Consumerbehavior Shortnotes

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ZAD INSTITUTE OF IT & MANAGEMENT

CONSUMER BEHAVIOR
MBA III SEMESTER
UNIT I
Q: Explain nature
nature ,scope , application of consumer behavior .
Ans : Introduction
Consumer behavior is defined as The dynamic interaction of
affect and cognition, behavior and the environment by human beings
conduct the exchange aspects of lives. IT means that the buying habits of
the consumer are greatly affected by their thought process and their
feelings experienced. Human beings are greatly influenced in their buying
actions by various factors like opinion of others, marketing stimuli like
product, advertising, packaging and product appearance.
Scope of Consumer behaviour:
Scope of consumer behavior is very wide due to following reasons:

Ever increasing intensifying competition.
More aggressive competitors emerging with greater frequency.
Changes basis of competition.
Geographic sources of competition are becoming wider.
Niche attacks are becoming frequent.
Pace of innovation is rapid.
Price competition becoming more aggressive
Product differentiation is declining.
As a principal, the marketing concept involves understanding the needs of

the consumers and translating these needs into products or services to
satisfy these needs. The basic objective in marketing is to achieve the goal
of profit making through customer satisfaction. To do this, an organization
should understand the consumer and be as close to them as possible.
Nature of consumer behaviour

1.Co
1.Consumer
Consumer behavior is dynamic
The feelings, thinking, perceptions and actions of the customer and the
society at large keep changing frequently. For example number of working
women is on rise and this has changed the concept of shopping. The
dynamic nature of the consumer behaviour offers challenges to marketers
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and the task of creating marketing strategies becomes complex, and

exciting. Strategies that work today may not work tomorrow. Strategies
adopted in one market ma not work in another. The product life cycle are
becoming shorter and create additional pressures on marketers to bring
innovative products and concepts. The concept value changes from time
to time. Mahindra and mahindra had to come out with Scorpio within
launch of Bolero
2.Consumer
2.Consumer behaviour
behaviour involves interactions:
Consumer behaviour involves interactions among peoples thinking,
feelings, and actions and the environment. This forces marketers to
understand
What mean to customers. products and services
What influences shopping, purchase, and consumption.
What consumers nee to do to purchase and consume products and
services.
3.Consumer
3.Consumer behaviour involves exchange:
Consumer behaviour involves exchanges between human beings. People
give up something of value to others and receive something in return.
Much of consumer behaviour involves people giving up money to obtain
product and services, that is, exchanges consumers and sellers. The role of
marketing in society is to help create exchange by formulating and
implementing marketing strategies.
There are four main applications of consumer behavior:
1. Marketing strategy:The
most obvious is for marketing strategy or
strategy:
making better marketing campaigns. For example, by understanding
that consumers are more receptive to food advertising when they are
hungry, we learn to schedule snack advertisements late in the
afternoon. By understanding that new products are usually initially
adopted by a few consumers and only spread later, and then only
gradually, to the rest of the population, we learn that (1) companies
that introduce new products must be well financed so that they can
stay afloat until their products become a commercial success and (2) it
is important to please initial customers, since they will in turn
influence many subsequent customers brand choices.
2. Public Policy:A
Policy: second application is public policy. In the 1980s,
Accutane, a near miracle cure for acne, was introduced. Unfortunately,
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Accutane resulted in severe birth defects if taken by pregnant women.

Although physicians were instructed to warn their female patients of
this, a number still became pregnant while taking the drug. To get
consumers attention, the Federal Drug Administration (FDA) took the
step of requiring that very graphic pictures of deformed babies be
shown on the medicine containers.
3.Social
3.Social marketing:
marketing: Social marketing involves getting ideas across to
consumers rather than selling something. Marty Fishbein, a marketing
professor, went on sabbatical to work for the Centers for Disease
Control trying to reduce the incidence of transmission of diseases
through illegal drug use. The best solution, obviously, would be if we
could get illegal drug users to stop. This, however, was deemed to be
infeasible. It was also determined that the practice of sharing needles
was too ingrained in the drug culture to be stopped. As a result, using
knowledge of consumer attitudes, Dr. Fishbein created a campaign that
encouraged the cleaning of needles in bleach before sharing them, a
goal that was believed to be more realistic.
4.Better
a final benefit, studying consumer behavior
4.Better Consumer:As
Consumer:
should make us better consumers. Common sense suggests, for
example, that if you buy a 64 liquid ounce bottle of laundry detergent,
you should pay less per ounce than if you bought two 32 ounce bottles.
In practice, however, you often pay a size premium by buying the
larger quantity. In other words, in this case, knowing this fact will
sensitize you to the need to check the unit cost labels to determine if
you are really getting a bargain.
There are several units in the market that can be analyzed. Our main thrust
in this course is the consumer. However, we will also need to analyze our
own firms strengths and weaknesses and those of competing firms.
Suppose, for example, that we make a product aimed at older consumers, a
growing segment. A competing firm that targets babies, a shrinking
market, is likely to consider repositioning toward our market. To assess a
competing firms potential threat, we need to examine its assets (e.g.,
technology, patents, market knowledge, awareness of its brands) against
pressures it faces from the market. Finally, we need to assess conditions
(the marketing environment). For example, although we may have
developed a product that offers great appeal for consumers, a recession
may cut demand dramatical.
Q: What are the different needs and motives of the consumer according
to which a consumer buy the product?
product?
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Ans: Needs :
Needs can be explained in the following manner:
Biological versus learned need:
need
Biological:
Biological:
Drive theory focuses on biological needs that produce unpleasant states of
arousal, e.g. stomach rumbling when you are hungry. We are motivated to
reduce the tension caused by such arousal.
Learned:
Expectancy theory suggests that behaviour is largely governed by expectations of
achieving desirable outcomes - positive incentives rather than pushed from within.
Biogenic vs psychogenic needs
Biogenic needs - people are born with a need for certain elements necessary to maintain
life, e.g. food, water, shelter, etc.
Psychogenic needs - are acquired in the process of becoming a member of a culture, e.g.
status, power, affiliation, etc.
Need vs want:
want
The particular form of consumption used to satisfy a need is called a want.
Biogenic needs - people are born with a need for certain elements necessary to maintain
life, e.g. food, water, shelter, etc.
Psychogenic needs - are acquired in the process of becoming a member of a culture, e.g.
status, power, affiliation, etc.
Maslows need hierarchy theory:
theory

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Maslows need hierarchy theory:

theory
The ultimate state in the hierarchy is difficult to achieve.
Certain needs can be placed in different areas
of the hierarchy, e.g. eating is necessary for survival but it is also a social act and
so can be placed further up the hierarchy. The hierarchical approach implies that
the order of development is fixed.
Approach often adapted by marketers because it indirectly specifies certain
product benefits that people might be looking for depending on their stage of
development and/or environmental conditions.
Approach does have problems.
Freudian theory:
The idea that much of human behaviour stems from a fundamental conflict
between a persons desire to gratify his/her physical needs and the necessity to
function as a responsible member of society.
The struggle is carried out in three internal systems:
- id (immediate gratification, directing a persons psychic energy towards
pleasurable acts without regard to the consequences).
- superego (the persons conscience working to prevent the id seeking selfish
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gratification).
- ego (mediating between the other two).
Consumer Desire:
Motivation:
Motivation
Motivation refers to the processes that cause people to behave as they do.
Motivation occurs when a need is aroused that the consumer wishes to satisfy. Once a
need has been activated, a state of tension exists that drives the consumer to attempt to
eliminate or reduce the need.
Understanding motivation = understanding why consumers do what they do.
Motivation satisfies either utilitarian or hedonic needs.
Satisfying utilitarian needs implies that consumers emphasize the objective, tangible
attributes of products e.g. fuel economy in a car.
Satisfying hedonic needs implies that consumers emphasize
subjective and experiential aspects, e.g. self confidence,
excitement, etc.
Marketer role:
Marketers try to create products and services that will provide the desired benefits
that permit the consumer to reduce the tension.
Tension = difference between the consumers present state and some ideal state.

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Motivational conflicts:
Positively valued goals - consumers are motivated to approach the goal and will
seek out products that will be instrumental in attaining it.
A voiding negative goals - consumers are motivated to avoid a negative outcome
structuring their purchases or consumption activities.
Cognative dissonance:
Premise that people have a need for consistency and order in their lives and that a
state of tension and conflict is created when beliefs or behaviours conflict with
one another.
The conflict may be resolved through cognitive dissonance reduction where
people are motivated to reduce this inconsistency and eliminate the unpleasant
tension.
Q: Explain Lifestyle
Lifestyle &.Psychographic
&.Psychographic Segmentation
Segmentation and benefit segmentation in regard
to consumer behavior.
behavior.
Ans: For many years, demographics have governed how communication target their
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campaigns. The problem is that even though individuals in a specific demographic

category share some common characteristic, such as age, sex or income, the
psychographics of these groups--their values, motivations and beliefs--are not
homogeneous. There are multiple motivations for a behavior, and people in a specific
demographic category have a wide range of attitudes. Although demographics can turn
up objective facts, such as that your target customer owns a car, they can't tell you why
the person bought the car. Lifestyle & Psychographics can. They measure the motivations
behind a behavior, including why individuals in a specific generation or income bracket
will accept or reject a message, act on it or ignore it.
Common obstacles
obstacles
When first beginning to understand and

communicators often run into three impediments.
apply
Lifestyle&
psychographics,
* The first is using demographics to infer an audience's motivations or behaviors. For

example, the suggestion that all mothers believe it is important for their children to play a
musical instrument. Such inferences are based on intuited leaps of faith, and the
relationships they postulate do not necessarily have a basis in reality.
* A second obstacle is the multiplicity of attitudes and motivations within an audience.

There may be multiple motivations for a behavior, and individuals in a demographic
category have a wide range of attitudes toward a subject. Statements such as "The
primary motivators for Latin Americans are home and family" or "Resistance to authority
is a hallmark of Generation Y" are oversimplifications.
* The third obstruction to understanding audience motivation lies in creating messages

