-called agony
commercials, which depict in diagrammatic detail the internal and intestinal effects of heartburn,
indigestion, clogged sinus cavities, hammer-induced headaches, and the like. Nevertheless,
pharmaceutical companies often run such commercials with great success because they appeal to
a certain segment of the population that suffers from ailments that are not visible and thus elicit
little sympathy from family and friends. Their complaints are legitimized by commercials with
which they immediately identify. With the sponsor's credibility established ("They really
understand the misery I'm going through"), the message itself tends to be highly persuasive in
getting con-timers to buy the advertised product.

e. Audience Participation Earlier we spoke about the importance of feedback in the

communications process. The provision of feedback changes the communications process from
one-way to two-way. This is important to senders because it enables them to determine whether
and how well communication has taken place. But feedback also is important to receivers
because it enables them to participate, to be involved, to experience in some way the message
itself. Participation by the receiver reinforces the message. An experienced communicator asks
questions and opinions of an audience to draw them into the discussion. Many professors use the
participative approach in classrooms rather than the more sterile lecture format because they
recognize that student participation tends to facilitate internalization of the information covered.

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Although participation is easily accomplished in interpersonal and online communications, it
takes a great deal of ingenuity to achieve in impersonal communications. Thus, it is a challenge
for imaginative marketers to get consumers actively engaged in their advertising as soon as they
see it.

Prestige/Status Appeal: There is no question that these nice, patent-leather work shoes were
chosen for a reason: status. The point of this ad was to get the viewer to identify the product with
a certain class. While the manufacturer is actually selling a car, classy shoes (clearly abused by a
love for the acceleration pedal) give a status appeal that is somewhat subliminal in its messaging.
Apartments, furniture stores, fashion brands and many other companies also lean on a level of
status to appeal to consumers concerned about where they are at, how they are viewed, and
where they are headed.

Rational Appeal: It is technique of designing advertising to appeal audience by using logical

arguments stating how it will satisfy customer’s practical needs. Rational appeal is based on
appealing price point and highlighting benefits of the products for the customers. The reasonable,
functional and practical aspect of the product or service is highlighted in rational appeal
advertisements. Generally small businesses use this kind of advertising method to fend off
competition.

The Rational Appeal is especially effective when the product, service, or idea contains many
features that will appeal to someone’s sense of reason. For example, if you are advertising a
vehicle that you know has technical features that will appeal to your audience (maybe enhanced
sound system, better gas mileage, higher safety rating, and so forth), you can use the rational
appeal to make your audience nod their head and say, “yep, that makes total sense. I want that.”

Price or Value Appeal: Such an appeal makes the price offer the dominant point of the
message. Price appeal advertising is used most often by retailers to announce sales, special
offers, or low everyday prices. Price appeal ads are often used by national advertisers during
recessionary times. Low value FMCG (Fast Moving Consumer Goods) brands often use the price
appeal to attract their target audience.

Tools of Persuasion
The six weapons of influence that Cialdini has identified are reciprocation, commitment and
consistency, social proof, liking, authority and scarcity.

1. Reciprocity - Give and Take…and Take

If a request is preceded by an unexpected gift, it has greater potential to convince potential

customers. The gift will make them feel the importance of returning the favor, or to reciprocate.

Social norms compel us to respond to a favor with another favor, in order to not be considered
ungrateful. Think about your daily life … Isn’t easier to get a person to do you a favor after

41
you’ve given them a gift or done something for them? That feeling of obligation makes them
more inclined to agree to your request.

An initial favor will be reciprocated many times over in the future. The most common example
of applying this principle in marketing are “free samples”. But be careful! To use the principle of
reciprocity to influence others, we must first be clear about who our target audience, know why
we want to influence them, and what exactly those people want. Once you’ve got all this, you
can identify what would be appealing to them to receive for free, that way you can implement the
principle of reciprocity successfully.

2. Commitment (and Consistency)

Human beings have a tendency to want to appear consistent in front of other people. We have a
need to be consistent with what we’ve done, what we said, and what we’ve bought. When
making any decision, we feel the “pressure” to behave in accordance with our prior
commitments. For example, this principle can explain why it’s easier to keep a customer than
attract a new one.

The influence of the principle of commitment is based on the desire to look and appear like a
person with consistent attitudes and behavior over time. Once we’ve publicly committed to
something or someone, then we’re much more likely to go through with the plan… hence
consistency.

Suppose you have 5 different phone numbers for pizza deliveries places that you like. The first
week you call 3 of them and make your order, but only 2 of them deliver your pizza in a timely
manner and in a good state. The next week you only have enough minutes to make one more
call, which of the 5 deliveries would you call? Probably one of the two who did a good job the
first week, since they’ve already fulfilled their job for you once and because the principle of
coherence tells us that they’re likely to do it again.

3. Social Proof:

You arrive to a new city that you’re not familiar with and you go out looking for a restaurant.
You get downtown and there are two very similar restaurants. However, there’s one fundamental
difference: one is almost full and the other is completely empty. Which one would you choose?

When we feel uncertain about making a decision, we observe what others are doing to get
“evidence” or social “proof” to see if something is OK or not.

We act in the same way that our society does (or social sub-groups) in order to be accepted by it.
Even when society is wrong! We tend to follow trends. And you can harness the power of social
proof to dramatically increase conversion rates of your website. Messages like: “9 out of 10
people recommend ….” are good examples of the principle of social proof beeing applied to
marketing. In this example, the sales pitch is based on the rate of collective approval.

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Amazon.com is a company known worldwide for selling goods over the Internet. We can see
how they put social proof to use by considering the way they expose buyers and sellers to ratings
that others have made about their products. This helps facilitate decision-making, because the
decision is backed by other’s experiences. It’s characterized by the star rating (1 to 5), including
the number of reviews received. You can also find comments from other users.

4: Liking: Cialdini said- We’re more likely to be influenced by the people who we like. If you
like someone you’re more likely to do something they want or ask. This principle is also based
on something as superficial as the physical appearance of a person.

The “About Us” part on a landing page is an excellent opportunity to tell and show potential
buyers all the similarities between them and us. This easily makes customers feel a connection
with someone or something they like and that represents them.

5: Authority: People in general have a tendency to obey authority figures, even if those
authority figures are questionable. It’s just human nature. When customers feel unsure about a
purchase, they usually look for a testimony from a “person with authority on the subject” to
serve as a guide. That’s why the opinion of professionals or experts is already a classic in the
world of advertising. If an authority figure or a leader in your industry has made a positive
comment about your product or service, make it known by showing it on your landing page or
your pricing page. It’ll help increase your sales!

6: Scarcity: With this principle, people have to know that they’re going to miss it if they don’t
act quickly. It mainly relies on the fact that things are more attractive when their availability is
limited, or when we risk losing the opportunity to acquire them. The law of supply and demand
plays a big role in the principle of scarcity. If the customer perceives a low supply or high
demand for a good, they’ll show that they’re immediately interested and even willing to pay a
higher price. Opportunities seem more valuable when we find it harder to get them.

Elaboration Likelihood Model Of Persuation (ELM)

In the elaboration likelihood model of persuasion, it is assumed that people either elaborate
(add details and information) based on what they hear (the facts of the message) or they do not
elaborate at all, preferring to pay attention to the surface characteristics of the message (length,
who delivers it, how attractive the message deliverer is, etc.). Two types of processing are
hypothesized in this model: central-route processing, in which people attend to the content of
the message; and peripheral-route processing, a style of information processing that relies on
peripheral cues (cues outside of the message content itself ), such as the expertise of the message
source, the length of the message, and other factors that have nothing to do with the message
content. This style of processing causes people not to pay attention to the message itself but
instead to base their decisions on those peripheral factors. For example, the author once

43
participated on a jury panel in which one woman voted “guilty” because the defendant had
“shifty eyes” and not because of any of the evidence presented.

Routes to Persuasion

Elaborative Likely hood Model (ELM)

The elaboration likelihood model above illustrates the two routes to message persuasion. Given
central route processing, factual messages are likely to be effective. Messages are remembered
because they contain quality arguments, substantiated by convincing evidence. Given peripheral
route processing, emotional appeals may make a positive impact—by making the consumer feel
good, for example. However, the impression they make is temporary and can be easily forgotten
or changed by competitive messages.

Central Route Persuasion: Central route of persuasion tells that if a person gets to think about a
message received for a longer duration of time, then the person has a greater chance of being
persuaded. The process of thinking for a longer duration is known as elaboration. For this, people
need motivation. If the persuasion level of the message is strong, he/she gets persuaded to
change their attitude or behavior.

Peripheral Route Persuasion: If a message given by a person does not elaborate on the
meaning of the message, the message can still be persuasive even if the content is not persuasive
enough. It can be due to direct relationship of the person with the content, familiarity with the
topic, positive attitude towards the sender, positive thoughts (sex, money), etc. This kind of
persuasion or attitude change might not last for a long time. This also happens if the recipient is
unable to process the message or if the content is weak.

Two conditions affect elaboration likelihood—motivation and ability. Consumers are likely to
process cognitively—think about—a message if they are motivated to do so and if they are able
to clearly distinguish among the product benefits it promises. If consumers are not motivated to
process the message and are not able to distinguish its merits, they are more likely to absorb it

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peripherally than centrally. Thus, given a highly motivated audience of consumers who are
willing to expend cognitive effort to process marketing information, factual messages work best.
Low motivation and low cognitive ability mean emotional appeals will be more effective.
Motivation to process the message depends upon the following three factors

 High motivation to process information

 Enduring Attitude toward product
 High ability to process information about a product

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Chapter 5: Perception
Perception is the process of selecting, organizing, and interpreting sensations into a meaningful
whole. In the past, methods of studying stimuli and measuring responses to them were restricted
to examining the five senses. Today, however, the view that perception uses merely sight,
hearing, smell, taste, and touch to comprehend the environment is inadequate. Although the
senses do play a major role in our comprehension of an event, our interpretation of a sensation
may lead to a false perception. Perception is highly subjective and therefore easily distorted.

An individual’s frame of reference affects the way he or she interprets sensations. For
example, two friends may go to see the same movie but leave with different interpretations of the
film. Their frames of reference, experience, and expectations are among the factors that influence
their evaluations. Not only may different people perceive the same stimulus differently, but the
same person may also perceive a given object or situation differently at various times or under
different circumstances.

Consumer perceptions are vital to marketers and often underlie the success or failure of
products in the marketplace. For example, a glance at the success story of the iPhone 4S is a case
in point. Apple witnessed overwhelming success with the 4S model when it sold more than 4
million units during the first weekend of its launch in October 2011. The iPhone 4S scored very
high on the customer satisfaction front, with 77 percent of owners saying that they are very
satisfied with the 4S. The phone also received a “thumbs up” from Consumer Reports, when the
magazine highly recommended it to readers. This has been a familiar theme for Apple’s iPhones
since the induction of the original model back in November 2007, during which sales amounted
to 1.4 million units in just the first 90 days.

Three concepts are intimately related to perception: exposure, attention, and sensation.
Acquisition of sensory information is possible only when con- sumers attend to stimuli they are
exposed to. For example, commercials that escape viewers’ attention produce no sensation and,
thus, have no effect on behavior.

Exposure, Attention, and Sensation

The process of perception begins with exposure to a stimulus. Exposure occurs when
individuals come into contact with environmental stimuli either accidentally or through their own
deliberate, goal-directed behavior. Not all stimuli to which we are exposed, however, get noticed.

Attention refers to the allocation of mental capacity to a stimulus or task. After

choosing whether or not to expose themselves to a message, consumers may momentarily pay
attention to a specific aspect of the stimulus that is within their range of exposure. Attention can
be planned, involuntary, or spontaneous.

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 Planned attention is goal directed; individuals use their attention—such as watching a TV
commercial or reading an ad in a magazine—to help them perform a specific activity such as
shopping. When external stimuli force their way into our awareness, attention is involuntary.
Imagine, for instance, that a fire alarm were to sound as you read this. Your automatic reaction
would be immediate involuntary attention to the alarm. Spontaneous attention, on the other hand,
may be exemplified by shoppers looking for birthday gifts.

They do not concentrate too narrowly on any particular product class; thus they may remain open
to other stimuli. A perfume bottle noticed by accident while shopping at a department store is an
example of a product that receives spontaneous attention.

Sensation:

Sensation refers to the responses of our sensory receptors (eyes, ears, mouth, nose, touch) to
environmental stimuli, and the transmission of this information to the brain via the nervous
system. This process represents the acquisition of raw sensory information received through the
sense organs—a preliminary step in the processing of information.

Sensory Systems

Environmental stimuli or sensory inputs are received through our five senses. Visualize for a
moment a young woman shopping in an open fruit market on a sunny summer day. She sees the
splendid colors of the different varieties of fruit, smells the sweet aromas of mangoes and
strawberries, tastes a sample of a ripe pineapple, hears the calls of vendors promoting their fruits,
and feels the weight and consistency of a melon as she examines it before purchase.

The input picked up by her senses as she walks among the fruit stands is the raw data—
ingredients in the initial step of information processing.

Elements Of Perception
Sensory Threshold: Any and every stimuli that we are exposed to may not catch our
attention. This is because the stimuli lacks in strength and intensity. The amount of strength and
intensity that a stimulus must possess so as to get noticed by the sensory receptors for ultimate
perception is referred to as sensory threshold. For example, a faint sound may not be heard, or a
light smell may get unnoticed, etc. Each one of us has our sense organs, and we all differ with
respect to how quick and competent they are to sense such stimuli. Sensory threshold is further
elaborated upon by the two sub-concepts of absolute threshold, and differential threshold.

a) Absolute Threshold: The minimum amount of strength or intensity that a stimulus

should possess to get noticed is referred to as an absolute threshold. It is the lowest intensity at
which a stimulus can be detected i.e. in other words, it is the lowest level at which an individual
can experience a sensation.

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An absolute threshold is the smallest amount of stimulation needed for a person to detect that
stimulus 50% of the time. This can be applied to all our senses:

• The minimum intensity of light we can see

• The lowest volume of a sound we can hear

• The smallest concentration of particles we can smell

• The smallest concentration of particles we can taste

• The lightest touch we can feel

But what is that “50% of the time” part of the definition for? Why not 100% of the time?

That is because our absolute threshold can vary according to external and internal factors like
background noise, expectation, motivation and physical condition. It is easier to hear a sound
when we are in perfect health, expecting to hear it in a quiet room than when we are tired,
unaware of it and in a noisy street.

Think of entering a room where the air conditioner is making a really loud noise. In the
beginning, the sound of the air conditioner may bother you, but after you’ve been in the room for
a while, you’ll stop noticing it. If somebody turns off the air conditioner, you’ll immediately
notice the difference, even if you were not aware of its sounds before. This is a biological
response that makes total sense because if a stimulus is perceived for an extended period of time
and nothing bad happens, then that stimulus is not dangerous and it can be ignored since it’s not
worth spending energy to sense and perceive it.

Our senses also have an absolute threshold that determines the minimum possible amount
of stimulation that is required for getting noticed. Thus, the absolute threshold varies from person
to person. Some people are good at hearing and can hear the faintest of sounds; on the other hand
there are others for whom a faint sound would get unnoticed. Similarly, some people have good
eyesight and can small prints while others cannot. Thus, absolute thresholds differ from person to
person, and any stimuli that falls below one’s threshold, would get unnoticed. Thus, in order to
get noticed, the marketer should understand that the absolute threshold for a stimulus should be
kept high; for example, when making decisions on packaging of potato wafers, the font size
should be big, the colors flashy and attractive etc.

b) Differential Threshold (just noticeable difference): The minimum amount of

change that is required to be brought about in a stimulus so that the change gets noticed is
referred to as the differential threshold. It is the minimum level of change that is necessary for a
person to detect that there has been a change in the stimuli. That is why it is also known as j.n.d.
(or just noticeable difference).
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• The smallest difference in sound for us to perceive a change in the radio’s volume

• The minimum difference in weight for us to perceive a change between two piles of sand

• The minimum difference of light intensity for us to perceive a difference between two light
bulbs

• The smallest difference of quantity of salt in a soup for us to perceive a difference in taste

• The minimum difference of quantity of perfume for us to perceive a difference in something’s

smell

You may have already had the experience of turning up the TV or radio volume and not noticing
a difference until a certain point. That is the difference threshold concept in action. If you don’t
notice the difference, your difference threshold has not been reached yet.

The concept can also be defined from the perceiver’s perspective. Human beings also have the
ability to perceive changes in a stimulus. Differential threshold refers to a person’s ability to
detect and perceive a change in the stimulus.

The marketer should understand that while making changes in his 4Ps, he should keep the
differential threshold in mind. He needs to determine the relevant j.n.d. for their offerings. For
certain changes like decrease in price or discounts, he could keep the j.n.d. high so that it is
noticeable, and consumers are attracted towards the discounted price; and in case of price
increase, he should keep the j.n.d. low and increase the price gradually, so that it does not get
noticed by the consumer. For changes like increased quantity at the same price, he should keep
the j.n.d. high again, so as to be noticed. A new variant or a modified form, should exhibit the
“NEW” so that it is noticeable.

In a nutshell, the j.n.d. should be used in a manner that while positive changes (eg.
reduced price, discounts, “extra” quantity, product improvement etc) should be noticeable to the
consumers, negative changes (eg. increased price, reduced quantity etc.) should not be apparent.

There are certain other concepts that relate to perceptual selectivity, viz., selective exposure,
selective attention, perceptual defense and perceptual blocking.

c. Subliminal Perception

When peoples' thoughts, feelings and actions are influenced by stimuli without awareness. When
perception about a product is more powerful than the awareness about that product. It is the mind
control that can be achieved without awareness. Two basic types of subliminal messages can be
sent to the unconscious- auditory & visual. It occurs even when the stimulus is very weak but
still can influence people.

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Stimuli that are too weak or too brief to be consciously seen or heard may nevertheless be strong
enough to be perceived by one or more receptor cells. This process is called subliminal
perception because the stimulus is beneath the threshold, of conscious awareness, though
obviously not beneath the absolute threshold of the receptors involved.

For instance, one can flash words or pictures so quickly on a computer screen (generally
faster than 10-15 milliseconds) that perceivers have the feeling they do not see anything at all. In
other words, they are not consciously aware of the presented words or pictures. However, such
visual stimuli are processed unconsciously, and they can have brief and subtle effects on our
feeling and thinking. In addition, some research has been done on auditory subliminal
perception. No reliable scientific evidence exists, however, for psychological effects of auditory
subliminal perception.

Thus, marketing messages that influence them unconsciously are called subliminal perception of
customer’s experience. Many marketers include these subliminal words and images in
advertising. They use the subliminal references to power, sex, happiness, wealth or hunger in
their online, print and television ads or in brand logos.

Example: The logo, shown alongside, features a smiley face that connects A to Z, as to suggest
that amazon can find anything starting with A to Z and customers will always be happy doing
business with Amazon.

Subliminal marketing helps to gain attention of the customers and influence them to prefer your
product if they are not loyal to another competing product. In order to be influenced by
subliminal perception, they must be motivated to do what the subliminal message suggests after
hearing about the brand. For example, is a subliminal message flashes about a product related to
sports gear, but you are not interested in sport, then it won’t influence you to buy.

Many marketers don't see the need, to sway some undecided consumers by the help of subliminal
marketing. Conscious thoughts and emotions by Compelling marketing keep the consumers
away from coming back to a brand they already like. When the supposed subliminal messages or
images are exposed, impact of ads and logos on consumers’ minds is diminished.

