~: Consumer Behaviour(Module) :~

2015

Q.1) Explain the role of ‘motive’ on purchase decision process.

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 onward for years.
Motivation is the driving force within individuals that impels them to action. 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.

Those influences or considerations which provide the impulse to buy, induce action or determine
choice in purchase of goods or services.

In simple words it is the reason why a consumer purchases a goods.

Different types of buying motives are:

Primary- Related to basic needs of human being which motivate the buyer to take a purchase
decision.

• Hunger

• Thirst

• Sleep
 • Shelter

• Entertainment

• Influenced by society where he is born and lives.

Secondary-

Emotional- Emotional motives imply the selection of goals according to personal or subjective
criteria. A feeling experienced by a customer through association with a product.

1. Love and Affection

2. Curiosity

3.Fashion

4.Pride and Prestige

5.Romance

6.Fear and many more

Rational- Rationality implies that consumers select goals based on totally objective criteria such as
size, weight, price, or miles per gallon.A conscious, logical reason for a purchase. A motive that
can be defended by reasoning or logical argument
1. Economy

2. Utility

3.Comfort & Convenience

4.Durability

5.Security

6.Maintenance and many more

Patronage-

1. Service

2. Special Discount

3. Location

4. Store loyalty

5. Friendliness

6. Habit and many more

Q.2) Discuss the role of ‘Reference Groups’ in buying decision process?

Each person in the society is not only the member of his or her family but the member of some
group or groups outside the family circle. These groups can be called as ‘reference groups’.
Reference groups are those groups which an individual identifies with to the extent that these
groups become a standard or norm which influences his or her behavior. Reference groups are a
social and professional group that influences the individual’s opinions, beliefs and aspirations. It
is one that which provides an individual with a sense of identity, accomplishment and stability.

Generally, a person refers to any one of the following types of reference groups in building his or
her behavior –

a) The groups that serve as comparison points: - here, the individual compares
himself/herself, his/her attitudes, his/her behavior and his/her performance with the group
of members.

b) Groups to which a person aspires to belong: - here, the individual aspires to be the
member of such group and imitates the behavior of that group including buying behavior.
 c) Groups whose social perspectives are assumed by the individual as a frame-work of
reference for his or her action:- here, an individual may adopt the views of the group
without becoming a member. A person need not be a professional sportsman to have the
outlook and opinion of a professional sportsman.

Reference Groups can and do have a tremendous influence on purchasing decisions. This is
evident in a number of ways, such as through roles. Everyone is expected to behave in a certain
way based on the reference group in which one’s belong to. Students acts like students. In
keeping with ideas, people will often modify their own behavior to coincide with group norms.
Reference group communicate through opinion leaders, who influence what others do, act and
buy. In the consumer world, this means that if a reference group purchases a product, those that
associate with the group likely will as well.

Q.3) Explain how the ‘Howard-Sheth’ model of consumer buying behavior distinguishes
three levels of decision making?

The Howard Sheth theory of buyer behavior is a sophisticated integration of the various social,
psychological and marketing influence on consumer choice into a coherent sequence of
information processing. John Howard was the first to introduce the difference between problem
solving beahaviour, limited problem solving and automatic response behavior. These are the
three levels of decision making:-

i) Extensive problem solving - It is the early stage of decision making in which the buyer has
little information about brands and has not yet developed a well defined and structured criteria
by which to choose among products.

ii) Limited problem solving – This is a more advanced stage where criteria are well defined but
the buyer is still undecided about which set of brands will best serve him. Thus the consumer still
experiences uncertainty about which brand is best.
iii) Routinized response behavior – Buyers have well defined choice criteria and also have strong
predispositions towards the brand. Little confusion exists in the consumer’s mind and he is ready
to purchase a particular brand with little evaluation of alternatives.

Q.4) Discuss the role of culture and sub-culture in shaping consumer behaviour.

Consumer buyer behaviour refers to the buying behaviour of final consumers- individuals and
households that buy goods and services for personal consumption. All of these final consumers
combine to make up the consumer market.

Consumer purchases are influenced strongly by culture, social, personal and

psychological characteristics. For the most part, marketers cannot control such factors, but they
must take them into account.

Cultural Factors: Cultural factors exert a broad and deep influence on consumer behaviour. The
marketer needs to understand the role played by the buyer’s culture, subculture and social class.

Role of culture in shaping consumer behaviour.

Culture is part of the external influences that impact the consumer. That is, culture represents
influences that are imposed on the consumer by other individuals. Every group or society has a
culture and cultural influences on buying behaviour, may vary greatly from country to country.
Failure to adjust to these differences can result in ineffective marketing or embarrassing
mistakes.

Marketers are always trying to spot cultural shifts in order to discover new
products that might be wanted. For example, the cultural shift toward greater concern about
health and fitness, especially among young urban women, has created a huge industry for health
and fitness services, exercises equipment and clothing, organic foods, and a variety of diets.

i. Culture exists to satisfy the needs of people within a society. It offers order, direction, and
guidance in all phases of human problem solving by providing tried and true methods of
satisfying physiological, personal, and social needs. Similarly, culture also provides insights as to
suitable dress for specific occasions (e.g., what to wear around the house, what to wear to school,
what to wear to work, what to wear to church, what to wear at a fast food restaurant, or a movie
theater). Cultural beliefs, values, and customs continue to be followed as long as they yield
satisfaction. In a cultural context, when a product is no longer acceptable because it’s related
value or custom does not adequately satisfy human needs, it must be modified.

ii. Culture is socially acquired We are not born with any cultural knowledge It is the society
which teaches an individual its various cultures and norms of behaving in the society Our society
plays a vital role in teaching its culture to an individual Sometimes people strictly follow their
culture only because of the fear of the society

iii. Culture is Dynamic to fulfill the need gratifying role; culture continually must evolve if it is
to function in the best interests of a society. The marketers must carefully monitor the socio
culture environment in order to market an existing product effectively or to develop promising
new products. The changing nature of culture means that marketers have to consistently
reconsider: Why consumers are now doing what they do? Who are the purchasers and the users
of their products? When they do their shopping? How and where they can be reached by the
media? What new product and service needs are emerging?

iv. Culture is Shared Culture is viewed as group customs that link together the members of the
society. Common language is the critical component that makes it possible for people to share
values, experiences, and customs. Social Institutions transmitting the element of culture and
sharing of culture Family: primary agent for enculturation Educational Institutions: imparts
learning skills, history, patriotism, citizenship and technical training. Religious Institutions:
Perpetuate religious consciousness, spiritual guidance, and moral training. Mass Media: wide
range of cultural values.

v. Culture is learned at an early age, we begin to acquire from our social environment a set of
beliefs, values, and customs that make up our culture. Anthropologists have identified three
distinct forms of cultural learning: 1. Formal learning: in which adults and older siblings teach a
young family member “How to behave”; 2. Informal learning: in which a child learns primarily
by imitating the behavior of selected others, such as family, friends, or TV stars. 3. Technical
Learning: Which teachers instruct the child in an educational environment about what, how and
why it should be done. Advertising can influence all three types of cultural learning's.

Role of sub-culture in shaping consumer behaviour.

Subculture can be defined as "a cultural group within a larger culture, often having beliefs or
interests at variance with those of the larger culture."

Sub Culture Categories Nationality Religion Geographic region Race Age Gender
Occupation Social class Ethnicity Examples Indian Hindu, Muslim, Christian Maharashtra,
Bihar, and Karnataka Brahmin. Kshitriya, Shudra Child, Teenager, Senior citizen Male, Female
Bus driver, mechanic, engineer. Lower, middle, upper. Similar values and customs.

Types of Subcultures:

Types of Subcultures Different subcultures are divided into various factors they are:- Age
Region Gender Social Class

1) Age Subcultures: Age Subcultures Consumers undergo predictable changes in values,

lifestyles, and consumption patterns as they move through their life cycle. Four Major Age
Trends:- Baby Youth Middle aged Elderly Consumer Behavior changes accordingly with the
change in the age trend

2) Regional Subcultures: Regional Subcultures Regional subculture is the culture practiced in

different states of a country People have distinct lifestyles resulting from variations in climate,
culture, and ethnic mix of people. Consequently, different product preferences exist.

3) Gender Subculture: Gender Subculture the Subculture based on Male-Female divide is known
as Gender Subculture. The needs and wants of men and women differ to a great extent.
Accordingly, their buying habits also differ
4) Social Class:

Social Class Human Societies are socially stratified the roles performed by various people are
valued differently Differentiation among roles and their relative evaluation leads to stratification
of society. Social Classes are easily identifiable market segments which can be reached with
relative ease since they have distinctively defined media habits. Consumer Behavior changes
with the change in the social class.

Q.5) Discuss the factors which may influence consumer decision making process?

