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1 O.D.M Computer & Mgt.

Education
- 309 Sem-III
CONSUMER BEHAVIOUR
Q.1:- Explain the meaning of Consumer Behaviour. Why should a marketer study the hierarchy of
needs model under this are of marketing?
Ans:- Consumer behaviour:-
A Consumer is an individual of a set of individuals who have an actual or potential interest in the
purchase of usage of any Product. Idea or a Service. The study of the behavioural aspects of a consumer:-
Purchase –intention
Purchase- decision
Product usage
Product disposition is called Consumer Behaviour.
Thus consumer behaviour is the study of the processes involved when individuals or groups select purchase,
use or dispose off products to satisfy their needs of wants.
Earlier the emphasis was on Buyer Behaviour. This means on attempt was made to study the
behaviour of an individual at the time of purchase of a product, service, idea, and experience etc. however it
has been realized that consumer behaviour is an on-going decision is important, but also the using &
disposing off the product gives a lot of insight into a customer’s future purchases.
The marketer is interested in understanding the entire consumption process:-
How does a customer decide which product to purchase?
Before
From which sources does he collects information about a product and
Purchasing
its alternative Brands?

How does a customer acquire a product?


During What all situational factors affect his choice?
Purchasing What does the purchase say about the consumer?
Is the consumer satisfied with the product?
Post Purchasing Will he buy/recommend the brand again?
Behaviour How does he uses a product?
How does he dispose off the product?
What are the environmental consequences of disposing?

Thus the concept of consumer behaviour entails all above mentioned stages and the issues involved in all the
stages. The study involves the in-depth analysis of what a customer buys why he buys, what influences his
choice and how does a customer disposes off a product? This study discusses the psychological, economic,
social and demographic aspects of a customer, which is turn affects the environmental variables.

INTER DISCIPLINARY APPROACH TO CONSUMER BEHAVIOUR


The study of consumer behaviour is interdisciplinary in nature. Various subjects have contributed to the
development of this subject. Psychology- as a field of study of an individual; Sociology as a filed of study of
an individual in a society; Anthropology as a field of study of various cultures; History as a field of study of
various past experiences of a consumer etc.

Economics Psychology

Sociology
Interdisciplinary
approach to C.B

Demography Anthropology

History

Roles of a consumer:- A marketer studies the various roles a consumer play in the decision making process:-
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Influencer (who influence the


purchase decision)

Role User (Who uses a product)


Purchase

(who actually purchase a product in may circumstances, user or purchaser may be the same. For eg. When
a doctor purchases a B.P. Apparatus for himself, he is a purchaser as well as a user.
The two may be different, when an individual gives the Apparatus as a gift to a friend who is a medical
student.
Influencer is the person providing information or recommendations for or against a particular Product or
Brand without actually buying or using the same e.g. the shop owner may guide the purchaser on which brand
of apparatus to buy. Before taking a decision on which product, which brand , from where, in what quantity &
at what price to buy a product, a consumer goes through a number of steps:-
STAGES IN CONSUMER DECISION-MAKING PROCESS
Stage- I
Marketer Family Awareness
This is a stage from being ignorant about a
Friends Reference product. The customer becomes aware of the
4P’s of an offering.

Stage-II At this stage the marketer aims at building the


Interest
Marketing efforts interest of a customer in a Brand. The
customer seeks more information and
becomes receptive to marketing efforts.

The marketer lures the customer to an event


Stage-III where he gets keenly involved in the product &
Choice of a brand Desire desires to obtain the same. He identifies &
Choice of store evaluates the various alternatives available for
Choice of time of purchase a specific product.
Choice of quantity.
This is stage when the customer purchase and
Stage- IV owns a Brand of his choice.
Action

Thus above mentioned are the stages through which a consumer goes through before deciding upon which
product to buy. The duration and the sequence of stages may differ from consumer to consumer and from
products to product.
The study of the above mentioned process of consumer behaviour helps the marketer in choosing a right
appeal to influence a customer.
Hierarchy-of needs:-
The study of consumer behaviour entails the hierarchy of needs as discussed by A.H. Maslow. This
model of need divides the needs of an individual in various levels. Depending upon which level of need is
more dominating at a given point of time, the marketer can design the promotional campaign accordingly.
a) Physiological Needs:-
The physiological needs are the first and the most basic level of human needs. These needs which are
required to sustain biological life, include food, water, air, shelter, clothing, sex etc. the marketers may appeal
to the physiological needs of a customer by:-
Promoting physical health
Appealing to taste buds etc.
b) Safety & Security Needs:-
These are the second level of needs which arise in a customer and may be tapped by a marketer.
These needs are concerned with physical safety, order, stability, routine, familiarly and control over ones life
and environment. For example:-
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Insurance policies
Savings accounts
Education &
Vocational training etc. are some products which generally use the appeals to the safety & security needs of a
cunsumer.
c) Social Needs
These are the needs for love, warmth, affection, belongingness and acceptance. People seek warm
and satisfying human relationships with other people and are motivated by love for their families and friend.
Toothpaste, Deodorants etc.
Are some products, which appeal to the social need of the customer.
d) Logistic needs
Inward-Self acceptance
Self esteem Success
Independence
Logistic orientation
Outward-Prestige reputation
Status & recognitions
These needs presume the desire to show off one’s success and achievement through material possessions
eg. Car, Suiting & Shirting’s, Jewellary etc.
e) Self-actualization Needs
This set of needs refers to an individual’s desire to fulfill his or her potential to become everything he or
she is capable of becoming. Many large companies use this level of needs to appeal to a customer.
Suiting & shirting
Holiday Package
Residential place in a peaceful area etc.
Therefore a study of any of the above mentioned needs may help a marketer to customise his offerings
or appeals to suit the customer.
The concept of hierarchy of needs may also be used by a marketer for the purpose of Segmentation,
Positioning & designing Promotional programme.
a) Segmentation:-
Segmentation is the process of dividing the market into various categories. By identifying the various
level of needs the marketer can divide the market on the basis of needs for example for a soap the needs may
be hygiene, clearness, fairness, softness, moisturizer etc,
Segments