The idea of an objective “threshold’ is misleading. No objective threshold exists for conscious
perception. Whether a briefly presented stimulus reaches conscious awareness depends on many
different factors, including individual differences. The threshold is merely subjective.

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Chapter 6 Learning
Learning is defined as a relatively permanent change in the behavior that occurs as a result of
experience of self or others. There occurs an enhancement of knowledge, skills and expertise
which are relatively permanent. Consumer learning is defined as a process by which people
gather and interpret information about products and services and use this information/knowledge
in buying patterns and consumption behavior. As Schiffman has put it “consumer learning can be
thought of as the process by which individuals acquire the purchase and consumption knowledge
and experience that they apply to future related behavior”. Consumer learning may be
intentional, where learning is an outcome of a careful search for information; learning can also
be incidental, where learning occurs as a matter of chance, by accident or without much effort.

Nature and Characteristics of Learning:

Consumer learning can be better explained by understanding the nature and characteristics of
learning:

a) Learning involves a change in behavior; in terms of consumer learning, it implies that a

consumer who is exposed to the marketing stimuli, may react to it through its purchase and
consumption; if his experience is satisfying, he would repeat the purchase behavior in favor of
the brand. In case he is not satisfied, he would switch over to another brand. Thus leaning
involves a change in behavior. Further this change in behavior is relatively permanent. Learning
also leads to development of attitudes. Until and unless an attempt is made to change this
behavior, it continues. For example, a person learns that Pepsodent toothpaste fights tooth decay
24 hours, and is better than Colgate. Now because of this learning, he develops a predisposition
that Pepsodent is better than Colgate. He would continue to purchase brand, Pepsodent. It is only
when another brand say, Colgate or Close up begin to claim and prove with data that they fight
tooth decay better than Pepsodent, would the consumer change his preference from Pepsodent to
another.

b) The change in behavior occurs because of experience, there has to be some kind of an
experience for learning to occur. This experience could be direct (self-experience) or indirect
(experiences of others, and word of mouth). A consumer learns about a product/service category
and the varying brands either on his own or from others. His pleasant experiences with the
product/service category, leads to a positive opinion about the brand, and would eventually
develop into brand loyalty. On the contrary, his unpleasant experience, leads to a negative word
of mouth and switchover to other brands. This leads us to another characteristic of the learning
process that has been explained above as an element of learning. Learning must be reinforced to
have an impact; if learning as a process is not reinforced, the behavior would disappear. This
reinforcement could be positive or negative. Through a positive reinforcement {where a purchase
(action) is followed by a satisfaction (reaction)}, learning would take place, and the consumer
would prefer to buy the same product/brand in future. In case of a negative reinforcement {where

51
an purchase (action) is followed by a dissatisfaction (reaction)}, learning would take place, and
the consumer would learn not to buy the same product/brand in future. Learning also leads to
development of attitudes.

c) Apart from experiences, consumer learning also reflects the impact of (i) marketing
(commercial) and non-marketing communication (interpersonal/non-commercial), as well as (ii)
background characteristics. Marketing communication (advertisements, publicity, personal
selling, sales force etc.) as well as interpersonal communication have a big role to play in
consumer learning. The marketer educates the consumer about the product/service category,
attributes, benefits, features, price etc. The consumer also learns about the brand from the dealer
or even from the packaging/labeling. Interpersonal communication with family, friends, peers
(word-of-mouth), opinion leaders etc. also impacts consumer learning. Consumer learning also
reflects personal, demographic and psychographic characteristics. Age, education, income,
occupation, lifestyle, values, attitudes, personality, perception, social class, culture and sub-
culture, all of these impact the knowledge base of a person and impact his purchase and
consumption patterns.

d) Learning is a cognitive process and can only be inferred through our actions and behavior.
Learning includes exposure to information, its processing and storage; this entire process cannot
be observed directly, and is only reflected in our behavior. In terms of consumer behavior, we
could explain consumer learning by observing the behavior of consumers in a store. For
example, majority of the people who buy health tonic for their children purchase the Complan
brand. This would give an input to the dealer that Complan is a popular brand and is favoured
over Boost and Bournvita. Heinz India Pvt. Ltd. would be able to interpret this behavior on the
part of the consumers as customer satisfaction and popularity with its brand Complan. On the
other hand, GlaxoSmithKline and Cadbury would infer that they need to improve upon Boost
and Bournvita respectively.

e) Learning is a continuous process. A person is exposed to information/ knowledge

and/experiences all the time; he interprets these, learns from them and stores these in his memory
for retrieval. This addition of knowledge to the memory bank may alter/modify existing
information (this entire bank is called the Associative Network). The upgraded information
provides a basis for future behavior. Consumer learning as a continual process where knowledge
is ever evolving as a result of (i) marketing stimuli (watching or reading about newer
products/services and brands, their features, prices etc. and thinking about them); or, (ii)
discussion with family, friends, peers, colleagues, blogs and public forums; or, (iii) direct
experiences (self) and indirect experiences (Word-of-Mouth). This knowledge gets integrated
into the memory with the other information stored earlier; infact, this newly acquired information
would alter/modify existing information, and acts as a basis for future purchase. For example, if
Samsung launches a new model of a microwave which is an improvement over the previous
model, the new inputs provided through the advertisement adds up to the existing information

52
about the Samsung and its microwave models. When a person wants to buy a microwave, he
would also include this brand and the model in his evoked/consideration set.

f) Learning may be specific/intentional, ongoing and incidental. - Consumer learning is

specific/intentional when it is directed to a specific need and problem solving; it is deliberate in
nature and specific to the situation, where the person intends making an immediate purchase.
Example: student enters college and needs to buy a laptop so that he can work on his
assignments. So he searches for information, talks to dealers, friends etc. and obtain knowledge.

- Ongoing learning is long drawn; the consumer intends making the purchase sometime in the
future, and is searching for information and adding up to his associated network. Example: the
same student, has been thinking of purchasing the laptop since the past five years, and over these
past 5-6 years, he has been gathering information specific to the laptop as a product category and
also about the various brands available.

- In incidental learning, learning occurs incidentally as a byproduct of something else; It is not

deliberately sought and is totally unintentional; it is acquired by accident or without much effort.
Example: the student goes to a mall; he has gone there to help his mother buy a microwave oven;
there in the store, he attends a demonstration of a new laptop that is being launched.

There are two approaches to the study of learning, viz., the behavioral theories of learning, and
the cognitive theories of learning. While the theories underlying these two approaches are dealt
within the next session, they are briefly explained here.

APPROACHES TO LEARNING:

A) Behavioral Theories Of Learning: According to this approach, learning within an

individual takes place in response to events/happenings/stimlui in a person’s external
environment. They explain learning in terms of observable responses to external stimuli or as a
relationship between stimulus and response. The main proponents of this approach were:

- Ivan Pavlov, who conducted the famous experiments on the dog; His theory came to be known
as the Theory of Classical Conditioning.

- Burrhus Frederic Skinner, who conducted his experiments with rats and pigeons; His theory
came to be known as the Theory of Operant Conditioning or Instrumental Conditioning.

In order to illustrate the two approaches in terms of consumer behavior, let us take an example.
A new detergent + starch combination gel is launched by Hindustan Uniliver Ltd. It is specially
developed for cotton clothes, and the USP of the product is that it does not only clean them but
also applies starch on them, making them clean and crisp after application.

Classical Conditioning:

53
Operant Conditioning: HUL decides to give free samples in small 25 gm pouches, with
products like Lux, Peposodent etc. The person who buy a Lux or a Pepsodent, would get a sachet
of this new product free; he would try it and if he finds it satisfying, he would desire buying a
larger quantity pack to be used regularly (positive reinforcement).

b) Cognitive theories of learning: Theorists of this approach believe that learning takes place as
a result of a person’s conscious and deliberate information processing and storage activity, often
in response to problem solving. Thus, learning is a function of mental processing. One of the
main proponents of this theory is Edward Tolman, who experimented on rats. In terms of
consumer learning, any kind of extensive problem solving, on the part of the consumer, is
cognitive and would be included under this approach. This would include gathering, processing
and interpreting information; storing it in memory; and final retrieval when required.

LEARNING THEORIES AND THEIR IMPLICATION FOR MARKETERS:

The approach defines learning in terms of an association between stimulus and response, where
the stimulus is an external object/person/situation that a person senses and perceives, and
response is the behavior of the person that occurs in reaction to the object/person/situation.

The theories are based on the assumption that:

- people learn to associate the stimulus and response.

- they begin to relate the stimulus and response and they generalize the relationship, across
situations; whenever the stimulus occurs, there is a similar response.

- observable and predictable responses to specific external stimuli are reflective and symbolic of
learning having taken place.

- thus, these behavioral theories are also referred to as stimulus-response theories .

Behavioral theorists do not concentrate on the dynamics of the learning process. Their major
concern is on viewing learning as a response to events/happenings in a person’s external
environment. The main proponents of this approach were Pavlov, who proposed the theory of
classical conditioning, and Skinner, who proposed the theory of operant/instrumental
conditioning. While they both spoke of the relationship between the stimulus and response, they
differed on the cause and effect relationship; while Pavlov believed in the Stimulus leading to
Response relationship (S�R), Skinner spoke of Response leading to Stimulus relationship
(R�S). The theories by the two psychologists are elaborated upon subsequently.

BEHAVIORAL LEARNING THEORY:

Theory of Classical Conditioning:

54
Proposed by Ivan Pavlov, a Russian psychologist, in the 1920’s, this pioneering work was based
on the famous experiments that were conducted on dogs.

The Classical Conditioning Theory was proposed by a Russian Physiologist Ivan Pavlov.
According to this theory, behaviour is learnt by a repetitive association between the response and
the stimulus.

The classical conditioning theory assumes that learning is developed through the interactions
with the environment. Also, the environment shapes the behaviour and internal mental state such
as thoughts, feelings, emotions do not explain the human behaviour.

Pavlov believed:

- all living beings are passive in nature; they can be taught how to behave through
repetition or conditioning; and,
- learning occurs as a repeated connection/association between stimulus and response
(Stimulus → Response) or (S - R).
- learning takes place through conditioning; as such classical conditioning also came to be
known as respondent conditioning.
- learning becomes conditioned when a stimulus that is paired with another stimulus that
leads to a known response serves to produce the same response when used alone.

Pavlov elaborated upon the process of conditioning through a series of experiments that he
conducted on dogs. Pavlov started his experiments on the dog by measuring the amount of
salivation secreted by the dog as and when changes were made. Initially, he gave meat
(unconditioned stimulus, US) to the dog and as natural, there was a great deal of salivation
(unconditioned response, UR). When he merely rang the bell (neutral stimulus) and gave no
meat, there was no salivation. In the next phase, he combined the two, meat as well as the ringing
of the bell (unconditioned stimulus plus conditioned stimulus, US+CS). The dog salivated
(unconditioned response, UR). He repeated the pairing many a times over a period of time. In the
last phase, Pavlov rang the bell without giving the meat (conditioned stimulus, CS); and the dog
salivated to the sound of the bell alone (conditioned response, CR). The dog became conditioned
to salivate at the sound of the ringing bell. The dogs associated the bell sound of the bell (CS)
with the meat (US) and, after a number of pairings between the CS and the US, gave the same
response (salivation) to the bell alone as he had been doing to the maet alone.

I Before conditioning

Meat (US) →Salivation (UR)

Ball (Neutral stimulus) →No response

II During conditioning

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Meat (US) + Bell (CS) → Salivation (UR)

III After conditioning

Bell (CS) →Salivation (UR)

In conceptual terms, according to Pavlov, conditioning would take place if:

- an unconditioned stimulus (US) results in an unconditioned response (UR).

Subsequently,

- an unconditioned stimulus (US) paired with a conditioned stimulus (CS), will result in the same
response, which would now be called a conditioned response (CR).

Finally, upon repeated pairings,

- the conditioning stimuli alone (without the unconditioned stimuli) would elicit the same
conditioned response (CR).

Thus, classical conditioning occurs when a person learns to relate an unrelated stimulus (CS)
with a particular behavioral response (UR/CR) that was previously elicited by a related stimulus
(US). If a person is exposed to a series of repetitive pairings between the first and second
stimulus, gradually what happens is that the second stimulus alone, begins to be associated with
the first, and elicits the same response, as the first one did alone or in combination with the other.

In terms of consumer behavior, let us take an example of a product, and a brand:

I Before conditioning

Grandmother (US) ----- Love and affection, Happiness and delight (UR)

Nivea Cream (Neutral stimulus) ---- No response

II During conditioning

Grandmother (US) + Nivea Cream (CS) ---- Love and affection, Happiness and Delight (UR)

III After conditioning

Nivea Cream (CS) ---- Love and affection, Happiness and Delight (UR)

Now, let us take an example of a store, and its patronage.

I Before conditioning

Himalaya soap (US) ---- Purchase and loyalty (UR)

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Noble Pharmacy (Neutral stimulus) ---- No response

II During conditioning

Himalaya soap (US) + Frank Ross Pharmacy (CS) ----- Purchase and brand loyalty (UR)

III After conditioning

Noble Pharmacy (CS) ---- Purchase and store loyalty (UR)

Implications for marketers:

The Pavlovian Theory has implications for marketers. Consumers respond to learning via
classical conditioning when:

- the level of perceived risk is low (and cognitive effort is not required)

- products are low on differentiation

- purchases are routine; convenience goods and impulse items.

The basic concepts that derive from classical conditioning are explained below with relevant
examples:

a) Repetition: The repeated pairings of the CS and the US, led to a strong association between
the two, and this resulted in a similar response, even when the US was missing; thus, repetition
increased the likelihood of a living entity’s responding to a conditioned stimulus. The more often
a CS is paired with a US, the stronger the association becomes and the more likely that it would
be remembered. Because of this principle of repetition, the dog had begun to associate the meat
and the bell.

Signs, symbols, logos, colours and jingles help facilitate consumer learning through the process
of association.

In terms of marketing, this is the reason why marketers repeat their messages either in print or in
audio visual media across channels several times a day. Repetition slows down the pace of
forgetting. For example, HUL advertises for its various brands separately all the day long on
various TV channels; while the brand is Lux or Liril or Dove (individual brand), the
advertisement concludes with the HUL logo, the parent brand.

However, this also has a demerit, in the sense that too much of repetition leads to boredom,
resulting in fall of attention and subsequent retention.

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In terms of marketing:

1. This is the reason behind the success of imitative “me too” products/brands. There is a
stimulus generalization on the part of the consumers who fail to differentiate between the “me
too” from the original products/brands. This may be because of similarity in the name or logo or
packaging or in the advertisement. When stimulus generalization takes place, the consumers
confuse the “me-too” with the original products/brands they have are familiar with, and go in for
the purchase of imitative products/brands. Example: Puma vs. Pama; Adidas vs. Abcids; Sony
vs. Sonia; KFC vs. KLC; Panasonic vs. Panosaonic.

2. Apart from the “me-too” marketers, there may also be competitors (market challengers and
followers) who may want to encourage stimulus generalization to take advantage of the market
leader’s position; they go in for similar packaging or advertisements or may even use the same
models and celebrities for their advertisements. Example: Duracell and Eveready played very
similar advertisements, much to the confusion of consumers.

3. Also in case where a brand is very successful, and the marketer is diversifying into other
related product lines, he adopts this principle to encourage generalization for all the new product
lines by using similar packaging for all the different products in a product line. Example, product
line extensions, brand extension, family branding, licensing.

- Product line extensions: The use of an established brand name for a new item in the same or
related product category, eg. Surf, Surf Excel, Surf Excel Blue, Surf Excelmatic. This practice is
commonly adopted as it is easier for a marketer to relate a new product or the new variants of an
existing product with a known brand name than having a totally new name. One needs to
exercise caution as any failure with any of the products, can tarnish the entire brand name.

- Brand extension: This implies the use of an existing brand for a new product.

- Family branding: It is also called umbrella branding. It is the practice of using the same brand
name for the whole line of the company’s products so as to generalize favorable brand
associations from one product to another. A large number of products capitalize on the reputed
name of the company, eg. Amul, Samsung.

- Licensing: The permission to use a well-known brand name to products/services of another

manufacturer/service provider is called licensing; the advantage of licensing is that it leads to
instant recognition as a quality brand and successful brand, eg McDonalds.

Overall Contribution of Classical Conditioning to Marketing: The Pavlovian theory, through

the above mentioned three principles provides insights into the understanding of consumer
behavior.

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Operant or Instrumental Conditioning:
B. F. Skinner concluded that a living entity, be it animals or human beings, act instrumentally;
they would act out certain behavior that would make them feel rewarded and get them what they
want; on the other hand, they would avoid those acts of behavior that would be punishing and not
get them what they want. The operant theory is based on the assumption that:

- behavior is a function of its consequences.

Skinner based his theory on the experiments he conducted while working with animals and birds,
like rats and pigeons. He developed a cage, what was came to be known as the “Skinner’s Box.”
The cage had a mechanism which facilitated the learning process; the cage had levers and keys;
it also had a bar or a pedal on one of its walls, and that when pressed, caused the mechanism to
release food into the cage. The rats moved across the cage; and suddenly, accidentally they
would press the bar, and the food was released. The rat began to understand a connection
between his movement and the food; and gradually, learnt to press the bar or pedal the right key
that gave him the food. Skinner repeated these experiments with pigeons; as and when they
pecked the right key, food was released. The food acted as a reward, where the rats and pigeons
were "rewarded" for choosing an appropriate behavior, and their behavior was positively
reinforced. Over time, Skinner decided to withdraw the food; while the rats and pigeons made
the right movements, food was no longer released and the creatures were disappointed. After
several attempts with unrewarding consequences, they stopped pressing the right bars and pedals.
This was referred to as extinction.

Skinner concluded that any behavior that is followed by pleasant events (reinforcing stimulus), is
likely to be repeated; a positively reinforced behavior increases the likelihood of repetition of
such behavior. On the other hand, any behavior that is followed by unpleasant events (and a non-
reinforcing stimulus), is less likely to be repeated; it results in a decreased probability of that
behavior occurring in the future.

Thus, operant or instrumental conditioning occurs when person learns to act out behaviors
that are positively reinforced, and avoids those acts of behavior that lead to punishment or yield
negative reinforcement. Of the several responses made to a situation (stimulus), those which are
followed by satisfaction and reward will be more likely to occur again; and, those which are
followed by dissatisfaction and punishment, will be less likely to occur again.

In terms of consumer behavior, let us take an example of a product, like shoes.

-A person want to buy a shoe. He would go to a shop and try out various brand, kinds and sizes
of shoes. He would continue with the trial and error process, till he can manage to get a shoe that
is most comfortable and rewarding. The next time he wants to buy a shoe, he would repeat the
behavior (purchase), and he would go to the store and ask for that particular brand, type and size.
This is because the satisfaction (Response) with the purchase of the brand, type and size

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positively reinforced his behavior towards his next purchase of shoes (Stimulus). In this way, he
would learn to repeat behavior and inculcate a habit that is rewarding.

Kinds of Reinforcement:

Reinforcement may be defined as something that increases the strength of a response and tends
to encourage repetitions of the behavior that preceded the reinforcement. There are four kinds of
reinforcement, viz., positive reinforcement, punishment, extinction and negative reinforcement.
As may be seen in the figure, a pleasant event may be applied or it may be withdrawn. Similarly,
a negative event may be applied or it may be withdrawn. The application or withdrawal of
pleasant and unpleasant events elicits learning in individuals and has varying impacts on the
behavior of a person (See Table 1).

