Module-1

Consumer Behaviour:

Consumer Behavior is the Process Involved When

Individuals or Groups Select, Use, or Dispose of Products, Services, Ideas or

Experiences (Exchange) to Satisfy Needs and Desires.
Issues During Stages in the Consumption Process

Consumers Impact on Marketing Strategy

Understanding consumer behavior is good business.

Firms exist to satisfy consumers needs, so

Firms must understand consumers needs to satisfy them.

The Process of Marketing Segmentation:

Identifies Groups of Consumers Who are Similar to One Another in One

or More Ways, and

Devises Marketing Strategies that Appeal to One or More of These

Groups.

Segmenting Consumers by Demographic Dimensions:

Demographics are Statistics That Measure Observable Aspects of a Population Such
As:

Consumers Impact on Marketing Strategy: Building Bonds with

Consumers

Relationship Marketing occurs when a company makes an effort to

interact with customers on a regular basis, and gives them reasons to
maintain a bond with the company over time.

Database Marketing involves tracking consumers buying habits very

closely, and crafting products and messages tailored precisely to peoples
wants and needs based on this information.

Marketings Impact on Consumers: The Meaning of Consumption

Marketings Impact on Consumers:

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

Marketings Impact on Consumers

Marketing and Culture

Popular Culture

Intangible and Tangible Objects

The Global Consumer

Global Consumer Culture

Virtual Consumption

Business to Consumer Selling (B2C Commerce)

Consumer to Consumer Selling (B2B Commerce)

Virtual Brand Communities

Blurred Boundaries: Marketing and Reality

Concept and Need for studying CB

Who buys products or services?

How do they buy products or services?

Where do they buy them?

How often do they buy them?

When do they buy them?

Why do they buy them?

How often do they use them?

Consumer decision making

Decision making (information search, consider brand alternatives)

Habit ( little or no information search , considers only one brand)

Consumers behavior includes post purchase satisfaction or dissatisfaction

behavior

Two types of customers- personal and organizational consumer

Factors influencing purchase decision

Who is interested in the study of CB

All firms

The new customer-Customer driven rewards-Customer driven goals-Customer

driven strategy- Customer driven vision, mission and values

Development of CB as a field of study

Psychology-study of individuals

Sociology study of groups

Socio-psychology study of hoe people are influenced by groups

Cultural anthropology- the influence of culture and society on the individual

Economics-study of demand and supply

The Dark Side of Consumer Behavior

Interdisciplinary Influences

Two Perspective on Consumer Research

The Wheel of Consumer Behavior

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

Do Marketers Create Artificial Needs?

Response: Marketing attempts to create awareness that these needs do

exist, rather than to create them.

Are Advertising and Marketing Necessary?

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

Do Marketers Promise Miracles?

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

History of Consumer Research

Extension of marketing research with more emphasis on consumer behavior

aspects

Two reasons for studying CB-why consumers made the purchase decisions
and how consumers would react to promotional messages

Modernist era positivists researchers conducted research studies adopting

methods of experimenting, observation and survey techniques-quantitative
data so statistical analysis carried out

Research technique- Motivational research ( use of projective techniques and

in-depth interviews)came to be used widely marketers and advertising
agencies

The effectiveness of Motivational research method depends on highly trained

personnel

Use of a combination of Qualitative and Quantitative research techniques

Another group of researchers academicians interested in the consumer

experiences

Ethnography related to cultural anthropology, where in the researchers put

themselves in the society under study so as to absorb all the implications of
the cultural practices

Semiotics the study of symbols and their interpretations

In- depth Interviews- method where the questions are asked to obtain a
gainful insight into the understanding of CB

Positivism vs. Intrepretivism

Positivism

Intrepretivism

Helps predict CB

Understanding consumption practices of

consumers

Uses Quantitative research methods

Use of qualitative methods of research

-experiments, survey techniques and

ethnography, Semiotics, in-depth

observations

interviews

Assumptions made-Consumers are

The cause and effect behavior, cannot be

rational decision makers, problem

extended to larger population

solvers, engaged in information

processing- can extend research finding
to large population

Value of Consumer Research

Provides information on how the consumers are behaving at the market place

Identify future consumer needs or marketing opportunities

Gives answers to what is the current consumer trend in the market, the
potential customers and what is consumer satisfaction level in products and
services

CONSUMER BEHAVOUR PROCESS(Consumer Research Process)

Secondary data

Internal source

External source

Books & Periodicals

Primary data

Depth interviews

Focus groups

Projective techniques- to understand a persons hidden attitudes, motivation

and feelings

Project Techniques

Word Association respondents are presented with a series of words or

phrases ask what comes first to their mind-Toothpaste---Coffee----,Soft
drink----, Ice cream----, Watch----- whether desirable or undesirable word

