1) Application of Consumer Buying Behaviour

The most obvious is for marketing strategyi.e., for 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.

A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, 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.

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.

As a final benefit, studying consumer behavior 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.

2) Consumer Decision making process

Problem Recognition

Information Search

Evaluation and Selection of Alternatives

Decision Implementation

Post-purchase Evaluation

In this model, the consumer passes through five stages: problem recognition, information search, evaluation and selection of alternatives, decision implementation, and post-purchase evaluation.

Problem Recognition In this information processing model, the consumer buying process begins when the buyer recognizes a problem or need. Information Search When a consumer discovers a problem, he/she is likely to search for more information. Evaluation and Selection of Alternatives How does the consumer process competitive brand information and evaluate the value of the brands? Unfortunately there is no single, simple evaluation process applied by all consumers or by one consumer in all buying situations.

One dominant view, however, is to see the evaluation process as being cognitively driven and rational. Under this view, a consumer is trying to solve the problem and ultimately satisfying his/her need. In other words, he/she will look for problem-solving benefits from the product. The consumer, then, looks for products with a certain set of attributes that deliver the benefits. Thus, the consumer sees each product as a bundle of attributes with different levels of ability of delivering the problem solving benefits to satisfy his/her need. The distinctions among the need, benefits, and attributes are very important. Decision Implementation To actually implement the purchase decision, however, a consumer needs to select both specific items (brands) and specific outlets (where to buy) to resolve the problems. There are, in fact, three ways these decisions can be made: 1) simultaneously; 2) item first, outlet second; or 3) outlet first, item second. In many situations, consumers engage in a simultaneous selection process of stores and brands. Post-purchase Evaluation Post-purchase evaluation processes are directly influenced by the type of preceding decisionmaking process. Directly relevant here is the level of purchase involvement of the consumer. Purchase involvement is often referred to as the level of concern for or interest in the purchase situation, and it determines how extensively the consumer searches information in making a purchase decision. Although purchase involvement is viewed as a continuum (from low to high), it is useful to consider two extreme cases here. Suppose one buys a certain brand of product (e.g., Diet Pepsi) as a matter of habit (habitual purchase). For him/her, buying a cola drink is a very low purchase involvement situation, and he/she is not likely to search and evaluate product information extensively. In such a case, the consumer would simply purchase, consume and/or dispose of the product with very limited post-purchase evaluation, and generally maintain a high level of repeat purchase motivation (Figure 3).

Purchase

Product Use

Disposition

Simple Evaluation

Repeat Purchase Motivation

Figure 3

Low Involvement Purchase Source: Hawkins, Best, and Coney (1983)

However, if the purchase involvement is high and the consumer is involved in extensive purchase decision making (e.g., personal computer), he/she is more likely to be involved in more elaborate post-purchase evaluation often by questioning the rightness of the decision: Did I make the right choice? Should I have gone with other brand? This is a common reaction after making a difficult, complex, relatively permanent decision. This type of doubt and anxiety is referred to as post-purchase cognitive dissonance (Figure 4).

Post-purchase Dissonance

Dissatisfaction

Purchase

Product Use

Disposition

Elaborate Evaluation

Repeat Purchase Motivation

Figure 4

Elaborate Post-purchase Evaluation Source: Adopted from Hawkins, Best, and Coney (1983)

According to the research, the likelihood of experiencing this kind of dissonance and the magnitude of it is a function of: The degree of commitment or irrevocability of the decision, The importance of the decision to the consumer, The difficulty of choosing among the alternatives, and

The individuals tendency to experience anxiety.

Because dissonance is uncomfortable, the consumer may use one or more of the following approaches to reduce it: Increase the desirability of the brand purchased. Decrease the desirability of rejected alternatives. Decrease the importance of the purchase decision. Reject the negative data on the brand purchased.

If the dissonance about the purchase is not reduced, the anxiety may transform into a dissatisfaction (general or specific). Certainly, this negative experience leads to a new problem recognition (Figure 1), and the consumer will engage in another problem solving process. The difference, however, is that in the next round of process, memory of the previous negative experience and dissatisfaction will be used as part of information. Therefore, the probability for the unsatisfactory brand to be re-selected and repurchased will be significantly lower than before.