Table1: Kinds of Reinforcement

Pleasant Event Unpleasant Event

Event is Applied Positive Reinforcement Punishment

Behavior becomes more likely to Behavior becomes less likely to

occur again occur again

Event is Extinction Negative Reinforcement

Withdrawn

Behavior becomes less likely to Behavior becomes more likely to

occur again occur again

- Positive Reinforcement: Here, a pleasant event is applied after the act of behavior; in other
words, the act of behavior is followed by pleasant consequences; The individual is rewarded for
his behavior, thereby encouraging repetition of the response. Thus, the behavior that precedes the
pleasant event is more likely to occur again. The behavior is positively reinforced.

- Punishment: An unpleasant event is applied after the act of behavior; in other words, the act of
behavior is followed by unpleasant consequences; The individual is punished for his behavior,
thereby discouraging repetition of the response. Thus, the behavior that precedes the pleasant
event is weakened and becomes less likely to occur again.

- Extinction: In the case of extinction, a pleasant event is withdrawn after the act of behavior; in
other words, the act of behavior is not followed by pleasant consequences; The individual is

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neither rewarded nor punished for his behavior, thereby discouraging repetition of the response.
Thus, the behavior that precedes the pleasant event is less likely to occur again.

- Negative Reinforcement: An unpleasant event is withdrawn after the act of behavior; in other
words, the act of behavior is not followed by unpleasant consequences; The individual is not
punished for his behavior, thereby encouraging repetition of the response. Thus, the behavior that
precedes the pleasant event is more likely to occur again.

The Operant Conditioning Theory has implications for marketers. Consumers respond to
learning via instrumental conditioning when:

- trial can be attempted before purchase

- purchases are linked to desirable affective experiences

- there is higher involvement and greater cognitive activity.

Implications for marketers:

Marketers can make use of instrumental conditioning when a consumer is rewarded for a brand
decision in their favour, or punished for a brand decision in the competitors favour. The rewards
here not only refer to product satisfaction and value for money but also services and facilities
provided, rebates, discounts, loyalty points, etc.

The marketers need to understand the impact of the trial and error on the learning process.
According to the theory, people learn by trial and error; they would find certain acts of behavior
more rewarding than the others, and the tendency on the part of the individual would be to repeat
such behaviors. People would also find certain acts of behavior threatening, and they would
avoid repeating those acts of behavior.

Consumers also learn by trial and error. Some purchases are more rewarding than others, i.e.
they result in favorable outcomes; this favorable outcome leads to an instrumental conditioning,
and the consumer learns to repeat the purchase behavior (in favor of the brand/marketer). The
brand that is most rewarding and satisfies him the most, is the one that he would like to buy in
future. Learning is viewed as a trial and error process in which the positive/desired outcomes
lead to repeat behavior like Repeat Purchase. Satisfaction/dissatisfaction with a product/brand act
as a reinforcement strategy and affect the habit paradigm. Further, heavily used reinforcements
lose effect, and this is referred to as the satiation effect.

Let us now discuss the implication of the reinforcement strategies for a marketer:

- Positive Reinforcement: A consumer will continue to patronize a brand and be loyal towards
it as long as his purchase decision is satisfying and rewarding. The purchase of the product/brand
elicits a reward in terms of satisfaction; thus the likelihood of the repeat behavior (purchase) is
high, and brand loyalty would develop. A habit would be formed as a result of the reward
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received for the behavior. For example, a lady would continue buying Dove soap as long as she
finds that the soap that has a moisturizer leaves her skin soft after a bath. The marketer needs to
fulfil all promises and keep the consumer satisfied.

- Punishment: As a strategy this has lesser implications for a marketer. However, policy makers,
governmental organizations and reform bodies, may depict this to create fear amongst the people
and make them law abiding citizens; Eg. fines for traffic rule violation, smoking and cancer,
drinking and driving etc. This would discourage a person from taking an action that would have
an unpleasant or a negative consequence.

- Extinction: A marketer who is popular with providing discounts, rebates and offs on his
products may face such a situation. If a company is frequent with providing discount and rebate
schemes, suddenly withdraws such schemes, the consumers would be discouraged from
purchasing the brand again. In a way, the consumers would have become used to such discounts
(rewards). Now if the schemes are withdrawn, then the likelihood of a repeat purchase of the
brand would reduce. For example, Koutons Retail has positioned itself as “High Fashion Value
for Money” brand; the brand is always on sale, like “50% off” or “Flat 50% off+49% off” or
“Flat 80% off” or Denims at Rs. 299. Now bargain hunters and price sensitive customers who
look out for good deals would purchase from Koutons. If Koutons withdraws it discount
schemes, the likelihood of consumers buying from there would reduce.

- Negative Reinforcement: As a strategy this implies, that a marketer should encourage

consumers to make purchases of their brands (act out behavior) to avoid the negative
consequences. This could be related to negative motivation, in the sense that the marketer
convinces the consumer to buy out his brand to avoid an unpleasant experience. For example,
HUL played an advertisement for Pepsodent Toothpaste for children. Targeted at children, a fear
appeal was used; it said, if you do not brush your teeth “kitanu kha jayenge”; For parents it said
that Pepsodent fights germs and tooth decay 24 hours a day; Now children/parents began to
use/buy Peposodent in order to avoid a negative consequence (tooth decay). Thus a marketer can
encourage a behavior on the part of the consumer by conveying a withdrawal of an impending
undesirable consequence, through the purchase of his brand. Consumers would learn that through
negative reinforcement that a change in behavior (change from existing brand to a new one)
could avoid negative consequences and subsequently provide rewards.

Marketers should also understand that heavily used reinforcements lose effect. This is referred to
as the satiation effect.

COGNTIVE LEARNING THEORY:

Cognitive theorists believe that a person’s learning is a complex mental process. It takes place as
a result of a conscious and deliberate information processing and storage activity that takes place
within living beings. Living beings make active use of creativity, insight, and information

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processing to solve issues and problems. The focus of cognitive theorist is on the “thinking”
rather than the “doing” of the behavioral scientists.

One of the main proponents of this theory is Edward Tolman, who conducted a series of
experiments on rats, and finally came up with his findings. In terms of consumer learning, any
kind of extensive problem solving, on the part of the consumer, is cognitive and would be
included under this approach. This would include gathering, processing and interpreting
information; storing it in memory; and final retrieval when required.

Cognitive learning focuses on the gathering and processing of information, storage in memory
and final retrieval of knowledge from a person’s memory. A person first gathers information and
then processes it. This information gathering and processing depends on the complexity of
information as well a person’s cognitive ability. Cognitive ability differs from person to person,
so does imagery. Imagery is a perceptual process that enables formation of mental images within
a person; these images relate to a stimulus and influence a person’s ability to recall information.
Once the information has been processed, a person organizes it by associating it with various
other cues, and creates mental images, and finally stores it in his memory. Memory involves the
process of gathering, processing and storing information over time so that it will be available
when required. As and when required to solve problems, he retrieves this information from his
memory. The process is continuous; on a regular basis, the person is confronted with new inputs
that he integrates with the existing knowledge that he already has in his memory; this may
require addition/deletion/modification of existing information.

In terms of consumer behavior,

Consumers are exposed to information about new product/services or changes in existing

products/services on a day to day basis; marketers also constantly update them about their brands
like the attributes, features, price, and comparison with other brands etc. In fact, consumers are
informed about any change that is bought about in any of the 4Ps; viz., product attributes,
benefits, features, price, discounts, availability etc. The consumer also forms mental images
about the various brands through imagery, which leads to easy recall later on. Once the consumer
receives this information, he integrates this information with the existing knowledge that he has
stored in his memory, and would retrieve this information as and when he wants to solve a
problem or satisfy a need through purchase and usage of a product/service.

The involvement theory has implications for selection of a media strategy:

- Non-verbal and pictorial cues trigger right brain processing, and impact recall and familiarity.
With involvement being low; people passively process and store nonverbal, pictorial
information. TV being an audio-visual medium, TV watching is regarded as a right-brain
activity, and a low-involvement medium.

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- Verbal or cognitive cues trigger left brain processing and impact evaluation, recall and
familiarity. With involvement being high; people passively process and store verbal and written
information. Print media (i.e. newspapers, magazines, journals, brochures etc) is regarded as a
high-involvement media, and reading and comprehending is regarded as a left-brain activity.

Social Learning Theory or Observational Learning

The social learning theory combines both the behaviorists and cognitive theories of learning, and
focuses on the interactive nature that cognitive, behavioral and environmental determinants,
play in the learning process. According to the social learning theory, people learn through direct
experience, observation and imitation (modeling). The process, by which an individual learns by
observing the behavior of others and the resultant consequences, is referred to as modeling or
vicarious learning. A major contribution to the field of social cognitive learning was made by
Albert Bandura, who emphasized that the influence of “models”, is central to social learning.
The social cognitive theory can be discussed under two heads, social learning theory and social
cognitive theory.

According to the social learning theorists, there are four processes that come into play for social
cognitive learning to take place, viz., attention, retention, motor-reproduction and reinforcement.
At first, an individual pays attention to and observes the model and his way of behavior; then he
tries to remember the model’s action; thereafter, he enacts the same behavior; and finally,
depending upon the reinforcement received, he would repeat the behavior, and thereby, learning
would take place. The person would be motivated to act out and repeat the modeled behavior if
he receives a positive reinforcement.

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Chapter 7 Personality
The study of personality has been approached by theorists in a variety of ways Some have
emphasized the dual influence of heredity and early childhood experiences on personality
development, others have stressed broader social and environmental influences and the fact that
personalities develop continuously over time Some theorists prefer to view personality as a
unified whole, others focus on specific traits. The wide variation in viewpoints makes it difficult
to arrive at a single definition Personality may be defined as those inner psychological
characteristics that both determine and reflect how a person responds to his or her environment
The emphasis in this definition is on inner characteristics—those specific qualities, attributes,
traits, factors, and mannerisms that distinguish one individual from other individuals As
discussed later, the deeply ingrained characteristics that we call personality are likely to
influence the individual's product choices They affect the way consumers respond to marketers'
promotional efforts, and when, where, and how they consume particular products or services
Therefore the identification of specific personality characteristics associated with consumer
behavior has proven to be highly useful in the development of a firm's market segmentation
strategies. Personality is another internal determinant that influences our consumption pattern.
We tend to use products that go with our personality.

The Nature Of Personality

In the study of personality, three distinct properties are of central importance

1. Personality reflects individual differences

Because the inner characteristics that constitute an individual's personality are a unique
combination of factors i.e. no two individuals are exactly alike we can categorize them into
groups on the basis of few traits, e.g. low sociability / high sociability, dull / bright. Practical vs.
imaginative etc Nevertheless, many individuals may be similar in terms of a single personality
characteristic but not in terms of others For instance, some people can be described as "high" in
venturesomeness (e.g. willing to accept the risk of doing something new or different, such as
skydiving or mountain climbing), whereas others can be described as "low" in venturesomeness
(e.g. afraid to buy a really new product) Personality is a useful concept because it enables us to
categorize consumers into different groups on the basis of one or even several traits If each
person were different in terms of all personality traits, it would be impossible to group
consumers into segments, and there would be little reason for marketers to develop products and
promotional campaigns targeted to particular segments.

2. Personality is consistent and enduring

An individual's personality tends to be both consistent and enduring. Indeed, the mother who
comments that her child "has been impulsive from the day he was born" is supporting the
contention that personality has both consistency and endurance. Both qualities are essential if

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marketers are to explain or predict consumer behavior in terms of personality. Marketers cannot
change consumers' personalities to conform to their products. However, if they know which
personality characteristics influence specific consumer responses, they can attempt to appeal to
the relevant traits inherent in their target group of consumers. Even though consumers'
personalities may be consistent, their consumption behavior often varies considerably because of
the various psychological, socio-cultural, environmental, and situational factors that affect
behavior. For instance, although an individual's personality may be relatively stable, specific
needs or motives, attitudes, reactions to group pressures, and even responses to newly available
brands may cause a change in the person's behavior. Personality is only one of a combination of
factors that influence how a consumer behaves.

3. Personality can change

Under certain circumstances personalities change. For instance, an individual's personality may
be altered by major life events, such as the birth of a child, the death of a loved one, a divorce, or
a significant career promotion. An individual's personality changes not only in response to abrupt
events but also as part of a gradual maturing process—"He's growing up, he is much calmer,"
says an aunt after not seeing her nephew for five years. There is also evidence that personality
stereotypes may change over time. More specifically, although it is felt that men's personality
has generally remained relatively constant over the past 50 years, women's personality has
seemed to become increasingly more masculine and should continue to do so over the next 50
years. This prediction indicates a convergence in the personality characteristics of men and
women. The reason for this shift is that women have been moving into occupations that have
traditionally been dominated by men and, therefore, have been associated with masculine
personality attributes.

Theories of Personality

The three major theories of personality are

(1) Freudian theory

(2) Trait theory.

1. Freudian theory:

Sigmund Freud, the father of psychology, became famous with its psychoanalytic theory of
personality. In fact the theory is regarded as the cornerstone of modern psychology. Sigmund
based his theory on certain assumptions:

- Unconscious needs or drives lie at the heart of human motivation and personality.

Freud explained much of how the psyche or the mind operates, and proposed that the human
psyche is composed of parts within our awareness and beyond our awareness. He said that all

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behavior within an individual cannot be explained, much lies in the sub-conscious. Freud viewed
personality as “an iceberg”; just as majority of the iceberg remains within water and only the tip
of the iceberg is above water, similarly, much of our personality exists below our level of
awareness, as the unconscious and just as a part of it lies above, as the conscious. Even though
an individual is not aware of the contents and processes of the unconscious, much of our
behavior is attributed to it.

Freud spoke of the Id, Ego and Super ego.

The Id contains consists of primitive drives that lack the real perception of reality. It operates on
the pleasure principle, with the objective of seeking pleasure and avoidance of pain, and doing
what one wants to do. The processes that come into play are primary processes like hunger, thirst
etc.

The Ego is aware of reality and operates via the reality principle, where it recognizes what is real
and understands that behavior has consequences. The processes that come into play are
secondary processes, like learning and memory, perception etc. It also includes the impact that
socialization has to play in the life of an individual; it recognizes the existence of social rules that
are necessary in order to live and socialize with other people, and thus, plans to satisfy ones’
needs within the social values and rules.

According to Freud, personality is based on the dynamic and continuous interplay between the
Id, Ego and Super Ego. The Id demands immediate gratification of needs and desires (pleasure
principle) regardless of constraints in the external environment; It operates on the pleasure
principle, with the objective of seeking pleasure and avoidance of pain, and doing what one
wants to do. The processes that come into play are primary processes like hunger, thirst etc.

the Ego acts to realistically meet the desires of the Id (reality principle);

The Ego is aware of reality and operates via the reality principle, where it recognizes what is real
and understands that behavior has consequences. The processes that come into play are
secondary processes, like learning and memory, perception etc. It also includes the impact that
socialization has to play in the life of an individual; it recognizes the existence of social rules that
are necessary in order to live and socialize with other people, and thus, plans to satisfy ones’
needs within the social values and rules.

the Super Ego (conscience) blends morals and societal rules upon the ego,

The Super ego comprises the value system and the morals, which emanate from what an
individual learns in childhood from his parents. It is contained in the conscious part of our
memory. It believes in doing what the society says. While the Ego and Super Ego are partly
conscious and partly unconscious, the Id is the unconscious. Further, the Super ego acts as a
counterbalance to the Id; the former seeks to restrict the pleasure-seeking demands of the latter,

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and it is left for the Ego to balance the demands of the Id and Super ego with the constraints of
reality; it controls the higher mental processes such as logical reasoning to solve the Id-Super
ego dilemma.

Thus, Freud also pointed out the impact of socialization on members of a society, especially with
reference to how this socialization impacts individual behavior. According to him, there exists a
state of tension within an individual; this tension arises out if there is a mismatch between an
individual’s needs and desires vis-à-vis the norms set up by the society and the socialization
process; the manner in which an individual sorts out the dilemma shapes his personality.

An Assessment of the Theory: The Freudian theory is the first comprehensive theory that was
proposed on the subject of personality. He described several components that underlie how
personality emanates, thus leading to a better understanding of the subject. Other theories have
emerged out of this pioneering work. Yet is has been criticized. It is pointed out that his theory
lacks reliability and validity; one, it does not lend itself to empirical testing, primarily because
the hypotheses are not testable; two, Freud based his theory on the case study approach, and it
would be inappropriate to make generalizations based on the case study approach; three, he
concentrated only on the impact that childhood experiences have on personality, and ignored
other experiences across life span.

Implications for marketers:

The Freudian theory holds relevance for a marketer. First, consumer reactions in the marketplace
with respect to purchase decisions and post purchase behavior are a reflection on individual
personality. Just as people have personalities, similarly product/brands also have personalities.
Consumers tend to relate "personality-like" traits to different products and brands. Consumers
match their personality styles with the product/brands they buy. Thus, marketers should segment
markets and position their brands accordingly. For example, there are variants of the same
motorbike; some plain and sleek, some trendy and some powerful, each of which are meant for
separate segments. Thus, marketers could take a clue and segment consumers on the basis of the
personality traits that determine their behavior.

Based on the dominant personality system, the three elements, Id, Ego, and Super Ego can also
be used to segment markets. The dominance of either of these would lead to a different
personality make up, and variation in decision making styles and consumption patterns; For
example, where the Id is dominant, the person would be pleasure seeking, often irrational; his
priorities and consumption patterns would be very different to another consumer who exhibits
dominance of Ego (rationality) and Super Ego (rationality plus social norms).

Second, the study of personality also holds good when we speak of colors, as personality factors
are associated with and reflective of specific colors. Like, green denotes freshness, nature; red
denotes passion, anger; black denotes power, sophistication; white denotes purity, chastity and
cleanliness; gold and silver denote regality and wealth. Marketers keep such associations in mind

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while designing the product, its packaging as well as the advertisement. For example,
mouthwash is white, herbal soaps are green, motorcycles are generally black and red etc.

Third, with a majority of human drives being unconscious, consumers themselves are
often unaware of the true reasons for buying a particular product or brand. Many a times, a
consumer fails to provide an answer as to why he bought a red shirt and not a yellow one.

Fourth, much of the processes that come into play while purchase decisions and
consumption patterns is unexplainable; behavior is many a times instant and spontaneous much
against market forecast. For example, Hrithik Roshan movies made by Rakesh Roshan and team
like Koi Mil Gaya, Krish etc. have been huge hits, but Kites made under the same banner was
quite a disaster, much against marketer expectations.

- Trait Theory: • A personality theory with a primarily empirical/quantitative orientation. It

focuses upon the measurement of personality in terms of specific psychological characteristics
called traits. Trait is a distinguished relatively enduring way in which one individual differs from
another. Trait theorists are concerned with construction of personality tests (or inventories) that
enable them to pinpoint individual differences through trait identification.

THE BIG FIVE: OCEAN, OR THE FIVE-FACTOR MODEL OF PERSONALITY

As shown in the table, these five trait dimensions can be remembered by using the acronym
OCEAN, in which each of the letters is the first letter of one of the five dimensions of
personality.