targeted to an average. An "average consumer" does not exist, and messages targeted to
this mythical audience remain too general to convince or motivate anyone. In addition, an
"average" perspective submerges and ignores the real motivational differences that occur
naturally within every audience
.
For example, when attitude toward a subject or awareness of it is measured before and
after a communication, the results are usually reported as averages of the total population.
Before an information campaign, a communicator may note that an average of 42 percent
of an audience agrees that an employee benefit is important, whereas an average of 58
percent agrees afterward. The problem with reporting averages is that a segment within
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that average may feel far more strongly about the subject than others--and that one
segment may be more critical to the company's success than any other.
Success through segmentation
These roadblocks can be removed by applying lifestyle & psychographic segmentation.
When attitudes, motivations, personality characteristics and belief systems are analyzed
mathematically or statistically to determine groups with substantially different attitudes,
the result is a lifestyle & psychographic segmentation. When psychographics are
segmented, the need to either oversimplify or use averages evaporates, and
communicators can select the most effective message for each segment. For one segment
a message may confirm an established viewpoint, and for another, a targeted message
will change a mindset. Segments that consider an issue or subject to be far more
important than does the mythical average could be made up of opinion leaders who
influence others' viewpoints. When these weighty segments are measured in a statistically
accurate way, a communicator can compare before and after measures--by segment--to
determine the true impact of a program.
Usage Segmentation
Marketers recognize that the occasion or situation often determines what consumers will
purchase or consume. For this reason, they sometimes focus on the usage situation as a
segmentation variable .
The following three statements reveal the potential of situation segmentation:
Whenever our son Eric gets a raise or a promotion , we always take him out to dinner
Benefit Segmentation
The benefit segmentation approach is based upon the belief that it is possible to measure
consumer value systems in detail, together with consumer thoughts about various brands
in the product category of interest . Grouping customers based on the benefits sought
from consumption will lead to multiple segments each with a number of benefits sought.
Some benefits will appear in multiple segments. It is however, the total configuration of
benefits sought which differentiates one segment from another. Although it is likely all
segments will seek multiple benefits. It is the relative importance each segment assigns to
a particular benefit that is likely to show differentiation between segments.
The true market segments are based on the causal relationship between the benefits
sought from consumption and future purchasing behaviour. Forms of segmentation
including geographic, demographic and psychographic tools provide only descriptive
data based on after the fact characteristics of consumers. Such approaches are therefore
not necessarily seen to be successful predictors of consumer choice.
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.
A key advantage of using benefit segmentation is seen to arise from the fact that
outcomes can then be acted upon, producing segments which will react differently to
altered marketing mix variables. Botschen, Thelen, and Pieters (1999) argue that benefit
segmentation has become the preferred technique for successful product positioning,
new product introduction, pricing, and advertising. It should be noted that benefit
segmentation is seen as the first stage in the segmentation process. Characteristics
such as age, income, lifestyle and media habits are then included in the process to
enable marketers to develop strategies to reach and communicate effectively with each
segment.
Botschen, Thelen and Pieters acknowledge that benefit segmentation is a powerful tool
product attributes and the benefits sought by consumers. They argue that the mean send
chain theory of cognitive structures holds that consumer behaviour is driven by the
true benefits sought which in turn drives the desire or preference for certain attributes. If
the focus of a segmentation study is on the level of preferred attributes the underlying
benefits sought by customers will not be clearly identified
Means-end theory holds that a product, service or behaviour is stored in memory as a
for predicting consumer preference and behaviour, they also point out that many of the
empirical studies undertaken in this area have not differentiated adequately between
chain of hierarchically related elements. The chain commences with the product or
service attribute and establishes a sequence of links with personal values through the
perceived consequences or benefits produced by certain attributes of the product. The
means-end chain is seen as a four-step process:
Step 1:product specific attributes (great climate) leads to
Step
Step 2: functional benefit (likely to be sunny when we visit) leads to
Step 3: practical benefit (the children will spend all their time at the beach) leads to
Step 4: emotional paypay-off (the parents will have a relaxing and stress free holiday).
Product attributes are the means by which consumers satisfy the desired consequences
of consumption. The argument, that consumers purchase goods and services to provide
satisfaction to the consumer at both a functional and emotional level, is a basic premise
of marketing (Kotler et.al, 2001). Therefore, market segmentation strategies which group
customers together based on the benefits they seek from consumption provides a
powerful diagnostic tool whereby manipulation of elements of the marketing mix can
influence consumer behaviour by better matching the market offering with the desired
consumption outcome (Botschen, Thelen and Pieters 1999).

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Q: Explain
Explain the concept of product positioning.
Ans : As rightly said by Al Ries and Jack Trout (who introduced the concept of
Positioning in the early 1970s in their series of articles called, The Positioning Era for
Advertising Age), .Positioning is not what you do to a product. Positioning is what
you do to the minds of the prospect.
It is defined as the consumer perception of a product or service as compared to its
competitors. In marketing, Positioning has come to mean the process by which
marketers try to create an image or identity in the minds of their target market for its
product, brand, or organisation. It is the relative competitive comparison their product
occupies in a given market as perceived by the target market.
It has also explains the terms Re-Positioning and De-Positioning which states that RePositioning involves changing the identity of the product, relative to the identity of the
competitors products, in the collective minds of the target market; whereas; DePositioning involves attempting to change the identity of competing products, relative to
the identity of your product, in the collective minds of the target market.
As quoted by someone, Positioning theory is a new discipline-based school of thought
about the strategic marketing process. It is the study of the governing laws, principles,
strategies, and models of how the consumers mind systematically sorts, ranks, and files
concepts in the minds directly related to the competitors.
Product Positioning is how the company wants its potential buyers to see the product; for
which the company needs to decide its niche market taking into consideration its
pricing, promotion, distribution, packaging, location and competitors strategy as well as
the needs, wants, desires of the customers. For example; Mercedes, BMW, Rolex is
positioned as a luxury brand.
Before Positioning the company should
should carefully analyse and answer the following
questions: i. What is my organisational objective?
ii. Where are my target audiences?
iii. How should I reach my target market?
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iv. Who should be involved in this process?

v. When is the right time to launch the product?
It requires a systematic effort; which is elaborated by the Dictionary through the
following process: 1. Defining the market in which the product or brand will compete (who the relevant
buyers are).
2. Identifying the attributes (also called dimensions) that define the product space.
3. Collecting information from a sample of customers about their perceptions of each
product on the relevant attributes.
4. Determine each products share of mind.
5. Determine each products current location
location in the product space.
6. Determine the target markets preferred combination of attributes (referred to as an
ideal vector).
7. Examine the fit between: The position of your product.

The position of the ideal vector.
8. Position.
Finally, in the words of Mississippi University State Extension Service; Positioning is
the attempt to control the publics perception of a product or service as it relates to
competitive products
Product positioning can also be explained by adopting following measures
Unique Selling Proposition
Something unique, that you have to offer. Not necessarily entirely unique. You can
appear unique by simply packaging your product or service in a unique way. For
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example, a lawyer, might advertise flat rate incorporation, and attract a lot of customers
because the market fears the open ended legal bill. In reality, it is all of the other "back
end" services that come about as a result of incorporation that generate incorporation
revenues. But who do you think will end up getting more of that lucrative business, the
flat rate USP savvy attorney, or Mr. Conventional?
Risk Reversal
Differentiate yourself with outrageously bold guarantees, that you're competition don't
have the guts for. Most people are genuinely honest, and if your service is what you say it
is, you've got nothing to worry about. The increased sales volume will be well worth it.
Inordinate Value
Leverage your advertising, by offering to let complimentary businesses come along for
the ride, in exchange for a free sample of their wares. Then bundle those into your
offering. Cut the right deals, & your offer will appear "irresistible", compared to your
competition.
Clear, Complete, & Concise Customer Education
Here's were most advertisers fall down, and you can stand head & shoulders above the
crowd Tell your full story. Don't make people try to figure out on their own why they
should be doing business with you. Spell it out for them. Introduction
A model is very often referred to as an abstract representation of a process or
relationship. We tend to hold various models in our minds, which allow us to make sense
of the world, and also help to predict the likely course of events. To put it simply, models
help us in the development of theories, understanding complex relationships, and
providing the framework fro discussions and research work. he reality, of course, is that
Q: Explain different models of consumer behavior.
behavior.
Ans:Models
Ans:Models of Consumer Behaviour
1. Economic model: Economic model of consumer behaviour is one-dimensional. This
means that buying decisions of a person are governed by the concept of utility. Being a
rational man he will make his purchase decisions with the intention of maximizing the
utility.
benefits.
Economic model is based on certain predictions of buying behaviour
(a) price effect-lesser the price of the product, more will be the quantity purchased
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(b) Lesser the price of the substitute product, lesser will be the quantity of the original
product bought (substitution effect)
(c) More the purchasing power, more will be the quantity purchased
(income effect).
2. Learning model:
model Classical psychologists have been interested in the formation and
satisfaction of needs and tastes. They argued that living beings were influenced by both
innate needs such as the primary needs of hunger, thirst, sex, shelter and learned needs
like fear & guilt. A drive or internal stimulus which when directed towards a drivereducing object becomes a motive. The various products or service will act as a stimulus
to satisfy drives.
For example, if you are hungry you will be driven towards food, which after consumption
will reduce the drive and provide and provide satisfaction..
3. Psychoanalytical model: This model is based on the work of psychologists who were
concerned with personality. They were of the view that human needs and motives
operated at the conscious as well as subconscious levels. Sigmund Freud developed this
theory. According to him human behaviour or personality for that matter is the outcome
of three components, viz
, (a) id which is the source of all psychic energy which drives us as action
(b) super ego which is the internal representation of what is
approved by the society
(c) ego which is the conscious directing id impulses to find gratification in a socially
acceptable manner. Thus we can say that human behaviour is directed by a complex
set of deep-seated motives.
This means that buyers will be influenced by symbolic factors in buying a product.
Motivational research has been involved in investing motives of consumer behaviour so
as to develop suitable marketing implications accordingly.
Marketers have been using this approach to generate ideas for developing product-design,
features, advertising and other promotional techniques.
4. The sociological model: According to this model the individual buyer is a part of the
institution called society. Since he is living in a society, gets influenced by it and in turn
also influences it in its path of development. He is playing many roles as a part of various
formal and informal associations or organisations i.e., as a family member, as an
employee of a firm, as a member of a professional forum and as an active member of an
informal cultural organization.
Some Popular models of consumer behavior:
1.1 The Howard Sheth Model of Buying Behaviour
This model serves two purposes:
1. It indicates how complex the whole question of consumer behaviour is.
2. It provides the framework for including various concepts like learning, perception,
attitudes, etc., which play a role in influencing consumer behaviour.
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Inputs:
Inputs In the Howard Sheth theory, the most significant stimulus affecting the buying
behaviour are the information cues about the characteristics of the product. These cues
may be significative if it comes to the buyer from the product itself when he is involved
in a shopping activity. A similar set of cues, which are symbolic in nature, may also act
as information sources. Both these significative and symbolic information cues represent
the firms marketing efforts. The broad or product characteristics acting as information
cues are quality, price, distinctiveness, service and availability. There are impersonal
sources like mass media communications and advertising, over which the firm has no
control. However, the information sources also include sales and service personnel who
can add and help the marketing efforts of the firm. The third source is social information
cues which could affect buying behaviour towards the product or brand and these include
family, friends or other members of the group with whom buyer comes into contact or to
which he aspires to be in. The social source is personal and the company marketer has no
control over this source.
2.2 EngelEngel-KollatKollat-Blackwell Model
Variables grouped into categories
a) Stimulus inputs b) information processing c) decision process and d) variables
influencing the decision process
Strength of model
Strength
Deals with low-involvement situations. It is suggested that in low involvement situation
the degree to which the various stages in the model are undertaken decreases
Problems with model
Problems
No way of testing e.g. If had idea of personalitycharacteristics how could they be applied
or measured in relation to predicting buyer behaviour
Lack of specificity i.e. variables are named in superficially plausible way but not
specified in any operational detail
i. Information processing
ii. Central control Unit
iii. Decision Process and
iv. Environmental influences
i.In
i.Information
Information processing:
processing this component comprises the consumers selective exposure,
attention, comprehension and retention of stimuli relating to a product or brand
received from marketing and non-marketing sources. As a marketer, the first step is to
ensure that a consumer is exposed to your message or stimuli, pays attention to it,
understands what it is all about and also remembers it.
ii. Central Control Unit:
Unit The stimuli thus received and retained are processed in the
central control unit. The stimuli is processed and interpreted with the help of four
psychological filter:
a. Stored information and past experience about the product/brand which serves as a
memory for comparing different alternatives;
b. Evaluative criteria which the consumer uses in judging the alternatives;
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c. General and specific attitudes which influence the purchase decision;

d. Basic personality traits, which influence how the consumer is likely to respond to
various alternatives.
iii. Decision process:
process The decision process component of the model consist of:
a. Problem recognition
b. Internal search and evaluation
c. External search and evaluation
d. Purchase processes
e. Decision outcomes
If the purchase decision is such that it requires extensive problem solving, the consumer
would go through all the above five stages. In case of limited problem solving or
routinised response behaviour, some of the intervening stages may be skipped and the
consumer may directly reach the purchase decision.
iv. Environmental Influences:
Influences The environmental factors that may influence the
consumers purchase decision are income, culture, family, social class and physical
situations. Depending on the specific product under consideration, these factors may have
a favorable or unfavorable influence on the purchase decision.
The bestbest-known response hierarchy models.