3) Classical & Instrumental Conditioning Behavioral Theories: Theories based on the premise that learning takes place as the result of observable responses to external stimuli. Also known as stimulus response theory. There are three types of Behavorial theory: Classical Conditioning i.e. Classical Repetition Instrumental or Operant Conditioning Modeling or Observational Learning

Classical Conditioning (also Pavlovian or respondent conditioning, Pavlovian reinforcement) One of the best-known aspects of behavioral learning theory is classical conditioning. Discovered by Russian physiologist Ivan Pavlov, classical conditioning is a learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus. It's important to note that classical conditioning involves placing a neutral signal before a naturally occurring reflex. In Pavlov's classic experiment with dogs, the neutral signal was the sound of a tone and the naturally occurring reflex was salivating in response to food. By associating the neutral stimulus with the environmental stimulus (the presentation of food), the sound of the tone alone could produce the salivation response. In order to understand how more about how classical conditioning works, it is important to be familiar with the basic principles of the process. The Unconditioned Stimulus The unconditioned stimulus is one that unconditionally, naturally, and automatically triggers a response. For example, when you smell one of your favorite foods, you may immediately feel very hungry. In this example, the smell of the food is the unconditioned stimulus. The Unconditioned Response

The unconditioned response is the unlearned response that occurs naturally in response to the unconditioned stimulus. In our example, the feeling of hunger in response to the smell of food is the unconditioned response. The Conditioned Stimulus

The conditioned stimulus is previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response. In our earlier example, suppose that when you smelled your favorite food, you also heard the sound of a whistle. While the whistle is unrelated to the smell of the food, if the sound of the whistle was paired multiple times with the smell, the sound would eventually trigger the conditioned response. In this case, the sound of the whistle is the conditioned stimulus. The Conditioned Response The conditioned response is the learned response to the previously neutral stimulus. In our example, the conditioned response would be feeling hungry when you heard the sound of the whistle. Strategic Application of Classical Conditioning Repetition Stimulus Generalization Stimulus Discrimination

Instrumental (Operant) Conditioning A behavioral theory of learning based on a trial-and-error process, with habits formed as the result of positive experiences (reinforcement) resulting from certain responses or behaviors Types of Reinforcement Positive Negative Forgetting Extinction

Model of Instrumental Conditioning

Consumers learn by means of trial and error process in which some purchase behaviors result in more favorable outcomes (rewards) than other purchase behaviors.

A favorable experience is instrumental in teaching the individual to repeat a specific behavior.

Customer Satisfaction (Reinforcement) Reinforcement Schedules Total (or continuous) Reinforcement Systematic (fixed ratio) Reinforcement Random (Variable ratio) Reinforcement Shaping

Massed versus Distributed Learning

Other Concept in Reinforcement Punishment Choose reinforcement rather than punishment

Extinction Combat with consumer satisfaction

Forgetting Combat with repetition

4) Pre Purchase Search The motivated acquisition of knowledge stored in memory or acquisition of information from the environment Internal search involves scanning and retrieving decision-relevant knowledge stored in memory Internal Search

External Search External search involves collecting information from the environment During external search, consumers may gather information from a variety of sources including: Advertisements Magazines Internet Friends and family members

When motivated by an upcoming purchase decision, external search is known as pre-purchase search

When information acquisition takes place on a relatively regular basis, regardless of sporadic purchase needs, it is known as ongoing search

Factors that are Likely to Increase Prepurchase Search Product Factors Long interpurchase time (a long-lasting or infrequently used product) Frequent changes in product styling Volume purchasing (large number of units) High price Many alternative brands Much variation in features

Experience First-time purchase No past experience because the product is new Unsatisfactory past experience within the product category

Social Acceptability The purchase is for a gift The product is socially visible

Value-Related Considerations Purchase is discretionary rather than necessary All alternatives have both desirable and undesirable consequences Family members disagree on product requirements or evaluation of alternatives Product usage deviates from important reference group The purchase involves ecological considerations Many sources of conflicting information

Personal Factors Demographic Characteristics of Consumer Well-educated High-income

White-collar occupation

Personality Low dogmatic Low-risk perceiver (broad categorizer) Other personal factors, such as high product involvement and enjoyment of shopping and search

5) Consumer Attitude A learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object The attitude object Attitudes are a learned predisposition Attitudes have consistency Attitudes occur within a situation

There are several structural models of attitude Tricomponent Attitude Model Muliattribute Attitude Model The Trying-to-Consume Model Attitude-toward-the-Ad Model

Tricomponent Attitude Model Cognitive Component The knowledge and perceptions that are acquired by a combination of direct experience with the attitude object and related information from various sources. Affective Component A consumers emotions or feelings about a particular product or brand. Conative Component The likelihood or tendency that an individual will undertake a specific action or behave in a particular way with regard to the attitude object.

Hierarchies In Attitude

Attitude hierarchy refers to the sequence in which the three components occur Learning Emotional Low Involvement

Multi Attribute Models The attitude-toward-object model Attitude is function of evaluation of product-specific beliefs and evaluations

The attitude-toward-behavior model A model that proposes that a consumers attitude toward a specific behavior is a function of how strongly he or she believes that the action will lead to a specific outcome (either favorable or unfavorable)

Theory-of-reasoned-action model A comprehensive theory of the interrelationship among attitudes, intentions, and behavior

Theory of trying to consume An attitude theory designed to account for the many cases where the action or outcome is not certain but instead reflects the consumers attempt to consume (or purchase).