The Big Five factors are:

• Extraversion. This dimension captures one's comfort level with relation ships. Extraverts tend
to be gregarious, assertive, and sociable. Introverts tend to be reserved, timid, and quiet.

• Agreeableness. This dimension refers to an individual's tendency to defer to others. Highly

agreeable people are cooperative, affectionate, and trusting. People who score low on
agreeableness are cold, disagreeable, and antagonistic.

• Conscientiousness. This dimension is a measure of reliability. A highly conscientious person is

responsible, organized, dependable, and persistent. Those who score low on this dimension are
easily distracted, disorganized, and unreliable.

• Emotional stability. This dimension taps a person's ability to bear up stress. People with
positive emotional stability tend to be calm, self-confident, and secure. Those with highly
negative scores tend to be nervous, anxious, depressed, and insecure.

• Openness to experience. The final dimension addresses an individual's range of interests and
fascination with novelty. Extremely open people are creative, curious, and artistically sensitive.

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Those at the other end of the openness category are conventional and find comfort in the
familiar.

The figure below explains the various factors included in each trait

Important Traits In Consumer Behavior

1. Consumer Innovativeness: How receptive a person is to new ideas.

i) Consumer Innovativeness:

Innovativeness as a personality trait reflects how well a person reacts to something that is “new”;
this “new” could be a new product or a brand or even a change in the marketing mix. A marketer
needs to assess in its target segment, the degree of receptivity towards new products and
services/brands or even towards changes made in the other Ps be it pricing, distribution and/or
communication; the marketer also needs to have an understanding of consumer segments who
would be most receptive to try out new products and services, so as to assess the target segments
that would be most lucrative; this has implications especially in terms of diffusion and adoption,
two important topics in the study of consumer behavior that shall be discussed subsequently.

2. Consumer Materialism: The degree of consumer's attachment to worldly possessions.

3. Consumer Ethnocentrism: The consumer's likelihood to accept or reject foreign products.

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• Other personality traits that influence consumer personality are:

1. Dogmatism: Opposite of open-mindedness, Dogmatism is a personality trait associated with a

tendency to habitually, arrogantly assert opinions, sometimes with little regard to evidence. This
may be an aspect of authoritarianism. The dogmatic personality style is characterized by
oversimplified thinking, resistance to changing attitudes or beliefs, and appealing to authority to
justify their beliefs. The personality may have its origins in childhood, caused by anxieties linked
to the parent-child relationship or modeling from parents.

2. Novelty Seeking Consumers (Neophilia): It is defined as liking anything new or being a

novelty-seeker. Such individuals are always eager to buy or try new
products/services/experiences. Most often they are the first movers to adopt something new as
well as the first ones to discontinue the same for a newer alternative.

Table 2: Personality traits and their Implications

Personality Trait Types Relevance/Implications for a

and Meaning Marketer

Consumer -High on Innovativeness: willing Innovativeness helps a marketer

Innovativeness to try out new product/service to:
- measures how open offerings and /or brands. - assess a consumers’
and receptive a -Low on Innovativeness: willingness to innovate.
consumer is towards a reluctant and unwilling to try out - analyze the degree of
new product or new product/service offerings and receptivity of segment(s).
service/ brand OR /or brands. - identify the most lucrative
even to changes made segment(s) for a new
to any or all of the 4 product/service.
Ps. - predict and forecast the rate of
diffusion and adoption of new
products and services.
An innovator would be willing
to try out new product/services
and would be receptive to new
offerings, as opposed to a non-
innovator.

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 Dogmatism - High dogmatism: when one High dogmatism:
- measures the extent approaches the new/ - Consumers who are high on
of rigidity within a unfamiliar/alien/strange object dogmatism decide to purchase
consumer towards defensively and with great traditional, established and time
something that is resistance and discomfort in tested product/brands;
new, or unfamiliar or thought and action. They are - They tend to become brand
contrary to “closed-minded.” loyal.
established - Low dogmatism: when one - In order to encourage such
preconceptions, ideas approaches and considers the consumers to try out new
and beliefs. new/unfamiliar/alien/strange object products/brands, the marketer
without any resistance and without needs to use authoritative
any discomfort in thought and appeals; Credible sources like
action. They are “open-minded”. experts/celebrities should be
used.
Low dogmatism:
- Consumers who are low on
dogmatism prefer to test out
new products/brands.
- Such consumers tend to be
innovators.
- For such consumers, the
marketer should design
advertisements that stress upon
product features, benefits,
factual differences and greater
value over previous product
offerings and /models.

3. Cognitive Personality Traits:

1. Visualizers: Consumers who prefer visual information and products that shows the visual /
visually appealing.

2. Verbalizers: Consumer who prefer verbal or written information about the products. They
don’t get attracted just by visuals of the product.

Table 3: Consumer Cognitive Personality Traits and their Implications

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Consumer Types Relevance/Implications for a Marketer
Cognitive
Personality
Traits
i) Visualizers -Visualizers: consumers who Visualizers:
and prefer the visual media or -As a consumer, they prefer the TV or
Verbalizers: visual information or even would prefer the audio visual CD to provide
products that stress the visual. them with information, rather than a book to
-Verbalizers: such consumers read.
prefer the written/verbal media -The marketer should present his
or the written/verbal communication via the visual media and
information or even products stress on pictures, charts, figures and
that stress the written/verbal. drawings in order to create awareness of the
product, the factual details, features and
benefits. The strategy would attract attention
and seek retention of information from
visualizers.
Verbalizers:
- As a consumer they prefer the newspaper/
magazine as a media and would desire
information via a brochure or a book rather
than audio visual CD.
- The marketer should use the print media or
even supplement it with the verbal to
educate verbalizers about their product and
service offerings, as also other information
about the 4Ps.

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 ii) Need for -High Need for Cognition: - High Need for Cognition:
cognition those consumers, who are high Consumers who are high on the NC, prefer a
(NC): on cognition, are desirous of message that is information providing, gives
information; they love to product/service related information,
think, and thus, like to collect arguments and counter-arguments; in other
information, and deliberate words, they like to process information
upon it. It refers to their through the central route to persuasion; they
propensity to gather would prefer the message content, rather
information and enjoying than the context.
thinking. - Low need for Cognition:
-Low need for Cognition: Consumers who are low on the NC, prefer a
such consumers are low in message that contains fun, fantasy, via
need for thought and colours, music, jingle etc.; they like to
deliberation. process information through the peripheral
route to persuasion, and would prefer the
message context (the music, jingle, scenery,
and celebrity/model) rather than the
message content.

MEANING OF SELF CONCEPT AND SELF IMAGE:

The two issues self-concept and self-image, have been widely researched and in studies on
consumer behavior. Every individual makes a self-assessment of himself/herself, and forms
opinions of himself/herself. He sees himself as an “actual”, and as an “ideal”. Based on such an
image, he acts out his behavior, both general and specific to consumption behavior.

The study on self-concept and self-image lay emphasis on such aspects of personality that are
expressive of an individual's image of him or herself. They hold relevance for a marketer in the
sense that consumers hold opinions of their own personalities, and such individual opinions have
an impact on their decision making as well as usage and consumption patterns. Many a times this
assessment of self-concept and self-image have a greater impact than even the personality traits;
as such while we could make broader generic conclusions with personality traits, the self-concept
and self-image help us make specific conclusions.
Theories related to self-concept indicate relationships between a person and his/her social
system, and conclude how this relationship affects a person’s personality make up. In other
words, an individual’s interaction with others around him affect his personality development,
through self-concept. While earlier theories like the Freudian theory and the Trait theory also
recognize the role played by social forces in the development of an individual’s personality,
there is a difference. The former theories recognize the role social forces could play in grooming
one's personality in the past, self-concept theories focus on the influence that such forces have on
one's current personality pattern.

Self-Concept:
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The self-concept comprises two components, viz., the “actual self”, and the “ideal self”. The
first, i.e., “actual-self”, refers to an individual’s perception of what/who he or she is; the second,
i.e., “ideal-self”, refers to an individual’s perception of what/who he or she wants to be. Both of
these concepts are related to each other. An individual can express his personality in two ways;
depending upon the priority that is assigned, the resultant behavior would differ. For example,
the person can either act out his “actual self” and behave as he is, consistent with his existing
personal make-up. The other alternative would be to act out in a manner that is close to or similar
to the “ideal-self”, something that he wants to be, thereby increasing his self-esteem. An
individual faces a conflict when there is a big difference between the ”actual” and “ideal” self,
and the choice to behave as “actual” or “ideal” depends on the situational context. Thus,
individual’s are not a “single self”; they are “multiple-selves”, and would act differently in
different situations.
As a consumer, also the two, “actual” and “ideal” selves come into play in the marketplace.
While a consumer tries to relate his personality with the personality of the product/service
offering, and the brand, the “actual-self”, comes into play; on the other hand, when he tries to
match the product /service and the brand personality with his aspirational group, and aspires to
buy the same, the “ideal-self” comes into play. This confirms the assumption that self-concept is
closely related with personality, and individuals would buy such products/services, which match
their concept and personalities.

Further, consumer’s also exhibit “multiple-selves”, and the same consumer could act differently
at different times with different people; for example, he could buy prefer a blue colour today, and
a black tomorrow. Again, whether the “actual-self” or the “ideal-self”, comes into play would be
determined by situational factors, which would include social visibility of purchase and usage,
and the importance/relevance of the purchase for the person’s self-image. This could have
implications for a marketer in terms of market segmentation (use-benefit, and use-situation
segmentation).
Self-Image:
Traits, characteristics, qualities and mannerisms of behavior, all put together create the self-
image of a person. This self-image arises out of the person’s background, values, lifestyles,
experiences, etc. as well as interactions with parents, family, friends, peers etc.
In terms of marketing also, we as consumers possess a self-image. Similar to relationship
between self-concept and brand personality, there also exists a relationship between self-image
and the brand personality. Consumers match the product and/or brand personalities, with their
self-image, and buy those where they find a close or perfect match. In this manner they attempt
to reaffirm and preserve their self-image.
Based on findings from research undertaken in consumer behavior, various kinds of self-images
have been identified, viz., actual self-image (how a consumer perceive himself), ideal self-image
(how he would like to perceive himself), social self-image (how a consumer feels others perceive
him, or how they think of him), ideal social self-image (how the consumer would like others to
perceive him), and expected self-image (how the consumer expects to see himself in future). The
expected self-image refers to something that lies between the actual and the ideal self-image, in
other words, it is something what the consumer would like to be. It needs to be mentioned here
that very often consumers’ seek to “alter their self”, and try and go for a personality change, for
example they could go in for fashion apparel, grooming and cosmetic surgery, etc., and try and
reach an ideal self.

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As a consumer, which of the self-images comes into play would depend upon the i)
product/service offering and, ii) the situational factors, which would include social visibility of
purchase and usage, and the importance/relevance of the purchase for the person’s self-image.
For example for convenience goods or day-to-day household goods, the consumer would base
his purchase on his actual self-image. On the other hand, for shopping goods or specialty goods,
he would be guided by the social self-image or the ideal self-image. This could have implications
for a marketer in terms of market segmentation and positioning. Self-image can be used as a
basis to segment the market, and the marketer can then position his product/service offering as a
symbol of such self-images.

Brand Personality: Just as individuals’ have a personal make-up with

characteristics/traits/qualities, similarly products/services also have personalities. Brand
personality refers to a set of characteristics/qualities similar to human beings that become
associated with a brand. Based on their understanding, consumers’ begin to ascribe certain
characteristics or traits to a brand. This association between the characteristic/trait and the brand
gets generated out of the manner in which it is positioned by the marketer. Thereafter, consumers
match the product and/or brand personalities, with their own personalities, self-image and self
concept; and they buy those where they find a close or perfect match. Sometimes they buy such
product/brands that help them bolster their weak or inferior self. Some personality traits with
examples of brands are mentioned below:
a) Sophistication: Dove, Titan Raga
b) Ruggedness: Levi’s Jeans, Bajaj Pulsar
c) Power: Surf, Rin, Hero Honda
d) Achievement: Boost, Glucon C
e) Competence: Kingfisher Airlines, IBM
f) Sincerity: Life Insurance Corporation, Western Union Money Transfer

Consumer Personality, Self-Concept And Self-Image And Implications For Marketers:

Consumer personality, self-concept and self image have implications for a marketer. Consumers’
purchase and usage of product and service offerings is reflective of his personality, self-concept,
and self-image. Consumers generally buy those products/brands, whose personality matches their
own. For marketers this is important as they must know that consumers make purchase decisions
to support their personality, self-concept and self-image. The concept of self helps a marketer to
understand, predict, and direct the purchase decisions of consumers. Thus, marketers need to
understand the congruity between personality, self-concept and self-image of the customers, vis a
vis, the brand personality and image of the product/service offering. The study of consumer
personality, self-concept and self-image can be useful for a marketer in the following ways:

1. Every person is unique in oneself, and thus personality reflects individual differences. Yet,
while we are different, we may be similar to each other on a trait (s), and could constitute a
personality type (s). A person’s decision with regard to the brand as well as the timing and place
of purchase, the amount purchased, its usage and disposal, are all based on his personality. This
could have implications for a marketer who could treat each personality type as a separate
segment, position his offering accordingly and design the 4Ps.

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Drawing upon from various theories on personality, marketers can formulate and implement
marketing strategies, through first segmenting the market, targeting it, positioning their
product/service offering, and designing the marketing mix accordingly. This would help him
classify segments, provide the product/service offering accordingly, and design the mix in terms
of price, place and promotion.

2. Self-concept is closely related with personality, and individuals would buy such
products/services, which match their concepts and personalities.
The study of consumer self-concept helps a marketer understand how the “actual” and “ideal”
selves come into play in the marketplace. A consumer tries to relate his personality with the
personality of the product/service offering, and the brand, the “actual-self”, comes into play; on
the other hand, when he tries to match the product /service and the brand personality with his
aspirational group, and aspires to buy the same, the “ideal-self” comes into play. Further,
consumer’s also exhibit “multiple-selves”, and the same consumer could act differently at
different times with different people;
Again, whether the “actual-self” or the “ideal-self”, comes into play would be determined by
situational factors, which would include social visibility of purchase and usage, and the
importance/relevance of the purchase for the person’s self-image. This has implications for a
marketer in terms of market segmentation.

3. Similarly, there also exists a relationship between self-image and brand personality.
Consumers match the product and/or brand personalities, with their self-image, and buy those
where they find a close or perfect match. In this manner they attempt to reaffirm and preserve
their self-image.

Based on findings from research undertaken in consumer behavior, various kinds of self-images
have been identified. As a consumer, which of the self-images comes into play would depend
upon the i) product/service offering and, ii) the situational factors, which would include social
visibility of purchase and usage, and the importance/relevance of the purchase for the person’s
self-image. Self-image can be used as a basis to segment the market, and the marketer can then
position his product/service offering as a symbol of such self-images.

Thus, the study of consumer personality (personality traits and types as well as general and
consumption specific personality traits), self-concept, and self-image is important, and holds
relevance for a marketer in the design, development and implementation of his marketing
strategies. After gaining an insight into the various personality types, a marketer could design his
marketing strategy so to be able to serve consumers with the varying personality types in a better
manner, leaving them more satisfied.

Virtual Personality Or Self

The notion of a virtual personality or virtual self provides an individual with the opportunity to
try on different personalities or different identities, much like going to the mall and trying on
different outfits in a department or specialty store. If the identity fits, or the personality can be
enhanced, maybe we keep the new personality in favor of our old personality. The Internet is

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redefining human identify, creating an “online self.” Thus then their purchase decisions may
reflect the virtual self they have created.

Personality and Color

Consumers also tend to associate personality factors with specific colors. In some cases, various
products, even brands, associate a specific color with personality-like connotations. It appears
that blue appeals particularly to male consumers. Many fast-food restaurants use combinations of
bright colors, like red, yellow, and blue, for their roadside signs and interior designs. These
colors have come to be associated with fast service and food being inexpensive. In contrast, fine
dining restaurants tend to use sophisticated colors like gray, white, shades of tan, or other soft,
pale, or muted colors to reflect fine leisurely service. Consumers’ like or dislike for various
colors can differ between countries.

The Personality Associations of Selected Colors

Color and Personality links Examples

Blue- Commands respect, authority America's favored color
IBM holds the title to blue
Associated with club soda
Men seek products packaged in blue
Low-calorie, skim milk
Coffee in a blue can perceived as "mild"

Yellow- Caution, novelty, temporary, warmth Maggi, Fast food brands like Mc Donalds.

Excitement , Eyes register it fastest

Green Wrigleys chewing gum’s sales increased when

it changed package from red to green and
Secure, natural, relaxed or Good work white
environment
Associated with vegetables (Natural)
easygoing, living things

Red Restaurant logos, Coco- cola

Britannia
Human, exciting, hot, passionate, strong

Makes food "smell" better, Induces hunger

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Coffee in red can perceived as "rich"

Women have a preference for bluish red

Men have a preference for yellowish red

Orange Fanta, Nickelodeon

Powerful, affordable, informal

Draws attention quickly

Brown Coffee in a dark-brown can be “too strong” eg:

Nescafe
Informal and relaxed, masculine, nature

White Clean, bath products

toiletries for women
cleanliness, delicacy, refinement, formality

Suggests reduced calories Pure and wholesome

food

Clean,

Black High-tech electronics, Powerful clothing

Apple, Dell
Sophistication, power, authority, mystery Allen Solly, Armani

Silver, Gold, Platinum Suggests premium price

Regal, wealthy, stately

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Chapter 8 CONSUMER ATTITUDES

Nature Of Consumer Attitudes

Marketers need to know what are consumer’s likes and dislikes or we can say favorable or
unfavorable attitudes.

Attitudes help us understanding, why consumers do or do not buy a particular product or shop
from a certain store etc. They are used for judging the effectiveness of marketing activities, for
evaluating marketing actions even before they are implemented within the market place
Consumer researchers assess attitudes by asking questions or making inferences from behavior.
For example, if a researcher determines from questioning a consumer that she consistently buys
Almay hypoallergenic skin care products and even recommends them to friends, the researcher is
likely to infer that the consumer possesses a positive attitude toward Almay products. This
example illustrates that attitudes are not directly observable but must be inferred from what
people say or what they do.

Moreover, the illustration suggests that a whole universe of consumer behaviors—consistency of

purchases, recommendations to others, top rankings, beliefs evaluations, and intentions are
related to attitudes. What then are attitudes? In a consumer behavior context, an attitude is a
learned predisposition to behave in a consistently favorable or unfavorable 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 behavior

Properties Of An Attitude

1. The Attitude "Object"

The word object in our consumer-oriented definition of attitude should be interpreted broadly to
include specific consumption- or marketing-related concepts, such as product, product category,
brand, service, possessions, product use, causes or issues, people, advertisement. Internet site,
price, medium, or retailer

In conducting attitude research, we tend to be object specific For example, if we were interested
in learning consumers' attitudes toward three major brands of DVD players, our “object” might
include Sony, Toshiba, and Panasonic, if we were examining consumer attitudes toward major
brands of cellular telephones, our “object” might include Nokia, Ericsson, Samsung, LG,
Panasonic, and Motorola

2. Attitudes Are A Learned Predisposition

There is general agreement that attitudes are learned This means that attitudes relevant to
purchase behavior are formed as a result of direct experience with that product, word-of-mouth
information acquired from others, or exposure to mass-media advertising, the Internet and

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various forms of direct marketing (e.g. a retailer's catalog) It is important to remember that
although attitudes may result from behavior, they are not synonymous with behavior Instead,
they reflect either a favorable or an unfavorable evaluation of the attitude object. As learned
predispositions, attitudes have a motivational quality, that is, they might propel a consumer
toward a particular behavior or repel the consumer away from a particular behavior

3. Attitudes Have Consistency

Another characteristic of attitudes is that they are relatively consistent with the behavior they
reflect. However, despite their consistency, attitudes are not necessarily permanent, they do
change.