Total Marks
b) Positioning: - Positioning is the process of creating an image in the mind of the customer about a
brand. The need, which is aroused in a customer, may be used as a platform to position a product.
For example, The need market for fairness was more in numbers & not being satisfied by any marketer, HLL
launched its ‘Fair & Lovely fairness soap’ which has been positioned as a soap to cater to the need of fair skin.
Following its success a number of brands have now positioned their product in the same category.
Therefore, various types of needs if identified well in advance by a marketer may be useful in designing
its promotional strategies etc.
Conclusion:-
The field of study of consumer behaviour is very vast.
- It includes the understanding of a customers personality, perception, motivation, attitudes & values.
- The sequential decision-making of a consumer
- The various levels of needs present in a consumer which affects his purchase decision etc.
All these area help the marketer in understanding the consumer better and serving him better by
customizing his offering accordingly.
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Q.2:- ANS: PERSONALITY

Personality may be defined as those inner characteristics which helps psychological in nature that both
determine and reflect how a person responds to his or her environment. Thus personality comprises of inner
characteristics, which are the specific qualities, attributes, traits, factors and mannerisms that distinguish one
individual from other individuals.
The concept of personality has the following:
Characteristics :-
a) Personality reflects individual differences
b) Personality is consistent and enduring
c) Certain circumstances may force personality in change.

These deeply engrained characteristics of an individual called personality traits, are very likely to influence the
product choice of an individual as well as the store choice.
It affect the way consumers respond to marketer’s promotional efforts.
The concept of personality is highly useful for marketers for the segmentation strategies.
Many marketers use the concept of personality for the purpose of Positioning of a product.
Freudian Theory
THEORIES OF PERSONALITIES

Neo- Freudian Theory Trait Theory

a) Freudian Theory:-
- Sigmund Freud
- Psychoanalytical theory
This theory was build on the premise that unconscious needs or drives, especially biological drives, are at the
heart of human motivation and personality.
Social code of conduct
Super Ego
Ego Individual’s conscious control

Id Basic Biological needs

Researchers believe that it is these basic, biological, unconscious needs of the customers, which
shape their personality and guide their product choice. Thus a consumer’s appearance and possessions are
the reflections of the individual’s personality.

Eg. The promotional campaign of Denim products also appeal to the hidden biological needs “Id”
though subtle sexual appeals.

b) Neo-Freudian Theory:-
- Alfred Adler
- Harry Stack
This theory believes that social relationships are fundamental to the formation & development of personality.
Acc. To Karen Horney- three personality groups are:-
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Compliant individuals- Those who want to adjust themselves to the society at large.

Aggressive individuals- Those who move against people & stress the need for power, strength & the ability
to manipulate others.

Detached Individuals:- Those who are indifferent and want to stay away from the social norms.
Many marketers position their product in relation to how an individual relates himself to the other
people in the society. For example:- The advertisement campaign designed for Rexona Deodorant targets the
compliant personality.
e.g. Elle 18 colour cosmetics targets the aggressive personality.
c) Trait Theory:-
A trait is any distinguishing, relatively enduring way in which one individual differs from others. The
orientation of trait theory is primarily quantitative or empirical. It focuses on the measurement of personality in
terms of specific psychological characteristics called –traits.
Traits may be:-
Self confidence
Risk-taking
Consumer materialism
Ethnocentrisms etc.
Traits researchers have found that it is generally more realistic to expect personality to be linked to how
consumers make their choices. For example, a consumer with a high risk taking trait may be more receptive to
new innovations and new brand launches in the market.
A consumer with low ethnocentrisms is more likely to buy foreign-made products as against buying
their own country-of-origin made product.

Consumer Innovators
Need for Uniqueness

Traits

Optimum Stimulation level


Sensation Seeking
Variety novelty Seeking

Thus a marketer tries to identify specific traits in the target customers to be able to appeal to them. The
Personality of individuals is one of the most significant factor affecting the choice of the type of product and the
brand chosen.

Conclusion:-
It is very popularly believed that:-
- What product or brands consumers purchase
- When & how they consume the products or brands
- From where they buy them
- How they dispose off.
Is very likely to be influenced by the personality factors.
For this reason, several advertising and marketing people have depicted and then incorporated specific
personality traits or characteristics in their marketing and advertising programme.
For example the purchase of ‘Ray Ban’ sun glasses targets the studies of the individual as one of the
personality attribute to position its brands.
Thus the concept of Personality has a very wide application, in helping the marketers to build a brand
image of the product. The marketers try to build an image which may be consistent with the personality of the
target customers so that the customers are able to relate themselves to the brand and therefore purchase the
same.
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Q. 3:- What are reference groups? What influences do reference groups have over the purchase
decision of the customer?

