CONSUMER BEHAVIOUR – 18MBAMM301

Unit 1: Introduction to the study of Consumer Behavior

Meaning and Definition of Consumer Behavior:

Consumer behavior is a rapidly growing application-oriented discipline of study. The recent

changes or advancement in the technological and digital communication domains also
influence the way consumers behave.

This study is not just limited to how a person buys a product but it is also a dynamic, complex
and multidimensional process and reflects the total of consumers’ decisions with respect to
acquisition, consumption or use and disposal activities.

Consumer behavior may be defined as the behavior that consumers display in searching
for, purchasing, using, evaluating and disposing of products and services that they expect
will satisfy their needs.

Consumer behavior focuses on how individuals make decisions to spend their available
resources on consumption related items. That includes;

❖ What they buy?

❖ Why they buy it?
❖ Where they buy it?
❖ When they buy it?
❖ How often they buy it?
❖ How often they use it? And how they evaluate it after purchase?
❖ The impact of such evaluations on future purchases. And
❖ How they dispose of it?

So in consumer behavior we not only learn what is the behavior of the consumer and when he
buys it but also before the consumption, during the consumption and after the consumption.

Difference between Consumer and Customer

A consumer is anyone who typically engages in any one or all of the activities mentioned in
the definition. Traditionally, consumers have been defined very strictly in terms of economic
goods and services wherein a monetary exchange is involved. This concept, over a period of
time has been broadened. Some scholars also include goods and services where a monetary
transaction is not involved and thus the users of the services of voluntary organizations are also

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thought of as consumers. This means that organizations such as UNICEF, CRY or political
groups can view their public as “Consumers”.

Nature and Characteristics of Indian Consumers:

India has the youngest population profile among the numerically significant countries – there
are a lot of young people, in different income segments and locations, who are influencing their
parents’ spending or spending their own money. On the other hand, many farmers have
unquestionably grown beyond “rural” in the broadly understood sense.

The Indian consumption patterns have been converging with the impact of globalization. Indian
consumers are spending more on consumer durables, apparels, entertainment, vacations,
lifestyle and other related activities. Entertainment, clothing and restaurant dinning are
categories that have been witnessing a maximum rise in consumer spending. The rate of growth
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of spending on discretionary items (unlike basic necessities like food) has been growing year
by year. A nation of savers, India has now altered into a nation of spenders. The middle class
with its rising numbers and incomes has thus become the biggest market segment. The affluent
class too is continuing to grow in terms of size and value, but at a slower pace when compared
with the middle class.

The widespread adoption of improved medical care and birth control since the 1970s has
reduced the birth rates and increased the proportion of citizens living past their retirement age
in most countries. In India, the proportion of citizens of working age is falling slowly and the
overall labor force continues to grow. India has a young population, where more than 50% are
under 25 years of age and more than 65% below the age of 35.

The Indian consumer market is drawing global attention not just because of its promise of sheer
volumes but also because of the tectonic shift happening in the nature of demand. The result of
this flux is a new Indian consumer who is more discerning than ever, ready to place his money
on brand, quality and convenience and eager to explore the organized retail market. The Indian
consumer will be as discerning when buying a product as his previous avatar. In fact, due to
rise in income, increased awareness about products and proliferation of choices, he will become
pickier with his purchases.

The Indian consumer market, which is primarily dominated by the young generation is
becoming increasingly sophisticated and brand conscious.

A typical upper middle class young consumer looks beyond the utility aspect of a product to
seek intangibles like brand and lifestyle statements associated with the product. As several first
time consumers enter the market, demand for food and beverages will continue to rise. Rise in
income and increasing social and economic awareness will fuel expenditure on health,
education, communication, transportation and entertainment. Thus electronic goods, personal
care, health care and automobile sectors are expected to receive a significant boost in coming
years.

Consumerism:

Meaning of Consumerism:

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As a consumer, you must be using goods and services from time to time. You may be having
the experience of being exploited by some or the other suppliers. Sometimes they overcharge
or supply inferior quality goods and services. It is difficult for an individual consumer to stop
such acts of exploitation. The intensity of such exploitation may be restricted if consumers
become alert and collectively take a stand against such malpractices. Self—effort on the part
of consumers for safe-guarding themselves is known as consumerism.

Consumerism refers to a movement by consumers to ensure fair and honest practices on the
part of manufacturers, traders, dealers and service providers in relation to consumers. The
movement may be regarded as an attempt by individual consumer activists and consumer
associations for creating consumer awareness about the malpractices in the market and finding
ways and means to protect their interests. This movement will be successful if consumers are
aware of their rights and responsibilities while using goods and services.

Consumer Movement in India:

Scholars most commonly view the modern consumer movement in India from two perspectives
- that of consumer activism and that of business self-regulation. There is tradition in India
which says that consideration for consumer rights began in the Vedic Period, and in these
narratives, laws encourage merchants to practice honesty and integrity in business. Most
discussion about India's consumer activism starts with a description of the Indian independence
movement. At this time Gandhi and other leaders protested taxation of basic consumer
products, such as during the Salt March, and encouraged people to make their own goods at
home, as with the Khadi movement to promote spinning thread and weaving one's own textiles.
These actions were to raise awareness that consumer purchase decisions fund the source of
India's political control.

Gandhi promoted the idea that businesses have a trustee role in being responsible to the
customers, workers, shareholders, and their community. In particular, Gandhi said that "A
customer is the most important visitor on our premises. He is not dependent upon us. We are
dependent upon him. He is not an interruption in our work - he is the purpose of it. We are not
doing him a favour by serving him. He is doing us a favour by giving us the opportunity to
serve him". United States consumer advocate Ralph Nader called Gandhi "the greatest
consumer advocate the world has seen" for advancing the concept that commercial enterprise
should serve the consumer and that the consumer should expect to be served by

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business. Vinoba Bhave and Jayaprakash Narayan, two great proponents of Gandhi's
philosophy, and V. V. Giri and Lal Bahadur Shastri, contemporary Indian president and prime
minister, similarly expected the business community to regulate itself as an expression of
responsibility to contribute to society. These ideas were developed by some business leaders.
In July 1966 in Bombay some people founded the Fair Trade Practice Association, which was
later renamed the Council for Fair Business Practice. This is now seen as a sincere effort toward
promoting business self-regulation, despite consumer activists' criticism that self-regulation
would not provide sufficient protection to consumers.

From the perspective of consumer activism, the Planning Commission backed the foundation
of the Indian Association of Consumers in 1956 in Delhi to be a national base for consumer
interests. For various reasons, it was not effective in achieving its goals. Other organizations
were established in the 1960 in various places in India but none were effective in achieving
community organization. Leading on past failures, in Bombay in 1966 nine female
homemakers founded the Consumer Guidance Society of India (CGSI) which remains one of
India's most important consumer organizations. The most powerful consumer organization in
India is the Consumer Education and Research Centre (CERC), founded in 1978
in Ahmedabad as part of the "social action litigation movement". At that time in society, courts
started recognizing social workers and public interest groups as consultants on behalf of
individuals or classes of people whose rights had been violated but who could not easily speak
for themselves. Since its founding CERC has become among the most successful consumer
organizations of the developing world in terms of its achievements of litigating on behalf of
consumers. The Consumer Protection Act of 1986 {COPRA} was mostly a result of intensive
lobbying by CERC and CGSI.

In 1991 the Economic liberalisation in India radically changed the Indian marketplace by
opening India to foreign trade and foreign investment.

It was thought that passage of the Consumer Protection Act in India in 1986 would encourage
consumers to stand up for their rights and lead to an overwhelming number of disputes in
consumer courts. Although a consumer movement has yet to get going in India, existence of
the act has stimulated the creation of many consumer organizations across the country. The
number has such organizations has more the doubled in the last few years so that there are now
600-800 organizations in the voluntary sector. The movement has not blossomed because not

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all of the organizations are active enough to make an impact, there has hardly been any unified
action which would demonstrate their strength, and there has been no active consumer
participation in the movements. Consumers claim that the lack of consumer education makes
them passive and apathetic, and blame consumer organizations. The majority of consumers in
the country are even unaware of the existence of consumer courts to which they make take their
grievances. Consumer rights organizations, however, counter that they lack sufficient funds
and blame the government for their inaction.

Rights of Consumers:

You know that today consumers face various problems on account of competition in the
market, misleading advertisements, availability of inferior quality of goods and services, etc.
Hence protection of consumers’ interest has become a matter of serious concern for the
Government as well as public bodies. It is to safeguard the interest of consumer’s; the
government has recognized certain rights of consumers.

Rights of Consumers that are recognized by the Government of India:

➢ Right to Safety: Consumers have a right to be protected against marketing of goods which
are injurious to health and life. As a consumer, if you are conscious of this right, you can
take precautions to prevent the injury or if injury is caused in spite of precaution, you have
the right to complain against the dealer and even claim compensation.
For example, if you buy any medicine, the pharmacy selling it can be held responsible if
the medicine proves harmful. Again a gas cylinder used for cooking, you have to check that
it does not leak when it is supplied to you. If it starts afterwards, the supplier will be liable
to pay compensation if the leakage of gas leads to fire and causes injury or death to anyone.

➢ Right to be Informed: Consumers also have the right to be informed about the quantity,
quality, purity, standard or grade and price of the goods available so that they can make a
proper choice before buying any product or service. Also, where necessary, the consumer
must be informed about the safety precautions to be taken while using the product to avoid
loss or injury. Taking the example of the gas cylinder again, the supplier must inform the
user to stop the flow of gas with the help of the regulator when not in use.

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➢ Right to be Heard: This right has 3 interpretations. Broadly speaking, this right means that
consumers have a right to be consulted by the Government and public bodies when
decisions and policies are made affecting consumer interests. Also, consumers have a right
to be heard by manufacturers, dealers and advertisers about their opinion on production and
marketing decisions. Thirdly, consumers have the right to be heard in legal proceedings in
courts of law which deal with consumer complaints.

➢ Right to seek Redress: If and when any consumer has a complaint or grievance due to unfair
trade practices like charging higher prices, selling of poor quality or unsafe products, lack
of regularity in supply of services, etc. or if he has suffered loss or injury due to defective
or adulterated products, he has the right to seek remedies. He has a right to get the defective
goods replaced or money refunded by the seller or dealer. He also has the right to seek legal
remedies in the appropriate courts of law. Through this right the consumers are assured that
their complaints will receive due attention. This right also provides for due compensation
to consumers if they have suffered a loss or are put to inconvenience due to the fault of the
supplier or manufacturer.

➢ Right to Consumer Education: To prevent market malpractices and exploitation of

consumers, consumer awareness and education are essentially required. For this purpose,
consumer associations, educational institutions and Government Policy makers are
expected to enable consumers to be informed and educated about (a) the relevant laws
which are aimed at preventing unfair trade practices; (b) the ways in which dishonest
traders and producers may try to manipulate market practices to deceive consumers; (c)
how consumers can protect their own interests; and (d) the procedure to be adopted by
consumers while making complaints.

Responsibilities of Consumers:

There is a well-known saying that ‘there cannot be rights without responsibilities’.

Having examined the consumer rights and the purpose served by them, it is necessary to
consider whether consumers should also be responsible enough to be entitled to exercise their
rights.

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• Responsibility of Self-help: It is always desirable that a consumer should not depend on the
seller for information and choice as far as possible. As a consumer, you are expected to act
in a responsible manner to protect yourself from being deceived. An informed consumer
can always take care of his interest more than anyone else. Also, it is always better to be
forewarned and forearmed rather than getting remedies after suffering a loss or injury.