It is important to illustrate what we mean by consistency Normally, we expect consumers'

behavior to correspond with their attitudes For example, if a French consumer reported
preferring Japanese over Korean electronics, we would expect that the individual would be more
likely to buy a Japanese brand when his current VCR needed to be replaced In other words, when
consumers are free to act as they wish we anticipate that their actions will be consistent with
their attitudes However, circumstances often preclude consistency between attitudes and
behavior For example in the case of our French consumer, the matter of affordability may
intervene, and the consumer would find a particular Korean VCR to be a more cost-effective
choice than a Japanese VCR Therefore, we must consider possible situational influences on
consumer attitudes and behavior

4. Attitudes Occur Within A Situation

It is not immediately evident from our definition that attitudes occur within and are affected by
the situation By situation, we mean events or circumstances that at a particular point in time,
influence the relationship between an attitude and behavior A specific situation can cause
consumers to behave in ways seemingly inconsistent with their attitudes For instance, let us
assume that Jayant purchases a different brand of deodorant each time the brand he is using runs
low Although his brand-switching behavior may seem to reflect a negative attitude or
dissatisfaction with the brand he tries, it actually may be influenced by a specific situation, for
example, his wish to economize Thus, he will buy whatever is the least expensive brand

The opposite can also be true If Rajan stays at a Holiday Inn each time he goes out of town on
business, we may erroneously infer that he has a particularly favorable attitude toward Holiday
Inn On the contrary, Rajan may find Holiday Inn to be "just okay" However, because he owns
his own business and travels at his own expense, he may feel that Holiday Inn is "good enough,"
given that he may be paying less than he would be paying if he stayed at a Marriott, Sheraton, or
Hilton hotel

Indeed, individuals can have a variety of attitudes toward a particular behavior, each
corresponding to a particular situation Tanya may feel it is alright to eat Momos for lunch but

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does not consider it appropriate for dinner In this case. Momos has its "time and place," which
functions as a boundary delineating the situations when Tanya considers Momos acceptable
However, if Diana is coming home late one night, feels exhausted and hungry, and spots Momos,
she may just decide to have "dinner" there Why? Because it is late, she is tired and hungry, and it
is convenient. Has she changed her attitude? Probably not

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, McDonald's, KFC) vary in terms of eating situations (i.e. lunch or snack, evening
meal when rushed for time, or evening meal with family when not rushed for time) Consumer
preferences for the various burger restaurants might depend on the anticipated eating situation
Chilli's, for example, might be favored by a segment of consumers as a good place to have dinner
with their families This suggests that its management might position Chilli'’s restaurants is a nice
place to take the family for a leisurely (and inexpensive) dinner

Clearly, when measuring attitudes, it is important to consider the situation in which the behavior
takes place, or we can misinterpret the relationship between attitudes and behavior

How Situations Might Influence Attitudes

PRODUCT/SERVICE SITUATION ATTITUDE

Saridon Migraine headache I've got to get rid of this headache fast
because I've got a midterm in three
hours

Life Insurance Financial planning If anything happens to me, my spouse

should have enough money to get the
kids through college

Hyundai Santro Shopping for a new car I want to drive the car Sharukh Khan
drives

Dove Soap Rough skin My skin gets dry in winter, so I want to

use a soap with moisturizer in it

Invisalign Braces Crooked teeth I need braces but don't want the world
to know I'm wearing them

Diet Pepsi Thirst Why bother to put lemon in the drink

when you can get it that way straight
from the bottle?

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ODONIL Air Freshener Bathroom odors Since the bathroom has no exhaust fan,
I'd better keep a can of air freshener on
the sink counter

 The tricomponent attitude model

Each of these models provides a somewhat different perspective on the number of component
parts of an attitude and how those parts are arranged or interrelated

1. Tricomponent Attitude Model

According to the tricomponent attitude model, attitudes consist of three major components a
cognitive component, an affective component and a conative component (see Figure)

A Simple Representation of the Tricomponent Attitude Model

a. The Cognitive Component

The first part of the tricomponent 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 commonly take the form of beliefs, that is, the consumer believes that the attitude
object possesses various attributes and that specific behavior will lead to specific outcomes

In terms of marketing, the knowledge or cognitive component of the tricomponent model

consists of consumers' knowledge about the products/service offering and the marketing mix.
Consumer attitudes are formed on the basis of experiences as well as information received from
personal (WOM, family, friends, peers etc.) as well as impersonal (marketer’s sources) sources

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of information that are retained in one’s memory. These get shaped by beliefs and opinions,
where the consumer begins to perceive that the attitude object (person, situation or thing)
possesses certain attributes and acts of behavior would lead to outcomes. The beliefs and
opinions get repeatedly reinforced, and finally give rise to attitudes. This knowledge component
leads to the emotional component.

b. The Feeling Or The Affect Component comprises the emotional component of attitudes. In
fact, this is understood to be the attitude itself, as it depicts emotional states that are positive,
neutral or negative. In marketing terms, it refers to a consumer’s feelings about a product/service
offering and the marketing mix. These emotions could relate to an attribute or the overall object.
It is evaluative in nature and would vary on a continuum as like or dislike, favorableness or
unfavorableness. It manifests itself through feelings and resultant expressions like happiness,
sadness, anger, surprise etc. and is indicative of consumer reaction towards the offering and the
mix, which subsequently affects the purchase decision making as well as the purchase process.
Such reactions and resultant states also get stored in our memory. Their retrieval, recall and
recollection also impacts future decision making.

c. The Behavioral Or The Conative Component of attitudes depicts the outcome of an attitude.
As attitudes are formed out of psychographic components, they cannot be seen. The first two
components, knowledge and feeling are not expressive or illustrative of attitudes. It is only this
third component through which attitudes can be inferred. The conative component, is indicative
of the an individual’s tendency to behave [act or not to act (to buy or not to buy)] in a particular
manner with respect to the attitude object (product/service offering, brand etc.).
As per the model, the knowledge and the feeling component cannot be seen, they can only be
inferred; it is only the behavioral component which can be observed.

Figure 1: Tricomponent Attitude Model

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ATTITUDE CHANGE AND UNDERLYING THEORIES:

b) Theory of Cognitive Dissonance:

Behavior can precede or follow attitude formation and change. While attitudes are generally
formed, before an act of behavior (purchase) or before an action is taken, they can also be
formed after an act of purchase. Behavior (act of purchase) may precede attitude formation.
Consumers experience a sense of uncertainty, uneasiness and discomfort when it comes to
making purchase decisions which pertain generally to high involving purchases. Such a feeling
arises particularly when the consumer has contradictory and conflicting thoughts about a product
and/or brand offering, and he has to make a compromise. This state of uneasiness and discomfort
is referred to as cognitive dissonance. It can occur while and after a purchase is made. When it
occurs after the act of purchase, it is known as post-purchase cognitive dissonance. Such feelings
of dissonance are reduced when a consumer changes his attitude to conform with the act of
purchase or behavior. So we can see that in cases of post-purchase cognitive dissonance, attitude
change happens as a result of an act of behavior, i.e. purchase. The uneasiness or the dissonance
that the consumer experiences compel him to change his attitude towards the attitude object
(product and/or brand), so that the attitude (positive/favorable) and the behavior (act of
purchase) are in congruence with each other. What happens in the process is that the dissonance
that the consumer experiences, induces him to reduce the indifferent or the unfavorable attitude,
and make way for a favorable attitude towards the purchase. Thus attitude formation and/or
change occur after a purchase has been made. The marketer also has a role to play in reduction of
cognitive dissonance.

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Chapter 9: Social & Cultural aspects & its impact on Consumer
Behaviour
 Culture
 Sub-culture
 Groups
 Indian core values
 Family

Culture
Culture may be defined as the “personality of a society”. It is broad and all pervasive in nature,
inclusive of language, customs and traditions, norms and laws, religion, art and music, etc. It also
includes the interests of people, the work practices and orientations, as also their attitudes
towards general and specific issues. Culture delineates precisely, the do’s and dont’s of a society,
and specifies all that is acceptable and all that is not. It is reflective of values and beliefs that are
widely accepted by members of a society.

Culture is a society's personality, unique in itself and differentiated from others; it is further
divided into various sub-cultures. Culture is also trans-generational, and is passed on from one
generation to another.

The culture of a society also has a bearing on buying patterns and consumption behavior. In
terms of consumer behavior, Schiffman defines culture as “the sum total of learned beliefs,
values, and customs that serve to direct the consumer behavior of members of a particular
society”. The kinds of products and services and/or brands that consumers’ buy and use, are all
based on their cultures and sub-cultures. For example, the food they eat and the kinds of clothes
they buy and wear, are all impacted by their culture, their customs, traditions, norms and values.
Culture and its impact on consumption behavior can be better explained by understanding the
nature and characteristics of culture:

For example, lately developed consciousness of people towards

i) fashion, has given boost to the apparel and accessories business;

ii) fitness, has given boost to the gymnasium and sports business;

iii) health, has given a boost to natural products like fruit juices, honey, aloe vera, etc.

Culture is shared. It is accepted and imbibed by all the members of the social system. In fact, it
ties together the people that form a social system. Social institutions (family), educational
institutions (schools, colleges and universities), political institutions (law, public policy, leaders
and government), and religious institutions (like places of worship, artifacts, and religious

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leaders) etc., all help in transmitting this culture to the members of the society. The mass media,
print and audio-visual, also has a role to play in the transmitting of culture. Also today, cultures
and sub-cultures are shared by people within, and outside. Needless to say, the mass media has a
big role to play. With the various satellite channels vying for viewer ship across India, and higher
TRP ratings, the various soaps and serials reflect cultures of all kinds; they portray all kinds of
families, all types of cultures and sub-cultures. We get to see stories on families from Gujarati,
Bengali, Punjabi and Tamilian cultures; the dressing patterns, the favorite dishes, the customs
and rituals etc. With the various national and vernacular channels that we have in India, we have
begun to share sub-cultures too. Subcultures are no longer restricted to geographical boundaries
today. As consumers, we are also impacted most by such institutions, and primarily by mass
media. As discussed in the above paragraph, with the advent of satellite channels, there is
growing awareness of other cultures and sub-cultures. An important role on spread of culture is
also through advertisements. Today there is demand for dhokla and khakra (Gujarati food) in
North India, or mishti doi and hilsa fish (Bengali food) in South India. This trend is also
increasing because people are crossing borders of their states and moving elsewhere for jobs and
assignments.

Culture is dynamic in nature, and evolves constantly with time. It adapts itself to the changing
environment. As said above, values, beliefs, customs and traditions continue to exist as long as
they satisfy the needs and wants of the people. Once they cease to satisfy people’s needs, they
change. Thus, culture changes and adapts to the environment. Marketers need to continually
assess the environment so as to identify changing need patterns, and change/modify/adapt
existing products and services, and even come up with new ones. One such example, i.e. dual
income households and the need for eating out, resulting in demand for fast food and restaurants,
has already been discussed above. With changes in culture, we can also witness its impact on the
buying roles. The marketers have to identify the initiators, influencers, deciders, buyers and
users, and approach them accordingly, either personally or impersonally via media. Marketers
who continually assess the environment can identify opportunities and exploit them to their
advantage. Culture is reflected through the various components that it comprises, viz., values,
language, myths, customs, rituals and laws.

These are briefly explained as follows: -

Values: Values are the beliefs and ideals shared by the people of a society, for which they have
great respect and regard. They could assume both positive (do’s) and negative (dont’s)
connotations, and are indicative of appropriate thoughts, feelings and acts of behavior.

Language: Man is a social animal and needs to communicate with others. Language is used as a
means to communicate with people in a social set up. It is the common language that binds
together the people in a social structure.

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Myths: Myths are legendary folktales and stories that describe events and occurrences, and teach
values to society. They are imaginary and fictitious, and comprise characters that are gods,
heroes and common men, ultimately aimed at giving lessons to the people, with respect to the
causes and effects, good and bad, right and wrong, etc. Myths describe the values that members
of a social structure should share.

Customs: Customs are habitual practices that formulate the established way of doing things and
reflect culturally accepted patterns of behavior. They reflect practices that have permanent
continuance and are so long established that they have the force of law; in other words they are
conventions. People in a social system follow such practices collectively, and the habitual
activity gets transmitted from one generation to another.

Components Of Culture:

Rituals: Rituals are prescribed processes and procedures for conduct of religious or social rites.
They are established rites, ceremonies and proceedings that are symbolic in nature. Rituals are
collective in nature, comprising many patterns of behavior that are interdependent to each other.
Laws: Laws are principles, rules and regulations that are formulated/sanctioned by an authority
(ruler, government, constitution etc.), and supported/protected by judicial authority. Their basis
can actually be found in the society’s values, customs, and rituals. Laws are universally
applicable across people in a society/country.

Sub-Culture:

Based on the varying criteria, there can be different types of sub-cultures. The important sub-
cultural categories are nationality, geographical location, religion, race and caste, gender and
age. From a marketing perspective, these could also be discussed as market segments, which
need to be studied and assessed carefully before deciding on a product/service offering and
formulating a marketing mix for a particular segment(s).

- Nationality: Sub-cultures could be based on nationality. While we are all Asians, we are
distinct with respect to culture, and are different in terms of language, customs and traditions etc.
Thus, we are classified as Indians, Burmese, Nepalese, Pakistani etc.

- Geographical location: Within a country, we could be different across geography, climatic

conditions, regions and terrains, and density of population. This is more so in cases where the
country is large and borders spread across a huge population occupying a vast territory. People
tend to develop regional affinity and identification, and this gets reflected in the food they eat,
clothes they wear, interests they pursue, etc. They constitute as distinct sub-cultures and people
across such sub-cultures are different to each other. For example, we can be classified as North
Indians and South Indians. As consumers, our needs are different and would translate into
various wants, for example, i) differences in food habits, and demand for poori-sabji, paratha,
idli-vada etc.; or ii) differences in clothing, and demand for cottons, woolens and silk.

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- Religion: People also exhibit differences when it comes to the religions that they belong to.
Hindus, Muslims, Christians, Sikhs, Parsis etc. are all different from one another and have
different values and beliefs, customs and traditions etc. As consumers, they make purchase
choices and purchase decisions that are influenced by the dictates of their religious leaders,
scriptures, and holy books. In fact, many products/services are symbolically and ritualistically
associated with religion. For example, as per Islam, non-vegetarian food must be “Halal”, and
this itself comprises a huge segment that marketers across national boundaries are catering to. .

TYPES OF SUB-CULTURE:

Race and caste: Culture and its components also vary across race and caste. Jats, Jaats, Rajputs,
Pathans and Yadavs are all different from one another. Such racial sub-cultures also impact
buying behavior and consumption patterns.

Gender: Because gender roles have an impact on acts of behavior, gender constitutes an
important cultural sub-group. Males and females across all cultures are assigned different traits
and characteristics that make them masculine and feminine. They also perform different roles in
society and are two distinct sub-groups. It is true that gender roles have got blurred, and both
men and women are performing such roles that they did not perform earlier. Product usage is
common to both man and woman; for example, a man shown as using a LG washing machine or
making Act II popcorn. Similarly products like shavers and razors exclusive to usage by men, are
also being used by women (Gillette thus introduced a razor for women). All this has brought
about a big socio-economic change and led to cultural transformation. The values espoused by
the generation of today is much different to the one espoused by the previous generation. The
pace of change has been further accelerated with households no longer being single income
households, but turned to dual-income households. The role of women is no longer restricted to
bearing children and managing the home. Women have started working outside, and are
contributing to household income. This has impacted consumer needs and wants as also the
priorities. The impact is evinced on consumption behavior, where the ‘decider’ role is no longer
confined to a single person, i.e. the man of the family. Today buying decisions are jointly taken
by husband and wife.

- Age: Infants, kids, teenagers and adolescents, adults and the aged, may all be looked up as
distinct sub-groups. They have different values and beliefs, and all this impacts upon their
priorities in life. Daily lifestyles, activities and interests, fashion and accessories, food and diet,
etc. receive varying priorities across the various sub-groups. For example, an aged person would
prioritize health and go in for nutritious home food as opposed to young man who would
prioritize work and go in for fast food. Today we see a rising trend amongst kids, adolescents
and the young towards junk food, and they constitute a lucrative segment for restaurants
providing fast food.

Marketing Communication- The Ethnic Way

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 A number of positioning strategies in the urban context reflect the growing influence
of the West. But there have been successful communication campaigns which have conveyed the
message effectively through the ethnic route.

There are many advantages of using the ethnic appeal (subject to the selection of the target
segments). Ethnic appeals are normally drawn from the culture of a specific market which
reflects the practices, rituals, taboos and behavioral orientation over generations. These may also
be useful in enabling consumers to connect with familiar situations. Ethnic advertising has the
ability to dramatize emotions in a specific cultural setting. Ethnic appeals can also be combined
with western appeals. This can be best illustrated when comparing Titan s advertisement with
that of Godrej s Storewell. The former has an element of dramatization woven around the
warmth expressed through the gift. The aspirational fantasy of gift-giving brought the brand into
the consideration set of consumers who shopped for gifts (not just watches). Watch as a gift
reflected in the picturization of the TV commercials clearly reflects a western orientation. The
changing lifestyles, especially in urban markets, are conducive to such a positioning strategy. In
the case of Godrej s Storewell, the emotional connection (though portrayed as a gift) is
achieved by the backdrop of a marriage in which the bride receives the cupboard as a gift.

Cultural Behavior

There are a number of behaviours that can be associated with a specific culture. Some of
these have their origin in certain kinds of beliefs that are associated with product categories. For
example, the bindi worn by Indian women is considered as an integral part of most cultures.

Hence it is essential that a brand name for such a bindi should have an ethnic sounding name. A
Western name is likely to be counter-productive. An interesting example of effective use of
cultural behavior is the Pepsodent TV commercial few years back. Snacking on the way to
school and back has been a cultural habit of Indians for many decades now. It is a behavior that
can be associated with the masses. The commercial for the toothpaste captures this and the
traditional behavior of the mother scolding her child. This gets the attention of viewers before the
brand benefit of protection is conveyed. Regardless of the extent to which this TV commercial
contributed to the success of the brand, this example reflects the need for marketers to have
insights from the daily life of consumers in a specific cultural backdrop. Even Maggi noodles
(noodles is not of Indian origin) was positioned as a 2 minute convenience snack for children.

The cultural practice of providing homemade snacks as food to children was the thought behind
the Maggi campaign. The portrayal for whiteness in clothes led to the creation of the whitener
category for clothes and Robin Blue was almost a household name before Ujala was launched.
Whiteness to masses in India is the whiteness with a bluish tinge. The practice of using soap for
washing clothes is so old that a brand like Ariel, which pioneered compact detergents at the
upper end, had to introduce soap at the lower end of the market. It is interesting that Ariel

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initially advertised that soap was not required if one uses a compact detergent for washing.
Samsung has introduced a washing machine to ensure that sarees do not get entangled.