These models are discussed giving attention to their origin and implications and include:
The AIDA Model
action)desireinterest(attention
The Hierarchy-of-Effects Model c...preferencelikingknowledge(awareness
The Innovation-Adoption Model
evaluate interest awareness trial
The Information-Processing Model
comprehension attention presentation
Black box model of consumer behavior

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ENVIRONMENTAL
FACTORS
Marketing
Stimuli
Product
Price
Place
Promotion
Environmental
Stimuli
Economic
Technical
Political
Cultural
BUYER'S BLACK BOX
Buyer
Characteristics
Decision
Process
Attitudes
Motivation
Perceptions
Personality
Lifestyle
Problem
recognition
Information
search
Alternative
evaluation
Purchase
decision
Post-purchase
behavior
BUYER'S
RESPONSE
Product choice
Brand choice
Dealer choice
Purchase timing
Purchase
amount
The black box model shows the interaction of stimuli, consumer characteristics, decision
process and consumer responses. It can be distinguished between interpersonal stimuli
(between people) or intrapersonal stimuli (within people).[2] The black box model is
related to the black box theory of behaviorism, where the focus is not set on the processes
inside a consumer, but the relation between the stimuli and the response of the consumer.
The marketing stimuli are planned and processed by the companies, whereas the
environmental stimulus are given by social factors, based on the economical, political and
cultural circumstances of a society. The buyers black box contains the buyer
characteristics and the decision process, which determines the buyers response.
The black box model considers the buyers response as a result of a consciousness
decision process, in which it is assumed that the buyer has recognized the problem.
However, in reality many decisions are not made in awareness of a determined problem
by the consumer.
Information search
Once the consumer has recognised a problem, they search for information on products
and services that can solve that problem. Belch and Belch (2007) explain that consumers
undertake both an internal (memory) and an external search.
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Sources of information include:
Personal sources
Commercial sources
Public sources
Personal experience
The relevant internal psychological process that is associated with information search is
perception. Perception is defined as 'the process by which an individual receives, selects,
organises, and interprets information to create a meaningful picture of the world'
The selective perception process Stage Description Selective exposure consumers select
which promotional messages they will expose themselves to. Selective attention
consumers select which promotional messages they will pay attention to Selective
comprehension consumer interpret messages in line with their beliefs, attitudes,
motives and experiences Selective retention consumers remember messages that are
more meaningful or important to them
The implications of this process help develop an effective promotional strategy, and
select which sources of information are more effective for the brand.
Information evaluation
At this time the consumer compares the brands and products that are in their evoked set.
How can the marketing organization increase the likelihood that their brand is part of the
consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the
functional and psychological benefits that they offer. The marketing organization needs
to understand what benefits consumers are seeking and therefore which attributes are
most important in terms of making a decision.
Purchase decision
Once the alternatives have been evaluated, the consumer is ready to make a purchase
decision. Sometimes purchase intention does not result in an actual purchase. The
marketing organization must facilitate the consumer to act on their purchase intention.
The provision of credit or payment terms may encourage purchase, or a sales promotion
such as the opportunity to receive a premium or enter a competition may provide an
incentive to buy now. The relevant internal psychological process that is associated with
purchase decision is integration.
Postpurchase evaluation
The EKB model was further developed by Rice (1993) which suggested there should be a
feedback loop, Foxall (2005) further suggests the importance of the post purchase
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evaluation and that the post purchase evaluation is key due to its influences on future
purchase patterns.
Internal influences
Consumer behavior is influenced by: demographics, psychographics (lifestyle),
personality, motivation, knowledge, attitudes, beliefs, and feelings.
External influences
Consumer behavior is influenced by: culture, ethnicity, family, social class, reference
groups, and market mix factors.
UNIT II
subculture?
culture?
Q: How can you expain the concept of culture and sub
Ans:M
Ans:Meaning
For the purpose of studying consumer behaviour, culture can be defined as the sum
total of learned beliefs, values and customs that serve to guide and direct the
consumer behaviour of all members of that society.
Howard and Sheth have defined culture as A selective, man made way of
responding to experience, a set of behavioral pattern. Thus, culture consists of
traditional ideas and in particular the values, which are attached to these ideas. It
includes knowledge, belief, art, morale, law, customs and all other habits acquired
by man as a member of society. An accepted concept about culture is that includes a
set of learned beliefs, values, attitudes, habits and forms of behaviour that are
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shared by a society and are transmitted from generation to generation within that
society.
We can also put as: Culture refers to the set of values, ideas, and attitudes that are
accepted by a homogenous group of people and transmitted to the next
generation.Or the sum total of ways of living built up by a group of human beings
Two terms that are associated with culture are:
EnculturationLearning
about ones own culture
Enculturation
AcculturationLearning
about a new culture
Acculturation
Culture is learned through the following three ways:
1.Formal
1.Formal learning:
learning
Parents and elders teach children the proper way to behave. For instance, you have
been taught that you need to study to be successful and happy in life. This learning
may influence your response both as a student and individual towards education.
2.Informal
2.Informal learning:
learning:
We learn by imitating the behaviour of our parents, friends, or by watching TV and
film actors in action
3. Technical learning:
learning
Instructions are given about the specific method by which certain things to done
such as painting, dancing, singing etc.
Types of Culture
National culture
The culture prevalent in a nation, common to everyone
Popular culture
The culture of the masses with norms of mass appeal
Subculture
The culture of a group within the larger society
Group identification based on nationality of origin,
race, region, age, religion, gender, etc.
Corporate culture
The companys values, rituals, customs, myths and heroes
Culture has several important characteristics:
(1) Culture is comprehensive. This means that all parts must fit together in some
logical fashion. For example, bowing and a strong desire to avoid the loss of face are
unified in their manifestation of the importance of respect.
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(2) Culture is learned rather than being something we are born with. We will consider
the mechanics of learning later in the course
(3) Culture is manifested within boundaries of acceptable behavior. For example, in
American society, one cannot show up to class naked, but wearing anything from a suit
and tie to shorts and a T-shirt would usually be acceptable. Failure to behave within the
prescribed norms may lead to sanctions, ranging from being hauled off by the police for
indecent exposure to being laughed at by others for wearing a suit at the beach.
(4) Conscious awareness of cultural standards is limited. One American spy was
intercepted by the Germans during World War II simply because of the way he held his
knife and fork while eating
(5) Cultures fall somewhere on a continuum between static and dynamic depending on
how quickly they accept change. For example, American culture has changed a great
deal since the 1950s, while the culture of Saudi Arabia has changed much less.
Culture can be divided into subcultures:
A sub-culture is an identifiable distinct, cultural group, which, while following the
dominant cultural values of the overall society also has its own belief, values and
customs that set them apart from other members of the same society.
SubSub-culture categories are:
Nationality: Indian, Sri-lanka, Pakistan
Religion: Hinduism, Islam
Race: Asian, black, white
Age: young, middle aged, elderly
Sex: Male, Female
Occupation: Farmer, teacher, business
Social class: upper, middle, lower
Geographic regions: South India, North-eastern India
Q: How family life cycle and family decision making can influence consumer behavior?
Ans: Families and Family Decision Making
The Family Life Cycle.
Cycle Individuals and families tend to go through a "life cycle:" The
simple life cycle goes from
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For purposes of this discussion, a "couple" may either be married or merely involve
living together. The breakup of a non-marital relationship involving cohabitation is
similarly considered equivalent to a divorce.
In real life, this situation is, of course, a bit more complicated. For example, many
couples undergo divorce. Then we have one of the scenarios:
Single parenthood can result either from divorce or from the death of one parent. Divorce
usually entails a significant change in the relative wealth of spouses. In some cases, the
non-custodial parent (usually the father) will not pay the required child support, and even
if he or she does, that still may not leave the custodial parent and children as well off as
they were during the marriage. On the other hand, in some cases, some non-custodial
parents will be called on to pay a large part of their income in child support. This is
particularly a problem when the non-custodial parent remarries and has additional
children in the second (or subsequent marriages). In any event, divorce often results in a
large demand for:
Low cost furniture and household

items
Time-saving goods and services

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Divorced parents frequently remarry, or become involved in other non-marital

relationships; thus, we may see
Another variation involves
Here, the single parent who assumes responsibility for one or more children may not
form a relationship with the other parent of the child.
Integrating all the possibilities discussed, we get the following depiction of the Family
Life Cycle:
Generally, there are two main themes in the Family Life Cycle, subject to significant
exceptions:
As a person gets older, he or she tends to advance in his or her career and tends to get
greater income (exceptions: maternity leave, divorce, retirement).
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Unfortunately, obligations also tend to increase with time (at least until ones
mortgage has been paid off). Children and paying for ones house are two of the
greatest expenses.
Note that although a single person may have a lower income than a married couple, the
single may be able to buy more discretionary items.
Family Decision Making. Individual members of families often serve different roles in
decisions that ultimately draw on shared family resources. Some individuals are
information gatherers/holders, who seek out information about products of relevance.
These individuals often have a great deal of power because they may selectively pass on
information that favors their chosen alternatives. Influencers do not ultimately have the
power decide between alternatives, but they may make their wishes known by asking for
specific products or causing embarrassing situations if their demands are not met. The
decision maker(s) have the power to determine issues such as:
Whether to buy;
Which product to buy (pick-up or passenger car?);
Which brand to buy;
Where to buy it; and
When to buy.
Note, however, that the role of the decision maker is separate from that of the
purchaser. From the point of view of the marketer, this introduces some problems
since the purchaser can be targeted by point-of-purchase (POP) marketing efforts that
cannot be aimed at the decision maker. Also note that the distinction between the
purchaser and decision maker may be somewhat blurred:
The decision maker may specify what kind of product to buy, but not which brand;
The purchaser may have to make a substitution if the desired brand is not in stock;
The purchaser may disregard instructions (by error or deliberately).
It should be noted that family decisions are often subject to a great deal of conflict. The
reality is that few families are wealthy enough to avoid a strong tension between demands
on the familys resources. Conflicting pressures are especially likely in families with
children and/or when only one spouse works outside the home. Note that many decisions
inherently come down to values, and that there is frequently no "objective" way to
arbitrate differences. One spouse may believe that it is important to save for the
childrens future; the other may value spending now (on private schools and computer
equipment) to help prepare the children for the future. Who is right? There is no clear
answer here. The situation becomes even more complex when more partiessuch as
children or other relativesare involved.
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Some family members may resort to various strategies to get their way. One is
bargainingone member will give up something in return for someone else. For
example, the wife says that her husband can take an expensive course in gourmet cooking
if she can buy a new pickup truck. Alternatively, a child may promise to walk it every
day if he or she can have a hippopotamus. Another strategy is reasoningtrying to get
the other person(s) to accept ones view through logical argumentation. Note that even
when this is done with a sincere intent, its potential is limited by legitimate differences in
values illustrated above. Also note that individuals may simply try to "wear down" the
other party by endless talking in the guise of reasoning (this is a case of negative
reinforcement as we will see subsequently). Various manipulative strategies may also be
used. One is impression management, where one tries to make ones side look good (e.g.,
argue that a new TV will help the children see educational TV when it is really mostly
wanted to see sports programming, or argue that all "decent families make a contribution
to the church"). A uthority involves asserting ones "right" to make a decision (as the
"man of the house," the mother of the children, or the one who makes the most money).
Emotion involves making an emotional display to get ones way (e.g., a man cries if his
wife will not let him buy a new rap album).
Q: How personal influence of consumer behavior can create Diffusion of Innovation.