• Proof of Transaction: The second responsibility of every consumer is that the proof of
purchase and documents relating to purchase of durable goods should be invariably
obtained and preserved. For example, it is important to get a cash memo on purchase of
goods. You should remember that in case you have to make any complaint about defects in
goods, the proof of purchase will enable you to establish your claim for repair or
replacement of the goods. Similarly, durable consumer goods like TV, refrigerator, etc.
carry warranty/guarantee cards issued by the dealers. The card entitles you to get the service
for repairs and replacement of parts free of cost during a certain period of time after
purchase.

• Proper Claim: Another responsibility that consumers are expected to bear in mind is that
while making complaints and claiming compensation for loss or injury, they should not
make unreasonably large claims. Very often, consumers have to exercise their right to seek
redress in a court. There have been cases in which consumers have claimed huge
compensation for no apparent reason. This is regarded as an irresponsible act which should
be avoided.

• Proper use of Product/Services: Some consumers, especially during the warranty period,
make rough use of the product, thinking that it will be replaced during the warranty period.
This is not fair on their part. They should always use the product properly.

Besides the above responsibilities, consumers should be conscious of some other

responsibilities:

• They should stick to the agreement made with the manufacturers, traders and service
providers
• They should make timely payments in case of credit purchases

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• They should not tamper with the media of services.

Benefits of Consumerism:

1. Economic growth:

Consumerism drives economic growth. When people spend more on goods/services produced
in a never-ending cycle, the economy grows. There is increased production and employment
which leads to more consumption. The living standards of people are also bound to improve
because of consumerism.

2. Boosts innovation and creativity:

Since consumers are actively looking for the next-best products/services to buy,
producers/manufacturers are under constant pressure to innovate. As consumers access better
goods/services, living standards improve.

Cons of consumerism

1. Environmental degradation:

Increasing demand for goods put extensive pressure on natural resources such as water and raw
materials. Consumerism also results in the excessive use of energy. Consumerism also
encourages the use of chemicals which are known to degrade the environment. In a nutshell,
consumerism does more harm than good to the environment.

2. Moral degradation:

Increasing consumerism tends to shift away societies from important values such as integrity.
Instead, there is a strong focus on materialism and competition. People tend to buy goods and
services they don’t need so that they can be at par or at a higher level than everyone else.

3. Higher debt levels:

Consumerism also increases debt levels in a society. The number of people taking short term
loans such as payday loans to buy luxury goods has increased drastically. Many short-term
loans aren’t channelled into constructive use today.

4. Mental health problems:

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Consumerism increases debt levels which in turn results in mental health problems like stress
and depression. Trying to follow the latest trends when you have limited resources can be very
exhausting to the mind and body. Consumerism forces people to work harder, borrow more
and spend less time with loved ones. Consumerism gets in the way of fruitful relationships. It
affects the overall well-being of people negatively in the long run since research has proven
that people don’t get valuable and long-lasting fulfilment from materialism.

Consumerism has a good and bad side. Although consumerism drives economic growth and
boosts innovation, it comes with a fair share of problems ranging from environmental and
moral degradation to higher debt levels and mental health problems. Since we are already in a
consumerist society, it is advisable to strike a healthy balance. A person’s love for the finer
things in life should not come at the expense of his/her mental health and financial stability.

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Unit 2: Models of Consumer Behavior

Input Process output model of Consumer Behaviour

This is a simple model of consumer behaviour, in which the input for the customer is the firm’s
marketing effort (the product, price, promotion and place) and the social environment. The
social environment consists of the family, reference groups, culture, social class, etc. which
influences the decision-making process. Both these factors together constitute the input in the
mind of the consumer.

Need Recognition
When one is aware of a want, tension is created and one chooses a product to satisfy his needs.
There is also a possibility that a person may be aware of a product before its need is recognized.
This is indicated by the arrows going both ways from the need to the product and vice-versa.

Product awareness
Product awareness can be had from advertisement or exposure to different types of media or by the
social circle. The awareness and the need leads to the building of interest. In some cases, the interest
may also breakdown and, the decision process also stops or may be postponed for the time being.

Evaluation
Evaluation may consist of getting more information about the product and comparing and
contrasting it with other products. This can be done theoretically or by taking a trial. Once the
evaluation is completed, the consumer’s interest may either build up and he has intentions to buy,
or he may lose interest and the decision process may again stop or be postponed.

Intention
Once there is intention to purchase the product, the consumer goes ahead and acts or purchases the
product. Once the product is purchased, it is used to fulfil the need and, the more the product is
used, the more the consumer becomes aware of the positive and negative points of the product.

Post-purchase behaviour
If, after the purchase and use of the product the customer is satisfied, he is happy and goes in for
repeat purchases or recommends the same to his friends and acquaintances. If, however, the
customer is dissatisfied, he discontinues further purchase of the product and builds a negative
attitude towards it, which may be harmful to the company.

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The post-purchase behaviour is very important for the marketer and the company because it leads
to proper feedback for improvement and maintaining the quality and features desired by the
product. If the customer is very happy with the purchase, he forms a good impression about the
product and the company.

Nicosia Model of Consumer Behavior:

Nicosia Model of Consumer Behavior was developed in 1966, by Professor Francesco M.

Nicosia, an expert in consumer motivation and behavior. This model focuses on the
relationship between the firm and its potential consumers. The model suggests that messages
from the firm (advertisements) first influences the predisposition of the consumer towards the
product or service. Based on the situation, the consumer will have a certain attitude towards
the product. This may result in a search for the product or an evaluation of the product
attributes by the consumer. If the above step satisfies the consumer, it may result in a positive
response, with a decision to buy the product otherwise the reverse may occur. Looking to the
model we will find that the firm and the consumer are connected with each other, the firm tries
to influence the consumer and the consumer is influencing the firm by his decision.

The Nicosia model of Consumer Behavior is divided into four major fields:

1. Field 1: The firm’s attributes and the consumer’s attributes. The first field is divided
into two subfields. The first subfield deals with the firm’s marketing environment and
communication efforts that affect consumer attitudes, the competitive environment, and
characteristics of target market. Subfield two specifies the consumer characteristics
e.g., experience, personality, and how he perceives the promotional idea toward the
product in this stage the consumer forms his attitude toward the firm’s product based
on his interpretation of the message.

2. Field 2: Search and evaluation. The consumer will start to search for other firm’s brand
and evaluate the firm’s brand in comparison with alternate brands. In this case the firm
motivates the consumer to purchase its brands.

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3. Field 3: The act of the purchase. The result of motivation will arise by convincing the
consumer to purchase the firm products from a specific retailer.

4. Field 4: Feedback of sales results. This model analyses the feedback of both the firm
and the consumer after purchasing the product. The firm will benefit from its sales data
as a feedback, and the consumer will use his experience with the product affects the
individual’s attitude and predisposition’s concerning future messages from the firm.

With this model Nicosia was able to represent consumer’s behavior when receivers of a
message and has agents in the buying process generated by that flow of information from a
company.

The Nicosia model of consumer behavior offers no detail explanation of the internal factors,
which may affect the personality of the consumer, and how the consumer develops his attitude

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toward the product. For example, the consumer may find the firm’s message very interesting,
but virtually he cannot buy the firm’s brand because it contains something prohibited according
to his beliefs. Apparently, it is very essential to include such factors in the model, which give
more interpretation about the attributes affecting the decision process.

Howard Sheth Model of Consumer Behavior:

John Howard and Jagadish Sheth put forward the Howard Sheth model of consumer
behavior in 1969, in their publication entitled, ‘The Theory of buyer Behaviour’.

The Howard Sheth Model is a sophisticated integration of the various social, psychological
and marketing influences on consumer choice into a coherent sequence of information
processing. It aims not only to explain consumer behavior in terms of cognitive functioning but
to provide an empirically testable depiction of such behavior and its outcomes (Howard 1977).

The logic of the Howard Sheth model of consumer behavior summarize like this. There are
inputs in the form of Stimuli. There are outputs beginning with attention to a given stimulus
and ending with purchase. In between the inputs and the outputs there are variables affecting
perception and learning. These variables are termed ‘hypothetical’ since they cannot be directly
measured at the time of occurrence.

The Howard Sheth model of consumer behavior suggests three levels of decision making:

1. The first level describes the extensive problem solving. At this level the consumer
does not have any basic information or knowledge about the brand and he does not have
any preferences for any product. In this situation, the consumer will seek information
about all the different brands in the market before purchasing.

2. The second level is limited problem solving. This situation exists for consumers who
have little knowledge about the market, or partial knowledge about what they want to
purchase. In order to arrive at a brand preference some comparative brand information
is sought.

3. The third level is a habitual response behavior. In this level the consumer knows very
well about the different brands and he can differentiate between the different
characteristics of each product, and he already decides to purchase a particular product.

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According to the Howard Sheth model of consumer behavior there are four major sets of
variables; namely:

1. Inputs: These input variables consist of three distinct types of stimuli (information
sources) in the consumer’s environment. The marketer in the form of product or brand
information furnishes physical brand characteristics (significative stimuli) and verbal
or visual product characteristics (symbolic stimuli). There are impersonal sources like
mass media communication and advertising, over which the firm has no
control. However, the information sources also include sales and service personnel
who can add and help the marketing efforts of the firm. The third type is provided by
the consumer’s social environment (family, reference group, and social class). This
social source is personal and the company/marketer has no control over this source. All
three types of stimuli provide inputs concerning the product class or specific brands to
the specific consumer.

2. Perceptual and Learning Constructs: The central part of the model deals with the
psychological variables involved when the consumer is contemplating a decision. Some
of the variables are perceptual in nature, and are concerned with how the consumer
receives and understands the information from the input stimuli and other parts of the
model. For example, stimulus ambiguity happened when the consumer does not
understand the message from the environment. Perceptual bias occurs if the consumer
distorts the information received so that it fits his or her established needs or experience.
Learning constructs category, consumers’ goals, information about brands, criteria for
evaluation alternatives, preferences and buying intentions are all included. The
proposed interaction In between the different variables in the perceptual and learning
constructs and other sets give the model its distinctive advantage.

3. Outputs: The outputs are the results of the perceptual and learning variables and how
the consumers will response to these variables (attention, brand comprehension,
attitudes, and intention).

4. Exogenous(External) variables: Exogenous variables are not directly part of the

decision-making process. However, some relevant exogenous variables include the
importance of the purchase, consumer personality traits, religion, and time pressure.

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The decision-making process, which Howard-Sheth Model tries to explain, takes place at three
Inputs stages: Significance, Symbolic and Social stimuli. In both significate and symbolic
stimuli, the model emphasizes on material aspects such as price and quality. These stimuli are
not applicable in every society. While in social stimuli the model does not mention the basis of
decision-making in this stimulus, such as what influence the family decision? This may differ
from one society to another.

Most scholars agree that the study of consumer behavior was advanced and given an impetus
by Howard Sheth Model. The major advantage and strength of the model lied in the precision
with which a large number of variables have been linked in the working relationships to cover
most aspects of the purchase decision and the effective utilization of contribution from the
behavioral sciences.

The Engel-Kollat-Blackwell Model of Consumer Behavior:

The Engel Kollat Blackwell Model of Consumer Behavior was created to describe the
increasing, fast-growing body of knowledge concerning consumer behavior. This model, like
in other models, has gone through many revisions to improve its descriptive ability of the basic
relationships between components and sub-components.

The Engel Kollat Blackwell Model of Consumer Behavior or consists of four distinct stages;

1. Information Input Stage: At this stage the consumer gets information from marketing
and non-marketing sources, which also influence the problem recognition stage of the

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decision-making process. If the consumer still does not arrive to a specific decision, the
search for external information will be activated in order to arrive to a choice or in some
cases if the consumer experience dissonance because the selected alternative is less
satisfactory than expected.

2. Information Processing Stage: This stage consists of the consumer’s exposure,

attention, perception, acceptance, and retention of incoming information. The consumer
must first be exposed to the message, allocate space for this information, interpret the
stimuli, and retain the message by transferring the input to long-term memory.

