Consumer Behaviour N

CONSUMER BEHAVIOUR
(FOR PRIVATE CIRCULATION ONLY)

2019
PROGRAMME COORDINATOR
Prof. Sudeep Limaye
COURSE DESIGN AND REVIEW COMMITTEE

Prof. Dr. Narendra Parchure Prof. Vijay Masarkar
Prof. Sudeep Limaye Dr. Rashmi Hebbalkar
Prof. Jayant D. Panse Prof. Anita Patankar
Prof. Sanjeev Phatak Prof. Abhay Karde
Prof. Sunil Kumar
COURSE WRITER
Mr. Pushkar T. Phadtare
EDITORIAL
Ms. Neha Mule
Published by Symbiosis Centre for Distance Learning (SCDL), Pune

July, 2006 (Revision 03, 2014)
Copyright © 2019 Symbiosis Open Education Society

All rights reserved. No part of this book may be reproduced, transmitted or utilised in any form or by any
means, electronic or mechanical, including photocopying, recording or by any information storage or retrieval
system without written permission from the publisher.
Acknowledgement
Every attempt has been made to trace the copyright holders of materials reproduced in this book. Should any
infringement have occurred, SCDL apologises for the same and will be pleased to make necessary corrections
in future editions of this book.
PREFACE
The study of Consumer Behaviour has become one of the most important disciplines of Marketing.
The last fifteen years have seen explosive growth in competition at all levels. This intense competition
has led organisations to shift their focus from Mass Marketing to Individual Marketing. For many
organisations, survival is at stake. The biggest challenge in the twenty first century for the Marketing
organisations is to increase their market share and also increase their profitability. For achieving
this objective, everyone in the Marketing organisations needs to understand the ‘Customer’ and his
needs. In a sense, every customer is different and unique. Yet, there are some common traits in these
customers that need to be understood effectively and Consumer Behaviour is an effective tool for
doing this.
The new means of information has changed the way consumers look at products and services. The
customer is extremely demanding and has become fully ‘Value oriented’. This has resulted in a
reduction in ‘Brand Loyalty’. The life styles are changing and the cultural values are also getting re-
defined although, the core cultural values remain intact.
This study note is an attempt to introduce the subject of Consumer Behaviour in the Indian perspective.
Here, an attempt is made to explain each concept with lot many examples in the Indian context.
It is pertinent to note here that consumer behaviour lacks a unified, well defined, and established
theory. Because what we have are only relevant ideas on buying behaviour. These ideas are based on
the studies of Economics, Psychology and Psychoanalysis, Social sciences. This problem gets more
complicated and multiplied in a highly diverse, multi-ethnical, and multi-cultural country like India.
Mr. Pushkar T. Phadtare
iii
ABOUT THE AUTHOR
Mr. Pushkar T. Phadtare worked in the field of Marketing and Sales in companies like Batliboi
& Co. Ltd., and Sandvik Asia Ltd. Later on he worked as a Consultant in Metric Consultancy Ltd.
Currently, he works as a Sr. Marketing Consultant with J. P. Synergy Consultants.
Prof. Phadtare has been teaching Marketing subjects like Consumer Behaviour, Marketing Research
and Distribution Management at Management Institutes like SIBM, and MIT School of Management.
iv
CONTENTS
Unit No. TITLE Page No.

1 Consumer Behaviour 1-14
1.1 Introduction
1.2 Scope of Consumer Behaviour
1.3 Importance of Consumer Behaviour
1.4 Characteristics of Consumer Behaviour
1.5 Consumer Behaviour Approaches
1.6 Problems in Consumer Behaviour
1.7 Snapshots
1.8 Marketing Concepts
Summary
Key words
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading
2 Consumer Research 15-24
2.1 Introduction
2.2 Relevance of Consumer Research
2.3 Need for Consumer Research
2.4 What constitutes good Consumer Research
2.5 Approaches to Consumer Research
2.6 Types of Data
2.7 Limitations and Threats
Summary
Key words
Suggested Reading
3 Motivation, Personality and Emotion 25-54
3.1 Introduction
3.2 Theories of Motivation
3.3 Motivation Theory and Marketing Strategy
3.4 Personality
3.5 Characteristics of Personality
3.6 Theories of Personality
3.7 Emotion
Summary
Key words
Suggested Reading
v
4 Consumer Learning 55-72
4.1 Introduction
4.2 Components of Learning
4.3 Theories of Learning
4.4 Habit
4.5 Brand Loyalty
4.6 Brand Equity and Brand Leverage
Summary
Key words
Suggested Reading
5 Consumer Perception 73-94
5.1 Introduction
5.2 Characteristics affecting Perception
5.3 Consumer Characteristics affecting Perception
5.4 Selective Perception and Marketing Strategy
5.5 Risk Perceptions
5.6 Snapshots
Case Study
Summary
Key words
Suggested Reading
6 Consumer Involvement 95-108
6.1 Introduction
6.2 Types of Involvement
6.3 Situational Influences
6.4 Involvement and Hierarchy of Effects
6.5 Strategic Implications of Low Involvement decision making
6.6 Shifting Consumers from Low Involvement to High Involvement
6.7 Snapshots
Summary
Key words
Suggested Reading
vi
7 Information Processing 109-124
7.1 Introduction
7.2 Information Acquisition
7.3 Perceptual Encoding
7.4 Integration and Outcome
7.5 Snapshots
Summary
Key words
Suggested Reading
8 Attitude 125-154
8.1 Introduction
8.2 Beliefs, Attitudes and Values
8.3 Components of Attitude
8.4 Characteristics of Attitude
8.5 Sources of Attitude
8.6 Functions of Attitude
8.7 Relationship between Attitude, Behaviour and Beliefs
8.8 Theories of Attitude
8.9 Attitude and Marketing Strategy
8.10 Attitude Measurement Techniques
8.11 Attitude Change
8.12 Functional Theory and Attitude Change
8.13 Communication Process
8.14 Snapshots
Summary
Key words
Suggested Reading
vii
9 Social Class, Lifestyle and Culture 155-174
9.1 Introduction
9.2 Factors Responsible for Social Stratification
9.3 Features of Social Classes
9.4 Social Influence on Consumer Behaviour
9.5 Changing Lifestyles and Consumer Behaviour
9.6 Culture
9.7 Cultural Values
9.8 Culture and Products
9.9 Culture and Consumption
9.10 Cross Cultural Influences
9.11 Snapshots
Summary
Key words
Suggested Reading
10 Retail Consumer and Outlet Selection 175-192
10.1 Introduction
10.2 Retail Outlet Selection
10.3 Consumer Characteristics and Outlet Choice
10.4 In-store Influences on Brand Choices
10.5 Outlet Choice vs. Brand Choice
10.6 Internet Retailing
Summary
Key words
Suggested Reading
11 Consumerism 193-204
11.1 Introduction
11.2 History of Consumerism
11.3 Consumerism in India
11.4 Types of Restrictive Trade Practices
11.5 Social Responsibility
11.6 The Rise of Consumerism
11.7 Benefits of Consumerism
Summary
Key words
Suggested Reading
viii
12 Consumer/Satisfaction 205-216
12.1 Introduction
12.2 Customer Orientation
12.3 Consumer Expectations
12.4 Enhancing Consumer Satisfaction
12.5 Sources of Customer Dissatisfaction
12.6 Customer Complaint Mechanism
Summary
Key words
Suggested Reading
13 Organizational Buying Behaviour 217-228
13.1 Introduction
13.2 Buyer Characteristics
13.3 Decision Process and Buying Patterns
13.4 Constituents of Professional Buying
13.5 Factors affecting Organizational Buyer Behaviour
13.6 Attributes used to Evaluate Suppliers
13.7 Buying Decision Process
13.8 Attributes Necessary to Improve Salespeople
Summary
Key words
Suggested Reading
14 Consumer Modeling 229-238
14.1 Introduction
14.2 Engel, Blackwell and Miniard Model
14.3 J. N. Sheth Model
14.4 Nicosia Model
Summary
Key words
Suggested Reading
ix
15 Rural Buying Behaviour 239-253
15.1 Introduction
15.2 Rising Rural Prosperity
15.3 Lifestyle Changes
15.4 Characteristics of Rural Markets
15.5 Marketing Research
15.6 Marketing Strategies
Summary
Key words
Suggested Reading
References 254
x
Consumer Behaviour
UNIT
1
Structure:
1.1 Introduction
1.2 Scope of Consumer Behaviour
1.3 Importance of Consumer Behaviour
1.4 Characteristics of Consumer Behaviour
1.5 Consumer Behaviour Approaches
1.6 Problems in Consumer Behaviour
1.7 Snapshots
1.8 Marketing Concepts
Summary
Key words
Suggested Reading
Consumer Behaviour 1
Notes
Objectives
----------------------
After going through this unit, you will be able to:
----------------------
• Identify the factors influencing consumer buying decisions
----------------------
• Assess an organisation’s commitment to deliver quality products
---------------------- • Describe the basic concepts of marketing that will help study
consumer behaviour
----------------------
---------------------- 1.1 INTRODUCTION

---------------------- Consumer behaviour is defined as “the dynamic interaction of affect and
cognition, behaviour, and the environment by which human beings conduct the
---------------------- exchange aspects of their lives.” This means that the buying actions of consumers
---------------------- are greatly affected by their thought process and the feelings experienced.
Human beings are greatly influenced in their buying actions by various factors
---------------------- like opinions of others, marketing stimuli like product, advertising, packaging
and product appearance. It is important here to understand that consumer
---------------------- behaviour is dynamic, involves interactions, and involves exchanges.
----------------------
1.2 SCOPE OF CONSUMER BEHAVIOUR
----------------------
Consumer behaviour can be looked upon as a study of how individuals
---------------------- make decisions on how to spend their available resources like time, money
---------------------- and effort on various consumption-related items. A marketer is interested in
knowing answers to the following questions:
---------------------- l Why do consumers buy a particular product/service brand?
---------------------- l How do they buy them?
---------------------- l Where do they buy these products?

l How often do they buy them?
----------------------
l When do they buy them?
---------------------- The answers to these questions can be obtained only by understanding
---------------------- Consumer Behaviour. Further, these answers will lead us to understand what
factors influence the decision making process of the consumers. The buying
---------------------- process involves the user, influencer, decider, and the buyer. The process is
greatly affected by selective information received by a consumer. It is very
---------------------- important to understand what and how much information is required by the
---------------------- consumer to help him evaluate the products and services. As such understanding
why a consumer finally buys a product is very complex. At this stage it is
---------------------- important to understand two basic needs of human beings:
---------------------- l Primary needs which include health, hygiene, food and clothing
Secondary
l needs, which include emotional needs like lifestyle needs,
---------------------- imitating of the affluent and ego-based life styles.
2 Consumer Behaviour
Notes
Check your Progress 1
----------------------
Fill in the blanks.
----------------------
1. The___________involves the user, influencer, decider and the buyer.
----------------------
1.3 IMPORTANCE OF CONSUMER BEHAVIOUR ----------------------
----------------------
The present business scenario is extremely complex and some highlights
of it are as under: ----------------------
l Ever increasing intensity of competition.
----------------------
l More aggressive competitors emerging with greater frequency.
----------------------
l Changing bases of competition.
----------------------
l Geographic sources of competition are becoming wider.
l Niche attacks are becoming frequent. ----------------------
l Pace of innovation is rapid. ----------------------
l Price competition becoming more aggressive. ----------------------
l Product differentiation is declining.
----------------------
As a principle, the Marketing Concept involves understanding the
needs of the consumer 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 consumers and be as close to them as possible. For many ----------------------
years, the concept of Marketing was not fully understood or implemented by
organizations throughout the world. The firms which accepted this concept in ----------------------
principle, failed to understand, that the implementation of this concept required
changes in their approach and existing practices. The firms, which used consumer ----------------------
research, rarely used it to form the basis for designing the marketing strategy. ----------------------
Many firms believed that Marketing is a task of the marketing department
rather than being a function of the entire organization. The most successful ----------------------
organizations in the present business world are committed to develop quality
products and services and selling them at a price, which provides ‘value’ to ----------------------
the consumers. In order to achieve this, these organizations have integrated ----------------------
all the functions in the organizations like Research and Development, Design,
Engineering, Production, Human Resources etc into Marketing. Each of these ----------------------
functions work towards the corporate objective of enhancing the ‘value’ to be
offered to the consumers. ----------------------
During the days of protected economy in India, companies rarely ----------------------

looked at the consumers and were focused only towards the maximization of
----------------------
profits through mass production. The consumers, who had no choice, were
forced to buy whatever was made and available in the market. For example, the ----------------------
Notes same scooters and cars were sold for more than thirty years till the Government
allowed Suzuki to enter India through Maruti. The success of Maruti, TVS
---------------------- Suzuki, and Hero Honda etc has been partly because of their better understanding
of their consumer needs. The process of liberalization in the late eighties forced
---------------------- the Indian companies to think differently. This was essentially because of the
---------------------- increasing competition and the survival of these organizations was at stake.
Today, these companies have to compete with the transnational organizations
---------------------- and to compete, they need to basically understand their customers. Those who
failed to do this had to close down their operations. The focus has now shifted to
---------------------- the consumer needs and the value perception of the consumers. Such a change
---------------------- in focus has partly contributed to making Indian companies like Bajaj Auto,
Telco, Bharat Forge to name a few to become global players.
----------------------
The second major reason for the shift to focusing on consumers is the
---------------------- dramatic increase in the quality of consumer and marketing research. In the
past, companies often did not have information on the actual purchases and
---------------------- users of their products. A few companies in the past did consumer research.
However this was not a continuous process and did not identify their actual
----------------------
users. The advent of electronics and information technology has opened new
---------------------- avenues in collecting data on actual users. This is both fast and accurate. Both
manufacturers and retailers can now carefully track consumer responses to
---------------------- products and services and evaluate marketing strategies better. Today, with the
help of scanners, large retailers like Westside, Spencer’s etc are in a position
----------------------
to capture consumer buying data immediately and send this back to the
---------------------- manufacturers.
A third reason for the shift to focusing on consumers is the development
----------------------
of consumer behaviour research. There has been a significant increase in the
---------------------- number of behaviour theories, concepts and models in recent years. The high
levels of sophistication in the consumer behaviour process help understanding
---------------------- and describing consumer behaviour much better.
---------------------- The Marketing strategies are today shifting from the mass marketing
concept to individual marketing concept. Each consumer is different than the
---------------------- other. This is so because the likes and dislikes of individuals, demographic
characteristics like economic and educational background, geographical factors
----------------------
etc are different. To effectively implement this new strategy, companies need
---------------------- to be in constant touch with their customers and their behaviour patterns.
Depending upon the above said factors, the needs of individuals also change.
---------------------- For example, air travel may be a luxury for the common man but is a necessity
for professionals since it saves time and time is money for them.
----------------------
----------------------
----------------------
----------------------
----------------------
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 1.1 : Focus of a firm’s marketing function
----------------------
Check your Progress 2 ----------------------
State True or False. ----------------------

1. The most successful organisations in the present business world are ----------------------
committed to develop quality products and services and selling them
at a price, which provides ‘value’ to the consumers. ----------------------
----------------------
Activity 1 ----------------------
Look around you and observe the different activities that organisations today ----------------------
are involved in. Out of all the marketing activities that you have noticed,
----------------------
which ones do you feel are based on some kind of consumer research or
study? Do you agree that customers are more satisfied today? ----------------------
----------------------
1.4 CHARACTERISTICS OF CONSUMER BEHAVIOUR
----------------------
1. Consumer behaviour is dynamic :
----------------------
The feelings, thinking, perceptions, and actions of the consumers and
the society at large keep changing frequently. For example, the number ----------------------
of working women is on the rise and this has changed the concept of
----------------------
shopping. The working women no long look at shopping as an enjoyable
experience and this has led to the success of the home delivery business. ----------------------
Searching for information about products needs time inputs and for these
women time is money. Further, this has been reinforced by the success of ----------------------
internet buying.
----------------------
The dynamic nature of consumer behaviour offers challenges to marketers
and the task of creating marketing strategies becomes complex yet ----------------------
exciting. Strategies that work today may not work tomorrow. Further the ----------------------
strategies adopted in one market may not be realistic in the other market.
The product life cycles are becoming shorter and create additional ----------------------
pressures on marketers to bring innovative products and concepts. The
concept of ‘value’ also changes from time to time. Hindustan Lever had ----------------------
Notes come out with a new product in toothpastes called Gel to attract the young
customers but after some time the market for gel was stagnated and HLL
---------------------- had to come out with a new product called Close up ‘Lemon Mint’ to
attract more young customers. Similarly Mahindra and Mahindra had to
---------------------- come out with ‘Scorpio’ within five years to replace ‘Bolero’.
---------------------- 2. Consumer behaviour involves interactions :
---------------------- Consumer behaviour involves interactions among people’s thinking,
feelings, and actions, and the environment. This forces marketers to
---------------------- understand three things:
---------------------- l What products and services mean to consumers.
---------------------- l What influences shopping, purchase, and consumption.

What
l consumers need to do to purchase and consume products and
---------------------- services.
---------------------- The more marketers know about how these interactions influence individual
consumers, the better they can satisfy consumer needs and create a value
---------------------- in the minds of consumers. For example, a syndicated survey conducted
---------------------- in Pune, indicates that the working class are shifting from small retailers
to super shops and exclusive shops for buying garments and apparel.
----------------------
3. Consumer behaviour involves exchange :
---------------------- Consumer behaviour involves exchanges between human beings. People
give 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 between consumers and sellers. The role
of marketing in society is to help create exchanges by formulating and
---------------------- implementing marketing strategies.
----------------------
----------------------
Fill in the blanks.
----------------------
1. Consumer behaviour involves between human beings.
----------------------
---------------------- Activity 2
----------------------
Try to make a list of changes that have taken place in the way consumers
---------------------- behave today as compared to in the past. May be you can talk to your
grandparents and find out how organisations ‘marketed’ products in the past.
----------------------
----------------------
----------------------
----------------------
1.5 CONSUMER BEHAVIOUR APPROACHES Notes
1. A Managerial Approach ----------------------

It is more micro and cognitive in nature. It is micro in emphasizing ----------------------
the individual consumer as regards to his attitudes, perceptions, and
lifestyle and demographic characteristics. It also attempts to study the ----------------------
environmental effects like reference groups, the family, and culture ----------------------
and their influence on the individual consumer. It is cognitive, that is, it
emphasizes the thought process of individual consumers and the factors ----------------------
that go into influencing their decisions.
----------------------
Such a view has some limitations. Firstly, it might overemphasize the
rationality of consumers. The cognitive view is that consumers search for ----------------------
and process information in some systematic manner to meet their needs.
But this view cannot hold true in all cases because consumers buy products ----------------------
for their symbolic value, on impulse, or an addictive basis. A cognitive ----------------------
approach fails to understand the cause of the often consumer’s decision
in such cases. Secondly, a micro view might overlook the dynamics of ----------------------
environmental factors that are independent of individuals. For example,
a perspective on gift giving in the context of ritual behaviour would be ----------------------
culturally derived and might be insightful for many marketers. Yet such ----------------------
a perspective might be overlooked if the focus is primarily on individual
consumer. Thirdly, such a perspective focuses more on purchase than on ----------------------
consumption. This is natural since marketing managers are more focused
to sales and results. But the recent focus is shifting from pre-to post- ----------------------
purchase behaviour. This is because consumer satisfaction stems purely ----------------------
from consumption and not purchase.
----------------------
2. A Holistic Approach
It is more macro in nature. It focuses on consumption experience which ----------------------
is a culturally derived context of consumption. Consumption is both
----------------------
symbolic as well as functional. For example using a premium car acts
as a status symbol but also provides safety to the user by protecting him ----------------------
from a direct impact of sun, heat and rain in addition to providing better
chances of survival in case of fatal accidents. ----------------------
A holistic approach has its own limitations. Firstly, many criticize it as ----------------------
being non-actionable. Secondly, it overemphasizes on post-purchase
at the cost of pre-purchase behaviour. Thirdly, it is imperative to note ----------------------
that though all decisions are not made through a process of systematic
----------------------
processing, many are. Hence a cognitive approach is also important.
Pre-purchase decisions are as important as the post-purchase experiences. ----------------------
Hence it is absolutely essential to take a balanced view for understanding ----------------------
consumer behaviour.
----------------------
----------------------
Notes
----------------------
State True or False.
----------------------
1. A holistic approach has no limitations.
----------------------
---------------------- 1.6 PROBLEMS IN CONSUMER BEHAVIOUR

---------------------- What we have are only relevant ideas on buying behaviour. These ideas are
---------------------- based on the inter-disciplinary studies of:
l Economics
----------------------
l Psychology and Psychoanalysis
----------------------
l Social Sciences
---------------------- These problems get more complicated and multiply in India. India being a
multicultural, multilingual, and multi ethnical where even the language changes
----------------------
after every fifty kilometers, the diversity makes it impossible to have a uniform
---------------------- theory which finds a universal application in the country.
---------------------- Consumer Behaviour and Marketing Strategy

Knowledge of Consumer Behaviour is critical for influencing product
---------------------- decisions. There is a need to collect information about the specific customers
---------------------- involved in the marketing decision at hand. Consumer behaviour is a complex,
multidimensional process. The centre for Media Education, the American
---------------------- Legacy Foundation, and Proctor & Gamble have invested millions of dollars
researching consumer behaviour and much more trying to influence it, yet
---------------------- none of them have been completely successful. One executive explains the
---------------------- importance of consumer behaviour research as under:
Understanding and properly interpreting consumer wants is a whole lot easier
---------------------- said than done. Every week our marketing researchers talk to more than 4000
---------------------- consumers to find out-
l What they think of our products and those of our competitors.
----------------------
l What they think of possible improvements in our products.
----------------------
l How they use our products
---------------------- l What attitudes they have about our products and our advertising.
---------------------- l What they feel about their roles in the family and society.
---------------------- l What their hopes and dreams are for themselves and their families.
Today as never before, we cannot take our business for granted. That’s
----------------------
why understanding, and therefore learning to anticipate consumer behaviour is
---------------------- our key to planning and managing this ever-changing environment.
Sufficient knowledge of consumer behaviour currently exists to provide a usable
----------------------
guide to marketing practice for commercial firms, nonprofit organizations and
regulators. It is important to note that all marketing decisions are based on Notes
assumptions about consumer behaviour. For example, a decision to match a
competitor’s price reduction must be based on assumption about how consumers ----------------------
evaluate prices and how do they respond to a price differential between two
brands. Further the decisions will be correct in specific situations only. If the ----------------------
situation changes, the decisions will also change. The primary objective here is ----------------------
to find usable managerial understanding.
----------------------
Marketing Strategy and Consumer Behaviour
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 1.2
----------------------

1. Consumer behaviour is a complex, multidimensional process. ----------------------
----------------------
Activity 3 ----------------------
Surf the Internet or read business magazines and find out about some recent ----------------------
survey that was conducted by an organisation in order to understand more
about consumer behaviour. What were the results? Do you feel these surveys ----------------------
are useful? ----------------------
----------------------
----------------------
Notes 1.7 SNAPSHOTS
---------------------- One of the leading national ice-cream brands in India, later taken over
---------------------- by India’s leading FMCG player, had a market share of 60 % in Mumbai
during the summer of 1989. But its performance in the towns of Andhra
---------------------- Pradesh, Maharashtra and Gujarat was a matter of concern, as it was trailing
it’s competitors, including local vendors in these towns. It was registering a
---------------------- moderate growth rate, and had a traditional image. The market had suddenly
---------------------- become very competitive with the advent of new brands. In the August of the
same year, the brand management asked the agency handling promotions to
---------------------- turn around the performance, and double the turnover in two years.
---------------------- Researchers identified teenagers as the major consumers at that time.

The issue that adversely affected the consumption of the brand in this group
---------------------- was identified as that of the brand not having the right image for a product
consumed by teenagers, especially in a group setting, such as amongst peers or
---------------------- with their family. It was certainly not identified as a young or teen brand, where
---------------------- ice-cream was associated with image, lifestyle and having fun. It was a product
bought purely on impulse buying forming a part of activity such as “hanging
---------------------- out’. The promos campaign attempted to create a brand persona in tune with
teenager’s lifestyle and aspirations reflecting humour and fun with a treatment
---------------------- of teen language, fashion and lifestyle. It created associations of these elements
---------------------- with the brand to change its persona from a staid family image to a livelier,
teen and happening persona. The effectiveness of this change can be judged
---------------------- by the figures of increase in brand sales of 25% over corresponding quarter.
This incidentally was not the traditional period of high consumption, which is
---------------------- usually summer.
---------------------- Proctor & Gamble created the disposable diaper market in Japan by
introducing Pampers. The product was an unmodified version of the American
---------------------- product and was marketed using the same rational approach used in the US.
---------------------- However, Japanese competitors reduced P& G’s share to less than 10%. “We
really didn’t understand the consumer,” remarked the P& G CEO.
----------------------
On the basis of consumer behaviour research, P& G redesigned the
---------------------- diapers to be much thinner. It also introduced pink diapers for girls and blue
for boys. Advertising was changed from having a rational appeal (a diaper was
---------------------- shown as absorbing a cup of water) to a more indirect, emotional appeal (an
animated talking diaper promises toddlers that it won’t leak or cause diaper
----------------------
rash). Finally, the Proctor and Gamble corporate name was made prominent
---------------------- in both packaging and design. Unlike Americans, Japanese consider corporate
identity and reputation to be critical. P& G is now successful in Japan.
----------------------
To survive in a competitive environment, an organization must provide
---------------------- target customers more value than is provided by the competitors. Customer
value is the difference of all the benefits derived from the total product and all
---------------------- the costs and risks of acquiring those benefits.
----------------------
Notes
----------------------
Fill in the blanks.
----------------------
1. Customer value is the_____________of all the benefits derived from
the total product and all the costs and risks of acquiring those benefits. ----------------------
----------------------
Activity 4 ----------------------
Assume that you are Marketing Manager at a big multinational company ----------------------
operating in urban India in the FMCG sector. Make a list of all the different
types of consumer data which you would be interested in. ----------------------
----------------------
1.8 MARKETING CONCEPTS
----------------------
Having understood the concept of Consumer Behaviour, let us now
----------------------
understand some basic concepts in Marketing:
Customer: An individual who pays for a product or service. He may or ----------------------
may not use the product.
----------------------
Consumer: An individual who consumes the product or service. He may
or may not be the buyer. ----------------------
Need: These are basic needs of human beings as explained in Maslow’s ----------------------
need hierarchy model. They can never be created and always exist.
----------------------
want: When a need is supported by a will power to obtain a product or
service it becomes a want. ----------------------
demand: When a want is supported by money power to obtain the product ----------------------
it becomes a demand.
----------------------
Product: A product is anything a consumer acquires to meet a perceived
need ----------------------
Marketing: It is the process of understanding consumer needs, converting ----------------------
them into opportunities through products or services to achieve profit objectives
through customer satisfaction. ----------------------
Production approach to Marketing: This approach focuses on making ----------------------
a product in large volumes at lowest overall cost and making it available
extensively. Customers will buy such products on their own. ----------------------
Product Approach: Here the focus is to create innovative products that ----------------------
meet the customer demands well. Make the best product or service and people
will buy them on their own. ----------------------
Selling Approach: This approach believes that if customers are left to ----------------------
themselves they will not buy sufficient and hence a marketer should make
special efforts through promotion to motivate him to buy more. ----------------------
Notes Summary
---------------------- l
The buying actions of consumers are greatly affected by their thought
process and their feelings experienced. Human beings are greatly
----------------------
influenced in their buying actions by various factors like opinions of
---------------------- others, marketing stimuli like product, advertising, packaging and product
appearance. Consumer behaviour can be looked upon as a study of how
---------------------- individuals make decisions on how to spend their available resources like
time, money and effort on various consumption-related items. The most
----------------------
successful organisations in the present business world are committed to
---------------------- develop quality products and services and selling them at a price, which
provides ‘value’ to the consumers.
----------------------
l The feelings, thinking, perceptions, and actions of the consumers and the
---------------------- society at large keep changing frequently. Consumer behaviour involves
interactions among people’s thinking, feelings, and actions, and the
---------------------- environment. Consumer behaviour involves exchanges between human
---------------------- beings. A managerial approach is more micro and cognitive in nature.
A holistic approach is more macro in nature. It focuses on consumption
---------------------- experience which is a culturally derived context of consumption. A
problem in consumer behaviour is the lack of a unified, well defined,
---------------------- and established theory on consumer behaviour. Knowledge of Consumer
---------------------- Behaviour is critical for influencing product decisions. There is a need to
collect information about the specific customers involved in the marketing
---------------------- decision at hand.
----------------------
Keywords
----------------------
l Consumer Behaviour : The dynamic interaction of affect and cognition,
---------------------- behaviour, and the environment by which human beings conduct the
exchange aspects of their lives.
----------------------
l Primary needs : Health, hygiene, food and clothing.
----------------------
l Secondary needs : It includes emotional needs like lifestyle needs,
---------------------- imitation of the affluent, and ego based life styles.
----------------------
----------------------
Answer the following questions:
----------------------
1. What is Consumer Behaviour? Explain it’s scope and importance in the
---------------------- present business scenario.
2. ‘A detailed study of Consumer Behaviour is essential for the success
----------------------
of any business organisation in the present environment’. Examine this
---------------------- statement in the Indian context, giving examples.
3. What are the various approaches to studying Consumer Behaviour?
----------------------
Explain the limitations of each.
4. Write short notes on: Notes
a) Marketing concepts.
----------------------
b) Problems in Consumer Behaviour.
----------------------
c) Marketing strategy and Consumer Behaviour.
----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. The buying process involves the user, influencer, decider and the buyer.
----------------------

1. True
----------------------
----------------------
Fill in the blanks. ----------------------
1. Consumer behaviour involves exchanges between human beings. ----------------------
----------------------
----------------------
----------------------
1. False
----------------------

1. True ----------------------
----------------------
----------------------
Fill in the blanks.
1. Customer value is the difference of all the benefits derived from the total ----------------------
product and all the costs and risks of acquiring those benefits.
----------------------
----------------------
----------------------
----------------------
Notes
Suggested Reading
----------------------
1. Assael, Henry. 2003. Consumer Behaviour: A Strategic Approach. South-
---------------------- Western College.
2. Chaudari, Arjun. 2006. Emotion and Reason in Consumer Behaviour.
----------------------
Taylor & Francis.
---------------------- 3. Goleman, Daniel. 1996. Emotional Intelligence. Bantam Doubleday Dell
---------------------- Publishing Group.
4. Nair, Suja R. 2013. Consumer Behaviour: Text and Cases. Mumbai:
---------------------- Himalaya Publishing House.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Consumer Research
UNIT
2
Structure:
2.1 Introduction
2.2 Relevance of Consumer Research
2.3 Need for Consumer Research
2.4 What constitutes good Consumer Research
2.5 Approaches to Consumer Research
2.6 Types of Data
2.7 Limitations and Threats
Summary
Key words
Suggested Reading
Consumer Research 15
Notes
Objectives
----------------------
----------------------
• Identify the purpose of consumer feedback
----------------------
• Describe the ways to collect internal and external data
---------------------- • Analyse the future of consumer research in India
----------------------
2.1 INTRODUCTION
----------------------
Consumer Research is the systematic collection and analysis of consumer
---------------------- information for the purpose of important decision making in marketing.
---------------------- Consumer Research plays an important role in marketing process, helps
in consumer measurement, market potential, sales forecast, each element like
---------------------- product mix, distribution mix, price, effectiveness of an advertisement campaign
and consumer acceptance of a product. In the fiercely competitive situation, it is
---------------------- extremely critical for an organization to monitor the customer satisfaction on a
---------------------- regular basis.
Consumer research is primarily used for two applications. These are:
----------------------
l Routine problem analysis i.e. product potential, sales forecasting etc.
----------------------
Non-routine
l problem analysis i.e. new product launch, success of
---------------------- promotional schemes
---------------------- 2.2 RELEVANCE OF CONSUMER RESEARCH

----------------------
Consumer Research has become extremely relevant especially in the present
---------------------- business scenario and the reasons can be stated as under:
---------------------- Today’s
l business decisions are extremely complex and a large number of
variables are involved.
---------------------- Globalization
l and liberalization has intensified competition and the
---------------------- survival of an organization is at stake.
Optimization
l at all levels to reduce costs. An organization needs to know
---------------------- the areas, which offer cost reductions without affecting the consumer
---------------------- expectations.
l Employees and shareholders are becoming increasingly aware of their
----------------------
rights to participate in decision-making process.
---------------------- The
l tools used for research have increased and organizations are
increasingly practicing data mining.
----------------------
----------------------
----------------------
Notes
----------------------
Fill in the blanks.
----------------------
1. The tools used for research have increased and organisations are
increasingly practising. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 2.1
----------------------
2.3 NEED FOR CONSUMER RESEARCH ----------------------
Marketers are often interested in the feedback of consumers. As it has ----------------------

been discussed earlier, the study of Consumer Research is extremely important
for the formulation of marketing strategies. A marketer would be interested in ----------------------
knowing the answers to the following questions: ----------------------
How
l do consumers interpret information about marketing stimuli such as
----------------------
products, stores, and advertising?
How
l do consumers choose from among alternative product classes, ----------------------
products, and brands?
----------------------
l How do consumers form evaluations of products and brands?
----------------------
l How do consumers interpret the benefits of marketing offerings?
l How do behaviour and environment affect consumer beliefs and attitudes? ----------------------
l Why consumers are more interested or involved in some products or ----------------------

brands than others?
----------------------
l How do marketing strategies influence consumer’s beliefs and attitudes?
----------------------
Answers to such questions can be obtained only through consumer
feedback and for this, it is imperative to study Consumer Research and integrate ----------------------
into the overall marketing function.
----------------------
----------------------
Notes
----------------------
----------------------
1. Consumer research has casual importance for the formulation of
---------------------- marketing strategies.
----------------------
----------------------
Activity 1
---------------------- Mention any five ways of collecting data from customers.
----------------------
---------------------- 2.4 WHAT CONSTITUTES GOOD CONSUMER