Innovation.?
Ans: Products tend to go through a life cycle. Initially, a product is introduced. Since the
product is not well known and is usually expensive (e.g., as microwave ovens were in the
late 1970s), sales are usually limited. Eventually, however, many products reach a growth
phasesales increase dramatically. More firms enter with their models of the product.
Frequently, unfortunately, the product will reach a maturity stage where little growth will
be seen. For example, in the United States, almost every household has at least one color
TV set. Some products may also reach a decline stage, usually because the product
category is being replaced by something better. For example, typewriters experienced
declining sales as more consumers switched to computers or other word processing
equipment. The product life cycle is tied to the phenomenon of diffusion of innovation.
When a new product comes out, it is likely to first be adopted by consumers who are
more innovative than othersthey are willing to pay a premium price for the new
product and take a risk on unproven technology. It is important to be on the good side of
innovators since many other later adopters will tend to rely for advice on the innovators
who are thought to be more knowledgeable about new products for advice.

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At later phases of the PLC, the firm may need to modify its market strategy. For example,
facing a saturated market for baking soda in its traditional use, Arm Hammer launched
a major campaign to get consumers to use the product to deodorize refrigerators.
Deodorizing powders to be used before vacuuming were also created.
It is sometimes useful to think of products as being either new or existing.
Many firms today rely increasingly on new products for a large part of their sales. New
products can be new in several ways. They can be new to the marketnoone else ever
made a product like this before. For example, Chrysler invented the minivan. Products
can also be new to the firm another firm invented the product, but the firm is now
making its own version. For example, IBM did not invent the personal computer, but
entered after other firms showed the market to have a high potential. Products can be new
to the segment e.g., cellular phones and pagers were first aimed at physicians and other
price-insensitive segments. Later, firms decided to target the more price-sensitive mass
market. A product can be new for legal purposes. Because consumers tend to be attracted
to new and improved products, the Federal Trade Commission (FTC) only allows firms
to put that label on reformulated products for six months after a significant change has
been made.
The diffusion of innovation refers to the tendency of new products, practices, or ideas to
spread among people. Usually, when new products or ideas come about, they are only
adopted by a small group of people initially; later, many innovations spread to other
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The bell shaped curve frequently illustrates the rate of adoption of a new product.
Cumulative adoptions are reflected by the S-shaped curve. The saturation point is the
maximum proportion of consumers likely to adopt a product.
In the case of refrigerators in the U.S., the saturation level is nearly one hundred percent
of households; it well below that for video games that, even when spread out to a large
part of the population, will be of interest to far from everyone.
Several specific product categories have case histories that illustrate important issues in
adoption. Until some time in the 1800s, few physicians bothered to scrub prior to
surgery, even though new scientific theories predicted that small microbes not visible to
the naked eye could cause infection. Younger and more progressive physicians began
scrubbing early on, but they lacked the stature to make their older colleagues follow.
ATM cards spread relatively quickly. Since the cards were used in public, others who
did not yet hold the cards could see how convenient they were. Although some people
were concerned about security, the convenience factors seemed to be a decisive factor in
the tug-of-war for and against adoption.
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The case of credit cards was a bit more complicated and involved a chicken-and-egg
paradox. Accepting credit cards was not a particularly attractive option for retailers until
they were carried by a large enough number of consumers. Consumers, in contrast, were
not particularly interested in cards that were not accepted by a large number of retailers.
Thus, it was necessary to jump start the process, signing up large corporate accounts,
under favorable terms, early in the cycle, after which the cards became worthwhile for
retailers to accept.
Rap music initially spread quickly among urban youths in large part because of the low
costs of recording. Later, rap music became popular among a very different segment,
suburban youths, because of its apparently authentic depiction of an exotic urban
lifestyle.
Hybrid corn was adopted only slowly among many farmers. Although hybrid corn
provided yields of about 20% more than traditional corn, many farmers had difficulty
believing that this smaller seed could provide a superior harvest. They were usually
reluctant to try it because a failed harvest could have serious economic consequences,
including a possible loss of the farm. Agricultural extension agents then sought out the
most progressive farmers to try hybrid corn, also aiming for farmers who were most
respected and most likely to be imitated by others. Few farmers switched to hybrid corn
outright from year to year. Instead, many started out with a fraction of their land, and
gradually switched to 100% hybrid corn when this innovation had proven itself useful.
Several forces often work against innovation. One is risk, which can be either social or
financial. For example, early buyers of the CD player risked that few CDs would be
recorded before the CD player went the way of the 8 track player. Another risk is being
perceived by others as being weird for trying a fringe product or idea. For example,
Barbara Mandrell sings the song I Was Country When Country Wasnt Cool. Other
sources of resistance include the initial effort needed to learn to use new products (e.g., it
takes time to learn to meditate or to learn how to use a computer) and concerns about
compatibility with the existing culture or technology. For example, birth control is
incompatible with strong religious influences in countries heavily influenced by Islam or
Catholicism, and a computer database is incompatible with a large, established card file.
Innovations come in different degrees. A continuous innovation includes slight
improvements over time. Very little usually changes from year to year in automobiles,
and even automobiles of the 1990s are driven much the same way that automobiles of the
1950 were driven. A dynamically continuous innovation involves some change in
technology, although the product is used much the same way that its predecessors were
usede.g., jet vs. propeller aircraft. A discontinous innovation involves a product that
fundamentally changes the way that things are donee.g., the fax and photocopiers. In
general, discontinuous innovations are more difficult to market since greater changes are
required in the way things are done, but the rewards are also often significant.
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Several factors influence the speed with which an innovation spreads. One issue is
relative advantage (i.e., the ratio of risk or cost to benefits). Some products, such as
cellular phones, fax machines, and ATM cards, have a strong relative advantage. Other
products, such as automobile satellite navigation systems, entail some advantages, but the
cost ratio is high. Lower priced products often spread more quickly, and the extent to
which the product is trialable (farmers did not have to plant all their land with hybrid corn
at once, while one usually has to buy a cellular phone to try it out) influence the speed of
diffusion. Finally, the extent of switching difficulties influences speedmany offices
were slow to adopt computers because users had to learn how to use them.
Some cultures tend to adopt new products more quickly than others, based on several
factors:
Modernity:
Modernity The extent to which the culture is receptive to new things. In some countries,
such as Britain and Saudi Arabia, tradition is greatly valuedthus, new products often
dont fare too well. The United States, in contrast, tends to value progress.
Homophily: The more similar to each other that members of a culture are, the more
likely an innovation is to spreadpeople are more likely to imitate similar than different
models. The two most rapidly adopting countries in the World are the U.S. and Japan.
While the U.S. interestingly scores very low, Japan scores high.
Physical distance:
distance The greater the distance between people, the less likely innovation is
to spread.
Opinion leadership: The more opinion leaders are valued and respected, the more likely
an innovation is to spread. The style of opinion leaders moderates this influence,
however. In less innovative countries, opinion leaders tend to be more conservative, i.e.,
to reflect the local norms of resistance.
It should be noted that innovation is not always an unqualifiedly good thing. Some
innovations, such as infant formula adopted in developing countries, may do more harm
than good. Individuals may also become dependent on the innovations. For example,
travel agents who get used to booking online may be unable to process manual
reservations.
Sometimes innovations are disadopted. For example, many individuals disadopt cellular
phones if they find out that they dont end up using them much.

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UNIT III
Q:How
Q:How can you explain
explain concept of personality and self concept?
Ans: Introduction
Personality can be described as the psychological characteristics that both determine
and reflect how a person responds to his or her environment. Although personality
tends to be consistent and enduring, it may change abruptly in response to major life
events, as well as gradually over time.
Three theories of personality are prominent in the study of consumer behavior:
psychoanalytic theory
neo-Freudian theory
trait theory.
Freuds psychoanalytic
psychoanalytic
This theory provides the foundation for the study of motivational research, which
operates on the premise that human drives are largely unconscious in nature and serve to
motivate many consumer actions.
NeoNeo-Freudian theory
This theory tends to emphasize the fundamental role of social relationships in the
formation and development of
personality. Alfred Adler viewed human beings as
seeking to overcome feelings of inferiority. Harry Stack Sullivan believed that people
attempt to establish significant and rewarding relationships with others. Karen Horney
saw individuals as trying to overcome feelings of anxiety and categorized them as
compliant, aggressive, or detached.
Trait theory
Trait theory is a major departure from the qualitative or subjective approach to
personality measurement. It postulates that individuals possess innate psychological
traits (e.g., innovativeness, novelty seeking, need for cognition, materialism) to a
greater or lesser degree, and that these traits can be measured by specially designed
scales or inventories. Because they are simple to use and to score and can be
selfadministered,
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Nature of personality
The study of personality reveals three distinct aspects:
Personality reflects individual differences
Personality is consistent and enduring
Personality can change
1. Personality reflects individual differences
The inner characteristics that constitute ones personality are a unique
combination of factors, so that no two individuals are exactly alike
Some people may be similar in terms of a single personality characteristic
This is helpful to marketers, who can thus categorize (segment) consumers into
groups based on similarities in one or more traits
2. Personality is consistent and enduring
However, consumption behavior may vary because of other factors that affect
behavior (e.g., psychological, sociocultural, environmental, etc.)
Personality is only one of a number of factors that influence consumer behavior
3. Personality can change
Personality may change due to abrupt events
Also part of a gradual maturation process
Specific personality traits
Innovativeness
Dogmatism
Social character
Materialism
Compulsiveness
1. Innovativeness
Willingness to try new products, services or practices
Innovators are the first to try a new product and often indicate its success or
failure
2. Dogmatism
Measures the degree of rigidity vs. openness individuals display toward he
unfamiliar and toward information that is contrary to their own established beliefs
An indicator of how consumers respond to unfamiliar products or features
Highly dogmatic (closed-minded) consumers are more likely to choose
established, rather than innovative, product alternatives
Highly dogmatic consumers tend to be more receptive to ads for new products or
services that contain an appeal from an authoritative figure
3. Social character
Personality trait that ranges on a continuum from inner-directedness to other
directedness
Inner
InnerInner-directed consumers rely on their own inner values in evaluating new
products and are likely to be innovators
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Outer
OuterOuter-directed consumers tend to look to others for direction on what is right
and wrong and thus less likely to be innovators
They are attracted to different types of promotional messages
Inner-directed consumers prefer ads that stress product features and personal
benefits (allowing them to use their own values and standards in evaluating
products)
Outer-directed consumers prefer ads that feature an approving social environment
or social acceptance
4. Materialism
It distinguishes between individuals who regard possessions as essential to their
identities and their lives, and those for whom possessions are secondary
Research indicates that characteristics of materialistic persons include:
They value acquiring and showing off possessions
Self-centered and selfish
They seek lifestyles full of possessions
Their possessions do not give them greater personal satisfaction
5. Compulsiveness
Compulsive activities include alcoholism, gambling, and various food disorders
Compulsive buying can be included in the list
Often requires some type of therapy or clinical treatment
Evidence suggests that some consumers use self-gifting and compulsive buying as
a way to influence or manage their moods
SelfSelf-concept/selfconcept/self-image
Ones perception of self or the overall image that a person holds of him or
herself
Consumers tend to buy products and brands and patronize retailers whose
images or personalities closely correspond to their own
Multiple selves
Individuals were originally thought to have only one self-image
Today it is believed that consumers have multiple selvesi.e., individuals act
differently with different people and in different situations
Marketers should target their products to consumers within the context of a
particular self
Extended self
Involves the interrelationship between consumers self-images and their
possessions
Possessions can be seen to extend the self-image
Possessions have badge value because they communicate something about their
owners and how they feel about themselves
SelfSelf-concept and consumption
The products and services we consume help us define our self-concept and social
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identity
They also affect other peoples perceptions of us, as it is common for people to
judge others based on their clothing, make of automobile, home, leisure activities,
etc.
Self-congruence describes the tendency of consumers to select products that
match some aspect of themselves
Q: How can you
you explain the concept of motivation and involvement?
Ans:
Motivation:
Motivation
Motivation refers to the processes that cause people to behave as they do.
Motivation occurs when a need is aroused that the consumer wishes to satisfy. Once a
need has been activated, a state of tension exists that drives the consumer to attempt to
eliminate or reduce the need.
Understanding motivation = understanding why consumers do what they do.
Motivation satisfies either utilitarian or hedonic needs.
Satisfying utilitarian needs implies that consumers emphasize the objective, tangible
attributes of products e.g. fuel economy in a car.
Satisfying hedonic needs implies that consumers emphasize
subjective and experiential aspects, e.g. self confidence,
excitement, etc.
Marketer role:
Marketers try to create products and services that will provide the desired benefits
that permit the consumer to reduce the tension.
Tension = difference between the consumers present state and some ideal state.