Consumer behaviour refers to the selection, purchase and consumption of goods and services for
the satisfaction of their wants. There are different processes involved in the consumer behaviour.
Initially the consumer tries to find what commodities he would like to consume, then he selects
only those commodities that promise greater utility. After selecting the commodities, the
consumer makes an estimate of the available money which he can spend. Lastly, the consumer
analyzes the prevailing prices of commodities and takes the decision about the commodities he
should consume. Meanwhile, there are various other factors influencing the purchases of
consumer such as social, cultural, personal and psychological. The explanation of these factors is
given below.

1. Cultural Factors

Consumer behaviour is deeply influenced by cultural factors such as: buyer culture, subculture,
and social class.

Culture

Basically, culture is the part of every society and is the important cause of person wants and
behaviour. The influence of culture on buying behaviour varies from country to country therefore
marketers have to be very careful in analyzing the culture of different groups, regions or even
countries.
Subculture

Each culture contains different subcultures such as religions, nationalities, geographic regions,
racial groups etc. Marketers can use these groups by segmenting the market into various small
portions. For example marketers can design products according to the needs of a particular
geographic group.

Social Class

Every society possesses some form of social class which is important to the marketers because
the buying behaviour of people in a given social class is similar. In this way marketing activities
could be tailored according to different social classes. Here we should note that social class is not
only determined by income but there are various other factors as well such as: wealth, education,
occupation etc.

2. Social Factors

Social factors also impact the buying behaviour of consumers. The important social factors are:
reference groups, family, role and status.

Reference Groups

Reference groups have potential in forming a person attitude or behaviour. The impact of
reference groups varies across products and brands. For example if the product is visible such as
dress, shoes, car etc then the influence of reference groups will be high. Reference groups also
include opinion leader (a person who influences other because of his special skill, knowledge or
other characteristics).

Family

Buyer behaviour is strongly influenced by the member of a family. Therefore marketers are
trying to find the roles and influence of the husband, wife and children. If the buying decision of
a particular product is influenced by wife then the marketers will try to target the women in their
advertisement. Here we should note that buying roles change with change in consumer lifestyles.
Roles and Status

Each person possesses different roles and status in the society depending upon the groups, clubs,
family, organization etc. to which he belongs. For example a woman is working in an
organization as finance manager. Now she is playing two roles, one of finance manager and
other of mother. Therefore her buying decisions will be influenced by her role and status.

3. Personal Factors

Personal factors can also affect the consumer behaviour. Some of the important personal factors
that influence the buying behaviour are: lifestyle, economic situation, occupation, age,
personality and self concept.

Age

Age and life-cycle have potential impact on the consumer buying behaviour. It is obvious that
the consumers change the purchase of goods and services with the passage of time. Family life-
cycle consists of different stages such young singles, married couples, unmarried couples etc
which help marketers to develop appropriate products for each stage.

Occupation

The occupation of a person has significant impact on his buying behaviour. For example a
marketing manager of an organization will try to purchase business suits, whereas a low level
worker in the same organization will purchase rugged work clothes.

Economic Situation

Consumer economic situation has great influence on his buying behaviour. If the income and
savings of a customer is high then he will purchase more expensive products. On the other hand,
a person with low income and savings will purchase inexpensive products.
Lifestyle

Lifestyle of customers is another import factor affecting the consumer buying behaviour.
Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her
surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole
pattern of acting and interacting in the world.

Personality

Personality changes from person to person, time to time and place to place. Therefore it can
greatly influence the buying behaviour of customers. Actually, Personality is not what one
wears; rather it is the totality of behaviour of a man in different circumstances. It has different
characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to
determine the consumer behaviour for particular product or service.

4. Psychological Factors

There are four important psychological factors affecting the consumer buying behaviour. These
are: perception, motivation, learning, beliefs and attitudes.

Motivation

The level of motivation also affects the buying behaviour of customers. Every person has
different needs such as physiological needs, biological needs, social needs etc. The nature of the
needs is that, some of them are most pressing while others are least pressing. Therefore a need
becomes a motive when it is more pressing to direct the person to seek satisfaction.

Perception

Selecting, organizing and interpreting information in a way to produce a meaningful experience

of the world is called perception. There are three different perceptual processes which are
selective attention, selective distortion and selective retention. In case of selective attention,
marketers try to attract the customer attention. Whereas, in case of selective distortion, customers
try to interpret the information in a way that will support what the customers already believe.
Similarly, in case of selective retention, marketers try to retain information that supports their
beliefs.

Beliefs and Attitudes

Customer possesses specific belief and attitude towards various products. Since such beliefs and
attitudes make up brand image and affect consumer buying behaviour therefore marketers are
interested in them. Marketers can change the beliefs and attitudes of customers by launching
special campaigns in this regard.

Q.6) What do you mean by attitude? Schematically explain the tri-component model of
attitude.

An attitude may be defined as a feeling of favourableness / unfavourableness that an individual

has towards an object (be it a person, thing or situation).

It is learned pre-disposition to exhibit and act based on evaluation resulting in a feelings of like
or dislike towards an object.

The tri-component model of attitude:

The most influential and widely used model is called Tri-Component Model. Psychologists have
proposed various theories and models to explain what attitudes are, how they are formed and the
circumstances under which they may change. This model is made up of three potential parts.

 Cognitive
 Affective
 Co native

Cognitive:

Knowledge and perceptions acquired. Through direct experience and information from various
sources.
Example: When a person hears about Pencil computer, they may be think that the computer is
operated by pencil or the computer is similar to a pencil. This theory is totally brainstorming
based.

Affective:

Emotions and feelings about the object.

Example: When a person talking about Pencil computer with other person, they may be think
that while the computer is about pencil sized, then is the computer is consisting of all features or
not? And is the computer is of highly configured or not?

Co native:

Action tendencies toward the object.

Example: When a person see that the other people break-down his/ her computer, then he/ she
also break-down his/ her computer but it actually shouldn’t be because you are not an expert to
assembly the computer.

Q.7) Who are opinion leaders? How do they influence consumer decision process?

An opinion leader is a well-known individual or organization that has the ability to influence
public opinion on the subject matter for which the opinion leader is known. Opinion leaders can
be politicians, business leaders, community leaders, journalists, educators, celebrities, and sports
stars.

Opinion leaders play their role when people look for products to purchase, use and to evaluate
before they buy or dispose of products and services in which they expect will satisfy their wants
and needs. There are two different types of consumers, the ones that buy for themselves, for gifts
or for their house. Next, they purchase for their organizational needs including businesses for
profit or non-profit, schools, hospitals, etc. (Schiff man & Kanuk, 2007). At First, others can
have an influence on the consumer’s decision-making process such as friends, relatives and there
are occurrences that influence the consumers’ acceptance. Next is word-of-mouth by the opinion
leader, who is considered to be the first person who influences the second person by giving their
opinion on a product. Further the receiver is the person who accepts the knowledge from the
opinion leader. People who look for new products and seek out information are called the
opinion seekers (Schiff man & Kanuk, 2007). The opinion leaders can give both advice and
proper information when they tell the adult decision-maker; they can purchase a product that has
higher quality. The present paper focuses on how marketers can use relationship marketing
through opinion leaders in their marketing techniques in order to reach consumers in a short
amount of time to build customer relationship and retain customer loyalty.

Q.8) When do motivational conflict occur explain the different types of such conflicts that
may occur, with examples.

->A motivational conflict is a situation in which a person is driven to make a decision based on
conflicting goals. All people are driven by positive and negative reinforcement. These form the
basis of individuals' motivations to act and make decisions. Marketers can take advantage of
these situations by providing solutions to these conflicts. These situations can range from social
and status problems to physical needs. When marketers are able to identify these conflicts, they
have the potential to offer the solution. In turn, this increases the interest in a marketer's product
or service offered, and makes for an effective marketing tool.

Types of motivational conflicts

 Approach-approach conflicts
 Approach-avoidance conflicts
 Avoidance-avoidance conflicts

Let’s explain all these motivational conflicts.

 Approach-approach conflicts

The approach-approach conflict is when there's conflict within a person where he or she needs to
decide between two appealing goals. The conflict is typically resolved when there's movement
towards one of the goals. This makes it easier to make the final decision.
Example-Car - Your car is about to give out and you're ready to buy a new one. You've been
researching and have narrowed it down to two options. One has more trunk space. Another has a
more appealing design. Again, you have approach-approach conflict. You need to make a
decision between two cars that are both appealing for different reasons.

 Approach-avoidance conflicts

Approach-avoidance conflict occurs when an individual is faced with a decision to pursue or

avoid something that has advantages and disadvantages. This form of conflict involves only one
goal. The name comes from the advantages of the goal making the person want to approach the
goal and the disadvantages making him or her want to avoid it.

Example- Promotion - Your boss recently approached you and offered you a promotion. The
new position comes with a $10,000 raise and a new title. However, you also learn that you will
be required to work an additional ten hours per week and travel out of town one weekend per
month. Now you have conflict going on in your mind. You aren't sure what to do. There are both
advantages and disadvantages involved in this single goal. This is approach-avoidance conflict.