Ans:- REFERENCE GROUPS


Human beings are social animals. They live and like to live in a group. They love and like to be loved by
others. Any group of which an individual is a member is called a Membership group. Any group which attracts
an individual to take its membership is called a reference group.
A references Group is an actual or imaginary group conceived to have significant relevance upon an
individuals evaluation, aspiration or behaviour. The group which influences the purchase process of an
individual, somewhat is called a Reference group. Reference groups influence consumers in three ways:-

Informational

Influence
Value expressive Utilitarian

Although two or more people are normally required to form a group, the term reference group is often used a
bit more loosely to describe any external influence that provides social cues.
The referent may be a cultural figure and have an impact on many people. It may on the other hand, be
a person or group whose influence is confined to the consumers’ immediate environment.
Some Reference group exerts more influence over a consumer, while others may simply have an
informative influence on the group.
The influence of a reference group may not be equally powerful for all types of products and
consumption activities.
Types of Reference Groups

Formal &
Informal Groups

Membership &
Aspirational Reference
Groups

Positive & Negative


Reference groups

Virtual/on-line
Reference Groups

For example, Products that are not very complex, that are low in perceived risk and that can be tried prior to
the purchase instance are less likely to be influenced by a Referent. On the other hand highly complex or
ambiguous features, which may be
expensive or crucial to the customer, are more likely to be influenced by the information made available by the
Reference groups.
The specific impact of reference groups may vary. At times may determine the use of certain products
rather than others. For example, owing a computer or not owning a computer.
At other times it may have specific effects on Brand choice decisions within a product category. For
example the Brand of jeans or jackets to be worn, the brand of mobile hand set to be used etc.
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Two dimensions that influence the degree to which reference groups are important are whether the
purchase is to be consumed publicly or privately and whether it’s a luxury or necessity.
As a rule Reference Groups effect is more the products, which are Luxuries rather than necessities. It
is so because the products that are purchased with discretionary income are subject to individual tastes and
preferences. Whereas necessities do nto offer this range of choices, it is so because the products, which will
not be visible to others do not matter much whether they are National Brands or not.
For example the coir mattresses purchased generally will be of any local or unheard of manufactures.
This will be in contrast to the brand of Television owned.

Acc. To Soloman
PRODUCT
Weak Reference group Strong reference group
influence (-) on product influence(-) on product
purchase purchase

Public Luxuries
Public Necessities Influence: Strong for Product & for brand
Strong Reference Influence: Weak for e.g. Holiday destination, expensive models
group influence (+) product & strong for of Automobiles
on brand selected Brand e.g. Wrist Watch,
Automobile

Brand Public Necessities Private Luxuries


Weak Reference Influence: Weak for product Influence: strong for product & weak for
group influence (-) on & weak for Brand e.g. floor Brand e.g. video games, VCD player.
brand selected cleaner, mattress

Different Reference groups may have different power. Influence power is the capacity to alter the actions of
others.
Referent Power

Legitimate Power Information Power

Expert Power Reward Power

Coercive Power
Factor affecting reference group influence
a) Information influence:-
The individual seeks information about various brands from an association of professionals or
independent group of experts.
The individual seeks information from those who work with the product as a professional.
The Brand, the individual selects, is influenced by observing a seal of approval of an independent
testing agency e.g. ISI/agmark.
The individual’s observation of what experts do influences his or her choice of a brand.
b) Utilitarian Influence:-
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The individuals’ decision to purchase a particular brand is influenced by the preferences of people with
whom he or she has social interaction.
The individual’s decision to purchase a particular brand is influenced by the preferences of family
members.
The desire to satisfy the expectations that others have of him has an impact on the individuals brand
choice.
c) Value Expressive influence:-
The individual feels that the purchase or use of a particular brand will enhance the image others have
of him or her.
The individual feels that those who purchase or use a particular brand posses the characteristics that
he or she would like to have.
The individual sometimes feels that it would be nice to be like the type of person that advertisement
show, using a particular Brand.
The individuals feel that the people who purchase a particular brand are admired or respected by
others.
The individual feels that the purchase of a particular brand would help show others, what he or she is
or would like to be e.g. model/athlete. Etc.
CONCLUSION:-
Thus the reference group inlfluences the purchase decision of the customer to a great extent. The
influence of Reference group is more on the luxury products as compared to the products of necessity.
Marketers have increasingly used the concept of Reference groups to promote their Brands. For example
Mayur Suitings, Dabur Amla Hair Oil, Lux soap, Santro etc are highly advertised brands showing celebrities- a
reference group to promote themselves and build a rapport with the prospective customers.
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Q. 4:- Recall the most recent relatively expensive purchase you have made. Who was more influential
in the purchase? Opinion leader or advertisement?
ANS:- ROLE OF OPINION LEADER
Here we are assuming the purchase process undertaken to purchase a family car for a joint family of
five individuals i.e. Me, my father, my mother, my brother and my bhabhi. In this answer we shall be discussing
the various influences exerted on the purchase decision.
Generally in a family, different members may have different priorities and different agendas. In this
purchase for e.g. Husband may be more concerned with economy, resale value, fuel efficiency etc, the wife
may be concerned with the latest brand on the streets. Thus the final decision made reflects a combined
decision influenced by a number of roles.
For relatively expensive purchases like a car the opinion leaders also play an important role in the
process of decision-making. Opinion leader is an individual who may be knowledgeable about products,
socially active & highly inter-connected & whose advice is seriously taken by his community members.
Opinion Leader

Generalised
Opinion leader (all
types of purchase)
Monomorphic Opinion Leader
(Expert in a limited field) Polymorphic Opinion Leader
(Expert in several fields)

An opinion leader may or may not be a purchaser of a product, which they recommend. But they are
innovative communicators. They are generally more involved in a product category and activity search for
information. Because of this interest, an opinion leader is more likely to talk about products with others and to
solicit other opinions as well.
An important factor in the influence of an opinion leader is that the conversation of an opinion leader
over the influenced is not a formal conversation. But it is a very informal conversation carried on between tow
socially interlinked individuals.
In the purchase decision, which we took, i.e. of buying a family car there were a number of factors
influencing our choice. These factors were within our family, related to our family, as well as, the factors
controllable by the marketers of the various Brands.