3. Decision Process Stage: The central focus of the model is on five basic decision-
process stages: Problem recognition, search for alternatives, alternate evaluation
(during which beliefs may lead to the formation of attitudes, which in turn may result
in a purchase intention) purchase, and outcomes. But it is not necessary for every
consumer to go through all these stages; it depends on whether it is an extended or a
routine problem-solving behavior.

4. Variables Influencing the Decision Process: This stage consists of individual and
environmental influences that affect all five stages of the decision process. Individual
characteristics include motives, values, lifestyle, and personality; the social influences
are culture, reference groups, and family. Situational influences, such as a consumer’s
financial condition, also influence the decision process.

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(Fig. Showing the Engel-Kollat-Blackwell Model of Consumer Behavior)

It can be seen that many of the elements of the model are similar to Howard Sheth model of
consumer behavior, however the structure of presentation and relationship between the
variables differs somewhat.

The Engel Kollat Blackwell Model of Consumer Behavior incorporates many items, which
influence consumer decision-making such as values, lifestyle, personality and culture. The
model did not show what factors shape these items, and why different types of personality can
produce different decision-making? How will we apply these values to cope with different
personalities? Religion can explain some behavioral characteristics of the consumer, and this
will lead to better understanding of the model and will give more comprehensive view on
decision-making.

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Unit 2: Consumer Decision Making

Consumer Buying Decision Process:

Consumers go through 5 stages in taking the decision to purchase any goods or services.

1. Problem Recognition.

2. Information Search.

3. Evaluation of Alternatives.

4. Purchase Decision.

5. Post-Purchase Evaluation.

When making a purchase, the buyer goes through a decision process consisting of 5 stages.

Clearly, the buying process starts long before the actual purchase and continues long after.

The marketer’s job is to understand the buyer’s behavior at each stage and the influences that
are operating. The figure implies that consumers pass through all five Stages with every
purchase.

Let’s explain all 5 stages of the buyer decision process.

1. Need or Problem Recognition

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During need or problem recognition, the consumer recognizes a problem or need that could be
satisfied by a product or service in the market.

Problem Recognition is the first stage of the buyer decision process.

At this stage, the consumer recognizes a need or problem. The buyer feels a difference between
his or her actual state and some desired state.

This could be a simple as “I’m hungry, I need food.”

The need may have been triggered by internal stimuli (such as hunger or thirst) or external
stimuli (such as advertising or word of mouth).

2. Information Search

Once the need is recognized, the consumer is aroused to seek more information and moves into
the information search stage.

The second stage of the purchasing process is searching for information.

After the recognition of needs, the consumers try to find goods for satisfying such needs. They
search for information about the goods they want. Consumers can get information about goods
from different sources.

▪ Personal sources: This includes family, friends, neighbours, acquaintance etc.

▪ Commercial source: This includes advertising, salespeople, dealers, packaging, display

etc.

▪ Public sources: This includes mass media, consumer rating organizations etc. they also
become confidential to provide information.

▪ Experimental sources: This includes handling, examining, using etc. Such information
becomes decisive and confidential.

3. Evaluation of Alternatives

With the information in hand, the consumer proceeds to alternative evaluation, during which
the information is used to evaluate” brands in the choice set.

Evaluation of alternatives is the third stage of ‘buying process’. Various points of information
collected from different sources are used in evaluating different alternatives and their
attractiveness.

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While evaluating goods and services, different consumers use different bases.

Generally, the consumers evaluate the alternatives on the basis of attributes of the product,
the degree of importance, belief in the brand, satisfaction etc. to choose correctly.

4. Purchase Decision

After the alternatives have been evaluated, consumers take the decision to purchase products
and services. They decide to buy the best brand. But their decision is influenced by others’
attitude and situational factors.

5. Post-Purchase Evaluation

In the final stage of the buyer decision process, post purchase behavior, the consumer takes
action based on satisfaction or dissatisfaction.

In this stage, the consumer determines if they are satisfied or dissatisfied with the purchasing
outcome. Here is where cognitive dissonance occurs, “Did I make the right decision.”

Consumers go through the 5 stages of the buyer decision process in taking the decision to
purchase any goods or services.

Levels of Consumer Decision Making:

There are 3 levels of consumer decision making:

1. Extensive Problem Solving:

When consumers have no established criteria for evaluating a product category or specific
brands in that category or have not narrowed the number of brands they will consider to a
small, manageable subset, their decision-making efforts can be classified as extensive
problem solving. Here, the consumer needs a great deal of information to establish a set of
criteria on which to judge specific brands and a correspondingly large amount of
information concerning each of the brands to be considered.

2. Limited Problem Solving:

Here, the consumers have already established the basic criteria for evaluating the product
category and the various brands in the category. They have not fully established preferences
concerning a select group of brands. The search for additional information is more like
“fine-tuning”; they must gather additional brand information to discriminate among the
various brands.

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3. Routinized Response Behavior:

Here, consumers have experience with the product category and a well-established set of
criteria with which to evaluate the brands they are considering. In some situations, they
may search for a small amount of additional information; in others, they simply review
what they already know. In extensive problem solving, customers seek for more
information to make a choice, whereas in routinized response behavior customers need only
little additional information.

Four Views of Consumer Decision Making:

The term models of consumers refer to a general view or perspective as to how individuals
behave as they do. The models of consumers are examined in the following four views:

1. An Economic View:
In the world of perfect competition, the consumer has often been characterized as making
rational decisions. This model, called economic man theory, has been criticized by
consumer researchers for a number of reasons. To behave rationally in the economic sense,
a consumer would have to (a) be aware of all available product alternatives, (b) be capable
of correctly ranking each alternative in terms of its benefits and disadvantages, and (c) be
able to identify the one best alternative. Consumers rarely have all the information or
sufficiently accurate information or even an adequate degree of involvement or motivation
to make the so-called ‘Perfect’ decision.

2. A Passive View:
Quite opposite to the economic view of consumers is the passive view that depicts the
consumer as submissive to the self-serving interests and promotional efforts of marketers.
Consumers are perceived as impulsive and irrational purchasers in the passive view, ready
to yield to aims and into the arms of the marketers. The principal limitation of the passive
model is that it fails to recognize that the consumers play an equal, if not dominant role in
many buying situations-sometimes by seeking information about product alternatives and
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selecting the product that appears to offer the greatest satisfaction and at other times by
impulsively selecting a product that satisfies the mood or emotion of the moment.

3. A Cognitive View:
The cognitive model portrays the consumer as a thinking problem solver. Within this
framework, consumers frequently are pictured as either receptive to or actively searching
for products and services that fulfil their needs and enrich their lives. The cognitive model
focuses on the processes by which consumers seek and evaluate information about
selected brands and retail outlets.

4. An Emotional View:
The marketers frequently prefer to think of consumers in terms of either economic or
passive models. In reality, each of us are likely to associate deep feelings or emotions
such as joy, fear, love, hope, sexuality, fantasy and even a little ‘Magic’ with certain
purchases or possessions. These feelings or emotions are likely to be highly involving.
For example, a person who misplaces a favourite fountain pen might go to great lengths
to look for it, despite the fact that he has six others at hand.
Possessions also may serve to preserve a sense of past and act as familiar transitional
objects when one is confronted with an uncertain future.
For example, members of the Indian army carry photographs of their family members and
loved ones and their lives in earlier times. These memories frequently serve as hopeful
reminders that normal activities will someday resume.

Online Decision Making: (Meaning)

Online decision making is a concept that describes the cognitive process that goes in the mind
of customers before they make a decision on the web.

The Online Decision Making Process

Making the choice to buy something online involves a variety of different factors. In this
article, we’ll consider a relatively simple model of the online decision making process that
covers the basic stages, and offers a brief explanation for them.

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1 – Identifying The Need

The first stage in the process is the “identification of a need”. Quite simply, this is the point at
which the potential customer realises that they need to purchase a product, or make use of a
service.

2 – Information Search
Once the need has been identified by the consumer, the next stage is to conduct an “information
search” to find out how the need can be satisfied.
In this digital age, that kind of research is more and more frequently being carried out online,
thanks to the ease and convenience of the medium. However, at this stage, 17% of people drop
out of the process, 9% because they can’t find or identify the required information, and 8%
because of lack of purchase information.

3 – Evaluation Stage
Once the research has been carried out, the evaluation stage begins, with the consumer
evaluating the available alternatives to determine which suits them best. This stage of the
process can include requesting quotes for comparison, and often involves additional research
into the credibility of the Business Providers whose offers are being considered.
However, this is also the stage that sees the greatest lead attrition. Only 25% of the shoppers
who began searching for information in the previous stage, reach the end of the evaluation
phase.

4 – Purchase Decision
Once the evaluation of alternatives has been carried out, the next step is the “purchase
decision,” which sees another 12% loss, as some people decide not to make the purchase.

5 – Purchase Evaluation
The final stage of the decision making process occurs after the actual purchase, and that is the
“purchase evaluation” stage. In this stage, the customer assesses whether or not the product or
service has met their expectations. This process not only affects whether they will become
repeat customers, but also whether they will offer positive or negative advice to other potential
customers.

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Situational Influences
Nature of Situational Influence:
Situational influence are all those factors particular to a time and place that do not
follow from knowledge of personal and stimulus (choice alternative) attributes and that have
an effect on current behaviour. Consumers do not respond to stimuli such as advertisements
and products presented by marketers in isolation; instead, they respond to marketing influences
and the situation simultaneously.

The consumption process occurs within four broad categories:

1. The Communication Situation:
a) The situation in which consumers receive information has an impact on their behaviour.
Whether one is alone or in a group, in a good or bad mood.
b) Is it better to advertise on a happy or sad television program?
c) A marketer is able to deliver an effective message to consumers who are interested in
the product and are in a receptive communication situation.

2. The Purchase Situation:

a) Situations can also affect product selection in a purchase situation.
b) Mothers shopping with children are more apt to be influenced by the product
preferences of their children than when shopping without them.
c) A shortage of time, the number of brands considered, and the price the shopper
is willing to pay

3. The Usage Situation:

a) Marketers need to understand the usage situations for which their products are, or may
become appropriate. Using this knowledge, marketers can communicate how their
products create consumer satisfaction in each relevant usage situation.

4. The Disposition Situation:

a) Consumers must frequently dispose of products or product packages after or before

product use. It can create significant opportunities for marketers.

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b) Some consumers consider ease of disposition an important product attribute. These

people may purchase only items that can be easily recycled.
c) Often disposition of an existing product must occur before or simultaneously with the
acquisition of the new product.

Situational Characteristics and Consumption Behaviour:

Here we describe 5 key characteristics of situations that help determine the situation’s impact
on behaviour.

1. Physical Features

➢ Physical Surroundings:
• Physical surroundings include décor, sounds, aromas, lighting, weather and
configurations of merchandise or other materials surrounding the stimulus/object
• Physical surroundings are a widely used type of situational influence, particularly
for retail applications.
• The sum of all the physical features of a retail environment is referred to as the
Store.
➢ Colours:
• The colour red is effective at attracting consumers’ attention and interest.
• Softer colours such as blue are less attention-attracting and arousing. They are
perceived as calm, cool and positive.
➢ Aromas:
• Odours can affect consumer shopping behaviour.
➢ Music:
• Music influences consumers’ moods.
• Slow music appears to have relaxed feeling for the customers.
• It also increases their positive emotional response to the service environment and
to wait for the service.

➢ Crowding:
• It generally produces negative outcomes for both the retail outlet as well as the
customers.

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• Using external personnel, adding additional checkout lines and similar measures
can enhance the flow of consumers through a store during peak periods and reduce
the crowding sensation.