 Avoidance-avoidance conflicts

The avoidance-avoidance conflict is one of the three possible conflicts that accompany a
decision-making situation. The avoidance-avoidance conflict refers to making a decision
between two equally undesirable choices. A simple example of this could be making a decision
between doing a homework assignment and doing housework. This type of conflict would
normally be settled by an assessment of the relative importance of the two tasks.

Example- A man may dislike his job intensely but fear the threat of unemployment if he quits. A
conflict between a need and a fear may also be avoidance- avoidance conflict.
Q.9) TECHNIQUES ADOPTED TO CARRY OUT MOTIVATIONAL RESEARCH

INTRODUCTION:
Interest in consumer attitude measurement now seems to be at an all- time peak. Acknowledge of
attitudes helps the marketer predict consumer reactions to product sand to advertising messages.
Motivation Research ³is a term used to describe the application of psychiatric and psychological
techniques to obtain a better understanding of why people respond as they do with products,
advertisements and various other marketing situations.´ Motivation Research attempts to gather
information buried in the unconscious mind of the consumer.
The biggest problem in Motivation Research is that direct approaches generally do not work. The
researcher cannot simply go up to a consumer and ask him why he prefers one product brand
over another and expect to get a correct answer. That’s why we have to follow some techniques.

I. BORROWING FROM PSYCHOLOGY:

In borrowing from the psychological clinic, an assemblage of features has been adopted without
much regard for their appropriateness to the particular marketing research situation. These
features include:

1. The aim of diagnosing consumer motives rather than past consumer actions.

2. The aim of diagnosing consumer motives of which the consumer himself is unaware.

3. The aim of diagnosing consumer motives, attitudes, intentions without the consumer being
aware that this is being done.

4. The aim of assessing the respondent's "product image," "image of the typical user,"
"phenomenological field," "idiosyncratic perspective," etc.

5. The introduction of biological and socially unacceptable motivational considerations such as

sex, toilet-training, and nursing as motivational residues affecting consumer choice. Greater
attentions to selfishness, greed, envy, prestige, sadism, love of violence, etc.

6. The employment of free-response, open-ended, unstructured interviews.

7. The shift of interviewing effort so that more time is spent on fewer respondents.

8. The shift of balance between preparation and analysis effort, so that more time is spent on
analyzing responses and less on preparing questions.

9. The reduction o£ the proportion of interviewing and analysis effort which can be delegated to
conscientious but uninsightful (uninspired, unindoctrinated) clerical workers.

10. The virtual abandonment of the effort to specify the frequency of given actions, motives, and
attitudes in the consumer population, and the substitution of the more modest goal of learning
about some of the motives that at least occasionally occur.

In the shift to "motivation research" the traditional structured survey methods were discarded
without any serious attempt to modify them to ask the new questions. It is the purpose of this
article to show that some of the insights on human beings turned up by the newer techniques
might also be found through a more imaginative application of the older structured techniques
which lend themselves better to controlled samples and to the type of interviewers and data
analysts readily available. At the very least, the authors feel that the more traditional methods
can be used to extend and better confirm the findings obtained by the newer techniques.

II. INSTANT-COFFEE STUDY:

One of the classics in motivation research is the study by Mason Haire. He reported that direct
questions on why people did not use instant coffee indicated a dislike of the flavor. Haire then
developed a Thematic-Apperception-Test type of approach to the problem. Two groups of fifty
people each were shown shopping lists. One group was shown a shopping list which included
instant coffee on it; the other group was shown the same list except that drip ground coffee
replaced instant coffee. Respondents were asked to describe the housewife who made up the
shopping list. From a comparison of the answers, Haire drew conclusions about what people
thought of housewives using instant coffee. Although Haire does not describe the field work and
sampling methods used, it would appear that the usual difficulties of motivation research were
encountered. It would be difficult to get cooperation from a controlled sample; field work would
have to be handled by a specially trained force, would be slow and costly; and tabulation and
analysis would be laborious. In the present study* data on what people think of housewives who
use instant coffee were secured through a structured, more direct type of questioning. The
comparison is not precise since Haire's study was made prior to April, 1950, apparently in the
Bay Area of California, while the present study was made in Chicago in February, 1955.
Nevertheless, the results are surprisingly similar and suggest that further efforts along the line of
using more of the structured type of approach might be productive.

Study design:

The sample in the present study was made up of housewives (N = 199) selected by probability
methods from selected Census tracts in Chicago. The questionnaire consisted essentially of three
questions:

(1) "Have you prepared coffee in the last week?" (If yes):

(2) "The last time you prepared coffee, which method did you use—percolator, drip method,
vacuum method, instant coffee, or some other method?"

(3) "Now I would like to read off a list of different types of people. After each one, will you tell
me whether you think that person prepares coffee by one of the regular methods or by using
instant coffee?" (The interviewer then read off such types of individuals as the best cook you
know, the poorest cook you know, a thrifty housewife, a housewife who is not thrifty, a lazy
housewife, a housewife with lots of energy, an elderly single woman, a widow living on a small
pension, the wife of a business executive, and a married woman who has a job outside the home.
A total of nineteen "types" were read to respondents.)

These are questions that could be handled by the typical field interviewer under conditions
permitting normal sampling procedures and routine tabulation.

Haire found a large difference between users and non-users of instant coffee on the question of
the poor cook. Only 16 per cent of the users associated instant coffee with a poor cook, but 55
per cent of the non-users did. In the present study, comparable percentages were 42 per cent and
52 per cent for the poor cook, and 95 per cent and 83 per cent for the woman who dislikes
cooking. The latter data show less difference between the two groups than do Haire's. Results
relative to the housewife who is a good planner and who is interested in her family are similar in
the two studies. On the question of whether or not women thought instant coffee users are lazy,
Haire found a difference of opinion between the two groups (19 per cent and 39 per cent); but in
the present study practically no difference showed up (80 per cent to 86 per cent).

III. HOT-CEREAL STUDY:

The authors have used approaches similar to the one described above on several other occasions.
Unfortunately data from "identical" studies using the newer motivation research techniques are
not available and, thus, no comparison can be made as was done with Haire. It is thought,
however, that a brief report of one such study will be of some value since it might suggest
additional ways of using a structured approach to certain motivational research problems.

One part of a hot-cereal study was designed to obtain a stereotype of the person who eats hot
cereal. The following question was asked of over 1,200 respondents:

"Now we'd like to find out what kind of people you think eat hot cereal the most. For each of the
following groups indicate whether you think they eat a lot of hot cereal, a little hot cereal, or
practically no hot cereal." (Interviewers then read off such types of persons as city people,
farmers, 'teen-age girls, 'teen-age boys, men, women, children, doctors, lawyers, airplane pilots,
and elderly people.)

Most respondents had a stereotype of the person who eats hot cereal. Definite patterns
developed. Thus, about two thirds of the respondents believed that children, farmers, athletes,
poor people, and elderly people eat a lot of hot cereal. Over half thought that movie stars ate
practically none, and one-third thought the same of rich people and 'teen-age girls. Doctors,
lawyers, and airplane pilots are the ones for whom the most "don't knows" were given. Males are
thought to eat more hot cereal than females. It is considered to be good for those doing physical
work. Significant regional differences were found, with the South having the most favourable
attitude (each type of person is thought to eat more) and the Northeast being the least favourable.
There was little difference by city size, but income did appear to influence results. Note that this
question, although structured, tapped the respondent's "phenomenological field" of "view of the
world." The respondent's product image and image of the typical user has been delineated.
Note also the degree of indirection or disguise involved: the respondent has not been asked to
report on his own attitudes and reasons for cereal buying—rather he has been asked to report on
the nature of the external world as he sees it. These invaluable features of the typical

Projective technique is thus, in part at least, available in this structured format which is
appropriate for use with large-scale opinion sampling.

IV. INFORMATION AND MISINFORMATION TESTS:

The questions about hot-cereal usage in various groups were in a sense factual; that is, they
asked the respondents about matters for which "right" answers potentially existed. If unconscious
attitudes are of interest, they can be diagnosed by the direction of the wrong answers as well as
by the selectivity of the right answers in a person's responses to a bona fide information test. The
reasoning here is that these unconscious attitudes are very often "projected" into the biases in
what a person regards as facts. In the hot cereal study, several questions of this more explicitly
informational nature were employed. The general order was as follows:

"How much do you think it costs for the hot cereal alone in an average bowl of cereal such as
you'd serve for breakfast?

"Which of the following cereals do you think costs more per serving than a hot cereal and which
costs less?"

"Do Corn Flakes cost more or less than hot cereal?"

"Do Wheaties cost more or less than hot cereal?"

"Do Cheerios cost more or less than hot cereal?"