RESEARCH
----------------------
The first step in creating good Consumer Research is to define the
---------------------- problem and the purpose of doing research. Often, the firms interested in doing
---------------------- research, give a problem to researchers, which is only a management problem.
The researchers need to understand and convert this problem into a research
---------------------- problem.
---------------------- The next step is to describe the research process and the methodology.
This is because the research process involves a large number of people and in
---------------------- the present scenario the movement of people in and out of an organization is
high. The researchers need to maintain a high standard of ethics. For example
---------------------- the data collected may be highly confidential for a firm. Further in certain cases,
---------------------- the consumers do not like their identity to be revealed. It is the duty of the
research team to keep such issues confidential.
---------------------- It may not be always possible to fully achieve the objectives of the
---------------------- research. This may be due to various reasons like shortage of time, resources,
and conditions prevailing during the data collection. Hence it is important to
---------------------- clearly state the limitations of the study in the beginning. The researchers need
to use all modern techniques to analyze the data fully and the findings need to
---------------------- be presented unambiguously. This is especially so when the job of Consumer
---------------------- Research is given to outside agencies. Such agencies are often under pressure
to tone down the findings if they are contrary to the interest of the managers in
---------------------- the organization. The findings can at times be against the tide and revolutionary
and hence the researchers need to justify their conclusions on the basis of hard
---------------------- evidence.
---------------------- Lastly, the researchers need to have high integrity and strive to fully
dedicate themselves to the cause of research.
----------------------
----------------------
----------------------
Notes
----------------------
Fill in the blanks.
----------------------
1. The first step in creating good consumer research is to and the purpose
of doing research. ----------------------
2. research offers an economical and efficient means of learning opinions ----------------------
and attitudes, intentions and expectations of respondents.
----------------------
Activity 2 ----------------------
----------------------
Out of the various approaches to do research, which in your opinion is the
most effective from the customer’s point of view and why? Surf the Internet ----------------------
and find out which approach seems to be popular amongst organisations
today. ----------------------
----------------------
2.5 APPROACHES TO CONSUMER RESEARCH ----------------------
There are three important approaches to Consumer Research. They are as under: ----------------------
l Observation Survey. ----------------------
l Survey Research.
----------------------
l In-depth Interviewing.
----------------------
1. Observation Survey :
It is a method of collecting past and current data by recording observations. ----------------------
The basic advantage of this approach is that it can be used to collect the
----------------------
data even when the respondents are hostile or unable to give information.
The data can be collected as it occurs and in it’s natural environment. ----------------------
Here, it is possible to record the information, which most respondents
would have ignored. It is less demanding since it does not include the ----------------------
developing of the questionnaires and involves less bias. The disadvantage
----------------------
of this approach is that it is slow and expensive process. Further it needs
the researchers to have interpretation skills and hence should be used with ----------------------
care and understanding.
----------------------
2. Survey Research :
It is the communication approach, which involves questioning respondents ----------------------
and recording their responses. It is the most versatile approach for the ----------------------
collection of abstract information of all types. Survey research offers
an economical and efficient means of learning opinions and attitudes, ----------------------
intentions and expectations of respondents. Interpretation of the question
by the respondents can greatly vary their responses. ----------------------
----------------------
Notes 3. In-depth Interviewing :
It involves a detailed probing of the respondent by a specialist interviewer.
----------------------
It has an informal approach where appropriate questions are developed
---------------------- during the course of the interview. The focus here is to identify and record
subtle reactions of the respondent. It attempts to discover the hidden
---------------------- motivations affecting consumer behaviour. This approach helps to provide
a strong stimulus to the insights of the researcher. Being unstructured,
----------------------
the information can be subjective leading to different interpretations by
---------------------- different researchers of the same information.
---------------------- 2.6 TYPES OF DATA

---------------------- 1. Secondary data: Data which has been collected earlier for some other
---------------------- purpose is secondary data in the hands of the marketing researcher.
2. Primary data: Data collected at first hand either by the researcher or by
----------------------
someone else especially for the purpose of the specific study are known
---------------------- as primary data
Sources of Secondary data:
----------------------
Internal
l sources i.e. data available within the organization like financial
---------------------- and sales records.
---------------------- External
l sources in India include government publications and non-
government publications.
----------------------
a) The Government publications are as under:
---------------------- l Population census by Registrar General of India.
---------------------- l National income figures by Central Statistics Organization (CSO).
---------------------- l Industrial statistics by CSO on industrial performance.
l Foreign trade of India by Director of Commerce.
----------------------
l Wholesale price index by Ministry of Commerce.
----------------------
l Statistics of Indian economy by Planning Commission.
----------------------
l Currency and financial report by Reserve Bank of India.
---------------------- l Socio-economic surveys by various government bodies.
---------------------- b) The non-government publications are as under:
---------------------- l Detailed information on corporate sector by stock exchanges.

l Reports of various industrial associations.
----------------------
Reports
l by the Federation of Indian Chambers of Commerce and
---------------------- Industries.
---------------------- Syndicated
l services by ORG like retail audits, pharmaceutical
audits, consumer product audits, advertisement audits.
----------------------
Syndicated
l services by IMRB like media research, national Notes
readership surveys, TRP ratings.
----------------------
Syndicated
l studies by business magazines, J D Power, Pathfinders,
National Council of Applied Economic Research. ----------------------
Advantages of Secondary data :
----------------------
1. It is far more economical, as the cost of collecting original data is saved.
----------------------
2. Use of secondary data saves much of the time of the researcher which
leads to prompt completion of the research project. ----------------------
3. Search for secondary data is helpful, not only because secondary data may ----------------------
be useful but because familiarity with such data indicated deficiencies and
gaps and as a result the researcher can make his primary data collection ----------------------
more specific and more relevant to his study.
----------------------
4. As the researcher explores availability of secondary data relevant to his
project, he finds, in the process, that his understanding of the problem has ----------------------
improved. He may even have to change his earlier ideas in the light of the
secondary data. ----------------------
5. Finally, secondary data can be used as a basis for comparison with the ----------------------
primary data that the researcher has just justified.
----------------------
Disadvantages of Secondary data:
----------------------
1. The unit in which secondary data are expressed may not be the same as is
required in the research project. ----------------------
2. One does not know how accurate the data are. ----------------------
3. There may be a possibility of the secondary data being outdated.
----------------------

1. Data, which has been collected earlier for some other purpose, is ----------------------
in the hands of the marketing researcher.
----------------------
Activity 3 ----------------------
----------------------
Visit the library or surf the Internet and find out more about secondary
sources of data that are popular in India. Also find out about some basic ----------------------
information on primary data sources.
----------------------
----------------------
----------------------
----------------------
Notes 2.7 LIMITATIONS AND THREATS
---------------------- Sometimes, Consumer Research tends to be fragmentary in its approach,
as a result of which it becomes difficult to have an overall perspective in which
---------------------- a marketing problem is to be viewed and studied. Organisations suffer from
faulty research and other reasons that are listed below:
----------------------
1. Consumer Research is sometimes criticized on the ground that it becomes
---------------------- too superficial and faulty.
---------------------- 2. If the problem of Consumer Research is not carefully designed.
---------------------- 3. If the researchers are less competent, not well trained and lack creativity.
4. If sufficient time and finance is not provided then the objectives will not
----------------------
be achieved.
---------------------- 5. Sometimes there exists a lack of co-ordination and understanding between
researchers and marketing managers.
----------------------
Threats :
----------------------
The success of Consumer Research depends upon the cooperation of the
---------------------- public. Unprofessional or unethical consumer research practices may seriously
jeopardize the public’s willingness to cooperate in surveys.
----------------------
The three identified threats to consumer research are as under:
----------------------
1. Excessive interviewing.
---------------------- 2. Lack of understanding and abuse of respondents.
---------------------- 3. Use of consumer research as a sales ploy.
---------------------- The empirical reappraisal of these threats found that the third threat, i.e. the use
of consumer research as sales ploy, is the biggest threat to the future of consumer
---------------------- research. A survey revealed that 40% of upper middle class respondents
perceived consumer research to be a sales ploy. This will lead to the erosion of
---------------------- trust of the consumer respondents.
----------------------
Summary
----------------------
l Consumer Research is the systematic collection and analysis of consumer
---------------------- information for the purpose of important decision making in marketing.
Consumer Research has become extremely relevant especially in the
----------------------
present business scenario. Marketers are often interested in knowing the
---------------------- feedback of consumers. The study of Consumer Research is extremely
important for the formulation of marketing strategies. Consumer Research
---------------------- to be successful needs to follow all steps systematically to achieve the
objectives. There are three important approaches to Consumer Research.
----------------------
viz. Observation Survey, Survey Research and In-depth Interviewing.
---------------------- Data collected at first hand either by the researcher or by someone else
especially for the purpose of the study are known as primary data. Data,
---------------------- which has been collected earlier for some other purpose, is secondary data
in the hands of the marketing researcher. There are a number of sources Notes
of secondary data in the form of Governmental and non- governmental
publications to name a few. ----------------------
l It may not be always necessary that the results of Consumer Research are ----------------------
accurate. A number of reasons can contribute to the failure of Consumer
Research. It has and can be misused and misuse is one of the biggest ----------------------
threats to Consumer Research.
----------------------
Keywords ----------------------
l Consumer Research : Systematic collection and analysis of consumer ----------------------

information for the purpose of important decision making in marketing.
----------------------
l Primary data : First hand data collected either by researcher or by
someone else for the purpose of study. ----------------------
l Secondary data : Data collected earlier for some other purposes is ----------------------
secondary data for the researcher.
----------------------
Self-Assessment Questions ----------------------
Answer the following questions : ----------------------

1. ‘Consumer Research is critical to the success of a marketing strategy’. ----------------------
Examine the above statement in the light of the present business ----------------------
environment in India. Support your answer with suitable examples.
----------------------
2. What are the threats to Consumer Research? Can they be avoided or
controlled to a major extent? ----------------------
3. What are the various sources to collect secondary data? Explain the merits
----------------------
and de-merits of each.
----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1.
The tools used for research have increased and organisations are
increasingly practising data mining. ----------------------
----------------------
1. False
----------------------
----------------------
----------------------
Notes Check your Progress 3
Fill in the blanks.
----------------------
1. The first step in creating good Consumer Research is to define the problem
---------------------- and the purpose of doing research.
---------------------- 2.
Survey research offers an economical and efficient means of learning
opinions and attitudes, intentions and expectations of respondents.
----------------------
---------------------- Fill in the blanks.
---------------------- 1. Data, which has been collected earlier for some other purpose is secondary
data in the hands of the marketing researcher.
----------------------
---------------------- Suggested Reading

---------------------- 1. Assael, Henry. 2003. Consumer Behaviour: A Strategic Approach. South-
---------------------- Western College.
---------------------- Taylor & Francis.
Publishing Group.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Motivation, Personality and Emotion
UNIT
3
Structure:
3.1 Introduction
3.2 Theories of Motivation
3.3 Motivation Theory and Marketing Strategy
3.4 Personality
3.5 Characteristics of Personality
3.6 Theories of Personality
3.7 Emotion
Summary
Key words
Suggested Reading
Motivation, Personality and Emotion 25

Notes
Objectives
----------------------
----------------------
• Discuss motivation as the driving force impelling action
----------------------
• Analyse personality as the inner psychological trait that reflects
---------------------- how a person responds to his environment
• Describe emotion as a strong, relatively uncontrolled feeling that
----------------------
affects behaviour
----------------------
----------------------
3.1 INTRODUCTION
---------------------- Water is inexpensive from municipal agencies, yet millions of consumers

pay many times more for expensive bottled water. Heavily advertised brands like
---------------------- Bisleri and Kinley are well known, a brand like Oxi-rich sells huge quantities
in 5 gallon containers. Why do consumers pay to purchase a nearly free
---------------------- product? There appear to be three purchase motives. Health concerns focusing
---------------------- on nutrition and fitness motivates one set of buyers. These individuals want
natural, untreated pure water. Safety motivates another set of buyers. Many
---------------------- are concerned about ground water contamination and reports of deteriorating
water quality. The third motivator is snob appeal or status. Ordering or serving
---------------------- a Kinley is more chic and higher status than plain water.
---------------------- The marketing implications of these differing motivations are:
---------------------- l Safety: Show the danger of tap water. Emphasizes filtration, safe source.
l Health: Emphasize purity and taste, no additives or treatments
----------------------
l Status: Emphasize quality, usage situations, exclusive taste, retail,
---------------------- restaurant and bar outlets
---------------------- Motivation is the reason for behaviour. A motive is a construct representing
an unobservable inner force that stimulates and compels a behavioural response
---------------------- and provides specific direction to that response. The motivation underlying the
---------------------- consumption of even a simple product like water can be complex. There are a
number of theories of motivation and they offer useful insights to the marketing
---------------------- manager to understand consumer behaviour. We will focus here on two theories
- namely, Maslow’s Need Hierarchy and McGuire’s Psychological Motives.
----------------------
---------------------- 3.2 THEORIES OF MOTIVATION

---------------------- 1. Maslow’s Hierarchy of Needs :
---------------------- It is based on four premises:

a) All human beings acquire a similar set of motives through genetic
---------------------- endowment and social interaction.
---------------------- b) Some motives are more basic or critical than others.
c) The more basic motives must be satisfied to a minimum level before Notes
other motives are activated.
----------------------
d) As the basic motives become satisfied, more advanced motives
come into play. ----------------------
Table 3.1
----------------------
Type Products Theme
Psychological Health foods, medicines, Boost is the secret of my ----------------------
Food, water, sleep Sports drinks, low energy, Saffola hai na ----------------------
Cholesterol foods
Safety Smoke detectors, insurance, Jindagi ke saath bhi, ----------------------
Security, insurance, Preventive medicines, seat jindagi ke baad bhi, Sleep
stability, familiarity belts, burglar alarms safe ----------------------
Belongingness Personal grooming, Hum hai na, Kuch kar
----------------------
Love, friendship, entertainment, clothing me dikhana hai, Chehare ke
affiliation, group gayab. daag saat din ----------------------
acceptance
Esteem Clothing, furniture, liquor, Duniya meri muththi ----------------------
Status, superiority, stores, hobbies, cars savari mein, Jandaar savari-
----------------------
self-respect, prestige shaandaar
Self-actualization Education, hobbies, Indian Army Sar utha ke ----------------------
Self fulfillment vacations, sports piyo
----------------------
2. Mcguire’s Psychological Motives :
McGuire developed a classification system that organizes various motives ----------------------
into 16 categories. This system helps marketers isolate motives likely to
----------------------
be involved in various consumption situations. McGuire first divided
motivation into four main categories: ----------------------
a) Cognitive
----------------------
b) Affective
----------------------
c) Focused on preservation of the status quo
----------------------
d) Focused on growth
Cognitive motives focus on the person’s need for being adaptively oriented ----------------------
toward the environment and achieving a sense of meaning. Affective
----------------------
motives deal with the need to reach satisfying feeling status and to obtain
personal goals. Preservation oriented motives emphasize the individual ----------------------
as striving to maintain equilibrium, while growth motives emphasize
development. These four main categories are then further subdivided on ----------------------
the basis of source and objective of the motive:
----------------------
1. Is the behaviour actively initiated or in response to the environment?
----------------------
2. Does this behaviour help the individual achieve a new internal state
or a new external relationship to the environment? ----------------------
----------------------

Notes Each of McGuire’s 16 motives and their implications for marketing are as
follows:
----------------------
1. Need for Consistency: A basic desire is to have all facets or parts of one
---------------------- consistent with each other. Cognitive dissonance is a common motive of
this type. Often making a major purchase is not consistent with the need to
---------------------- save money, to make other purchase, or to purchase a different brand with
desirable benefits not in the purchased brand. This inconsistency motivates
----------------------
the individual to reduce it. Understanding the need for consistency is also
---------------------- important for structuring advertising messages and developing attitude
change strategies. Thus marketers intending to change attitude should use
---------------------- credible sources to achieve it.
---------------------- 2. Need for Attribution: This set of motives deals with our need to determine
who or what causes the things that happen to us. Do we attribute the cause
---------------------- of favourable or unfavourable outcome to ourselves or to some outside
force? The fact that consumers need to attribute cause underlies an area
----------------------
of research known as attribution theory. This approach to understanding
---------------------- the reasons consumers assign particular behaviours of others has been
primarily used for analyzing consumer’s reactions to promotional
---------------------- messages. When consumers attribute a sales motive to advice given by
a salesperson or advertising message, they tend to discount the advice
----------------------
while the advice of friends would be held in high regard.
---------------------- 3. Need to Categorize: People have a need to categorize and organize the
vast array of information and experiences they encounter in a meaningful
----------------------
yet manageable way. They establish categories or mental partitions that
---------------------- allow them to process large quantity of information. Prices are often
categorized such that different prices connote different categories of
---------------------- products. For example, cars below Rs. five lakhs and above Rs. five lakhs
may elicit two different meanings, because of information categorized on
----------------------
the basis of price level.
---------------------- 4. Need for Objectification: These motives reflect needs for observable
---------------------- cues or symbols that enable people to infer what they feel and know. In
many instances, clothing plays an important role in presenting the subtle
---------------------- meaning of a desired image and consumer lifestyle. Marketers use this
in advertising like in the case of Raymond that talks of the image of “A
---------------------- complete man”, or Grasim suiting projecting the “royale image”.
---------------------- 5. Need for Autonomy: The need for independence and individuality is a
characteristic of the American culture. People like to express their desire
---------------------- for autonomy by using products that are unique or are positioned to be so.
---------------------- The increasing popularity of hand made products, original art, antiques
reflects this need. For example, Windsor Fashion carries the punch line
---------------------- “In every crowd there is always one.” Products with limited editions are
exploiting these needs to position their products. Fashion designers in
---------------------- India have been using this need to market their products better.
----------------------
6. Need for Stimulation: People often seek variety and difference out Notes
as a need for stimulation. Such variety seeking behaviour may be a
prime reason for brand switching and impulse purchasing. The need for ----------------------
stimulation is curvilinear and changes over time.
----------------------
7. Teleological Need: Consumers are pattern matchers who have images
of desired outcomes or end states to which they compare their current ----------------------
situation. This motive propels people to prefer mass media such as T.V
----------------------
programs and books that match their view of how the world should work.
This has obvious implications for advertising messages. ----------------------
8. Utilitarian Need: This theory views the consumer as a problem solver
----------------------
who approaches situations as opportunities to acquire useful information
or skills. Thus, a consumer watching a soap opera on T.V is not only ----------------------
being entertained but is learning clothing style, lifestyle options.
----------------------
9. Need for Tension Reduction: People encounter situations in their daily
life that create uncomfortable levels of stress. In order to effectively ----------------------
manage tension and stress, people are motivated to seek ways to reduce
arousal. Recreational products are often promoted in terms of tension ----------------------
relief.
----------------------
10. Need for Expression: This motive deals with the need to express one’s
identity to others. People feel the need to let others know who and what ----------------------
they are by their actions, which include the purchase and use of goods. ----------------------
The purchase of many products such as clothing and automobiles allows
consumers to express their identity. Products like Rolex, Swatch, and ----------------------
Pajero use this to position their products accordingly.
----------------------
11. Need for Ego defense: The need to defend one’s identity or ego is
another important motive. When one’s identity is threatened, the person is ----------------------
motivated to protect his or her self-concept and utilize defensive behaviours
and attitudes. Mouthwashes, deodorants and other hygiene products use ----------------------
this need to position their products as satisfying ego-defensive needs. ----------------------
12. Need for Reinforcement: People are often motivated to act in certain ways
because they were rewarded for behaving that way in similar situations in ----------------------
the past. This is the basis for operant learning. It is primarily a resultant of ----------------------
a reward-punishment relationship. Advertisements like “Enter a room and
you are immediately surrounded by friends sharing your excitement”. ----------------------
13. Need for Assertion: Many people are competitive achievers who seek ----------------------
success, admiration and dominance. Important to them are power,
accomplishment, and esteem. ----------------------
14. Need for Affiliation: Affiliation is the need to develop mutually helpful ----------------------
and satisfying relationships with others. It relates to altruism and seeking
acceptance and affection in interpersonal relations. Themes like “Your ----------------------
kids will love you for it” are examples.
----------------------
----------------------

Notes 15. Need for Identification: The need for identification results in the
consumer playing various roles. A person may play the role of a college
---------------------- student, bookstore employee, fiancée, and many others. One gains
pleasure from adding new roles and by increasing the significance of roles
---------------------- already adopted. Marketers encourage consumers to assume new roles
---------------------- while positioning their products to them for example, a theme like “No
working mother should be without one”.
----------------------
16. Need for Modeling: The need for modeling reflects the tendency to base
---------------------- behaviour on that of others. Modeling is a major means by which children
learn to become consumers. The tendency to model explains some of the
---------------------- conformity that occurs within reference groups. Marketers utilize this
motive by showing desirable types of individuals using their brands.
----------------------
Nakshatra shows Aishwarya Rai using their brand of diamonds.
----------------------
----------------------
----------------------
1. As per Maslow, all human beings acquire different set of motives
---------------------- through genetic endowment and social interaction.
----------------------
---------------------- Activity 1
---------------------- 1. Using Maslow’s hierarchy theory, show how marketers of clothes can
target various needs.
----------------------
2. Name two advertisements on TV that match with your thinking and
---------------------- ideologies.
----------------------
---------------------- 3.3 MOTIVATION THEORY AND MARKETING STRATEGY
---------------------- Heineken and Beck’s are imported beers, consumed primarily by

confident, upscale professional men. However a major advertising agency
---------------------- found through its motivational research that Heineken consumption is driven
by a desire for status, while Beck’s is associated with a desire for individuality.
----------------------
Classico spaghetti buyers are motivated by indulgence and romance while
---------------------- Newman’s Own spaghetti buyers showed ambition and individuality. Since
the purchase of these brands is caused by a different motive, each requires a
---------------------- distinct marketing and advertising program. Consumers do not buy products:
instead they buy motive satisfiers. Consumers do not buy perfumes instead
----------------------
they buy romance, sex appeal, sensuality, sophistication and a host of other
---------------------- emotional benefits. Managers must discover these motives that their brands
can satisfy and weave their strategies around these motives. Consumers often
---------------------- buy products and services as gifts for themselves, though they may feel some
guilt at being self-indulgent. Motivation research has found that people make
----------------------
such purchases for a variety of motives, including rewarding themselves for an
accomplishment. Consistent with this research, Keepsake has run advertising Notes
campaigns emphasizing the appropriateness of self-gifts of diamond jewellery
as a reward. ----------------------
Discovering Purchase motives : ----------------------
During a market research, a firm interviewing users of top class branded
----------------------
apparel can get reasons for the purchase as “They have the style”, “They are hip
and happening”, “I like the feel of them”, or “My friends use them”. However ----------------------
there may be other reasons that he does not want to reveal or may not be really
aware of like “They enhance my status”, “They make me look sexy”, and “They ----------------------
show I am still young”. All or any combinations of above mentioned motives
----------------------
may influence the purchase decision. The first set of motives admitted by and
were known to the respondent are called manifest motives. Motives that conform ----------------------
to the prevailing values of a society are more likely to be manifest. The second
set of motives not admitted to by the respondents and may not be known to him ----------------------
are called as latent motives. A marketing manager needs to unearth all motives
----------------------
and use them to formulate marketing strategies. Such motives can be extremely
helpful to a marketer for positioning his brands. Researching manifest motives ----------------------
is relatively simpler task. But finding latent motives is very tough. Techniques
like multidimensional scaling can be useful in such a task. These techniques are ----------------------
used to enhance and enrich the insights that can be gained from more empirical
----------------------
sources. Brand Oreo used projective techniques in a focus group discussion
to gain a fuller understanding of the brand: “We had always known that Oreo ----------------------
evoked strong emotions but what surprised us was that many regarded Oreo
as almost magical”. As a result, “Unlocking the Magic of Oreo” became a ----------------------
campaign theme.
----------------------
Latent and Manifest Motives in a Purchase Situation :
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Motives known and freely admitted ----------------------
Motives either unknown or such that respondent is reluctant to admit ----------------------
Fig 3.1
----------------------

Notes Marketing Strategies based on Motivational Conflict :
With the many motives consumers have and the many situations in which
----------------------
these motives are activated, there are frequent conflicts between motives. The
---------------------- resolution of a motivational conflict often affects consumption patterns. In
many instances, the marketer can analyze situations that are likely to result in a
---------------------- motivational conflict, provide a solution to the conflict, and attract the patronage
of those consumers facing the motivational conflict.
----------------------
There are three types of motivational conflicts important to managers that are
---------------------- as under:
---------------------- 1. Approach - Approach motivational conflict: A consumer who must
choose between two attractive alternatives faces approach-approach
---------------------- conflict. For example, a consumer may be torn between a trip abroad and
a purchase of a macho bike. This conflict may be resolved by a timely
----------------------
advertisement to encourage one or the other action. A scheme like buy
---------------------- now and pay later can also be booster to make a decision.
---------------------- 2. Approach - Avoidance conflict: A consumer who is faced with both

positive and negative consequences confronts approach-avoidance
---------------------- conflict. A person who is concerned about gaining weight yet likes junk
food faces this type of problem. He may want the taste and emotional
---------------------- satisfaction associated with junk food (approach) but does not want to
---------------------- gain weight (avoidance). The development of low calorie healthy snack
food reduces this conflict and allows the weight sensitive consumer to
---------------------- enjoy snacks and yet control the calorie intake. Similarly, many consumers
want a tan but don’t want to risk the skin damage. Neutrogena’s Instant
---------------------- Bronze sunless tanner resolves this problem.
---------------------- 3. Avoidance - Avoidance conflict: A choice involving only undesirable
outcomes produces avoidance-avoidance conflict. When a consumer’s
---------------------- old television fails, this conflict may occur. The person may not want to
---------------------- spend on a new TV or pay to have the old one repaired, or go without one.
Advertisements emphasizing the importance of regular maintenance for
---------------------- cars, such as oil filter changes, also use this type of motive conflict: “Pay
me now, or pay me more later.”
----------------------
---------------------- 3.4 PERSONALITY

---------------------- The term ‘Personality’ is often used but there has been difference in views
about its exact meaning. Some people refer to personality as a general sum of
---------------------- traits of characteristics of the person, while others refer to it as a unitary way of
---------------------- responding to particular situations. This means that some view personality as a
unified whole while others focus on some particular traits. The most appropriate
---------------------- definition of personality is as under:
---------------------- The characteristic and distinctive trait of an individual, the stable and
shifting pattern of relationship between these traits and the way the traits interact
---------------------- to help or hinder the adjustment of a person to other people and situations.
Thus we find that the emphasis is on certain characteristic features, which are Notes
as under:
----------------------
l There are certain distinctive and characteristic traits.
There is a sort of integration between the psychological and physiological
l ----------------------
facets of a person.
----------------------
l Each person has a unique nature.
----------------------
l Personality is something that gets habitually associated to a particular
individual. ----------------------
Personality relates to certain behaviour or mannerisms, which distinguishes
l
----------------------
one person from the other.
Thus we see that the definition emphasizes on certain inner characteristics ----------------------
like specific qualities, attributes, traits, which separates one individual from ----------------------
the other. It is very important for marketers to identify the specific personality
characteristics associated with consumer behaviour. Such information is useful ----------------------
in developing a firm’s segmentation strategies. In today’s context, understanding
of the individual’s product and brand choices is very much related to his or her ----------------------
personality traits and characteristic features. ----------------------
----------------------
Fill in the blanks.
1. It is very important for marketers to identify the specific associated ----------------------
with consumer behaviour.
----------------------
----------------------
Activity 2
----------------------
What are the motives behind the following advertisements: Colgate Gel,
Huggies diapers, Westside clothing, Revlon hair colour, Adidas shoes and ----------------------
Tanishq jewellery. ----------------------
----------------------
3.5 CHARACTERISTICS OF PERSONALITY
----------------------
The three broad characteristics of Personality are as under:
----------------------
1. Personality as a reflection of an individual’s preferences or differences:
The term personality was used to describe the external appearance or ----------------------
actions of individuals. Two individuals differ from each other due to their
different interests, attitudes, behaviour, ability to adapt to the society and ----------------------
environment etc. However it is pertinent to note here that it is possible to ----------------------
identify individuals having a single personality characteristic. This means
that there are a few common traits, which may be visible in some persons. ----------------------
----------------------

Notes For example, people with a dominant style of functioning may be termed
as strong in social success.
----------------------
2. Personality of an individual is more stable, quite consistent and
---------------------- enduring: Man consistently copes with the environment. He adopts a
consistent pattern of response to all the internal and external factors in
---------------------- the environment. It is presumed that how an individual will react to an
internal or external situation depends on his ability to be consistent and
----------------------
his power of endurance. However, the outcome of the behaviour will be
---------------------- affected by sociological and psychological factors. How a person reacts
to an internal or external situation or to a new stimulus depends upon
---------------------- his perception of the situation. In turn, such perception will depend on
how he has coped with the situation in the past, because individuals have
----------------------
the tendency to respond in a stable manner. For instance, a person who
---------------------- does not like to show his emotions will react similarly to a difficult and a
favourable situation.
----------------------
3. Personality can change: Having said that the personality of an individual
---------------------- is consistent, it is imperative to note that there can be a change in
personality due to certain events, circumstances or situations. Such events
---------------------- can be a change in social status, education, death of a close relative or
career growth. Personality also changes due to the maturing effect.
----------------------
The Five-Factor Model :
----------------------
The multitrait theory used most commonly by marketers is the Five-Factor
---------------------- model of personality. This theory identifies five basic traits that are formed by
genetics and early learning. These core traits interact and manifest themselves
---------------------- in behaviours triggered by situations. The Five-Factor Model has proven useful
---------------------- in such areas as understanding bargaining and complaining behaviour and
compulsive shopping. There is evidence that it may have validity across cultures.
---------------------- The advantage of this approach is the fuller picture it allows of the determinants
of the behaviour. For example, a research on complainers found that these set of
---------------------- people had strong traits of extrovert. This can give us useful insights in creating
---------------------- right training modules for customer care executives to handle complaints in a
more cooperative manner. The more we know about a consumer, the more we
---------------------- understand him.
---------------------- Table 3.2

Core Trait Manifestation
----------------------
Extroversion Prefer to be in a large group than alone
---------------------- Talkative when with others
Bold
---------------------- Instability MoodyTemperamental
Touchy
---------------------- Agreeableness Sympathetic
---------------------- Kind to others
Polite with others
----------------------
Openness to experience Imaginative Notes
Appreciative of art
Find novel solutions ----------------------
Conscientiousness Careful ----------------------
Precise
Efficient ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 3.2 : Dimensions of Brand Personality
----------------------
----------------------
1. Personality as a reflection of an individual’s preferences or differences,
----------------------
personality of an individual is more stable, quite consistent and
enduring and personality can change are not the characteristics of ----------------------
personality.
----------------------
3.6 THEORIES OF PERSONALITY ----------------------
1. Freud’s Psychoanalytical Theory : ----------------------

Sigmund Freud, considered to be the father of psychoanalysis, developed ----------------------
his theory of personality in the beginning of the twentieth century. This
theory finds wide application and has been a major contribution in ----------------------
psychological analysis of personality. This theory is based on the premise ----------------------
that unconscious (biological) needs are root forces determining human
motivation and personality. ----------------------
According to Freud, personality of an individual is a resultant of three ----------------------
interacting forces, which are Id, Ego and Superego.
----------------------
a) Id : Id is the source of strong inborn drives and urges such as
aggression, hunger, self-preservation, and sex. It acts to avoid ----------------------
tension and seeks immediate pleasure. For instance, a person having
headache gets hold of a pain killer drug like crocin is a reflection ----------------------
of Id. Id acts at a subjective and unconscious level and is incapable
----------------------
of dealing with the objective reality. Its impulses are many a time
unacceptable to the society. For example, when a person is hungry, ----------------------

Notes Id motivates him to snatch the food of others to satisfy his hunger.
Such an act is unacceptable in the society.
----------------------
b) Ego : The Ego is the individual’s self-concept and is the
---------------------- manifestation of objective reality as it develops in interaction with
the external world. Through learning and experience, ego develops
---------------------- an individual’s capacity of realistic thinking. It operates on reality
principle, which is capable of postponing the release of tension until
----------------------
that time which is conducive environmentally. For instance, going
---------------------- back to the earlier example of headache, Ego helps the individual to
postpone the act of taking a crocin. Headache may be due to acidity
---------------------- or blood pressure or due to some other reason. Ego helps him to
look for these alternatives.
----------------------
c) Superego: It constitutes the moral factor or force and represents the
---------------------- ideal. It attempts to define good and bad and induces an individual
to attain perfection. Superego can be seen as the leash on the Id and
----------------------
works against its impulses. It does not manage the Id but restrains it
---------------------- by punishing unacceptable behaviour through the creation of guilt.
It also operates at the unconscious level and motivates individuals
---------------------- to act in a moral way.
---------------------- Superego acts as a balancing force between Id and Ego. It controls the Id, which
could disrupt the social system and influences the Ego to strive for socially
---------------------- acceptable rather than purely realistic. Superego, many a times, resolves the
conflicts arising between the three personality components. But sometimes it
----------------------
is not possible to resolve the conflict. Hence dissonance occurs and gives rise
---------------------- to defense mechanisms to deal with tension. The defense mechanism works at
the unconscious state and to understand behaviour, unconscious levels need to
---------------------- be studied.
---------------------- There are basically four types of defense mechanisms and they are as under:
---------------------- a) Repression: It represses one of the forces to eliminate conflict.