Mixing Culture with changing trends

A type of effective cultural appeal consists of mixing certain cultural beliefs with trendy products
or advertising. Promise toothpaste, which had a successful run, highlighted the traditional clove
oil used by the people to control toothaches. Cadbury s recent television campaign (for Moulded
chocolate) shows people of different groups enjoying the chocolate with a well known celebrity
endorsing the brand. Normally, one associated chocolates with children in the brand .Normally,
one associated chocolates with the children in the Indian context .But decades back the brand 5-
star from Cadbury positioned itself as a ³togetherness bar´ towards the youth segment .(In fact,
this was even before charms or Closeup addressed this segment). Snacking is a part of Indian
culture. Positioning a chocolate for adults in India involves a mix of tradition and modernity,
which is context, is Westernization. Chocolate, in the west, is a favorite with adults as well.

Cricket has been so long part of Indian culture that Pepsi used I its campaign for the younger
generation and the associated this brand with fun that goes with the game. Ragga collection
from Titan is another example of contemporary positioning with ethnic overtones.

Relevance Of Culture For A Marketer:- Marketers must also be conscious of newly developed
and embraced values, customs and traditions, so as to be able to take advantage of the situation. -
Subcultures are relevant units of analysis for market research. A sub-cultural analysis helps a
marketer identify distinct segments that are “natural”, sizable and easy to cater to.

Every component of culture should be carefully studied and a marketing program designed
accordingly; Product names or brands should not have double meanings; they should not be
insensitive in any manner; they should be distinct, easy to remember, recall and pronounce.

While deciding on positioning and communication, marketer must be sensitive to culture, and
particularly, cross-culture; the colors, language and symbols, should all be kept in mind. -The
analysis of the culture, sub-culture and cross-culture helps profile consumers into segments that a
marketer could take advantage off through formulation of an appropriate marketing strategy. The
marketer could choose from two options, viz., either decide on a standardized global strategy or
go in for a localized customized strategy. - MNC’s who desire to enter foreign markets should
carefully study and understand the cultures of such countries; They need to go through an
elaborate process of acculturation so that they can understand the inhabitants of such cultures and
their needs.

Marketers must make sure that they employ local (foreign) people for sales and marketing in
foreign cultures. They should avoid sending their own people as the latter would take time to be
acculturated.

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 Especially with reference to international marketing, marketers must make sure that they i)
modify their product and service offerings so as to meet local cultures, and gain easy and quick
acceptance in the foreign country; ii) design a communication /promotion programme where the
message content, language etc. is consistent with those of the segment; iii) adjust the prices and
payment terms and conditions to meet local expense and consumption patterns; iv) adapt their
distribution policies, including retailing to adjust with what the target segment in foreign cultures
is used to.

Indian Core Values

The Indian society is driven by a set of core values, though these may vary in the urban context.

These values remain basic to the Indian culture and are strongly embedded in most sub-cultures.
The variation in the urban milieu may be attributed to changing lifestyles, impact of
Westernization and diffusion of technology. Even within the urban context, these values may
have further variations or contradictions. Young couples working with high-technology firms
may lead a typically Western lifestyle (cars, fast food and weekend holidays) but still hold on to
or practice certain religious beliefs and customs which are totally ethnic in nature. In general,

Indian consumers are still culture conscious in the sense that they conform to the cultural
expectations of society. Core values are those

1) Which are adopted by a significant number of people

2) Which are enduring and are followed by people for a long period of time and

3) Which enable marketers to understand the behaviour of consumers

The following are some of the core values of Indians:

1. Family Orientation: Family for an average Indian not only includes his own family only but
also the extended family-parents, brothers and sisters. That is the reality for a majority of Indians
though the joint family is fast diminishing in the urban context. The commitment of the male
consumer (in some cases, the female consumer too) to the family is such that he, as the chief
wage earner, supports the entire joint family. This has several marketing implications. First, the
disposable income of such a consumer gets radically reduced and he/she is always looking for
value-based brands at a lower price point. This logic works equally for purchases concerning self
and the immediate family members. The brands at the lower end of the market in a number of
product categories like tea, soap, toothpaste and shampoo typically cater to these kinds of
consumers. This type of consumer also mixes up brands and offerings from the unorganized
sector to balance his/her expenditure on such consumption needs. In fact the low-end brands
attempt to upgrade the consumer from the offerings of the unorganized sector (unbranded and
local offerings which may be marketed in an unstructured and haphazard manner). A consumer
may buy a branded detergent powder like Surf to wash his/her 'special' clothes and may buy low-

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end washing soaps (branded but cheaper) for washing ordinary clothes. She/he may buy
shampoo sachets (small packets which are offered for around Rs. 2 to Rs 2.5-Chik shampoo was
introduced at 50paise) once in a while. Consumers may down-trade at any price-point in the
product-line and not necessarily at the lower end of the market (though brands towards the upper
end may experience a degree of price insensitivity). Hindustan Lever introduced Surf Excel
Powder detergent priced between Surf and Surf Excel brand in an attempt to move consumers of
Surf to Surf Excel Powder (middle end of the market) some years back, but the toothpaste brand
is Aim, with penetrative pricing at the lower end of the market. These examples reflect that price
sensitivity is a part of the Indian Culture.

Britannia, the brand of biscuits (the brand was built over a period of several decades) has a
product line, ranging from the low-end to premium offerings for a niche market. It introduced
Tiger brand of glucose biscuits (a major part if the biscuit market is in the unorganized sector
and glucose biscuits are extremely popular at the low end of the market) at the low-end who are
conscious of 'value' differentiate across product categories even when they are under pressure to
bring down their regular consumption expenses.

2. Savings: Savings is an inherent value of Indians; given the uncertainty in income generation
(a majority of the population depends on agriculture and only 24 per cent lives in urban areas and
the monthly salary as a regular source of income is available only to a small cross section of the
population). Unlike in the developed countries, community medical services or assured pension
after retirement are not available to most consumers. Consumers fall back on their savings to
celebrate festivities, very specifically weddings in the family, and spend as lavishly as possible.
In the recent times, consumers have begun spending on durable products after the basic needs
have been taken care of. Bicycles, watches and TVs are perhaps popular 'entry-level' purchases
for the average Indian who is able to take care of the basic necessities. Savings as a habit
pervades all sections of the society. Consumers belonging to all socio-economic classes are
interested in jewellery and for most of them it may mean investing a considerable amount of
their savings. Traditionally, jewellery is more associated with women. Families with girl children
are more likely to spend their savings on jewellery. Mostly, consumers buy their jewellery from
their family jewellers who have been associated with their client-families for several generations.

Branded jewelry like Tanishq and Kalyan cater to just about 2 per cent of the jewellery market
and target an up-market niche. The popularity of installment payments for a number of products
ranging from bicycles to computers can be attributed to consumers splitting savings between
traditional purchases like jewelry and appliances required for a convenient living.

3. Festivities: Celebrating festivals is very much a part of India's culture in all the states. The
sub-culture within a state (territory) determines the type of festival which is to be actively
celebrated.

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For example, Pongal is not quite popular except in Tamil Nadu. Like most festivals in this
country, Pongal has a special association with the farmers of the state. Durga Puja in West
Bengal is celebrated with a great deal of enthusiasm every year. But it is not popular in any other
states even though its variations are celebrated in other parts. Similarly, Onam in Kerala is
another example of a regional festival. Such festivals are a huge opportunity for marketers.

Given that 76 per cent of the Indians live in rural areas, a number of companies step up their
advertising campaigns and logistics during the festive months. Asian Paints, a leading paints
brand, associated its brands with festivities in Bengal and found that there was a substantial
increase in its sales. Several brands in a number of product categories offer sales promotional
programs during festive seasons and lakhs of consumers make use of the 'value-based' deals
during these times.

A number of consumers make use of the value-based' deals during these times. A number of
consumers postpone their purchases, especially durables, in the hope of getting such deals. Even
a niche jewellery brand like Tanishq came out with 'Oraaphis' (fraternal friendship bonds tied by
girls to boys of their choice, usually in the neighbourhood) in gold on Raksha Bandhan. Gold
coins with images of gods (a sign of financial prosperity) are given away as gifts by marketers of
durable brands, normally through specified outlets in a city.

4. Shopping as a ritual: Shopping is a ritual of sorts, among both urban and rural Indians.
The type of buyers, the shops they buy from and the product they purchase vary across
geographical territories and the economic spectrum of consumers. Retail outlets may
range from a roadside shop selling vegetables to Big Bazaar or Croma or Shopper's Stop
that promises a considerable degree of ambience, variety and service over other
conventional outlets. The fact that only less than 2 per cent of the products (in value
terms) are retailed through departmental stores is a reflection of the fragmented nature of
retailing in India, quite the reverse of what happens in developed countries. Housewives
shop almost regularly for basic commodities and vegetables even though the trend may
be changing in the urban context. Bargaining, especially in the case of commodities and
vegetables, is an unwritten rule in the transaction process. The popular departmental store
caters to the middle-class and has a sales promotion strategy for all of the year across
several product categories. In the case of durable products like TV, refrigerators or two-
wheelers, the average Indian consumer is oriented towards 'extended problem-solving'
kind of decision making. As part of the great shopping ritual, members of a family go
visiting different outlets with the objective of comparing prices and arriving at the best
deal in a product category.

The shopping of durables by typical Indian consumers can be associated with compensatory style
of decision making, with buyers analyzing one brand after another (especially when sales
promotions are advertised). It is extremely difficult to find retailers (durable categories) who
refuse to sell the brand below the marked retail price in order to clinch the deal with the

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consumer. This has been true of FMCG products in the recent times and such shops use the
signboard 'Buy and Save' to achieve big volumes.

Given the nature of the potential of durables (upper-end ones like refrigerators and colour
television sets), brands are not in a position to have a network of outlets reaching out to most
parts of the country (like FMCG companies that reach millions of outlets in rural areas). There
are potential markets in villages where higher-end durable categories may be consumed, but the
rural households in such categories, unlike their urban counterparts, are spread out while the
latter are concentrated in a specific state (Punjab, for instance, has a number of such households
in rural areas). Marketers of durables can adopt specialized channel strategies. A brand can
identify such customers, have a company-owned outlets are preferred because the company
establishes contact with these consumers and can, at a later stage, attempt up-selling and cross-
selling of its products. LG the brand that has a leading share in several categories of durable
products opened up sales offices in semi-urban markets in an effort to reach out to consumers in
the hinterland.

5. Mythology: Mythological stories, scriptures and music are an inherent part of the Indian
culture that has attracted scores of tourists from different parts of the world. Apart from creating
a brand experience in a service like tourism, toys, souvenirs and artifacts can also be drawn from
the Indian cultural milieu. Such offerings are marketed in places of tourist interest but the
offerings are not branded. Most of these may not even have the right quality in terms of product
finish and durability. Tourism, largely promoted by Government enterprises has received
considerable impetus in the form of infrastructure and service support. But there is a vast
potential for creating a brand in this industry- among both foreign and domestic travellers. A
value-based branding experience can create a huge market in tourism, which seems to have taken
off in a big way only in the upper social crust. Local toy manufacturers cater to specific markets
and a large chunk of the industry is in the unorganized sector. Branded toys with Indian cultural
themes (with several elements of the marketing mix brought together) can open up attractive
avenues for a brand. Even multinational brands like Leo and Mattel can develop ethnic brands
and make it affordable for the masses considering the potential that exists in this sector.

6. Foods As with most Asian countries, hot, spicy delicacies are popular in India too. It may be
worthwhile to note that food habits have a strong link with culture and are difficult to change.
With the exception of Maggi noodles during the eighties, there has not been a 'foreign' food
which has become so popular. Bread, which has been around for several decades, is still not
popular barring certain urban and some semi-urban markets. But it is interesting to note that
several variants of wheat flour are popular throughout India.

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Group

A group may be defined as

 Two or more people who interact to accomplish either individual or mutual goals.
 Number of persons belonging or classed together
 Persons come together to represent or for a common cause
 Persons working together

Persons who function collectively

What are Groups?

Definition: “Groups consist of two or more persons engaged in social interaction who have some
stable structure relationship with one another, are interdependent, share common goals and
perceive that they are in fact part of a group.” Thus, when two or more individuals gather
together to serve a common purpose or common motive it is called a group.

Characteristics:

- A group consists of more than one person

- They meet together to satisfy some common motive or common purpose say to collect money
for flood affected persons, or national defense fund. The common motive may be biogenic or
sociogenic

- The group may disintegrate when the common motive is satisfied. This refers to a temporary
group like a party or groups formed to collect money for relief fund or to celebrate Ganesh Puja.

- But a group can also have permanent motive or purpose like family, religious groups and clubs
which are formed to fulfil some permanent purposes. These are stable groups and continue for a
long period. Usually sociogenic needs have got an upper hand in group situation.

Classification/Types of Groups

Primary & Secondary: Primary groups are those that are close-knit. They are typically small
scale, include intimate relationships, and are usually long lasting. The members of primary
groups feel a strong personal identity with the group. Example: Nuclear Family. Secondary
groups have the opposite characteristics of primary groups. They can be small or large and are
mostly impersonal and usually short term. These groups are typically found at work and school.
Example: A committee organized to plan a holiday party at work. Members of the committee
meet infrequently and for only a short period of time.

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Formal & Informal: A group having its own rules, regulations, preordained norms and
guidelines is called a formal group. These guidelines and norms determine and control the
functions and activities of its group members in a rigid manner. Each and every person in the
formal group has to function as per his position and norm and as per the guideline determined for
him. Example: Organization, College, Legislative Committee. An informal group on the other
hand, does not have a definite norm, rules and regulations, there is more freedom in the informal
group than its counterpart and one can develop his own role as comfortable to him. Example: A
cultural group in the colony that organizes festivals, where no one has a clear role or designation.

Friendship Groups: Informal groups that comprise of small friendship groups, play groups,
gangs are Friendship groups. When some people develop friendship and the friends as a group
meet in a club or village panchayat room or in a members’ house and chat, gossip, and play for
some time, it is called an informal group. It is relatively transitory.

Work Groups: This type of group also serves as a major influence on the consumption
behaviour of members as they spend a sheer amount of time at their jobs (around 48 hours per
week). Formal work group consists of those individuals who work together as a team.

Their direct and sustained work relationship offers substantial opportunity for one or more
members to influence the consumption related attitudes and activities of other team members.
Informal friendship/work groups consist of people who have become friends as a result of
working for the same firm, they may/ may not work together as a team.

Shopping Groups: Two or more people who shop together for either food or clothing or simply
to pass the time can be called a shopping group; people like to shop with others who are pleasant
company or who they feel have more experience or knowledge about a desired product or
service. Shopping with others reduces the risk that a purchase decision will be socially
unacceptable, collective decision is the best in which none of the members knows about the
product to be purchased.

Concept of Reference Groups & its importance

A reference group includes individuals or groups that influence our opinions, beliefs, attitudes
and behaviour. They often serve as our role models and inspiration.

A reference group may or may not be a membership group. It is common to orient ourselves to
more than one reference group at a time. One’s family members, teachers, neighborhood and co-
workers shape different aspects of our self- evaluation. In addition, certain reference group
attachments change during the life cycle. We shift reference groups as we take on different
statuses during our lives. A reference group may be an actual group, a collectivity or an
aggregate, a person or personification of an abstraction.

Reference Group

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a) Celebrity: They represent an idealization of life that most people imagine that they would
love to live. Their credibility adds to the worthiness of the product/service they are associated
with. Advertisers spend enormous amount of money to have celebrities promote their products
with the expectation that the reading or viewing audience will react positively to the celebrity’s
association with their products. A company has the choice to use the celebrity in different ways:

• Testimonials: The celebrity has personally used the product

• Endorsement: Celebrity adds his/her name to the product which he/she may be an
expert with or not

• Actor or Spokesperson: The celebrity represents the product over time in a variety of
media and in personal appearances.

b) Expert: A type of reference group appeal used by marketers is the expert – a person who,
because of his/her occupation, training, or experience, can help the consumer evaluate the
product being promoted.

c) Common Man: This appeal is based on the testimonials of satisfied customers. It

demonstrates that someone just like the customer is satisfied with the product or service.

d) Executive/ Employee Spokesperson: Like celebrity, the executive spokesperson (CEO,

Founder, MD, Head of Marketing, etc.) is admired by general people because of his/her
achievements and the status implicitly conferred on business leaders at large.

e) Trade or Spokes-characters: Spokes-characters or cartoons, serve as a quasi-celebrity

endorser. This person represents the idealized image and dispenses important product
information. Such a character is largely exclusive to the specific product or product-line.

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Opinion Leadership
The power and importance of personal influence are captured in the following comment by an ad
agency executive "Perhaps the most important thing for marketers to understand about word of
mouth is its huge potential economic impact” Opinion leadership (or word-of-mouth
communications) is the process by which one person (the opinion leader) informally influences
the actions or attitudes of others, who may be opinion seekers or merely opinion recipients. The
key characteristic of the influence is that it is interpersonal and informal and takes place between
two or more people, none of whom represents a commercial selling source that would gain
directly from the sale of something Word of mouth implies personal, or face-to-face,
communication, although it may also take place in a telephone conversation or within the context
of e-mail or a chat group on the Internet.

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This communication process is likely, at times, to also be reinforced by nonverbal observations
of the appearance and behavior of others One of the parties in a word-of-mouth encounter
usually offers advice or information about a product or service, such as which of several brands
is best or how a particular product may be used This person, the opinion leader, may become an
opinion receiver when another product or service is brought up as part of the overall discussion
Individuals who actively seek information and advice about products sometimes are called
opinion seekers. For purposes of simplicity, the terms opinion receiver and opinion recipient will
be used interchangeably in the following discussion to identify both those who actively seek
product information from others and those who receive unsolicited information Simple examples
of opinion leadership include the following

 During a coffee break, a coworker talks about the movie he saw last night and
recommends seeing it
 A person shows a friend photographs of his recent Australian Outback vacation, and the
friend suggests that using a polarizing filter might produce better pictures of outdoor
scenery
 A family decides that they would like a swimming pool for their backyard and they ask
neighbors who have pools which pool construction company they should call

The Family
Although the term ‘family’ is a basic concept, it is not easy to define because family composition
and structure, as well as the roles played by family members, are almost always in transition
Traditionally, however, family is defined as two or more persons related by blood, marriage, or
adoption who reside together In a more dynamic sense, the individuals who constitute a family
might be described as members of the most basic social group who live together and interact to
satisfy their personal and mutual needs According to many sources, the family remains the
central or dominant institution in providing for the welfare of its members Although families
sometimes are referred to as households, not all households are families For example, a
household might include individuals who are not related by blood, marriage, or adoption, such as
unmarried couples, family friends, roommates, or boarders However, within the context of
consumer behavior, households and families usually are treated as synonymous. In most Western
societies, three types of families dominate

 The married couple - The simplest type of family, in number of members, is the married
couple - a husband and a wife As a household unit, the married couple generally is
representative of either newly married who have not yet started a family and older
couples who have already raised their children
 The nuclear family - A husband and wife and one or more children constitute a nuclear
family. This type of family is still commonplace but has been on the decline

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  The extended family - The nuclear family, together with at least one grandparent living
within the household, is called an extended family. Within the past 30 years the incidence
of the extended family has also declined because of the geographic mobility that splits up
families Moreover, because of divorce, separation, and out-of-wedlock births, there has
been a rapid increase in the number of single-parent family households consisting of one
parent and at least one child.