Sentence completion-The beginning of the sentence is read out to the

respondent and asked to complete it (People who dont drink arieted drinks
are------)

Third person technique- Respondents are asked to describe a third person

about whom they have little information- to check attitudes about the
respondent

Role Playing

Thematic Apperception Test (TAT)-Under this technique the respondents

are shown an ambiguous picture or drawing or fill in a blank speech buble
associated with a particular character or a ambiguous situation and then ask
to interpret it

Repertory Grid ( Rep Grid)Respondents are presented with a grid and

asked to title the columns with brand names types of a particular
product( tastes of soft drink,types of two wheeler) select any of three think
of a phrase in which two are different from the third)

Consumer Behavior Models

Economic Model

Learning Model

Psychoanalytic Model

Sociological Model

Howard Sheth Model

Psychoanalytic Model

Personality is an outcome of

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

Super ego-the internal representation of what is approved by the society

Ego- the conscious directing id directing id impulses to find gratification in a

socially accepted manner

Sociological Model

Individual buyer is part of the institution called society

Formal / Informal associations- family members, employee, member of a

informal cultural organisation

Howard Sheth model

Objective

It reflects how complex the whole question of CB is

To provide the framework for including various concepts like learning,

perception, attitudes which play a role in influencing CB

Input Stimulus display Significant and Symbolic( Quality, Price,

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

MODULE-2
Segmentation

 It is the Process of dividing a heterogeneous market into homogeneous sub

units.
The company can either launch a products , appreciating the fact that the
market is a heterogeneous one.
Need for Segmentation
Michael Porter The competitive advantage of a firm lies in being everything
to a select few
To be everything to everyone is a sure recipe for a strategic failure
Helps the firm compete in a highly competitive market
Segmenting Consumers by Demographic Dimensions
Demographics are Statistics That Measure Observable Aspects of a Population Such
As:

MARKET SEGMENTATION
Individual Preference ( Motivation, Knowledge, Attitude, Beliefs, Values)
Family &Peer pressure
Social acceptance

 Education
Early experiences
Other environmental influences
Advantages of Market Segmentation
Tap the market effectively
Preference of place of purchase for customers
Identify and find out additional benefit desired by the people
The Willingness to pay for the additional benefit desired by the people
Source or place from where consumers would like to buy
Give consumer value
Develop a distribution strategy
Develop a suitable pricing strategy
Usage of database marketing
Planning marketing activities around the customer
Marketing efforts are more efficient and economical
Increases productivity
Criticisms of segmentation
Markets are not made up of segments with different wants because buyers of
one brand buy other brands as well
Buyers often choose from a list of acceptable brands
Brands may differ in product form yet differ widely in market share
Criteria for selecting a market segment
Identification
Measurability
Accessibility
Substantiality
Stability

Bases for segmenting consumer markets

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

Age Infant, child market 1-12yrs, teens market, adolescent market, youth
market , middleaged ,seniormarket

Income Low income , low middle income, middle income, upper middle
income, higher income

Gender Female /Male

Occupation Professional, Business, self employed ,student , Housewives

Education

Marital Status

Family size and structure

Psychographic Variables
Personality & Life styles
Brand personality is a direct outcome of the usage of psychographic variables
in formulating marketing strategies
How to segment
3 stages

 Survey stage- 2 parts -1) Focus group discussions & in-depth interviews to
get consumer motivation, attitudes, & behavior
2) Based on the focus group a questionnaire is administered to the sample
group
Objective of Questionnaire
Attributes sought in a product & their priority ratings
Brand awareness & rating of different of different brands
Product usage patterns
Customer attitudes towards the generic product or product category itself
Demographics, psychographics & media habits of sample respondents
Analysis Stage- factor analysis is used to identify factors that differentiate
customer groups, Cluster analysis is now used to cluster customer into
different groups
Profiling Stage- Each cluster is profiled in terms of demographics ,
psychographics, media habits, attitudes, behavior and consumption habits .
The marketer can give each segment a name based on a dominant
distinguishing characteristic
Requirements for Effective Segmentation:
Accessibility
Measurability
Viable
Intensity in Competition
Motivation
Needs, Drives, Goals
Emotional Versus Rational Motives
Positive Motivation-If an individual experiences a driving force towards an
object /person or situation