For example, bullock cart racing during various festivals in India.
---------------------- Observers know that it is inhuman to exploit animals. But they suppress
---------------------- this feeling and enjoy watching.
b) Projection: The feelings generated due to Id or Superego is ascribed to
----------------------
another person to release tension. For example, criticism of a neighbour
---------------------- for purchasing costly items and displaying them is in fact a mask of his
own desire to do that.
----------------------
c) Identification: This mechanism induces an individual to unconsciously
---------------------- imitate behaviour of another who has successfully handled the conflict.
---------------------- d) Reaction formation: Unconscious feelings held towards others are

consciously expressed opposite.
----------------------
----------------------
Application of Freud’s theory in Marketing : Notes
Many marketers have been extensively used specially in advertising to have
----------------------
a favourable opinion of them towards their products. This theory finds wide
application in brand positioning. Positioning is adopted by marketers so as ----------------------
to carve out a distinct and valued slot in consumer minds. Consumers have
a tendency to assign certain psychological and symbolic values to the brand. ----------------------
The term brand personality is a metaphor for the emotional relationship that
----------------------
exists between a consumer and a brand. Consumers prefer to look beyond the
functional value and performance and look at a brand with human description. ----------------------
For example, the recent success of the motorcycle ‘Pulsar’, due to its positioning
and promotion as ‘definitely male’. Such a positioning targets the needs of those ----------------------
male customers who need their masculine desires to be satisfied. Further such
----------------------
positioning has also attracted a sizeable female customers who do not want to be
considered any lower then males. This positioning uses the Id factor to promote ----------------------
it. Similarly the advertisements of King Fisher beer, Esselworld, use Id theme to
promote their products as tension relieving. Many a times, the three personality ----------------------
factors are used by marketers in combination, to promote their products more
----------------------
effectively. For example, the advertisement of ‘Kamasutra’ condoms disguises
Id with Superego. ----------------------
2. Karen Horney Theory :
----------------------
The neo –Freudian school classified personality traits into ten sets. These
were further classified into three major orientations: ----------------------
a) Compliant orientation: Those who move towards people and stress the ----------------------
need for love, approval, and affection. They exhibit large amounts of
empathy and humility and are unselfish. ----------------------
b) Aggressive orientation: Those who move against people and stress the ----------------------
need for power, strength, and manipulate others.
----------------------
c) detached: Those who move away from people. They stress the need for
freedom and self-reliance. No strong emotional ties between them and ----------------------
others.
----------------------
Applications of this theory in Marketing :
----------------------
The Neo-Freudian theory did not have influence in the field of marketing.
But many of the advertisements indicate that marketers have been using ----------------------
this theory intuitively. These advertisements depict products or services to
provide an opportunity to individuals to ‘belong’, to be appreciated by others. ----------------------
Advertisements like those of Close Up confidence, Rexona deodorant, Axe
----------------------
perfumes, Denim after shave lotion, etc. are all targeted towards creating the
self image by focusing on enhancing self confidence or in reducing tension. ----------------------
----------------------
----------------------
----------------------

Notes 3. Trait Theories :
In psychology, trait theory is an approach to the study of human personality.
----------------------
Trait theorists are primarily interested in the measurement of traits, which can
---------------------- be defined as habitual patterns of behaviour, thought, and emotion. According
to this perspective, traits are relatively stable over time, differ across individuals
---------------------- (e.g. some people are outgoing whereas others are shy), and influence behaviour.
---------------------- List of personality traits
1. Openness to experience
----------------------
2. Conscientiousness (Scrupulous, meticulous, principled behavior guided
---------------------- or conforming to one’s own conscience.)
---------------------- 3. Extraversion (Gregarious, outgoing, sociable, projecting one’s personality
outward)
----------------------
4. Agreeableness (a compliant, trusting, empathic, sympathetic, friendly
---------------------- and cooperative nature)
---------------------- 5. Neuroticism (an individual’s tendency to become upset or emotional)
6. Self-esteem (low) (favorable or unfavorable attitude toward the self)
----------------------
7. Harm avoidance (A tendency towards shyness, being fearful and uncertain,
---------------------- tendency to worry.)
---------------------- 8. Novelty seeking (Impulsive, exploratory, fickle, excitable, quick-tempered
and extravagant. Associated with addictive behaviour.)
----------------------
9. Perfectionism (an internally motivated desire to be perfect)
----------------------
10. The inability to express emotions. (Alexithymia)
---------------------- 11. Rigidity (Inflexibility, difficulty making transitions, adherence to set
patterns)
----------------------
12. Impulsivity (Risk taking, lack of planning, and making up one’s mind
---------------------- quickly)
---------------------- 13. Disinhibition (an inability or unwillingness to constrain impulses)
---------------------- 14. Psychoticism (personality pattern typified by aggressiveness and

interpersonal hostility)
---------------------- 15. Obsessionality (Persistent, often unwelcome, and frequently disturbing
---------------------- ideas, thoughts, images or emotions, rumination, often inducing an
anxious state).
----------------------
The Big Five
---------------------- In recent times, a number of researchers have been using the latest in computer
technology to redo the work that Eysenck and other earlier researchers did in
----------------------
far more laborious ways. This has lead to what is known as the “big five” or the
---------------------- “five factor” theory.
1. The first dimension is extraversion-introversion.
----------------------
2. The second is usually called emotional stability, Notes
3. The third is called agreeableness.
----------------------
4. The fourth is conscientiousness.
----------------------
5. The fifth is culture, openness to experience, or just openness.
They are based upon three assumptions: ----------------------
l Individuals possess relatively stable behavioural tendencies. ----------------------

l People differ in the degree to which they possess these tendencies. ----------------------
When
l identified and measured, these relative differences between
----------------------
individuals are useful in characterizing their personalities.
Applications of this theory in Marketing: ----------------------
One
l research based on Edwards Personal Preference Schedule ----------------------
(EPPS) indicated a positive relationship between smoking and
aggression. Differences between filter and non-filter cigarette ----------------------
smokers. ----------------------
EPPS
l applied to find the difference between Zen buyers and Santro
buyers indicated no difference. It however can indicate the type of ----------------------
automobile preference. ----------------------
4. Carl Jung’s Theory :
----------------------
Carl Jung had conducted systematic investigations of the unconscious
dynamics with the association test. He had given more focus to the question ----------------------
of personality type in the association test. Based on the typology of the
----------------------
personality, he grouped them into two basic types, which are Extrovert
and Introvert. ----------------------
The Extrovert was very much interested in building a social relationship.
----------------------
The introvert was occupied with his own inner world of fantasy and
body activity and was relatively incapable of outgoing social interactions. ----------------------
This concept was further elaborated by going for a sub-division of the
mental operations into four basic activities, which are as under: ----------------------
l Sensing. ----------------------
l Feeling. ----------------------
l Thinking.
----------------------
l Intuiting.
----------------------
According to Jung, individuals are strong either in sensation or intuition
while gathering information, and while evaluating the information they ----------------------
are strong either in thinking or feeling.
----------------------
Application of this theory in Marketing :
The study of such psychological inventory indicators helps in learning ----------------------
about the impact of the four personality types on consumer behaviour. For ----------------------

Notes instance, if four individuals representing these personality types are in
the market for purchase of a two-wheeler, both the sensing-thinking and
---------------------- sensing-feeling will gather information about the product from various
sources like auto magazines internet etc. The sensing-thinking types
---------------------- will arrive at their own decision and purchase a two-wheeler while the
---------------------- sensing-feeling ones will include the recommendations of mechanics and
prefer to buy from a service reputed dealer. The intuitive-thinking and the
---------------------- intuitive-feeling types will buy on their own gut feeling or hunch.
---------------------- Table 3.3 : Few characteristics of selected Jung’s personality types
Sensing Thinking (ST) Intuitive Thinking (IT)
----------------------
● Empirical & rational in decision. ● Takes a broader perspective of
---------------------- the situation.
● Risk avoider, will search in depth ● Thinks, uses logic & imagination
---------------------- for making information. in considering motives.
● Price-sensitive & materialistic. ● Speculative- considers many
----------------------
options before decision.
---------------------- ● Short term consideration. ● Takes long term view.
● Considers personal values rather ● People oriented in decision
---------------------- than logic. making.
● Decides after considering others ● Least price conscious and novelty
---------------------- objective orientation. seeking.
---------------------- ● Status conscious & materialism, ● The time period is indefinite in
reflects the impact on other decision making.
---------------------- persons.
---------------------- 5. Schiffman & kanuk Personality Traits :
Consumer innovativeness: These are acceptors of new products and
●
---------------------- services if they are convinced that the new product will benefit them and
---------------------- are risk taking buyers.
Dogmatism: rigidity displayed when information received is contrary to
●
----------------------
own beliefs. Need endorsement by celebrity or an authoritative person.
---------------------- ● Social character: Socio-cultural environment. Two types of traits i.e.
inner directedness & other directedness.
----------------------
Optimum stimulation level: Consumer researchers have examined
●
---------------------- the relationship between personality traits and the differences in the
---------------------- stimulation, which in turn may be related to the consumer behaviour.
Consumers make choices depending on their OSL.
---------------------- OSL= present living status (satisfied consumers)
---------------------- OSL> present status (restless)
---------------------- OSL< Present status (relief seeking)
Variety Novelty seeking: Acceptance of a product is based on presentation
●
----------------------
of facts.
----------------------
Application of this theory in Marketing : Notes
When marketers want to communicate about new products or services
----------------------
to consumers who display high dogmatism, would go in for an advertisement
having an authoritative person endorsing the brand. For example, during the ----------------------
initial stage of ‘Oral B brush’ launch a dentist was shown advocating the
advantages of the brush to non-innovators. Consumers with low dogmatism ----------------------
accept advertisements showing benefits. For instance, the recent advertisement
----------------------
of ‘Ayush’ showing total eradication of dandruff in a couple of weeks will
motivate innovators having low dogmatism to buy the shampoo. ----------------------
6. Inter-Related Consumption & Possession Personality Traits :
----------------------
a) Consumer Materialism: Refers to attachment people have towards
material possessions. Characteristics of persons who identify ----------------------
themselves and others on the basis of material possession are:
----------------------
● Give undue importance to acquiring & displaying their
worldly possessions. ----------------------
● Crave for possessing lots of things. ----------------------
● Are usually self centered and selfish. ----------------------
●
Possess things irrespective of whether they derive satisfaction
----------------------
from them.
b) Fixated Consumption Behaviour: Lie in between materialistic ----------------------
and addictive behaviour. Characteristics are:
----------------------
● Deep interest displayed for a particular product/category.
----------------------
● A dedicated search for particular product category.
● Willingness to spend considerable amount & time in searching
----------------------
for product category ----------------------
c) Compulsive Consumption Behaviour:
----------------------
● Their behaviour indicates addiction.
----------------------
● Harmful to them and others.
d) Consumer Ethnocentrism Behaviour: ----------------------
● Consumer highly ethnocentric-Swadeshi’s ----------------------
● Consumers low on ethnocentricity: only foreign products. ----------------------
Self concept or self image
----------------------
Individuals have a specific perception and image of themselves. These self
concepts or self images are closely connected to the personality of the products ----------------------
or services patronized by them. This means that consumers tend to purchase
----------------------
goods or services, which according to them have symbolic representation
closely related to their self image. ----------------------
----------------------

Notes Multiple Selves :
Researchers have indicated that instead of considering an individual as
----------------------
a ‘single self’, it would be more appropriate to think of the consumer in terms
---------------------- of a multiple self. This is because the behaviour of an individual at a particular
time will depend on his interactions with others and the social role that was
---------------------- prominent at that time.
---------------------- Self Image :
Each individual has an image of himself as a certain kind of person, with
----------------------
certain personality traits, habits, possessions, behaviour etc. Such image will be
---------------------- unique to an individual based on his background and experience, knowledge
gained from others over a period of time. The kinds of self image an individual
---------------------- will have are as under:
---------------------- ● Actual self image i.e. how they actually see them.
---------------------- ● Ideal self image i.e. how they would like to see themselves.
● Social image i.e. how they feel the society sees them.
----------------------
● Ideal social self image i.e. how they would like the society to see them.
----------------------
● Expected self image i.e. how they would like to see themselves at some
---------------------- future time.
Applications of the theory in Marketing :
----------------------
Knowledge of the various types of self images of the consumers will
---------------------- help the marketers to work out marketing strategies. Marketers can work out
---------------------- segmentation programs on the basis of this theory and position their products
or services to match the social status and life style in various categories. For
---------------------- example, Enfield Bullet is targeted to persons who consider or desire to have an
authoritative image. This is the reason for its higher sales among policemen and
---------------------- affluent agriculturists.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
The use of Id in an advertisement to promote the product. Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes The use of Id in an advertisement to promote the Bajaj Pulsar.
----------------------
----------------------
----------------------
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----------------------
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----------------------
----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
The use of ‘Ego’ in an advertisement of Thumps Up on T.V. Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes Use of ‘Super Ego’ in an advertisement.
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
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----------------------
----------------------
----------------------
----------------------
Use of ‘Super Ego’ in an advertisement. Notes
----------------------
----------------------
----------------------
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----------------------
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----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------

Notes Karen Horney Theory used by Samsonite to show carefree, detached person.
----------------------
----------------------
----------------------
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----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Notes
----------------------
Fill in the blanks.
----------------------
1.
Inter-related consumption and possession personality traits are
consumer materialism, fixated consumption behaviour, consumer ----------------------
ethnocentrism behaviour.
----------------------
3.7 EMOTION ----------------------
Emotion is defined as strong, relatively uncontrolled feelings that affect ----------------------

behaviour. All of us experience a wide array of emotions. All emotional ----------------------
experiences tend to have several elements in common. Emotions are generally
triggered by environmental events. Anger, joy, and sadness are most frequently ----------------------
a response to a set of external events. However, we can also initiate emotional
reactions by internal processes such as imagery. Athletes frequently use ----------------------
imagery to “psych” themselves into a desired emotional state. Emotions are ----------------------
accompanied by physiological changes. Some characteristic changes can be
eye pupil dilation, increased perspiration, more rapid breathing, increase pulse ----------------------
rate and blood pressure and enhanced blood sugar level. Another characteristic
feature of an emotional experience is cognitive thought. Emotions are generally ----------------------
though not necessarily, are accompanied by thinking. The types of thoughts and ----------------------
our ability to think rationally vary with the type of degree of emotion. Extreme
emotions are frequently used as an explanation for inappropriate thoughts or ----------------------
actions. Emotions also have associated behaviours. While the behaviours vary
across individuals and within individuals across situations and time, there are ----------------------
unique behaviours characteristically associated with different emotions: fear ----------------------
triggers fleeing responses, anger triggers striking out, grief triggers crying and
so on. Finally, emotions involve subjective feelings. In fact, it is the feeling ----------------------
component we generally refer to when we think of emotions. Grief, joy, anger,
jealousy, and fear feel very different to us. These subjectively determined ----------------------
feelings are the essence of emotions. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 3.3
----------------------
Emotions and Marketing Strategy :
---------------------- Marketers have been exploiting emotions to guide product positioning,
---------------------- sales presentations on an intuitive level. However, the deliberate and systematic
study of relevance of emotions in marketing strategy is relatively new.
----------------------
The following caselet illustrates how marketers have used emotions for
---------------------- reviving a brand.
Nicholas Hayek performed what some consider a business miracle by
----------------------
changing SMH, today called the Swatch group, the Swiss firm best known for
---------------------- its Swatch watch, from a $ 1.1 billion firm losing $ 124 million a year to a $ 2.7
billion firm making $ 336 million a year. His success was surprising because
---------------------- he ignored the conventional wisdom that firms must seek the countries with
the lowest labour cost in which to produce products subject to global price
----------------------
competition. The Swatch group is committed to its Swiss home base. The bulk
---------------------- of its technology, people and production are centered in the Jura mountains of
Switzerland As Hayek said “we are all global companies competing in global
---------------------- markets. But that does not mean we owe no allegiance to our own societies
and cultures.” His philosophy was that they were not just selling a consumer
----------------------
product or even a branded product. They were selling an emotional product.
---------------------- One wears a watch on his wrist against his skin. He may have it there for 12
hours and at times even for 24 hours. It can be an important part of his self-
---------------------- image. It cannot be a commodity. If genuine emotions get added to the watch
and attack low end with a strong message, Hayek believed, they could succeed.
----------------------
Swatch does not offer people a style, it offers a message. This is absolutely
---------------------- critical. Fashion is all about image. Emotional products are about message- a
strong, exciting, distinct, authentic message that tells people who they are and
---------------------- what they do. There are many elements that make up the Swatch message: High
quality, low cost, provocative and joy of life. But the most important element is
----------------------
the hardest for others to copy. “Swatch does not offer a watch; we offer you our Notes
personal culture.”
----------------------
Emotional Arousal as a Product Benefit :
Emotions are characterized by positive or negative evaluations. Consumers ----------------------
actively seek products whose primary or secondary benefit is emotional arousal.
----------------------
Many products feature arousal as a primary benefit. Las Vegas, Atlantic city, and
Disney world are positioned as emotion-arousing destinations, as are various ----------------------
travel programs. Several brands of soft drinks emphasize excitement and fun
as primary benefits. Even cars have been positioned to be emotion-arousing ----------------------
products. For example, Toyota-”Oh what a feeling”, and Pontiac-”We build
----------------------
excitement” have used emotions.
Emotion Reduction as a Product Benefit : ----------------------
Some emotions are unpleasant to many individuals and would like to ----------------------
overcome these as fast as possible. Emotions like sadness, powerless, humiliation
or disgust are never liked by individuals. Shopping malls, departmental stores ----------------------
and coffee shops are often visited by people to alleviate boredom or loneliness. ----------------------
Food and alcohol, often harmful, are consumed to reduce stress. Flowers are
heavily promoted as an antidote to sadness. Weight-loss products and other ----------------------
self-improvement products are frequently positioned primarily in terms of guilt
/ helplessness / shame / disgust-reduction benefits. Charities frequently stress ----------------------
guilt reduction or avoidance as a reason for donations. ----------------------
Emotions in Advertising :
----------------------
Emotional arousal is often used in advertising even when emotional arousal
or reduction is not a product benefit. For example, BSNL in its advertisement ----------------------
of landline portrays the relationship between a son and a mother and weaves
its message around the emotions of a caring mother. ICICI Bank uses a jingle ----------------------
“hum hai na” while Bajaj Auto in the past has used the emotions about being ----------------------
an Indian in their campaign “Hamara Bajaj”. Emotional advertisements that
trigger a positively evaluated emotion enhance liking of the ad itself. Emotional ----------------------
ads may be remembered more than neutral ads. An emotional content in ads
enhances their attention attraction and maintenance capabilities. Emotional ----------------------
appeals can play a powerful role in developing brand image. A person having a ----------------------
single or a few exposures to an emotional ad may simply decide that the product
is good. ----------------------
----------------------
----------------------
----------------------
1. Emotions are not triggered by environmental events.
----------------------
----------------------
----------------------

Notes Summary
---------------------- ● Motivation is the reason for behaviour. There are a number of theories
of motivation and they offer useful insights to the marketing manager to
----------------------
understand consumer behaviour. Maslow’s theory and McGuire’s theory
---------------------- of motivation help us to understand motives of consumers. McGuire’s 16
motives and their implications for marketing are worth studying for better
---------------------- understanding of consumer motives. In today’s context, understanding of
the individual’s product and brand choices is very much related to his or
----------------------
her personality traits and characteristic features.
---------------------- ● The seven Personality theories give new insights into why consumers
---------------------- choose specific products and brands. People associate brands with their
own personalities, associate emotions with brands and as such brands
---------------------- help a person to make a status statement.
----------------------
Keywords
----------------------
● Motivation : Reason for behaviour. It is the driving force that impels
---------------------- them to action.
---------------------- ● Latent motive : Motives not admitted to by respondents and may not be
known to him.
----------------------
● Manifest motive : Motives admitted to by respondents and known to
---------------------- him.
● Id : It is the strong inbound drives.
----------------------
● Ego : Operates on the reality principle.
----------------------
● Super ego : Is the moral part of individual’s psychic structure through
---------------------- internalizing the values of society.
---------------------- ● Personality : Inner psychological characteristics that determine and
reflect how a person responds to his or her environment.
----------------------
● Emotion : Strong, uncontrolled feelings that affect behaviour.
----------------------
----------------------
---------------------- 1. Do you agree that personality greatly affects the buying motives of
consumers? Justify your claim on the basis of some personality theories.
----------------------
2. Explain in brief McGuire’s motives and their implications in Marketing.
---------------------- 3. Define Personality. What are the characteristics of Personality?
---------------------- 4. What is Emotion? How are emotions used in Advertising? Support your
answer with suitable examples.
----------------------
----------------------
Answers to Check your Progress Notes

1. False ----------------------
----------------------
Fill in the blanks.
----------------------
1. It is very important for marketers to identify the specific personality
characteristics associated with consumer behaviour ----------------------
----------------------
1. False
----------------------
1. Inter-related consumption and possession personality traits are consumer ----------------------
materialism, fixated consumption behaviour, compulsive consumption
behaviour and consumer ethnocentrism behaviour. ----------------------
1. False
----------------------
Suggested Reading ----------------------
1. Assael, Henry. 2003. Consumer Behaviour: A Strategic Approach. South- ----------------------

Western College. ----------------------
Taylor & Francis. ----------------------
3. Goleman, Daniel. 1996. Emotional Intelligence. Bantam Doubleday Dell ----------------------

Publishing Group.
----------------------
Himalaya Publishing House. ----------------------
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Notes
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Consumer Learning
UNIT
4
Structure:
4.1 Introduction
4.2 Components of Learning
4.3 Theories of Learning
4.4 Habit
4.5 Brand Loyalty
4.6 Brand Equity and Brand Leverage
Summary
Key Words
Suggested Reading
Consumer Learning 55
Notes
Objectives
----------------------
----------------------
• Describe how consumer behaviour is mostly learned behaviour
----------------------
• Analyse how learning leads to habitual buying behaviour
---------------------- • Propose methods for organisations to enhance their brand loyalties
----------------------
4.1 INTRODUCTION
----------------------
Learning is defined as a permanent change in the behaviour of a consumer as a
---------------------- result of past experience. The characteristic features of learning are as under:
---------------------- Learning involves a change in behaviour. This change may or may not be
•
an improvement over previous behaviour.
----------------------
Learning is a process, which continuously evolves and changes as a result
•
---------------------- of newly acquired knowledge.
Learning can occur by increase in knowledge through reading of books,
•
---------------------- articles, observation, thinking, and through discussions.
---------------------- • The behaviour change is based on some form of practice or experience.
---------------------- Thus we see that learning is based on two vital aspects that are behaviour and
experience. Learning can be either intentional or incidental. Intentional
---------------------- learning occurs when the individual is deliberately searching for information on
the features, benefits etc. of the product before a purchase. Incidental learning
---------------------- occurs when the information comes to him on its own either through the print
---------------------- or electronic media, exhibitions etc.
---------------------- 4.2 COMPONENTS OF LEARNING

---------------------- Every day an individual receives a variety of stimulus inputs. When a
specific stimulus becomes associated with a specific response in a sufficiently
---------------------- permanent manner then the occurrence of the stimulus tends to bring a particular
---------------------- response, we conclude that learning has occurred. In order to understand the
learning process, we need to consider various components of the learning
---------------------- process. These components are as under:
---------------------- 1.
Drive: Drive is said to be the strong stimuli that forces action. The drive
arouses in an individual an urge to respond to the stimuli and thus forms the
---------------------- basis of motivation. Here, one needs to differentiate a motive from a drive.
A Motive is based on needs and goals, which means a motive is purposeful
---------------------- and directed towards the specific goal while drive refers to an increase in
---------------------- probability of activity without actually specifying the nature of the activity.
For example, seeing a product like a microwave oven at a friend’s place and
---------------------- watching advertisements may create a drive to know more about the oven.
This in turn motivates the person to physically visit a retailer and have more
---------------------- information about the oven and thus leads to learning.
2. Cues: A cue is any object existing in the environment, as perceived by the Notes
individual. Cues give direction to the motives. Hence marketers need to
determine the conditions that a cue will increase the probability of getting ----------------------
a specific response. For example, seeing an advertisement of a packaged
tour of Europe may act as a cue for a senior executive to enjoy a vacation ----------------------
with his family and reduce the tension. It is pertinent to note here, that the ----------------------
cues should be consistent with the expectations of the consumers.
----------------------
3. Response: A stimulus leads to a response. It is the reaction of an
individual to a stimulus. Such a response may be in the physical form or ----------------------
may be in terms of complex phenomena such as attitudes, perceptions
etc. Psychologists have the opinion that responses must be operationally ----------------------
defined and physically observable however it is important to note that
----------------------
the response does not merely depend on the drive, motive or a cue. It
also depends on the past experience of consumers and their association ----------------------
of the cue with something different than the target. For example, the blue
Pepsi was targeted to create a positive response in the minds of the Indian ----------------------
consumers by taking the advantage of the world cup cricket matches and
----------------------
blue colour association with the Indian cricket team. However, many
retailers and consumers in Mumbai started calling it ‘Ghaslet’ Pepsi ----------------------
because of their association of the blue colour with kerosene.
----------------------
4. Reinforcement: Reinforcement is a very basic condition of learning.
Without it, we cannot observe any measurable modification of behaviour. ----------------------
Reinforcement is closely associated to the psychological process of
motivation. Reinforcement refers to those environmental events, which ----------------------
increases the likelihood of specific response occurring in the future as a
----------------------
result of particular cue or stimuli. Of several responses made to the same
situation, those that are accompanied by satisfactions or reinforcements ----------------------
will be more likely to recur. For example, if a girl finds using a particular
brand of cosmetics helped her to win the beauty contest in her college, ----------------------
she is likely to buy and use the brand of cosmetic again and again. In this
----------------------
case, learning takes place since she has won the contest after using the
cosmetic for the first time. ----------------------
5. Retention: The stability of learned behaviour maintained by the individual
----------------------
over a period of time is called retention. Under repeated conditions of
positive reinforcement, there is a tendency for the conditioned response ----------------------
to continue for a long period of time. For example, a consumer who
is absolutely delighted by the use of a product will continue to have a ----------------------
positive feeling about the product for a long time.
----------------------
6. Extinction: It occurs when the reinforcement for the learned response is
withdrawn, the learned response is no longer used, or the individual is no ----------------------
longer reminded of the response. ----------------------
----------------------
----------------------
Notes
----------------------
Fill in the blanks.
----------------------
1. Drive, cues, response, reinforcement, retention and are the
---------------------- components of learning.
----------------------
---------------------- Activity 1
---------------------- Give two practical examples to show how marketers are using classical
conditioning theory.
----------------------
----------------------
4.3 THEORIES OF LEARNING
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 4.1
---------------------- 1. Behaviourist Learning Theories :
---------------------- a) Classical Conditioning :
---------------------- This theory is based on the postulate of the existence of two stimuli
namely; primary and secondary stimulus and the two are in
---------------------- association with each other. As the association between the two
stimuli becomes strong, it leads to the same reaction being yielded
----------------------
by the secondary stimulus as the primary.
---------------------- This theory is based on the experiment conducted by a psychologist,
Pavlov. Pavlov’s experiment was conducted with the help of dogs.
----------------------
Whenever Pavlov gave food to his dogs, he used to ring a bell. The sight
---------------------- of food salivated the dogs. When the ringing of bell was associated to
the giving of food for a long time, Pavlov observed that the dogs started
---------------------- salivating at the hearing of the bells even in the absence of the food. In
short, after a number of trials, the dogs learned the connection between
----------------------
bell ringing and food. Here the sight of the food is the primary stimulus Notes
and the ringing of the bell is the secondary stimulus. The primary
stimulus is known as the unconditioned stimulus while the secondary ----------------------
is known as the conditioned stimulus. To establish a conditioned
response, the conditioned stimulus must be repeated frequently in close ----------------------
congruity with the unconditioned stimulus. ----------------------
A good example is one of the most successful and longest running
----------------------
advertising campaigns in history, the Marlboro cowboy campaign. A
cowboy was viewed as an image of strength, masculinity and security. ----------------------
The cowboy represents the primary stimulus. The positive feelings that
the cowboy generated got associated with Marlboro cigarettes, which ----------------------
was the secondary stimulus. A repeated association of these two led
----------------------
people to buy Marlboro whenever they saw a cowboy
Requirements of classical conditioning : ----------------------
i. There should be no overshadowing effect i.e. there should be only one ----------------------
unconditioned stimulus in association with the conditioned response. In
the advertising campaign in Singapore, the cowboy was shown on a white ----------------------
horse. Thus the white horse overshadowed the cowboy and the same
----------------------
association levels could not result.
ii. There should be no previous association of the unconditioned stimulus ----------------------
with any other stimulus. Many advertisements use brand ambassadors to ----------------------
achieve the effects of conditioned learning but the same personality being
associated with other brand dilutes the effect. For instance, Shahrukh Khan ----------------------
being an ambassador for Videocon and Mayur suiting. The objectives of
Videocon and Mayur thus get diluted. ----------------------
iii. The unconditioned stimulus should not be overly familiar. Use of well ----------------------
known personalities in advertisements, do not, as a principle, improve
conditioning. The over exposure to such personalities reduces the impact. ----------------------
iv. Classical conditioning is more effective when the conditioned stimulus is ----------------------
new i.e. the product should be new.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 4.2 : Pavlov’s Experiment of Conditioned Response ----------------------
----------------------
Notes Application of Conditioned Learning in Marketing :
There are a large number of identical products in the market place. A
----------------------
manufacturer of a less known brand is often seen imitating the packaging
---------------------- of well-known brands. We often find manufacturers imitating the external
features of a well-known brand. All recent manufacturers of gel pens have
---------------------- copied the Add Gel pen, Nima soaps copying the external packaging of
Nirma are some examples of the conditioned learning. This concept of
----------------------
learning is being used to a large extent in the field of advertising. For
---------------------- example, the Close Up gel association with fresh breath energy, Bajaj
scooters with value for money etc.
----------------------
b) Instrumental Conditioning :
---------------------- This also requires development of a link between stimulus and the
response. Here the individual determines that response which gives
----------------------
him greater satisfaction and the response is within the conscious
---------------------- system of the individual. This learning is based on the research of the
American psychologist, Burrhus Skinner. According to him, the process
---------------------- of instrumental conditioning rests on the unconditioned stimulus after
certain behaviour. The unconditioned response is said to be the positive
----------------------
or negative reinforcement of the performed behaviour. The effect of
---------------------- instrumental conditioning is based on the strengthening or weakening
of the performed behaviour. A positive stimulus or reward increases the
---------------------- chances of the given behaviour being performed repeatedly. According
to Skinner most of the learning takes place in a controlled environment,
----------------------
where in the individuals are rewarded for the selection of the appropriate
---------------------- behaviour.
---------------------- While analysing the consumer behaviour, consumers learn through trial
and error process, in which some purchase decisions can have favourable
---------------------- outcomes. Hence a favourable experience is instrumental in encouraging
the individual to repeat the purchase behaviour. To explain this further,
---------------------- let’s take the Pavlov’s research model. If hypothetically, Pavlov’s dogs
---------------------- were given two levers, one that gives food to the dogs when operated
and the second, which gives an electric shock. When the dogs use these
---------------------- levers, they would, after repeated experience, use only that lever which
gives food.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 4.3 : Three types of reinforcement in Instrumental Conditioning
----------------------
Consumer Learning effected by informative advertisements. Notes
----------------------
----------------------
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----------------------
----------------------
Notes Consumer Learning effected by informative advertisement.
----------------------
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----------------------
Customer Learning through informative advertisement. Notes
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
Application of Instrumental Conditioning in Marketing :
----------------------
The concept of habit formation in case of a product purchase, can well be
explained with the help of this conditioning. For example, if a consumer ----------------------
uses a particular shampoo for some time and realises that his problem of
dandruff has been substantially reduced, this positive reinforcement becomes ----------------------
instrumental in motivating the individual to buy the same shampoo again
----------------------
and again in the future. Automobile dealers are extensively applying this
conditioning. They motivate potential customers to take a test ride of their ----------------------
Notes automobile. When the individual gets satisfaction of a drive, he gets motivated
to buy the automobile.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 4.4 : A model of Instrumental Learning
----------------------
2. Cognitive Learning Theory :
---------------------- This theory views learning as a problem solving process rather than a mere
---------------------- association of a stimulus and response. Consumer associates the stimulus
with his needs. He learns to evaluate alternate brands and decides on the
---------------------- brand that meets his expectations. Proponents of this theory propose that
consumers do not respond merely to the stimuli. Instead they act on the
---------------------- basis of their beliefs, values, express attitude and strive towards goals.
---------------------- Cognitive learning theory is based on the experiment by Kohler on apes
conducted in the early 1920s. Kohler placed a chimpanzee in a cage with
---------------------- several boxes, and bananas were hung from the roof. After trying to reach
the food and failing, the chimpanzee solved the problem by placing a box
----------------------
under the bananas to reach them. Learning was not a result of contiguity
---------------------- between stimulus and response or reinforcement; it was the result of
insight. Learning starts with recognition of a goal, finding means to
---------------------- achieve it and taking the necessary action to achieve the goal. The nature
of the goal is understood from the beginning and the reward is anticipated
----------------------
but it is imperative to note that the reward is not apparent until after the
---------------------- behaviour takes place.
----------------------
----------------------
Fig. 4.5 : Cognitive Learning Theory: A Problem solving Process
----------------------
3. Vicarious Learning :
----------------------
A type of cognitive learning that has important applications is Vicarious
---------------------- or Observational Learning. Through vicarious learning, people imitate
the behaviour of others as a result of observing them. To be effective,
---------------------- the consumer should have the ability to perform the behaviour and it
should appear useful to him. Sports gear manufacturer Nike advertises
----------------------
its sports gear by showing David Beckam wearing them. Similarly, Boost
shows Kapil Dev, a cricket star in India, saying, “Boost is the secret of Notes
my energy”. A sports enthusiast is likely to emulate the behaviour of these
stars, by using the products identified with these stars. ----------------------
Application of Cognitive Conditioning in Marketing : ----------------------
Marketers frequently show the positive results of using their products;
----------------------
for example, attractive models are shown using cosmetics, soaps that
result in social success or wearing clothes that result in business success. ----------------------
Sometimes typical consumers are portrayed providing testimonials for
the product as in the case of ‘Rin Shakti’. In each case, the consumer ----------------------
learns by associating the actions of others to some positive consequence
----------------------
and emulating those actions.
A study pattern of the purchasing patterns of recent residents of a community ----------------------
reflects a process of cognitive learning. Researchers studied the purchasing
----------------------
patterns of three groups in a particular area in a city: less than three months,
one and a half to two years, and three years and more. It was found that the ----------------------
group that had stayed for three and more years was closer to the purchase
patterns of the established permanent residents of the area. ----------------------
Cognitive vs. Behaviourist Theory : ----------------------
The two approaches to learning are very different. One might be interested ----------------------
in evaluating the two in the marketing perspective. The behaviourist
approach gives little emphasis on thought processes and consumer attitude. ----------------------
This approach will be more relevant when the consumer’s cognitive
activity is minimal and his involvement in the product purchase is ----------------------
minimal. For convenience goods like toothpastes, soaps, salt etc. it is ----------------------
not worth for the consumers to spend time in information search to find
better brands. They would like to go in for those brands that have been ----------------------
reasonably satisfactory.
----------------------

Cognitive learning theory is more relevant for important and involving
products. For such products, consumer considers spending time for ----------------------
information search and brand evaluation to be worthwhile. For example, a
consumer is most likely to do extensive search when buying products like ----------------------
a car, house, furniture and clothing. ----------------------
----------------------
1. Learning never starts with recognition of a goal, finding means to ----------------------
achieve it and taking the necessary action to achieve the goal.
----------------------
----------------------
Activity 2
----------------------
Show with two examples how marketers are using instrumental conditioning. ----------------------
Notes 4.4 HABIT
---------------------- Habit can be defined as repetitive behaviour resulting as an absence of:
---------------------- • Information seeking, and
---------------------- • Evaluation of alternative choices.