2. Social Surroundings:

❖ Are other individuals present during the consumption process? People’s actions are
frequently influenced by those around them.
❖ Most people would change their apparel for at least some of the situations
❖ Social influence is a significant force acting on our behaviour, since individuals tend to
comply with group expectations, particularly when the behaviour is visible.

3.Temporal Perspective:

❖ These are situational characteristics that deal with the effect of time on consumers
behaviour.
❖ The amount of time available for the purchase has a substantial impact on the consumer
decision process.
❖ The less time there is available, the shorter will be the information search, the less
available information will be used, and the more suboptimal purchase will be made.
❖ Limited purchase time can also result in a smaller number of product alternatives being
considered.

4. Task Definition:

❖ It is the reason the consumption activity is occurring. The major task dichotomy used
by marketers is between purchases for self-use versus gift giving
❖ Consumers give gifts for many reasons.
❖ Gifts are also given to elicit return favours in the form of either gifts or actions.
❖ The type of gift given and desired varies by occasion and gender.

5. Antecedent States:

❖ Features of the individual person that are not lasting characteristics, such as momentary
moods or conditions, are called as antecedent states.
❖ Most people experience states of depression or excitement from time to time that are
not normally part of their individual makeup.

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Note: Moods are transient feeling states. Moods both affect and are affected by the
consumption process.

Positive moods appear to be associated with increased browsing and impulse purchasing.

Negative moods are associated with compulsive purchasing.

Momentary Conditions: Momentary conditions reflect temporary states of being such as

feeling ill or tired, etc.

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Unit 3: Individual Influences on Consumer Behavior and CRM – Part 1

Basics of Motivation:

People are motivated by many things, some positive others not. Some motivating
factors can move people only a short time, like hunger which will last only until you are fed.
Others can drive a person for years onwards.

▪ Motivation is the driving force within individuals that impels them to action.
▪ This driving force is produced by a state of tension, which exists as the result of an
unfulfilled need. Individuals strive both consciously and subconsciously to reduce this
tension through selection of goals and subsequent behavior that they anticipate which will
fulfill their needs.
▪ Motivation is the activation or energization of goal-oriented behavior.
▪ Motivation may be intrinsic or extrinsic.
▪ The term is generally used for humans but, theoretically, it can also be used to describe the
causes for animal behavior as well. According to various theories, motivation may be
rooted in the basic need to minimize physical pain and maximize pleasure, or it may include
specific needs such as eating and resting, or a desired object, hobby, goal, state of being,
ideal, or it may be attributed to less-apparent reasons such as altruism, morality, or avoiding
mortality.

Needs:

• Needs are the essence of the marketing concept. Marketers do not create needs but can
make consumers aware of needs.
• A need is something that is necessary for humans to live a healthy life. Needs are
distinguished from wants because a deficiency would cause a clear negative outcome, such
as dysfunction or death.

Types of Needs

▪ Innate Needs: Physiological (or biogenic) needs that are considered primary needs or
motives. They include the needs for food, water, air, clothing, etc.
▪ Acquired Needs: Learned in response to our culture or environment. These needs ae
generally psychological and considered secondary needs. These may include the needs for
self-esteem, prestige, affection, power, etc.

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Needs can be a positive or negative direction:

▪ Feel a driving force toward some object or condition.

▪ Driving force away from some object or condition.
▪ For example, a person may be impelled to start exercising in order to avoid health problems
(i.e. Negative Outcome) or in order to look more attractive and dynamic (Positive Outcome)

Goals:

• A goal or objective is a protected state of affairs that a person or a system plans or intends
to achieve.
• A personal or organizational end-point in some sort of assumed development. It is the
sought-after results of motivated behavior.

Types of Goals:

1. General goals: These are general categories of goals that consumers see as a way to fulfill
their needs.
2. Product-specific goals: These are specifically branded products or services that consumers
select as their goals.

For example, a student tells his parents that he wants to become an entrepreneur, he has stated
his generic goal. If he says he wants to get an MBA degree from the Harvard Business School,
then he is expressing a product – specific goal.

Goals can be Positive or Negative:

• A positive goal is one toward which behavior is directed thus it is referred as an approach
object
• Persons with approach focus are interested in their growth and development
• A negative goal is one from which behavior is directed away and is referred as an avoidance
object
• Persons with avoidance focus are interested in safety and security.

The Selection of Goals:

The goals selected by an individual depend on their:

➢ Personal experiences
➢ Physical capacity

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➢ Prevailing cultural norms and values

➢ Goal’s accessibility in the physical and social environment.

Positive and Negative Motivation:

❖ Positive motivation is a response which includes enjoyment and optimism about the tasks
that you are involved in.
❖ Positive motivation induces people to do work in the best possible manner and to improve
their performance.
❖ Better facilities and rewards are provided for their better performance. Such rewards and
facilities may be financial and non-financial.
❖ Negative motivation aims at controlling the negative efforts of work and seeks to create a
sense of fear for the worker, which he has to suffer for lack of good performance.
❖ It is based on the concept that if a worker fails in achieving the desired results, he should
be punished.
❖ Negative motivation involves undertaking tasks because there will be undesirable
outcomes.
For example, failing a subject, if tasks are not completed.

Almost all students will experience positive and negative motivation, as well as loss of
motivation, at different times during their college life. Both positive and negative
motivation aim at inspiring the will of the people to work but they differ in their approaches.
Whereas one approaches the people to work in the best possible manner by providing better
monetary and non-monetary incentives, the other tries to induce the individual by cutting
their wages and other facilities and amenities on the belief that the individual works out of
fear.

Rational versus Emotional Motives:

▪ Rationality implies that consumers select goals based on totally objective criteria such as
size, weight, price or Kms per litre.
▪ A conscious, logical reason for a purchase. A motive that can be defended by reasoning or
logical argument.
▪ Emotional motives imply the selection of goals according to personal or subjective criteria.
▪ A feeling experienced by a customer through association with a product.

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The Dynamic Nature of Motivation:

Motivation is highly dynamic construct that is constantly changing in reaction to life

experience. Needs and goals change and grow in response to an individual’s physical
conditions, environment, interactions with others and experiences.

1. Needs are never fully satisfied:

Most human needs are never fully or permanently satisfied. In this instance, temporary
goal achievement does not adequately satisfy the need for power, and the individual strives
ever harder to completely satisfy that need.

For example, a person may partially satisfy a need for power by working as an
administrative assistant to a local politician, but this vicarious taste of power may not
sufficiently satisfy his needs; thus, he may strive to work for a state legislator or even to
run for political office himself.

2. New needs emerge as old needs are satisfied:

Higher – order needs emerge as lower – order needs are fulfilled.
For example, a man whose basic physiological needs are fairly well satisfied may turn his
efforts to achieving acceptance among his neighbors by joining their political clubs and
supporting their candidates.

3. People who achieve their goals set new and higher goals for themselves:
Individuals who successfully achieve their goals usually set new and higher goals for
themselves, that is, they raise their levels of aspiration. Those who do not reach their
goals sometimes lower their levels of aspiration. Thus goal selection is often a function
of success and failures.

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The Motivation Process

The motivational process is the steps that you take to get motivated. It is a process, that when
followed produces incredible results. It is amazing what you can do if you are properly
motivated, and getting properly motivated is a matter of following the motivational process.
Like any other process, it takes a little work and foresight and planning on your part. However,
the return on your investment of time is significant, and it is important when needing extra
motivation that you apply the motivational process

In the initiation an individual starts feeling lack. There is an arousal of need so urgent
that the bearer has to venture in search to satisfy it. This leads to creation of tension, which
urges the person to forget everything else and cater to the aroused need first. This tension also
creates drives and attitudes regarding the type of satisfaction that is desired. This leads a person
to venture into the search of information. This ultimately leads to evaluation of alternatives
where the best alternative is chosen. After choosing the alternative, an action is taken. Because
of the performance of the activity, satisfaction is achieved which then relieves the tension in
the individual.

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Arousal of Motives:
The arousal of any particular set of needs at a specific moment in time may be caused
by internal stimuli found in the individual’s physiological condition, by emotional or cognitive
processes or by stimuli in the outside environment.

1. Physiological Arousal: Bodily needs at any one specific moment in time are based on the
individual physiological condition at the moment.
For example, a drop in blood sugar level or stomach contractions will trigger an awareness
of a hunger need. A decrease in body temperature will induce shivering, which makes an
individual aware of the need of warmth. These feelings arouse related needs that cause an
uncomfortable feeling until they are satisfied.

2. Emotional Arousal: Sometimes daydreaming results in the arousal (autistic thinking) or

stimulation of latent needs. People who are bored or who are frustrated in trying to achieve
their goals, often engage in daydreaming, in which they imaging themselves in all sorts of
desirable situations.

3. Cognitive Arousal: Sometimes random thoughts can lead to a cognitive awareness of needs.
An advertisement that provides reminders of home might trigger an instant yearning to speak
with ones loved ones. Advertisements are cues designed to arouse needs. Without these cues,
the needs might remain dormant. Creative advertisements arouse needs and create a
psychological imbalance in the consumer’s mind.

4. Environment Arousal: The set of needs an individual experience at a particular time are often
activated by specific cues in the environment. Without these cues the needs might remain
dormant.

Selection of Goals:

Usually consumers set purchase-related goals that satisfy more than one need. We buy
clothing for protection and for a certain degree of modesty; in addition, our clothing fulfills a
wide range of personal and social needs, such as acceptance by others. People with different
needs may seek fulfillment by selecting the same goal, and people with the same needs may
seek fulfillment via different goals. For example, two people driven by the need for

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achievement may seek fulfillment in different ways. One may seek advancement and
recognition through a professional career, whereas the other may choose to run marathons.

For any given need, there are many different and appropriate goals. The goals that
individuals select depend on those individuals’ personal experiences and knowledge, physical
capacity, prevailing cultural norms and values, and the goal’s accessibility in the individuals’
physical and social environments. For example, a young woman may wish to get a deep, even
tan and may envision spending time in the sun as a way to achieve her goal. However, if her
dermatologist advises her to avoid direct exposure to the sun, she may settle for a self-tanning
cosmetics instead. The goal object has to be both socially acceptable and physically accessible.
If cosmetic companies did not offer effective alternatives to tanning in the sun, woman would
either have to ignore the advice of their dermatologists or select a substitute goal, such as fair
(but undamaged) youthful-looking skin.

The motivation to select goals can be either positive or negative. We may feel a driving
force toward some object or condition or a driving force away from some object or condition.
For example, a person may be encouraged to start exercising in order to avoid health problems
(i.e., a negative outcome) or in order to look more attractive and dynamic (i.e., a positive
outcome). Positive outcomes that we seek are called approach objects; negative outcomes that
we want to prevent are called avoidance objects. For instance, a college is an approach to a
high school graduate who is motivated by the desire for higher education. Another person
knows that his parents would criticize him if he does not go to college, so he goes to college to
avoid being criticized. Both individuals have the same goal – college education – but are
motivated to adopt that goal in opposite ways.

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Motivation Theories and Marketing Strategy

Maslow’s Hierarchy of Needs:

One of the most widely mentioned theories of motivation is the hierarchy of needs
theory put forth by psychologist Abraham Maslow. Maslow saw human needs in the form of a
hierarchy, ascending from the lowest to the highest, and he concluded that when one set of
needs is satisfied, this kind of need ceases to be a motivator.

As per Maslow’s theory, these needs are:

1. Physiological Needs: These are important needs for sustaining the human life. Food, water,
warmth, shelter, sleep, medicines are the basic physiological needs which fall in the
primary list of need satisfaction. Maslow was of an opinion that until these needs were
satisfied to a degree to maintain life, no other motivating factors can work.