Questions similar to the last one above were asked on the vitamin quality, the protein content,
and the fattening aspects of hot cereal versus selected brands of cold cereal. As a result of these
questions, certain interesting and useful findings were obtained. For example, nonhot cereal
users (younger age groups living in the larger cities) exaggerated the costs for an "average" bowl
of hot cereal. With respect to perceived vitamin content, differences were found between users,
regions, and city-size groups. Thus, the larger the city size, the better was the vitamin rating for
dry cereals. These structured questions and others focused more directly on motives were judged
in this case to have provided evidence on the consumer product and user image comparable to,
but more precise than, what would have been provided by more "typical" research procedures.

V. SENTENCE COMPLETION TEST:

In the sentence completion method, respondents are given incomplete sentences and asked to
complete the thought. These sentences are usually in the third person and tend to be somewhat
ambiguous.

For example, the following sentences would provide striking differences in how they were
completed depending on the personality of the respondent:

"A beach vacation is……….

"Taking a holiday in the mountains is…….."

"Golfing is for……."

"The average person considers skiing………"

"People who visit museums are…………….."

Generally speaking, sentence completion tests are easier to interpret since the answers provided
will be more detailed than in a word association test. However, their intent is also more obvious to the
respondent, and could possible result in less honest replies.

A variant of this method is the story completion test. A story in words or pictures is given to the
respondent who is then asked to complete it in his/her own words.
Q.10) Compare & contrast the various DECISION RULES

These are generally referred to as information processing strategies. These are procedures that
help consumers to evaluate various options and reduce the risk of making complex decisions by
providing the guidelines. Decision rules have been broadly classified into two categories : 1.
Compensatory Decision Rules : Consumers evaluate brand or model in terms of each attribute
and computes a weighted score for each brand. The computed score reflects the brand‘s relative
merit as a potential purchase choice. The assumption is that consumer will select the brand that
scores highest among alternative brands. The unique feature of this rule is that it balances the
positive evaluation of a brand on one attribute to balance out a negative evaluation on some other
attribute. For example, positive attribute like high fuel efficiency is balanced with the negative
evaluation of high maintenance cost. 2. Noncompensarory Decision Rules: In contrast to the
above rule noncompensatory rules do not allow consumers to balance positive evaluation of a
brand on one attribute against negative evaluation on some other attribute. There are three types
of noncompensatory rules. Conjunctive Decision Rule : In conjunctive decision rule the
consumer establishes a different, minimally acceptable level as a cut off point for each attribute.
In this the option is eliminated for further consideration if a specific brand or model falls below
the cut off point on any attribute. Disjunctive Rule : It is the ‗mirror image‘ of conjunctive rule.
Here the consumer establishes a separate minimally acceptable cut off level for each attribute. In
this case if an option meets or exceeds the cut off establishes for any one attribute it is accepted.
Lexicographic Decision Rule : In this rule the consumer initially ranks the attributes in terms of
perceived relevance or importance. Later he compares different alternatives in terms of the single
attribute that is considered most important. On this top ranked alternative, regardless of the score
on any other attribute, if one option scores sufficiently high it is selected and the process ends.

Q.11) Compare and Contrast consumer buying decision in various levels of involvement

A consumer who is highly involved with a product would be interested in knowing a lot about it
before purchasing. Hence a consumer reads brochures thoroughly, compares brands and models
available at different outlets, asks questions, and looks for recommendations. Thus consumer
involvement can be defined as heightened state of awareness that motivates consumers to
seek out, attend to, and think about product information prior to purchase.

There are few factor that influence the consumer involvement in buying the various products or
services decision. Some of them are:-
a) Personal
b) Product
c) Situational

Personal – To extent the consumer involvement in various products or services self esteem, need
and the values are the three things that are needed. The more product
image, the value symbolism inherent in it and the needs it serves are fitting
together with the consumer self- image, values and needs, the more likely the consumer is to feel
involved in it.

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

Situational Factors - The situation in which the product is brought or used can generate
emotional involvement. The reason for purchase or purchase occasion affects involvement.

There are two types of consumer involvement are there in the consumer buying decision.
a) Situation
b) Enduring

Situation Involvement – Situational involvement is temporary and refers to emotional feelings of

a consumer, experiences in a particular situation when one thinks of a specific
product.

Enduring Involvement - Enduring involvement is persistent over time and refers to feelings
experienced toward a product category across different situations. For example, holiday-
makers renting a resort for their trip are highly involved in their choice, but their
involvement is temporary.

The contrast between situational and enduring involvement is important. When

marketers measure involvement they examine the extent to which it can be
induced by the product or selling situation. After noticing the type of
involvement they are facing, marketers work to control products or selling
situations.

Involvement with the product makes consumers process product-related

information more readily. This information is processed thoroughly, hence, it is
retained for a longtime.
Customers who are highly involved tend to search for information and shop
around more when compared with low involvement customers. For example, the
customer who is highly involved with cars and thinks about buying it is likely to
gather information. The consumers are usually sees for alternative models to figure the
advantages and
disadvantages of each products and services. The more they are involved, the more they learn
about the alternatives with in that category. One such behaviour is to shop around, where they
visit various outlets and talk to sales people. The customers of this kind should be encouraged
buy retailers to visit the outlets to know, and compare various models to meet
information needs.

Q.12) Write short notes on:-

(1) Theory of Reasoned Action (5 marks)

The theory of Reasoned Action was developed by Martin Fishbein and Icek Ajzen as an
improvement over Information Integration theory. There are two important changes. First,
Reasoned Actions adds another element in the process of persuasion, behavioral intention.
Rather than attempt to predict attitudes, as does Information Integration theory. Reasoned Action
is explicitly concerned with behavior. However, this theory also recognizes that there are
situations (or factors) that limit the influence of attitude on behavior.

For example, if our attitude leads us to want to go out on a date but we have no money, our lack
of money will prevent our attitude from causing us to go on a date. Therefore, Reasoned Action
predicts behavioral intention, a compromise between stopping at attitude predictions and actually
predicting behavior. Because it separates behavioral intention from behavior, Reasoned Action
also discusses the factors that limit the influence of attitudes or behavioral intention on behavior.

(2) Attitude towards the object model (5 marks)

The attitude-toward-object model states that a consumer’s attitudes towards a product or service
offering or a brand is a function of the presence or absence of certain attributes, and the
corresponding evaluation. Attitude is function of evaluation of product -specific beliefs and
evaluations. In other words, while evaluating an offering, the consumer’s attitude would be based
on the presence of attributes, and the aggregation of a consumer’s belief about each of these, the
overall evaluation of the relevance of each of these attributes in providing the necessary gains
and benefits.

For example, let us take the example of Complan as a health drink. A lady wants her children to
grow faster, taller and healthier. She would have a positive attitude towards Complan, if it
contains vitamins and minerals, and she gives value to such vitamins and minerals. The model is
depicted in the form of the following equation:

Attitude0 = N ∑ i=1 bi ei

where Attitude0= the overall affect for or against the object

bi = the strength of the belief that the object contains the i th attribute (e.g., the likelihood that
Complan is a nutritious health drink with vitamins and minerals)

ei = the evaluative criteria associated with the i th attribute (e.g., how "good" or "bad" is a
nutritious health drink with vitamins and minerals)

∑ is indicative of the N salient attributes over which the bi and ei combinations are summated.

Thus, consumers would tend to have favorable attitudes toward such offerings and/or brands
that they have sufficient amount of attributes that are deemed important and evaluated as
positive. On the other hand, they would have unfavorable attitudes towards offerings and/or
brands which do not have the desired attributes or have many negative attributes.

Q.13) What is post-purchase cognitive dissonance? How can a marketer reduce such
dissonance? (5 marks)

Post Purchase Cognitive Dissonance:

Post Purchase Cognitive Dissonance is the phrase we give to the state of unease which exists in
the customer’s mind after buying a product or service. You buy a car and then you think you
paid too much for it? Whether you work in sales or marketing – or simply starting out on a
romantic relationship – honesty from beginning to end creates loyalty. No one wants to buy a car
and then find out that had they bought online they could have saved £3000. No one wants to chat
up up the beautiful blonde or the tall dark and handsome guy only to find out later they have a
string of children by several relationships and owe thousands in credit card debts. So it is that
consistent truth delivers credibility and long-lasting – and profitable – loyalty.

How can a marketer reduce such dissonance:

Dissonance-Reducing Buying Behavior:

Just like complex buying behavior, consumers with Dissonance-Reducing Buying Behavior have
high amounts of involvement. However, buyers in this behavioral situation are perceiving very
few differences among the brands they are selecting products from. The key word here is
perceiving. There may be many real differences between the different brands, however the
buyer's beliefs about the other brands are that there are very similar or essentially the same. Let's
examine a common product such as paint.

Choosing paint for the interior of your house is an extremely expressive process. The colors a
person may choose are varied and will always vary from person to person depending on their
highly personal tastes. Paint can also be expensive, with some brands costing over $20 per
gallon. When a consumer finds a group of brands in a determined price range, their
understanding of the difference between brands may be very low. As a result, a consumer may
do some research, but in the end, they may be swayed by price or convenience of purchase in the
end.