Learning leads to habitual purchasing behaviour if the consumer is satisfied with
----------------------
the brand over a period of time. After repetitive purchases, the consumer will buy
---------------------- the brand again with little information search or brand evaluation. Such an absence
of cognitive activity can also be described as routinized decision making.
----------------------
A model of Habitual Purchasing Behaviour :
---------------------- A consumer has settled for a regular brand of biscuits, say, Parle-G based on past
experience and has become a loyal buyer. Need arousal may occur because the
----------------------
consumer is out of stock or may be due to a stimulus such as a crunch with a
---------------------- cup of tea. Here, the information search is non-existent i.e. recognition of a
need is likely to lead directly to an intention to buy. The consumer had evaluated
---------------------- the brand when he had bought it the first time. The packaged biscuits generally
ensure standardization. Continued satisfaction results in a high probability that
----------------------
the consumer will repurchase Parle-G.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 4.6 : A Model of Habitual Purchasing Behaviour
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 4.7 : Learning is a key to Consumer Behaviour
----------------------
Learning is essential to the consumption process. In fact, consumer behaviour
is largely learned behaviour. People acquire most of their attitudes, values, ----------------------
tastes, behaviours, preferences, symbolic meanings and feelings through
----------------------
learning. Social institutions like schools, religious institutions, family, friends,
mass media and advertising provide learning experiences that greatly influence ----------------------
the type of lifestyle people seek and the products they consume. A wide array
of organizations attempt to help consumers learn appropriate attitudes and ----------------------
behaviour issues such as environmental protection, proper nutrition, and racial
----------------------
discrimination. Marketers expend considerable effort to ensure that consumers
learn of the existence and nature of their products. ----------------------
Table 4.1 : Summary of learning theories with examples of involvement level ----------------------
Theory description Low-Involvement High-Involvement
example example ----------------------
Classical A response created Thanda matlab Travel business ----------------------
Conditioning by a secondary Coca Cola class-
stimulus in the New Indigo ----------------------
absence of primary
stimulus ----------------------
----------------------
Notes Instrumental Response created A familiar brand of A test drive of an
Conditioning by reward or pickles purchased purchase automobile
---------------------- punishment without much leads to a great feel.
---------------------- thought tastes This results in
good. Creates purchase by
---------------------- repeat consumer
Iconic Rote Two or more A commercial like A sports enthusiast
---------------------- Learning concepts become “Daag achche hai” learns about sports
associated without leads to a relation gear by closely
----------------------
conditioning between stains and reading enjoyable
---------------------- Surf Excel ads
Cognitive A learning through A customer A motorcycle being
---------------------- Learning a rational way replacing his land purchased on the
such as a problem line and mobile basis of high fuel
----------------------
solving process connection with efficiency, broad
---------------------- Airtel GSM giving wheels and disc
advantages of brakes
---------------------- mobile phone at the
cost of a landline
----------------------
Vicarious Learning by A consumer A person buys an
---------------------- Learning observing prefers a particular investment plan
others who have brand of lubricant that has given good
---------------------- successfully solved used by his friend returns to others
a problem that gives good
----------------------
performance
----------------------
----------------------
Fill in the blanks.
----------------------
1. Learning leads to____________if the consumer is satisfied with the
---------------------- brand over a period of time.
----------------------
---------------------- 4.5 BRAND LOYALTY

---------------------- Brand loyalty represents a favourable attitude towards a brand resulting in
consistent purchase of the brand over a period time. It is the consumer learning
---------------------- that one brand can satisfy his needs. There exists a close resemblance between
---------------------- Brand loyalty and habit in that habit gradually leads to Brand loyalty.
Behavioural Approach to Brand Loyalty :
----------------------
Recent developments in data collection during the purchase process
---------------------- have given more spur to the behavioural as opposed to the cognitive school in
measuring brand loyalty. The availability of electronically recorded purchases
---------------------- through in-store scanners has made it possible to provide marketing managers
---------------------- with quick information on what people do. As a result, marketers are relying
more on behavioural data generated through scanners and less on attitudinal Notes
and perceptual data generated through surveys.
----------------------
Cognitive Approach to Brand Loyalty :
Some of the limitations of a strictly behavioural approach in measuring ----------------------
brand loyalty are overcome when loyalty includes both attitudes and behaviour.
----------------------
To be truly loyal, the consumer must hold a favourable attitude towards a brand
in addition to purchasing it repeatedly. Sometimes consumers might continue ----------------------
to buy the same brand because other brands are not readily available or a brand
offers a long series of price cuts, or consumers want to minimize decision-making. ----------------------
These are defined as spurious loyalty because they do not reflect a commitment
----------------------
to a brand. Utilizing both the attitudinal and behavioural components provides
a more powerful definition of brand loyalty. It was observed in a study that if ----------------------
the behaviour measure alone were used, over 70 percent of the samples under
study would have been defined as brand loyal. Adding the attitudinal component ----------------------
reduced the proportion of brand loyal consumers to fewer than 50 percent.
----------------------
Characteristics of a Brand Loyal Consumer :
----------------------
1. The brand loyal consumer tends to be more self-confident in his choice of
product purchase. ----------------------
2. Brand loyal consumers are more likely to perceive a higher level of risk ----------------------
in the purchase and use repeat purchasing of a single brand as a means of
reducing risk. ----------------------
3. The brand loyal consumer is more likely to be store loyal. ----------------------
4. Minority-group consumers tend to be more brand loyal. Loyalty may be
----------------------
the result of a desire to ‘play it safe’.
----------------------
----------------------
----------------------
1.
Brand loyalty represents a favourable attitude towards a brand
resulting in consistent purchase of the brand over a period time. ----------------------
----------------------
Activity 3 ----------------------
Make a list of 10 products for which you are loyal to particular brands. Give ----------------------
reasons. ----------------------
----------------------
4.6 BRAND EQUITY AND BRAND LEVERAGE
----------------------
Brand equity is the value consumers assign to a brand above and beyond
the functional characteristics of the product. For example, consumers prefer ----------------------
to buy Kohinoor brand Basmati rice in spite of the fact that rice is an usually
identical commodity and can be available at a relatively lower price. Brand ----------------------
Notes equity is nearly synonymous with the reputation of the brand. Brands that have
a high reputation will result in having high brand equity. Brand equity implies
---------------------- economic value. It is often based on product position of the brand. A consumer
who believes that a brand delivers a superior performance, is exciting to use,
---------------------- and is produced by a company with appropriate social values is likely to be
---------------------- willing to pay a premium for the brand, to take extra trouble to locate and buy it,
to recommend it to others, to forgive a mistake or a product flaw, or to otherwise
---------------------- engage in behaviours that benefit the firm that markets the brand. Thus, one
source of economic value from a positive brand image results from consumers’
---------------------- behaviours towards the brand.
---------------------- Brand leverage is often termed as family branding, brand extensions,
or umbrella branding. A marketer tries to capitalize consumer’s strong value
----------------------
perceptions towards a brand by bringing other products and uses the same brand
---------------------- to receive consumer’s patronage. This will be further discussed in the next topic
under stimulus generalization.
----------------------
---------------------- Check your Progress 5
---------------------- 1. ________________is often termed as family branding, brand

extensions or umbrella branding.
----------------------
---------------------- Summary
---------------------- Learning is defined as a permanent change in the behaviour of a consumer
•
as a result of past experience. The characteristic features of learning
----------------------
include: Learning involves a change in behaviour. Learning is a process,
---------------------- which continuously evolves and changes as a result of newly acquired
knowledge. Learning can occur by increase in knowledge. The behaviour
---------------------- change is based on some form of practice or experience. Components
of learning are drive, cues, response, reinforcement, retention, and
----------------------
extinction.
---------------------- • Behaviourist theory deals exclusively with stimulus-response relationship
---------------------- and includes Classical and Instrumental Conditioning. Cognitive theory
deals with rationality as a tool of learning and includes Vicarious Learning.
---------------------- Behaviourist theory usually applies for low-involvement products and
Cognitive theory applies to high-involvement products.
----------------------
• Brand loyalty represents a favourable attitude towards a brand resulting
---------------------- in consistent purchase of the brand over a period time. Brand loyalty can
be approached with a behavioural as well as cognitive theory.
----------------------
----------------------
----------------------
Keywords Notes
----------------------
Learning : A process by which individuals acquire the purchase and
•
consumption knowledge and experience which they apply to future ----------------------
related behaviour.
----------------------
• Cues : The stimuli that give direction to motives.
• Instrumental conditioning : Consumers learn by means of a trial and ----------------------
error process.
----------------------
• Classical conditioning : Existence of two stimuli who are in association
with each other. ----------------------
• Cognitive learning : Learning based on mental activity. ----------------------

• Habit : Repetitive behaviour in absence of evaluation of alternative ----------------------
choices.
----------------------
• Vicarious learning : Learning by observing others.
----------------------
1. What is learning? What are its various types? ----------------------
2. Explain the various components of learning process.
----------------------
3.
How can the principles of instrumental conditioning be applied in
advertising? ----------------------
4. In what way do applications of instrumental conditioning differ from ----------------------
those of classical conditioning? Give examples.
----------------------
Answers to Check your Progress ----------------------
Fill in the blanks.
----------------------
1. Drive, Cues, response, reinforcement, retention and extinction are the
components of learning. ----------------------
1. False
----------------------
----------------------
Fill in the blanks.
1. Learning leads to habitual purchasing behaviour if the consumer is ----------------------
satisfied with the brand over a period of time. ----------------------
----------------------
----------------------
1. True
----------------------
---------------------- 1.
Brand leverage is often termed as family branding, brand extensions or
umbrella branding.
----------------------
---------------------- Suggested Reading

---------------------- 1. Assael, Henry. 2003. Consumer Behaviour: A Strategic Approach. South-
Western College.
----------------------
---------------------- Taylor & Francis.
Publishing Group.
----------------------
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----------------------
Consumer Perception
UNIT
5
Structure:
5.1 Introduction
5.2 Characteristics affecting Perception
5.3 Consumer Characteristics affecting Perception
5.4 Selective Perception and Marketing Strategy
5.5 Risk Perceptions
5.6 Snapshots
Case Study
Summary
Key words
Suggested Reading
Consumer Perception 73
Notes
Objectives
----------------------
----------------------
• Analyse why individuals react on the basis of their perceptions and
---------------------- not on the basis of objective reality
---------------------- • Describe the importance of individual perceptions to marketers
• Propose marketing strategies based on these perceptions
----------------------
---------------------- 5.1 INTRODUCTION

---------------------- Perception is the selection, organization, and interpretation of marketing
---------------------- and environmental stimuli into a cohesive picture.
The above definition emphasizes on certain features of perceptions, which are
---------------------- as under:
---------------------- • Perceptionis a mental process, whereby an individual selects data or
information from the environment, organizes it and draws significance or
---------------------- meaning from it.
---------------------- • Perception is basically a cognitive or thinking process and an individual’s
activities, emotions, feelings etc. are based on his perceptions of his
---------------------- surroundings or environment.
---------------------- • Perceptionbeing an intellectual and cognitive process will be subjective
in nature. This means that different people may perceive the same
---------------------- environment differently based on the effect of the environment on them.
----------------------
5.2 CHARACTERISTICS AFFECTING PERCEPTION
----------------------
Several characteristics of marketing stimuli affect the way consumers
---------------------- perceive a product. These characteristics can be divided into sensory elements
and structural elements.
----------------------
1. Sensory Elements
----------------------
Sensory elements are composed of colour, smell, taste, sound and touch.
---------------------- a) Colour :
---------------------- Colour has important sensory connotations. Evidence suggests
that red is regarded as warm, sensual and not intimidating. It is the
---------------------- lifeblood. Blue is seen as conforming and is regarded to be a colour
that attempts to convey a friendlier image. However, the message
---------------------- given by a colour largely depends on the culture of the people. This
---------------------- is the reason why companies like Coke, Eveready, Colgate, and
Kellogg’s use red colour on their logos. IBM, which was perceived
---------------------- to be a cold and distant company, adopted the blue colour on its
logo to send out a message that it is not cold but a customer friendly
---------------------- company.
Research also shows that there is a close link between colour and Notes
brand choice. One study tested the same roll-on deodorant packaged
in three different colours. Respondents were not informed that the ----------------------
three packages are having the same deodorant. Respondents said
the product in one colour scheme dried quickly and was effective, ----------------------
the product in the second had a strong aroma, and the product in ----------------------
the third was irritating and ineffective. Differences in consumer’s
reactions to the identical product were caused solely by differences ----------------------
in the colour of the packaging.
----------------------
Proctor and Gamble’s attempt to change Prell shampoo from its
traditional green to blue further illustrate the importance of colour ----------------------
perceptions. An outcry arose among loyal Prell users, forcing the
----------------------
company to change Prell back to its traditional green. P&G realized
that challenging long-standing consumer perceptions is very tricky ----------------------
and is a mistake. Pepsi’s attempt to cash on the blue colour of the
Indian cricket team during the recent World Cup cricket matches ----------------------
has received a similar response. Many retailers in Mumbai call it
----------------------
‘Ghaslet Pepsi’. This is because Indians are more used to identify
blue with kerosene and their long association with blue colour of ----------------------
kerosene led them to call blue Pepsi as Ghaslet Pepsi.
----------------------
b) Taste :
Taste is another sensory factor that will condition consumer’s brand ----------------------
perceptions. The importance of taste is illustrated by P&G’s blunder
----------------------
when it first introduced Pringles potato chips. The chips were packed
in an easy-to-stack cylindrical can to avoid breakage of chips. The ----------------------
consumers responded by saying that the packaging resembles a
tennis ball can. Further, consumers felt that the chips tasted like ----------------------
tennis balls. This forced P&G to reformulate the packaging strategy
----------------------
resulting in wasting hundreds of millions of dollars. A study
conducted by a team of researchers found that when consumers ----------------------
were asked to taste three unlabeled brands of beer in a blind taste
test, they rated all three brands similarly, and most consumers could ----------------------
not identify their regular brand. However, when shown the labels,
----------------------
consumers had a strong preference for their regular brand. This
showed that taste is not an objective criterion. It is invariably linked ----------------------
to the brand’s image in the consumer’s mind.
----------------------
A similar experience was observed in case of Coke. In order to beat
Pepsi, Coke came up with a new formula. Blind taste tests were ----------------------
conducted to a large scale spending millions of dollars. The results
indicated that the respondents had liked the taste of the new formula ----------------------
more than the old and the taste of Pepsi. Coke changed its 99-year- ----------------------
old formula and introduced the ‘New Coke’. The results were
disastrous. Consumers stopped buying the new coke and retailers ----------------------
were up in arms against Coke forcing Coke to finally discard the
new formula and revert to the old. Here, the consumers identified ----------------------
Notes the old taste with the American culture and the new formula was
perceived as an assault on their cultural heritage.
---------------------- c) Smell :
---------------------- Smell is particularly important for cosmetics and food products.
In one study, two fragrances were added to the same facial tissue.
---------------------- Consumers perceived one facial tissue as elegant and expensive
---------------------- and the other as a product to use in the kitchen. Smell is important
factor in car purchases too. Car dealers have been known to use
---------------------- spray inside cars so they smell ‘new’. Rolls Royce included scent
strips in an advertisement in a magazine to convey the smell of
---------------------- its upholstery. Smell also has cross-cultural dimensions. The social
role of perfumes and colognes of the western society was never
----------------------
established in Japan. Because of crowding and small living spaces,
---------------------- Japanese consumers value cleanliness and never felt the need for
using these products as a means of avoiding body odour. In fact,
---------------------- many Japanese regard perfumes and colognes as intrusive to other
people’s privacy.
----------------------
d) Sound :
----------------------
Sound is another important sensory stimulus. Advertisers have
---------------------- traditionally used accent to convey status and authority. Even in case
of TV serials, voice is being used to create an impact on the masses.
---------------------- The voice of Harish Bhimani as ‘samay’ in the serial Mahabharata
and the voice of Amitabh Bachchan for some serials lies testimony
---------------------- to this fact. The ‘Binaca geetmala’ was characterized by the voice
---------------------- of Amin Sayani. Advertisers also frequently use music through
jingles or as a background theme to create positive associations
---------------------- with a brand. For example the jingle ‘jab ghar ki roshni badhani ho
to Nerolac’.
----------------------
e) Touch :
---------------------- The feel of certain products will also influence consumer’s
---------------------- perceptions. Softness is considered a desirable attribute in many
paper products. Touch / Feel is also a means of determining quality.
---------------------- Consumers often use the feel of a textile fabric, clothing, carpeting,
or furniture to evaluate quality. For example, a smooth, velvety feel
---------------------- in textile fabrics is considered an indication of quality.
---------------------- 2. Structural Elements :
a) Intensity and size :
----------------------
The brighter an advertisement and larger the size, more it
---------------------- is able to attract the attention of potential consumers. Such large
advertisements can be in the form of full page advertisements in
----------------------
newspapers or in the form of large hoardings on the road. The recent
---------------------- advertisement campaign by Telco in newspapers for its ‘Indigo’
wherein a large comfortable sofa chair is shown and the large
---------------------- hoardings of ‘Pulsar’ at important crossroads are good examples.
b) Position : Notes
Attraction towards an advertisement depends largely on the place
----------------------
where it is positioned. Positioning includes the page of a newspaper.
It is a known fact that an advertisement on the front page attracts ----------------------
maximum attention. Similarly, the placement of product for display
on the shelves at the retail outlet plays an important role in attracting ----------------------
the attention of the consumers. For example, the advertisements of
----------------------
Banks, Hotels, Airlines, and Restaurants are prominently placed at
airports. Premium products like Cross Pens, Rado watches, etc. are ----------------------
displayed at all international airports.
----------------------
c) Contrast :
Media planners plan their advertisements keeping in mind the ----------------------
impact of contrast on perception. Following are a few instances of
----------------------
the use of contrast:
• A black
and white advertisement with a small spot used by Jet ----------------------
Airways is likely to attract attention. ----------------------
• The voice modulations used in the advertisement of ‘Ariel’.
----------------------
• A quiet commercial after a loud program can attract attention
like the advertisement of ‘De Beers’ diamond after listening ----------------------
to a frantic rock show.
----------------------
• Showing an object or product out of its normal setting also
attracts attention. The advertisement of LX luxury model of ----------------------
‘Ford Escort’ car against the backdrop of a beach.
----------------------
d) Novelty :
----------------------
It is observed that anything which is different from what is normally
expected tends to attract attention like an unusual bottle shape or ----------------------
different packaging material. For example, ‘Frooti’ was the first to
introduce the soft drink in a tetra pack or when Pepsi and Coke ----------------------
were launched in small cans. A similar response was observed for
----------------------
the beer brand ‘Fosters’ when it was launched in a can instead of the
traditional bottles. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Notes Advertisements intended at creating positive perceptions.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Advertisements intended at creating positive perceptions. Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
e) Repetition :
----------------------
Advertisements are repeated often to enable consumers for brand recall
as well as stimulate them and create a strong desire for interest in the ----------------------
purchase of the product. Repetition is particularly important in case of low ----------------------
involvement convenience goods like soaps, toothpastes. The repetitive
advertisements by Close Up and Colgate are intended to continuously ----------------------
hamper upon the minds of the consumers that they need to buy toothpaste.
----------------------
Notes
----------------------
Fill in the blanks.
----------------------
1. Colour, _____________, smell, sound and touch are the sensory
---------------------- elements.
----------------------
Activity 1
----------------------
---------------------- Which advertisement do you remember at the mere mention of a large

hoarding? Do you remember its logo also?
----------------------
---------------------- 5.3 CONSUMER CHARACTERISTICS AFFECTING

---------------------- PERCEPTION
---------------------- 1. Stimulus discrimination :

One of the basic questions regarding the effect of marketing stimuli
----------------------
on perceptions is whether consumers can discriminate among different
---------------------- stimuli. The ability to discriminate among stimuli is learned. Generally,
frequent users of a product are better able to notice small differences in
---------------------- product characteristics between brands. However, in many cases, ability
to discriminate sensory characteristics is small. As a result, marketers rely
----------------------
on advertising to convey brand differences that physical characteristics
---------------------- alone would not impart. They attempt to create a brand image that will
convince consumers that one brand is better than another.
----------------------
2. Threshold Level :
---------------------- The ability of consumers to detect the variations in sensory elements is
---------------------- determined by their threshold level. Some consumers are more sensitive
to these stimuli than others. This will be quite clear from the fact that tea
---------------------- and coffee companies employ persons called tea or coffee ‘tasters’. These
are the persons who have a greater sensitivity and can detect even small
---------------------- differences in tastes and flavors, which will be unnoticed by average
---------------------- consumers. It is impertinent to note that these persons are a rare breed and
have lot of restrictions on their diet. Once these experts identify the best
---------------------- prospective blends, the products are then tested on consumers in standard
taste tests.
----------------------
3. Just noticeable difference :
---------------------- It is based on the differential threshold of a consumer. A consumer will not
---------------------- be able to detect any change in stimulus below his differential threshold.
For example, if an unbranded detergent costs 5 percent less than the
---------------------- consumer’s regular brand, the consumer may not notice the difference.
However, if the same unbranded product costs say 30 percent less than he
---------------------- is definitely going to notice the difference. Thus, just noticeable difference
is that difference above which a consumer perceives a difference. As most Notes
consumers cannot detect small changes in a product’s price, package size,
or physical characteristics, a relevant question for marketers is the degree ----------------------
of change required for consumers to take notice. A principle developed by
a German psychologist known as Weber’s law provides some insight into ----------------------
this question. ----------------------
4. Weber’s Law :
----------------------
It states that the stronger the initial stimulus, the greater the change
required for the stimulus to be seen as different. The most important ----------------------
application of this law is in price. One critical implication is that the
----------------------
higher the original price of an item, the greater the markdown required
to increase sales. For example, if the price of a Mercedes Benz S class ----------------------
is reduced by Rs. 25,000/-, it will not have any impact on sales because
the basic price is in several lakhs that a difference of 25,000/- may not be ----------------------
noticeable for consumers. On the other hand a price reduction of even Rs.
----------------------
5000/- for a Maruti 800 is seen to push the sales substantially because of
its low original price. ----------------------
Marketers have been using this law in advertising and promotion. For
----------------------
example, ‘Grasim’ suiting has been for long associated with the royal,
Nawab of Pataudi. This trend was continued only with the emphasis, ----------------------
shifting to fall below the just noticeable difference with the inclusion of
his son, Saif Ali Khan. Boost had been long associated with cricket star ----------------------
Kapil Dev. With the product name shifting to just noticeable difference,
----------------------
to the current cricket star Sachin Tendulkar. Here the marketers have only
changed the packaging to include a new face, to reflect the changing times ----------------------
and the interests of consumers.
----------------------
5. Absolute threshold :
It is the stimulus below which consumers cannot detect the stimulus at all. ----------------------
It is also referred to as subliminal perception i.e. perception of a stimulus ----------------------
below the conscious level.
One of the major controversies regarding consumer perceptions is ----------------------
whether consumer perceptions is whether consumers can actually ----------------------
perceive marketing stimuli below their absolute threshold level. The
absolute threshold level at which perceptions occur is referred to as limen. ----------------------
Thus, perception below the absolute threshold is subliminal. It may seem
contradictory that consumers can perceive a message below minimum ----------------------
level of perception. A test conducted in 1957 in which two messages, ----------------------
“Eat popcorn” and “drink Coca-Cola”, were shown in a movie theatre for
1/3000 of a second (well below the absolute threshold) at five –second ----------------------
intervals. Popcorn sales in the theatre increased by 58 percent and Coca-
Cola sales by 18 percent compared to periods in which there was no ----------------------
subliminal advertising. However, these results could not be repeated in ----------------------
any of the further research studies.
----------------------
Notes 6. Adaptation Level :
It is the level at which at which consumers’ no longer notice a frequently
----------------------
repeated stimulus. An individual walking into an air-conditioned room,
---------------------- a kitchen full of fragrances, or a noisy party will not notice these stimuli
after a period of time. Advertising wear out is the consumers’ adaptation
---------------------- to an advertising campaign over time due to boredom and familiarity.
Consumers reduce their attention level to frequency repeated ads and
----------------------
eventually fail to notice them.
---------------------- Consumers differ in their level of adaptation. Some tune out more quickly
than others. Novelty, humor, contrast, and movement are all stimulus
----------------------
effects that may gain consumers’ attention and reduce their attention and
---------------------- reduce their adaptation.
7. Stimulus generalization :
----------------------
It occurs when two stimuli are seen as similar and the effects of one,
---------------------- therefore, can substitute for the effects of the other. Brand loyalty and
---------------------- Perceptual categorization are forms of stimulus generalization.
Marketers use this for brand leveraging in two ways:
----------------------
1. Extension of the brand under the successful brand. For example,
---------------------- Heinz uses a strategy of using the same brand for a range of
products. General Electric also exploits its strong brand image for
---------------------- one product for a variety of products.
---------------------- 2. Extension in a different product category. For example, Amul used
its brand so successful in cheese and butter for newly launched
----------------------
Pizza.
---------------------- 8. Selective Perception :
---------------------- Consumers in United States are exposed to about six hundred
advertisements every day. In India, this number is about thirty per day.
---------------------- Each consumer perceives a marketing stimulus selectively because every
individual is different as regards to his needs, attitudes, experience, and
----------------------
personal characteristics.
---------------------- Selective Perception means that two consumers may perceive an identical
---------------------- marketing stimulus, which may be an advertisement, packaging or product
very differently. For example, one consumer may perceive a Maruti Van
---------------------- to be a highly unsafe car because its engine is below the body and in case
of an head on collision, the car will become highly vulnerable and risky
---------------------- for the passengers inside while another may perceive the Van to be a
---------------------- highly useful car because of its spacious and large seating arrangement.
Similarly, followers of Ayurveda regard pure ghee to be highly useful
---------------------- because of its medicinal value while the followers of Allopath regard pure
ghee as a source of high calorie content and hence not useful.
----------------------
----------------------
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 5.1 : Process of Selective Perception
----------------------
9. Perceptual Vigilance :
Consumers will receive only that information that is relevant to their ----------------------
needs. This process is called Perceptual Vigilance. It helps consumers to
----------------------
collect more information on products about their benefits before purchase.
10. Perceptual defense : ----------------------
Consumers will receive information to confirm their beliefs and attitudes. ----------------------
For example, a purchaser of Honda Activa, who bought it knowing well
about its low fuel efficiency, will actively receive information about other ----------------------
buyers of Activa also getting low fuel efficiency. ----------------------
11. Perceptual Equilibrium :
----------------------
Consumers seek consistency between the information they receive about
a brand and their prior beliefs about the brand. Three cognitive theories ----------------------
are based on this principle, which are as under:
----------------------
a) Sheriff’s Social Judgment Theory:
----------------------
It states that consumers process information to ensure consistency
by either rejecting contradictory information or by interpreting ----------------------
acceptable information to fit more closely with their views.
----------------------
Notes b) Heider’s Balance Theory:
This theory states that when information about an object conflicts
----------------------
with consumer’s beliefs, they will achieve balance by changing
---------------------- their opinion about the object, or about the source of information,
or about both. For example, if a colleague of yours expresses a view
---------------------- about your new vehicle being poor in performance, you may doubt
his credibility or form a negative opinion about the vehicle or do a
----------------------
little of both to obtain a balance between the information and the
---------------------- object.
c) Cognitive dissonance Theory:
----------------------
It states that when post purchase conflicts arise, consumers look for
---------------------- a psychological balance by seeking supporting information about
the purchased product or by distorting contradictory information
----------------------
about it.
----------------------
----------------------
---------------------- State True or False.

1. Absolute threshold is the stimulus below which consumers cannot
---------------------- detect the stimulus at all.
----------------------
---------------------- Activity 2
---------------------- What are the various criteria that can be used to differentiate between two
different brands of washing machines?
----------------------
----------------------
5.4 SELECTIVE PERCEPTION AND MARKETING
---------------------- STRATEGY
---------------------- 1. When a product is important to the consumers but its benefits are not
---------------------- clear-cut, the operating principle is perpetual defense. Hence one should
use ambiguous messages in advertisements. For example, Microsoft ad
---------------------- saying ‘ Where do you want to go today’ or Thums Up ad ‘ Are you ready
for the magic’ or Telco’s ad in the past which said ‘A movement called
---------------------- Telco’. Telco in 1990’s had severe labour problems, which were in news
---------------------- every day. For readers of this news the ad meant togetherness, for fleet
owners i.e. customers this ad meant technology and for dealers of Telco it
---------------------- could mean uninterrupted supply even during labour problems.
---------------------- 2. When product benefits are clear-cut, the operating principle is perceptual
vigilance where marketers should use explicit ads. For example the ads
---------------------- of Coloured TV are where a manufacturer compares each of his features
with those of his close competitors in the same product class.
----------------------
3. Process of Categorization: Notes
Marketers seek to facilitate the process of perceptual categorization. They
----------------------
want to make consumers recognize a brand as part of a product class, but
do not want their product to be a direct duplicate of other brands. It is ----------------------
impertinent to note here that if the process of categorization fails to take
place in the consumers mind, the product has the risk of failure. This is ----------------------
because the consumers compare any new product or brand introduced
----------------------
with other products in the same perceived category. For example Honda
Street failure in India is partly due to the failure of product categorization. ----------------------
Customers could neither categorize it as a scooter nor as a motorcycle. It
could not be categorized as a step-through bike simply because the step- ----------------------
through category in consumers mind included the likes of Bajaj M-80.
----------------------
Street could not be categorized as belonging to the same class because of
its high price. ----------------------
In product categorization two concepts need to be understood which are
----------------------
as under:
a) Schema : ----------------------
When consumers first gather information about a new product such ----------------------
as computers, they store bits and pieces about the category in their
memory. As they gain more knowledge of the category, they recall ----------------------
information in clusters of thoughts, ideas, and symbols known as ----------------------
schema.
b) Sub typing : ----------------------
It involves developing a category of a broader category. Let’s take ----------------------

an example of computers. The consumers’ original schema for
computers in the 1950s might have equated them to desk calculators. ----------------------
By the 1960s their schema for computers was more detailed ----------------------
involving ideas and objects such as punch cards, mainframes,
automatic processing. ----------------------
By 1970s, consumers could distinguish between mainframes and ----------------------
microcomputers. The schema became the definition of a subcategory
of computers in consumers’ minds. By the 1980s, personal computers ----------------------
became the dominant subtype based on a schema that includes hard
----------------------
discs, floppies, memory, portability and other features.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig 5.2 : Category levels for computers