 Negative Motivation- Driving force compelling the person to move away from
someone or something
Hulls drive reduction theory attempts to explain both motivation and
learning is a popular theory which links needs, drives and goals
Needs & Goals:
Physiological needs(primary needs)
Learned (Secondary or Cultural )Needs
Needs Arousal Types of Stimulus (Physiological , Cognitive, Emotional,
Exterior or Environmental)
Goals and selection of Goals Selection by an individual will depend on a
number of factors such as personal experience, social and cultural norms
and values , personal norms and values, physical and intellectual capacity,
accessibility of goal and self image
An individuals behavior towards reaching out to goals is very often
influenced by his expectation of success and failure as well as his past
experience
Frustration is the feeling experienced by an individual when he/she fails to
achieve a goal
Frustration mechanism-Aggression, Rationalization or compromise,
Regression, Withdrawal, Projection blame( putting blame )
Theories of Needs:
Maslows Hierarchy of Needs
Henry Murrays List of Psychogenic Needs
Mc Clelland's Theory of Need Achievement- Needs for Power, Needs for
Affiliation, Needs for Achievement
Maslows Hierarchy of Needs:

Henry Murray Pshycogenic Needs

American psychologist Henry Murray (1893-1988) developed a theory of personality
that was organized in terms of motives, presses, and needs. Murray described a
needs as a, "potentiality or readiness to respond in a certain way under certain
given
circumstances"
(1938).
Theories of personality based upon needs and motives suggest that our
personalities are a reflection of behaviors controlled by needs. While some needs
are temporary and changing, other needs are more deeply seated in our nature.
According to Murray, these psychogenic needs function mostly on the unconscious
level, but play a major role in our personality.
Murray's Types of Needs
Murray identified needs as one of two types:
1. Primary Needs
Primary needs are based upon biological demands, such as the need for
oxygen, food, and water.
2. Secondary Needs
Secondary needs are generally psychological, such as the need for nurturing,
independence, and achievement.
List of Psychogenic Needs
The following is a partial list of 24 needs identified by Murray and his colleagues.
According to Murray, all people have these needs, but each individual tends to have
a certain level of each need.
1. Ambition Needs

Achievement: Success, accomplishment, and overcoming obstacles.

Exhibition: Shocking or thrilling other people.

Recognition: Displaying achievements and gaining social status.

2. Materialistic Needs

Acquisition: Obtaining things.

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

3. Power Needs

Abasement: Confessing and apologizing.

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

4. Affection Needs

Affiliation: Spending time with other people.

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

5. Information Needs

Cognizance: Seeking knowledge and asking questions.

Exposition: Education others.

Influences on Psychogenic Needs

Each need is important in and of itself, but Murray also believed that needs can be
interrelated, can support other needs, and can conflict with other needs. For
example, the need for dominance may conflict with the need for affiliation when
overly controlling behavior drives away friends, family, and romantic partners.
Murray also believed that environmental factors play a role in how these
psychogenic needs are displayed in behavior. Murray called these environmental
forces "presses."
Research on Psychogenic Needs
Other psychologists have subjected Murray's psychogenic needs to considerable
research. For example, research on the need for achievement has revealed that
people with a high need for achievement tend to select more challenging tasks.
Studies on the need for affiliation have found that people who rate high on

affiliation needs tend to have larger social groups, spend more time in social
interaction, and more likely to suffer loneliness when faced with little social contact.
David C Mcclelland's Motivational Needs Theory
American David Clarence McClelland (1917-98) achieved his doctorate in
psychology at Yale in 1941 and became professor at Wesleyan University. He then
taught and lectured, including a spell at Harvard from 1956, where with colleagues
for twenty years he studied particularly motivation and the achievement need. He
began his McBer consultancy in 1963, helping industry assess and train staff, and
later taught at Boston University, from 1987 until his death. McClelland is chiefly
known for his work on achievement motivation, but his research interests extended
to personality and consciousness. David McClelland pioneered workplace
motivational thinking, developing achievement-based motivational theory and
models, and promoted improvements in employee assessment methods,
advocating competency-based assessments and tests, arguing them to be better
than traditional IQ and personality-based tests. His ideas have since been widely
adopted in many organisations, and relate closely to the theory ofFrederick
Herzberg.
David McClelland is most noted for describing three types of motivational need,
which he identified in his 1961 book, The Achieving Society:

achievement motivation (n-ach)

authority/power motivation (n-pow)

affiliation motivation (n-affil)

david mcclelland's needs-based motivational model

These needs are found to varying degrees in all workers and managers, and this
mix of motivational needs characterises a person's or manager's style and
behaviour, both in terms of being motivated, and in the management and
motivation others.
the need for achievement (n-ach)
The n-ach person is 'achievement motivated' and therefore seeks achievement,
attainment of realistic but challenging goals, and advancement in the job. There is a
strong need for feedback as to achievement and progress, and a need for a sense of
accomplishment.
the need for authority and power (n-pow)
The n-pow person is 'authority motivated'. This driver produces a need to be
influential, effective and to make an impact. There is a strong need to lead and for
their ideas to prevail. There is also motivation and need towards increasing personal
status and prestige.

the need for affiliation (n-affil)