Dealer’s Sales person


Advertisement

Purchase Friends/Relatives
Parents decision

Brother/Sister Peers

FACTORS INFLUENCING PURCHASE DECISION


The various steps of a purchase decision process are as:-
Problem Identification
Search for alternatives Brands
Evaluation of alternatives

Selection of suitable alternative


Purchase behaviour
Post purchase behaviour
Stage I:- When we decided to purchase a car, there were certain factors which made us realize that we
must purchase a car. We are in a joint family. There were instances when more than two people had to go &
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attend function/gathering. At times of an emergency, two wheeler was not a safe option. Thus many of our
friends influenced us for the realization of the conveyance problem for formal as well as emergency situation.
Stage II;- AT the second stage, when we were searching ro the various alternatives to solve our problem
and suit our budget, we depended largely on Advertisements of various Brands of Car. We made a passive
Search and in creation of Awareness, the marketing efforts played a very important role. The basic analysis
and evaluation of the Brands was also influenced by the Advertisements.
Stage III:- By the time, we reached the third stage, we identified
Maruti Zen
Maruti Alto
Huyndai Santro
Tata Indica
as the various options available within out budget and as per our requirement.
Stage IV:- The Evaluation of the available alternatives was majority influenced by the opinion leaders. We
identified & passively noticed which all brands were owned by the prominent personalities in our locality. We
also had discussions with our friends who owned a car and took their opinion.
Stage V:- The choice of the brand was influenced by my brother who thought the car must be good to
look and must have a good resale value.
My father was very conscious of the fact that we must not exceed the budget. Thus they were the
influencers of the purchase process.
Considering that we are five members in the family, we wanted a car to be occasionally used on some
functions or on a long trip. Our family thus decided to buy a Santro car of white colour.
Stage VI:- My father and my brother went to purchase the car. They acted as a purchaser. The dealer’s
salesperson influenced them in deciding which model to buy.
Presently we own a Hyundai Santro of white colour which is financed and is used by me, my father and
my brother.
Purchase Process Purchase Process

Problem Identification Friends/Peers


Search for Alternatives Advertisements
Evaluation for Alternatives Opinion Leaders
Selection of a band Opinion leader & family
Purchase Decision Dealer’s Salesperson
CONCLUSION:-
To conclude, a lot of factors influence the purchase process at various stages. The Advertisements
only help in creating basic involvement products the opinion leaders are considered to be more influential; as
an informal source of information. They are considered to be more personal and genuine information
providers. Advertisements, on the other hand, are thought of only as a paid form of information.
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Q.5:- What do you mean by Diffusion of Innovations? Explain the process of diffusion of innovation.
Ans:- DIFFUSION OF INNOVATION:-
An innovation is any product or service that is perceived to be new by consumers. An innovation may
be

Consumer Setting Industrial Setting


Product Product
Technology Technology
Service Service
If an innovations successful it spreads through the population. First it is bought or used by only a few
people, and then more and more consumers decide to adopt it. Most of the Innovations are a failure. However,
every marketer tries to make its innovation available to the maximum number of people in a given market.
Diffusion of Innovations refers to the process whereby a new product, service, or idea spread through
population. The rate at which the product diffuses may vary on a number of factors.
The diffusion of innovation takes an entire sequence and resembles the decision-making sequence
where a person moves through the stage of

Awareness

Information Search

Evaluation

Trial

Adoption

PROCESS OF DIFFUSION OF INNOVATIONS. TYPES OF ADOPTERS

34% Early 34% Late


Majority Majority

13.5% Early
innovators

2.5% 16% Laggards


innovators

Introduction Growth Maturity Decline


Life Cycle
The process of diffusion of innovation spreads in the market with one person adopting an innovation and
communicating it to the other people.
a) Innovators:-
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Innovators are the first ones to try and adopt a new innovation. Though only 25% of the populations
are innovators, marketers are always interested in identifying them. They are people who are on the lookout
for novel development and aer the first ones to try a new offering. They are the ones who spread innovation
through word of mouth to others.
B) Early adopters:-
Early adopters share many of the same characteristics as innovators but an important difference is
their degree of concern for social acceptance, especially with regard to expensive products.
An early adopter is receptive ot new styles because he or she is involved in the product category and
also places high value on being in fashion. They are not first ones to adopt an innovation, but are relatively
early one to adopt the same.
c) Early majority
There are 34% of the society who are early group as compared to most of the society. They are a
major group but who adopt a product only when it has been adopted by a substantial number of people.
d) Late Majority
This is a majority of 34% but who are late to adopt a product. They represent the mainstream public.
They do not want to adopt new products due to several reasons. However thy do adopt the product when it
reaches its maturity.
e) Laggards:-
Constituting 16% of the population, they are the most conservative and traditional in their outlook. They
are the late group who adopt an innovation when it is no more an innovation. When the product is on the
declining stages, this group adopts the same.
Therefore, this is the sequence and the categories of people in a market who adopt an innovation.
Consumer Modification of an
existing product

Dynamically Continuous
Pronounced change in an Types of Discontinuous- major
existing product innovations changes in the way we live

For a successful adoption an Innovation should have


Compatibility
Traibility Complexity
Pre-
requisites

Observability Relative Advantage

CONCLUSION:-
Some Innovations like mobile phones etc. to diffuse itself took vary less time. It took Radio 30 years to
reach 60 million users and TV 15 years to reach this number. In contrast, within 3 years 90 million were surfing
the web. Today with the development of technology, innovations are diffused at a faster rate, yet as in India,
Rural India is not very quick to adopt the Innovations at the same pace.
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Q.6:- Explain in detail the Organizational Decision Making.
Ans:- ORGANISATIONAL DECISION MAKING:
Customers