---------------------- 4. Price and Quality Perceptions :
Price Perceptions directly influence consumer’s perceptions of brand
----------------------
quality and determine their purchasing behaviour. For example, Parker
---------------------- Pens were positioned as expensive, hand-finished pens. In order to
achieve large volume growth and to share a pie of the explosive growing
---------------------- ballpoints, Parker entered this market for cheap pens moving away from
its traditional positioning. The results were disastrous because company’s
----------------------
image was not consistent with its price. In the late eighties, it moved back
---------------------- to its strength, high priced fountain pens, with an ad campaign featuring
style and luxury. This shift made the company profitable again.
----------------------
5. Price Expectations :
---------------------- Consumers have certain expectations about what prices are or should be.
---------------------- This is also known as reference price. This is never an absolute value but
a range. For example, if we consider cotton shirts, we have a price range
---------------------- in our mind of Rs. 500 to Rs. 2500. This range is also perceived to have
an association with quality. Hence, if a consumer is offered a cotton shirt
---------------------- below Rs. 500, he will have a doubt regarding the quality of the shirt. This
---------------------- is called as the lower price threshold. If the price offered is more than Rs.
2500, the consumer may doubt the value for money offered and perceive
---------------------- the shirt to be costly. The reference price is never static and changes due
to the product knowledge. Greater the product knowledge, lesser will be
---------------------- this price range.
----------------------
----------------------
6. Actual versus Reference prices : Notes
As discussed above, consumers have a price range in their minds. It often
----------------------
happens that the actual price of a product differs from the consumer’s
reference price. If the price is within the acceptable range, a consumer ----------------------
buys the product. However, if the price difference is large, the consumer
is more likely to reject it. ----------------------
7. Price Quality Relationship : ----------------------
Various research studies indicate that there is a strong relationship between
----------------------
price and quality. This relationship is strong when:
• Consumers lack product knowledge and use price as quality index. ----------------------
• The source of price information is credible. ----------------------
When the product differentiation is large e.g. Mercedes Benz, Rado
• ----------------------
watches, Cross-pens.
----------------------
1. Consumers have certain expectations about what prices are or should
----------------------
be. This is also known as _____________.
----------------------
Activity 3 ----------------------
----------------------
What criteria in your opinion, could be used to decide whether to buy a
Mercedes, Toyota or Ford model of car? ----------------------
----------------------
5.5 RISK PERCEPTIONS
----------------------
A famous automobile manufacture in India entered the tractor segment. It
----------------------
tied up with the best engine manufacturer in the world. It tied up with another
world giant for the design of the tractor. The company invested heavily in ----------------------
creating world class manufacturing facilities to produce a really world class
tractor. The market response to the new tractor was lukewarm. Three years ----------------------
down the line, the sales volumes were not growing. A detailed marketing
----------------------
analysis was done to understand what went wrong. One of the major factors
was the shape of the bonnet of the tractor. This bonnet was facing the ground. ----------------------
Having such a shape is necessary to take advantages of aerodynamics and this
is the shape of all tractors world over except India. In India, farmers perceive a ----------------------
tractor to be ‘Laxmi’ and culturally people in India do not want ‘Laxmi’ to enter
----------------------
their homes with head down. For them Laxmi should enter homes holding head
high. Finally, the company had to change the design and make the bonnet like ----------------------
all other tractors in India.
----------------------
Notes Factors affecting perceived risks :
• Thereis very little information about the product. For example, in case
----------------------
of pharmaceutical products, consumers do not like to go in for alternative
---------------------- products unless they re-consult the doctor. As laymen we know very little
about pharmaceutical products.
----------------------
• The product is new.
---------------------- • The product is technologically complex, such as a laptop.
---------------------- • Perceived absence of product differentiation. When two products are
absolutely similar, the choice is difficult and people go by the name of the
---------------------- manufacturer.
---------------------- • Consumers have little confidence in evaluating the brands.
---------------------- • Variation in the quality among brands. For example, music system for
cars.
----------------------
• The price is very high. For example, jewelry.
---------------------- • The purchase is very important to the consumer. For example, purchase
of a car or purchase of a residential flat.
----------------------
Types of Risks :
----------------------
• Financial risks.
---------------------- • Socialrisks such as risks in purchasing those items designed to enhance
---------------------- social attractiveness.
• Psychological risks such as the risk of losing self-esteem.
----------------------
• Performance risks such as the purchased product not yielding the targeted
---------------------- output or results.
---------------------- • Physical risks such as the risks to the human body by use of the product.
---------------------- For example, in the initial days of mobile phones, there was a strong
feeling that use of mobile phones leads to brain tumor.
----------------------
Consumer’s strategy to reduce risk :
----------------------
1. Increasing purchasing confidence by:
---------------------- • Acquiring additional information about the product to be purchased.
---------------------- • Undertaking extensive information processing. The additional
information that is obtained needs to be thoroughly evaluated.
----------------------
• Remain brand loyal. A consumer who has used a particular brand
---------------------- and has been satisfied with the brand usage would like to stick to
that brand to reduce risk.
----------------------
• Buy most popular and well-known brands.
----------------------
----------------------
2. Reducing the chances of failure: Notes
• Buylowest priced item so that the stakes are minimum and in the
----------------------
event of failure of the product, financial loss will be limited.
• Obtain warranty and guarantees. ----------------------
• Reduce levels of expectations. Today, a lot of advertisements ----------------------
guarantee the audience of giving them moon. The consumer should
know what should be expected and limit the expectations to reduce ----------------------
risk of failures.
----------------------
1. There are four types of risks: social risk, psychological risk, physical ----------------------
risk and performance risk.
----------------------
----------------------
5.6 SNAPSHOTS
----------------------
Colour perceptions are likely to differ among countries because of
cultural associations. A study by Jacobs et al. of consumers in the Far East ----------------------
and in the United States found that consumers in China and Japan associate
purple with expensive products and gray with inexpensive products. The ----------------------
associations are exactly opposite for American consumers, who associate purple ----------------------
with inexpensive products and gray with expensive products. In Hong Kong,
Marlboro used cross-cultural differences in colour perceptions by depicting the ----------------------
Cowboy in a white hat on a white horse because white has cultural significance.
In Latin American countries, women prefer strongly accented hues of lipstick ----------------------
and powders because of the cultural association of femininity with these hues. ----------------------
The cultural trend in America is reverse where consumers prefer more subdued
hues. This may partially because many working women consider excessive ----------------------
makeup to be unprofessional. Cosmetics still retain sensual role, but in a more
understated fashion ----------------------
The Federal Crop Insurance Corporation spent $13.5 million over a four ----------------------
year period on advertising campaign to increase awareness and knowledge among
farmers. However farmer response was negligible that led the spokesperson to ----------------------
comment “ It was very good and effective advertising. The trouble is that we ----------------------
had a hard time getting people to read it.”
----------------------
Marketers often use intriguing headlines or attractive models to attract
attention to their advertisements. How effective is this tactic? An eye tracking ----------------------
device is a combination of computer and video technology that allows one to
record eye movements in relation to a stimulus such as a website, package, or ----------------------
a commercial. The respondent sits in a chair at a table and reads a magazine,
----------------------
watched TV commercials, billboards, p-o-p displays. The eye-tracking device
sends an unnoticeable beam of filtered light that is reflected off the respondent’s ----------------------
Notes eyes. This reflected beam represents the focal point and can be superimposed on
whatever is being viewed. It allows the researcher to determine how long an ad
---------------------- or other marketing stimuli is viewed, the sequence in which it was examined,
and how much time was devoted to looking at each element.
----------------------
RCA used an attractive model in a TV ad for its Colortrack TV sets.
---------------------- The model wore a conservative dress. Eye tracking revealed that the audience
focused a substantial attention on the product. 72 hours later, brand name recall
----------------------
was 36%. A similar commercial used an attractive female in a revealing dress.
---------------------- Eye tracking showed that the ad attracted considerable attention but most of it
was focused on the model. 72 hours later, brand name recall was only 9%.
----------------------
---------------------- 1. Marketers often use intriguing headlines or attractive models to attract

attention to their advertisements.
----------------------
----------------------
Case Study
----------------------
GIORGIO BEVERLY HILLS
----------------------
Giorgio Beverly Hills had built a very successful business on the company’s
---------------------- signature scent of women’s perfume-Giorgio was the top-selling fragrance in the
US market. However, not resting on its laurels, the managers decided to launch
---------------------- an addition to their product line. Of primary importance was that the perfume
has a unique image and be targeted at a distant group of women who do not use
----------------------
Giorgio. This was required so that the new scent would not cannibalize sales
---------------------- from the Giorgio brand. Giorgio is a strong and quite expressive fragrance,
women who wear it tend to be rather outgoing and feel comfortable being the
---------------------- center of attention. Its bright yellow packaging had been designed to express
this vitality and it had been successful.
----------------------
The company developed its new, softer fragrance brand to reach a slightly older
---------------------- (25 to 54), more moneyed, and more sophisticated woman than the Giorgio
buyer. The name red was chosen for the brand to connote vibrancy, passion, and
----------------------
romance but with a more subtle image than Giorgio. The package colour was
---------------------- also unique in the fragrance market at the time, so its distinctiveness captured
---------------------- considerable attention. The package was indeed red, but touches of purple and
gold were added to convey a festive, elegant, and upscale quality.
---------------------- A major task in any new product introduction is to get the consumers to try the
---------------------- product. But consumer trials are hard to obtain in the perfume market if women
are not given any idea of what the fragrance is like. Consequently, fragrance
---------------------- strips were placed in a variety of print media prior to product introduction. In
fact, one estimate is that by the time Red was launched, over 20 million scent
---------------------- strips had been placed in circulation.
Research had also revealed that women are much more likely to purchase a Notes
fragrance if they have worn it at least three times. Therefore, the company
obtained mailing lists of department stores’ preferred charge customers, and ----------------------
two weeks prior to product launch, special red tubes holding a three-day supply
were sent out. ----------------------
The brand’s roll-out was scheduled for February, which provided a nice tie-in ----------------------
with the product colour because of Valentine’s Day. Special in-store materials
----------------------
were also obtained to emphasize the product’s name and package colour,
including hundreds of red roses and red carpets, which were rolled out. In many ----------------------
places mannequins were even dressed with material featuring the product’s
package colours. ----------------------
Consumer response was very enthusiastic–sales of $ 90 million were achieved ----------------------
in its first year and Red jumped to number one fragrance position, while Giorgio
also remained a top seller. ----------------------
Questions ----------------------
1. Enumerate the importance of the image of Red to the company. ----------------------
2. What are the information processing issues in front of the company and
how did the company address these issues? ----------------------
3. Discuss the degree of involvement, brand-and self-image issues that were ----------------------
central to the success of Red.
----------------------
4. Discuss the principles of learning utilized by the company.
----------------------
Summary ----------------------
• Perception is the selection, organization, and interpretation of marketing ----------------------
and environmental stimuli into a cohesive picture. Several characteristics
of marketing stimuli affect the way consumers perceive a product. These ----------------------
characteristics can be divided into sensory elements and structural
elements. Sensory elements are composed of colour, smell, taste, sound, ----------------------
and feel. Structural elements include intensity & size, position, contrast, ----------------------
novelty, and repetition.
----------------------
• Threshold Level is the ability of consumers to detect the variations in
sensory. Just noticeable difference is based on the differential threshold of ----------------------
a consumer. A consumer will not be able to detect any change in stimulus
below his differential threshold. Weber’s Law states that the stronger ----------------------
the initial stimulus, the greater the change required for the stimulus to be
----------------------
seen as different. The most important application of this law is in price.
Absolute Threshold is the stimulus below which consumers cannot ----------------------
detect the stimulus at all. It is also referred to as subliminal perception i.e.
perception of a stimulus below the conscious level. Adaptation Level ----------------------
is the level at which at which consumers’ no longer notices a frequently
----------------------
repeated stimulus. Stimulus generalization occurs when two stimuli
are seen as similar and the effects of one, therefore, can substitute for ----------------------
Notes the effects of the other. Selective Perception means that two consumers
may perceive an identical marketing stimulus, which may be an
---------------------- advertisement, packaging or product very differently. Categorization is
the process by which consumers categorize new brands into a product
---------------------- class. Categorization includes schema and sub-typing.
---------------------- • Price Perceptions directly influence consumer’s perceptions of brand
quality and determine their purchasing behaviour. Consumers have certain
----------------------
expectations about what prices are or should be. This is also known as
---------------------- reference price. This is never an absolute value but a range. The reference
price is never static and changes due to the product knowledge. Greater
---------------------- the product knowledge, lesser will be this price range. Consumers have
a price range in their minds. It often happens that the actual price of a
----------------------
product differs from the consumer’s reference price. Consumers are prone
---------------------- to high risk perceptions while buying a product. Types of Risks include
financial risks, social risks, psychological risks, performance risks, and
---------------------- physical risks. Consumers use various methods to reduce risk perceptions
----------------------
Keywords
----------------------
• Perception : Selection, organization and interpretation of environmental
---------------------- stimuli into a cohesive picture.
---------------------- • Sensation : Immediate and direct response of the sensory organs to simple
stimuli.
----------------------
• Absolute threshold : Lowest level at which an individual can experience
---------------------- a sensation.
---------------------- • Differential threshold or just noticeable difference (j.n.d) : The
minimum difference that can be detected between two stimuli.
----------------------
• Weber’s Law : Stronger the initial stimulus the greater the additional
---------------------- intensity needed for the second stimulus to be perceived as different.
• Subliminal perception : Also called limen. Perception of a stimulus
----------------------
below a conscious level.
----------------------
---------------------- Self-Assessment Questions
---------------------- 1. What do you understand by Perception? How can we use the

concept of Sensation to influence Perception?
----------------------
2. Explain using examples from the world around you the concept of
---------------------- Absolute and Differential Threshold and how it can be applied by
marketers in influencing Consumer Behaviour.
----------------------
3. Describe in brief various theories of Perception.
----------------------
----------------------

1. Colour, taste, smell, sound and touch are the sensory elements. ----------------------
----------------------
----------------------
1. True

1. Consumers have certain expectations about what prices are or should be. ----------------------
This is also known as reference price.
----------------------
1. False ----------------------
----------------------
1. True
----------------------
Western College.
----------------------
Taylor & Francis. ----------------------
Publishing Group.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Notes
----------------------
----------------------
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----------------------
----------------------
----------------------
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Consumer Involvement
UNIT
6
Structure:
6.1 Introduction
6.2 Types of Involvement
6.3 Situational Influences
6.4 Involvement and Hierarchy of Effects
6.5 Strategic Implications of Low Involvement decision making
6.6 Shifting Consumers from Low Involvement to High Involvement
6.7 Snapshots
Summary
Key words
Suggested Reading
Consumer Involvement 95
Notes
Objectives
----------------------
----------------------
• Analyse the involvement level that affects consumers in deciding
---------------------- about the product and brands to buy
---------------------- • Describe the reasons for differences in levels of involvement
• Plan marketing strategies for creation of high involvement
----------------------
---------------------- 6.1 INTRODUCTION

---------------------- A consumer is said to have a high involvement in purchase, when he considers
---------------------- the product to be important and strongly identifies with it.
Conditions for involvement :
----------------------
A consumer is likely to be more involved with a product when:
----------------------
The consumer’s self image is tied to the product. For example, aggressive
•
---------------------- youth craving for power identify themselves with Enfield Bullet.
Policemen, rich farmers prefer Bullet. Khadi is preferred by politicians
---------------------- and budding politicians. Similarly, we find politicians preferring a multi-
utility vehicle like Scorpio or a Tata Safari.
----------------------
Product has a symbolic meaning tied to consumer values such as ownership
•
---------------------- of a BMW car, a Cross pen, Rolex watches have a symbolic value of the
---------------------- affluent class.
• Product is expensive such as jewellery, real estate etc.
----------------------
It has some important functional value such as fuel efficiency of a vehicle,
•
---------------------- cricket gear for a cricketer etc.
---------------------- Product has an emotional appeal such as buying of a gift article, buying
•
of articles for religious purpose.
----------------------
Product is continually of interest to the consumer such as a fashion-
•
---------------------- conscious consumer has an ongoing interest in clothing and apparel.
Product entails significant risks such as buying a technologically complex
•
----------------------
product, buying a house, social risks of changing one’s wardrobe or
---------------------- physical risk of buying wrong medication.
---------------------- Product is identified with the norms of the group such as school children
•
buying ‘Pokemon’ articles, Chitos for collecting Pokemon.
----------------------
6.2 TYPES OF INVOLVEMENT
----------------------
1. Situational Involvement :
----------------------
This occurs only in specific situations and is temporary. For example,
---------------------- when a person is buying a suit for his marriage. Formal dressing for the
marriage is a necessity and hence a person not very fashion-conscious Notes
about clothes gets involved temporarily for his marriage in a piece of suit.
----------------------
2. Enduring Involvement :
It indicates an ongoing interest in the product category. For example, ----------------------
a consumer who is an automobile enthusiast will be having continuous
----------------------
interest and will visit every exhibition like the auto expo. Such interest
may or may not lead to a purchase situation. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 6.1 : High level of involvement ----------------------
High involvement may not always lead to a complex decision-making. ----------------------
At times it may lead to brand loyalty. Here past experience plays a very
important role. ----------------------
It is impertinent to note that Involvement is consumer-needs specific and ----------------------
not product specific. The same product may be a high involvement for
one consumer and may be a low involvement for another. For example, ----------------------
toothpaste is regarded to be a low involvement product. But for a consumer,
having acute dental problems, it will become a high involvement product. ----------------------
Similarly products like cigarettes and alcohol. A habituated smoker may ----------------------
not feel cigarette to be a high involvement product. This is because if
he does not get his regular brand, he may smoke any brand but needs a ----------------------
smoke definitely at that moment. But for an occasional smoker, it may
be a high involvement product and will not smoke if he does not get his ----------------------
specific brand. ----------------------
----------------------
Fill in the blanks.
1. ________________ occurs only in specific situations and is temporary. ----------------------
----------------------
----------------------
----------------------
Notes
Activity 1
----------------------
List five product categories in which you are highly involved and lowly
----------------------
involved.
----------------------
6.3 SITUATIONAL INFLUENCES
----------------------
Situational influences are temporary conditions or settings that occur in
----------------------
the environment at a specific time and place. An example is shopping for a gift
---------------------- 1. Consumption Situation
---------------------- It is the one in which consumers use a brand on specific occasions only.
For example, a consumer may use a specific brand of perfume for a party
---------------------- and another brand for every day use. In many families, Mysore Sandal
Soap is used during Diwali and some other brand throughout the year.
----------------------
2. Purchase Situation
----------------------
a) In-store situations: In store stimuli such as product availability,
---------------------- pricing, promotion, displays, and ease of shopping influence
purchasing decisions especially for unplanned purchases.
----------------------
b) gift-giving situation: The second purchase related situation is
---------------------- whether consumers buy the product as a gift or for themselves. For
example, a consumer may buy a low-end shirt like Peter England for
----------------------
himself but will buy a premium shirt like Van Huessen shirt while
---------------------- gifting it to someone close on an occasion. Similarly, a consumer
may buy a Parker pen for himself but may buy a Cross pen to be
---------------------- gifted to his close relative on his promotion.
---------------------- c) Unanticipated purchase situations: These are the situations when
purchasers buy goods in an unplanned manner. For example, arrival
---------------------- of unexpected guests at home may force a consumer to make a
special shopping trip and may be willing to pay a higher price or
----------------------
a consumer traveling suddenly falls short of items and buys them
---------------------- quickly. In such purchase decisions, evaluation of alternate brands
may not take place and in such a case issues like price, brand
---------------------- preference take a back seat.
---------------------- Consumer attributions to situation vs. product :
---------------------- Attribution theory states that people attribute a cause to their prior
behaviour. If consumers attribute behaviour to the product rather than to the
---------------------- situation, attitudes towards the product will be more positive, increasing the
likelihood that consumers will purchase the product again.
----------------------
----------------------
----------------------
Following are some principles : Notes
1. Greater the degree of brand loyalty, less important is situational factors.
----------------------
For example, a brand loyal customer of Nescafe makes no distinction
between drinking Nescafe when alone, with guests, while watching TV, ----------------------
after dinner or at any other time. For him, brand is more important than
the situation. ----------------------
2. The higher the level of enduring product involvement, less important is ----------------------
situational influences. For example, a customer totally involved in skin
care, will do extensive search and tryout various soaps and skin creams. ----------------------
The brand that suits his skin the most will affect his behaviour. Such a
----------------------
consumer will not buy any other brand unless that brand gives better skin
care. ----------------------
3. When a product has multiple uses, situational factors will be less important
----------------------
in determining the brand choice.
----------------------
----------------------
1. Attribution theory states that people attribute a cause to their future
behaviour. ----------------------
----------------------
6.4 INVOLVEMENT AND HIERARCHY OF EFFECTS
----------------------
If low involvement characterizes so much of purchasing, why have ----------------------
marketers focused on high-involvement decisions? There are two reasons. First,
since marketers are highly involved with their products, they easily assume ----------------------
consumers are also involved. They spend a major part of their waking hours
thinking about their brand. Hence, when they evaluate the advertising strategy, ----------------------
they do so as highly involved individuals, unlike the target consumer. Highly ----------------------
cluttered, complex advertising copy is often a result of agency and brand group
decision makers who are unable to view the product from the perspective of the ----------------------
un-involved consumer.
----------------------
A second reason to focus on high-involvement decision is that it is easier
for them to understand and influence consumers if they assume consumers ----------------------
employ a cognitive process of brand evaluation. Complex decision making
assumes a sequence in the consumers’ choice process, which stipulates that ----------------------
consumers think before they act. That is, they first form brand beliefs (cognitive ----------------------
component), then evaluate brands (affect component), and then make a purchase
decision (conative component). ----------------------
Low involvement hierarchy : ----------------------
Consumer behaviour researchers are directing more attention to low
----------------------
involvement hierarchy of effects. This hierarchy stipulates that consumers may
act without thinking. For example, when purchasing table salt, it is unlikely ----------------------
Notes that the consumer will initiate a process of information search to determine
brand characteristics. Nor is the consumer likely to evaluate alternative brands
---------------------- to identify the most favoured one. Rather than searching for information, the
consumer will receive information passively. The consumer sits in front of the
---------------------- TV and sees an ad of Tata salt being pure and iodized. The consumer is looking
---------------------- at the ad but probably thinking of something else and not salt because he is not
involved in salt. The consumer is not really evaluating the ad. Rather, in just
---------------------- seeing the ad, the consumer is storing information in bits and pieces without
any active cognitive process. However, over time, he establishes an association
---------------------- of Tata salt with purity and iodine. This is information catching rather than
---------------------- information processing.
A need arises simply because the quantity of salt in the house is running
----------------------
low. The consumer buys Tata salt because of the familiarity that repetitive
---------------------- advertising produces. The consumer sees the brand on the store shelf, associates
it with the advertising theme, and has sufficient stimulus to buy Tata salt. Under
---------------------- these conditions, the consumer does not form an attitude towards the brand
and has no favourable or unfavourable reaction. Instead, the consumer regards
----------------------
the brand as relatively neutral since it is not associated with any important
---------------------- benefits tied to self or group identification. Hence, the hierarchy of effects for
low-involvement products is quite different from that for high-involvement
---------------------- products. Consumers become aware of the product and form beliefs about it
passively. They make a purchase decision with little brand information and
----------------------
evaluate the brand after the purchase to determine the level of satisfaction. At
---------------------- this point, consumers may develop weak attitudes towards the brand.
Table 6.1 : Low and high involvement hierarchy
----------------------
Low-Involvement Hierarchy High-Involvement Hierarchy
----------------------
1. Brand beliefs are formed first by 1. Brand beliefs are formed first by
---------------------- passive learning. active learning.
2. A purchase decision is made. 2. Brands are evaluated.
----------------------
3. The brand may or may not be 3. A purchase decision is made.
---------------------- evaluated afterward.
---------------------- Low-involvement decision criteria

If brand evaluation is minimal in low-involvement conditions, then how
---------------------- do consumers make decisions? They follow relatively simple decision rules that
---------------------- follow principles of cognitive economy by minimizing the time and effort in
shopping and decision making. One rule cited in Tata salt example is to pick the
---------------------- most familiar brand. Our consumer saw Tata salt on the shelf, recognized the
name, associated it with advertising, and picked it because it was most familiar.
---------------------- A study by Hoyer and Brown found that consumers who are aware of one brand
---------------------- in a product category will repeatedly choose it even if it is lower in quality than
other brands.
----------------------
----------------------

Table 6.2 Notes
Newer, Low-Involvement Traditional, High-Involvement
----------------------
View of a Passive Consumer View of a Active Consumer
1. Consumers learn information at 1. Consumers are information ----------------------
random. processors.
2. Consumers are information 2. Consumers are information ----------------------
gatherers. seekers.
3. Consumers represent a passive 3. Consumers represent an active ----------------------
audience for advertising. As a audience for advertising. As a ----------------------
result, the effect of advertising on result, the effect of advertising on
the consumers is strong. the consumers is weak. ----------------------
4. Consumers buy first. If they do 4. Consumers evaluate the brands
evaluate the brands, it is done before purchase. ----------------------
after purchase. ----------------------
5. Consumers seek some acceptable 5. Consumers seek to maximize
level of satisfaction. As a result, expected satisfaction. As a result, ----------------------
consumers buy the brand least which provide the most benefits
consumers compare brands to related to needs. ----------------------
see likely to give them problems.
----------------------
Familiarity is the key.
6. Personality and lifestyle 6.
Personality and lifestyle ----------------------
characteristics are not related to characteristics are related to
consumer behaviour because the consumer behaviour because ----------------------
product is not closely tied to the the product is closely tied to the
----------------------
consumer’s identity and belief. consumer’s identity and belief
system. ----------------------
7. Reference groups exert little 7. Reference groups influence
influence on product choice because consumer behaviour because of ----------------------
products are unlikely to be related to the importance of the product to
----------------------
group norms and values. group norms and values.
1. Complex decision-making assumes a sequence in the consumers’ choice ----------------------
process, which stipulates that consumers think before they act.
----------------------
6.5 STRATEGIC IMPLICATIONS OF LOW INVOLVEMENT
----------------------
DECISION MAKING
----------------------
Marketing Strategy
----------------------
The most important implications of low-involvement perspective are
for the advertising strategy. Important implications apply to other facets of ----------------------
marketing strategy as well.
----------------------
----------------------

Notes A) Advertising :
Differences in advertising approaches, as reflected, suggest the following
----------------------
strategies for low-involvement products:
---------------------- 1. Advertising budgets should be spent in a campaign of high repetition
and add should provide short-duration messages. Repetition is
----------------------
necessary to gain exposure, even though processing of the message
---------------------- may be minimal. High repetition and short messages encourage
passive learning and ensure brand familiarity. These principles
---------------------- apply concepts of classical conditioning
---------------------- 2. Advertising should focus on a few key points rather than on a
brand based information campaign. Where there is little consumer
---------------------- interest or attention, there is limited ability to process and assimilate
information. A proper campaign in the low-involvement case
----------------------
utilizes short messages emphasizing a few key points.
---------------------- 3. Visual and non-message components should be emphasized. Since
---------------------- un-involved consumers learn passively and forget quickly, it is
important to keep the product visually in front of them. In-store
---------------------- displays and packaging are important tools. TV advertising will
be more effective than print media because of the actual visual
---------------------- component. Where print media is used, the product should be in the
---------------------- foreground and any peripheral cues in the background.
4. Advertising should be the primary means of differentiating the
---------------------- product from that of the competition. There are no substantial brand
---------------------- differences for many low-involvement products. Hence, advertising
becomes the means of competitive differentiation. Advertisers use
---------------------- symbols and imagery as substitutes for actual product differences
and to maintain interest in undifferentiated brands.
----------------------
5. TV rather than print media should be the primary vehicle for
---------------------- communication.
---------------------- If less product information is required, a low-involvement medium such
as TV is more suitable. This is because TV does not require consumers
---------------------- to evaluate the content of the communication as closely as they do print
communication.
----------------------
B) Product Positioning :
----------------------
Low-involvement products are more likely to be positioned to minimize
---------------------- problems, whereas high-involvement products are positioned to maximize
benefits. This is because uninvolved consumers seek acceptable, not
---------------------- optimal products. Frequent reference to avoiding problems such as dirty
floors, stained glasses, or ring round the collar suggests the prevalence of
----------------------
a problem minimization approach for low-involvement products.
----------------------
----------------------

C) Pricing : Notes
Consumers buying low-involvement products are likely to be more price-
----------------------
sensitive. They frequently purchase on the basis of price alone, since
brand comparisons are unimportant and there are few differences between ----------------------
brands. Therefore, a decrease in price or a coupon offer may be enough to
influence the consumer to buy. A study by Gotlieb, Schlacter, and St. Louis ----------------------
confirmed the greater price sensitivity of less involved consumers. They
----------------------
found that it took smaller decreases in price of competitive products to
get uninvolved consumers to switch from their current brand. In his study ----------------------
of margarine purchases, Lastovicka also demonstrated the importance of
price for uninvolved consumers. Among those who said the purchase was ----------------------
unimportant, 52 percent said price was the determining factor. Among
----------------------
those who thought the purchase important, only 22 percent said price is a
determinant. ----------------------
d) In-Store Stimuli :
----------------------
Since most low-involvement purchases are unplanned, in-store stimuli
such as coupons, displays, or price deals are more likely to be important ----------------------
when consumers are not involved. Consumers may purchase the brand
----------------------
at eye level or the one with the largest shelf space simply because of the
reminder effect. The package may be more influential for low-involvement ----------------------
goods because it is encouraged in the store.
----------------------
E) distribution :

Intensive distribution is a necessity for low-involvement products because ----------------------
consumers are not motivated to search for a brand. If the preferred brand ----------------------
is not in the store, consumers are likely to make another choice. Marketing
strategy must ensure in-store availability to discourage the likelihood of a ----------------------
brand switch.
----------------------

1.
Low-involvement products are more likely to be positioned to ----------------------
maximise problems, whereas high-involvement products are
positioned to minimise benefits. ----------------------
----------------------
Activity 2 ----------------------
Name five low-involvement products that you buy on the basis of price ----------------------
alone.
----------------------
----------------------
----------------------

Notes 6.6 SHIFTING CONSUMERS FROM LOW TO HIGH
----------------------
INVOLVEMENT
---------------------- Every marketer wants his product to be a high involvement product.

Involvement means commitment; involved consumers are more likely to
---------------------- remain brand loyal in the face of competitive activity. Following are some of
the strategies that can be adopted for this purpose:
----------------------
1. Link the product to an involving issue. When a low-involvement product
---------------------- is linked to be an involving issue, the consumer gets involved in the
product. For example, edible oil is a low-involvement product. In the
----------------------
Suffola ad, oil is linked to the health of the heart. The recent ad mentions
---------------------- that every fourth papa, mama, brother, friend etc in India is susceptible to
a heart problem. A recent finding in India indicates the possibility of every
---------------------- fourth Indian being a likely heart patient. Such linking makes edible oils
such as Suffola an involving product.
----------------------
2.
Create a problem and solve it. Madison Avenue tried to increase
---------------------- involvement in mundane products by attempting to convince consumers
that they have problems they never knew about. In 1940s and 1950s, it
----------------------
was halitosis and body odour; in 1960s and 1970s, it was coffee nerves
---------------------- and dishpan hands.
3. Link the product to a currently involving situation. In India, during cricket
----------------------
matches, marketers create involvement by linking the product to cricket.
---------------------- One finds maximum advertisements involving cricketers. This may create
an involving situation. All Amul advertisements use this strategy to create
---------------------- an involvement in Amul products.
---------------------- 4. Link the product to an involving advertisement: The recent ad of Close
Up “Kya aap close up karte hai…”. Colgate had also created an involving
---------------------- ad in the past titled ‘talk to me’. Toothpaste is a low involvement product
---------------------- and such ads increase the involvement of some consumers.
5. Change the importance of product benefits. A more difficult strategy is to
---------------------- try to change the importance consumers attach to product benefits. Vicco
---------------------- Turmeric cream advertises itself as not being a cosmetic but an antiseptic
cream that can also be used for minor cuts and wounds. Vicks VapoRub
---------------------- advertises as being an Ayurvedic medicine.
---------------------- 6. Introduce an important characteristic in the product. This considers the

possibility of introducing an attribute into a product that had not been
---------------------- considered important or that did not previously exist. Examples include
the recent ad of Speed where it talks about being better petrol because of
---------------------- addition of few additives.
----------------------
----------------------
----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. Changing the importance of product benefits, introducing an
important characteristic in the product are the strategies that can be ----------------------
adopted for the purpose of _____________from low involvement to
high involvement. ----------------------
----------------------
Activity 3 ----------------------
Name two slogans involving current issues that have been used in the ----------------------
advertisements of Amul. ----------------------
6.7 SNAPSHOTS ----------------------
Weddings are a joyous moment in the lives of those involved. The 2.4 ----------------------
million weddings each year in the U.S are also a big business ($35 billion).
----------------------
Weddings are not only social, legal, and religious rituals; they are also
consumption rituals. Bridal gowns, tuxedo rentals, bridal showers, wedding ----------------------
gifts, dinners and receptions, rings, honeymoons, and other consumption
activities are now an integral part of a wedding. While details differ, ritualized ----------------------
consumption patterns surround this event in most cultures. Marketers have been
----------------------
attracted to this huge business coming entirely due to situational influences.
Freixenet, marketers of Cordon Negro sparkling wine, offer a free Wedding ----------------------
Beverage Guide, which includes toasts, graces, and paper tuxedos to wrap
around the wine bottles. It also provides a coupon for a $1 refund per bottle. ----------------------
The internet is quickly becoming a major part of the marriage market. The
----------------------
WeddingChannel.com currently makes it easy for couples to create personal
wedding web pages on which they can post directions and pictures, notify guests ----------------------
of last minute changes, recount how they met, and so forth. The goal is to have
a constantly updated gift registry available. This would allow guests to learn ----------------------
what gifts the couple desires that they have not yet received and to order those
----------------------
gifts online from participating retailers. Walt Disney World capitalizes on this
consumption ritual by serving as a wedding site through its Fairytale Weddings ----------------------
department. Almost 2000 couples are married every year at Walt Disney World
each year. ----------------------
----------------------
Summary
----------------------
• A consumer is said to have a high involvement in purchase, when he
considers the product to be important and strongly identifies with it. ----------------------
Various factors like self-image, functional importance, symbolic value,
----------------------
price etc. increase consumer involvement. Types of Involvement include
situational involvement i.e. it is the one that occurs only in specific ----------------------

Notes situations and is temporary. Enduring Involvement i.e. it indicates an
ongoing interest in the product category. For low-involvement decisions,
---------------------- consumers follow relatively simple decision rules that follow principles
of cognitive economy by minimizing the time and effort in shopping and
---------------------- decision making.
---------------------- • Depending on the type of involvement, marketers have to opt for the right
strategies as regards to pricing, distribution, promotion, and advertising.
----------------------
Marketers can and should attempt to create more involvement in their
---------------------- brands by using right tactics so as to get consumer patronage for their
brands.
----------------------
---------------------- Keywords
---------------------- Situational involvement : Occurs only in specific situations and is
•
temporary.
----------------------
• Enduring involvement : An ongoing interest in the product category.
---------------------- May or may not lead to a purchase situation.
---------------------- • High involvement : Active search for information about the product is
done by consumer.
----------------------
• Low involvement : Passive search for information by the consumer
---------------------- characterised by low awareness and knowledge.
----------------------
----------------------
1. Low involvement products can be converted to high involvement products.
---------------------- Comment and give examples of companies using this strategy.
---------------------- 2. Explain the term involvement in detail. What are its various types. Support
your answer with examples.
----------------------
3. Discuss the strategies to shift products from low to high involvement.
----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. Situational involvement occurs only in specific situations and is temporary.
---------------------- 1. False
----------------------
----------------------

Check your Progress 3 Notes
----------------------
1. True
----------------------
1. False ----------------------
Fill in the blanks.
----------------------
1. Changing the importance of product benefits, introducing an important
characteristic in the product are the strategies that can be adopted for the ----------------------
purpose of consumer shifting from low involvement to high involvement.
----------------------

Western College. ----------------------
----------------------
Taylor & Francis.
Publishing Group.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Information Processing
UNIT
7
Structure:
7.1 Introduction
7.2 Information Acquisition
7.3 Perceptual Encoding
7.4 Integration and Outcome
7.5 Snapshots
Summary
Key words
Suggested Reading
Information Processing 109

Notes
Objectives
----------------------
----------------------
• Use your knowledge of information processing to market products
---------------------- and services
---------------------- • Analyse the relation between a consumer’s cognitive ability and the
complexity of information to be processed
----------------------
---------------------- 7.1 INTRODUCTION
---------------------- It is often useful to view consumers as problem solvers who use information
to satisfy their consumption goals. Consumer information processing may be
---------------------- thought of as the acquisition of stimulus inputs, the manipulation of these inputs
to derive meaning from them, and the use of this information to think about
----------------------
products and services.
---------------------- The five ways in which consumers use information from their environment are:
---------------------- 1. To understand and evaluate products and services
---------------------- 2. To attempt to justify previous product choices

3. To resolve conflict between buying or postponing purchase
----------------------
4. To satisfy the need for being informed about products and services
----------------------
5. To serve as a reminder to purchase products that must be regularly
---------------------- replenished
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 7.1 : Information processing framework