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

Motivational Research
1)Depth Interviews
2)Project Techniques
Word Association respondents are presented with a series of words or
phrases ask what comes first to their mind-Toothpaste---Coffee----,Soft
drink----, Ice cream----, Watch----- whether desirable or undesirable word
Sentence completion-The beginning of the sentence is read out to the
respondent and asked to complete it (People who dont drink arieted drinks
are------)
Third person technique- Respondents are asked to describe a third person
about whom they have little information- to check attitudes about the
respondent
Role Playing
Positive and Negative Motivation
Motivation is concerned with inspiring the man to work to get the best result.
Motivation may be of two types:

Positive
Negative

Positive motivation
In real sense, motivation means positive motivation. Positive motivation induces
people to do work in the best possible manner and to improve their performance.
Under this better facilities and rewards are provided for their better performance.
Such rewards and facilities may be financial and non-financial.
Negative motivation

Negative motivation aims at controlling the negative efforts of the work and seeks
to create a sense of fear for the worker, which he has to suffer for lack of good
performance. It is based on the concept that if a worker fails in achieving the
desired results, he should be punished.
Both positive and negative motivation aim at inspiring the will of the people to work
but they differ in their approaches. Whereas one approaches the people to work in
the best possible manner providing better monetary and non-monetary incentives,
the other tries to induce the man by cutting their wages and other facilities and
amenities on the belief that man works out of fear.

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

buying decisions by targeting your pitch toward particular buying motives.
Rational And Emotional Buying Motives
Buying motives can be looked at as the way to approach prospects or a way to
present the product to the prospect. There are two approaches that buying motives
can make toward the customer. These are emotional and rational motives.
Emotional motives prompt a prospect to act because of an appeal to some
sentiment or passion. Emotional reasons for buying products often involve little
logic and usually stem more from the heart than the head. Rational buying motives
usually appeal to the consumer's reason or better judgment.
Some emotional motives include:
* A romantic desire to attract the opposite sex
Rational buying motives
Economy of purchase
Economy of use
Efficient profits
Increased profits
Durability
Accurate performance
Labour-saving
Time-saving
Simple construction
Simple operation
Ease of repair
Ease of installation
Space-saving
Increased production
Availability

Complete servicing
Good workmanship
Low maintenance
Thorough research
Desire to be unique
Curiosity
Emotional buying motives
Pride of appearance
Pride of ownership
Desire for prestige
Desire for recognition
Desire to imitate
Desire for variety
Safety
Fear
Desire to create
Desire for security
Convenience
Desire to be unique
Curiosity

Dynamic Nature of Motivation:

Needs & their fulfillment are the basis of motivation needs change, so also
motivation. Both internal & external factors are responsible for change. The fact is
that not all needs are satisfied fully. When some are satisfied, some others arise.
Sometimes because of personal, financial, social & cultural limitations, people cant
fulfill some of their needs, wants & goals. Failure of need fulfillment may give rise to
the following states:
1.Rationalisation trying to justify the situation & excusing oneself,
2.Aggression getting angry & frustrated, and resorting to unsocial actions,
3.Regression trying to settle without that particular need & try something else,
4.Withdrawal trying to disassociate oneself from the very thought of it.
The Measurement of motives
The measurement of the motives is done on 3 ways

Self-Enhancement
The self-enhancement motive states that people engage in self-evaluation in view of, not only improving
the positivity of their self-conceptions, but also protecting the self from negative information (they search
for positivity and avoid negativity)
In order to do this, people process information important to the self in a selective manner (for instance, by
focusing on information that has favourable implications to the self and discarding information with
unfavourable implications to the self). People also choose to compare themselves socially to others so as
to be placed in a favourable position. By doing this, people seek to boost the positivityof the self or
decrease its negativity, aiming to make others see them as socially desirable, hence increasing their
levels of self-esteem.

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

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

Elements of Consumer Behavior

Variables & Processes Inside Black Box

Consumer Buying Process

The Buyer Decision Process

Module-3
Personality

Patterns of Individual behavior which are consistent and enduring

An Individuals personality represents a set of characteristics to understand

CB Boost,Horlicks( Sporty Personality)

Properties of Personality

Personality reflects individual differences

Personality is consistent and enduring- does not change

Personality can change- specific events can bring change in individual

personality-marriage, career, study, promotion

Theories of Personality

Trait Theory

Psychoanalytical Theory (Freudian theory)

Neo- Freudian Theory

Trait Theory

Quantitative in nature & focuses on the measurement of certain specific

characteristics or traits

Marketers use personality traits to segment different markets

Personality tests to measure consumer traits are

Consumer Traits

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

buying experience

Consumer susceptibility to interpersonal influence (SUSCEP): To understand

how consumers will respond to social influences

Consumer materialism : To ascertain the extent to which consumers are

attached to worldly material possessions

Consumer ethnocentrism: CETSCALE the likelihood of consumer accepting

rejecting foreign- made products

Personality traits: Attitudes, Interests, Needs, Physiology, Aptitude ,

Morphology, Temperament,

Psychoanalytical Theory (Freudian theory)