However, this concept is not true for India and many other cultures. In India family consists of
grandparents (sometimes even great grand parents), his male children (girls are family members
upto the time of their marriage and do not remain family members after marriage). In India at
least in rural areas male members continue to live with their parents even after the marriage and
even after they start earning; only when they leave the village for earning do they not remain
family members in the defined sense. However, even this is not always true and they remain
member of their father’s family.

The Family Life Cycle

Sociologists and consumer researchers Family life-cycle is a part of consumer buying behaviour
study as it concerns itself with the various phases and generations of people present within an
individual family and how to target them with your marketing efforts. This study can be applied
for different kind of industries with successful results. It focuses on shopping styles, information
use and decision-making differences by a person in the different stages of his life.

As we grow older, we are moving steadily from one stage to another, moving from an initial
buying behaviour focusing only on ourselves to a more mature and responsible one, by taking
into consideration not only our needs but also the needs of our families. By understanding in
which stage a person is in the family life cycle, marketers can anticipate their needs, and
determine the products and services they can provide him.

Traditional Family Life Cycle

 The traditional family life cycle is a progression of stages through which many families
pass, starting with bachelorhood, moving on to marriage (and the creation of the basic
family unit), then to family growth (with the birth of children), to family contraction (as
grown children leave the household), and ending with the dissolution of the basic unit
(due to the death of one spouse). Although different researchers have expressed various
preferences in terms of the number of FLC stages, the traditional FLC models proposed
over the years can be synthesized into just five basic stages, as follows:

 Stage I; Bachelorhood—young single adult living apart from parents

 Stage II: Honeymooners—young married couple

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  Stage III: Parenthood—married couple with at least one child living at home.
 Stage IV: Postparenthood—an older married couple with no children living at
home.
 Stage V: Dissolution—one surviving spouse

The following discussion examines the five stages in detail and shows how they lend
themselves to market segmentation strategies.

Stage I: Bachelorhood

The first FLC stage consists of young single men and women who have established households
apart from their parents. Although most members of this FLC stage are fully employed, many are
college or graduate students who have left their parents' homes. Young single adults are apt to
spend their incomes on rent, basic home furnishings, the purchase and maintenance of
automobiles, travel and entertainment, clothing and accessories. Members of the bachelorhood
stage frequently have sufficient disposable income to indulge themselves: Marketers target
singles for a wide variety of products and services. In most large cities, there are travel agents,
housing developments, health clubs, sports clubs, and other service and product marketers that
find this FLC stage a lucrative target niche. Meeting, dating, and mating are prominent concerns
of many young adults who typically are beginning their working lives after recently completing
college or some other form of career or job training. It is relatively easy to reach this segment
because many special-interest publications target singles. For example, Playboy are directed to a
young, sophisticated, single male audience, whereas Cosmopolitan, Allure, and Glamour are
directed to young single females. It is interesting to note how the perceptions of 18- 29 year olds
have been changing with respect to marriage. Whereas in 1991, 72 percent of this group felt that
a happy marriage is part of the good life, by 1996 the number had risen to 86 percent. This
growth in percentage is higher than for any other age group of U.S. adults. Marriage marks the
transition from the bachelorhood stage to the honey-mooner stage. Engaged and soon-to-be-
married couples have a combined income of more than $48,000 (30 percent greater than the
average U.S. household); therefore, they are the target for many products and services They want
their wedding to be special which explains the recent trend in wedding sites that are far from
home - an exotic Carribean island or a major European capital city. For example, a Wyoming
company, Bonham Western Weddings, arranges ceremonies at local ranches and also sells
wedding outfits with a Western design. The owner of the company claims, "A lot of people from
back East come out here."

Stage II: Honeymooners

The honeymoon stage starts immediately after the marriage vows are taken and generally
continues until the arrival of the couple's first child.

This FLC stage serves as a period of adjustment to married life. Because many young husbands
and wives both work, these couples have available a combined income that often permits a
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lifestyle that provides them with the opportunities of more indulgent purchasing of possessions
or allows them to save or invest their extra income Honeymooners have considerable start-up
expenses when establishing a new life (major and minor appliances, bedroom and living room
furniture, carpeting, drapes, dishes, and a host of utensils and accessory items). During this stage,
the advice and experience of other married couples are likely to be important to newly-weds
Also important as sources of new product information are the so-called shelter magazines, such
as Better Homes and Gardens and Metropolitan Home.

Stage III: Parenthood

When a couple has its first child, the honeymoon is considered over. The parenthood stage,
sometimes called the full-nest stage, usually extends over more than a 20-year period. Because of
its long duration, this stage can be divided into shorter phases the preschool phase, the
elementary school phase the high school phase, and the college phase Throughout these
parenthood phases, the interrelationships of family members and the structure of the family
gradually change Furthermore, the financial resources of the family change significantly, as one
(or both) parents progress in a career and as child-rearing and educational responsibilities
gradually increase and finally decrease as children become self-supporting An increase in the
number of births among baby boomers (born between 1946 and 1964) has resulted in a "baby
boomlet " These parents are older, better educated, more affluent, and more socially aware than
previous generations Many feel that they are better parents to their children than their parents
were to them Their children often become the focus of their lives, and they spend money
accordingly "Boomer" parents have become an important target for companies that serve the
baby market They also are an important market for many investment and insurance services
There is even a company called Cover Concepts Marketing Services that distributes product
samples, coupons, and other promotions to boomer parents and their preschool children at more
than 22,000 day care centers The purpose here is to secure product and service exposure among
this important group of consumers Many magazines cater to the information and entertainment
needs of parents and children For example, there are many other special-interest publications,
such as Humpty Dumpty, designed for the young child Just learning to read, Scholastic
Magazine, for the elementary school pupil. Boy's Life, for young boys, and American Girl,
Seventeen, Glamour, and Mademoiselle, for teen and young adult girls interested in fashion.

Stage IV. Postparenthood:

Because parenthood extends over many years, it is only natural to find that post-parenthood,
when all the children have left home, is traumatic for some parents and liberating for others This
so-called empty nest stage signifies for many parents almost a “rebirth”, a time for doing all the
things they could not do while the children were at home and they had to worry about soaring
educational expenses For the mother, it may be a time to further her education, to enter or reenter
the job market, or to seek new interests For the father, it is a time to indulge in new hobbies For
both it is the time to travel to entertain, perhaps to refurnish their home or to sell it in favor of a

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new home or condominium It is during this stage that married couples tend to be most
comfortable financially.

Today’s empty nesters have more leisure time They travel more frequently, take extended
vacations and are likely to purchase a second home in a warmer climate They have higher
disposable incomes because of savings and investments, and they have fewer expenses (no
mortgage or college tuition bills) They look forward to being involved grandparents For this
reason, families in the postparenthood stage are an important market for luxury goods, new
automobiles, expensive furniture, and vacations to faraway places Many empty nesters retire
while they are still in good health Retirement provides the opportunity to pursue new interests, to
travel, and to fulfill unsatisfied needs Hotels, airlines, and car-leasing companies have responded
to this market with discounts to consumers over 60; some airlines have established special travel
clubs with unlimited mileage for a flat fee Of course for older retired couples who do not have
adequate savings or income retirement is far different and very restrictive Older consumers tend
to use television as an important source of information and entertainment They favor programs
that provide the opportunity to "keep up with what s happening especially news and public
affairs programs In addition a number of special interest magazines cater exclusively to this
market, such as Modern Maturity.

Stage V: Dissolution: Dissolution of the basic family unit occurs with the death of one spouse.
When the surviving spouse is in good health, is working or has adequate savings, and has
supportive family and friends, the adjustment is easier. The surviving spouse (usually, the wife)
often tends to follow a more economical lifestyle. Many surviving spouses seek each other out
for companionship; others enter into second (or third and even fourth) marriages.

Marketing and the Traditional FLC Whereas the foregoing discussion of the traditional family
life cycle concept indicated the types of products and services that a household or family might
be roost interested in at each stage, it is also possible to trace how the FLC concept impacts a
single product or service over time.

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Chapter 10 CONSUMER DECISION MAKING

What Is a Decision?

Every day, each of us makes numerous decisions concerning every aspect of our daily lives.
However, we generally make these decisions without stopping to think about how we make them
and what is involved in the particular decision-making process itself. In the most general terms, a
decision is the selection of an option from two or more alternative choices. In other words, for a
person to make a decision, a choice of alternatives must be available. When a person has a
choice between making a purchase and not making a purchase, a choice between brand X and
brand Y, or a choice of spending time doing A or B, that person is in a position to make a
decision. On the other hand, if the consumer has no alternatives from which to choose and is
literally forced to make a particular purchase or take a particular action (e.g., use a prescribed
medication), then this single "no-choice" instance does not constitute a decision; such a no-
choice decision is commonly referred to-as a "Hobson's choice." In actuality, no-choice purchase
or consumption situations are fairly rare. For consumers, freedom often is expressed in terms of a
wide range of product choices. Thus, if there is almost always a choice, then there is almost
always an opportunity for consumers to make decisions. Moreover, experimental research
reveals that providing consumers with a choice when there was originally none can be a very
good business strategy, one that can substantially increase sales. For instance, when a direct-mail
electrical appliance catalog displayed two coffeemakers instead of just one (the original
coffeemaker at $149 and a "new" only slightly larger one at $229), the addition of the second
comparison coffeemaker seemed to stimulate consumer evaluation that significantly increased
the sales of the original coffeemaker.

DECISION MAKING:

A decision is defined as choosing an option of the few/many available. Decision making is the
process of choosing between two or more alternatives; It is the selection of an alternative out of
the few/many choices that are available.

Decision making is:

a) a goal oriented process.

b) it is a problem solving process: helps take advantage of opportunities and fight threats.

CONSUMER DECISION MAKING PROCESS:

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1. Need recognition/Problem recognition: This is a stage of perceiving a deficiency/need. A
need could be triggered off by an internal stimulus or an external stimulus. For example, a person
is thirsty and feels like having a cola drink. The stimulus is internal. On the other hand, while
walking across the street, he sees a hoarding which shows a person having a frosted, chilled cola,
and he too desires to have the same, the need is said to have been stimulated by an external
stimuli. When a person has an unsatisfied need, the buying process begins to satisfy the needs.
The need may be activated by internal or external factors.

The intensity of the want will indicate the speed with which a person will move to fulfill the
want. On the basis of need and its urgency, the order of priority is decided. Marketers should
provide required information of selling points.

b) Pre-purchase information search: After a need is recognized, the consumer goes for an
information search, so as to be able to make the right purchase decision. Different products are
available in the market, but consumer must know which product or brand gives him maximum
satisfaction. And the person has to search out for relevant information of the product, brand or
location. Consumers can use many sources e.g., neighbors, friends and family. Marketers also
provide relevant information through advertisements, retailers, dealers, packaging and sales
promotion, and window displaying. Mass media like news papers, radio, and television provide
information. Nowadays internet has become an important and reliable source of information.
Marketers are expected to provide latest, reliable and adequate information.

The consumer gathers information about the:

(i) product category and the variations

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(ii) various alternatives

(iii) various brands.

The amount of information a consumer will gather depends on the following: i) the consumer:
demographics (age, gender, education), psychographics (learning, attitudes, involvement,
personality type)

The information sources are of two types:

i) Internal sources: This includes the consumer and his self. He recalls information that is stored
in his memory (comprising information gathered and stored, as well as his experiences, direct
and indirect). Internal sources seem sufficient when:

- it is a routine purchase

- the product is of low involvement

ii) External sources: Here the consumer seeks information from the external environment.
External sources of information include:

-Interpersonal communication (family, friends, work peers, opinion leaders etc.)

-Marketing communication or commercial information (advertisements, salespeople, company

websites, magazines etc.)

Types of Search Activity:

Information Sources:

-Other public sources (editorials, trade magazines and reports, consumer awareness programmes
on TV, Internet etc.)

External sources are resorted to in cases where:

- past knowledge and experience is insufficient.

- the product is of high involvement and the risk of making a wrong decision is high.

c) Evaluation of alternatives: Once the consumer has gathered information and identified the
alternatives, he compares the different alternatives available on certain criteria. This is a critical
stage in the process of buying. Following are important elements in the process of alternatives
evaluation

a. A product is viewed as a bundle of attributes. These attributes or features are used for
evaluating products or brands. For example, in washing machine consumer considers price,
capacity, technology, quality, model and size.

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b. Factors like company, brand image, country, and distribution network and after-sales service
also become critical in evaluation.

c. Marketers should understand the importance of these factors with regards to the consumers
while manufacturing and marketing their products.

d) Purchase Decision: After the consumer has evaluated the various alternatives, he selects a
particular brand. Outcome of the evaluation develops likes and dislikes about alternative
products or brands in consumers. This attitude towards the brand influences a decision as to buy
or not to buy. Thus the prospective buyer heads towards final selection. In addition to all the
above factors, situational factors like finance options, dealer terms, falling prices etc., are also
considered. Consumer purchases may be trials/first purchases or repeat purchases.

Trials/First purchase: Trials could be elicited through market testing, or through promotional
tactics such as free samples, coupons, etc.

Repeat purchases: If the consumer is satisfied, he would buy the brand again. Repeat purchases
lead to brand loyalty.

The consumer may further have to make decisions on:

a) where to buy from? (Place: Real/brick and mortar or virtual/online);

b) whom to buy from? (Which store: Depends on reputation of seller, past experience, etc.)

b) when to buy? (Time: Emergency or Routine; During season, off season, sale, rebate etc.)

It is noteworthy that a purchase intention (desire to buy the most preferred brand) may not
always result in a purchase decision in favor of the brand; it could get moderated by (i) Attitudes
of others; and (2) Unexpected situational factors.

e) Post-Purchase Outcome And Reactions: Post-purchase behavior of consumer is more

important as far as marketer is concerned. Consumer gets brand preference only when that brand
lives up to his expectation. This brand preference naturally repeats sales of marketer. A satisfied
buyer is a silent advertisement. But, if the used brand does not yield desired satisfaction, negative
feeling will occur and that will lead to the formation of negative attitude towards brand. This
phenomenon is called cognitive dissonance. Marketers try to use this phenomenon to attract
users of other brands to their brands. Different promotional-mix elements can help marketers to
retain his customers as well as to attract new customers.

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IMPLICATIONS FOR A MARKETER:

An understanding of the consumer decision making process, can help a marketer formulate
appropriate marketing strategies. He can also model his marketing mix accordingly. The
implications of understanding the dynamics of consumer behavior are discussed as follows:

1. Need/Problem recognition:

-A marketer can create an imbalance between the actual and desired state; it would trigger of the
purchase decision process.

-He can launch newer models; marketing communication has a big role to play.

-He can focus on both functional (utilitarian) and emotional (hedonic) benefits that the product
purchase could offer.

-He can activate a need through communication (advertisements, sales promotion, point-of-
purchase stimuli, opinion leaders and reference groups).

2. Pre-purchase information search: -Marketing communication has an important role at this

stage. -The marketer can identify the sources of information that the people generally access and
use these to present information about his product and service offering. -The marketer can also
identify the functional or hedonic utility and use appeals accordingly. -This would help create the
right kind of cognitive and emotional touch point so as to elicit a favorable behavior (purchase). -
The marketer should be able to provide the right kind of information at the right place and at the
right time. -The marketer must make sure that his product and service offering forms a part of the
evoked /consideration set. a) For high involvement products: the marketer should ensure that
information is available. b) For low involvement products: he should use emotional appeals, POP
stimuli etc.

3. Evaluation of alternatives:

-The marketer should be careful that his product is:

i) positioned and promoted well;

ii) is readily available and displayed well;

iii) the product features prominently in the evoked/consideration set; and,

iv) he highlights those attributes and benefits that are regarded as most important to the
consumers, and which they are most likely to evaluate while selecting an alternative.

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-The marketer should inform and educate the customer about the various criteria to use for
evaluation of alternatives.

-While doing so an intelligent marketer should focus on those attributes, where his product is
better and/superior.

4. Purchase decision: - The marketer should be careful to stock the product at the right place at
the right time so that the consumer who has made a decision in favour of the brand can have
access to the product; Else the consumer may have to change his decision at the last moment. -
As far as trial and first time purchases are concerned, the marketer should encourage trials
through market testing, or through promotional tactics such as free samples, coupons, etc. - For
repeat purchases:

i) the marketer should make sure that he has satisfied the customer at the first time.

ii) that his offering is a part of the evoked/consideration set. He should aim towards creation of
brand loyalty.

v) Post-purchase outcome and reactions: - The marketer can play an important role in
reducing the dissonance that the consumer faces and reassuring him that the choice he made was
the right one.

i) The marketer can communicate with the customer about the various attributes/features and
benefits that the product has to offer in comparison with other alternatives.

ii) He can follow up with the customer and address queries and concerns if any (eg. follow up
calls).

iii) Marketers’ assurances with respect to warranties, guarantees and exchange can also pacify
the cognitive dissonance state.

iv) Company websites with FAQs (frequently asked questions); satisfied customers’ comments
and blogs; and customer care information (eg. toll free numbers etc) can also prove to be helpful.

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Consumer Involvement

Productor
Degree Examples
Service

Low involvement Short life Fast moving consumer goods.

Medium
Medium Furniture, crockery, ordinary medical treatment
involvement

Automobiles, surgery, purchase of immovable assets,

High involvement Long
insurance policy etc.

Another component that closely relates to consumer decision making is involvement.

Involvement is defined as a psychological state that motivates people to be more aware and
careful about persons/objects/situations. It also indicates a level of personal importance that the
person attaches to such persons/objects/situations. Thus, there are (a) high and low-involvement
consumers; (b) high and low-involvement purchases.

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Meaning of Consumer Involvement:

As Schiffman has put it “Involvement is a heightened state of awareness that motivates

consumers to seek out, attend to, and think about product information prior to purchase”. It is the
perceived interest and importance that a consumer attaches to the acquisition and consumption of
a product/service offering.

This is referred to as consumer involvement. Involvement of consumers while makes purchase

decisions varies across persons, across product/service offerings in question as well as purchase
situations and time at hand. Some consumers are more involved in purchase processes than
others.

So basically involvement is “the importance of the product/service to the consumer. The

amount of time and effort spent while buying purchasing any product or service.

The involvement theory holds that there are low and high involvement purchases. Consumers’
involvement depends on the degree of involvement of purchase to a consumer. For example,
while buying a pack of bread, the consumer does not feel very much involved. It is because the
life of the product is very short. Once it is consumed, it gets exhausted. If the consumer is not
satisfied with the particular bread brand, he will purchase some other brand next time.

In the case of purchase of consumer durable (Laptop, refrigerator, household furniture, two
wheeler etc), the involvement of the consumer in making the purchase decision is high.
Consumers take a decision after much deliberations. These products have long-term
consequences. Consumers make lot of inquiries before they purchase the products which have a
high degree of involvement. The following table shows various degrees of involvement
depending upon the nature of the product or service.