It is important to realize that, as it’s definition implies, information Notes
processing is not the end result of an activity, but the actual process itself that
consumers engage in dealing with their environment. The model shown in Fig. ----------------------
7.1 is more descriptive of processing activities that consumers engage in under
conditions of high involvement. The basic components are arranged into four ----------------------
groupings that are as under: ----------------------
1. Stimuli that serve as the raw material to be processed
----------------------
2. The stages of processing activities which are linked by arrows and are
mainly internal to the consumer ----------------------
3. Situational and consumer characteristics that can influence the nature of ----------------------
these activities
----------------------
4. An executive system that guides the process by regulating the type and
intensity of processing activities engaged in at any time. ----------------------
Stimuli can be thought of as units of energy such as light and sound which ----------------------
can excite our sensory receptors. We have receptors for internally produced
stimuli such as hunger pangs, as well as receptors for the commonly known ----------------------
senses such as colour, taste, smell, sound and feel. Typically, a stimulus does
not exist in isolation but is part of a large stimulus situation which comprises ----------------------
many individual stimuli. ----------------------
The acquisition process enables consumers to confront certain stimuli in
their environment and begin to process them. Exposure, which is the part of ----------------------
acquisition process, occurs in a wide variety of ways, but two major categories ----------------------
exist: Active search and Passive search. In active search, the consumer’s
executive system serves as a guide to seek out specific types of stimuli, such ----------------------
as the nutritional content per serving in a can of soup. The way in which the
search process is conducted will be influenced by consumer’s motives, and it ----------------------
is mainly within conscious control. Conversely, in passive search, consumers ----------------------
confront stimuli in the process of living daily lives. Exposure to too many ads,
news reports on various products, and information acquired as a by-product of ----------------------
normal shopping activities are examples of passive reception.
----------------------
The exposure process, through both active and passive reception,
is capable of acquiring almost an infinite number of stimuli. Consumer has ----------------------
limited capacity to process this data; two major mechanisms reduce the number
----------------------
of stimuli to manageable proportions. First, sensory receptors have a limited
sensitivity, which means that our sensory processes produce sensations for only ----------------------
a specific range of stimulus values. Secondly, we selectively devote attention
to only a small proportion of the resulting sensations, and we literally ignore ----------------------
the rest. Thus, with certain exceptions, stimuli that are capable of producing
----------------------
sensations and then attracting the consumer’s attention are the main focus of
further processing efforts. ----------------------
A perceptual encoding process involves several activities that allow the
----------------------
consumer to interprete these raw inputs. The processes can be thought of as
constructing mental symbols to represent sensations in order to derive meanings ----------------------

Notes from them. Process of perceptual encoding is said to develop personal meaning
called information from raw stimulus inputs. Thus, consumers act on their
---------------------- own interpretation of the world, as opposed to what actually may exist. Fig.7.1
shows that information generated by perceptual encoding may be stored in
---------------------- memory for future use, and it can be directly transferred to the integration stage
---------------------- of processing. Here, the consumer combines and arranges various informational
inputs to reach conclusions about the environment. For example, information
---------------------- on package size, number of servings, price and brand name of several retailing
products could be arranged in various ways to be meaningful in the consumer’s
---------------------- mind. Information available from memory as well as material obtained directly
---------------------- from the environment represents inputs to this integration process.
A major goal of information processing is to deal effectively with the
----------------------
environment. Hence, outcomes of information processing activities are likely
---------------------- to affect evaluation, attitude and even eventually, observable behaviour.
Information that has been integrated involves attitudes when the consumer’s
---------------------- beliefs or feelings about a particular object are developed or changed. These
attitudes can be held by the consumer to influence later actions toward the
----------------------
object. For example, if the consumer’s attitude towards purchasing a stain
---------------------- remover is positively influenced by an advertisement, this is likely to increase
the probability of a later purchase. A second outcome can occur more directly.
---------------------- Information can be processed for the purpose of product evaluation, choice,
and immediate purchase. Here, the consumer, rather than forming attitudes to
----------------------
influence later decisions, makes a brand choice as the information is processed.
---------------------- In yet another scenario, information is processed and evaluation of alternatives
is made but purchase is postponed for some later date. For example, a consumer
---------------------- may process considerable information about MRF radial tyres and decide that
the next time he replaces his tyres, it will be MRF.
----------------------
Information processing is strongly influenced by consumer characteristics.
---------------------- Consumer’s motives, involvement, learning and personality traits directly
affect information processing. Situational characteristics can also play a vital
----------------------
role in information processing. Information processing activities do not act
---------------------- independently of each other. Rather, each activity needs to be coordinated
with others so that intelligible meaning can be derived from the stimuli. The
---------------------- executive system is the mechanism that coordinates various information
processing activities. It also serves as a command centre that directs attention
----------------------
and organizes processing energies toward those stimuli that are potentially
---------------------- more relevant to the consumer’s goals. The majority of information processing
is internal to the consumer and therefore unobservable. Two notable exceptions
---------------------- are portions of stimulus-acquisition process and certain overt responses.
----------------------
7.2 INFORMATION ACQUISITION
----------------------
The information acquisition describes the set of activities or means by
---------------------- which consumers are exposed to various environmental stimuli and begin to
process them. The process consists of:
----------------------

1. Active Search : Notes
Consumers often seek information actively and selectively acquire
----------------------
information that has potential usefulness for achieving their consumption
goals. The first stage in this process appears internal search because ----------------------
of the relative ease with which it can be accomplished. Internal search
involves scanning memory for stored information that is relevant to the ----------------------
purchase situation under consideration. This available information has
----------------------
been previously acquired from passive reception experiences as well as
through active external searches. Consequently, it can include information ----------------------
derived from advertising claims, personal experiences, product test
reports, previous solutions to similar purchase problems, and interactions ----------------------
with other consumers.
----------------------
Internal search will rather tend to be deliberate and comprehensive
when the consumer views a situation as important, when the purchase ----------------------
decision is a difficult one, or when the amount of information in memory
----------------------
is considerable or complex. In other cases, such as during the regular
replenishment of one’s usual brand of bath soap, the memory scan may ----------------------
be so automatic that it never even reaches conscious awareness. In what
actually appears to be in the majority of cases, information acquired from ----------------------
an internal memory scan is sufficient for the consumer’s needs.
----------------------
For the remaining situations, the consumer is not satisfied with his
existing knowledge and becomes sufficiently motivated to engage in ----------------------
external search. The amount of external search varies considerably across
----------------------
individuals and purchase situations.
Factors affecting this include : ----------------------
1. Market conditions such as price and feature differences between ----------------------

brands
----------------------
2. Situational factors including conditions of store crowding and the
urgency of need. ----------------------
3. Buying strategies that a consumer may adopt such as brand or store ----------------------
loyalty patterns.
----------------------
4.
Individual factors such as involvement, motivation and self-
confidence ----------------------
2. Passive Reception : ----------------------
The passive reception process is another means of information acquisition.
In this mode, consumers confront and acquire information in the process ----------------------
of living their daily lives. For example, when watching a TV program, ----------------------
casually talking to a friend, or searching for literature about house paints,
one could be exposed to information about aluminum house siding. This ----------------------
information might be stored away for a future time when the need to
address the issue of house siding arises. As this situation demonstrates, ----------------------
passive reception occurs when consumers acquire information that they ----------------------

Notes are not present seeking. Instead of having a plan of search, the individual
responds to environmental stimuli to which she is exposed. Although
---------------------- virtually any type of stimulus may be passively acquired, substantial
amounts of certain types of information are likely to be received in this
---------------------- manner. For example, consumers frequently become aware that various
---------------------- products exist without actively seeking such knowledge. A significant
amount of learning about product attributes and their advantages can also
---------------------- be acquired passively. In addition, it is likely that the consumers obtain
at least some of their knowledge about the quality of products through
---------------------- conversations with friends or other passive means.
---------------------- The way in which passive reception occurs has important practical
implications, because the consumers’ daily living patterns selectively
----------------------
influence their exposure to advertisements and other sources of
---------------------- consumption-related information. For this reason, marketers spend
considerable time and effort on studies of consumers’ selective media
---------------------- habits (magazine leadership, TV programs watched, and so on.) and
activity patterns (such as shopping habits, and so on) that lead to exposure
----------------------
opportunities. Recent changes in technology seem to have significantly
---------------------- altered the passive reception of TV advertisements. Traditionally, when
TV shows broke for commercials, unless the viewer got up to change
---------------------- the channel or leave the room for some reason, he was confronted with
advertising messages. Attention may not have been focused on the ads but
----------------------
exposure to the ads did occur. However, with the arrival of DVD and CD
---------------------- players and remote control units in millions of households, the situation
is now considerably different. Many use remote control units to rapidly
---------------------- switch to other channels during commercial breaks and thereby avoid
commercial messages. This behaviour has become known as zapping.
----------------------
A similar form of commercial avoidance also became popular with the
---------------------- technological breakthrough of “windows” on television. Here the viewer
can partition a section of the TV screen to show an additional channel.
---------------------- Thus, while ads are on one channel the viewer can watch another show
through the window.
----------------------
The use of CD players has also affected exposure to advertisements. When
---------------------- viewers pre-record programs for enjoyment at a later time, the remote
control unit allows them to fast-forward through commercial breaks.
----------------------
On many DVD units the resulting picture is distorted and has no sound.
---------------------- Consequently, this so-called zipping results in very little exposure to the ad
messages. Because these behaviours serve to limit consumers’ exposure to
---------------------- advertising content, they are considerable interest to researchers and those
responsible for developing marketing communications. Consequently,
----------------------
additional information on the nature and effect of zapping, zipping, and
---------------------- similar technology-aided behaviour should become available. However,
one response by advertisers has already been developed: the so-called
---------------------- chameleon advertisement. Here the ad is designed to mimic an actual
show such as a news show or a talk show. For example, in one such
----------------------
ad, Linda Ellerbee speaks briefly and then introduces Willard Scott in a
scene that looks like a TV morning show. In fact, it turns out to be an ad Notes
for Maxwell House coffee. The intent is to keep the viewers’ attention
by simulating the content of an actual show and thereby postponing or ----------------------
eliminating zapping behaviour.
----------------------
3. Attention :
----------------------
A research study conducted some time ago suggested that the average
American adult is aware of seeing less than 100 major media per day ----------------------
however, the daily advertising exposure rate for a typical consumer has
been estimated to range as high as 3000 or more. This suggests that ----------------------
although exposure and sensory processes both selectively filter stimuli for
----------------------
information processing, additional points of selectively must also exist.
One such filtering mechanism is attention, which can be viewed as the ----------------------
allocation of processing capacity to stimuli that is, attention regulates the
amount of additional processing that a stimulus will receive. Generally, ----------------------
the more processing capacity that is devoted to a stimulus, the greater will
----------------------
be the consumer’s awareness and comprehension of it.
Voluntary and Involuntary Attention ----------------------
Consumers allocate their attention on both a voluntary and an involuntary ----------------------
basis. For voluntary attention, stimuli are deliberately focused on
because of their relevance to the task at hand. Carefully reviewing the ----------------------
manufacturer’s specifications on a microwave oven that one is about ----------------------
to purchase is an example. The consumer’s motives, knowledge, and
expectations about what information will be found serve to guide this ----------------------
selective attention. Conversely, involuntary attention occurs when the
consumer confronts novel or unexpected stimuli that seem interesting or ----------------------
distinctive in some way, even though they may be unrelated to the current ----------------------
goal or activity at hand. Funny, “catchy”, or otherwise unusual ads often
fall into this category. Also, many other stimuli which consumers confront ----------------------
in their daily lives are handled by the involuntary attention process. In
fact, most of the stimuli that the consumers process, reach awareness ----------------------
via involuntary attention. Both types of attention play a useful role for ----------------------
consumers. Voluntary attention facilitates progress toward immediate
goals by concentrating processing capacity on the most task-related ----------------------
stimuli and filtering out others. On the other hand, involuntary attention
allows consumers to be generally knowledgeable about the environment ----------------------
by keeping them in touch with stimuli that are potentially relevant to a ----------------------
variety of their interests.
Characteristics of Attention ----------------------
We have already noted that the consumer’s attention is selectively ----------------------
allocated to certain stimuli. Three characteristics of attention having
important implications for marketers are mentioned here. First, consumers ----------------------
can only attend to limited number of items at any one time. This limit ----------------------
appears to be from 5 to 7 “chunks” of information, in which a chunk is an
organized grouping of data or informational inputs. An example would be ----------------------

Notes how telephone numbers are arranged into three major chunks to facilitate
their retention-area code, prefix, and suffix. This five-to-seven-chunk
---------------------- capacity shows that consumers’ span of attention can be quite limited.
Second, many stimuli require attention to be processed, while others that
---------------------- are very familiar to the consumer do not. Because the span of attention is
---------------------- limited, those stimuli require attention cannot all be processed at the same
time. The consumer must allocate this limited resource to them in some
---------------------- type of sequence or order; while one is being processed, others cannot be
attended to. A case in point is when we are unable to both read something
---------------------- and to listen to a radio message at the same time. Conversely, stimuli not
---------------------- requiring attention can be received simultaneously from several channels
and will be automatically transferred to the next stage of processing. A
---------------------- third characteristic is that attention can be allocated to stimuli on a rapid
basis. One set of studies found that processing occurred at the rate 20-6
---------------------- items per second. This speed tends to compensate for consumers’ limited
---------------------- span of attention.

----------------------
Fill in the blanks.
---------------------- 1. describes the set of activities or means by which consumers are
exposed to various environmental stimuli and begin to process them.
----------------------
----------------------
Activity 1
----------------------
Give an example of how a new advertisement of a product on TV tries to
---------------------- postpone or eliminate zapping behaviour. Suggest an alternative from your
---------------------- side.
----------------------
7.3 PERCEPTUAL ENCODING
----------------------
Because sensations generated by stimuli are only a series of electrical
---------------------- impulses they must be transformed into a type of language that is understandable
to the consumer. This is accomplished by perceptual encoding, which is the
---------------------- process of assigning mental symbols to sensations. These symbols can be
---------------------- words, numbers, pictorial images, or other representations that consumers use to
interpret or assign meaning to their sensations. They are also used to remember
---------------------- stimuli and do any subsequent thinking about them.
---------------------- Stages in the encoding process :

Two major activities involved in encoding appear to be feature analysis
----------------------
and a synthesis stage. In feature analysis, the consumer identifies main stimulus
---------------------- features and assesses how they are organized. In the synthesis stage, organized
stimulus elements are combined with other information available in the
---------------------- environment and in the memory to develop an interpretation of the stimulus.

How consumers react to the Maruti Swift illustrates these stages. First they Notes
would assess the basic size, shape, colour, and other prominent features of the
car. These characteristics would then be organized into a unified whole and ----------------------
appreciated as a type of motorized vehicle rather that as separate components
of glass, steel, rubber, and so on. However, even in the unlikely event that ----------------------
all consumers develop the same unified whole during the feature analysis ----------------------
stage, each would interpret it differently depending on his or her individual
experiences. ----------------------
In fact, it can be said that there are three major influences on the synthesis stage ----------------------
that are:
----------------------
1. Stimulus features
2. Contextual influences ----------------------
3. Memory factors ----------------------
The consumer’s experiences and knowledge will also strongly influence ----------------------
how interprets a stimulus situation. An expanding body of evidence suggests
that consumers interpret stimuli by attempting to categorize them along with ----------------------
other stimuli already contained in memory. Much of this is done automatically
without conscious deliberation. A benefit of this process is that similar stimuli ----------------------
can be efficiently resounded to in much the same way instead of treating each as ----------------------
a novel situation requiring a different reaction. The categorization process also
influences the consumer to interpret a stimulus based on its resulting category ----------------------
membership as well as its actual features. That is, the meaning the consumer
ascribes to the stimulus will be partly due to its actual features (and context) ----------------------
and partly due to the meaning associated with its category. For example, assume ----------------------
that a consumer confronts O’Doules, which is a beverage positioned as a beer.
It is packaged in a bottle like beer, it has colour and carbonation like beer, and it ----------------------
smells like beer. However, the consumer also notices that its alcohol content is
significantly less than beer. The issue now is whether to categorize O’Doules as ----------------------
a beer, a soft drink, or some other form of beverage. If the consumer categorizes ----------------------
it as beer than he is likely to view it differently that if he categorizes it as a
soft drink. To be more likely to be consumed in different social settings, there ----------------------
may be more willingness to pay a higher price for it, etc. We can see from this
example that how the consumer categorizes a product influences the meaning ----------------------
that he will ascribe to it. ----------------------
Research suggests that consumers perceive degrees of match between any
stimulus and a given category that it might be assigned to. That is, the match ----------------------
does not have to be perfect in order to be assigned to a given category. However, ----------------------
the more a given stimulus is perceived to be typical of a given category, the
greater the likelihood that it will be assigned to that category. This so-called ----------------------
typicality appears to be influenced by the match of attributes between stimuli in
the category and the stimulus being evaluated, whether the stimulus has certain ----------------------
valued attributes and the frequency with which it is encountered. ----------------------
----------------------

Notes
----------------------
----------------------
1. Two major activities involved in encoding are feature analysis and
---------------------- synthesis stage.
----------------------
7.4 INTEGRATION AND OUTCOME
----------------------
---------------------- Much of feature analysis involves mentally arranging sensations into a

coherent pattern which is often called a gestalt. In fact, this process has been
---------------------- the prime interest to gestalt psychologists. The factors are as follows:
---------------------- 1.
Figure-ground: This is one of the most basic and automatic organizational
processes perceivers impose on their world. Two properties of this innate
---------------------- perceptual tendency are:
---------------------- a) The figure appears to stand out as being in front of the more distant
background.
----------------------
b) The figure is perceived to have form and to be more substantial than
---------------------- ground.
Print advertisers often employ figure-ground techniques to assist readers
----------------------
in organizing symbols and other material that the marketer deems most
---------------------- important
2. Proximity: In this organization process, items close to each other in time
----------------------
or space tend to be perceived as being related, while separated items are
---------------------- viewed as being different. The uses of proximity in promotions are many.
Mentholated cigarettes are shown in beautiful green, spring like settings
---------------------- or against a deep blue sky to suggest freshness. Soft drinks and fast foods
are usually shown being enjoyed in active, fun-oriented settings, and
----------------------
sporty cars are frequently pictured at race tracks or in other competitive
---------------------- situations.
---------------------- 3. Similarity: Assuming that no other influence is present, items that are
perceived as being similar to one another will tend to be grouped together,
---------------------- this, in turn, can influence the pattern one perceives in a conglomeration
of items. The principle of similarity has been used in various ways to
---------------------- influence consumers’ perceptions. Some auto manufacturers have
---------------------- attempted to develop certain style similarities between their products and
the BMW in the hope that consumers will conclude that the cars are also
---------------------- similar in other important respects. This led to some concern at BMW and
they responded with ad messages stressing that their car is a standard that
---------------------- others have tried to copy, but have done so unsuccessfully, since similar
---------------------- looks do not necessarily mean similar cars.
----------------------

4. Closure: Frequently, consumers organize incomplete stimuli by Notes
perceiving them as complete figures. In other words, a figure such as
an opened circle would tend to be filled in by the individual to result in ----------------------
perception of a whole.
----------------------
Research suggests that under certain conditions this tendency toward
closure can be an effective advertising device, because it motivates ----------------------
consumers to mentally complete the message. This can focus attention
and facilitate learning and retention. In fact, the closure concept has been ----------------------
employed by leading producers of consumer products. For example, ----------------------
Salem cigarettes were first advertised heavily in TV employing the often
quoted jingle: “You can take Salem out of the country but-You can’t take ----------------------
the country out of Salem.” The verse was repeated several times with a
bell ringing between two halves of the message. Finally, only the first ----------------------
half of the jingle was sung, ending with the bell and leaving the listener to ----------------------
complete the message.
Marketing Implications : ----------------------
1. Product Factors : ----------------------
The relevance of information processing to consumers’ product evaluation ----------------------
has been discussed at length in the previous pages of this topic. It expected
that a consumer will be in a position to evaluate product attributes on the ----------------------
basis of physical features of a product like size, shape, and ingredients.
These are often termed as intrinsic cues. However, evidence suggests ----------------------
that buyers can have difficulty in differentiating between brands purely ----------------------
on the basis of physical features. For example, one study revealed
that respondents could differentiate between a Coke and a Pepsi in a ----------------------
blind taste test, but they had difficulty in distinguishing each of them
from Royal Crown Coke. This fact was aggressively used by Pepsi in ----------------------
its advertising, considerably damaging the image of Coke and this led ----------------------
to almost an advertising war between the two rivals. A very important
point to be noted here is whether consumers’ differential thresholds are ----------------------
sensitive enough to differentiate between brands. If differences between
brands go undetected in taste tests in which consumers attempt to “tune ----------------------
in” their discriminatory powers, perhaps even larger differences escape ----------------------
notice in everyday consumption. For nonfood products, consumers may
be capable of using intrinsic cues to differentiate between brands, but not ----------------------
be able to determine whether these differences are important in predicting
which brand will provide greater satisfaction. Studies have shown that the ----------------------
addition of a faint, not consciously noticed perfume to women’s hosiery ----------------------
can lead consumers to strongly prefer them over identical but unscented
alternatives. Another finding indicated that bread in cellophane was ----------------------
judged by consumers to be fresher than identical bread wrapped in waxed
paper. To summarize following four points are worth noting: ----------------------
a) Certain intrinsic cues are more likely than others to be selected ----------------------
for use in judging products. The selection will be influenced by
consumer’s experience as well as the type of cues available. ----------------------

Notes b) The way in which extrinsic cues are encoded can strongly influence
consumers’ product evaluation.
----------------------
c) Certain extrinsic cues may not be encodable in a meaningful way by
---------------------- the consumer. These would then have little if any subsequent effect
on how the product is interpreted. The listing of certain packaged-
---------------------- food ingredients such as sodium ascorbate, calcium propionate, and
propyl gallate might fit this description.
----------------------
d) Available extrinsic cues may lead the consumer to develop additional
---------------------- inferential beliefs or interpretations of the product. An inferential
belief one formed without a direct basis in the existing stimulus
----------------------
situation. For example, an ad that only mentions the whitening
---------------------- ability of a detergent might also lead some consumers to interpret
the brand as having clothes-softening properties. This could occur
---------------------- because ads for other brands claim to have both properties, and
consumers have associated the two in their minds. However, since
----------------------
the present ad makes no softening claim, such interpretations are
---------------------- based on inference and do not have a basis in the stimulus situation.
2. Price Considerations :
----------------------
Much discussion of how consumers encode price information has focused

---------------------- on the concept of “psychological pricing”; this suggests that there is
---------------------- greater consumer demand at certain prices and that this demand decreases
at prices above and below these points. Here it is said that prices ending in
---------------------- an odd number (5, 7, and 9) or just under the round number (96 or 98 as
opposed to 100) generate significantly higher demand that related round-
---------------------- numbered prices. However, this argument is usually based on retailers’
---------------------- experiences and has not yet been confirmed by rigorous testing. This has
been extensively used in India by leading foot-wear Company called Bata
---------------------- India Ltd. The prices of their shoes or chappals will be Rs.199.90 and so
on.
----------------------

---------------------- 1. ___________ involves mentally arranging sensations into a coherent
pattern.
----------------------
---------------------- Activity 2
----------------------
Name five brands that practice psychological pricing. Do you feel that this
---------------------- is a practical policy? Does it really work?
----------------------
----------------------

7.5 SNAPSHOTS Notes
The television camera shows a small audience with a master of ceremonies ----------------------
(MC) informing them about some amazing new product that has recently
become available. Soon the M.C. introduces the developer of this new cooking ----------------------
aid. His shows a series of racks designed for cooking poultry and claims that ----------------------
they result in more healthful (less fatty) food which can be cooked in a regular
oven in a fraction of the time that it used to take to do the job. He then goes ----------------------
on for the next fifteen minutes to demonstrate how easy the devices are to use
and clean and how quickly the poultry is cooked to delicious and healthful ----------------------
perfection. The studio “audience” is obviously quite impressed, breaking into ----------------------
apparent spontaneous oohs and aahs at numerous times.
When hearing the price for a set of these cooking aids they applaud. ----------------------
But the audience is even more pleased when the M.C. is able to convince the ----------------------
developer to add some extra items and also reduce the price for those who are
presently watching the show. When there is a break for a “commercial” the ----------------------
viewer is told how to order a set of the same devices that were just described
on the “show”. Regular viewers will soon see that this “show”, like others that ----------------------
typically air during low-cost time periods on independent stations of certain ----------------------
cable channels, is actually a half-hour paid commercial set up to resemble a show
that is presenting new technological advances. These so-called “infomercials” ----------------------
are a fast-rising method of pitching a variety of products to TV viewers.
----------------------
However, some people have expressed a general concern over this type of
show because they claim there is no clear disclaimer as required by the Federal ----------------------
Communications Commission that labels the show’s sponsor-that is, they are not
clearly labeled as ads and therefore may have an unfair advantage in convincing ----------------------
some consumers to purchase. The problem can become more complicated in ----------------------
shows meant for the children. For example, TV shows like Teenage Mutant
Ninja Turtles break for commercials where replicas of the show’s characters ----------------------
are advertised. A concern is that children, especially quite young ones, will not
distinguish clearly between an ad for a product and the entertainment content of ----------------------
the related show. ----------------------
Summary ----------------------
It is often useful to view consumers as problem solvers who use information

• ----------------------
to satisfy their consumption goals. Consumers use information from their ----------------------
environment in five ways. Information processing is not the end result of
an activity, but the actual process itself that consumers engage in dealing ----------------------
with their environment. Stimuli can be thought of as units of energy such
as light and sound which can excite our sensory receptors. The acquisition ----------------------
process enables consumers to confront certain stimuli in their environment ----------------------
and begin to process them. A major goal of information processing is to
deal effectively with the environment. Information processing is strongly ----------------------
influenced by consumer characteristics. The process of information
processing consists of aspects like ----------------------

Notes • Active Search, Passive Reception, and Attention. Sensations generated by
stimuli are only a series of electrical impulses that must be transformed
---------------------- into a type of language that is understandable to the consumer. This is
accomplished by perceptual encoding. The consumer’s experiences and
---------------------- knowledge will also strongly influence how interprets a stimulus situation.
---------------------- • In this topic we have briefly also discussed how information processing
should be used by marketers to promote their brands.
----------------------
---------------------- Keywords
---------------------- • Encoding : It is the process by which we select and assign a word or
visual image to represent a perceived object.
----------------------
• Information acquisition : Set of activities by which consumers are
---------------------- exposed to various environmental stimuli and begin to process them.
---------------------- • Perceptual encoding : It involves several activities that allow the
consumer to interpret the raw inputs.
----------------------

---------------------- 1. Explain the process of consumer information processing with the help of
---------------------- a diagram.
2. What is Information Acquisition?
----------------------
3. What is the difference between Zipping and Zapping? Support your
---------------------- answer with examples.
---------------------- 4. Write short notes on:
a) Perceptual encoding
----------------------
b) Feature analysis
----------------------
c) Psychological pricing
---------------------- d) Attention.
----------------------
----------------------
----------------------
Fill in the blanks.
---------------------- 1.
Information acquisition describes the set of activities or means by which
---------------------- consumers are exposed to various environmental stimuli and begin to
process them.
----------------------
----------------------
----------------------

----------------------
1. True
----------------------
1. Gestalt involves mentally arranging sensations into a coherent pattern. ----------------------
----------------------
Suggested Reading
----------------------
Western College. ----------------------
2. Chaudari, Arjun. 2006. Emotion and Reason in Consumer Behaviour. ----------------------
Taylor & Francis.
----------------------
3. Goleman, Daniel. 1996. Emotional Intelligence. Bantam Doubleday Dell
Publishing Group. ----------------------
4. Nair, Suja R. 2013. Consumer Behaviour: Text and Cases. Mumbai: ----------------------
Himalaya Publishing House.
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
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----------------------
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----------------------
----------------------
----------------------

Notes
----------------------
----------------------
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Attitude
UNIT
8
Structure:
8.1 Introduction
8.2 Beliefs, Attitudes and Values
8.3 Components of Attitude
8.4 Characteristics of Attitude
8.5 Sources of Attitude
8.6 Functions of Attitude
8.7 Relationship between Attitude, Behaviour and Beliefs
8.8 Theories of Attitude
8.9 Attitude and Marketing Strategy
8.10 Attitude Measurement Techniques
8.11 Attitude Change
8.12 Functional Theory and Attitude Change
8.13 Communication Process
8.14 Snapshots
Summary
Key words
Suggested Reading
Attitude 125
Notes
Objectives
----------------------
----------------------
• Analyse the benefits that a marketer reaps after researching the
---------------------- attitudes people hold
---------------------- • Identify the relationship among attitudes, behaviour and beliefs
• Create marketing strategies that are based on a study of consumer
----------------------
attitudes
---------------------- • Describe attitude theories
----------------------
8.1 INTRODUCTION
----------------------
A learned orientation or disposition, toward an object or situation, which
•
---------------------- provides a tendency to respond favourably or unfavourably to the object
or situation.
----------------------
• Attitudes are likes and dislikes.
----------------------
It is how positive or negative, favourable or unfavourable a person feels
•
---------------------- towards an object.
---------------------- Attitude is a combination of beliefs of consumers about the product

attributes and the evaluation of these attributes as being beneficial or not. For
---------------------- example, the attributes of Natural’s Ice cream are freshness, natural fragrance,
hygienic, tasty and refreshing. Evaluating these attributes as being favourable
---------------------- or unfavourable creates an attitude towards Natural’s.
----------------------
8.2 BELIEFS, ATTITUDES AND VALUES
----------------------
Attitudes are a resultant of the combination of beliefs and values. They are
---------------------- generalized predispositions to react in some way towards objects or concepts.
---------------------- Beliefs on the other hand are defined as the enduring organization of perceptions
and cognitions about some aspects of individual’s world. For example, smoking
---------------------- is injurious to health is a belief which is based on scientific results. Values
involve an individual’s judgment on what is right, good and desirable. For
---------------------- example, by smoking one may feel that he is polluting the environment and
---------------------- will be harmful to others is a value.

---------------------- 1. Values involve an ____________ on what is right, good and desirable.
----------------------
----------------------

8.3 COMPONENTS OF ATTITUDE Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.1 : Components of Attitude
----------------------
Brand beliefs are the characteristics or features of the brand. Brand
evaluation relates to the feeling component, which is one-dimensional. Such ----------------------
evaluation creates either a positive or a negative feeling about the product,
----------------------
which creates an intention to buy. The final act is the behaviour or the action of
physically obtaining the brand i.e. purchasing the brand. Table 8.1 indicates the ----------------------
brand beliefs (product attributes) and brand evaluation (product benefits). The
table refers to a leading car in India. ----------------------
Table 8.1 ----------------------
Product Attributes (Beliefs) Product Benefits (Evaluation) ----------------------
V2 Engine Compact, Low maintenance, Long life
----------------------
Advanced Fuel Pump Fuel efficiency, better fuel burning
1300 CC High power, high pickup, High capacity ----------------------
----------------------
----------------------
----------------------
1. The final act is the behaviour or the action of physically obtaining the
brand, i.e., purchasing the brand. ----------------------
----------------------
Activity 1
----------------------
Do you form your own attitude about a product after its use or get influenced ----------------------
by peers or friends?
----------------------
----------------------
----------------------
Attitude 127
Notes 8.4 CHARACTERISTICS OF ATTITUDE
---------------------- Attitudes have an object: Attitudes have a focal point either abstract like
•
ethical behaviour or a tangible item like a motorcycle. The object can be
---------------------- a physical thing like a product or an action like buying a product.
---------------------- Attitudes have direction, degree and intensity: Direction means the person
•
is either favourable or unfavourable towards an object. Degree means
---------------------- how much does the person like or dislikes the object. Intensity is the level
---------------------- of confidence of expression about the object.
Attitudes have a structure: Attitudes are organized. They have an internal
•
---------------------- consistency and have a high degree of centrality. Attitudes are not isolated
---------------------- but are interconnected.
Attitudes are learned: We acquire the attitudes in much the same way
•
----------------------
we acquire culture, through classical and instrumental conditioning and
---------------------- social interaction.
Attitudes are dynamic: Attitudes do not remain stagnant and change with
•
----------------------
the situation based on experience and information.
----------------------
----------------------
Fill in the blanks.
----------------------
1. Attitudes are____________and dynamic.
----------------------
---------------------- 8.5 SOURCES OF ATTITUDE

----------------------
1. Personal Experience :
---------------------- We come in contact with many objects in our daily life. We evaluate the
new and re-evaluate the old. This evaluation helps in developing attitudes
----------------------
towards objects. We evaluate these on the basis of:
---------------------- a) Needs: Needs differ and vary over a period of time and hence people
---------------------- develop different attitudes towards the same object at different
points in their life.
---------------------- b) Selective perception: People operate on their personal interpretation
---------------------- of the reality. Hence, the way people interpret the information about
products, stores and so on affect their attitude.
---------------------- c) Personality: Perceived personality of an individual affects his
---------------------- attitudes towards products and services.
2. group Associations :
----------------------
The groups that we value and with whom we associate influence our
---------------------- attitudes. These groups could be family, peer groups, cultural groups etc.
----------------------

3. Influential Personalities : Notes
People who have a strong standing in a society are respected and their
----------------------
opinions matter on a variety of issues. Opinion leaders are respected by
their followers and may strongly influence the attitudes and purchase ----------------------
behaviour of their followers. For example, in rural India, the village
----------------------
‘Mukhia’ has a considerable clout in their villages. Asian Paints had used
such ‘Mukhias’ to considerably influence the consumers of paints during ----------------------
the launch of their new brand called ‘Utsav’.
----------------------
1. The groups that we value and with whom we associate influence our ----------------------
attitudes.
----------------------
8.6 FUNCTIONS OF ATTITUDE ----------------------
1. Utilitarian Function : ----------------------
It guides consumers in achieving desired benefits. For example, a ----------------------
consumer who considers safety and immediate relief the most important
criteria in selecting a pain reliever will be directed to the brands that fulfill ----------------------
these benefits. Conversely, in their utilitarian role, attitudes will direct
consumers away from brands unlikely to meet their needs. ----------------------
2. Value-Expressive Function : ----------------------

Attitudes can express consumers’ self-images and value systems, ----------------------
particularly for a high-involvement product. The self-image of an
individual purchasing a sports bike may be of a hard-driving, domineering ----------------------
person who likes to gain an upper hand. Aggressiveness may manifest
----------------------
itself in purchasing a bike that fits this image. Advertisers often appeal to
the value-expressive nature of attitudes by implying that the purchase and ----------------------
use of a certain product will lead to self-enhancement, achievement, or
independence. ----------------------
3. Ego-defensive Function : ----------------------
Attitudes protect the ego from anxieties and threats. Consumers purchase ----------------------
many products, such as deodorants to avoid anxiety-producing situations.
Advertisers capitalize on the fear of social ostracism by demonstrating ----------------------
greater social acceptance through use of certain products. The recent ads
of Close Up ‘Lemon Mint’ Gel, ‘Pass Pass’ are examples. As a result, ----------------------
consumers develop positive attitudes towards brands associated with ----------------------
social acceptance and confidence.
4. knowledge Function : ----------------------
Attitudes help consumers organize the mass of information they are ----------------------
Attitude 129
Notes exposed to daily. Consumers sort all of the messages, ignoring less
relevant information. The knowledge function also reduces uncertainty
---------------------- and confusion. Advertising that provides information about new brands
or new characteristics of existing brands is valuable for the information it
---------------------- provides. Many advertisements such as those of pharmaceutical products
---------------------- give a lot of information on health care and the way these products help
to avoid health hazards ads of Sony, Canon in the past are examples.
----------------------
To conclude, attitudes have different functions. The function that is served
---------------------- will determine the attitude of an individual towards a brand.