In-depth study of individual of personality

Personality is an outcome of

Id- the source of all psychic energy which drives us as action, basic,
instinctive, needs, desires, impulses that demand immediate gratification

Super ego-the internal representation of what is approved by the societyInternal expression of societal values and ideals, moral conscience

Ego- the conscious directing id directing id impulses to find gratification in a

socially-Individual conscious control, internal monitor to balance the
impulsive demands of the id and restraints put by the super ego. -Brand
Positioning and Brand Personality

Brand Positioning and Brand Personality

Depth and Focus Group Interviews

Projective Techniques- motivational research techniques asking consumers

to complete sentences,pictures, personify brands

Neo- Freudian Theory

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

personality

Freuds colleagues who disagreed with Freuds rigid adherence to consider

only the basic biological or instinctive traits as determinants of personality

Authors felt other reasons

Strive for Superiority

Inter- relationship with other men

Parent child relationship

Karen Horney- classified three personality groups- Complaint type,

Aggressive type, Detached type

Complaint type- desire to be included in activities of group, want appreciation

Aggressive- excel, see others as competitors

Detached- emotional distance between themselves and others prefer

independence, self reliance, self sufficiency

Jungs Personality Types

Grouped into 2 fundamental types-Extrovert & Introvert

Mental operations into 4 fundamental activities-sensing, feeling, thinking,

Intuiting

Few characteristics of Selected Jungian Personality types

Sensing- Thinking(ST)

Logical, empirical and rational

Risk avoider, will search in depth for decision making information

Price sensitive and materialistic in considering motives

Short term consideration in decision making

Intuitive - Thinking(IT)

Takes a broader perspective of the situation and world

Thinks , uses logic and imagination in taking decisions

Considers many options while taking decisions- speculative

Takes long term view while taking decisions

Sensing - Feeling(SF)

Considers personal values rather than logic- empirical viewpoint

Makes decision after considering others subjective orientation

Status conscious and materialism reflects the impact on other persons

Short term consideration in decision making

Intuitive- Feeling (IF)

Takes a broader perspective of the situation or world

Considers various options for decision making

People oriented and subjective oriented in decision making

Least price conscious, are venturesome and novelty seeking

The time period is indefinite while taking decisions

BT study

Tween Type 1-15.2% brash, spoilt, not academically oriented and prone to
tantrums, receive pocket money, freedom of space, big priced purchases

Tween Type 2- 11.8%quite, traditionalist at heart, do not care about most

things nor do their parents have high expectations of them

Tween Type 3 -25.38% highly involved in purchase of high priced products for
home , expresses views of their parents,receive least pocket money parents
buy them everything

Tween Type 4 -47.51% home birds with an active outside life, good at school
and with a strong value system ingrained in them

Personality Influences and Consumer Behavior

Consumer Innovativeness

Dogmatism

Social character

Need for uniqueness

Optimum stimulation level

Variety- novelty seeking

Consumer Innovativeness

Element of risk, easy accepters of new products and services

Gary and Starke have identified sixteen source personality traits

Dogmatism

Is a personality trait which indicates degree of rigidity individuals display

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

Optimum Stimulation level (OSL)

Display more willingness to take risks , try new products , be innovative

OSL reflects a persons desire for the level of lifestyle stimulation

Variety or Novelty Seeking

Exploratory purchase behavior- exploring newer brands

Vicarious exploration- consumer obtains information about new alternatives

and contemplates about the new option with caution and reservation

Use innovativeness- already using a product in a new or novel way

Social Character

Personality trait depicts character closely related to socio- cultural

environment

Consumers rely on their own intuition, standards and values

Consumers who look for guidance new products

Need for Uniqueness

Unique people

Do not want to conform to others expectations or standards

Cognitive Personality Traits

Visualizers Vs Verbalizers

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

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

Inter related consumption and possession personality traits

Consumer Materialism- People attached to material possessions ,

characteristic observation

Undue importance to acquiring and displaying their worldly possessions

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

Fixated Consumption Behaviour- between materialistic and addictive buying

is fixated consumption, interested in buying but enjoy displaying them and
known for their involvement with others of same interest

Very deep interest displayed for a particular object or product

Dedicated search

Willingness to spend a considerable amount

Compulsive Consumption Behaviour- abnormal behaviour,addiction, actions

out of control causing harm to them and people around them-liqour, drug
addiction