Consumer purchase Organisational purchase


A consumer purchase decision making is a process where an individual or a group of individuals
purchase a product for final consumption.
An organisational purchase decision—making is the process whereby an individual or a group of
individuals purchase a product or a service on behalf of companies for use in the process of production,
facilitate the process of production, distribution or Resale. These individuals buy from organisational buyers,
who specialize in meeting the needs of organisations.
Organisational buyers have to decide:
Supplier, with whom they want to do business?
What specific items they want to purchase?
What will be the specifications of the items?
What shall be the price of the item?
What shall be the terms & conditions of purchase?

Expectations of the Product quality, prior


Suppliers experience with supplier

Organisational Purchase
Situation
Organisational Climate Assessment of his own
performance

Like other consumers,organisational buyers engage in a learning process in which members of the firm share
information with one another and develop an organisational memory which guides the purchase decision in
future.
Consumer Decision Making
Organisational Decision Making
1) Consumer decisions may be made by
1) Purchase decisions involve many
individuals alone & may be by the whole
people including those who directly or
family.
indirectly influence, the decider, purchaser
and user.
2) Products are purchased on both
2) Products are bought according to
emotional and bounded rationality factor.
precise, technical specifications the
3) Many low-involvement products may be
require knowledge.
purchased on impulse
3) Impulse buying is rare
4) Decisions may not put career on stake.
5) Volumes are not too large.
4) Decisions often are risky, sometimes
staking even careers,
6) Number of buyers is large
5) The rupee volume of purchases is often
7) More emphasis on Advertising or other
substantial.
forms of promotion.
6) Number of buyers are small.
8) They are too geographically spread over.
7) More emphasis on personal setting
9) Higher emotional or status oriented
.
purchase decision.
8) They tend to be geographically
concentrated.
9) Higher economic or functional
component in the organisational
purchase.
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Hence consumer buying differs widely from industrial buying. The motive of purchase,
the purchase influences, the purchase process etc. all is different in the two forms of decision-making.
TYPES OF ORGANIZATIONAL BUYING DECISIONS
The organisation decision-making may be of three different types

Straight rebuy Habitual decision- Automatic


decision.
Approved vendor, quantity,
New Task price & specifications
Extensive problem solving.
Identify new vendor. Freshly
specifies quality, price & Organisational Modified Rebuy:
specifications. Buying decisions Limited decision-making
purchase Same product with
minor modifications

Whenever the organisation purchases a product or a component for the first time or from a new vendor it is a
new task. If satisfied the similar order is put again a making the purchase decision as a straight Rebuy.
However if any changes are made in the order, keeping the vendor as the same it is called as a modified
Rebuy.
DECISION ROLES:-
When a collective decision must be made a number of specific, roles are played by individuals.
Who conducts the The person who brings up the idea
information search &
controls the flow of info Initiator
Gatekeeper Influencer Who tries to sway the
outcome of the
Decision Roles
decision?

Buyer Users
Who actually uses the
product
Who actually makes the
purchase

The more complex, novel or risky the decision, the greater the amount of information search and effort
will be devoted to evaluating alternatives.
On the other hand, reliance on a fixed set of suppliers for routine purchases is one strategy that greatly
reduces the information search and effort in evaluating competing alternatives that would otherwise be
required.
Factors affecting Organisational Buyers.
The organisational buyers are influenced by various variables both internal, as well as, external in making the
purchase decision.

External Stimuli. Nature of the industry, Overall


economic & technological env. Culture.

Internal Stimuli.
Buyer’s unique psychological
Characteristics e.g. Job experience.

Willingness to make risky decisions.


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The External factors are macro and common to all the organisations operating in the Industry. For example the
general economic scenario of the country, the overall level of country’s technological development, Cultural
variables etc.
On the other hand, the Internal factors are organisational specific & relate only to an Individual
organisation. For example the experience in purchasing, attitude towards risk, locus of control, domination of
technical or financial variables etc.

Conclusion:-
Organisational Decision making requires extensive information search which must be gathered prior to
making a decision. The buyer should have sufficient knowledge of the reason of purchase, a high degree of
seriousness and ample knowledge of the working of the product. The quality & efficiency of the production
process & the final product depends upon the raw material or component. Therefore an organisational buyer
should be more careful in taking a purchase decision.
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16 O.D.M Computer & Mgt. Education
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Q.7:- Is it possible to change Attitudes? How? (With reference to ELM)
Ans:- ATTITUDE:-
Attitude is a lasting, general evaluation of people, objects, advertisement or issues either favourable or
unfavourable, which is enduring.
An attitude performs the following functions:-
a) Utilitarian function
b) Value-expressive function
c) Ego-defensive function
d) Knowledge function
An attitude can serve more that one functions, but in many cases a particular one will be dominant. By
identifying the dominant function a product serves for consumers what benefits its provides- marketers can
emphasise these benefits in their communication and packaging.
As discussed, an attitude is a predisposition to evaluate an object or product positively or negatively.
Every marketer wants its target segment to have a positive attitude towards its brand of offering. Though
attitudes are enduring, every marketer attempts to change a negative attitude into a positive one. One of the
most important methods of converting a negative attitude into positive is communication.