----------------------
Fill in the blanks.
---------------------- 1. ____________ protect the ego from anxieties and threats.
----------------------
---------------------- 8.7 RELATIONSHIPS BETWEEN ATTITUDE,
BEHAVIOUR AND BELIEFS
----------------------
1. Lack of involvement: If the involvement of an individual in a particular
----------------------
issue is low, then the relationship between attitudes and behaviour is
---------------------- also low. For example, the involvement in the purchase of an electric
bulb for an individual may be low. For him buying a bulb is not of a
---------------------- great importance. In such a situation, he will not be enthusiastic to get
more information on bulbs and hence will not have any beliefs about any
----------------------
specific nature. Hence, a particular brand does not really matter him and
---------------------- will accept a Philips, or HMT, or Surya.
2. Lack of purchase feasibility: An individual may be highly enthusiastic
----------------------
about cars. He may collect as much information on cars as possible. He
---------------------- may get totally attracted to the new ad of Toyota ‘Corolla’. After seeing
the ad and getting more information about ‘Corolla’, he may form strong
---------------------- positive beliefs about the brand. But such a belief may not lead to a buy
basically because the person may not have the buying capacity. Thus a
----------------------
positive attitude may not necessarily lead to the act of purchase.
---------------------- 3. Lack of direct product experience: For high involvement products, the
---------------------- risk perceptions can be also very high. For such products, direct hands
on experience of use matters the most. For example, we all are aware of
---------------------- the rising petrol prices and we are also aware of the advantages of using
alternate fuels or energy sources for vehicles. But we may not go in for
---------------------- a battery operated car like ‘Rewa’ unless we are sufficiently conversant
---------------------- with the product. If such is the case, then, knowing well the advantages of
‘Rewa’, which create a positive attitude, may not lead to a behaviour of
---------------------- purchase.
----------------------

4. Lack of relation between values and beliefs: An individual may well Notes
be aware of the risks of smoking. The values an individual has towards
smoking can be negative yet if he believes that he does not want to live ----------------------
longer than there will be no association between values and beliefs.
Hence such an individual may continue smoking knowing well that it is ----------------------
injurious to health. ----------------------
5. Changing market conditions: One might have a very positive attitude
----------------------
towards a brand. He may have continued buying it for a long time. But
if the prices are suddenly increased beyond his acceptable level or if the ----------------------
brand vanishes from the market then he will have no option but to go
in for a different brand. Hence the attitude will have no link with the ----------------------
behaviour.
----------------------
6. Poor attitude accessibility: Consumers retain brand beliefs in memory
as schema representing their associations with the brand. For these beliefs ----------------------
to affect brand evaluations, they must be accessible from memory. Lack
----------------------
of a relationship between attitudes and behaviour may be due to the fact
that some attitudes are so weakly held that they are not accessible. If ----------------------
consumers have strongly held attitudes, they spontaneously retrieve
them when they encounter the object. For example, if a consumer has a ----------------------
strong positive attitude towards Amul, the consumer could spontaneously
----------------------
retrieve the Amul schema by the mere mention of butter or by the sight of
a picture of ‘childhood Lord Krishna’ ----------------------
----------------------
1. Lack of a relationship between attitudes and behaviour may be due ----------------------
to the fact that some attitudes are so weakly held that they are not ----------------------
accessible.
----------------------
8.8 THEORIES OF ATTITUDE ----------------------
1. Heider’s Balance Theory : ----------------------

It maintains that people seek to achieve balance between their thoughts ----------------------
(Beliefs) and feelings (evaluations). It is mainly concerned with the
transfer of information between people. There are three elements in ----------------------
attitude formation: the person, other person, and the ‘object’. There are
----------------------
two generic types of relationships that exist between the elements. They
are (1) linking or sentiment relations and (2) unit relations. ----------------------
Both the relations can be positive or negative. In a three-element system,
----------------------
balance will exist if all three relations are positive or if two are negative
and one is positive. Conversely, imbalance exists if all three are negative ----------------------
or if two relations are positive and one is negative. People have a tendency
to perceive others and objects linked to them such that the system is ----------------------
Attitude 131
Notes balanced. This theory is useful to marketers to find ways to communicate
better.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 8.2

---------------------- Let’s analyze this further with an illustration. A salesman of a microwave oven
has approached you for selling it to you. The process will have three stages
---------------------- which are as under:
---------------------- Stage 1: In the first stage, the salesman shows you the leaflets and understands
your needs. He then matches the benefits of the product with your needs which
---------------------- leads to a positive attitude built by the trust you place on him. This can be
---------------------- illustrated by Fig 8.3
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 8.3

Stage 2: After the sales talk, you may either form a positive or negative opinion
---------------------- about the salesman. If you are favourable towards the salesman, to achieve
---------------------- stability you will also form a positive opinion about the oven. If you are
unfavourable towards the salesman, you will also be unfavourable towards the
---------------------- oven.

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.4 ----------------------

2. Congruity Theory : ----------------------
This theory was developed by C.E.Osgood and P.H.Tannenbaum. This ----------------------
theory is building on the notion of positive and negative attitudes and
adds the concept of attitude strength. Congruity exists when a source ----------------------
and concept are positively associated have exactly the same evaluations.
Congruity is a stable state and is also said to exist when a source and ----------------------
a concept are negatively associated have exactly opposite evaluations ----------------------
attached to them. When congruity exists, it leads to an attitude change.
Congruity theory helps to rate attitude on a quantitative scale from -3 ----------------------
(highly unfavourable) to +3 (Highly favourable) with a middle zero point. ----------------------
In order to obtain congruity, one should take into account the direction as
well as the strength. ----------------------
Let us illustrate this theory with our earlier example of a salesman of ----------------------
microwave oven. Suppose that we are convinced that the microwave is
good and will meet our needs well, a rate of +3 may be given. However, ----------------------
if we develop a slight unfavourable for the salesman, a rating of –1 will
----------------------
be given. According to the congruity theory, the final attitude towards the
oven is the difference between the two ratings, which, in this case will be ----------------------
+1, the mid point between –1 and +3.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.5 ----------------------
----------------------
Attitude 133
Notes
----------------------
Fill in the blanks.
----------------------
1.
Congruity Theory was developed by_______________and P.H.
---------------------- Tannenbaum.
----------------------
8.9 ATTITUDE AND MARKETING STRATEGY
----------------------
Role of Attitudes in developing Marketing Strategy :
----------------------
Marketers define and measure attitudes towards their brands because
---------------------- attitudes can help them identify benefit segments, develop new products, and
---------------------- formulate promotional strategies.
1. Define benefit segments :
----------------------
Market segments can be defined by the benefits consumers’ desire. These
---------------------- benefits identify the key attributes marketers should use to influence
consumers. The benefits consumers’ desire is measured by attribute
---------------------- evaluations. For example, taste, nutrition or economy can be the three
---------------------- benefit segments for food products while economy, performance and
luxury can be the benefit segments in case of a car. Marketers attempt
---------------------- to influence consumer attitudes in the performance segment by citing
key features like acceleration, horsepower, and fuel efficiency. Price and
---------------------- operating costs are the primary criteria to emphasize for the economy
---------------------- segment.
2. Develop new products :
----------------------
Attitudes are crucial in evaluating alternative positioning for new products.
---------------------- For example, Hindustan Lever Ltd. identified six benefit segments in the
shampoo market desired by consumers. They were natural products with
----------------------
no side effects, conditioning, competitive prices, dandruff prevention and
---------------------- smooth hair, and made by a reliable marketer. This led HLL to bring out
the ‘Ayush’ shampoo that offers all these benefits. Thus, HLL was in a
---------------------- position to launch a product that had total product differentiation from
the existing product range. The present range of products offered dandruff
----------------------
protection but were not natural and those which were natural were not
---------------------- made by reliable manufacturers. This helped HLL to have a product in the
shampoo market that will not be regarded as a ‘me too’ product.
----------------------
3. Develop and evaluate promotional strategies :
---------------------- Attitudes are important in developing promotional strategies. They tell
---------------------- us the benefits that need to be highlighted. For example, if the shampoo
consumers feel that using a natural product is more important then it
---------------------- is pertinent on the part of the manufacturers to highlight this benefit.
Advertising role is to communicate the desired benefits the brand can
---------------------- deliver.

Attitudes are also important in evaluating the effectiveness of advertising Notes
messages. Media ads are frequently evaluated and judged on the basis
of the attitudinal changes brought about by them. Brand attitudes are ----------------------
measured before and after the exposure to a commercial in a controlled
environment. ----------------------
----------------------
Activity 2
----------------------
As a marketer, what strategy will you adopt to influence the attitude of ----------------------
consumers to buy a luxury car which has just been introduced in the market
and is priced slightly higher as compared to its competitors? ----------------------
----------------------
8.10 ATTITUDE MEASUREMENT TECHNIQUES ----------------------
1. Thurstone scale : ----------------------
This scale also known as Thurstone and Clave scale is one of the best
techniques of measuring attitude with the help of equal appearing ----------------------
intervals. It is a technique in which a large number of statements are ----------------------
collected regarding a subject. This can be done through past experience,
brain storming, expert opinions etc. The statements should range from ----------------------
one extreme of favourable response to the other extreme of highly
unfavourable response. There is no definite number of statements to be ----------------------
collected but they should be sufficiently large. Care should be taken that ----------------------
the statements are brief, they truly indicate the attitude of the respondent
leading to acceptance or rejection of the statement, and they should not be ----------------------
double meaning statements.
----------------------
Thurstone and Clave had collected 130 statements regarding the attitude
of the respondents towards church. Respondents were asked to sort these ----------------------
statements into 11 piles evenly divided into those having extremely
----------------------
favourable to extremely unfavourable attitude.
All techniques used today for attitude measurement are based on the ----------------------
Thurstone attitudinal scales.
----------------------
2. Summated rating scale :
----------------------
The methodology used in the development of this scale for the purpose of
attitude measurement is as under: ----------------------
• Researcher collects a large number of statements and eliminates ----------------------
those which are ambiguous, irrelevant or deficient.
----------------------
The remaining statements are administered to one or more
•
respondents for their reaction using a five point rating system i.e. ----------------------
strongly approve, approve undecided, disapprove, and strongly
disapprove. ----------------------
• These categories are assigned value 5,4,3,2 and 1 respectively. ----------------------
Attitude 135
Notes • In case of negatively worded statements, this scoring is reversed.
The correlation between the statement scores and the total score is
•
----------------------
ascertained.
---------------------- • Statements with a high correlation with total score are selected for
final scale.
----------------------
3. Scalogram Analysis :
----------------------
Guttman proposed this attitudinal scale. This method of scaling is based
---------------------- on the assumption that, an individual with a more favourable attitude
score than another must be just as favourable or more favourable in his
---------------------- response to every statement in the set than the other individual i.e. if
---------------------- a respondent replies positively to a difficult question then he will also
respond positively to all questions which are simpler than the earlier
---------------------- question.
---------------------- 4. Semantic differential :

This technique involves three dominant factors viz. evaluation, potency
---------------------- and activity factor. It is a bi-polar scale conforming to the basic concept
---------------------- of motivation, attraction or repulsion from an object. Here respondents
are asked to give their opinion on a seven-point scale. For example, one
---------------------- might be interested in the relative performance of two or more banks on
issues like courteous behaviour, atmosphere, technological up gradation,
---------------------- ambience etc. The respondents will rate the banks on these parameters
---------------------- on a rating scale having ratings such as +3, +2, +1, 0, -1, -2, and 3. The
average of these for each parameters can help us find the attitude of
---------------------- respondents towards these banks.
----------------------
----------------------
Fill in the blanks.
----------------------
_______________technique involves three dominant factors, viz.,
1.
---------------------- evaluation, potency and activity factor.
----------------------
8.11 ATTITUDE CHANGE
----------------------
Conditions for attitude reinforcement and change :
----------------------
1. Beliefs are easier to change than desired benefits :
----------------------
Desired benefits are more enduring, ingrained, and internalized than
---------------------- beliefs as they are more closely linked to consumer values. For example,
a manufacturer of pain relievers produces a brand that consumers
---------------------- regard as significantly stronger and as providing more immediate relief.
However many consumers put more value on the benefits of a mild, safe
----------------------
brand that doctors recommend. The manufacturer could try to convince
---------------------- consumers that pain relievers are nonprescription items that do not need

a prescription, that safety should be no concern, and that a strong brand Notes
is perfectly available. Alternatively, the manufacturer could tone down
the emphasis on strength in advertising, continue to emphasize quick ----------------------
relief, and point out the safety of the product based on Indian Medical
Association (IMA). The latter strategy is going to be more effective than ----------------------
the former because the marketer is trying to change beliefs about the ----------------------
brand within the consumer’s existing value structure.
----------------------
2. Brand beliefs are easier to change than brand attitudes :
Cognitions are easier to change than affect. A change in beliefs precedes ----------------------
a change in brand attitudes. When consumers are involved, changing
----------------------
their beliefs is easier than changing brand attitudes. For example, the
information that a car has a faster acceleration will change the beliefs ----------------------
about a brand, but the evaluation of the car will not change unless
consumers see a benefit in fast acceleration. Most advertising follows the ----------------------
principle that beliefs are easier to change because advertising generally
----------------------
communicates the attributes of the brand.
3. For hedonic products, attitudes are a more relevant vehicle for change ----------------------
than beliefs :
----------------------
When consumers buy a product based on emotion or fantasy, they are
relying on affect rather than cognitions; hence, attitudes are the more ----------------------
relevant strategic vehicle for change. For example, the ad of ‘Esselworld’ ----------------------
of “Esselworld me rahoonga main ghar nahi jaonga main” is attempting
to change the attitude rather than the belief. Volvo, an automotive giant, ----------------------
attempted to change its image from a somewhat dour, dependable car to
one associated with pleasure and fantasy. Here Volvo tried to appeal to the ----------------------
attitudes rather than beliefs. ----------------------
4. Attitudes are easier to change when there is a low level of involvement:
----------------------
Consumer attitudes are easier to change if there is little self-identification
with the product, little emotional attachment to it and no badge value ----------------------
associated with it. For example, a consumer will have little emotions for
----------------------
products like a notebook, safety pins, stapler pins etc. For such products
having low involvement, attitude change is much easier. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Attitude 137
Notes 5. Changing Attitude towards a product by Changing Beliefs.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Changing Attitude towards a product by Changing Beliefs. Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Attitude 139
Notes For Hedonic Products Changing Attitude rather than Changing Belief.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Changing Attitude by Changing a Utilitarian Product into a Hedonic Notes
Product.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Attitude 141
Notes Changing Brand Beliefs by showing Benefits.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
6. Weak attitudes are easier to change than strong ones :
----------------------
If consumers brand attitudes are not strong, marketers can more easily
---------------------- establish new associations with the brand. For example, Vicco turmeric
cream was viewed by consumers as a cosmetic product and the marketers
---------------------- knew that the attitudes of non-users had to change if sales had to increase.
----------------------

Hence the company began to advertise the cream as an antiseptic cream Notes
also suitable for small burns and wounds to attract the users of ‘Burnol’.
----------------------
7. Attitudes held by consumers who have less confidence in their brand
evaluations are easier to change : ----------------------
Consumers who are unsure of their evaluation of the brand will be more
----------------------
receptive to attitude change. Confusion about the criteria to use in evaluating
a brand can cause consumers to lack confidence. For example, the wide ----------------------
confusion amongst the consumers as regards to branded computers and
unbranded assembled computers is so high that their attitudes are much ----------------------
easier to change in any direction.
----------------------
8. Attitudes are easier to change when they are based on ambiguous
information: ----------------------
When information is highly ambiguous, any clarifying information can ----------------------
cause a change in attitude. For example, the branded petrol ‘Speed’ of
HPCL received a lukewarm response from consumers but as the consumers ----------------------
were informed by HPCL about its advantages like higher fuel efficiency, ----------------------
better performance of the engine etc. the response started increasing
leading to a considerable increase in the sales volumes of ‘Speed’ ----------------------
----------------------
Fill in the blanks.
----------------------
1. Consumer attitudes are easier to change if there is little with the
product, little emotional attachment to it and no badge value associated ----------------------
with it.
----------------------
8.12 FUNCTIONAL THEORY AND ATTITUDE CHANGE ----------------------
1. Changing Attitudes through Utilitarian Function : ----------------------

A positive change can be obtained by showing how the product can solve ----------------------
a utilitarian goal not previously considered. For instance a manufacturer
of baking soda advertised the product to contain the following utilitarian ----------------------
functions of baking soda:
----------------------
• Soothes minor skin irritations.
----------------------
• Absorbs carpet odours.
• Is a pure, natural, natural skin conditioner. ----------------------
• Is an antacid. ----------------------
• Is a bleach booster. ----------------------
This array of uses for a traditional cooking and baking product may induce
----------------------
a favourable change in the consumers mind.
----------------------
Attitude 143
Notes 2. Changing Attitudes through Value-Expressive Function :
A clear principle is that an ad should accept deep-seated values rather
----------------------
than attempt to change them.
---------------------- 3. Changing Attitudes through Ego-defensive Function :
---------------------- More ego-defensive the attitude, the less subject it is to outside influences.
Avoiding painful, negative information and showing what steps can be
---------------------- taken to reduce the pain works better. For example in a campaign against
drugs, instead of taking a negative approach by showing the dangers of
----------------------
drug use, advertising should instead show what steps the user can take to
---------------------- decrease usage of drugs. Such an approach would account for the user’s
ego-defensive function.
----------------------
4. Changing Attitudes through knowledge Function :
---------------------- Provide a clear and unambiguous positioning of the product to ensure
---------------------- favorable attitudes.
An example of this is a company manufacturing instant breakfast.
---------------------- The company clearly positioned the product as a breakfast directed to
---------------------- nutritionally oriented consumers having no time to prepare a breakfast. It
clearly outlined the nutritional value and calorie content of the product.
----------------------
5. Attitude Change after a Purchase :
---------------------- Changing and reinforcing the attitudes needs to be done both before and
after purchase. This is because, when a consumer buys a product, he goes
----------------------
through a post purchase dissonance (confusion in the mind) as to whether
---------------------- he has made a right decision or not. Hence it is important to reinforce the
attitude post-purchase. This is highlighted in the following theory:
----------------------
Dissonance theory :
---------------------- • Provideadditional product info and suggestions for product care
---------------------- and maintenance.
• Provide warranties and guarantees.
----------------------
• Ensure good service and immediate follow-up.
----------------------
Advertise reliable product quality and performance to reassure
•
---------------------- product purchase satisfaction.
Follow up after purchase with direct contacts to make sure the
•
----------------------
customer understands product usage.
---------------------- 6. Attitude Change Strategies for Low-Involvement Products
---------------------- It is important to note that under low-involvement conditions, consumers
are not likely to make brand choices on the basis of attitudes established
---------------------- through developing clearly formulated beliefs about the product or
---------------------- service.
In essence, there interest is too low to spend time thinking about products
---------------------- and evaluating them in a rational and deliberative fashion. Given this, it

is generally unproductive for marketers to develop communications to Notes
develop or modify thought-intensive pre-purchase beliefs about their
brands among consumers. Consumer’s attitudes seem capable of being ----------------------
changed by a variety of cues that are among the incidental stimuli in the
ad itself or are part of the situation in which the advertisement is being ----------------------
perceived by the consumer. This seems especially so in low-involvement ----------------------
situations. Consequently, one potential low-involvement strategy will be to
change consumers’ attitudes by using so-called peripheral cues to encourage ----------------------
favourable reactions toward ads used to promote the brands. Such cues
might involve use of pictures, colour, attractive spokespeople or characters, ----------------------
creative placement of ad components, and music in broadcast ads. What ----------------------
is important to appreciate hers is that ensuing favourable reactions these
mechanisms can generate among consumers toward the ad itself would ----------------------
then be expected to become associated with the product being advertised.
The options that remain stress capitalizing on a means to transform the ----------------------
situation into one characterized by high involvement. Success here would ----------------------
allow use of high-involvement attitude- change methods to influence brand
choices. This increase in pre-purchase involvement is accomplished by ----------------------
various options that have been researched are as under:
----------------------
a) Link the product or service to an involving issue: Because issues
are often more involving than are products, this linkage could ----------------------
increase involvement regarding the product. Linking a breakfast
----------------------
cereal to problems of deficient performance among school children
who have not had a wholesome breakfast will be one example. The ----------------------
ad for Promise represents another example.
----------------------
b) Link the product to a presently involving personal situation: On some
occasions a message can be targeted to audiences at the time they ----------------------
are engaged in an activity related to the product. At this time, their
interest could be sufficiently high to qualify as high involvement. ----------------------
An example can be radio ads for a suntan lotion during midday
----------------------
hours of summer weekends.
c) Develop high-involvement ads: Because consumers’ involvement is ----------------------
low, it does not necessarily mean that they cannot become involved
----------------------
in ads for the products. The use of humour, dramatic events, or other
methods can create an involving ad to which the product could ----------------------
then be linked. Examples might include the active scenes in many
sportswears commercial and other TV ads showing the humourous ----------------------
woes of people who failed to use the advertised brand.
----------------------
d) Change the importance of product benefits: This option is quite
difficult to pursue, because it attempts a frontal attack on consumers’ ----------------------
perceptions of product benefits. To illustrate, if consumers could be ----------------------
convinced that the fiber content in dried cereal is very important to
their health, they might become more involved in their choice of ----------------------
cereal. The brands that possess this attribute are then likely to be the
recipient of favourable consumer attitudes. ----------------------
Attitude 145
Notes e)
Reveal or introduce important product characteristics: New
attributes can be associated with a product, and consumers can also
---------------------- be made aware that some favourable attributes have been product
characteristics for a long time. These have a potential for increasing
---------------------- involvement levels. The absence of caffeine and sugar or the
---------------------- addition of calcium in a number of soft drinks certainly appears to
capture the interest of many consumers because of their implications
---------------------- regarding the health and appearance of the body. Fortification of
milk and other foods with vitamins represents another example.
----------------------
In all of these cases, the attempt has been to increase involvement levels
---------------------- among consumers to the point where they will form attitudes prior to
purchase and use these attitudes to influence their purchase decisions.
----------------------
7. High-Involvement Strategies
----------------------
Potentially, a variety of strategies are available for changing consumer
---------------------- attitudes under high-involvement conditions. Before implementing such
strategies, however, the marketer must be clear on whether the attempt is
---------------------- to change consumer attitudes about the brand, or whether it is to change
attitudes about behaving toward the brand. Consumer attitudes about
----------------------
behaving toward a brand are more closely related to their intentions to
---------------------- purchase. Therefore, we will focus on attitudes toward behaviour in the
following discussions.
----------------------
As shown in Fig 8.6 based on Fishbein’s behavioural intentions model
---------------------- suggests a variety of potential strategies for influencing change in
consumers’ attitudes toward behaviour. Employing the same reasoning
---------------------- as Fishbein used to develop model, we can argue that behavioural change
---------------------- is a function of changes in behavioural intentions and other intervening
factors. Changes in behavioural intentions are related to changes in
---------------------- attitudes toward the behaviour and changes in subjective norms about the
behaviour. All of these, in turn, are functions of their components. These
---------------------- relationships suggest the following potential strategies (Fig. 8.6):
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.6 ----------------------
a) Change existing beliefs about the consequences of behaviour: ----------------------
Consumers often hold incomplete or incorrect beliefs about
consequences of purchasing and using particular brands. ----------------------
Modification of those beliefs that will positively influence attitudes
can increase intentions to purchase. One way to accomplish this is ----------------------
for advertisements to focus on brand benefits. Here, the message ----------------------
would be that purchase of the brand will yield beneficial results for
the consumer. For example, consider the message “Users of Top ----------------------
Flight golf balls get up to 14 more yards per drive than users of
other brands.” Of course, a second option is for ads to suggest that ----------------------
few negative consequences will result from purchasing the brand. ----------------------
Stress on a low price is one such method.
b) Change Consumers’ evaluation of the consequences of a particular ----------------------
action: In many cases, consumers may believe that using a brand ----------------------
will lead to certain consequences, but these consequences are not
evaluated very positively. Measures taken to increase evaluations of ----------------------
the consequences can have positive results. For example, an ad for
Listerine mouth wash has stressed that its strong taste is associated ----------------------
with effectiveness with killing germs and giving breath-”It tastes ----------------------
strong because it is strong.” Potential results are more positive
evaluations of the strong taste and enhancement of attitudes toward ----------------------
the brand.
----------------------
c)
Introduce new belief/evaluation combinations: In some cases,
marketers can add or delete product attributes and generate positive ----------------------
consequences for the consumer. In other cases, the presence or
----------------------
absence of existing product attributes can be stressed in terms of
Attitude 147
Notes their favourable consequences for the consumer. The former case is
exemplified by the addition of Fluoristat to Crest toothpaste. This
---------------------- ingredient was advertised as being more effective in preventing tooth
decay that its previous fluoride compound known as Fluoristan.
---------------------- An example of the latter strategy was used by Canada Dry when
---------------------- it announced that its ginger ale does not have caffeine and it never
did. This was important information to consumers who wanted to
---------------------- minimize their caffeine intake.
---------------------- d) Change existing normative beliefs: In some situations, consumers
may hold favourable attitudes towards certain behaviours but be
---------------------- reluctant to take action because of an unfavourable reaction on the
subjective norm component. Such a situation could occur when
----------------------
the consumer holds a belief that others who are important to her
---------------------- will not react favourably to the actions in question. This can be
an important consideration with regard to the purchase of certain
---------------------- clothing items and other socially visible products. Although it may
be difficult, the possibility exists that changes in such beliefs can
----------------------
be achieved. For example, promotions may simulate group settings
---------------------- in which people with whom the consumer might identify express
favourable reactions to purchasing the advertised brand. Given
---------------------- sufficient realism, such ads may weaken the consumer’s beliefs that
people important to her will have negative reactions to purchase of
----------------------
the brand.
---------------------- e) Change motivations to comply with subjective norms: A second
strategy to modify the subjective norm component of behavioural
----------------------
intentions is to alter consumers’ motivations to comply with the
---------------------- influences of people important to them. One way this can be
accomplished is to diminish or increase the perceived importance or
---------------------- status of these influential others for at least the decision in question.
For example, ad for a brand might stress the importance of being
----------------------
an individual and not always heeding the opinions of friends or
---------------------- important others.
f) Introduce new normative components: Subjective norms can also
----------------------
be influenced by the addition of new normative components which
---------------------- will be strong in their influence on the consumer. This can be done
through introducing additional individuals the consumer deems
---------------------- important, or additional norms that the consumer might think
important. Promotions showing how family, friends, and so on
----------------------
react to certain purchase decisions and why these reactions might
---------------------- be important to the consumer are possibilities, as is introducing new
standards of behaviour that others may expect.
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. Changing attitudes through knowledge function provides a clear
and unambiguous positioning of the product to ensure favourable ----------------------
attitudes.
----------------------
----------------------
Activity 3
----------------------
For a high-involvement product, interview five people and find out what are
their beliefs, attitudes and intention to buy. ----------------------
----------------------
8.13 COMMUNICATION PROCESS ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.7 ----------------------

Source Factors ----------------------
In a marketing context, several sources can be employed in an attempt to reach
----------------------
consumers with persuasive communications. These can be used alone or in
combination to produce a combined source effect on consumers. Six prominent ----------------------
sources are elaborated below:
----------------------
1. Consumers perceive companies as source of information, and some
are seen as highly credible but others are viewed with suspicion. Most ----------------------
consumers feel that Tata group companies are trustworthy companies.
----------------------
2. Because of their daily face-to-face contact, sales representatives are
viewed by consumers as information source. Also, salespeople who are ----------------------
viewed as knowledgeable and trustworthy often are more persuasive.
Eureka Forbes salespeople are often trusted more than any companies and ----------------------
the biggest success of this company has been because of their salespeople. ----------------------
3. Consumers use media extensively for product information. Although
media are actually channel links between companies and consumers, ----------------------
Attitude 149
Notes people view them as sources and hence it is important to note their role
in persuading consumers. For example, auto shows on CNBC channel or
---------------------- NDTV Profit are often viewed by consumers as “reliable” information
providers.
----------------------
4. Companies typically employ individuals as representatives in advertising.
---------------------- In fact, on-camera spokespeople appear in a significant portion of TV
ads. Effective hired promoters like Amir Khan for Coca Cola, Amitabh
----------------------
Bachchan have established reputations for themselves, often in occupations
---------------------- unrelated to the advertised product.
5.
At the local level, retailers often act as sources for marketing
----------------------
communications. A department store that has a good reputation may more
---------------------- easily sell unknown brands than less-reputable stores.
6. The combined source effects that interact to produce a persuasive impact
----------------------
on consumers. Hence, marketers must carefully select hired promoters,
---------------------- media, and retailers to deliver persuasive brand messages.
---------------------- Communication Source credibility :

The objective of achieving a change in or reinforcing the attitude can be met
---------------------- only by means of effective communication. Further the communication needs
---------------------- to be specific and clear. In addition to this, the source of communication plays
a vital role in achieving this objective. The source credibility can be evaluated
---------------------- on the following:
---------------------- 1. Expertise :
Acommunication made by an expert lends credibility to the communication.
----------------------
Usually the communication is made through the advertisements. For
---------------------- example, racer Kartikeyan talking about MRF tyres lends credence to the
performance of the tyres. Similarly, Beautician Shahnaz Hussein talking
---------------------- about cosmetics, sportspersons like Kapil Dev, Sachin Tendulkar talking
about health drinks are examples.
----------------------
2. Trustworthiness :
----------------------
It relates to the reliability and credibility of the source. For example, the
---------------------- syndicated Customer Satisfaction Studies conducted by organizations
like J D Power are looked upon as trustworthy sources. Findings of such
---------------------- studies are communicated by manufacturers through advertisements like
---------------------- the one by MRF.
3. Neutral sources :
----------------------
These are the ones who critically evaluate the facts of the products and are
---------------------- not paid by manufacturers for giving their opinion. Automobile analyst
like Dilip Bam, who gives his evaluation in auto magazine ‘Auto India’,
---------------------- is an example of neutral source.
----------------------
----------------------

4. Attractiveness : Notes
It is observed that if the source is a celebrity or a social figure, people get
----------------------
attracted to the communication. For example, use of brand ambassadors
like Shahrukh Khan, Steve Waugh attracts consumers to the products ----------------------
promoted by them like Pepsi, MRF tyres etc.
----------------------
8.14 SNAPSHOTS ----------------------
The Indian Railways has had its ups and downs in popularity among ----------------------
people. Of late, rail travel is taking a back seat especially among the higher
and upper middle class. At one time, trains were the only practical way to ----------------------
traverse the vast areas of the country. Air travel was preferred only if it was
for a business trip i.e. was paid for by some one else, usually the employer. ----------------------
Trains were preferred for personal travel. They were decently fast, comfortable, ----------------------
timely, and convenient as compared to other means of transport.
----------------------
Today, road travel and air travel are gaining preference. Road due to its
ease in reaching any remote destination and air for its speed. Commercial goods ----------------------
transporting agencies were preferring road transport for their economy and
reach. The result was a loss for the railways. With introduction of “Economy ----------------------
class” air travel where ticket costs were competing with second class A.C fairs,
----------------------
things became extremely tough for the railways.
The Indian Railway authorities cut commercial goods transport costs to ----------------------
attract a huge volume. The safety of railways over air travel particularly in view
----------------------
of 9/11 was promoted in a subdued manner. Bogies for A.C second class and
first class were increased for each train. These measures have brought railways ----------------------
back into huge profits in two years. Attitude can be changed!!!
----------------------
Summary ----------------------
• Attitude is how positive or negative, favourable or unfavourable a person ----------------------
feels towards an object. Attitudes are a resultant of the combination of
beliefs and values. They are generalized predispositions to react in some ----------------------
way towards objects or concepts. Beliefs on the other hand are defined
----------------------
as the enduring organization of perceptions and cognitions about some
aspects of individual’s world. ----------------------
• Attitude has an object; it has a direction and intensity. Attitudes are learnt
----------------------
and are dynamic. Attitudes have a structure. Personal experience, self-
image and group associations, and influential personalities are sources of ----------------------
attitudes. The functions of attitude include utilitarian, value-expressive,
ego-defensive, and knowledge function. There is a consistency in beliefs, ----------------------
values and perceptions except under certain circumstances. Heider’s
----------------------
Balance theory and Congruity theory help us to understand the balance
of attitude. Various techniques of attitude measurement have also been ----------------------
discussed in the topic. Changing attitudes of consumers is an extremely
difficult yet very vital for marketers. Attitude reinforcement is necessary ----------------------
Attitude 151
Notes for creating brand loyalty. The methods of doing these and the conditions
in which they can be achieved have also been discussed here. On the
---------------------- basis of this, marketers have been suggested to use the source of attitude
change carefully.
----------------------
---------------------- Keywords
---------------------- • Attitude : Generalized predispositions to react in some way towards
objects or concepts.
----------------------
• Beliefs : Enduring organization of perceptions and cognitions about some
---------------------- aspects of individual’s world.
---------------------- • Values : It involves an individual’s judgment on what is right, good and
desirable.
----------------------
• Encoding : Process of putting meaning into symbols to be conveyed as
---------------------- message.
---------------------- • Decoding : Process by which the receiver converts symbols into message.
----------------------
----------------------
1. Explain various attitude measurement techniques in brief.
---------------------- 2. “Is it possible to change the attitude of consumers towards products and
---------------------- brands”? Do you agree to this statement? Justify your claim with a few
examples.
----------------------
3. What are the characteristics and functions of Attitude? What are the
---------------------- factors that affect relationship between attitude, beliefs and behaviour?
4. Explain the various theories of Attitude with examples.
----------------------
---------------------- Answers to Check your Progress