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Motivational conflicts:
Positively valued goals - consumers are motivated to approach the goal and will
seek out products that will be instrumental in attaining it.
A voiding negative goals - consumers are motivated to avoid a negative outcome
structuring their purchases or consumption activities.
Cognative dissonance:
Premise that people have a need for consistency and order in their lives and that a
state of tension and conflict is created when beliefs or behaviours conflict with
one another.
The conflict may be resolved through cognitive dissonance reduction where
people are motivated to reduce this inconsistency and eliminate the unpleasant
tension.
Consumer Involvement:
Involvement
Involvement refers to a persons perceived relevance of the object based on their
inherent needs, values and interests. (Zaichkowsky, 1985)
Involvement can be viewed as the motivation to process information. (Mitchell,
1979)
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The type of information processing that occurs ranges from simple processing
where the basic features of a message are considered elaboration where the
incoming information is linked to a persons pre existing knowledge systems.
Types of cognitive invol
involvement
Cognitive involvement - where a person is motivated to learn all s/he can about
the product.
Product involvement - the consumers level of interest in making a particular
purchase.
Message response involvement (advertising involvement) - the consumers
interest in processing marketing communications.
Ego involvement (enduring involvement) - the importance of a product to a
consumers self-concept.
An involvement profile:
The perceived importance of the potential negative consequence of a bad
purchase.
The probability of making a bad purchase.
The pleasure value of the product category.
The sign value of the product category.
Such profiles allows consumer researchers to capture the diversity of the

involvement construct and use involvement as a segmentation base.
Techniques to increase involvement:
Appeal to the consumers hedonic needs (smell good, sense good, etc).
Use novel stimuli (Commercial surprise).
Use prominent stimuli (contrast, loud music, anything that doesnt fit).
Include celebrity endorsers.
Q: How can you explain Information Processing?
Ans:
A customer can obtain information from several sources:
Personal sources: family, friends, neighbours etc
Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-ofsale displays
Public sources: newspapers, radio, television, consumer organisations; specialist
magazines
Experiential sources: handling, examining, using the product
The usefulness and influence of these sources of information will vary by product and by
customer. Research suggests that customers value and respect personal sources more than
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commercial sources (the influence of word of mouth). The challenge for the marketing
team is to identify which information sources are most influential in their target markets.
Information search and decision making.
making Consumers are engage in both internal and
external information search.

Internal search involves the consumer identifying alternatives from his or her memory.
For certain low involvement products, it is very important that marketing programs
achieve top of mind awareness. For example, few people will search the Y ellow Pages
for fast food restaurants; thus, the consumer must be able to retrieve ones restaurant
from memory before it will be considered. For high involvement products, consumers
are more likely to use an external search. Before buying a car, for example, the consumer
may ask friends opinions, read reviews in Consumer Reports, consult several web sites,
and visit several dealerships. Thus, firms that make products that are selected
predominantly through external search must invest in having information available to the
consumer in neede.g., through brochures, web sites, or news coverage.
A compensatory decision involves the consumer trading off good and bad attributes of
a product. For example, a car may have a low price and good gas mileage but slow
acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may
then select it over a car with better acceleration that costs more and uses more gas.
Occasionally, a decision will involve a non-compensatory strategy. For example, a
parent may reject all soft drinks that contain artificial sweeteners. Here, other good
features such as taste and low calories cannot overcome this one non-negotiable
attribute.
The amount of effort a consumer puts into searching depends on a number of factors such
as the market (how many competitors are there, and how great are differences between
brands expected to be?), product characteristics (how important is this product? How
complex is the product? How obvious are indications of quality?), consumer
characteristics (how interested is a consumer, generally, in analyzing product
characteristics and making the best possible deal?), and situational characteristics (as
previously discussed).
Two interesting issues in decisions are:
V ariety seeking (where consumers

seek to try new brands not because
these brands are expected to be
better in any way, but rather
because the consumer wants a
change of pace, and

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Impulse
purchasesunplanned
buys. This represents a somewhat
fuzzy group. For example, a
shopper may plan to buy vegetables
but only decide in the store to
actually buy broccoli and corn.
Alternatively, a person may buy an
item which is currently on sale, or
one that he or she remembers that is
needed only once inside the store.
A number of factors involve consumer choices. In some cases, consumers will be more
motivated. For example, one may be more careful choosing a gift for an in-law than
when buying the same thing for one self. Some consumers are also more motivated to
comparison shop for the best prices, while others are more convenience oriented.
Personality impacts decisions. Some like variety more than others, and some are more
receptive to stimulation and excitement in trying new stores. Perception influences
decisions. Some people, for example, can taste the difference between generic and name
brand foods while many cannot. Selective perception occurs when a person is paying
attention only to information of interest. For example, when looking for a new car, the
consumer may pay more attention to car ads than when this is not in the horizon. Some
consumers are put off by perceived risk . Thus, many marketers offer a money back
guarantee. Consumers will tend to change their behavior through learninge.g., they
will avoid restaurants they have found to be crowded and will settle on brands that best
meet their tastes. Consumers differ in the values they hold (e.g., some people are more
committed to recycling than others who will not want to go through the hassle). We will
consider the issue of lifestyle under segmentation.
Q: What
What role is played by learning and memory in the context of consumer behavior?
behavior?
Learning and Memory
Background.
Background. Learning involves "a change in the content or organization of long term
memory and/or behavior." The first part of the definition focuses on what we know (and
can thus put to use) while the second focuses on concrete behavior. For example, many
people will avoid foods that they consumed shortly before becoming ill. Learning is not
all knowledge based. For example, we may experience the sales people in one store being
nicer to us than those in the other. We thus may develop a preference for the one store
over the other; however, if pressed, we may not be able to give a conscious explanation
as to the reason for our preference.

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Much early work on learning was actually done on rats and other animals (and much of
this research was unjustifiably cruel, but that is another matter).
Classical conditioning.
conditioning Pavlovs early work on dogs was known as classical conditioning.
Pavlov discovered that when dogs were fed meat powder they salivated. Pavlov then
discovered that if a bell were rung before the dogs were fed, the dogs would begin
salivating in anticipation of being fed (this was efficient, since they could then begin
digesting the meat powder immediately). Pavlov then found that after the meat had been
"paired" with the meat powder enough times, Pavlov could ring the bell without feeding
the dogs and they would still salivate.
In the jargon of classical conditioning, the meat powder was an unconditioned stimulus
(US) and the salivation was, when preceded by the meat powder, an unconditioned
response (UR). That is, it is a biologically "hard-wired" response to salivate when you are
fed. By pairing the bell with the unconditioned stimulus, the bell became a conditioned
stimulus (CS) and salivation in response to the bell (with no meat powder) became a
conditioned response (CR).
Many modern day advertisers use classical conditioning in some way. Consider this
sequence:
Operant conditioning. Instrumental, or operant, conditioning, involves a different series

of events, and this what we usually think of as learning. The general pattern is:

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There are three major forms of operant learning. In positive reinforcement, an individual
does something and is rewarded. He or she is then more likely to repeat the behavior. For
example, you eat a candy bar (behavior), it tastes good (consequence), and you are thus
more likely to eat a similar candy bar in the future (behavioral change).
Punishment is the opposite. You eat what looks like a piece of candy (behavior), only to
discover that it is a piece of soap with a foul taste (consequences), and subsequently you
are less likely to eat anything that looks remotely like that thing ever again (changed
behavior).
It should be noted that negative reinforcement is very different from punishment. An
example of negative reinforcement is an obnoxious sales person who calls you up on the
phone, pressuring you into buying something you dont want to do (aversive stimulus).
You eventually agree to buy it (changed behavior), and the sales person leaves you alone
(the aversive stimulus is terminated as a result of consequences of your behavior).
In general, marketers usually have relatively little power to use punishment or negative
reinforcement. However, parking meters are often used to discourage consumers from
taking up valuable parking space, and manufacturers may void warranties if the
consumers take their product to non-authorized repair facilities.

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Several factors influence the effectiveness of operant learning. In general, the closer in
time the consequences are to the behavior, the more effective the learning. That is,
electric utilities would be more likely to influence consumers to use less electricity at
peak hours if the consumers actually had to pay when they used electricity (e.g., through
a coin-slot) rather than at the end of the month. Learning is also more likely to occur
when the individual can understand a relationship between behavior and consequences
(but learning may occur even if this relationship is not understood consciously).
Another issue is schedules of reinforcement and extinction. Extinction occurs when
behavior stops having consequences and the behavior then eventually stops occurring.
For example, if a passenger learns that yelling at check-in personnel no longer gets her
upgraded to first class, she will probably stop that behavior. Sometimes, an individual is
rewarded every time a behavior is performed (e.g., a consumer gets a soft drink every
time coins are put into a vending machine). However, it is not necessary to reward a
behavior every time for learning to occur. Even if a behavior is only rewarded some of
the time, the behavior may be learned. Several different schedules of reinforcement are
possible:
Fixed interval: The consumer is

given a free dessert on every
Tuesday when he or she eats in a
particular restaurant.
Fixed ratio: Behavior is rewarded (or
punished) on every nth occasion that
it is performed. (E.g., every tenth
time a frequent shopper card is
presented, a free product is
provided).
V ariable ratio: Every time an action
is performed, there is a certain
percentage chance that a reward will
be given. For example, every time
the consumer enters the store, he or
she is given a lottery ticket. With
each ticket, there is a 20% chance of
getting a free hamburger. The
consumer may get a free hamburger
twice in a row, or he or she may go
ten times without getting a
hamburger even once.
Variable ratio reinforcement is least vulnerable to extinction.