Consumer Ethnocentrism Consumers response to foreign products

Highly ethnocentric-khadi products

Low ethnocentric- affinity for USA made products

Self Image

Personality traits, habits, Possessions, behavior

Unique-Background, experience, knowledge

Actual self image-How they actually see themselves

Ideal self image- How they would like to see themselves
Social self image-how they feel the society sees them
Ideal social self image-how they would like the society to see them
Expected self image-Their expectation of how they see themselves at some
specified future time

Ideal self image and expected self image is of more importance to the marketerconsumer may be induced to buy products
Extension of self image

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

operate a PC

Through symbolic representation-bat with sachin signature

By conferring status or rank

By bestowing upon someone close and handing over a priced possession

Firms marketing products /services related to cosmetics, jewellery, hair

styles,

membership to certain clubs,other personal care products , beauty salons

are working out marketing plans to help consumer gain inflated self image

Consumer Perception

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

interprets stimuli into a meaningful and coherent picture of the world

No two individuals are alike

Perception is based on each ones needs , values and expectations

Sensation/ Absolute Threshold

Sensation is the immediate direct response of a physical sensory organ

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

External factors

Intensity and size

Position

Contrast

Novelty

Repetition

Movement

Internal Factors influencing Attention

Marketing Mix

Brand Personality

Perceptual Process

Perceptual Selection

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

Perceptual Organization

Grouping
Context

Perceptual Interpretation

Categorization
Inference
Perceptual Distortion

Personality/physical appearance

Stereotypes

Halo Effect

Irrelevant Cues

First Impression

Hasty Conclusions

Perceptual Inference

Brands

Outlets

Association

Consumer Imagery

Consumers have a number of enduring perceptions and images which are

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

Learning

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

Cognitive Personality Factors

Need for cognition (NC)

A persons craving for enjoyment of thinking

Individual with high NC more likely to respond to ads rich in product

information

Visualizers versus verbalizers

A persons preference for information presented visually or verbally

Verbalizers prefer written information over graphics and images.

From Consumer Materialism to Compulsive Consumption

Consumer materialism

Fixated consumption behavior

The extent to which a person is considered materialistic

Consumers fixated on certain products or categories of products

Compulsive consumption behavior

Addicted or out-of-control consumers

Sample Items to Measure Compulsive Buying

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

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

They can be targeted by stressing nationalistic themes

Items from the CETSCALE

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

Personality-like traits associated with brands

Examples

Purdue and freshness

Nike and athlete

BMW is performance driven

Levis 501 jeans are dependable and rugged

Brand personality which is strong and favorable will strengthen a brand but
not necessarily demand a price premium

A Brand Personality Framework

Product Personality Issues

Gender

Often used for brand personalities

Some product perceived as masculine (coffee and toothpaste) while

others as feminine (bath soap and shampoo)

Geography

Actual locations like Philadelphia cream cheese and Arizona iced tea

Fictitious names also used such as Hidden Valley and Bear Creek

Color

Color combinations in packaging and products denotes personality

Marketers often use a fictitious location to help with personality.

Self and Self-Image

Consumers have a variety of enduring images of themselves

These images are associated with personality in that individuals consumption

relates to self-image

The Marketing Concept

Issues Related to Self and Self-Image

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

situations or with different people

We have a variety of social roles: Contains traits, skills, habits, possessions,

relationships and way of behavior Developed through background,
experience,and interaction with others Consumers select products congruent
with this image

Marketers can target products to a particular self

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

relationships and way of behavior

Developed through background, experience,and interaction with others

Consumers select products congruent with this image

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

Actually

Symbolically

Conferring status or rank

Bestowing feelings of immortality

Endowing with magical powers

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

individualism by

Creating new self

Maintaining the existing self

Extending the self

Conforming

ELEMENTS OF LEARNING PROCESS

Drive

Motivation

Cues

Response

Re-inforcement

Retention

LEARNING THEORIES
1. Classical Conditioning (behaviours as a result of close
association between a primary stimulus and a secondary
stimulus)

2. Operant or Instrumental Conditioning (consequences of

behaviours can result in changes in the probability of it
occurrence)

3. Cognitive Theory (emphasis is on the thought process involved

in learning)

4. Observational Learning (leaving based on imitating others

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

CONSUMER MEMORY
Short term memory

 Long term memory

Learning process:

HABIT
Define Habit
A model of habitual purchasing behaviour

Perception
To understand how consumer decision making process can be influenced by his or
her perception of the product or brand .

Factors influencing perception

EXTERNAL AND INTERNAL FACTORS

THE PERCEPTUAL PROCESS

The perceptual process involves three components:

Perceptual Selection (The three processes which define selection

are: exposure, attention and selective perception)

Perceptual organization (The three basic principles used are

grouping, closure and context)

Perceptual interpretation (Two principles are used

Categorization and Inference)

Consumer Imagery and marketing implications

Consumer have a number of enduring perception or images which are

quite relevant to the consumer behaviour study.