Sender Communication Medium Receiver

I THE SOURCE:-
Source of a message is the person or authority promoting an offering. It is very understandable that the
same words uttered or written by different people can have very different effects. Under most conditions the
source of a message can have a big impact on the likelihood that the message will be accepted. The source
can be chosen because he or she is an expert, attractive, famous or even a typical consumer who is both
likeable & trustworthy.

Credibility: Source’s perceived expertise,


objectivity or trustworthiness.

Source

Attractiveness:- Source’s perceived social


value due to physical appearance,
personality, social status or his similarity to
receiver.
II. THE MESSAGE
Characteristics of the message itself help to determine its impact on attitudes. These variables include
how the message is said as well as what it said. These include:-
The use of words & pictures
Repetition
Conclusion – Explicit or implicit
One-sided or two-sided argument
Comparative advertising.
Type of appeal:- Sexual/Fear/Humorous/ Emotional/Logical
Form of a story presentation Drama/Lecture.
Effects of Visual & Verbal components of Advertisements on Brand Attitudes.

Visual Component Attitude towards the


of Advertisement advertisement
Brand
Attitudes

Verbal Component Benefits about


of advertisement product Attribute
17 O.D.M Computer & Mgt. Education
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Thus we have reviewed the two major components of the communication model-the source and the
message. Depending upon the consumer’s level of involvement either of the two components will be more
influential in the process of attitude change.
Research indicates that this level of involvement determines which aspects- the Source (endorser
Celebrity) or the message shall be processed. This concept can be understood with the
ELABORATION LIKELIHOOD MODEL (ELM)
It assumes that once a consumer receives a message, he or she begins to process it. Depending on
the personal relevance of this information, the receiver will follow one of two routes to persuasion.
Under conditions of high involvement, the consumer takes the central route to persuasion. Under conditions of
low involvement a peripheral is taken instead.
Behaviour

Change
Attitude
Change
Belief & Attitude

Behavioural
change
change

Belief change
Peripheral Route
Responses

Central Route
Cognitive

(Message)

(Source)
Comprehensive
Attention &
High-Involvement

Low-Involvement
Processing

processing
Message
Communication

channel)
(Source,
18 O.D.M Computer & Mgt. Education
- 309 Sem-III
Q.8:- “Do consumers form strong relationship with products and service?” How can the marketer
increase the customer’s level of involvement with a product?

Ans:- CONSUMER INVOLVEMENT :-


A product or a service is a means to satisfy an individuals needs & desires. Very often these products
or services from an integral part of an individuals life. Therefore the statement that “Consumers form strong
relationships with products & services” is true.
However, the degree of involvement of a consumer with a product may not be the same for all product
types. Generally, an individual may be more involved in an expensive product but may not be equally involved
in a product which is just a rupee or two priced.
Consumer Involvement may be defined as a persons perceived relevance of the object based on their
inherent needs, values and interest. The object here refers to any product, which a customer involvement
refers to the degree of information processing or extent of importance that a consumer attaches to a product.
For example:- if a customer wants to purchase a mid-segment Car, be has to spend an approximate
amount of Rs. Three lakhs. Thus for any individual spending such a big amount on purchasing a product, be
tends to get highly involved in the process of search for alternatives evaluation of various alternatives & finally
taking a decision. Therefore it is clear that most of the times, when more expensive products are to be
purchased the consumer gets more involved in the purchase process.

Expensive product:- Higher Involvement

When a student is purchasing a book for preparing for a competitive examination, the book to be
purchased may not be as expensive as a car, yet the customer gets highly involved in the process of
evaluation of alternatives & making a final purchase decision.
This is because for the student the purchase decision may affect his career objectives & the efficiency
with which he achieves it.
Therefore, in such circumstances, the consumer involvement is high, as the relevance of the product to
be purchased is perceived to be very high.
A similar situation may occur when a medicine is being purchased, which may not be very expensive,
yet the consumer may be highly involved in checking that it shouldn’t react him.

Important products:- Higher involvement

Broadly, speaking consumer involvement may be considered as the motivation to process the
information related to the product. The level of involvement may be influenced by”-

Personal Factors Objects factors Situational Factors


Needs Differentiation Purchase
Importance of alternatives Use

Interest Source of communication Occasion

Values Content of Communication

LEVELS OF INVOLVEMENT

The degree to which an individual is involved in the processing of information about any product or a
specific brand ranges from simple processing to elaboration.
19 O.D.M Computer & Mgt. Education
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I Level Low involvement
Inertia Habitual decisions
Lack of motivation to evaluate alternative e.g. Tea, Tooth brush,
Washing powder, cigarettes. Etc.

II Level Simple processing Some involvement


Some evaluation of alternatives
Simple decision-making
E.g. skin creams, torch, snacks etc.

III Level Elaboration High involvement


Lengthy decision-making process
Evaluation of alternatives of various factors.
e.g. Cars, Diamond, Property etc.
Thus from low to high, the consumer may be involved in the process of purchase in varying degrees. This
involvement may be of any type:-
Product Involvement High Involvement if the Consumer is
highly interested in a given product
category.

High Involvement at the time of


High Involvement is the processing Types purchase if the product is being
of marketing communication e.g. Purchase purchased to impress someone or
looking for Advertisement Situation as a gift.
Involvement Involvement

The type of consumer may be cognitive or emotional


Based on the object to be purchased
Cognitive:- Expensive products, Highly differentiated products.
Emotional:- Less expensive products, gifts, low degree of differentiation.

The level of consumer involvement broadly speaking depends upon the following components.