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Sometimes, shaping may be necessary to teach the consumer the desired behavior. That
is, it may be impossible to teach the consumer to directly perform the desired behavior.
For example, a consumer may first get a good product for free (the product itself, if good,
is a reward), then buy it with a large cents off coupon, and finally buy it at full price.
Thus, we reinforce approximations of the desired behavior. Rather than introducing Coca
Cola directly in Indonesia, fruit flavored soft drinks were first introduced, since these
were more similar to beverages already consumed.
Vicarious learning.
learning The consumer does not always need to go through the learning
process himself or herselfsometimes it is possible to learn from observing the
consequences of others. For example, stores may make a big deal out of prosecuting shop
lifters not so much because they want to stop that behavior in the those caught, but rather
to deter the behavior in others. Similarly, viewers may empathize with characters in
advertisements who experience (usually positive) results from using a product. The Head
n Shoulders advertisement, where a poor man is rejected by women until he treats his
dandruff with an effective cure, is a good example of vicarious learning.
Memory
Memory ranges in duration on a continuum from extremely short to very long term.
Sensory memory includes storage of stimuli that one might not actually notice (e.g., the
color of an advertisement some distance away). For slightly longer duration, when you
see an ad on TV for a mail order product you might like to buy, you only keep the phone
number in memory until you have dialed it. This is known as short term memory. In
order for something to enter into long term memory, which is more permanent, you must
usually rehearse it several times. For example, when you move and get a new phone
number, you will probably repeat it to yourself many times. Alternatively, you get to
learn your drivers license or social security numbers with time, not because you
deliberately memorize them, but instead because you encounter them numerous times as
you look them up.
Several techniques can be used to enhance the memorability of information. Chunking
involves rearranging information so that fewer parts need to be remembered. For
example, consider the phone number (800) 444-1000. The eight digits can be more
economically remembered as an 800 number (1 piece), four repeated 3 times (2 pieces),
and 1000 (1-2 pieces). Rehearsal involves the consumer repeating the information over
and over so that it can be remembered; this is often done so that a phone number can be
remembered while the memoree moves to the phone to dial it. Recirculation
involves repeated exposure to the same information; the information is not learned
deliberately, but is gradually absorbed through repetition. Thus, it is to the advantage to a
marketer to have an advertisement repeated extensivelyespecially the brand name.
Elaboration involves the consumer thinking about the objecte.g., the product in an
advertisementand thinking about as many related issues as possible. For example,
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when seeing an ad for Dole bananas, the person may think of the color yellow, going to
the zoo seeing a monkey eating a banana, and her grandmothers banana-but bread. The
Dole brand name may then be activated when any of those stimuli are encountered.
Memories are not always easily retrievable. This could be because the information was
given lower priority than something elsee.g., we have done a lot of things since last
buying a replacement furnace filter and cannot remember where this was bought last.
Other times, the information can be retrieved but is not readily availablee.g., we will
be able to remember the location of a restaurant we tried last time we were in Paris, but it
may take some thinking before the information emerges.
Spreading activation involves the idea of one memory triggering another one. For
example, one might think of Coke every time one remembers a favorite (and very wise)
professor who frequently brought one to class. Coke might also be tied a particular
supermarket that always stacked a lot of these beverages by the entrance, and to baseball
where this beverage was consumed after the game. It is useful for firms to have their
product be activated by as many other stimuli as possible.
There are numerous reasons why retrieval can fail or, in less fancy terms, how we come
to forget. One is decay. Here, information that is not accessed frequently essentially
rusts away. For example, we may not remember the phone number of a friend to
whom we have not spoken for several months and may forget what brand of bullets an
aunt prefers if we have not gone ammunition shopping with her lately. Other times, the
problem may rest in interference. Proactive interference involves something we have
learned interfering with what we will late later. Thus, if we remember that everyone in
our family always used Tide, we may have more difficulty later remembering what other
brands are available. You may be unable to remember what a new, and less important,
friends last name is if that person shares a first name with an old friend. For example, if
your best friend for many years has been Jennifer Smith, you may have difficulty
remembering that your new friend Jennifers last name is Silverman. In retroactive
interference, the problem is the reverselearning something new blocks out something
old. For example, if you once used WordPerfect than then switched to Microsoft Word,
you may have trouble remembering how to use WordPerfect at a friends housemore
so than if you had merely not used any word processing program for some time.
Memorability can be enhanced under certain conditions. One is more likely to remember
favorableor likable stimuli (all other things being equal). Salienceor the extent to
which something is highly emphasized or very clearly evidentfacilitates memory.
Thus, a product which is very visible in an ad, and handled and given attention by the
actors, will more likely be remembered. Prototypicality involves the extent to which a
stimulus is a perfect example of a category. Therefore, people will more likely
remember Coke or Kleenex than competing brands. Congruence involves the fit with a
situation. Since memory is often reconstructed based on what seems plausible,
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something featured in an appropriate settinge.g., charcoal on a porch next to a grill

rather than in a garage or kitchenis more likely to be remembered (unless the
incongruence triggers an elaborationlife is complicated!) Redundancies involve
showing the stimulus several times. Thus, if a given product is shown several places in a
houseand if the brand name is repeatedit is more likely to be remembered.
Priming involves tying a stimulus with something so that if that something is

encountered, the stimulus is more likely to be retrieved. Thus, for example, when one
thinks of anniversaries, the Hallmark brand name is more likely to be activated. (This is
a special case of spreading activation discussed earlier).
A special issue in memory are so called scripts, or procedures we remember for doing
things. Scripts involve a series of steps for doing various things (e.g., how to send a
package). In general, it is useful for firms to have their brand names incorporated into
scripts (e.g., to have the consumer reflexively ask the pharmacist for Bayer rather than an
unspecified brand of aspirin).
Positioning involves implementing our targeting. For example, Apple Computer has
chosen to position itself as a maker of user-friendly computers. Thus, Apple has done a
lot through its advertising to promote itself, through its unintimidating icons, as a
computer for non-geeks. The Visual C software programming language, in contrast, is
aimed a techies.
Repositioning involves an attempt to change consumer perceptions of a brand, usually

because the existing position that the brand holds has become less attractive. Sears, for
example, attempted to reposition itself from a place that offered great sales but
unattractive prices the rest of the time to a store that consistently offered everyday low
prices. Repositioning in practice is very difficult to accomplish. A great deal of money
is often needed for advertising and other promotional efforts, and in many cases, the
repositioning fails.
Q:How consumer
consumer behavior is effected by attitude and attitude change?
Attitudes
Introduction.
Introduction Consumer attitudes are a composite of a consumers (1) beliefs about, (2)
feelings about, (3) and behavioral intentions toward some object--within the context of
marketing, usually a brand or retail store. These components are viewed together since
they are highly interdependent and together represent forces that influence how the
consumer will react to the object.

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Beliefs. The first component is beliefs. A consumer may hold both positive beliefs
toward an object (e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily
spilled and stains papers). In addition, some beliefs may be neutral (coffee is black), and
some may be differ in valance depending on the person or the situation (e.g., coffee is hot
and stimulates--good on a cold morning, but not good on a hot summer evening when one
wants to sleep). Note also that the beliefs that consumers hold need not be accurate (e.g.,
that pork contains little fat), and some beliefs may, upon closer examination, be
contradictory (e.g., that a historical figure was a good person but also owned slaves).
Since a consumer holds many beliefs, it may often be difficult to get down to a bottom
line overall belief about whether an object such as McDonalds is overall good or bad.
The Multiattribute (also sometimes known as the Fishbein) Model attempts to summarize
overall attitudes into one score using the equation:
That is, for each belief, we take the weight or importance (Wi) of that belief and multiply
it with its evaluation (Xib). For example, a consumer believes that the taste of a beverage
is moderately important, or a 4 on a scale from 1 to 7. He or she believes that coffee
tastes very good, or a 6 on a scale from 1 to 7. Thus, the product here is 4(6)=24. On the
other hand, he or she believes that the potential of a drink to stain is extremely important
(7), and coffee fares moderately badly, at a score -4, on this attribute (since this is a
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negative belief, we now take negative numbers from -1 to -7, with -7 being worst). Thus,
we now have 7(-4)=-28. Had these two beliefs been the only beliefs the consumer held,
his or her total, or aggregated, attitude would have been 24+(-28)=-4. In practice, of
course, consumers tend to have many more beliefs that must each be added to obtain an
accurate measurement.
Affect.
Affect Consumers also hold certain feelings toward brands or other objects. Sometimes
these feelings are based on the beliefs (e.g., a person feels nauseated when thinking about
a hamburger because of the tremendous amount of fat it contains), but there may also be
feelings which are relatively independent of beliefs. For example, an extreme
environmentalist may believe that cutting down trees is morally wrong, but may have
positive affect toward Christmas trees because he or she unconsciously associates these
trees with the experience that he or she had at Christmas as a child.
Behavioral Intention.
Intention The behavioral intention is what the consumer plans to do with
respect to the object (e.g., buy or not buy the brand). As with affect, this is sometimes a
logical consequence of beliefs (or affect), but may sometimes reflect other circumstances-e.g., although a consumer does not really like a restaurant, he or she will go there
because it is a hangout for his or her friends.
AttitudeAttitude-Behavior Consistency.
Consistency Consumers often do not behave consistently with their
attitudes for several reasons:
A bility. He or she may be unable to

do so. Although junior high school
student likes pick-up trucks and
would like to buy one, she may lack
a drivers license.
Competing demands for resources.
Although the above student would
like to buy a pickup truck on her
sixteenth birthday, she would rather
have a computer, and has money for
only one of the two.
Social influence. A student thinks
that smoking is really cool, but since
his friends think its disgusting, he
does not smoke.
Measurement problems. Measuring
attitudes is difficult. In many
situations, consumers do not
consciously set out to enumerate
how positively or negatively they

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feel about mopeds, and when a

market researcher asks them about
their beliefs about mopeds, how
important these beliefs are, and their
evaluation of the performance of
mopeds with respect to these beliefs,
consumers often do not give very
reliable
answers.
Thus,
the
consumers may act consistently with
their true attitudes, which were never
uncovered because an erroneous
measurement was made.
Attitude Change Strategies
Strategies.
gies Changing attitudes is generally very difficult, particularly
when consumers suspect that the marketer has a self-serving agenda in bringing about
this change (e.g., to get the consumer to buy more or to switch brands).
Changing affect. One approach is to try to change affect, which may or may not involve
getting consumers to change their beliefs. One strategy uses the approach of classical
conditioning try to pair the product with a liked stimulus. For example, we pair a car
with a beautiful woman. Alternatively, we can try to get people to like the advertisement
and hope that this liking will spill over into the purchase of a product. For example,
the Pillsbury Doughboy does not really emphasize the conveyance of much information
to the consumer; instead, it attempts to create a warm, fuzzy image. Although Energizer
Bunny ads try to get people to believe that their batteries last longer, the main emphasis is
on the likeable bunny. Finally, products which are better known, through the mere
exposure effect, tend to be better liked--that is, the more a product is advertised and seen
in stores, the more it will generally be liked, even if consumers to do not develop any
specific beliefs about the product.
Changing behavior. People like to believe that their behavior is rational; thus, once they
use our products, chances are that they will continue unless someone is able to get them
to switch. One way to get people to switch to our brand is to use temporary price
discounts and coupons; however, when consumers buy a product on deal, they may
justify the purchase based on that deal (i.e., the low price) and may then switch to other
brands on deal later. A better way to get people to switch to our brand is to at least
temporarily obtain better shelf space so that the product is more convenient. Consumers
are less likely to use this availability as a rationale for their purchase and may continue to
buy the product even when the product is less conveniently located. (Notice, by the way,
that this represents a case of shaping).
Changing beliefs. Although attempting to change beliefs is the obvious way to attempt
attitude change, particularly when consumers hold unfavorable or inaccurate ones, this is
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often difficult to achieve because consumers tend to resist. Several approaches to belief
change exist:
1. Change currently held beliefs. It is
generally very difficult to attempt to
change beliefs that people hold,
particularly those that are strongly
held, even if they are inaccurate. For
example, the petroleum industry
advertised for a long time that its
profits were lower than were
commonly believed, and provided
extensive factual evidence in its
advertising to support this reality.
Consumers were suspicious and
rejected this information, however.
2. Change the importance of beliefs.
Although the sugar manufacturers
would undoubtedly like to decrease
the importance of healthy teeth, it is
usually not feasible to make beliefs
less important--consumers are likely
to reason, why, then, would you
bother bringing them up in the first
place? However, it may be possible
to strengthen beliefs that favor us-e.g.,
a
vitamin
supplement
manufacturer may advertise that it is
extremely important for women to
replace
iron
lost
through
menstruation.
Most consumers
already agree with this, but the belief
can be made stronger.
3. A dd beliefs. Consumers are less
likely to resist the addition of beliefs
so long as they do not conflict with

existing beliefs. Thus, the beef
industry has added beliefs that beef
(1) is convenient and (2) can be used
to make a number of creative dishes.
Vitamin manufacturers attempt to
add the belief that stress causes
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vitamin depletion, which sounds

quite plausible to most people.
4. Change ideal. It usually difficult,
and very risky, to attempt to change
ideals, and only few firms succeed.
For example, Hard Candy may have
attempted to change the ideal away
from traditional beauty toward more
unique self expression.
UNIT IV
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Q: Explain the concept of problem recognition , search and evaluation .