Do a bit of research: Before you buy – okay, that’s not always possible, but don’t just
believe the marketing rubbish you read. In my defense, the restaurant looked quite swish and
the menu was good, but if Iwould looked at a couple of online reviews I would have thought
twice about ordering a takeaway.
Don’t get too carried away with your expectations: When people say “Sky+ changed my
life”, they are exaggerating and shouldn’t be taken literally – as in if you were to cross the
road today and walk down the other side of the road to normal you will have changed
something in your life – not found the answer to a happy (gastric flu free) existence.

Just when you’re ready to buy: Don’t. Take a break, go and get a coffee. Give yourself a chance
to talk yourself out of it.
Q.14) Explain your attitude towards any brand of your choice based on the tri-component
attitude model. Be sure to isolate each component in your answer.

Tri-component Attitude Model towards KFC & McDonald's.

There are three components of attitudes are identified by researchers n these are; Cognitive
Component, Affective Component, Conative Component. Three three components are
interrelated and integrate to form an attitude of a person toward any product or service in
consumer scenario.

Cognitive Component:
1.Cognition is basically making decisions going through a thinking process where to take food
either in McDonald's or in KFC.

2. Before choosing any of these brands, we will gather information through online, our own past
experience and other sources.

3. Thinking process can occur on the basis of knowledge and perceptions in KFC & McDonald's
which is already existing in our mind.

4. So we will judge which brand will be the best for having food weather it is KFC or
McDonald's.
Affective Component:
1. I may prefer KFC over McDonald's as KFC people are more into charitable social work .

2. I may also prefer KFC because of the food quality and emotions attached with it.

3. KFC is a good place to take food with family and friends because of the service it provides.

4. I prefer KFC compare to McDonald's because of more availability in Kolkata.

Conative Component:
1. I feel happy to have food in KFC compare to McDonald's.

2. My intentions towards KFC brand is positive, so my attitude towards this brand would be
positive.

3. I also prefer KFC because of the friendly behaviour of their employees compare to
McDonald's.

4. Whenever I purchase any product online I also get a discount voucher of KFC free with that
product, which also attract me towards the KFC brand.

Q15). Explain the importance of understanding target market’s attitude towards your
brand. What marketing strategies can you adopt in the context of attitude? (10 marks)

Answer: A marketing strategy is selecting and describing one or more target markets that a
company's product or service will identify for business opportunities. A target market is a
defined group most likely to buy a company's products or services.
In order to be an effective and efficient business, you should seek out your target customer
market. There are three main issues to consider when determining your target market:

Market segmentation:

Market segmentation involves grouping your various customers into segments that have common
needs or will respond similarly to a marketing action. Each segment will respond to a different
marketing mix strategy, with each offering alternate growth and profit opportunities.
 Some different ways you can segment your market include the following;

 Demographics which focuses on the characteristics of the customer. For example age,
gender, income bracket, education, job and cultural background.

 Psychographics which refers to the customer group's lifestyle. For example, their social
class, lifestyle, personality, opinions, and attitudes.

 Behaviour which is based on customer behaviour. For example, online shoppers,

shopping centre customers, brand preference and prior purchases.

 Geographical location such as continent, country, state, province, city or rural that the
customer group resides.

Targeting:

After segmenting the market based on the different groups and classes, you will need to choose
your targets. No one strategy will suit all consumer groups, so being able to develop specific
strategies for your target markets is very important.

There are three general strategies for selecting your target markets:

 Undifferentiated Targeting: This approach views the market as one group with no
individual segments, therefore using a single marketing strategy. This strategy may be useful
for a business or product with little competition where you may not need to tailor strategies for
different preferences.

 Concentrated Targeting: This approach focuses on selecting a particular market niche on

which marketing efforts are targeted. Your firm is focusing on a single segment so you can
concentrate on understanding the needs and wants of that particular market intimately. Small
firms often benefit from this strategy as focusing on one segment enables them to compete
effectively against larger firms.
 Multi-Segment Targeting: This approach is used if you need to focus on two or more well
defined market segments and want to develop different strategies for them. Multi segment
targeting offers many benefits but can be costly as it involves greater input from management,
increased market research and increased promotional strategies.

Prior to selecting a particular targeting strategy, you should perform a cost benefit analysis
between all available strategies and determine which will suit your situation best.

Positioning:

Positioning is developing a product and brand image in the minds of consumers. It can also
include improving a customer's perception about the experience they will have if they choose to
purchase your product or service. The business can positively influence the perceptions of its
chosen customer base through strategic promotional activities and by carefully defining your
business' marketing mix.
Effective positioning involves a good understanding of competing products and the benefits that
are sought by your target market. It also requires you to identify a differential advantage with
which it will deliver the required benefits to the market effectively against the competition.
Business should aim to define themselves in the eyes of their customers in regards to their
competition.

Q.16) Discuss Behavioral and Cognitive learning Theories. Mention the marketing
strategies that you can adopt for each type of these theories.

Answer: - Behavioral learning theorists believe that learning has occurred when you can see
changes in behavior. The behavioral learning model learning is the result of conditioning. The
basis of conditioning is that a reward following a desirable response acts as a reinforce and
increases the likelihood that the desirable response will be repeated. Reinforcement is the core of
the behaviorist approach. Continuous reinforcement in every instance of desirable behavior is
useful when a behavior is being introduced. Once a desired behavior is established, intermittent
reinforcement maintains the behavior. Behaviorist theory approaches are frequently used in
weight loss, smoking cessation, assertiveness training, and anxiety-reduction programs. The
importance of regularly and consistently rewarding desired behavior immediately and not
rewarding undesirable behavior is crucial to the success of a behaviorist approach to learning.
Learning is broken down into small steps so that the person can be successful.

Cognitive learning theorists believe that learning is an internal process in which information is
integrated or internalized into one’s cognitive or intellectual structure. Learning occurs through
internal processing of information. From the cognitive viewpoint, how new information is
presented is important. In the first , or cognitive phase of learning, the patient learns the overall
picture of what the task is and the sequences involved. In the second, or fixation learning phase,
the learner begins to gain skill in performing the task. Whether a physical task is learned as a
whole or part by part depends on its complexity.

Behavioral Marketing Strategy

As opposed to direct marketing, where advertisers send the same message to everyone and
expect a large portion of those people to reject the message behavioral marketing takes online
information and uses it to tailor the message to the user.

We will use web analytics, computer applications and cookies, browsing and search history, and
IP addresses, to create user profiles of individual consumers. With that information, the website’s
ad server will then generate relevant and targeted content or advertisements that appeals to their
interests. For example, those who visit the automotive section of a general news site will start
seeing car ads as they browse other sections of that site and those ads will change and become
more “targeted” over time.

Consider Facebook, where users share a variety of information every day -- not only about their
likes and interests, but about their friends as well. That information is used not to connect
consumers to ads in areas of interest, but also to create an online peer pressure of sorts—“Ram
likes this,” so why shouldn’t you? The ads targeted at consumers watching YouTube videos are
also often the result of behavioral marketing. A consumer's past likes, IP location, and even
comments are taken into consideration when presenting the “right” ad for their tastes and
location.
This can be a strategy regarding the application of Behavioural Theory of Learning into
Marketing.

Cognitive Marketing Strategy

In the person-environment interaction, human beliefs, ideas and cognitive competencies are
modified by external factors such as a supportive parent, stressful environment or a hot climate.
In the person-behavior interaction, the cognitive processes of a person affect his behavior;
likewise, performance of such behavior can modify the way he thinks. Lastly, the environment-
behavior interaction, external factors can alter the way you display the behavior. Also, your
behavior can affect and modify your environment. This model clearly implies that for effective
and positive learning to occur an individual should have positive personal characteristics, exhibit
appropriate behavior and stay in a supportive environment.

Q.17) Different types of consumer memory ? What advertising tactics can you adopt to
achieve short term and long term memory for your brand?

1st part: There are three types of memory that play an integral role in how people will remember
your brand.

1.Sensory Memory
2. Short-Term Memory (STM)
3. Long-Term Memory (LTM)

Sensory Memory

Sensory memory refers to how we remember the way things look, feel, smell, or taste. Typically,
our brain stores this type of information quickly, as if it were taking a snapshot of the event using
your senses as the camera.

For instance, when you touch a hot coal and burn your finger, your brain takes a snapshot of the
look of the coal and the feeling in your finger after touching it. In this case, the information is
pretty important, especially since there is pain and damage to the body. Your brain will then
quickly file this away for future reference.
Many advertisers appeal to your senses by showing you something you may have had a positive
experience with. For example, Jack In The Box will appeal to your memory of showing you a
burger. They know that if they repeatedly flash the image of their meals on screen it is possible
you will end up with a craving for their food.

Another example of an advertiser appealing to your sensory memory is a recent Chipotle video
that promoted an iOS application. The video uses the famous Willy Wonka and The Chocolate
Factory song that most people are very familiar with. This song might bring out certain emotions
that will allow the viewer to remember the advertisement later on if the song plays again.