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2. Security or Safety Needs: These are the needs to be free of physical danger and of the fear
of losing a job, property, food or shelter. It also includes protection against any emotional
harm.
3. Social Needs: Since people are social beings, they need to belong and be accepted by others.
People try to satisfy their need for affection, acceptance and friendship.
4. Esteem Needs: According to Maslow, once individuals start satisfying their need to belong,
they tend to want to be held in esteem both by themselves and by others. This kind of need
produces such satisfaction as power, prestige, status and self-confidence. It includes both
internal esteem factors like self-respect, autonomy and achievements and external esteem
factors such as status, recognition and attention.
5. Need for Self-Actualization: Maslow regards this as the highest need in his hierarchy. It is
the drive to become what one is capable of becoming; it includes growth, achieving one’s
potential and self-fulfillment. It is to maximize one’s potential and to accomplish
something.

As each of these needs are substantially satisfied, the next need becomes dominant. From
the standpoint of motivation, the theory would say that although no need is ever fully gratified,
a substantially satisfied need no longer motivates. So if you want to motivate someone, you
need to understand what level of the hierarchy that person is on and focus on satisfying those
needs or needs above that level.

Maslow’s need theory has received wide recognition, particularly among practicing
managers. This can be attributed to the theory’s intuitive logic and ease of understanding.
However, research does not validate this theory. Maslow provided no empirical evidence and
other several studies that sought to validate the theory found no support for it

An evaluation of the need hierarchy and its marketing applications

The hierarchy offers a highly useful framework for marketers trying to develop appropriate
advertising appeals for their products. It is adaptable in two ways:

1. It enables marketers to focus their advertising appeals on a need level that is likely to be
shared by a large segment of the target audience.
2. It facilitates product positioning or repositioning.

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Segmentation and Promotional applications

Maslow’s need hierarchy is readily adaptable to market segmentation and the

development of advertising appeals.

1. Individuals buy health foods, medicines and low-fat products to satisfy physiological needs
2. Buying insurance, preventive medical services and home security systems to satisfy
security needs
3. Almost all personal care and grooming products, as well as clothes are purchased to satisfy
social needs
4. High – tech products, big cars, expensive furniture’s are purchased to fulfill ego and esteem
needs.
5. Post graduate college education, hobby-related products and exotic and physically
challenging adventure trips are sold as ways of achieving self-fulfillment.

Advertisements can also use the need hierarchy for positioning products – that is, deciding how
the products should be perceived by prospective consumers. The key to positioning is to find a
niche – an unsatisfied need – that is not occupied by a competing product or brand.

Mc Guire’s Psychological Motives:

1. Need for consistency: People try to buy things which are consistent with their liking and
taste. A sophisticated person will be consistent in his choice of colours of clothing,
paintings, colour of rooms. He would prefer sophisticated instead of flashy objects.
2. Need to attribute causation: We often attribute the cause of a favorable or unfavorable
outcome to ourselves or, to some outside element. You can buy shoes by your choice and
may not like them. It can be attributed to you. If you buy a dress by the advice of your
friends and companions, and do not like it, the causes are attributed to other factors.
3. Need to categorize: The objects are categorized in number of ways. The most popular is
the price. Cars can be categorized around Rs 3 – 5 lakhs for a hatchback and from 10 to 15
lakhs for a sedan. Many products are priced at 499.00 to keep them under 500.00. This need
is practiced by companies such as Bata and Electronic goods.
4. Need for cues (Objectification): These are hints or symbols that affect our feelings,
attitudes, impressions, etc. for instance, clothing can be a cue to adopt a desired lifestyle.
The use of products can be enhanced by providing proper cues to the purchasers.

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5. Need for Autonomy: The need for independence and of self-government is a characteristic
of the American culture. It is likely that all individuals have this need at some level.
Americans are taught that it is proper and even essential to express and fulfill this need.
6. Teleological need: This motive propels us to prefer mass media such as movies, television
programs and books with outcomes that match our view of how the world should work.
7. Need for novelty (Stimulation): We sometimes want to be different in certain respects and
want to be conspicuous. This is evident in impulse purchasing or unplanned purchasing.
We go in for novelty products, novelty experiences. A different kind of travel with many
novelties offered by a traveling agency.
8. Utilitarian need: These theories view the consumer as a problem solver who approaches
situations as opportunities to acquire useful information or new skills.
9. Need for tension reduction: We encounter situations in our daily lives that create
uncomfortable levels of stress. In order to effectively manage tension and stress in our lives
we are motivated to seek ways to reduce arousal
10. Need for self-expression: We want to identify ourselves and go in for products that let
others know about us. We may buy a jacket not only for warmth but also for expressing
our identity to others.
11. Need for ego defense: When our identity is threatened or when we need to project a proper
image, we use products in our defense. Deodorants are used for ego defense. Mouthwash
for fresh breath or, false teeth to protect or image. We use hair dye to look younger, better,
etc. We rely on well-known brands to give a correct social image of ourselves.
12. Need for reinforcement: When we buy a product which is appreciated by others, it
reinforces our views, our behavior, our choice and we go in for repeat purchases. More
products can be sold if their reinforcement is greater by their purchases.
13. Need for assertion: These needs are fulfilled by engaging in those kind of activities that
bring self-esteem and esteem in the eyes of others. We can buy an expensive car which may
be for esteem but if it does not perform well, we tend to complain bitterly. Individuals with
a strong need for self-esteem tend to complain more with the dissatisfaction of the product.
14. Need for affiliation: We like to use products which have been used by those whom we get
affiliated to. If one’s friend appreciates and wears a certain brand, then one also tries to use
the same brands or objects for affiliation. It is the need to develop mutually helpful and
satisfying relationships with others. Marketers use the affiliation themes in advertisements
which arouse emotions and sentiments in the minds of the consumers for their children and
families.
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15. Need for Identification: These theories view the consumer as a role player. One gains
pleasure from adding new, satisfying roles and by increasing the significance of roles
already adopted.
16. Need for modeling: We try to copy our parents our heroes and those we admire. We base
our behavior on the behavior of others. Marketer’s use these themes for selling their
products. For example, Lux soap is advertised by actresses, Sportsmen rely on BOOST for
their energy, and such captions are used regularly and repeatedly.

Discovering purchase motives:

Consumers do not buy products. They buy motive satisfaction or problem solutions. A
person does not buy a sofa set but he buys comfort. A person does not buy cosmetics but she
buys hope for looking good. Marketers therefore try to find the motives for buying and building
their products and marketing mixes around these motives. A person may buy a product for a
number of motives. One of them could be rewarded for oneself or to self-indulge in them or
for a gift.

Multiple motives are involved in consumption. Therefore, a marketer tries to find them out:

a) The motive for buying

b) How to formulate a strategy to fulfil these motives, and
c) How to reduce conflict between motives.

How to Discover Motives:

This is found out by asking questions from the respondent. Some motives are disclosed
by the respondent; others are not divulged or are hidden.

For instance, you ask a lady why she wears designer jeans. She may say that

a) They are in style

b) They fit well
c) Her friends wear the same brand.

These motives are disclosed. They are called as Manifest motives.

Latent motives are those which may not be disclosed. These may be

a) They show that I have money

b) They make one look cute and desirable

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c) They show I am young

d) They project my slimness, etc.

Buying motives determine two things:

1. What consumers want to do, and

2. How much they want to do it.

To market successfully, purchase motives

❖ First have to be directed towards your goods and not someone else’s
❖ Second, the drive has to be strong enough so that people will act on it; they have to be
willing to pay the price in terms of money, time and effort.

Manifest and Latent Motives:

Another important method to find out the motives may be by “Motivational Research”
where indirect questions are asked to elicit the information from the respondents. This is done
by unstructured disguised interviews or questionnaires. Once the motives have been known,
the marketing strategy is designed around the appropriate set of motives. While designing the
strategy, the target market has to be decided and the communication has to be chosen for the
said target market. Since there is more than one motive, more than one benefit should be
communicated by advertising and other methods of promotion.

Marketing Strategies Based on Motivational Conflict;

With the many motives consumers have and the many situations in which these motives
are activated, there are frequent conflicts between motives. The resolution of a motivational
conflict often affects consumption patterns. In many instances, the marketer can analyze
situations that are likely to result in a motivational conflict, provide a solution to the conflict,
and attract the patronage of those consumers facing the motivational conflict.

There are three types of motivational conflict of importance to marketing managers:

1. Approach-Approach Conflict
2. Approach-Avoidance Conflict
3. Avoidance-Avoidance Conflict

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1. Approach-Approach Motivational Conflict:

A consumer who must choose between two attractive alternatives faces an approach-
approach conflict. The more equal this attraction, the greater the conflict. A consumer who
recently received a large cash gift by winning the lottery (situational variable) may have to
choose between an international trip to Europe and the purchase of a new BMW. This conflict
could be resolved by a timely advertisement designed to encourage one or the other action. Or
a price modification, such as “buy now, pay later” could result in a resolution whereby both
alternatives may be selected.

2. Approach-Avoidance Motivational Conflict:

A consumer facing a purchase choice with both positive and negative consequences
confronts approach-avoidance conflict. A person who is concerned about gaining weight but
yet likes snacks and junk food faces this type of problem. He or she may want the taste and the
emotional satisfaction associated with the snacks (approach) but does not want to gain weight
(avoidance). The development of lower-calorie snack foods reduces this conflict and allows
the weight-sensitive consumer to enjoy snacks and also control calorie intake.

3. Avoidance-Avoidance Motivational Conflict:

A choice involving only undesirable outcomes produces avoidance-avoidance conflict.

When a consumer’s old washing machine fails, this conflict may occur. The consumer may not
want to spend money on a new washing machine, or pay to have the old one repaired, or go
without one. The availability of credit is one way of reducing this motivational conflict.
Advertisements emphasizing the importance of regular maintenance for cars, such as oil filter
changes also use this type of motive conflict: “Pay me now or pay me more later.”

Frustration:

Failure to a goal often results in a feeling of frustration. Limited physical or financial

resources, - obstacles in the physical or social environment, such frustration where individuals
are likely to adopt a defense mechanism to protect their egos from the feelings of inadequacy.

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Defense Mechanism:

Methods by which individuals mentally redefine frustrating situations to protect their

self-image and self-esteem.

➢ Aggression this includes aggressive behavior like physical violence, such as assaulting and
verbal hostility, like sending threatening messages through emails, phone calls, or social
media, or making achieve threats against someone’s life, shouting and swearing.
➢ Rationalization - (Convincing oneself) one may decide that the goal is not really worth it.
➢ Regression - Individuals react to frustrating situations with childish or immature behavior
➢ Withdrawal – withdrawing from the situation. For example, an individual who has
difficulty achieving the manager position in an organization may simply quit that
organization and look for the similar position in another organization.
➢ Projection – an individual may project blame for his/her own failure and inabilities on other
objects and individuals. For example, a student who has failed may blame himself, his
teachers or his friends.
➢ Autism or Autism thinking – day dreaming that enables the individual to attain unfulfilled
needs.
➢ Identification – sometimes individuals feel frustrated by subconsciously identifying with
other individuals or situations that they consider relevant.
➢ Repression – another way that individuals avoid the tension arising from frustration is by
repressing the unsatisfied need. For example, a consumer who cannot afford to buy a brand
new car may satisfy themselves with a second hand one.

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Personality

Meaning of Personality:

❖ Personality may be defined as those inner psychological characteristics that determine and
reflect how a person responds to his/her environment.
❖ Inner characteristics are those specific qualities and attributes, traits, factors, mannerisms
that distinguish one person from another.
❖ Personality influences the individual’s product choices and brand choices
❖ It also responds to a firm’s promotional efforts and, when and how they consume particular
products or services.
❖ Personality reflects individual differences. Therefore, we can categorize them into groups
on the basis of few traits. For example, low vs high sociability, dull/bright, practical vs
imaginative, etc.
❖ Personality is consistent and enduring and is only one of the factors that affect consumer
behavior.
❖ Personality can change due to major life events. These could be birth, death, marriage. It
can also be changed by a gradual process.