Ans: Problem Recognition. One model of consumer decision making involves several
steps. The first one is problem recognitionyou realize that something is not as it should
be. Perhaps, for example, your car is getting more difficult to start and is not accelerating
well. The second step is information searchwhat are some alternative ways of solving
the problem? You might buy a new car, buy a used car, take your car in for repair, ride
the bus, ride a taxi, or ride a skateboard to work. The third step involves evaluation of
alternatives. A skateboard is inexpensive, but may be ill-suited for long distances and for
rainy days. Finally, we have the purchase stage, and sometimes a post-purchase stage
(e.g., you return a product to the store because you did not find it satisfactory). In reality,
people may go back and forth between the stages. For example, a person may resume
alternative identification during while evaluating already known alternatives.
Consumer involvement will tend to vary dramatically depending on the type of product.
In general, consumer involvement will be higher for products that are very expensive
(e.g., a home, a car) or are highly significant in the consumers life in some other way
(e.g., a word processing program or acne medication).
It is important to consider the consumers motivation for buying products. To achieve
this goal, we can use the Means-End chain, wherein we consider a logical progression of
consequences of product use that eventually lead to desired end benefit. Thus, for
example, a consumer may see that a car has a large engine, leading to fast acceleration,
leading to a feeling of performance, leading to a feeling of power, which ultimately
improves the consumers self-esteem. A handgun may aim bullets with precision, which
enables the user to kill an intruder, which means that the intruder will not be able to harm
the consumers family, which achieves the desired end-state of security. In advertising, it
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is important to portray the desired end-states. Focusing on the large motor will do less
good than portraying a successful person driving the car.
Information search and decision
decision making.
making Consumers are engage in both internal and
external information search.

Internal search involves the consumer identifying alternatives from his or her memory.
For certain low involvement products, it is very important that marketing programs
achieve top of mind awareness. For example, few people will search the Y ellow Pages
for fast food restaurants; thus, the consumer must be able to retrieve ones restaurant
from memory before it will be considered. For high involvement products, consumers
are more likely to use an external search. Before buying a car, for example, the consumer
may ask friends opinions, read reviews in Consumer Reports, consult several web sites,
and visit several dealerships. Thus, firms that make products that are selected
predominantly through external search must invest in having information available to the
consumer in neede.g., through brochures, web sites, or news coverage.
A compensatory decision involves the consumer trading off good and bad attributes of
a product. For example, a car may have a low price and good gas mileage but slow
acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may
then select it over a car with better acceleration that costs more and uses more gas.
Occasionally, a decision will involve a non-compensatory strategy. For example, a
parent may reject all soft drinks that contain artificial sweeteners. Here, other good
features such as taste and low calories cannot overcome this one non-negotiable
attribute.
The amount of effort a consumer puts into searching depends on a number of factors such
as the market (how many competitors are there, and how great are differences between
brands expected to be?), product characteristics (how important is this product? How
complex is the product? How obvious are indications of quality?), consumer
characteristics (how interested is a consumer, generally, in analyzing product
characteristics and making the best possible deal?), and situational characteristics (as
previously discussed).
Two interesting issues in decisions are:
V ariety seeking (where consumers

seek to try new brands not because
these brands are expected to be
better in any way, but rather
because the consumer wants a
change of pace, and

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Impulse
purchasesunplanned
buys. This represents a somewhat
fuzzy group. For example, a
shopper may plan to buy vegetables
but only decide in the store to
actually buy broccoli and corn.
Alternatively, a person may buy an
item which is currently on sale, or
one that he or she remembers that is
needed only once inside the store.
A number of factors involve consumer choices. In some cases, consumers will be more
motivated. For example, one may be more careful choosing a gift for an in-law than
when buying the same thing for one self. Some consumers are also more motivated to
comparison shop for the best prices, while others are more convenience oriented.
Personality impacts decisions. Some like variety more than others, and some are more
receptive to stimulation and excitement in trying new stores. Perception influences
decisions. Some people, for example, can taste the difference between generic and name
brand foods while many cannot. Selective perception occurs when a person is paying
attention only to information of interest. For example, when looking for a new car, the
consumer may pay more attention to car ads than when this is not in the horizon. Some
consumers are put off by perceived risk . Thus, many marketers offer a money back
guarantee. Consumers will tend to change their behavior through learninge.g., they
will avoid restaurants they have found to be crowded and will settle on brands that best
meet their tastes. Consumers differ in the values they hold (e.g., some people are more
committed to recycling than others who will not want to go through the hassle). We will
consider the issue of lifestyle under segmentation.
Q: Explain the process of consumer buying behavior.
Ans : The buyer decision process consists of the following steps:
1.
2.
3.
4.
5.
Need recognition;
Search for information on products that could satisfy the needs of the buyer;
Alternative selection;
Decision-making on buying the product;
Post-purchase behavior
How do customers buy?

Research suggests that customers go through a five-stage decision-making process in any
purchase. This is summarised in the diagram below:
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This model is important for anyone making marketing decisions. It forces the marketer to
consider the whole buying process rather than just the purchase decision (when it may be
too late for a business to influence the choice!)
The model implies that customers pass through all stages in every purchase. However, in
more routine purchases, customers often skip or reverse some of the stages.
For example, a student buying a favourite hamburger would recognise the need (hunger)
and go right to the purchase decision, skipping information search and evaluation.
However, the model is very useful when it comes to understanding any purchase that
requires some thought and deliberation.
The buying process starts with need recognition. At this stage, the buyer recognises a
problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to
a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee
and chocolate muffins).

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An aroused customer then needs to decide how much information (if any) is required.
If the need is strong and there is a product or service that meets the need close to hand,
then a purchase decision is likely to be made there and then. If not, then the process of
information search begins.
A customer can obtain information from several sources:
Personal sources: family, friends, neighbours etc
Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-ofsale displays
Public sources: newspapers, radio, television, consumer organisations; specialist
magazines
Experiential sources: handling, examining, using the product
The usefulness and influence of these sources of information will vary by product and by
customer. Research suggests that customers value and respect personal sources more than
commercial sources (the influence of word of mouth). The challenge for the marketing
team is to identify which information sources are most influential in their target markets.
In the evaluation stage, the customer must choose between the alternative brands,
products and services.
How does the
the customer use the information obtained?
An important determinant of the extent of evaluation is whether the customer feels
involved in the product. By involvement, we mean the degree of perceived relevance
and personal importance that accompanies the choice.
Where a purchase is highly involving, the customer is likely to carry out extensive
evaluation.
HighHigh-involvement purchases include those involving high expenditure or personal risk
for example buying a house, a car or making investments.
Low involvement
involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in
the supermarket) have very simple evaluation processes.
Why should a marketer need to understand the customer evaluation process?
The answer lies in the kind of information that the marketing team needs to provide
customers in different buying situations.
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In high-involvement decisions, the marketer needs to provide a good deal of information

about the positive consequences of buying. The sales force may need to stress the
important attributes of the product, the advantages compared with the competition; and
maybe even encourage trial or sampling of the product in the hope of securing the
sale.
PostPost-purchase evaluation - Cognitive Dissonance

The final stage is the post-purchase evaluation of the decision. It is common for
customers to experience concerns after making a purchase decision. This arises from a
concept that is known as cognitive dissonance. The customer, having bought a product,
may feel that an alternative would have been preferable. In these circumstances that
customer will not repurchase immediately, but is likely to switch brands next time.
To manage the post-purchase stage, it is the job of the marketing team to persuade the
potential customer that the product will satisfy his or her needs. Then after having made a
purchase, the customer should be encouraged that he or she has made the right decision.
There are a range of alternative models, but that of AIUAPR, which most directly
links to the steps in the marketing/promotional process is often seen as the most
generally useful
AWARENESS - before anything else can happen the potential customers must
become aware that the product or service exists. Thus, the first task must be to
gain the attention of the target audience. All the different models are, predictably,
agreed on this first step. If the audience never hears the message they will not act
on it, no matter how powerful it is.
INTEREST - but it is not sufficient to grab their attention. The message must
interest them and persuade them that the product or service is relevant to their
needs. The content of the message(s) must therefore be meaningful and clearly
relevant to that target audience's needs, and this is where marketing research can
come into its own.
UNDERSTANDING - once an interest is established, the prospective customer

must be able to appreciate how well the offering may meet his or her needs, again
as revealed by the marketing research. This may be no mean achievement where
the copywriter has just fifty words, or ten seconds, to convey everything there is
to say about it.

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ATTITUDES - but the message must go even further; to persuade the reader to
adopt a sufficiently positive attitude towards the product or service that he or she
will purchase it, albeit as a trial. There is no adequate way of describing how this
may be achieved. It is simply down to the magic of the copywriters art; based on
the strength of the product or service itself.
PURCHASE - all the above stages might happen in a few minutes while the
reader is considering the advertisement; in the comfort of his or her favourite
armchair. The final buying decision, on the other hand, may take place some time
later; perhaps weeks later, when the prospective buyer actually tries to find a shop
which stocks the product.
REPEAT PURCHASE - but in most cases this first purchase is best viewed as
just a trial purchase. Only if the experience is a success for the customer will it be
turned into repeat purchases. These repeats, not the single purchase which is the
focus of most models, are where the vendors focus should be, for these are where
the profits are generated. The earlier stages are merely a very necessary
prerequisite for this!
This is a very simple model, and as such does apply quite generally. Its lessons are that
you cannot obtain repeat purchasing without going through the stages of building
awareness and then obtaining trial use; which has to be successful. It is a pattern which
applies to all repeat purchase products and services; industrial goods just as much as
baked beans. This simple theory is rarely taken any further - to look at the series of
transactions which such repeat purchasing implies. The consumer's growing experience
over a number of such transactions is often the determining factor in the later - and future
- purchases. All the succeeding transactions are, thus, interdependent - and the overall
decision-making process may accordingly be much more complex than most models
allow for.
Q: How Post Purchase behavior of a consumer can be explained?
Ans: Post-purchase behavior involves all the consumers activities and the experiences
that follow the purchase. Usually, after making a purchase, consumers experience postpurchase dissonance. In other words, they regret their purchase decision. The reasons for
high post-purchase dissonance can be attractiveness and performance of forgone
alternatives, difficult purchase decision, large number of alternatives, etc.
A high level of post-purchase dissonance is negatively related to the level of satisfaction
the consumer draws out of product usage. While experiencing post-purchase dissonance,
consumers become acutely aware of the marketers communication. To reduce post
purchase dissonance, consumers may sometimes even return or exchange the product.
Marketers, therefore, can use these opportunities to reduce consumers risk perception by
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way of good return/exchange policies and reduce their post-purchase dissonance by