For copy to be effective in the absence of photos, copywriters need to appeal to as many senses
as possible. This will allow the reader to access any memories that might be associated with the
advertisement.

Recent examples from an article in Entrepreneur Magazine describe how appealing to a person’s
sense would be more effective by comparing two very different headlines that advertise the same
service

Short-term Memory

Another type of memory, short-term memory, temporarily holds information actively being used.
You remember what you need for only for a small amount of time due to the duration and
capacity limits of short-term memory.

Repetition has a great effect on memory. When your brain repeatedly experiences the same
event, it is more likely to deem the information important. In Advertising 101, it is taught that
most people need to hear the name of a product a minimum of seven times to remember it.

However, there are instances where repetition in a short amount of time can lead to storage in the
short-term memory bank. For example, when someone tells you a phone number and you repeat
it to yourself until you reach the phone, there is a high chance that you will forget the number as
soon as the other end starts to ring. This type of memory will probably not be a benefit to
advertisers on a grand scale.
Long-term Memory

The third type of memory, long-term memory, is a complex human attribute. Aside from the
primary abilities it gives us, it allows us to store information almost permanently with virtually
unlimited capacity.

In a recent radio advertisement pushing safety, Grainger uses the science behind memory as part
of their hook. They begin by telling you “the average person needs to hear something at least
three times to remember it.” Throughout the commercial, they repeat several words. The words
repeated are Grainger and Safety. The commercial, for a brand that we may not necessarily have
a past experience with, repeatedly says, “Grainger, Grainger, Grainger. Safety, Safety, Safety.”
The commercial might be annoying, but it is also effective for many to remember the
commercial later on.

A study was conducted at Cornell University’s School of Hotel Administration to determine if an

advertising campaign would create brand loyalty among those that were exposed to an
established spokesperson or character since an early age.

In their study, the researchers refer to MetLife’s use of the peanuts characters to in order to help
expose their brand to children demonstrating that “early exposure to adult-oriented products can
create preferences later in life…using an established spokesperson or character has the advantage
of having an already well-defined schema. Whether or not his rich memory network benefits the
advertiser depends on how well a linkage between the brand and the spokesperson can be
created.”

This study also suggests “the move from a short-term to long-term outlook has formed the
underpinnings of the relationship-marketing paradigm. When a consumer has a particularly
strong relationship to a brand, he or she can move beyond preference to the formation of a strong
emotional attachment.”

If you don’t have an emotional or visual tie-in, the chances of the audience simply forgetting
your product — even though they’ve seen the advertisement — is very high. Or, worse, your ad
becomes annoying background noise.
Memory plays an important role in the decision-making of consumers and various factors make
our brains determine whether information is important or disposable. Understanding what
influences these subconscious decisions is what marketing is all about.

Q.18) Explain the ‘Buy-Grid Framework’ in the context of organizational buying. Mention
the various buy-classes and the role of ‘buying centre’ in each of the buy-classes.

Buy-grid model In the Context of Organization Buying:

The buy-grid model is a business model depicting rational organizational decision making.
Business marketers use the buy-grid model to portray the steps businesses go through in making
purchase decisions. The model includes two components: buy phase and buy class.

Buy phase represents the logical eight steps businesses (or consumers involved in extensive
problem solving) go through need recognition.

 Definition of product type needed

 Development of detailed specifications
 Search for qualified suppliers
 Acquisition and analysis of proposals
 Evaluation of proposals and selection of a supplier
 Selection of an order procedure
 Evaluation of product performance

Business-to-business marketers recognize that at each step in the buying process, business buyers
have different needs, and different groups within the organization may be involved. Business
marketers anticipate which step organizational buyers are in an attempt to provide the needed
information and support for that stage of decision making. Marketers who can become involved
early in the decision-making process have a greater chance of being considered in the final
selection process. Many organizations, including government agencies, have formal purchasing
procedures incorporating the buy-grid model. Set-aside programs targeting small and minority-
owned businesses and bid solicitation requirements for government offices follow a similar
defined procedure for purchasing.

Most business-buying situations do not involve all of the steps in the buy-grip model. The
number of steps varies with the buy-class, the type of buying decision. There are three buy-class
categories: new buys, straight re-buys, and modified re-buys. While the complete buying process
is typically used for new buys (purchases of products or services never used before), a majority
of business purchasing decisions are either straight re-buys or modified re-buys. In straight re-
buy situations, only the need recognition (the company almost out of the product) and reordering
steps are used. For business marketers it is critical for their products or services to be listed as
approved vendors for straight re-buys. Marketers will use reminder advertising, relationship-
building entertainment and hospitality, and personal selling to maintain their status as the
preferred provider. In modified re-buy decisions (where a buyer is willing to “shop around”), the
buyer may go through some or all of the purchasing steps. For marketers desiring to be
considered during modified re-buy situations, comparison advertising and demonstrations are
used to influence business buyers. Incumbent firms will use relationships, special offers, and
anticipation of or quick response to customer needs to maintain their status when business buyers
are considering alternatives.

The different buy-classes are:-

• Straight re-buy

• Modified re-buy

• New task

Role of Buying Centre:-

A buying center brings together "all those members of an organization who become involved in
the buying process for a particular product or service".[1] Buying centers are also sometimes
known as 'decision-making units' (DMUs). The concept of a buying center (as a focus of
business-to-business marketing) represents an attempt to formalize understanding of purchasing
decision-making in complex environments.

The key factors influencing a buying center or DMU's activities include:

 Buy class (e.g. straight re-buy, new task or modified re-buy)

 Product type (e.g. materials, components, plant and equipment and MRO (maintenance,
repair and operation)
 Importance of the purchase

Different Members of the Buying Centre of an Organization are as follows:

1. Initiators

2. Users

3. Buyers

4. Influencers

5. Deciders

6. Approvers

7. Gate Keepers

As we have seen earlier under different situations of purchase, different personnel are
participating.

The Purchasing department is influential in straight re-buy and modified re-buy situations.
Engineering personnel usually have a major influence in selecting product components and
purchasing managers dominate in selecting suppliers.
Thus in new buy situations, the industrial marketer must first direct his product information to
the engineering personnel. In re-buy situations and at supplier-selection time, communication
must be directed at the purchasing department personnel.

A buying centre is comprised of all those individuals and groups who participate in the buying
decision-making process, who share some common goals and the risks arising from these
decisions. Before identifying the individuals and groups involved in the buying decision process,
a marketer must understand the roles of buying centre members. Understanding the buying
centre roles helps industrial marketers to develop an effective promotion strategy.

Within any organization, the buying centre will vary in the number and type of participants for
different classes of products.

But on an average a buying center of an organization has the following seven members or a
group of members who play these roles:

1. Initiators:

Usually the need for a product/item and in turn a supplier arises from the users. But there can be
occasions when the top management, maintenance or the engineering department or any such
recognize or feel the need. These people who “initiate” or start the buying process are called
initiators.

2. Users:

Under this category come users of various products. If they are technically sound like the R&D,
engineering who can also communicate well. They play a vital role in the buying process. They
also act as initiators.

3. Buyers:

They are people who have formal authority to select the supplier and arrange the purchase terms.
They play a very important role in selecting vendors and negotiating and sometimes help to
shape the product specifications.
The major roles or responsibilities of buyers are obtaining proposals or quotes, evaluating them
and selecting the supplier, negotiating the terms and conditions, issuing of purchase orders,
follow up and keeping track of deliveries. Many of these processes are automated now with the
use of computers to save time and money.

4. Influencers:

Technical personnel, experts and consultants and qualified engineers play the role of influencers
by drawing specifications of products. They are, simply put, people in the organization who
influence the buying decision. It can also be the top management when the cost involved is high
and benefits long term. Influencers provide information for strategically evaluating alternatives.

5. Deciders:

Among the members, the marketing person must be aware of the deciders in the organization and
try to reach them and maintain contacts with them. The organizational formal structure might be
deceptive and the decision might not even be taken in the purchasing department.

Generally, for routine purchases, the purchase executive may be the decider. But for high value
and technically complex products, senior executives are the deciders. People who decide on
product requirements/specifications and the suppliers are deciders.

6. Approvers:

People who authorize the proposed actions of deciders or buyers are approvers. They could also
be personnel from top management or finance department or the users.

7. Gate Keepers:

A gatekeeper is like a filter of information. He is the one the marketer has to pass through before
he reaches the decision makers.
Understanding the role of the gatekeeper is critical in the development of industrial marketing
strategies and the salesperson’s approach. They allow only that information favorable to their
opinion to flow to the decision makers.

By being closest to the action, purchasing managers or those persons involved in a buying centre
may act as gatekeepers. They are the people whom our industrial marketer would first get in
touch with. Hence, it so happens that information is usually routed through them.

They have the power to prevent the sellers or information from reaching members of the buying
centre. They could be at any level and even be the receptionists and telephone operators.