Attitude towards the Ad-Model A model that proposes that a consumer forms various feelings (affects) and judgments (cognitions) as the result of exposure to an advertisement, which, in turn, affect the consumers attitude toward the ad and attitude toward the brand.

Ways of Measuring Attitude observation qualitative methods attitude scales

Four Basic Attitude Function The Utilitarian Function The Ego-defensive Function The Value-expressive Function The Knowledge Function

6) Post Purchase Dissonance It is Cognitive dissonance that occurs after a consumer has made a purchase commitment. Consumers resolve this dissonance through a variety of strategies designed to confirm the wisdom of their choice. Consumers may become dissonant over a purchase decision. Cognitive dissonance occurs as a result of a discrepancy between a consumers decision and the consumers prior evaluation. Consider the illustration of the Nikon camera buyer encounters some problems with the brand she has purchased. This is typical leading to post purchase dissonance. Dissonance theory was derived form two basic principles (1) dissonance is uncomfortable and will motivate the person to reduce it and (2) individuals experiencing dissonance will avoid situations that produce more dissonance. Let us examine this concept more closely to see what factors lead to dissonance how the consumer deals with the conflict and what marketing implications are embodied in the concept. Conditions Leading to Dissonance: From a review of research findings on cognitive dissonance, it appears that dissonance is likely to occur under the following conditions. 1) Once a minimum threshold of dissonance tolerance is passed. That is, consumer may tolerate a certain level of inconsistency in their lives until this point is reached 2) The action is irrevocable. For instance, when the consumer purchases a new car, there is little likelihood that he will be able to reverse his decision and get his money back. 3) Unselected alternatives have desirables features. In our camera example, earlier, the Pentax Canon, and Minolta (brands now selected) all had attractive features. 4) There are several desirable alternatives. Todays car buyer, for example has an abundance of choices among similar attractive models. In fact, research indicates that those consumers who experience greater difficulty in making purchase decision, or who consider a wider range of store and brand options are more likely to experience greater magnitudes of post purchase dissonance.

5) Available alternatives are quite dissimilar in their qualities (there is little cognitive overlap) For instance ,although there are many automobile models each one may some unique characteristics 6)The buyer is committed to his decision because it has psychological significance. A large and important living room furniture purchased is likely to have great psychological significance to the buyer because of its dramatic reflection of ones decorating tastes, philosophy and lifestyle Ego involvement will be quite high. 7) There is no presume applied to the consumer to make the decision. If the consumer is subjected to outside pressure, he will do what he is forced to do without letting his own viewpoint or preference really be challenged. It is clear that dissonance is likely to be strongest for the purchase of durables, although it can exist for almost every purchase. The factors cited above and others are illustrated in Table. Which presents conditions under which high or low dissonance would be expected. Dissonance Reduction: There are several major ways in which the consumer strives to reduce dissonance. He may (1) change his evaluation of the alternative of the alternative (2) seek new information to support his choice or (3) change his attitudes.

7) Stimulus Generalization It is the inability to perceive differences between slightly dissimilar stimuli or having the same response to slightly different stimuli.

Stimulus Generalization in Marketing

1. The principle of stimulus generalization is applied by marketers to product line, form, and

category extensions. a) In product line extensions, the marketer adds related products to an already established brand, knowing that the new product is more likely to be adopted when it is associated with a known and trusted brand name. i) Conversely, it is much more difficult to develop a totally new brand.

b) Marketers offer product form extensions that include different sizes, different colors, and even different flavors. c) Product category extensions generally target new market segments. i) The success of this strategy depends on a number of factors.

For example, if the image of the parent brand is one of quality, consumers are more likely to bring positive associations to the new category extensions.

2. Family brandingthe practice of marketing a whole line of companys products under the

same brand nameis another strategy that capitalizes on the consumers ability to generalize favorable brand associations from one product to the next.
3. Licensingallowing a well-known brand name to be affixed to products of another

manufactureris a marketing strategy that operates on the principle of stimulus generalization. Corporations also license their names and trademarks, usually for some form of brand extension, where the name of the corporation is licensed to the maker of a related product and thereby enters a new product category. Municipal and state governments have begun licensing their names to achieve new sources of revenue. The Vatican Library licenses its name for a variety of products from luggage to bed linens.
4. Generalizing Usage Situations

8) Just Noticeable Difference or Differential Threshold It is the Minimal difference that can be detected between two similar stimuli. Webers Law: The j.n.d. between two stimuli is not an absolute amount but an amount relative to the intensity of the first stimulus. The stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different. Marketing Application of JND Marketers need to determine the relevant j.n.d. for their products so that negative changes are not readily discernible to the public so that product improvements are very apparent to consumers OR Negative changes in products should be below than JND Positive changes in products should be higher than JND

Some examples of JND:

9) Defense Mechanism Methods by which people mentally redefine frustrating situations to protect their selfimages and their self-esteem