Theories of Personality:

There are three major theories of personality they are

1) Freudian Theory (The Psychoanalytic Theory of Freud)

2) Neo-Freudian Theory, and
3) Trait Theory

1. Freudian Theory (The Psychoanalytic Theory of Freud)

Sigmund Freud’s theory of personality is a cornerstone of modern psychology. This

theory is built on the bases of unconscious needs.

Freud proposed that every individual’s personality is the product of struggle among
three interacting forces: these three are fully developed and are in a state of balance in a healthy
person. If any individual is underdeveloped, then this balance is disturbed and there is
dissatisfaction with the self and the world.

Id, Ego and Super ego

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A representation of the interrelationships among the Id, Ego and the Superego can be shown
with the help of a diagram.

The Id was conceptualized as a “warehouse” of primitive and impulsive drives – basic

physiological needs such as thirst, hunger—for which the individual seeks immediate
satisfaction without concern for the specific means of satisfaction.

The Ego is the individual’s conscious control. It functions as an internal monitor that
attempts to balance the impulsive demands of the id and the socio-cultural constraints of the
superego.

In contrast to the id, the superego is conceptualized as the individual’s internal

expression of society’s moral and ethical codes of conduct. The superego’s role is to see that
the individual satisfies needs in a socially acceptable fashion. Thus, the superego is a kind of
“brake” that restrains or inhibits the impulsive forces of the id.

Note:

Id – It is a source of strong basic and interactive drives and urges which demand instant
gratification even at the cost of violating the norms of society. It demands instant
gratification—pleasure principle.

Ego – It operates on a reality principle, and seeks to achieve the pleasurable demands
of the id in as realistic a way as possible. It helps to develop cognition and controls impulsive
behavior.

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Superego – It is the individual’s moral code and helps in striving for perfection. Its
primary purpose is to restrain aggressive impulses of the id rather than seek to postpone them,
as does the ego.

According to this theory, these three systems are fully developed and are in a state of
balance in a normal healthy person. But when one or more of these systems are
underdeveloped, then the internal balance is disturbed, which leads to maladjustment and
dissatisfaction.

Applications:

Consumers have competing desires and want to satisfy their wants. Marketers therefore
create fantasies about the product which is used as a basis for influencing consumers. Marketers
use flights of fantasy to propel people to buy their products. Hedonism (high living) is an appeal
to the pleasure principle and this approach offers products for an affluent (rich) society.
Psychoanalytical theory appeals to the buyer’s dreams, hopes and fears. It can also provide
products which are rational and socially acceptable.

Id: It is the strong urge or desire which is at the heart of a consumer’s motivation and
personality. The function of the id is to discharge tension which it does by demanding instant
gratification, even at the cost of violating the norms of society. Id operates on the pleasure
principle. Psychologically, id is the source of all desires and wishes that exist in the form of
unconscious images and fantasies. Since all wishes are not satisfied, there is frustration and
this may lead an individual to break norms and rules for his satisfaction. It does not deal with
objective reality and is subjective.

Ego: This comes into existence because of the limitation of the id. Ego operates on the reality
principle. It tries to achieve the demands of id in a realistic and possible way. The ego develops
ways to postpone the wishes of id. If id wants a product, the ego restrains it because of financial
constraints. It controls impulsive behavior. Id engages in dreams and fantasies which exist as
pleasurable imaginations. Ego can distinguish between dreams and reality. Ego is an

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individual’s social control. It acts as an internal monitor and attempts to balance the demand
of the id.

Super Ego: It strives for perfection. It is the individual’s moral code and helps in striving for
perfection. It restrains the aggressive impulse of the id rather than postponing them, as does
the ego.

2. Social-Psychological/Neo-Freudian Personality Theory

There are some Neo-Freudians who believe that social relationships are fundamental to the
formation and development of personality. So, consumers have been classified into three
personality groups:

CAD Model

• Compliant Individuals: Move towards others for the need of love, affection and
approval; are conformists who prefer known brands.
• Aggressive Individuals: Tend to move against others and are manipulative; feel a high
need for achievement, power and success; prefer specific brands, so that they can be
noticed.
• Detached Individuals: Move away from others; feel a need for self-reliance,
independence and freedom; are least aware of brands.

Alfred Adler viewed human beings as seeking to attain various rational goals, which he called
style of life. He also placed much emphasis on the individual’s efforts to overcome feelings of
inferiority.

Harry Stack Sullivan, another Neo-Freudian, stressed that people continuously attempt
to establish significant and rewarding relationships with others. He was particularly concerned
with the individual’s efforts to reduce tensions, such as anxiety.

Karen Horney another Neo-Freudian was also interested in anxiety. She focused on the impact
of child-parent relationships and the individual’s desire to conquer feelings of anxiety.

Applications:

• Different personality types of individuals tend to use different products and brands.
• Compliant types prefer known products and brands, while aggressive types prefer specific
brands out of a desire to be noticed.

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• Detached types appear to have the least awareness of brands.

• Emphasis on the social nature of consumption for example, while advertising for personal
care products, care is taken not to offend any particular group. Products to be advertised
which are used in social interactions or when in groups

3. Trait Theory:

It is defined as “any distinguishing, relatively enduring way in which one individual

differs from another”. The trait which measures just one trait, such as self-confidence, the
personality tests measure such traits as consumer innovativeness, consumer materialism and
consumer ethnocentrism etc.

Cattell believes that traits are acquired at an early age, or through learning, or are
inherited. This theory is representative of multi-personality theories (more than one trait that
influences behavior)

Trait theory is based on certain assumptions, which are;

a) Traits are relatively stable characteristics

b) A limited number of traits are common to most people
c) The degree of traits possessed by an individual can be measured by using a rating
questionnaire in a continuum, on a 1 to 10 scale.

There are a number of traits given by Cattell and they are as follows:

Cognitive personality factors

• Consumer Innovativeness: The degree to which consumers are receptive to new products,
new services or new practices.
• Dogmatism: A personality trait that reflects the degree of rigidity a person displays toward
the unfamiliar and toward information that is contrary to his or her own established beliefs.
• Social Character: It has its origins in sociological research, which focuses on the
identification and classification of individuals into distinct socio-cultural types. The
personality trait ranges on a series from inner-directedness to outer-directedness.
• Need for uniqueness: Consumers who avoid appearing to conform to expectations or
standards of others.
• Optimum Stimulation Level: A personality trait that measures the level or amount of
novelty or complexity that individuals seek in their personal experiences.

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• Visualizers vs Verbalizers: People who respond favorably to visual and pictorial messages
and pay less attention to verbal messages are visualizers. Verbalizers are those people who
respond to verbal messages and pay less attention to visual and pictorial messages.

Consumer Materialism

Consumer materialism refers to the importance that a consumer places on the

acquisition and possession of material objects. In the consumer behavior literature, materialism
is usually considered to be a personal value, meaning that it affects the priorities in people’s
lives and the choices they make.

Researchers have found some characteristics of materialistic people; they are:

➢ They acquire value and showoff possessions

➢ They are self-centered and selfish people
➢ They seek lifestyle full of possessions
➢ They are not satisfied with their possessions

Consumer Ethnocentrism:

Consumers who are highly ethnocentric are likely to feel that it is inappropriate or
wrong to purchase foreign made products because of resulting economic impact on the
domestic economy.

Although trait theories were well established by the 1960s, there was no consensus
concerning the number or nature of the traits that make up personality. Replications of Cattell’s
work in factor analysis often failed to find the original factor structure he described. Instead, a
number of studies using Cattell’s variables came up with a simpler five factor structure.

Five factor model of personality a model developed using factor analysis to try to determine
the key traits in human personality

1. Extraversion
❖ Sociable vs Retiring
❖ Fun-loving vs Sober
❖ Affectionate vs Reserved

2. Agreeableness

❖ Soft-hearted vs Ruthless

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❖ Trusting vs Suspicious
❖ Helpful vs Uncooperative

3. Conscientiousness

❖ Well organized vs Disorganized

❖ Careful vs careless
❖ Self-disciplined vs Weak willed

4.Neuroticism

❖ Worried vs Calm
❖ Insecure vs Secure
❖ Self-pitying vs Self-satisfied

5.Openness

❖ Imaginative vs Down-to-earth
❖ Prefers variety vs Prefers routine
❖ Independent vs Conforming

Brand Personality

Its defined as brand image or identity expressed in terms of human characteristics.

Distinguishing and identifiable characteristics which offer consistent, enduring and predictable
messages and perceptions. What people associate the brand with? Brand personality is a set of
human characteristics associated with a brand.

A brand personality framework reflects extensive consumer research design to pinpoint the
structure and nature of a brand’s personality

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Brand Personification:
This tries to recast customers’ perception of the attributes of a product or service into a
human-like character. For instance, in focus groups research, well-known brands of
dishwashing liquid have been liked by “demanding task masters” or “high energy people”.
Many consumers express their inner feelings about products or brands in terms of their
association with known possibilities.

Product Personality Issues

Gender:
A product personality or person frequently endows the product or brand with a gender.
For instance, some products perceived as masculine (coffee and toothpaste) while others as
feminine (bath soap and shampoo)

Geography:
Certain products in the minds of consumers possess a strong geographical association.
Consequently, by employing geography in the product’s name, the product’s manufacturer
creates a geographic personality for the product. Actual locations like Banaras sarees and
Darjeeling tea.
Color:
Color combinations in packaging and products denote personality. For instance, Coca-
Cola is associated with the color red, which connotes excitement, blue bottles are often used to
sell wine because the color blue appeals particularly to female consumers, the color yellow is
associated with novelty, etc.

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Self and self-image:

Consumers have a variety of lasting images of themselves; these images are associated
with personality in that individual’s consumption relates to self-image. This self-image is very
closely associated with personality in that individuals tend to buy products and services.

One or multiple selves:

A consumer who acts differently in different situations or with different people, for
instance, a person is likely to behave in different ways at home, at work or with friends. It’s
normal that a person is likely to display different personality in different situations and social
roles.
A variety of self - images have been recognized:
• Actual self-image: - how consumers in fact see themselves
• Ideal self-image: - how consumers would like to see themselves
• Social self-image: - how consumers feel when others see them
• Ideal social self-image: - how consumers would like others to see them
• Expected self-image: - how consumers expect to see themselves at some specified
future time
• Ought – to self-image: - consists of traits or characteristics that an individual believes
it is his or her duty to possess.

Extended self:

It is an interrelationship between consumer’s self-image and their possession (i.e.

objects they call their own). A consumer’s possession may extend their self-image in number
of ways:

• Actually – by allowing the person to do things that otherwise would be very difficult to
accomplish
• Symbolically – by making the person feel better or bigger
• Conferring status or rank – by identifying for his/her efforts or work
• Bestowing feelings of immortality – by leaving valued possessions to young family
members
• Endowing with magical powers – for example, a shirt or a particular dress or color
might be perceived as magical as it bestows good luck when it is worn.

Altering the self:

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The consumers who try to modify their appearances to become a different or improved
self by using all kind of accessories, this is frequently done to express their individualism or
uniqueness by creating a new self and maintaining the existing self. Closely related to both
self-image and altering the self is the idea of personal vanity. Vanity is often associated with
acting self-important, self-interested, or admiring one’s own appearance or achievements.

Perception

Basics of Perception and Marketing Implications

Meaning and definition of Perception:

Perception is defined as the process by which an individual select, organizes and

interprets stimuli into a meaningful and coherent picture of the world. It can be described as
‘how we see the world around us’. Two individuals may be exposed to the same stimuli under
the same apparent conditions. But how each person recognizes, selects, organizes and interprets
these stimuli is a highly individual process based on each person’s own needs, values and
expectations.