When a buying centre includes many participants, the industrial/ business marketer will not have
the time or resources to reach all of them. Small sellers could concentrate on reaching the key
buying influences. Large sellers on the other hand go for multi-level in-depth selling to reach as
many buying participants as possible.

It is important to note, that functional responsibilities and job titles are often not true indicators
of the relative influence of buying center members in a purchase decision task.
Q.19) What are the key characteristics of organizational buying behaviour? Mention the
key organizational buying criteria.

Key characteristics of organizational buying behaviour

Derived Demand: Organizational buying is based on derived demand. Demand made by the
ultimate consumers creates demand for industrial for industrial goods and services. For instance,
demand of electricity generator is determined according to the demand made by the consumers.
Demand of organizational buyer changes in keeping with the changes in consumers’.

Few Buyers and Large Volume: The number of organizational buyers remains small but
volume of sale is large. So, organizational marketers focus on their efforts on very small number
of main buyers who buy goods and services in large volume paying bug amount of price.

More Direct Channel of Distribution: High quantity of consumer goods or services is sold out
through complex structure of wholesalers and retailers. This structure keeps producers and
consumers separate or it works as the bridge between them but in organizational selling, direct
contact is established between buyers and sellers. The organization, which buys necessary goods
directly goods from producers.

Professional Buying: Compared to consumer buyer , organizational buyers become systematic,

rational and professional. Buying agent becomes skilled professional. They should take frequent
trainings on buying process, contract, material management and legal aspects of buying.
Professional buyers develop formal methods of buying.

Rational Buying: Organizational buyers use rational in buying goods or services compared to
the ultimate consumers. They want to take information about the features, quality, technical use,
utility etc. of products. Organizational buyers become aware of quality, services, delivery price
etc. of any product.

Key organizational buying criteria

 Price
 Quality Specification
 Delivery Schedules
 Past Performance
 Production Facilities / Capacity
 Warranty/ Claim Policy
 Technical Capability

Q.20) Write short note on:

(1) Derived demand for industrial products

(2) Reverse marketing

(3) Reciprocity

(4) Buying center

(5) Reverse auction

1. Derived demand for industrial products

Demand for Industrial goods and services are derived from expectations of the actions of
ultimate consumers. Demand for Industrial products is also often joint. Joint demand
occur when the demand for a product depends upon its use in conjunction with another
product or products while cross elasticity of demand exists in both markets, it is more
important in Industrial marketing since it can have a more effect on a firm’s overall
corporative strategy.

(a) The demand for Industrial goods is ultimately derived from the demand of consumer
goods. Thus animal hides are purchased because consumers want to buy shoes, purses
and other leather goods. If the demand for the consumer goods slackens so will the
demand for all Industrial goods entering their production. For this reason the
industries must closely monitor the buying pattern of ultimate consumers.
(b) Stimulating industrial demand because of the nature of industrial demand the
influence of final consumer is well recognized. One way which industrial marketers
attempt to increase sales is by stimulating increases in demand of ultimate consumers.
By directing advertising to ultimate consumers, industrialists can often increase
consumer demand for final products, which in turn, increase their industrial sales.
(c) Joint Demand occurs when one product requires the existence of others to be careful
while exceptions may be found. Most products require several components, parts or
ingredients.
(d) Fluctuating Demand: The demand for business goods and services tends to be more
volatile than the demand for consumer goods and services. This is especially true of
the demand for new plant and equipment.
(e) Inelastic demand: The total demand for many Industrial goods and services is
inelastic that is not much affected by price changes. Demand is especially inelastic in
the short run because producers cannot make quick changes in their production
method. Demand is also inelastic for Industrial products that represent a small percent
of the total cost of the item
(f) Cross elasticity of demand: Cross elasticity of demand is the responsiveness of the
sales of one product to a price change in another. It can have a dramatic impact on the
marketing strategy of an Industrial firm. The concept of cross elasticity of demand
can be very useful to industrial marketers. For example the quantity of granite
required for construction is related to the price of its close bricks or marble and vice-
versa.
2. Reverse marketing
Reverse marketing is the concept of marketing in which the customer seeks the firm
rather than marketers seeking the customer. Usually, this is done through traditional
means of advertising, such as television advertisements, print magazine advertisements
and online media. While traditional marketing mainly deals with the seller finding the
right set of customers and targeting then, reverse marketing focuses on the customer
approaching potential sellers may be able to offer product.
Reverse marketing occurs when the customer becomes the marketer.
Social media is an example of reverse marketing. Customers are marketing to other
customers and to organizations. That’s the big difference between social media and
traditional media, where the organization markets and communicates to the customer.
Search is an example of reverse marketing. A typical search is an advertisement. A search
for “cheap flights Dublin” asks organizations to respond to my specific request for a good
value flight to Dublin.

3. Reciprocity
Reciprocity is a situation in which two people, countries, etc. provide the same help or
advantages to each other.
In social psychology, reciprocity is a social rule that says we should repay, in kind, what
another person has provided us. That is, people give back the kind of treatment they have
received from you. By virtue of the rule of reciprocity, we are obligated to repay favors,
gifts, invitations, etc. in the future. If someone invites us to their birthday party and buy
us a gift, we are expected to do the same when the time for their birthday comes. This
sense of future obligation associated with reciprocity makes it possible to build
continuing relationships and exchanges. Reciprocal actions of this nature are important to
social psychology as they can help explain the maintenance of social norms

4. Buying center
Buying center is the idea that in businesses and organizations, many people with different
roles and priorities participate in PURCHASING decisions. Unlike consumer buying,
where the consumer, alone or with assistance or influence from acknowledged opinion
leaders, makes his or her own purchase decisions, in business buying a group often
determines which PRODUCTs or SERVICES are purchased.
The typical business buying center will include a variety of participants:

Initiators: people who start the purchase process by defining a need

Decision makers: people who make the final decision
Gatekeepers: people who control the flow of information and access to individual in an
organization
Influencers: people who have input into the purchase decision
Purchasing agent: The person who actually makes the purchase order
Controller: the person who oversees the budget for the purchase
Users: people who use the product or service.

5. Reverse auction
A reverse auction is a type of auction in which the roles of buyer and seller are reversed.
In an ordinary auction (also known as a forward auction), buyers complete to obtain a
good or service by offering increasingly higher prices. In a reverse auction, the sellers
complete to obtain business from the buyers and prices will typically decrease as the
sellers undercut each other.

A reverse auction (also called procurement auction, e-auction, sourcing event, e-

sourcing) is a tool used in business-to-business procurement. In this process, the role of
buyer and seller is reversed, with the primary objective to complete purchase prices
downwards.

A reverse auction is an event usually used as the last leg of sourcing and tendering to
obtain the best price by encouraging competition among bidders on price. It is hosted by
 a single buyer and features two or more suppliers completing for business. It is called
reverse because during the auction, the price can only come down.

Q.20) What do you mean by family life cycle?

Stage 1: Family of origin experiences

 During this phase the main tasks are:

o Maintaining relationships with parents, siblings and peers
o Completing education
o Developing the foundations of a model of family life

Stage 2: Leaving home

 During this phase the main tasks are:

o Differentiation of self from family of origin and parents and developing adult to
adult relationships with parents
o Developing intimate peer relationships.
o Beginning work, developing work identity and financial independence.

Stage 3: Premarriage stage

 During this phase the main tasks are:

o Selecting partners
o Developing a relationship
o Deciding to establish own home with someone.

Stage 4: Childless couple stage

 During this phase the main tasks are:

o Developing a way to live together both practically and emotionally
o Adjusting relationships with families of origin and peers to include partner

Stage 5: Family with young children

  During this phase the main tasks are:
o Realigning family system to make space for children
o Adopting and developing parenting roles
o Realigning relationships with families of origin to include parenting and
grandparenting roles
o Facilitating children to develop peer relationships

Stage 6. Family with adolescents

 During this phase the main tasks are:

o Adjusting parent-child relationships to allow adolescents more autonomy
o Adjusting family relationships to focus on midlife relationship and career issues
o Taking on responsibility of caring for families of origin

Stage 7: Launching children

 During this phase the main tasks are:

o Resolving midlife issues
o Negotiating adult to adult relationships with children
o Adjusting to living as a couple again
o Adjusting to including in-laws and grandchildren within the family circle
o Dealing with disabilities and death in the family of origin

Stage 8: Later family life

 During this phase the main tasks are:

o Coping with physiological decline in self and others
o Adjusting to children taking a more central in family maintenance.
o Valuing the wisdom and experience of the elderly
o Dealing with loss of spouse and peers
o Preparation for death, life review and reminiscence.
 Q.21) Discuss the significance of family in consumer behavior?