Personal Interest in the


Probability of making a product
bad purchase. Perceived Importance

Pleasure value of the Status value of the


product product

Hence, any of the above mentioned characteristics may decide, how much will a consumer be involved in the
process of purchasing a product.
For a marketing manager, it is important to understand that what creates or affect the involvement of a
consumer in a product category. This is so, because if the marketers have something different to offer to the
consumer, he would influence the customers cognitive involvement to get a sale.
Further, a marketing manager must also analysis the level to which the consumer is involved in the
product category, so that a communication strategy may be designed accordingly.
For products falling in low involvement category:
Attractive celebrity
Musical message
20 O.D.M Computer & Mgt. Education
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Emotional appeal
Humour etc. may be used
e.g. Kurkure, pepsi etc
High Involvement Category:
Logical Reasoning
Arguments & counter arguments
USP
e.g. Automobiles, Real Estate etc.
Although consumers differ in their level of involvement with respect to a product, marketers try to be aware of
those factors that increase or decrease attention. With this they can take steps to increase the likelihood that
product information will get through.
A consumer’s motivation to process relevant information can be enhanced fairly by the marketer who uses any
of the following techniques:-
a) An appeal to the consumer hedonic needs generally generate higher levels of attention e.g.
Denim, Tale, LML Motorcycles.
b) Use of new stimuli, tends to catch the attention of the audience e.g. Onida Television shows a
‘devil’ in the advertisement.
c) Highly popular or sought-after celebrities may be used as endorsers in a product advertisement
e.g. Amitabh Bachchan for Nerolac, Cadbury’s , Parker.
d) Customer Relationship Management techniques may be an individual to the company with an
ongoing relationship & in turn loyality.
CONCLUSION:-

From the above discussion, it is clear that generally people get attached to products. Though not
everyone is motivated to the same extent and in the same form.
But a marketing manager can study the level, type & form of a consumer’s involvement and aim to
increase the same with a view to improve the bond between the consumer and the product.
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21 O.D.M Computer & Mgt. Education
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Q.9:- Discuss the stages in Consumer Decision Making. Do all Consumers pass through the same
stage?
Ans:- CONSUMER DECISION- MAKING:-
Generally speaking, the decision of a consumer to purchase a product is a response to a problem
realized by him traditionally, consumer researches have approached decision-making from a rational
perspective. It was viewed that consumers pass through a series of stages to finally arrive at a purchase
decision. This implies that these steps in the decision-making process should be carefully studied by
marketing managers to understand how consumers obtain information, how beliefs are formed and what
product choice criteria are specified by consumers.
Before we discuss the stages involved in the consumer decision-making process, let us look at the types of
consumer decisions.

Routine Response Limited Problem Extensive Problem


Behaviour Solving Solving
Low cost products More Expensive products
Frequent purchasing Infrequent purchasing
Low involvement High Involvement
Familiar Products & Brand Unfamiliar products & Brands & their
Differences
Less time spent on purchasing Extensive time spent on purchasing.
Low risk High risk
Decision may be taken at the Multiple consultation prior to store visits.
Point of purchasing
Broadly speaking an elaborate process of decision-making is adopted in extensive problem solving type of
consumer decision.
Stages in consumer Decision-Making

Problem Recognition

Information Search

Evaluation of Alternatives

Product choice

Outcomes
Stage I:- PROBLEM RECOGNITION:-
This is the first stage in the consumer decision-making and occurs whenever the consumer sees a
difference between his current state of affairs and some desired state.

Ideal

Ideal State Ideal

Actual State Actual

No Problem Opportunity Actual need


Recognition Recognition
Need Recognition can occur due to
Running out of a product
22 O.D.M Computer & Mgt. Education
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By buying a product that doesn’t satisfy the need
Creation of new needs.
By watching a friend use a product
By watching an advertisement
By discussions
By cognition
At the Problem Recognition stage, the consumer becomes aware of some lack of comfort in his life due to the
absence of some product in his possession.
STAGE II:- INFORMATION SEARCH
Once a problem has been recognized consumer need adequate information to resolve it. Information
search is the process by which the consumer surveys his environment for appropriate data to make a
reasonable decision.
Types of Information search

Prepurchase Search On- going search


Search for information Search is done during
Before a purchase is made the process of purchase.
Aim to make a better Aim to gather
Purchase decision information just at the time of
Purchase.

Sources of Internal-prior experience, prior learning


Information External- Advertisements, friends, observation.

Deliberate search – Search for information actively.


Search for
Information
Accidental Search – Coming across information passively.
e.g. advertisement, packaging, sales promotion.

According to the Economics- of information approach to the search process, consumers gather only as much
data as needed to make an informed decision. Consumers form expectation of the value of additional
information & continue to search to the extent that the rewards of doing so exceed the costs. This also implies
that the most valuable units of information will be collected first. The amount of external search for most
roducts is generally very small, but is more for expensive products.

However, consumers differ in the amount of search they tend to undertake. All things being equal
- Younger, better-educated to search people tend to collect more information.
- Women are inclined to search than men.
- Those who place greater value on style and image do more search
- Search is more for products with high perceived risk.
STAGE III:- EVALUATION OF ALTERNATIVES
In this stage of information search, a consumer may come across various alternatives to solve a
problem. A consumer engaged in extended problem solving may be fully evaluate several Brands, whereas
someone making habitual decision may not consider any alternatives to their normal brand.
All the alternatives may be categorized as under:-

All Alternatives All existing brands

Evoked set Aware Inert set Inept set


Considered
23 O.D.M Computer & Mgt. Education
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Aware but not Brand not aware


considered

Brands already
Retrieval Prominent
in memory
set products in retail
Environment

Generally the consumer evaluates the brand from his evoked set i.e. the brands about which a
consumer is aware and would like to take a decision to purchase.