messages targeted at this segment of their consumers.
Consumers retail store selection behavior depends on store image Despite postpurchase dissonance, many consumers proceed with consumption of the product. How
consumers use the products is an important knowledge source for marketers, as they can
offer better products and reach more consumers based on these consumer usage patterns.
In some cases, however, consumers initially use the product but after a period of time fail
to do so. Marketers, therefore, should not consider a product purchased as a product
consumed. A non-used product is also more likely to affect the repurchase pattern of the
consumers negatively. Consumers need to dispose off the products or packaging before,
during, or after the use. The issue of disposal is gaining considerable importance for
marketers as it directly affects the repurchase pattern of the consumers.
As more and more products are consumed and disposed off, it is likely that repurchase
will also be more. Many a time, consumers cannot repurchase without disposing off the
product first, due to space and financial constraints. Thus, many marketers, especially
retailers, are helping consumers to dispose off their old products. This not only gives
consumers a reason to repurchase but also increases marketers sales. The disposal
options the consumers have are keep the product, temporarily dispose off, or
permanently dispose off.
Product use/consumption is followed by its evaluation, which may then lead to
satisfaction (perceived performance > minimum desired expectations); non-satisfaction
(perceived performance = minimum desired expectations); or dissatisfaction (perceived
performance < minimum desired expectations). Consumer dissatisfaction may result in
complaint behavior. Consumers may choose to take action against the marketer/service
provider by way of warning friends, returning the product, boycotting and brand
switching, complaining to the marketer, complaining to the relevant government/nongovernment bodies, and/or taking legal action against marketers/service provider.
Marketers should try to use consumer complaints as a way of assessing their performance
as perceived by their consumers and should use this opportunity to delight them by
showing their commitment to consumer service. Many marketers are actively seeking
consumer feedback to improve their products and service quality with a view to retaining
their existing consumers and attracting new ones. They have identified consumer
retention as a major concern, as research has shown that even satisfied consumers cant
be termed as loyalists and often switch to competing brands to get a better deal.
Marketers thus, have identified the quality of product and service as the parameter to
evaluate consumers intention to repurchase instead of their level of satisfaction. Only
totally satisfied and committed consumers are recognized as brand loyalists. Brand loyal
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consumers not only spread positive word-of-mouth for the brand but are also less likely
to switch to other brands. Marketers are increasingly indulging in loyalty marketing to
increase consumer retention, with various schemes and discount offers for their high
value regular consumers.
However, many observers believe that these kinds of tactics, if not implemented properly,
can fail to deliver what they initially promised, resulting in frustrated consumers. Others
also believe that marketers should classify their consumers on the basis of their
satisfaction thresholds and then treat each group differently.
Q: Give a descriptive overview of organizational buying behavior.

Ans :Selling strategies that target the organisational customer and use the concept of the
buying centre, buying situations and the buying stages will result in unique strategies for
different customer groups, thus making business-to-business marketing more effective.
Business-to-business marketing is an area which is gaining an identity of its own in the
Indian context. Marketers can benefit from the conceptual aspects associated with
organisational buying behaviour. This article attempts to explore some dimensions a
ssociated with business-to-business marketing situations.
Applying the buying centre concept
The decision-making unit in a buying organisation consists of the buying centre. This is
made up of the decider who gives the `yes' or `no' decision, the initiator or the user who
initiates the need for the product, the influencer who exerts influence on the buying
process, the user who gives feedback on the product, the purchasers or the buyers who
formalise the purchasing process and the gatekeepers (such as secretaries and clerks) who
control the flow of information in an organisation.
The basic aspects to be noted about the buying centre are that:
--The influences across the centre can vary from one product category to another.
--The composition itself can vary from one product to another.
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--Monitoring the buying centre should be a dynamic process; personnel may enter and
leave an organisation and hence constant monitoring is required.
--Informal power equations in an organisation can affect a buying centre.
--In a smaller organisation, the same employee (as a participant in the buying centre) can
play several roles involved in the buying centre. For example, in a small-scale industry,
the managing director who monitors the stock levels of various requiremen ts may initiate
the purchase of drill bits and also select the brand during the purchasing process.
--The composition of the buying centre will vary across the different phases of industrial
buying. This means that the buying centre which faces the marketer during the pre-sale
phase can be different from the one which deals with the same marketer after the sale of
the product is over. An organisation marketing computers will face financial executives,
corporate planning and perhaps the departmental heads of respective departments where
the computer is intended to be used during the pre-sale phase. The same organisation may
have to work with the training department of the buyer organisation after the sale is over.
John R. Devincentis and Neil Rackham in their article Breadth of a Salesman (The
McKinsey Quarterly 1998, No 4 issue) highlight the importance of the changing sales
function.
There can be three kinds of customers.
One group can comprise the price-sensitive ones called the transactional ones. In India
this segment exists in most product categories ranging from consumables to projects.
The second
second group of customers require `consultative selling'. This will require the
marketing organisation to have analytical and intimate knowledge of the customer's
requirements and provide a consultative edge to the total offering.
The third group of customers are the ones who require the ènterprise sales effort' by
which they may have a strategic association with the marketer. This approach should
enable the marketer to bring in marketing efforts which may require inputs from sev eral
functional areas of the marketing and buying organisation. This eventually results in
offering the customer a strategic product. This approach leads to continuous improvement
between the customer and the marketer. The `Docutech' model of digital cop ier which
was developed by Xerox for Boeing is a good example of this approach.
These customer groups add a new dimension to business-to-business marketing. The
`three-value philosophy' of buying organisations can also help a marketer categorise
buying centres according to the value expected by the organisation. There has been a rad
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ical shift of the value concept in business-to-business marketing -- from the priceperformance equation to the three kinds of expectations based on the type of customers.
The implications of the shift in the value-orientation of buying organisations are that a
marketing manager should be able to develop parameters for classifying buying
organisations and train the sales force to cater to the three kinds of customer groups .
There is a need to break away from the `products-benefits-brand' sales pitch which is
generally the approach in business-to-business marketing.
While the ideal approach may be the ènterprise sales effort', this may not suit every
customer. A marketing organisation may have to deal with all the three types of customer
organisations and the respective buying centres. There is a need to evolve sel ling
strategies for all the customer groups and define value for each of them.
The three buying situations
There is a need to discuss the three kinds of buying situations before they can be applied
to the buying centre and the different stages involved in the organisational buying
process.
The first kind of buying situation is the `new buy' situation in which a company buys a
product for the first time and does not have any experience with the vendors or the
product it is attempting to buy. This situation is very important, especially for a project
situation in which consultative selling efforts are involved. A company attempting to
market an ERP package to an organisation has to obtain the precise customised
requirements of the buying organisation before formulating a solution. For insta nce, lifts
for a commercial complex can be classified under a new buy situation.
The second type of buying situation is a `straight re-buy' situation in which a buying
organisation records or repeats the previous order without changes; hospital consumables
and office stationery may be examples. In this situation, the organisation whi ch is
currently the supplier, the ìn-supplier', will have to ensure that it is able to sustain its
offerings and service so that competitors do not enter the scene. These competitors are
òut-suppliers' who would like to enter the buying organisation.
The third kind of situation is the `modified re-buy' situation in which the buying
organisation brings in changes in its requirements. An automobile company may prefer to
use an updated version of bearings. A company working on updating its offerings can
create a modified re-buy situation by working with the influences of the buying centre in
the organisation. A company marketing x-ray equipment can introduce an updated
offering for the replacement market -- hospitals which had procured the earlier vers ion.
In such equipment, new product introductions always create a modified re-buy situation
and hence a company should introduce new products to stay ahead of the competition.
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Even in consumables, there is scope to create a modified re-buy situation with new
products; self-stick pads from 3M and waterproof medicated plasters from Johnson and
Johnson are examples. A modified re-buy situation can also be created through services
such as the consultative sales efforts discussed earlier or through better product delivery
promises.
Stages in
in organisational buying
There are three areas of operation in industrial buying.
The initiation stage: This is a stage in which a problem or a need is recognised by the
organisation. For example, because of the changing environmental trends, a manufacturer
of pharmaceutical products may want to introduce certain kinds of medicinal fo
rmulations in the form of capsules. This may require specific kinds of raw materials and
changes in the production process. Special kinds of industrial automation or
instrumentation may be required.
The recognition of a need can be from the environment, from the move made by
competitors or it may be a move made by a buying organisation to pre-empt competition.
While the buying organisation itself may be monitoring its direct competition, a supplier
can initiate the process of change and create a `new buy' situation by highlighting the
need for a specific product or service. Grill-type of lifts have been banned in the country
from the next millennium and hence a lift manufacturer can create a new bu y situation
for sophisticated lifts in high-rise buildings. The same lift company can also create a
modified re-buy situation by offering a lift which is not sophisticated.
By pioneering consultative selling, a company has an early entry into the buying
organisation in spite of the fact that the buying organisation can make use of a consultant
in a complex new buy situation. Apart from problem recognition, the initiation st age also
deals with the determination and description of the characteristics of the required product
and service. There may be a need for an advanced industrial instrumentation system in a
power plant and this calls for the firming up of characteristics of several kinds of
instruments which are likely to be used in the instrumentation system.
Search stage: This stage consists of information search regarding vendors, their
credibility, their compatibility with the requirements of the buying organisation, an
analysis of the offerings of different companies and the selection of a supplier. Compa
nies that have pioneered the consultative selling approach in the early new buy phase will
have a reasonable edge over other companies in the search stage.
Though it may not be possible to state that firms entering the initiation stage will end up
with the order, there is a likelihood that these companies may be considered more
favourably than companies which enter only during the search stage. In complex n ew
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buy situations such as electrical projects, the company, which may have entered the
initiation stage, might have even formulated the broad specifications of the project.
The search stage is equally important for organisations that are currently not in business
with buying organisations. In industrial automation where there are frequent changes in
hardware and software, the buying organisation and the respective buying ce ntres need
to be apprised of the latest in the field. An òut-supplier' taking this approach, especially
where the ìn-supplier' is not active on this front, will benefit when the buying
organisation formulates an extension programme.
In certain cases the buying organisation may have different plants at different locations
and an òut-supplier' may be able to dislodge the ìn-supplier' for a new bid in a specific
location. This also means that the ìn-supplier' has to be associated wi th the search stage,
by providing current information, even after the product is sold or project is executed.
The ìn-supplier' has to maintain a preferred position every time the buyer organisation
gets involved in the analysis of proposals to cater to an emerging need such as expansion,
updated offerings and so on.
The feedback stage:
stage This stage is concerned with the establishment of order routine,
performance feedback and so on, and hence the focus shifts to the user. Product
management of the marketing organisation can play a vital role in scheduling of delivery,
complaint redressal, providing inputs for new product development and generally
ensuring that the buying organisation is satisfied after the sale is over. Service
departments also become important in this stage.
Formulating selling strategies using the buying centre, buying situations and the buying
stages will result in unique strategies for respective customer groups. This is marketing
orientation in practice.

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Scope of consumer behavior is very wide due to following reasons:

As a principal, the marketing concept involves understanding the needs of

Nature of consumer behaviour

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and the task of creating marketing strategies becomes complex, and

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Accutane resulted in severe birth defects if taken by pregnant women.

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Maslows need hierarchy theory:

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campaigns. The problem is that even though individuals in a specific demographic

When first beginning to understand and

* The first is using demographics to infer an audience's motivations or behaviors. For

* A second obstacle is the multiplicity of attitudes and motivations within an audience.

* The third obstruction to understanding audience motivation lies in creating messages

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iv. Who should be involved in this process?

7. Examine the fit between: The position of your product.

Unique Selling Proposition

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c. General and specific attitudes which influence the purchase decision;

The bestbest-known response hierarchy models.

Black box model of consumer behavior

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BUYER'S BLACK BOX

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Sources of information include:

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Low cost furniture and household

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Divorced parents frequently remarry, or become involved in other non-marital

Another variation involves

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Q: How personal influence of consumer behavior can create Diffusion of Innovation.

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