We examined the topic of social groups in order to understand their relevance to individuals
and how marketers could use this knowledge. Now we turn to the family, not just as a type of
small group, but one that is often predominant in its influence over consumer behavior. The
family is both a primary group (characterized by intimate, face to face interaction) and a
reference group (with members referring to certain family values, norms, and standards in
their behavior) These two factors, however are not the sole reasons accounting for the
strength of the family’s influence. Rather, it is first, the fact that the bonds within the family
are likely to be much more powerful than those in other small groups. Second, contrary to
most other groups to which the consumer belongs the family functions directly in the role of
ultimate consumption. Thus, the family operates as an economic unit, earning and spending
money. In doing this, family members must establish individual and collective consumption
priorities decide on products and brands that fulfill their needs, and also decide where these
items are to be bought and how they are to be used in furthermore family members’ goals.
Also, consumers attitudes toward spending and saving and even the brands and products
purchased have been molded, often quite indelibly by the family’s influence on its members
and the way in which purchase decisions are made by members so that they may effectively
program their marketing mix.

Table below Illustrates several ways in which families differ from other groups:

Differences between families and other groups:

Family Versus Other Groups

Formation by marriage or birth Formation by job or task

More permanent relationship More contractual relationship

More interpersonal relations

oriented More Goal oriented
More intrinsic value seeking More rational oriented ties

Group oriented (cooperative) Self-oriented (competitive)

Q.22) What types of influences can reference groups have on consumers? How do
marketers use the concept of reference group influence in their strategy?

Answer: There are 4 main types of influences can reference groups have on consumers

I. Cultural factors

Culture and societal environment:

Culture is crucial when it comes to understanding the needs and behaviors of an individual. For a
brand, it is important to understand and take into account the cultural factors inherent to each
market or to each situation in order to adapt its product and its marketing strategy. As these will
play a role in the perception, habits, behavior or expectations of consumers.

Sub-culture:

A society is composed of several sub-cultures in which people can identify. Subcultures are
groups of people who share the same values based on a common experience or a similar lifestyle
in general.

Social classes:

Social classes are defined as groups more or less homogenous and ranked against each other
according to a form of social hierarchy. Even if it’s very large groups, we usually find similar
values, lifestyles, interests and behaviors in individuals belonging to the same social class.

We often assume three general categories among social classes : lower class, middle class and
upper class. For example, consumers from the middle class and upper class generally consume
more balanced and healthy food products than those from the lower class.

II. Social factors

Reference groups and membership groups :

The membership groups of an individual are social groups to which he belongs and which will
influence him. The membership groups are usually related to its social origin, age, place of
residence, work, hobbies, leisure, etc.

Family: The family is maybe the most influencing factor for an individual.

Social roles and status:

The position of an individual within his family, his work, his country club, his group of friends,
etc. All this can be defined in terms of role and social status.

III. Personal factors:

Age and way of life:

A consumer does not buy the same products or services at 20 or 70 years. His lifestyle, values
environment, activities, hobbies and consumer habits evolve throughout his life.

Lifestyle:

The lifestyle of an individual includes all of its activities, interests, values and opinions.

Personality and self-concept:

Personality is the set of traits and specific characteristics of each individual. It is the product of
the interaction of psychological and physiological characteristics of the individual and results in
constant behaviors.

IV. Psychological factors

Motivation:

Motivation is what will drive consumers to develop a purchasing behavior.

Reference groups are of two types: primary and secondary. A primary reference group is one
with which the members have frequent face-to-face contact and are close knit. Families,
households, study groups, work teams, roommates, and fishing pals are all primary groups. A
secondary reference group is one in which interaction with other members is less frequent.
Professional organizations, church congregations, large social clubs, and alumni associations are
examples.

Reference groups are also either formal or informal. A formal group is one in which there is
some sort of structure and, in some cases, for which there are specific membership requirements.
An informal group is one that has no special membership or attendance requirements other than
common interests. Walking clubs, reading groups, and mother-and-toddler play groups are
typical examples.

Q.23) Bases for Market Segmentation.

Markets may be divided into several sub-markets on several bases. We will discuss the most
general and popular variables here.

1. Geographic Segmentation

A market segmented into sub-markets on the basis of geographic location is known as

Geographic Segmentation. Examples of such division are nations, states, regions, provinces,
districts, counties, cities or even neighbourhoods. An international firm may divide its market on
the basis of nations and then move further down to the level of cities and neighbourhoods. A
national company may start with at the level of counties/regions and move down to cities and
other sub-levels. Geographic segmentation is important as there are many factors contributing to
the varying needs of consumers across different regions of the world. What is considered as a
need in the US may be a luxury in Singapore. What is a luxury in India may be something
redundant or useless in the UK. The customer needs and wants, the ways and means to satisfy
them may be entirely different in one country from those who in another.

2. Demographic Segmentation
A market split into sub-segments on the basis of variables such as age, gender, sex, family,
income, education, religion, culture, occupation, profession, ethnicity etc is known as
demographic segmentation. To make it simpler, it is the division of market on the basis of
demographics. We will discuss each variable briefly here.

Age:

This is one of the most effective ways of demographic segmentation. Modern firms use this as a
very useful marketing tactic to create and retain their customers right from birth to death. At the
age of 1 to 2, firm shall try to offer stuff like nappies for new born, baby cream, anti colic, baby
clothes etc. With the passage of time, these may change to toys ( a lot of sub-division) then
bikes, balls, sport, jeans, school, then college, then University, car, insurance, employment, then
retirement, pension and even death (funeral services!)

McDonald’s different ads and media campaigns target people of different ages such as children,
teens, adults and senior citizen. Insurance companies announce special packages and offers for
people over certain age. Theme Parks offer kids and infants deals.

Ethnic Segments:

The multi-cultural societies’ potential customers may all be located in the same geographic
location but their needs and wants and ways to satisfy these needs and wants are different.
Companies have successfully segmented their markets on ethnic basis all over the world in areas
where the demand needs to be met that way. HFA (Halal Monitoring Authority) in the UK
makes sure that Muslim consumers are provided Halal foods (food that is processed, or meat that
is obtained and sold in the market per Islamic regulations of slaughtering). HMC (the Halal
Monitoring Committee) in the UK even goes a step further by providing halal meat only to
specific grocery stores after these shop meet very strict and stringent.
Indian restaurants and clothes shops around Europe and America are some of the best examples
of Market Segmentation based on ethnic grounds.

Gender:
Gender segmentation is another powerful and successful segmentation and can be seen in areas
like clothing, cosmetics, beauty products, hair styles, careers, cars, insurance and now even
education. Perfume companies target men and women separately with their various model and
brands. Sheila’s Insurance provides insurance only to women while other companies specifically
target only the young drivers (who may have just recently passed their driving tests). Girls like
pink bags while boys may go for blues or blacks. Subtleties do make difference. There are
several separate male and female schools. Again in Europe, schools for girls only have
successfully targeted the part of the ethnic population who are averse to co-education. Car
designers know that subtleties make difference, so Nissan’s Micra and Mini Cooper have special
attractions for ladies.

There is a huge scope of demographic segmentation and is not limited to age, ethnicity and
gender only. Other bases for this type of segmentation are like Life Cycle Stage, Income groups,
sexual orientations, family size, education and many others.

3. Psychographic Segmentation

Life style, social class and personality may the basis for psychographic segmenting of markets.
Examples of life styles segments would be people drinking decaf coffee or tea, weight watchers,
seekers of less fatty food. Products based on life styles may be highly customised to appeal to a
particular way of life. Younger people’s life-style requirements may be a great deal different
than of those who are above their age group.
Examples of social class segments are holdiays, hotels and air travel tickets targeting people of a
particular class.
The consumer in psychographic segmentation may have the same income level and gender but
they may have different inclinations and a unique style of living. They may have different
personalities determining their likes and dislikes for a particular class of products.

4. Behavioural Segmentation
Behavioural segmentation is based on the variables of the actual behaviour of the consumer. For
instance, some users may be classed as heavy users while others as light users. Some may be just
first time user while other are occasional users only. To summarise the behavioural segment may
consist of the following variables.
User status
Usage rate
Benefits sought
Occasions
Brand loyalty
Attitude towards product
Readiness to buy

5. Other Variables

Marketers have even further dug the subject and provided some other variables. Briefly these
are:
Distribution segmentation
Media segmentation
Time segmentation

Measuring social impact in consumer behavior

Behavioral economics focuses on the kinds of attitudes

people have towards money and how they spend their
money. Consumer sentiment is a significant influence
which relates to consumer spending patterns; it depends
on the employment scenario, the economy as a whole, the
level of regular income, the quality of life, and stock
market performance. Societies are generally divided into
various hierarchical social strata, which are dependent on
factors like education, occupation, and income.

Different societies have different strata, which may vary

from as low as two to as high as nine or ten. Most
societies have three broad social classes - upper class,
middle class, and lower class. People belonging to one
particular class can move to other classes, willingly or
unwillingly, in an open society.

Such moves can significantly affect their consumption behavior. Consumer tastes and
preferences are influenced greatly by consumer socialization, as well as economic, social, and
cultural capital.

Marketers generally focus on affluent consumers, but recent trends have shown increasing
penetration in middle and lower social classes. Many products and services are used by people as
indicators of their social standing and are known as status symbols.