Elements of Perception:

Sensation:

❖ Sensation is the immediate and direct response of the sensory organs to stimuli. A
stimulus may be any unit of input to any of these senses.
❖ Examples of stimuli include products, packages, brand names, advertisements and
commercials.
❖ Sensory receptors are the human organs that receive sensory inputs. Their sensory
functions are to see, hear, smell, taste and feel. All of these functions are called into
play, either singly or in combinations, in the evaluation and use of most consumer
products.

The Absolute Threshold:

❖ The lowest level at which an individual can experience a sensation is called the absolute
threshold.
❖ The point at which a person can detect a difference between “something” and “nothing”
is that person’s absolute threshold for that stimulus.

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❖ For instance, the distance at which a driver can note a specific billboard on a highway
is that individual’s absolute threshold. Two persons riding together may first spot the
billboard at different distances.

The Differential Threshold:

❖ The minimal difference that can be detected between two similar stimuli is called the
differential threshold or the just noticeable difference (JND). For instance, a Rs. 5
increase in the price of petrol would be noticed very quickly by consumers because it
is a significant percentage of the initial cost of the product.

Marketing application of the differential threshold:

Marketers determine the relevant differential threshold to their products for two very
reasons;

1) Negative changes – reduction in the product size or quality, or increase in product price
should remain below the differential threshold
2) Positive changes – improved or updated packaging, larger size, lower price should be
above the differential threshold.

Subliminal Perception:

❖ People are motivated below their level of conscious awareness.

❖ People are also stimulated below their level of conscious awareness; that is, they can
perceive stimuli without being consciously aware that they are doing so.
❖ 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, or “limen” of
conscious awareness, though obviously not beneath the absolute threshold of the
receptors involved.

Dynamics of Perception;

Human beings are constantly bombarded with stimuli during every minute and every
hour of everyday. The sensory world is made up of an almost infinite number of discrete
sensations that are constantly changing. According to the principles of sensation, intensive
stimulation “bounces off” most individuals, who sub consciously block a heavy bombardment
of stimuli.

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One type of input is physical stimuli from the outside environment; the other type of
input is provided by individuals themselves in the form of certain predispositions based on
previous experience. The combination of these two very different kinds of inputs produces for
each of us a very private, very personal picture of the world. Because each person is a unique
individual, with unique experiences, needs, wants, desires and expectations, it follows that each
individual’s perceptions are also unique.

Perception Selection
Consumers subconsciously exercise a great deal of selectivity as to which aspects of the
environment they perceive. An individual may look at some things, ignore others, and turn
away from still others. In actually, people receive only a small fraction of the stimuli to which
they were exposed.
Which stimuli get selected depends on two major factors in addition to the nature of the
stimulus itself. (1) Consumers previous experience as it affects their expectations. And
(2) their motives at the time. Ease of these factors can serve to increase or decrease the
probability that a stimulus will be perceived.

Nature of the stimulus

Marketing stimuli include an enormous number of variables that affect the consumer’s
perception, such as nature of the product, its physical attributes, the package design, the brand
name, the advertisements and commercials including copy claims, choice and sex of model,
size of ad, topography, the position of print ad or a commercial, and the editorial environment.

Expectations
People usually see what they expect to see, and what they expect to see is usually based on
familiarity, . Previous experience, or preconditioned set. In a marketing context, people tend to
perceive products and product attributes according to their own expectations.

Motives
People tend to perceive the things they need or want; the stronger the need the greater the
tendency to ignore unrelated stimuli in the environment. In general, there is heightened
awareness of stimuli that are relevant to ones needs and interests and a decreased awareness of
stimuli that are irrelevant to those needs.

Selective perception

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The consumers “selection” of stimuli from the environment is based on the interactions of
expectations and motives with the stimulus itself. These factors give rise to four important
concepts concerning perception.

Selective Exposure
Consumers actively seek out messages that they find pleasant or with which they are
sympathetic. And they actively avoid painful or threatening ones. They also selectively expose
themselves to advertisements that reassure them of the wisdom of their purchase decisions.

Selective attention
Consumers exercise a great deal of selectivity in terms of the attention they give to commercial
stimuli. They have a heightened awareness of stimuli that meet their needs or interests and
minimal awareness of stimuli irrelevant to their needs. Thus, consumers are likely to note ads
for products that would satisfy their needs and disregard those in which they have no interest.

Perceptual Defence
Consumers subconsciously screen out stimuli that they find psychologically threatening, even
though exposure has already taken place. Thus, threatening or otherwise damaging stimuli are
less likely to be consciously perceived than are neutral stimuli at the same level of exposure.

Perceptual Blocking
Consumers protect themselves from being bombarded with stimuli by simply “tuning out” –
blocking such stimuli from conscious awareness. They do so out of self – protecting because
of the visually overwhelming nature of the world in which we live. The popularity of such
devices as TiVo and Replay TV, which enable viewers to skip over TV commercials with great
ease, is, in part, a result of perceptual blocking.

Perceptual Organization
People do not experience a numerous stimulus they select from the environment as separate
and discrete sensations rather they tend to organize them into groups and perceive them as
unified wholes.

Figure and Grounds

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People have tendency to organize their perceptions into figure and ground relationship. How a
figure- ground pattern is perceived can be influenced by prior pleasant or painful associations
with one or the other element in isolation.

Grouping
Individuals tend to group stimuli so that they form a unified picture or impression. The
perception of stimuli as groups or chunks of information, rather than as discrete bits of
information, facilitates their memory and recall. Grouping can be used advantageously by
marketers to simply certain desired meanings in connection with their products.

Closure
Individuals have a need for closure. They express this need by organizing their perceptions so
that they form a complete picture. If the pattern of stimuli to which they are exposed is
incomplete, they tend to perceive it, nevertheless, as complete; that is, they consciously or
subconsciously fill in the missing pieces.

Perceptual interpretation
Stimuli are often highly ambiguous. Some stimuli are weak because of such factors as poor
visibility, brief exposure, high noise level or constant fluctuations. Even the stimuli that are
strong tend to fluctuate dramatically because of such factors as different angles of viewing,
varying distances, and changing levels in illumination.

Perceptual distortion
Individuals are subject to a number of influences that tend to distort their perceptions, such as
physical appearances, stereotypes, first impressions, jumping to conclusions and the halo
effect.

Consumer imagery
Consumers have a number of enduring perceptions, or images, that are particularly relevant to
the study of consumer behavior. Products and brands have symbolic value for individuals, who
evaluate them on the basis of their consistency with their personal pictures of themselves.

Product positioning
The essence of successful marketing is the image that a product has in the mind of the
consumer-that is positioning. Positioning is more important to the ultimate success of a product
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than are its actual characteristics, although products are poorly made will not succeed in the
long run on the basis of image alone.

Product repositioning
Regardless of how well positioned a product appears to be, the marketers may be forced to
reposition it in response to market events, such as competitor cutting into the brands market
share or too many competitors stressing the same attribute.

Perceptual mapping
It helps them to know how their product and service appear to the customer when compared to
the competitors’ product and services.

Positioning of services
Compared with manufacturing firms, service marketers face several unique problems in
positioning and promoting their offering. Because services are intangible, image becomes a
key factor in differentiating a service from its competition. The marketing objective is to make
the customer understand the how the service factor is related to the product.

Perceived price
It is important to know how the consumer perceives the price, as high, low or as fair. The
consumer must be made to perceive the price which he is paying is fair. No one will be happy
to know that they have paid twice the price.

Reference price
A reference can be external or internal; it can be any price that a consumer uses as a basis for
comparison in judging another price.

Perceived quality
The consumer usually judges the quality of a product or services with the other attributes
relating with it. Such related factors become important to understand in order to satisfy the
customer.

Perceived quality of the product

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Cues that relate to the physical characteristics of the product like color, flavor, or aroma, size
etc.

Perceived quality of the service

The service is more difficult for the consumer to evaluate; it is intangible, variable and
perishable. They are produced and consumed at the same time.

Price quality relationship

The studies have found out that consumers rely on price as an indicator of product quality, that
consumers attribute different quintiles to identical products that carry different price tag, and
that such consumer characteristics as age and income affect the perception of values.

Retail store image

Retail store have image of their own. The customer perceives the retail store according to their
image and environment. The study proves that the customer determines by the availability of
the products available in the stores, advertising, time availability and easy shopping.

Manufacturer’s Image
The customer’s imaginary extends beyond the perceived price and store image. The
manufacturer who enjoys the favorable image generally finds new customer in his store where
new products are accepted more readily than those manufacturers who have a less favorable or
neutral image.

Perceived Risk
The perceived risk varies depending on the person, the product, the situation and the culture.
Some of the customers may perceive high degree of risk depending on the consumption
situation.

Types of Perceived Risk:

Functional Risk: Is the risk that product will not perform as expected.
Physical Risk: Is the risk to self and others that the product may pose.
Financial Risk: Is the risk that the product will not be worth its cost.
Social Risk: Is the risk that a product choice will bruise the consumer’s ego
Time Risk: Is the risk that the time spent on in the product such may be wasted if the product
does not perform as expected.
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How consumers handle risk

Consumers develop a self-defensive weapon in order to satisfy the unsatisfied needs.

Consumers seeks information

Consumers seek information through his friend family and other people. They spend more time
thinking and getting information about the product when they associate a high degree of risk
with the purchase.

Consumers are brand loyal

Consumers remain brand loyal in order to avoid the risk.

Consumers select by brand image

When consumers have no experience with the product they trust the brand name. The
consumers often think about the well-known brand, worth buying and go for the product.

Consumers reply on store image

If the consumers do not have any information about the product they trust the merchandise
buyers of reputable stores and depend on them.

Consumers buy the most expensive model

When in doubt the consumers feel that the most expensive model is probably the best in terms
of quality and price.

Consumers seeking reassurance

Consumers who are uncertain about the product choice seek for reassurance through money
back guarantees and warranty’s or trial use etc.

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Unit 4: Individual Influences on Consumer Behavior

A – Learning

Learning:

A relatively permanent change in knowledge or behavior that results from experience.

From a marketing perspective, the process by which individuals acquire the purchase and
consumption knowledge and experience that they apply to future related behavior.

• Consumer learning is process

• Result of newly acquired knowledge
• Learning may be intentional vs incidental
• Both newly acquired knowledge and personal experience serve as feedback to the
individual and provide the basis for future behavior in similar situations.

The term consumer learning encompasses the total range of learning from simple, almost
reflexive responses to the learning of abstract concepts and complex problem solving.

Marketers must teach consumers:

➢ Where to buy?
➢ How to use?
➢ How to maintain?
➢ How to dispose of products?

Elements of Consumer Learning

Motivation:

“It is the process that lead people to behave as they do.”

It occurs when a need arises that a consumer wishes to satisfy. Motivation is based on
needs and goals. It acts as a spur of learning. Uncovering consumer motives is one of the prime
tasks of marketers, who then try to teach motivated consumer segments why and how their
products will fulfil the consumer’s needs.

Cues:

“It is a stimulus that suggests a specific way to satisfy a silent motive.”

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If motives serve to stimulate learning, cues are the stimuli that give direction to these
motives. In the marketplace, price, styling, packaging, advertising and store displays all serve
as cues to help consumers fulfil their needs in product-specific ways. Cues serve to direct
consumer drives when they are consistent with consumer expectations. Marketers must be
careful to provide cues that do not upset those expectations.

Response:

“Response means how individuals react to a drive or cue or how they behave.”

Learning can occur even when responses are not overt. The automobile manufacturers
that provide consistent cues to a consumer may not always succeed in stimulating a purchase.
A response is not tied to a need in a one-to-one fashion. If the manufacturer succeeds in forming
a favorable image of a particular automobile model in the consumer’s mind, when the consumer
is ready to buy, it is likely that he or she will consider that make or model.