STAGE IV:- SELECTION AMONG ALTERNATIVES


Once the relevant options from a category have been assembled and evaluated, a choice must be
made among them. The decision rules guiding choice can range from very simple and quick strategies to
complicated process requiring much attention & cognitive processing.
There are various dimensions used to judge the alternatives which are called as evaluative criteria.
Evaluative criteria may be Functional attributes
- Experiential attributes
- Significant differences amongst brands
- Emotional attributes etc.
Many a times, certain shortcuts may be used for selecting among alternatives, called, Heuristics. For e.g.
- Relying on a product Signal ISI/Agrmark/ISD
- Country of origin,- Made in USA’
- Choosing Familiar Brands
- High price means high quality
- Habitual purchase.

Conclusion:-
Thus, a decision of purchase is made using several short cuts. Consumers are faced the need to make
decision about products almost all the time. Some of these decisions are very important & entail great effort
and an elaborate decision-making process, as described above. However, other habitual or routine decisions
which are virtually automatically made , may not pass through a detailed & time consuming process.
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24 O.D.M Computer & Mgt. Education
- 309 Sem-III
Q.10:- (a) What is subliminal perception? Is it effective?

Ans:- Percetpion:-
Perception is the process by which the sensory organs of an individual selects, organizes & interprets
the stimuli from the environment. Perception is an intellectual process and is different from sensation.
Sensation refers to the immediate response of our sensory receptors ie. Eyes, ears, nose, mouth etc.
perception focuses on what we add to the raw sensations in order to give a meaning to the stimuli.

Perceptual process
Sensory Stimuli Sensory Receptors

Sight Eyes
Sound Ears
Exposur Attention Interpretatio
Smell Nose
e n
Taste Mouth
Textures Skin
SUBLIMINAL PERCEPTION
Most marketers are concerned with creating messages about consumer’s thresholds so that it ma get
noticed by the audience. At the same time, there are advertisements whose messages have been deliberately
designed to be perceived below the conscious level.
The concept of subliminal perception is based on twin concepts of

Absolute Threshold Differential Threshold

Threshold refers to the lowest level of sensory reception at which a stimuli can be noticed by an
individual absolute threshold is the minimum amount of stimulation that can be detected on a given sensory
channel. e.g. There may be very creatively designed message on a banner on the road. But if its font size is
small enough to be visible, it is not noticed. Thus it is below the absolute threshold.

DIFFERENTIAL THRESHOLD

It refers to the ability of a sensory system to detect changes or differences between two stimuli. The
minimum difference that can be detected between two stimuli is known as the Just Noticeable Difference.
Many times if any marketer has made some negative changes in the product quality is reduced product
price is increased etc. he doesn’t want the customer to notice the same. Therefore he keeps these changes
below the just noticeable difference level.
In the other hand any positive changes made by a marketer, however small it may be is preferred to be
kept above the Just Noticeable Difference.
Thus the changes which a marketer wants to be observed by the customers are deliberately made
known to the audience by making them notice the same.
The concept of the threshold helps in the subliminal Perception. Another word for threshold is ‘limen’,
stimuli that fall below the limen are termed subliminal. Subliminal perception occurs when the stimulus is
below the level of the consumers conscious or awareness.
The topic of subliminal perception has been debated for over 40 years. some believe that it is not
ethical to use it because by this you are exploiting the sub-conscious level of a consumer. Research has
shown that many consumers believe that subliminal advertising actually made them buy things that they do
not really want.
Subliminal advertising makes use of hidden messages and images which are not consciously
perceived. Subliminal messages can be sent on both visual and oral channels.
Subliminal Techniques

Visual Oral
25 O.D.M Computer & Mgt. Education
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EMBEDS:- These are tiny figures inserted into print advertisements, by use of high-speed photography or
airbrushing. These hidden figures, usually of a sexual nature, supposedly exert strong but unconscious
influence on innocent readers.

B) SOUND RECORDING: Generally used in self-help cassettes the audio message contains sound of
waves crashing or some other natural sound. These tapes are mean to help the listener stop smoking, lose
weight, gain confidence etc.
As on the debate on the use of the technique of subliminal perception, so does a debate exist on the
effectiveness of this technique? Some research on clinical psychologist suggests that people can be
influenced by subliminal messages under very specific conditions. However it is doubtful that these techniques
would be of much use in most marketing contexts.
Effective subliminal perceptions must be very specifically tailored to individuals, rather than the mass
messages required by advertising. Also these messages should be close to ‘liminal’ messages. For example in
PVR multiplex cinema halls during intervals, a slide shows the message’ Mac Donal Burger Ndn Coke”.
Though there is nothing written on the slide to the effect of purchasing the same. Yet the audience may times
are induced to buy the Burger& the Cold drink.
LML, when first introduced its motorcycles in India, used a subliminal perception message of
comparing the body of the motorcycles with a female body. There are consumer groups who consider
subliminal advertising as unethical and discourage marketers to use it.
At the same time there are many advertisers who have questioned the very usefulness of these
messages on the following issues.
a) The individuals differ widely on threshold levels. Some people have a low threshold as compared to
others. To target such people, the message has to be so weak that it would not reach those who
have a high threshold.
b) Advertisers lack control over consumers distance & position from a screen. In a big cinema hall,
only a small portion of the audience would be in exactly the right seats to be exposed to a
subliminal message.
c) At home people may not be watching the TV commercial with such a great attention that they may
catch a subliminal message.

CONCLUSION:-
There is not much proof on the effectiveness of subliminal messages on the buying behaviour of the
audience. Further even if the desired effect is induced it operates at a very general level. For example, a
message for a specific drink. Because basic drives are affected, if affected at all and it helps the competitors
equally.