Brand image Consumer over all perception of the brand, which to a

certain extent could be influenced by product positioning) and self image of the
consumer (which could include: actual self image, Social self image, Ideal self
image and expected self image)

Consumer's perception of quality

Consumer's price perceptions

Advertising and perceived benefit

Sales promotion and perceived value

Public relation and perceived value

Personal selling and perceived value

Risk:
CONCEPT OF PERCEIVED-RISK
Risk reduction strategies Adopted by consumer
Seek information
Continuing the same brand
Brand image
Store image
Buy the most expensive brand
Seek reassurance
Memory
Two sources of product information:
External environment: packaging, labels, POS displays, prices, other
marketing information
Memory: past experiences, word-of-mouth, family preferences
Associative network of nodes (concepts) and links (connections)

 Scripts: information organized in memory around different types

of events or episodes (e.g., a restaurant script)
How Information is Captured and Stored in Memory
Memory processing areas:
New information is initially captured in sensory memory.
processing is shallow; capacity is limited
Information is transmitted from sensory memory to short-term
(ST)memory.
Analyzing and assigning meaning; limited capacity to a finite
number of chunks (units of memory); information may be
rehearsed to retain its meaning
Information rehearsed in ST memory is transmitted to long-term (LT)
memory for storage and retrieval as needed; LT memory capacity is
unlimited
Information Retention
It refers to the amount of material previously learned that is remembered
Forgetting the loss in retention of material previously learned
Retention affected by:
Incoming information
The person receiving the information
Retention: Characteristics of Incoming Information and Processing
Repetition or rehearsal
Relevance
Competing information (new information competes with old; ad clutter
issue)
Completeness of information (Zeigarnik Effect if incomplete, info retained
for later completion)
Time (lapsed time since exposure)

 Mood (positive mood impact)

How Retention is Influenced by the Information Recipient
Consumer familiarity or experience
Being more familiar with a product category increases the chances of
remembering information about new or existing brands
Affects way information is organized in memory
Consumer motivation
Higher motivation to process info is positively related to doing so at
deeper levels of memory and to retain info longer and more
accurately.
How Information is Retrieved from Memory
Retrieval cues self- or externally- generated (sensory images: sounds,
shapes, colors, smells,etc.)
Interference from competing cues (make cue to stand out)
Consumers state of mind: higher retrieval levels occur when info processing
and retrieval mood and/or interest levels match
Information Storage in Memory Processing Effects
Recall of numerically-coded information is better than verbal information
Surface-level processing (sensory) occurs when there is no analysis of meaning.
Consumer judgment error rate higher.
Meaning-level processing (semantic) implies analysis of meaning. Consumer
judgment error rate lower.
Learning Probability Theory
Learning formation of habits formed and changed through experience with
products or services

 Strength of habit depends upon the amount of reinforcement it receives

Probability models are used to predict the formation of habits:
Brand loyalty
Brand acceptance
Brand switching
New product forecasting
Learning Behavior Analysis
The relationship between marketers and consumers often resembles a
negotiation
Several behavior modification principles (BMPs) are used by marketers to
induce consumers to buy their products and services.
Classical conditioning learning results from a relationship between a
stimulus and a response
Pavlov and his salivating dogs: a conditioned stimulus (the ringing bell
before each feeding) results in a conditioned response (salivation)
Marketing applications
Higher order conditioning and celebrity advertising
Strength of the unconditioned stimulus
Number of pairings
Forward versus backward versus simultaneous conditioning
New versus existing products
Operant conditioning a process in which the frequency of occurrence of a
bit of behavior is modified by the consequences of the behavior
1. Especially relevant in low involvement purchases
2. Rewards & punishments AND consumer behavior
3. Generalization the tendency to respond in similar ways to similar stimuli.
4. Discrimination the process through which consumers restrict their range of
responses and attach themselves to a particular brand.
5. Modeling the process through which an individual learns a behavior by
observing the behavior of others and the consequences of this behavior.

Learning Cognitive Theory

Emphasis is on thinking rather than the doing aspects of learning.
Four stages:
Formulation of hypotheses (specific testable assumptions) about
products or brands
Exposure to evidence (passive or active)
Encoding of the evidence
Integration of earlier hypotheses with new information into beliefs
Familiarity, ambiguity, motivation
Cognitive Theory and Marketing
Strategies for market leaders (topdogs)
Reinforcement
Blocking
Explaining
Strategies for market underdogs
Disruption
Facilitating trial
Perception
Perception is the way in which an individual gathers, processes, and
interprets information from the environment.
Two views of consumer perception
Sensory perception
Gestalt theory of perception
Sensory Perception
It is governed by the five senses: sight, smell, sound, touch, and taste
It focuses on product specific sense attributes and how these are understood
and evaluated by consumers.