Types of Consumer Involvement

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a) High Involvement/Rational: This quadrant of the matrix consists of high involvement and
thinking, typically signifying higher level of rationality. Products that fall into this quadrant are
high involvement products, where decision making involves a lot of thinking. Because of the
nature of product/service offerings that fall in this category, consumers have a high need for
information. Also, consumer decision making is driven by economic motives. Examples of
products that would fall into this quadrant include cars, laptops, real estate etc as well as
innovative products. The strategy model is learn -> feel -> do.

b) High Involvement/Emotional : This quadrant is representative of situations which are high

involvement and high feeling; while there is a level of involvement, information and thinking is
less important than the feeling factor; this is because such purchases are related to the persons
self-esteem. The affect component is stronger than the information factor. The person is drawn
by the feeling, emotional and psychological motives; and, they become a "feeler" about the
product. Examples include sports cars and motorcycles, fashion apparel and jewellery, perfumes
etc. The strategy model is feel -> learn -> do.

c) Low Involvement Rational: The third cell requires minimal effort on the part of the consumer,
in terms of involvement. It actually results from habit forming within the consumer (or the doer),
as a result of habitual buying and purchase.

He becomes a reactor in the sense that whenever he has a need, he reacts and immediately
purchases whatever brand he has been purchasing. Over a period of time, almost all products
would fall into this quadrant. Examples of products that would involve the low
involvement/thinking dimensions include staples, bread, stationery, soap etc. The strategy model
is feel -> learn -> do.

d) Low Involvement/Emotional: The products that fall in this quadrant signify low involvement
and high feeling; they promote self satisfaction. Consumers buy such products to satisfy personal
tastes, many a times influenced by peer influence and social pressures. Examples include
cigarettes, liquor, movies etc. The strategy model is do-> feel -> learn.

Implications for a marketer:

1. For high involvement/Rational products, the marketer should provide such information about
the product/service and the brand offering that helps build a favourable attitude for his brand, so
that it could lead to a purchase. The focus of the advertisement should be on factual relevance.

2. For products that fall in the high involvement/emotional quadrant, a marketer should devise a
promotional strategy that arouses an affective state that is positive and favourable. A good
psychological emotional and mood state would create an urge within the consumer to learn more
about the offering, and finally buy the product/service. The advertisement should focus on both
facts and entertainment.

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3. For low involvement and Emotional products, the marketer needs to create and maintain brand
loyalty; promotional strategies should focus on creation of brand recall. The advertisement
should focus on both facts and entertainment.

4. This proves to be challenging for marketers as consumers are driven by social pressures and
brand loyalty is short lived. The promotional strategy should include social appeals with an
entertainment orientation.

Causes of Consumer Involvement

The factors that influences consumer involvement include personal, product and situational.
Personal factors self-concept, needs, and values are the three personal factors that influence
the extent of consumer involvement in a product or service.

Product Factors:

The consumer involvement grows as the level of perceived risk in the purchase of a good or
service increases. It is likely that consumers will feel more involved in the purchase of their
house than in the purchase of tooth paste, because it is a much riskier purchase. Product
differentiation affects involvement.

The involvement increases as the number of alternatives that they have to choose from,
increases. The pleasure one gets by using a product or service can also influence involvement.
Some products are a greater source of pleasure to the consumer than others. Tea and coffee have
a high level of hedonic (pleasure) value compared to, say household cleaners.

Hence the involvement is high. Involvement Any product that is socially increases when a
product gains public attention. visible or that is consumed in public, demands high involvement.
For example, involvement in the purchase of car is more than the purchase of household items.

Situational Factors: The situation in which the product is bought or used can generate
emotional involvement. The reason for purchase or purchase occasion affects involvement. For
example, buying a pair of socks for oneself is far less involved than buying a gift for a close
friend. Social pressure can significantly increase involvement.

One is likely to be more self conscious about the products and brands one looks at when
shopping with friends than when shopping alone. The need to make a fast decision also
influences involvement. A consumer who needs a new refrigerator and sees a ‘one- day- only
sale’ at an appliances retailer does not have the time to shop around and compare different
brands and prices. The eminence of the decision heightens involvement. The involvement is high
when the decision is irrevocable, for example when the retailer does not accept return or
exchange on the sale items. Thus involvement may be from outside the individual, as with

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situational involvement or from within the individual as with enduring involvement. It can be
induced by a host of personal-product-and situation related factors, many of which can be
controlled by the marketer. It affects the ways in which consumers see, process, and send
information to others.

Types of Buying Decision Behavior

Buying behavior differs greatly for different types of products. As participants and involvement
in the buying process increase, buying decisions become more complex.

The types of consumer buying behavior depend on buyer involvement and the degree of
differences among brands.

Four types of buying behavior are;

1. Complex Buying Behavior.
2. Dissonance- Reducing Buying Behavior.
3. Habitual Buying Behavior.
4. Variety-Seeking Buying Behavior.
Types of Buying Decision Behavior

1. Complex Buying Behavior

Complex buying behavior is when the consumer is highly involved in the purchase and have
knowledge about significant differences between brands, it is called complex buying behavior.
Buying a car is an example of complex buying behavior.

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Consumers demonstrate complex buying behavior when their involvement in the purchase is
high, and when they perceive significant differences among brands. Consumers’ purchase
involvement is high when the product is costly, risky, purchased infrequently, and highly self-
expressive. In such a situation, the consumer has much to know about the product category.

For example, a laptop buyer may not know what attributes to consider. Many product features
carry no real meaning: a “Pentium chip,” “Super VGA resolution,” or “8 megs of RAM.” Thus
the buyer will go through a learning process that involves, learning about the specs, developing
beliefs about the brand, developing attitudes, and making a contemplated purchase choice.

Marketers of high-involvement products need to know the information-gathering and evaluation

behavior of high-involvement consumers. They must assist buyers in learning about product
features and their importance, and the brand.

It is also necessary for marketers to motivate store sales staff and the buyers’ acquaintances for
influencing the ultimate brand choice.

2. Dissonance- Reducing Buying Behavior

Dissonance- reducing buying behavior happens when consumers are highly involved with an
expensive, infrequent, or risky purchase but perceives little difference among brands.

For example, consumers buying split type air conditioner may face a high-involvement decision
because air conditioning is costly and self-expressive. Still, buyers may consider most air
conditioner brands in a given price range to be the same.

In this situation, because perceived brand differences are not wide, buyers may shop around to
learn what is available, but relatively quickly. They may respond primarily to an attractive price
or to purchase convenience.

Consumers might experience postpurchase dissonance in the form of after-sale discomfort when
they notice certain disadvantages of the purchased air conditioner brand.

This can also occur if the buyer hears favorable things about brands not purchased. To counter
such dissonance, the marketer should undertake proper after-sale communication and support to
help consumers feel happy about their brand choices. Also marketers should also enhance
communication on add products or services on the product or services already purchased.

3. Habitual Buying Behavior

Habitual buying behavior happens when consumer involvement is low, and the perceived brand
difference is low.

For example, take flour; consumers have insignificant involvement in this product category.
They go to a store and ask for a brand. If they keep asking for the same brand, it is out of habit

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rather than strong brand loyalty. Consumers have low involvement with most low-cost,
frequently purchased products.

Consumers do not look for extensive information about the brands. They do not evaluate brand
features and make strong decisions about which brands to buy. Instead, they passively receive
information from the media to which they are exposed.

Repetitive ads build brand familiarity rather than brand conviction. As consumers’ involvement
is low, they may not make a postpurchase evaluation.

Thus, the buying process contains brand beliefs acquired through passive learning. Habitual
buying behavior has important marketing implications.

Since buyers are not highly committed to any specific brand, marketers of low-involvement
products with few brand differences may use price and sales promotions to encourage product
trial. Ads of low involvement products should emphasize only a few key points. Visual symbols
and imagery should be used extensively. Ad campaigns should consist of a high repetition of
short-duration messages. Visual media like television should be preferred to print media because
it is a low-Involvement medium suitable for passive learning.

4.Variety-Seeking Buying Behavior

In Variety seeking behavior, there is low involvement of the consumer regarding the product,
and there are significant differences between brands. Consumers generally buy different products
not due to dissatisfaction but due to seek variety.

For instance, an individual may shop around for different breakfast cereals because he/she wants
variety in the mornings!

Consumers undertake variety-seeking buying behavior in situations characterized by low

consumer involvement, but significant perceived brand differences. In such cases, consumers
often do a lot of brand switching.

For example, when buying cookies, a consumer may hold some beliefs, choose a cookie brand
without much evaluation, then evaluate that brand during consumption. But the next time, the
consumer might pick another brand out of boredom or try something different. Brand switching
occurs for the sake of variety rather than because of dissatisfaction.

Variety-seeking buying behavior calls for different marketing strategies for the market leader and
market challenges. The market leader will encourage habitual buying behavior by ensuring
sufficient supply all the time as well as using push advertising.

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The market challenger will encourage variety seeking by using various sales promotion tools
such as cash discounts, special deals, coupons, free samples that will induce buyers to try new
brands.

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Chapter 11 Diffusion and Adoption
Faced with a dynamically changing environment, marketers are always with regard to new
product development. This could result in modification ranging from slight to moderate to large
or the continuum, or even result in totally new product and service offerings. The two questions
that face a marketer are, i) whether the modified/new product and service offering would be
accepted by the segment(s), and ii) how quickly would the product and service offering be
accepted by the segment(s). While the first pertains to what is referred to as diffusion, the second
pertains to what is known as adoption.

DIFFUSION OF INNOVATION

Introduction:

In a highly competitive environment, where number of players exist and vie for a share of the
market, the introduction of new product and service offerings becomes crucial for existence and
long term survival; thus, marketers are always on the move towards introduction of new product
and service offerings that would help meet the evolving needs and wants of the consumer
segment(s). The products that are offered may be slightly different from the existing alternatives,
some may be highly different, and some totally new. They all fall under the purview of what is
referred to as an “innovation”, and the product and services, referred to as “innovative products
and services”.

Wherever they fall on a continuum, they illustrate a change in one of few or all of the 4Ps, be it
in product form (product features, attributes, benefits, packaging or even brand name) , the price
(price, terms of payment, installments etc), place (physical versus electronic formats or even
personal selling) and/or promotion (media strategy, message strategy etc.). Whatever be the
changes that a marketer offers, it is the changing needs and desires amongst the consumers that
the former attempts to address; and, so it is important for him to understand how the segment(s)
would react to such a product and service offering.

Varying perspectives to defining “Innovation”:

The term “innovation” has been described with varying perspectives and orientations, viz., firm
oriented, product-oriented, market-oriented, and consumer-oriented. Let us discuss each one of
these:

a) Firm-oriented: As per this approach, a product or service offering is regarded as “new,” if the
company starts manufacturing or marketing it for the first time. In other words, the firm
orientation treats the “newness” in terms of the company’s perspective.

-the product is “innovative”, if it is “new” for the company.

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-the existence of the product in the market (as competitor’s offering, or even as consumers’
awareness) is disregarded; as long as it is “new” to the company, it is regarded as an innovation.

b) Product-oriented: A product and service offering is regarded as an “innovation”, if the

product changes in terms of form, attributes, features, and overall benefits; such changes have a
twofold connotation, one, in terms of technology, and two, in terms of consumption usage and
behavioral patterns.

-the product is “innovative”, if it is “new” in terms of form, attributes and features.

-there are changes in technology, as well as impact on consumer consumption behavior.

DEFINITION AND MEANING OF i) DIFFUSION OF INNOVATION, and ii)

ADOPTION:

There are two issues that a marketer needs to address while launch of new products and services,
i) whether the modified/new product and service offering would be accepted by the segment(s),
and ii) how quickly would the product and service offering be accepted by the segment(s). The
two issues are dealt with within the purview of “Diffusion of Innovation.”

“Diffusion” is regarded as a macro process that deals with the spread of a new product or service
offering amongst the potential market; it relates to the acceptance/rejection of an innovation by
the segment(s).

“Adoption”, on the other hand is a micro concept that lays emphasis on the various phases or
stages through an individual consumer passes while accepting/rejecting a new product or service
offering.

DIFFUSION PROCESS:

“Diffusion” is defined as a macro process that deals with the spread of a new product or service
offering amongst the potential market; it relates to the acceptance/rejection of an innovation by
the segment(s). “Diffusion of Innovation” is defined as a process by which an innovation spreads
amongst and gets the absorbed/accepted or assimilated by the market.

Schiffman defines “diffusion”, as “the process by which the acceptance of an innovation (a new
product, new service, new idea, or new practice) is spread by communication (mass media,
salespeople, or informal conversations) to members of a social system (a target market) over a
period of time”. The definition comprises four basic elements of the diffusion process:

- innovation: the term “innovation” refers to the newness of the product/service offering.

- channels of communication: this includes

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i) Marketing communication that takes place between the marketer and the potential market, or
the target segment; it could be personal (salesperson and consumer) or impersonal (via print or
audio visual media).

ii) Interpersonal communication that takes place between the consumers themselves or within
members of the target segment(s); it could be word of mouth communication within consumers
or through an opinion leader.

- social system: this refers to the social setting in which the diffusion takes place; it actually
refers to the market segment(s) or the target market(s). The definition and scope of the social
system depends on the product and service in question, its usefulness and its very basis for
existence. In a way, it reflects the target market(s) for whom the product and service is designed,
and within what segment(s), it would be diffused. For example, for a new herbal anti-wrinkle
cream, the social system would be confined to ladies who are in their late 40s. The social system
has wide repercussions on the diffusion of a product/service:

i) First, the new product and service is discussed and or evaluated within members of the social
system through interpersonal communication, opinion leadership and word-of-mouth.

ii) Second, the philosophy and the resultant orientation, with respect to culture, traditions, values
and norms also impacts the diffusion process. Thus, the social system impacts the ultimate
adoption and assimilation of the innovative offering; in order to be accepted quickly and
penetrate successfully, the marketer needs to keep this social system in mind and design his
product and the marketing mix accordingly.

- time: time is an important factor in the diffusion of innovation, as it determines the pace of
adoption and resultant assimilation of the innovative offering; researchers have studied the
impact of time in the following ways:

i) The amount of purchase time: the amount of purchase time refers to the average time that a
consumer would take to adopt a new product and service offering; this would include the total
time between the consumers’ initial awareness to the final acceptance/rejection of the new
product or service. Time as a factor has relevance for the diffusion process in the sense that it
helps assess the total time that it would take for a new product or service offering to get totally
diffused and adopted by the market at large; when the average purchase time is less, it can be
assumed that the rate of diffusion would be faster.

ii) The rate of adoption

Rate of adoption: The rate of adoption refers to the period that it is taken for a new product or
service to be accepted by the target market(s). It is a measure of how long it takes a new product
or service offering to be adopted by the members of the target market.

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With global advances in all respects, be it socio-economic, political, cultural and technological,
the rate of adoption is getting faster. The marketer also aims at a rapid acceptance of his
innovative offering, so that he can gain maximum advantage as a first-mover; thus he designs his
marketing mix as per the needs of the segment(s), across international cultures and communities.

ADOPTION PROCESS:

The second major process in Diffusion of Innovation is “Adoption”. Adoption is a micro concept
that lays emphasis on the various phases or stages through an individual consumer passes while
accepting/rejecting a new product or service offering. The study of adoption is important for a
marketer in the sense that it helps him understand the various stages through which a consumer
passes right from his initial awareness to the final acceptance/rejection. It may so happen that the
innovative offering may be existing for long in the market, but the consumer is unaware of it; or,
it may have existed in the market for long, but is regarded as “new” because the consumer has
heard of it for the first time. This implies that consumers could differ in the manner they
complete their purchase activity, right from initial awareness to the final act of purchase. This
could mean that the marketer needs to design his selling strategy accordingly. Schiffman defines
adoption as “the stages through which an individual consumer passes while arriving at a decision
to try or not to try or to continue using or to discontinue using a new product”.

Consumer researchers have proposed a number of models to describe the steps in the adoption
process, viz., Heirarchy of Effects’ Model, Robertson’s model, and Roger’s model (see 12 table).
The models explain the stages through which a prospect passes to end up being a consumer, right
from the stage of initial awareness to final adoption.

Generally speaking, the consumer passes through five stages of adoption, viz., awareness,
interest, evaluation, trial, and adoption (or rejection). The assumption underlying this general
model of adoption is that when a new product/service is introduced, prospects go through an
information search which could range between limited to extensive; of course, for some products
this search is highly limited (routine purchases). The five stages are explained below:

i) Awareness: This is the first stage in the adoption process, where the consumer is exposed to
the new product/service offering, and gets to know of the product. The marketers’ objective here
is to provide some awareness about the innovation, the features and benefits as also the brand.
The consumer is generally passive and acts as a mere recipient of information. He becomes
aware but lacks sufficient knowledge about the new offering.

ii) Interest: In this next stage, the consumer begins to develop some interest in the innovative
offering, and thereby puts in some effort to know more about it. The consumer becomes active in
his search for information and tries to elaborate on the information received at the awareness
stage. He actively searches for information about the new product /service and tries to assess
how it can benefit him.

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iii) Evaluation: The consumer who has acquired knowledge about the innovation, now begins to
evaluate; he evaluates whether, i) more information search is necessary with respect to the
innovation as well as to the brand; ii) he is sufficient with the product/service information that he
possesses.

The consumer also evaluates the innovative offering in terms of the attributes, features, and
overall benefits, as compared to existing alternatives; he assess the “value” of the product/service
offering and the brand. If he feels that the offering provides “value”, he goes in for the next stage
which is trial; else the process is aborted, and the innovation rejected.

iv) Trial: The consumer goes and tries out the innovative offering, but there is not yet any further
purchase (repurchase) commitment. The product/service is experienced on a small scale and used
on a limited basis only, to determine the worth or usefulness.

Adoption (Rejection): Based on the trial stage, and the resultant experience, the consumer would
decide to decision to use/reuse/patronize the offering. If the experience is satisfying, and the
evaluation favorable, the innovative offering would be accepted, else it would be rejected.

While this five staged procedure constitutes a general model of adoption of innovation, it has
been criticized to be very general that lacks the complexities of real life buying and consumption.

Researchers argue that:

- The model does not indicate a need recognition stage or a problem solving scenario; critics
argue that when faced with a problem, the prospect’s approach towards an innovative offering
would be much different, than when he is not faced with one.

- Evaluation takes place both before and during trial; in fact it takes place throughout the process.

- Trial is no guarantee for future purchase or repurchase; although experience may be

satisfactory, a consumer may never use the product/service offering again.

- The model makes no mention of post purchase behavior; it does not speak of cognitive
dissonance, neither does it speak of post purchase evaluation leading to a commitment to
use/reuse/patronize the offering in future.

Thus, keeping in view these realities, the model has been modified, and consumer researchers
have incorporated two more stages between trial and adoption, viz., direct product experience
(consequences), and product evaluation (confirmation). Direct product experience refers to
experience with the product/service offering on a longer duration; so as to experience its
consequences and to assess it better. Product evaluation refers to assessing the consequences of
the experience so as to accept the innovation or reject it After modification, the stages of the
model stand as Awareness, Interest, Evaluation, Trial, Direct product experience, Product
evaluation, and Adoption.

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The Adoption Process and the Facilitators:

Information sources act as a strong facilitator in the adoption process; right from the stage of
awareness to that of final adoption, information remains a strong determinant. Marketing
communication and in particular, impersonal sources like print and audio-visual media have a
major role to play in creating awareness about a new product/service offering. Thereafter, their
impact goes to on decline relatively, and that of interpersonal sources (family, friends, peers and
colleagues, as well as salespeople) goes on to increase. In fact interpersonal influence that gets
reflected in social influence and/or social approval acts as a major determinant in adoption of
innovative products and services, primarily in stages of trial and final adoption.

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