Reinforcement:

“A positive or negative outcome that influences the likelihood that a specific behavior will be
repeated in the future in response to a particular cue or stimulus.”

It increases the likelihood that a specific response will occur in the future as a result of
particular cues or stimuli. Through positive reinforcement, learning has taken place.

Learning Theories:

There are two general categories of learning theory:

1. Behavioral learning theory

2. Cognitive learning theory

1. Behavioral learning theory:

Behavioral learning is sometimes referred to as stimulus-response learning because it

is based on the premise that observable responses to specific external stimuli signal that
learning has taken place. Behavioral learning is not so much concerned with the process of
learning as it is with the inputs and outcomes of learning. The two forms of behavioral learning
with great relevance to marketing are:

a) Classical conditioning
b) Instrumental or Operant conditioning

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2. Cognitive learning theory:

Cognitive Learning Theory implies that the different processes concerning learning can
be explained by analysing the mental processes first. It posits that with effective cognitive
processes, learning is easier and new information can be stored in the memory for a long time.
On the other hand, ineffective cognitive processes result to learning difficulties that can be seen
anytime during the lifetime of an individual.

Note: the other major learning theories are Observational theory and Involvement theory.

Classical Conditioning:

Classical conditioning is a reflexive or automatic type of learning in which a stimulus acquires

the capacity to evoke a response that was originally evoked by another stimulus.

Ivan Pavlov’s Dogs Experiment: (Pavlovian Model)

In the early twentieth century, Russian physiologist Ivan Pavlov did Nobel prize-winning work
on digestion. While studying the role of saliva in dogs’ digestive processes, he stumbled upon
a phenomenon he labelled “psychic reflexes.” While an accidental discovery, he had the
foresight to see the importance of it. Pavlov’s dogs, restrained in an experimental chamber,
were presented with meat paste and they had their saliva collected via a surgically implanted
tube in their saliva glands. Over time, he noticed that his dogs who begin salivation before the
meat powder was even presented, whether it was by the presence of the handler or merely by
a clicking noise produced by the device that distributed the meat paste.

Fascinated by this finding, Pavlov paired the meat paste with various stimuli such as the ringing
of a bell. After the meat paste and bell (auditory stimulus) were presented together several
times, the bell was used alone. Pavlov’s dogs, as predicted, responded by salivating to the sound
of the bell (without the food). The bell began as a neutral stimulus (i.e. the bell itself did not
produce the dogs’ salivation). However, by pairing the bell with the stimulus that did produce
the salivation response, the bell was able to acquire the ability to trigger the salivation response.
Pavlov therefore demonstrated how stimulus-response bonds (which some consider as the basic
building blocks of learning) are formed. He dedicated much of the rest of his career further
exploring this finding.

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Neo – Pavlovian Model:

Under the Neo-Pavlovian theory, the consumer can be viewed as an information seeker who
uses logical and perceptual relations among events, along with his or her own perceptions, to
form a sophisticated representation of the world.

Optimal conditioning – the creation of a strong association between the conditioned stimulus
(CS) and the unconditioned stimulus (US) is known as neo-pavlovian model. It requires

• CS should precede the US

• Repeated pairings of the CS and the US
• CS and US that logically belong together
• CS that is novel and unfamiliar
• US that is symbolically salient

Strategic Applications of Instrumental Conditioning:

1. Reinforcement of Behaviour:
There are two types of reinforcement (or reward) that influences the likelihood that a
response will be repeated. The first type, positive reinforcement, consists of events that
strengthen the likelihood of a specific response. Using a shampoo that leaves your hair
feeling silky and clean to result in a repeat purchase of a shampoo. Negative Reinforcement
is an unpleasant or negative outcome that also serve to encourage a specific behavior. An
advertisement that shows a model with wrinkled skin is designed to encourage consumers
to buy and use the advertised skin cream.

For appeals in ad message are examples of negative reinforcement. Many life insurance
commercials rely on negative reinforcement to encourage purchase of life insurance. The
ads warn husbands of the dire consequences to their wives and children in the event of their
sudden death. Either positive or negative reinforcement can be used to elicit a desired
response. However, negative reinforcement should not be confused with punishment,
which is designed to discourage behavior.

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2. Forgetting and Extinction:

When a learned response is no longer reinforced, it diminishes to the point of extinction,
that is, to the point at which the link between the stimulus and the expected reward is
eliminated. If a consumer is no longer satisfied with the service a retail store provides, the
link between the stimulus (the store) and the response (expected satisfaction) is no longer
reinforced, and there is little likelihood that the consumer will return.

When behavior is no longer reinforced, it is unlearned. There is a difference, however,

between extinction and forgetting. A person who has not visited a once favorite restaurant
for a very long time may simply forget how much he used to enjoy eating there and not
think to return. Thus, his behavior is unlearned because of lack of use rather than lack of
reinforcement. Forgetting is often related to passage of time; this is known as the process
of decay.

3. Customer Satisfaction (Retention):

The objective of all marketing efforts should be to maximize customer satisfaction.
Marketers must be certain to provide the best possible product for the money and to avoid
raising consumer expectations for product (or service) performance beyond what the
product can deliver. Aside from the experience of using the product itself, consumers can
receive reinforcement from other elements in the purchase situation, such as the
environment in which the transaction or service takes place, the attention and service
provided by employees and the amenities provided.

4. Relationship Marketing:
Developing a close personalized relationship with the customer is another form of non-
product reinforcement. Knowing that she will be advised of a forthcoming sale or that
selected merchandise will be set aside for her next visit cements the loyalty that a consumer
may have for a retail store. The ability to telephone a personal banker to transfer funds
between accounts or to make other banking transactions without coming into the bank
reinforces the satisfaction a consumer may have with his bank.

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5. Reinforcement Schedules:
Marketers have found that product quality must be consistently high and provide customer
satisfaction with each use for desired consumer behavior to continue. However, they have
also discovered that some non-product rewards do not have to be offered each time the
transaction takes place; even an occasional reward provides reinforcement and encourages
consumer patronage.

For example: an airline may occasionally upgrade a passenger at the gates, or a clothing
discounter may from time to time announce a one-hour sale over the store sound system.
The promise of possibly receiving a reward provides positive reinforcement and encourages
consumer patronage.

A fixed ration reinforcement schedule provides reinforcement every “nth” time the product
or service is purchased. For example, a retailer may send a credit voucher to account holders
every three months based on a percentage of the previous quarter’s purchases. A variable
ratio reinforcement schedule rewards consumer on a random basis or on an average
frequency basis.

6. Shaping:
Reinforcement performed before the desired consumer behavior actually takes place is
called shaping. Shaping increases the probabilities that certain desired consumer behavior
will occur. For example, retailers recognize that they must first attract customers to their
stores before they can expect them to do the bulk of their shopping there.

Many retailers provide some form of preliminary reinforcement (Shaping) to encourage

consumers to visit only their store. For example, some retailers offer loss leaders-popular
products at severely discounted prices to the first hundred customers to arrive, since those
customers are likely to stay to do much of their shopping.

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7. Massed VS Distributed Learning:

Timing has an important influence on consumer learning. Should a learning schedule be
spread out over a period of time (distributed learning), or it should be “bunched up” all at
once (Massed Learning)? The question is an important one for advertisers planning a media
schedule, because massed advertising produces more initial learning, whereas a distributed
schedule usually results in learning that persists longer.

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PART – B - ATTITUDES

What are Attitudes?

In the 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.

MARKETING IMPLICATIONS OF ATTITUDES

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 uses, causes or issues, people, advertisements,
internet site, price, medium or retailer

In conducting attitude research, we tend to be object specific.

1. Attitudes are a learned Predisposition:

There is a general agreement that attitudes are learned. This means that attitudes relevant
to purchase behavior are formed as a result of direct experience with the product, WOM
information acquired from others, or exposure to mass-media advertising, the internet and
various forms of direct marketing (eg, a retailer’s catalogue)

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.

2. 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.

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3. Attitudes Occur within a Situation:

It is not immediately evident from our definition that attitude occurs within and are affected
by a situation. By situation we mean events or circumstances that at a particular point of
time, influence a relationship between attitude and behavior.
A specific situation can cause consumers to behave in ways seemingly inconsistent with
their attitudes.
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.

MODELS OF ATTITUDE
1.Tricomponent Attitude Model
2.The Multi attribute Attitude Models
3.The Elaboration Likelihood Model

1. Tricomponent Attitude Model:

According to the tri-component attitude model, attitudes consist of three major
components:
A Cognitive Component
An Affective Component
A Conative Component
➢ The Cognitive Component:
The first part of the tri-component attitude consists of a person’s cognitions, 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 form of beliefs; that is, the
consumer believes that the attitude object possesses various attributes, and that specific
behavior will lead to specific outcomes.
The types of connections consist of the same basic four attributes:
Speed
Availability
Reliability
Other Features

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➢ The Affective Component:

A consumer’s emotions or feelings about a particular product or brand constitute the
affective component of an attitude.
These emotions and feelings are frequently treated by consumer researchers as primarily
evaluative in nature; that is, they capture an individual’s direct or global assessment of the
attitude object.

➢ The Conative Component:

Conation, the final component of the tri-component attitude model, is concerned with the
likelihood or tendency that an individual will undertake a specific action or behave in a
particular way with regard to the attitude object.
According to some interpretations, the conative component may include the actual behavior
itself.

In marketing and consumer research, the conative component is frequently treated as an

expression of the consumer’s intention to buy. Buyer intention scales are used to assess the
likelihood of a consumer purchasing a product or behaving in a certain way.

MULTI ATTRIBUTE ATTITUDE MODELS

Multi attitude attribute models portray consumer’s attitudes with regard to an attitude object
(egs, a product, a service, a direct mail catalog or a cause or an issue) as a function of
consumer’s perception and assessment of the key attributes or beliefs held with regard to
the particular attitude object: Although there are many variations of this type of attitude
model, we have selected the following three models to briefly consider here:

1. The Attitude-Toward-Object Model

2. The Attitude-Toward-Behavior Model
3. The Theory-of-Reasoned-Action Model

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1. The Attitude-Toward-Object Model:

The attitude-toward-object model is especially suitable for measuring attitudes toward a
product (or service) category or specific brands. According to this model, the consumer’s
attitude toward a product a specific brand of a product is a function of the presence (or
absence) and evaluation of certain product-specific beliefs and/or attributes.

In other words, consumer’s generally have favorable attitudes towards those brands that
they believe have an adequate level of attributes that they evaluate as positive, and they
have unfavorable attitudes toward those brands they feel do not have an adequate level of
desired attributes or have too many negative or undesired attributes.

2. The Attitude-Toward-Behavior Model:

The attitude-toward-behavior model is the individual’s attitude toward behaving or acting
with respect to an object rather than the attitude toward the object itself.
The appeal of the attitude-toward-behavior model is that it seems to correspond somewhat
closely to actual behavior than does the attitude-toward-object model.

For instance, a consumer looking for a new car might like BMW cars (i.e. the positive
attitude towards the object), but not ready or willing to buy an expensive BMW (i.e. a
negative attitude towards the behavior associated with the object)

3. The Theory-of-Reasoned-Action Model:

The theory-of-reasoned-action model represents a comprehensive integration of attitude
components into a structure that is designed to lead both better explanation and better
predictions of behavior.
Like the basic tri-component attitude model, the theory-of-reasoned-action model
incorporates a cognitive component, an affective component and a conative component;
however, these are arranged in a pattern different from the tri-component model.
In accordance with this expanded model, to understand the intention we also need to
measure the subjective norms that influence an individual’s intention to act.
For instance, the subjective norms of a student contemplating getting a tattoo consists
of answers to the following questions:
Who are her relevant others?
What are her beliefs about how each relevant other would respond to the tattoo?
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