Factors Affecting Sensory Perception

Stimulus factors (examples)
Visual cues: color, shape, and size
Aural cues: tempo and pitch
Olfactory cues (taste + smell): sweet, bitter, salty, and floral
Tactile cues: soft, coarse, and silky
Individual Response Factors
Sensory acuity: the capacity to recognize and differentiate among
certain sensory cues; the limin
Sensory preferences: sensory product features are perceived and
evaluated based on those liked or disliked
Consumer expectation: affects how product features are likely to be
perceived/evaluated. When features match expectations this yields
more positive preference outcomes
Gestalt Theory of Perception
Gestalt principle: the whole adds up to more than the sum of its parts
People perceive form above all else
The form may remain constant even though some specific features of it may
change (color, tempo, etc.) variations on the same theme
Applications: size, actual/illusion of motion, bordering for ads or displays
while really the same
Factors Influencing Gestalt Perception
Stimulus factors: color and contrast, size, intensity, position, isolation, and
unity
Individual response factors:
cognitive set

interest, involvement, needs, values, and

How consumers Interpret Perceptions?

Categorization: the psychological process through which a consumer
compares the perception of a product with a mental representation of that
product in memory.
Analytic versus non-analytic (meeting or not meeting required
attributes to fit)
Marketing implications for new products or innovations
Consumer Attributions
It refers to the process through which people connect events and behavior
with causes.
Forms of attribution
Product perception (a product problem)
Self-perception (questioning oneself)
Person perception (questioning others motives)
Perceptions of Product/Service Quality
Perceived quality a perceptual outcome generated from processing product
or service features (benefits delivered) that leads the consumer to make
inferences about the quality of that product or service
Dimensions of perceived quality for durable goods: ease of use, versatility,
durability, serviceability, performance, and prestige
Perceived high quality product satisfaction
Risk Perception/Risk Reduction
It refers to a perceptual process and behavior outcomes generated from the
perception of risk in the purchase or a product or service
Components of risk:
Severity of consequences (how bad will it be)

 Uncertainty related to those consequences (what are the chances the

consequence will occur)
Risk reduction strategies: behaviors to reduce their perception of risk in
purchase situations
Price Perception
Consumers perceive a price as either high or low on the basis of a
comparison with an internal price (or referent price).
Price perceptions and the social judgment theory regions
Assimilation (acceptable) and contrast (too high or low)
Perceived Value
The trade-off between product benefits and product costs.
Perceived value = perceived benefits / perceived costs

MODULE-5
Basic Communication Model

Elements of the Communications Process

The Message Initiator (the Source)

The Sender

The Receiver

The Medium

The Message

The Target Audience (the Receivers)

Feedback - the Receivers Response

Issues in Credibility

Credibility of Informal Sources

Credibility of Formal Sources

Credibility of Spokespersons and Endorsers

Message Credibility

Endorser Credibility

Endorser credibility is important when message comprehension is low

Match must exist between product attributes and endorser attributes

Credibility is higher when endorsers demographic characteristics are similar

to those of target audience

Endorser credibility is not a substitute for corporate credibility

Barriers to Communication

Selective Perception

Wandering, Zapping, Zipping, and Channel Surfing

Combat with Roadblocking

Psychological Noise

Combat with repeated exposures, contrast in the copy, and teasers

Comprehensive Communication Model

Issues in Designing Persuasive Communications

Communications strategy

Media strategy

Message strategy

Communications Strategy

Perception/ Experience/ Memory Model of Advertising

Media Strategy

Consumer profiles

Audience profiles

A cost-effective media choice is one that closely matches the advertisers

consumer profile with the mediums audience profile.
Buyer Personalities and Advertising Strategies

Involvement Theory and Persuasion

The Elaboration Likelihood Model (ELM) proposes that marketers use the
central route to persuasion for high involvement products and the
peripheral route to persuasion for low involvement products
Issues in Message Presentation

Resonance-continuing to sound and ring ,causing reinforcement

Message Framing

One-sided Versus Two-sided Messages

Comparative Advertising

Order Effects

Repetition

Two-Sided Appeal
Emotional Advertising Appeals: Fear, Humor, Abrasive advertising, Audience
participation
IMPACT OF HUMOR ON ADVERTISING

Humor attracts attention.

Humor does not harm comprehension.

Humor is not more effective at increasing persuasion.

Humor does not enhance source credibility.

Humor enhances liking.

Humor that is relevant to the product is superior to humor that is

unrelated to the product.

Audience demographic factors affect the response to humorous

advertising appeals.

The nature of the product affects the appropriateness of a humorous

treatment.

Humor is more effective with existing products than with new

products.

Humor is more appropriate for low-involvement products and

feeling-oriented products than for high-involvement products.