1. Values involve an individual’s judgment on what is right, good and
----------------------
desirable.
---------------------- 1. True
----------------------
Fill in the blanks.
----------------------
1. Attitudes are learned and dynamic.
----------------------

----------------------
1. True
----------------------
1. Attitudes protect the ego from anxieties and threats. ----------------------
----------------------
1. True
----------------------
Fill in the blank ----------------------
1. Congruity Theorywas developed by C.E. Osgood and P.H. Tannenbaum. ----------------------

Fill in the blanks.
----------------------
1.
Semantic differential technique involves three dominant factors, viz.,
evaluation, potency and activity factor. ----------------------
1. Consumer attitudes are easier to change if there is little self-identification
with the product, little emotional attachment to it and no badge value ----------------------
associated with it. ----------------------
----------------------
----------------------
1. True
----------------------
Western College.
----------------------
Taylor & Francis. ----------------------
----------------------
Publishing Group.
----------------------
Attitude 153
Notes
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------

Social Class, Lifestyle and Culture
UNIT
9
Structure:
9.1 Introduction
9.2 Factors Responsible for Social Stratification
9.3 Features of Social Classes
9.4 Social Influence on Consumer Behaviour
9.5 Changing Lifestyles and Consumer Behaviour
9.6 Culture
9.7 Cultural Values
9.8 Culture and Products
9.9 Culture and Consumption
9.10 Cross Cultural Influences
9.11 Snapshots
Summary
Key words
Suggested Reading
Social Class, Lifestyle and Culture 155

Notes
Objectives
----------------------
----------------------
• Analyse and describe how culture, lifestyle and social class affect
---------------------- consumer buying decisions
---------------------- • Suggest how marketers should incorporate these elements into their
marketing strategies
----------------------
• Describe the influence of culture on consumption
----------------------
---------------------- 9.1 INTRODUCTION

---------------------- Social stratification is the division of members of a society into a hierarchy
of distinct status classes, so that members of each class have relatively the same
---------------------- status and members of all other classes have either more or less.
---------------------- A specific social class is usually defined by the amount of status that
members of a specific class possess in relation to members of other classes.
---------------------- Each class has its own lifestyle and consumer behaviour pattern. The society
for attaining its longevity and smooth functioning requires its members
----------------------
to perform certain differentiated roles. Social stratification has resulted in
---------------------- these differentiated roles being valued differently or given a different status.
Prestige or value attached to the holder of a position is referred to as status. An
---------------------- appropriate example to explain the above concept will be the role of ‘doctors’
and ‘nurses’. Both these roles are very important from the point of public health
----------------------
but it goes without saying that the former role is valued much more than the
---------------------- latter. Consequently, the service level expectations from the former are also
high. This differentiation of value of position is the basis for stratification.
----------------------
---------------------- 9.2 FACTORS RESPONSIBLE FOR SOCIAL

STRATIFICATION
----------------------
1. Authority :
----------------------
A person may have authority by virtue of holding an authoritative position
---------------------- in various organizations or on account of owning land and property. For
example, chairmen of cooperative societies in rural India, mukhias,
---------------------- politicians, and industrialists etc. are considered to wield considerable
---------------------- authority. In today’s context(s), people with ‘high contacts’ like press
journalists are considered to have high authority. Such persons are
---------------------- accorded a high status in the society.
---------------------- 2. Income :
The lifestyle, fashion, views and consumption pattern of a person with
----------------------
high income will convey a message of sophistication and sometimes of
---------------------- insignia. Such persons are looked upon highly by the society. For example,

a director of a company wields much more value than a manager in the Notes
company drawing a handsome salary. This well to do manager will not be
anywhere near to the former’s lifestyle. ----------------------
3. Occupation and Achievements : ----------------------
Mostly an individual is “born into” a class. That is, he automatically
----------------------
becomes a member of the class to which his parents belong. However
there are possibilities for social mobility, through sheer hard work and ----------------------
determination. Such people by virtue of their achievements and occupation
are referred to as persons of high status and prestige in the society. Some ----------------------
examples of such personalities include the current President of India
----------------------
Mr. A.P.J. Abdul Kalam, Mr. Narayan Murthy, ex-chairman of Infosys,
considered to be the idol of the middle class, late Mr. Dhirubhai Ambani, ----------------------
ex-chairman of Reliance.
----------------------
4. Education :
It is another important parameter for measuring the value and status of ----------------------
an individual in a society. A professionally qualified person is accorded
a higher status as compared to an ordinary graduate. Such individuals ----------------------
belonging to the elite professions like civil services, chartered accountants,
----------------------
lawyers, business executives, graduates and postgraduates form IITs and
IIMs are always considered as belonging to a higher social class. This ----------------------
gives them distinct advantages over their lesser-known counterparts. For
example, civil servants are considered ‘men from heaven’ in northern ----------------------
parts of India like in the states of Uttar Pradesh, Bihar etc.
----------------------
1. Mostly an individual is into a class. ----------------------
----------------------
Activity 1
----------------------
Mention two names of people who were born in to a ‘class’ and two people ----------------------
who have achieved high status by sheer hard work.
----------------------
----------------------
9.3 FEATURES OF SOCIAL CLASSES
----------------------
Be it a developed economy or a developing economy like India, the
society has certain characteristics, which will distinguish it from other societies. ----------------------
Analysis of the characteristics of the social class will help the marketer to gain
----------------------
a better understanding of its target market and thereby the consumption patterns
of these social classes. The characteristics are as under: ----------------------
----------------------

Notes 1. Persons within a given social class tend to behave alike :
Social classes are relatively permanent homogeneous divisions of the
----------------------
society with each social class showing similar life styles values, status,
---------------------- prestige, interests and behaviour pattern. For example, the choice of a
middle class man will be to buy an entry level car like a Maruti 800, Indica
---------------------- and so on, while, the choice of a higher middle class will be a Ford Fiesta,
Palio, Scorpio and so on. The rich class may prefer the likes of Honda
----------------------
City, Tata Safari, and Toyota and so on. Such preferences exist even in
---------------------- case of goods like shoes, shirts, perfumes and so on. Such information is
essential for manufacturers to make products to suit the life styles of a
---------------------- particular class.
---------------------- 2. Social class is hierarchial :
Persons are ranked as occupying inferior or superior positions according
----------------------
to their social class or status held by them in the society. Members of a
---------------------- specific social class perceive members of other social classes as having
either more or less status as compared to them.
----------------------
Such a distinction in class reflects in the type of products preferred and
---------------------- the type of retail stores preferred by the class. An upper class member
may prefer to buy from retails that suit their status and prestige. They
---------------------- prefer to buy goods like refrigerators, TVs from any good showroom, but
---------------------- where taste or style is important, as with furniture, jewellery, premium
watches etc. they would prefer buying them from exclusive showrooms.
---------------------- 3. Social class is not measured by a single variable : but is measured as a
---------------------- weighted function of one’s occupation, income, wealth, education, status,
prestige, etc:
---------------------- The upper class consists of a very small percent of the population. They
---------------------- have the benefits of going to the best schools like the Doon school,
occupy executive positions and inculcate the values of living graciously,
---------------------- upholding the family reputation and displaying a sense of community
responsibilities. The middle class comprises of a relatively higher percent
---------------------- of the population and is growing at a phenomenal rate. Such a class of
---------------------- people earns sufficiently high income. Their drive is to earn professional
excellence and membership into the higher class. They, with their limited
---------------------- income try to copy the life style of the upper class that is evident in their
choice of clothing, furnishing etc.
----------------------
The lower class which has the highest percent of population consisting of
---------------------- semi skilled, manual labour, lower level of supervisors who draw lower
salaries and hence have a limited choice and having no money to waste
----------------------
on luxury.
---------------------- 4. Social class is continuous : rather than concrete, with individuals able to
move into a higher social class or drop into a lower class.
----------------------
This mobility either up or down can take place either with more
---------------------- industrialization or degree of urbanization. Few of the successful men

today have moved up to the upper class through sheer determination and Notes
knowledge.
----------------------
----------------------
1. Information is essential for manufacturers to make products to suit
----------------------
the lifestyles of a particular class.
----------------------
Activity 2 ----------------------
----------------------
Give the names of three products of the same company, which are targeted
towards three different classes, viz., lower, middle and elite classes. ----------------------
----------------------
9.4 SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
----------------------
There are broadly three groups in society who can influence the buying
behaviour of individuals: ----------------------
1. Groups that serve as comparison points : ----------------------

This refers to such groups who will be used as a comparison to evaluate ----------------------
the individual status. It has been observed that the consumers today get
influenced by those individuals with whom they share some common ----------------------
values and traits, behavioural peculiarities. Thus marketers attempt to
----------------------
segment the target customers based on the group which will serve as a
point of comparison. For example, a large number of marketers are trying ----------------------
to use the cricket stars to promote products like Coke, Pepsi, TVS Victor,
Hero Honda motorcycles. The target customers comprise of youngsters ----------------------
dreaming of becoming cricket stars. Cadbury’s chocolates realized
----------------------
that there is a child in every adult. Hence the advertisement speaks of
experiencing “the real taste of life” targeted at the adult buyer. Here, the ----------------------
point of comparison is an adult to a carefree, unself-conscious, pleasure-
seeking child. ----------------------
2. Groups to which the individual aspires to be a member : ----------------------
Individuals have the tendency to imitate the behaviour of the individuals ----------------------
belonging to those groups they aspire to be a part of. Marketers have been
exploiting this to their maximum use by using such personalities in their ----------------------
commercials. For example, HLL’s Lux soap is a classic one where film
stars are used to promote the product to influence those youngsters who ----------------------
cherish to be film stars. ----------------------
3.
Groups whose perspectives are assumed by the individuals,
irrespective of whether he aspires for its membership or not. ----------------------
The urban market has saturated to a considerable level and most ----------------------

Notes manufacturers have realized that the growth is possible in the vast
untapped rural market. They have a huge potential as 73 percent of the
---------------------- Indian population resides in the rural market. The rural consumers are
also looking for value and quality in the product and are interested in
---------------------- upgrading their lifestyles. However, a majority of this population depends
---------------------- on agriculture and in-turn on the climate. The irrigation of land has
remained concentrated to a certain part of the country while others are
---------------------- still dependant on the rain God. This has increased the risk perceptions
of the rural consumers at the same time they are also interested in trying
---------------------- out new things. Velvette International Pharma realized this early and
---------------------- introduced shampoo in a sachet for the first time in India. This was
followed by a number of other manufacturers and could attract a large
---------------------- number of rural buyers and buyers of the low-income groups. This group
had strong aspirations for lifestyle improvements and was fulfilled by
---------------------- such strategies.
---------------------- 4. Role of opinion leaders :
---------------------- It is important to understand that the impersonal form of promotion of
products has its limitations. ‘Word of mouth publicity’ is very important
---------------------- in the urban market in general and the rural market in particular. These
are the persons who use the product and having been satisfied spread the
----------------------
word that the product is good. This class of individuals are innovators
---------------------- and self-confident and are looked upon by others as trendsetters. Their
opinions are regarded by others with high esteem and are extremely vital
---------------------- from the point of view of the manufacturers.
---------------------- A number of manufacturers are, these days, spending a considerable time
and effort in locating these opinion leaders. Opinion leaders get involved
---------------------- in social activities. They are more gregarious and enjoy being in the
limelight. Such individuals may or may not belong to the same social
----------------------
groups but have some trait commonalities with their followers. Opinion
---------------------- leaders may not directly influence the day-to-day purchase behaviours of
others but definitely affect them indirectly. They voice their opinions and
---------------------- follow a lifestyle, which is attractive enough to the group members so as
to purchase a particular product. A number of companies have used the
----------------------
services of opinion leaders in the past. For instance, Asian Paints had used
---------------------- the services of village mukhias to create a positive influence of their
---------------------- ‘Utsav’ brand of paints, specifically targeted to the rural consumers. A

leading tractor manufacturer had similarly used the services of innovative
---------------------- and socially active farmers for promoting their tractors.
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. Groups that serve as comparison points refer to groups who will be
used as a comparison to evaluate the______________. ----------------------
----------------------
9.5 CHANGING LIFE STYLES AND CONSUMER ----------------------
BEHAVIOUR
----------------------
Changing lifestyles are a result of changes in demographic characteristics and
changing values of consumers. These have become more apparent and visible ----------------------
in 1990s. Some highlights and their effects on consumer behaviour are as under:
----------------------
1. Changes in male purchasing roles :
----------------------
The increase in the number of working women particularly in the urban
areas has created a shift in the traditional roles of a working male and a ----------------------
housewife. Today, the role of a male has extended to the responsibilities
for shopping, childcare and more involvement in cooking all of which ----------------------
were traditionally female roles. However, the responsibilities of women ----------------------
are much greater than the males. Further, males are still not comfortable
talking about their new role and many a times hide that they in fact play ----------------------
these roles. As a result of this, many food products, convenience goods
are now being advertised in male magazines. Males have started buying ----------------------
goods like skin creams, jewellery, moisturizers which were traditionally ----------------------
considered to be feminine products. This indicated a change in values
of consumers. Thus the net result is that of a merger of male and female ----------------------
purchasing roles.
----------------------
2. Changes in female purchasing roles :
The economic and financial independence of the working women leading ----------------------
to greater affluence, independence, and self-confidence have created a ----------------------
substantial change in women’s purchasing roles. As their purchasing
power has increased they have started buying almost all products which ----------------------
were traditionally known to be male products. As a result of this many
working women no longer like to identify with the ads that tell them how ----------------------
to clean the floors or to please their husbands. ----------------------
3. Emphasis on health and fitness :
----------------------
On one hand consumers have become more aware of health and fitness
issues and have started going in for low calorie foods, refined oils, and ----------------------
low fats but on the other hand the fast life especially in the urban areas
----------------------
is forcing these people to go in for fast food that is considered by many
nutritionists to be unhealthy. The large-scale increase in fitness related ----------------------
business in India has slowly started receding due to the fast life of
individuals. To add to this the increasing recessionary trends have forced ----------------------

Notes many employed people to put in much more number of hours than ever.
Many consumers prefer to do workouts at home that have given a boost to
---------------------- the manufacturers making exercise equipment. The large-scale ad on TV
by Asian Sky Shop and others and the response of consumers to this is a
---------------------- testimony to the changing trend.
---------------------- 4. A more isolated lifestyle :
---------------------- The early 90s saw a large number of TV channels coming into India. This
has led to people spending more time at home. The wide choice of the
---------------------- soap opera on these channels has forced people of wide cross sections to
stick to their homes. The entry of high- fi electronic gadgets like video
----------------------
games, audio-video systems, computers and the Internet has only added
---------------------- to the number of people choosing to stay back at home. The outdoor
publicity is taking a back seat and the electronic media is becoming more
---------------------- relevant in this scenario.
---------------------- To add to this is the growing number of people choosing or being forced
to do their jobs from residence. The middle 90s saw a lot of companies
---------------------- going in for a large-scale reduction in manpower through various
Voluntary Retirement Schemes (VRS). This rapidly increased the number
----------------------
of people becoming self-employed. In developed countries like USA
---------------------- and Japan, employers have started allowing their employees to operate
from their home which has been possible because of the advances in the
---------------------- field of computers. Marketers like IBM, Canon, and Lotus etc. have been
attracting these self-employed individuals through a range of products
----------------------
varying from smaller fax machines to software programs.
---------------------- 5. Greater time pressures :
---------------------- In the present scenario, the working class is under tremendous pressure
when it comes to time management. The ever-increasing expectations of
---------------------- the consumers have led to employers becoming more demanding. Added
---------------------- to this is the recession in the market. This has forced many working class
people to put in long working hours. Further the increase in competition
---------------------- has increased at all levels which force them to give more time to their
children to prepare them for the competition. This means that individuals
---------------------- need to give more time to the job as well as family. This has affected
---------------------- the buying patterns of individuals. Today, consumers prefer to buy goods
from stores that offer a wide variety of products. Such a shift has increased
---------------------- the number of super stores in large cities. Today, for many consumers,
shopping is no longer a highly pleasant job. Consumers do not have
---------------------- time to obtain information to evaluate products pre-purchase. They go
---------------------- more towards known brands and expect the retail stores to advice them
on product selection. Convenience in purchasing is becoming vital. A
---------------------- phenomenal increase in vending machines, mail ordering, Internet buying
are abundant proofs of the changing trends.
----------------------
----------------------

6. Better means of information : Notes
With the advent of electronics, computers and internet, the awareness
----------------------
levels of consumers have increased dramatically. Product knowledge is
also going up. This is in a way advantageous to the manufacturers in that ----------------------
the communication process becomes simplified. On the other hand, more
product knowledge means a better understanding of product features and ----------------------
what these features mean to them. More product knowledge leads to a
----------------------
dramatic reduction in brand loyalty. As the product knowledge increases
the levels of product differentiation reduces and leads the consumers to ----------------------
be more price conscious. Consumers are reluctant to pay a premium for a
brand. This leads to a large-scale increase in price wars and as a principle ----------------------
price wars only benefit the end customers. Such wars have had an adverse
----------------------
impact on the profitability of many manufacturers.
To create product differentiation, manufacturers have to continuously ----------------------
upgrade their existing products and work towards new product
----------------------
development. This further increases the costs of R&D, new manufacturing
systems, new materials etc. Another aspect of this is the decrease in the ----------------------
life cycle of the products, which puts additional pressures on matters
relating to pricing. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes Leisure promoted to attract customers adapted to new lifestyles and work
pressures
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
1.
Changing lifestyles are a result of changes in demographic
---------------------- characteristics and changing values of consumers.
----------------------

9.6 CULTURE Notes
To understand the nature and relevance of culture in consumer behaviour, let us ----------------------
see a few examples of how culture affects behaviour:
----------------------
The average Frenchman uses almost twice as many cosmetics and beauty
•
aids as does his wife. ----------------------
Women in Tanzania will not give eggs to their children for fear of making
• ----------------------
them bald and impotent.
Italian children like to eat a bar of chocolate between two slices of bread
• ----------------------
as a snack.
----------------------
The Germans and the French eat more packaged branded spaghetti than
•
the Italians. ----------------------
Culture is a set of socially acquired values that society accepts as a whole ----------------------
and transmits to its members through language and symbols. As a result, culture
reflects a society’s shared meanings and traditions. ----------------------
1. Culture influences and reflects consumer behaviour : ----------------------
Culture influences the purchase and consumption patterns. For example,
----------------------
one consumer may place a high value on achievement and may demonstrate
success with symbols of luxury and prestige. Another consumer may ----------------------
have a culturally derived desire to appear young and active, may buy
cosmetics that advertise a ‘younger look’, and join a gym. In either case, ----------------------
the marketer must define the consumer’s value orientation and determine
the symbols that reflect these values. Culture not only influences consumer ----------------------
behaviour, it reflects it. Culture is therefore a mirror of both the values ----------------------
and possessions of its members.
2. Culture influences and reflects marketing strategies : ----------------------
Marketing strategies rarely attempt to change cultural values because ----------------------
of the simple fact that advertising, sales promotions, salespeople and
packaging are not sufficiently powerful forces to influence consumers’ ----------------------
core values. For example, the strong campaign of ‘Ruf n Tuff’ denim
jeans in the rural India could not change the wearing habits of the farmer. ----------------------
They hold ‘dhotis’ as their traditional wear and are culturally attached to ----------------------
it. Denim can be extremely comfortable and convenient in the farms but
culture is much more important to them than convenience. Having said ----------------------
this, it is important to note that the
‘Ruf n Tuff’ brand is worth 300 crores. We have been talking a lot of the ----------------------
impact of western culture on urban India, yet it is important to note that ----------------------
these influences have not affected the core values. For example, urban
women have changed their casual dressing according to the western ----------------------
styles to a great extent. Yet it is impossible to replace formal dressing
like ‘silk sarees’ during ceremonial functions like marriages. Marketing ----------------------
does influence culture and culture influences marketing. An advertising
agency, a music company, a fashion design house, or a book publisher ----------------------
is all producers of culture. In total, they can be regarded as a ‘culture
----------------------
production system’.

Notes
----------------------
Fill in the blanks.
----------------------
1. _____________ is a set of socially acquired values that society
---------------------- accepts as a whole and transmits to its members through language
and symbols.
----------------------
---------------------- 9.7 CULTURAL VALUES

---------------------- Cultural values are defined as beliefs that a general state of existence is
personally and socially worth striving for. Value system is the relative importance
---------------------- culture places on these values. For instance, the Eastern world places more
---------------------- emphasis on achieving inner harmony whiles the Western world emphasis more
on individual accomplishments. On the other hand, concepts like peace, social
---------------------- justice and nonviolence have universal acceptance across cultures. Cultural
values can be categorized as terminal values and instrumental values. Terminal
---------------------- values are the goals to be attained and developed. Instrumental values are
means of achieving the desired goals. For example, the terminal values of both,
---------------------- the radicals and the moderates in India were achieving independence but the
---------------------- instrumental values of radicals were to use armed struggle, while, moderates
had nonviolence as their instrumental values.
---------------------- Characteristics of Cultural Values :
---------------------- 1. Cultural values are learnt :
---------------------- Children are instilled with cultural values at an early age. The process
of learning the values of one’s own culture from childhood is known
---------------------- as enculturation. Learning the values of another culture is known as
acculturation. Cultural learning can happen by informal learning like a
---------------------- foreigner copying local customs. It can be learnt by formal learning like a
child taught to behave by family members. It can be also learnt formally
----------------------
like a child taught in a school environment.
---------------------- Enculturation takes place through a process of instilling values from key
institutions, particularly the family, schools, and religious institutions.
----------------------
The family is particularly important since it is the vehicle for passing
---------------------- values from one generation to the next. Advertising also plays a role
in enculturating consumers through informal learning. The use of
---------------------- spokespersons like some players of the Indian cricket team for ‘Team
Ambition’ of Hero Honda group encourages consumers to imitate these
---------------------- role models or experts and to adopt certain products or styles.
---------------------- Consumer acculturation occurs when a person from another country
adapts to the consumption values and behaviour of his or her adopted
---------------------- country. Such adaptation occurs by observation, by word of mouth
---------------------- communication, and through communication from the mass media. The
process of acculturation is particularly important for business organizations
---------------------- in foreign markets, since an understanding of the local culture is necessary
before they can develop product and advertising plans.
2. Cultural values are guides to behaviour : Notes
Cultural values guide and direct an individual’s behaviour through the
----------------------
establishment of cultural norms. Such norms establish standards of
behaviour regarding proper social relations, means of ensuring safety, ----------------------
eating habits and so on. If behaviour deviates from the cultural norm,
society may place sanctions or restrictions on behaviour. ----------------------
3. Cultural values are permanent : ----------------------
Cultural values gain permanence as parents pass them on to children.
----------------------
Schools and religious groups are important in maintaining the permanence
of cultural values. For example, the values in India of respecting elders, ----------------------
respecting teachers’ etc. have remained unchanged in India for thousands
of years. ----------------------
The ‘Reading Culture’ used by a leading daily. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes 4. Cultural values are dynamic :
Culture is also dynamic; values must change as society changes. For
----------------------
example, the traditional culture in India was that the females should not
---------------------- take up jobs outside and should take care of home and upbringing of the
children. However, a change in this regard has taken place in India in last
---------------------- 40 years. Similarly, the gap between the children and parents was huge
in olden days. But the impact of drugs, films and others have changed
----------------------
the thinking of parents and we find that more and more parents in India
---------------------- today discuss many matters including sex education more openly with
their children to give them a better understanding of these issues.
----------------------
5. Cultural values are widely held :
---------------------- Each culture has certain widely held and commonly accepted values that
differentiate it from other cultures. Conformity to group and respect for
----------------------
the aged are widely shared values in India whereas individuality and
---------------------- youthfulness are widely shared values in the US.

----------------------
Fill in the blanks.
---------------------- 1. Cultural values can be categorised as terminal values and ___________.
----------------------
---------------------- Activity 3
---------------------- Mention two values that you have imbibed from your own culture and two
---------------------- that you have imbibed from other cultures.
----------------------
----------------------
9.8 CULTURE AND PRODUCTS
---------------------- The five symbolic roles of products that reflect cultural values are as under:
1. Products are a means of communicating social status:
----------------------
Products often connote a consumer’s status in the society. Symbols of
---------------------- status may be a Mercedes Benz, a Rolex watch, or rich jewelry. Marketers
try to establish their products as symbols of prestige, whether aiming at
----------------------
affluent business executives or rich farmers or children of influential
---------------------- people.
2. Products are a means of self-expression:
----------------------
As such, products reflect values that are most important to consumers.
---------------------- Marketers try to associate their products with symbols of achievement,
individualism, or personal development. The ad of Garden Varelli sarees,
----------------------
saying ‘a woman expresses herself in many ways ….’ The attempt is
---------------------- to associate the product with freedom, expression, and individualism,
important values for this market.
3. Products are a means of sharing experience: Notes
Products often provide a basis for sharing experiences. Food and drink on
----------------------
social occasions, flowers for happy or sad events, and gifts are all a means
of sharing social events. In this respect, products have an important role ----------------------
since the nature of the products defines the occasion. Serving beer or
champagne at a party, sending roses or carnations for special occasion, or ----------------------
gifting pen as a graduation present, all have very different meanings.
----------------------
4. Products are hedonic :
----------------------
Products often have aesthetic or emotional qualities that give pleasure.
Jewellery, clothing, work of art or even a motorcycle are examples. The ----------------------
emphasis on the hedonic, as against the utilitarian qualities of a product
reflects consumers’ values. For example, the ad of ‘Bajaj Eliminator’ puts ----------------------
more value on the hedonic side while the ad of ‘Bajaj Boxer’ puts more
----------------------
value on the utilitarian side.
5. Products are experiential : ----------------------
Products remind consumers of past experiences. On a personal level, ----------------------

an engagement ring, an old photo album, a record or videotape are all
experiential products that trigger memories of past events. The ad of ----------------------
‘Kinetic moped’ in the past effectively captures a teenager’s experience in ----------------------

getting a driver’s license and the resulting feeling of power and freedom.
Here Kinetic is effectively associating its product with this positive ----------------------
experience. ----------------------
----------------------
1. Products never remind consumers of past experiences. ----------------------
----------------------
9.9 CULTURE AND CONSUMPTION ----------------------
Culture not only influences the way products are portrayed, but also ----------------------
influences the way they are consumed. In particular, culture is important in
defining the ritualistic role of consumption for many product categories. ----------------------
Consumption Rituals ----------------------
A ritual is a series of symbolic behaviours that occur in sequence and are ----------------------
repeated frequently. Grooming is a ritual for many. Marketers try to associate
their products to these rituals. For example, brush your teeth twice a day or ----------------------
shampoo frequently to keep hair clean and healthy. Gift giving is also a ritual
that requires a sequence of events, namely, acquiring a gift, exchanging gifts, ----------------------
and then evaluating the receiver’s reaction. These are all fairly well prescribed ----------------------
in the society. Some products primarily rely on gift giving for sales. Gift giving
during festivals like Diwali is itself a huge business for many manufacturers. ----------------------

Notes An important distinction as regards to the consumption is the sacred consumption
and secular consumption. Sacred consumption is the consumption of the goods
---------------------- that promote beauty, the preservation of nature, and cooperation. The consumers
who seek the sacred aspects of consumption are attached to natural imagery
---------------------- or appeals to family ties. They prefer food products with natural ingredients
---------------------- and fashions with simple styles. Secular consumption is the one that promotes
technology, the conquest of nature, and competition. Consumers who seek the
---------------------- secular aspects of consumption are attracted to products that improve control
over one’s life.
----------------------

---------------------- Consumers who seek the________________of consumption are
1.
attracted to products that improve control over one’s life.
----------------------
---------------------- 9.10 CROSS CULTURAL INFLUENCES
---------------------- The increasing importance of international trade in the recent years makes
---------------------- it essential for marketers to understand the value systems of other cultures. Such
cross-cultural values form the basis for marketing strategies abroad. Kellogg’s
---------------------- understood that the greater emphasis on health and nutrition was not just an
American phenomenon. It correctly saw that appeals to health could change
---------------------- breakfast habits abroad, thus increasing demand for packaged cereals. On the
---------------------- other hand, Kentucky chicken found in India that the core cultural values in
India cannot be challenged and changed and faced stiff resistance from various
---------------------- social and political organizations.
---------------------- The determination of such societal values is essential in applying culture

to marketing strategies. For example, it would be logical for a furniture
---------------------- manufacturer marketing abroad to determine the value consumers in each
country place on beauty, social recognition, and comfort. The manufacturer
---------------------- will have to develop different product lines and marketing strategies for each
---------------------- market. If beauty is the dominant value, consumers will desire highly styled
and pleasurable furniture. Advertising symbols for this market would appeal
---------------------- to environment and to pleasure. A market that emphasizes social recognition
would desire furniture that demonstrates status. The furniture might be richer
---------------------- in design, and advertising would use the symbols oriented to acceptance in a
---------------------- social environment.
Not everyone in a particular country holds cultural values to the same
---------------------- degree. Differences in these degrees provide opportunities to manufacturers
---------------------- to develop strategies within as well as across countries. Frequently, strategies
are targeted to particular subcultures, that is, broad groups of consumers with
---------------------- similar values that distinguish them from a society as a whole. Subcultures
can be defined on the basis of demographic factors like age, religion, religious
---------------------- affiliations, ethnic identity, and castes.

9.11 SNAPSHOTS Notes
Indian society has always been rich in traditions. Norms are strictly ----------------------
adhered to generally. Regard for age and family elders have been a typical Indian
phenomenon, where caring for children and parents is a part of the norms across ----------------------
sectarian groups in all religions in the country. The values that drive this norm
----------------------
are deeply embedded in social mores and in most cases has religious sanctions.
The traditional family unit in India, joint families where siblings co resided, are ----------------------
now becoming rare as families break up and become more unitary. But strong
traditions regarding supporting one’s children till they are independent in their ----------------------
means, as well as the inclusion of parents in the family unit especially once
----------------------
they have stopped earning, are norms that would continue beyond the wane
of joint family systems. However, post liberalization, these values also started ----------------------
eradicating to such an extent where the Government was forced to pass a law to
ensure that dependant parents are taken care off. Yet another change in values is ----------------------
visible in the adoption of a material culture over the older generations’ values of
----------------------
simplicity, daily spirituality and observance of codes of consumption of food,
clothing, occupations, and so on. Peer pressures, expressions of individualistic ----------------------
identities, and aspirations for material lifestyles are clearly the paradigm shift
in social values. ----------------------
Children and youth who contribute an overwhelming majority of the ----------------------
population are the drivers of the new culture. Their roles in making purchase
decisions in households are extremely vital today. Advertisements using children ----------------------
and youth are a testimony to the fact. Most marketers have accepted this new ----------------------
challenge and have geared themselves to ‘satisfy’ these new breed of “hungry”
consumers. Creches and day-care facilities, full time household help, have now ----------------------
become the prerogative of the middle class and not just upper class groups.
Mobile phone connections have overtaken landline ones. Net sales of many ----------------------
high value branded products are growing at a minimum of 20% per annum. The ----------------------
rise of web buying is also an evidence of changing India.
----------------------
Summary
----------------------
• Social Stratification is the division of members of a society into a hierarchy
----------------------
of distinct status classes, so that members of each class have relatively
the same status and members of all other classes have either more or ----------------------
less. Factors responsible for Social Stratification are Authority, Income,
Occupation & Achievements, and Education. These factors often act in ----------------------
conjunction rather than in isolation. Persons within a given social class
----------------------
tend to behave alike, social class is hierarchal, Social class is continuous
rather than concrete, with individuals able to move into a higher social ----------------------
class or drop into a lower class, are some of the characteristics of Social
class. ----------------------
• Social influence on Consumer Behaviour can be looked upon from ----------------------
the point of view of groups that serve as comparison points, groups to
which the individual aspires to be a member, groups whose perspectives ----------------------

Notes are assumed by the individuals irrespective of whether he aspires for
its membership or not, and role of opinion leaders. Culture influences
---------------------- and reflects Consumer Behaviour. Culture influences the purchase and
consumption patterns.
----------------------
---------------------- Keywords
---------------------- • Culture : The basic values and traditions that pass from one generation to
another.
----------------------
• Social class : Division of members of society into hierarchy of distinct
---------------------- status classes so that members of each class have relatively same status
and members of other classes have more or less status.
----------------------
• Status : Prestige or value attached to the holder of a position is referred
---------------------- to as status.
---------------------- • Terminal values : Goals to be attained and developed.
---------------------- • Instrumental values : Means of achieving the desired goals.
• Enculturation : It is the process of learning the values of one’s own
----------------------
culture from childhood.
---------------------- • Acculturation : Learning the values of another culture is known as
acculturation.
----------------------
• Ritual : Series of symbolic behaviours that occur in sequence and are
---------------------- repeated frequently.
---------------------- • Lifestyle : Demographic characteristics and values of customers.
----------------------
----------------------
1. List down the changing Indian cultural values and show how this has
---------------------- resulted in many new products and advertising themes.
---------------------- 2. Describe how culture has affected marketing of gold in India. Also bring
out sub-cultural differences if any.
----------------------
3. Explain with the help of few examples how social class and lifestyle
---------------------- affect the buying patterns of consumers.
----------------------
----------------------
---------------------- 1. Mostly an individual is born into a class.
----------------------
----------------------

----------------------
1. True
----------------------
1. Groups that serve as comparison point refer to groups who will be used as ----------------------
a comparison to evaluate the individual status.
----------------------
----------------------
1. True ----------------------
1.
Culture is a set of socially acquired values that society accepts as a whole
and transmits to its members through language and symbols. ----------------------

1. Cultural values can be categorised as terminal values and instrumental
----------------------
values.
1. False ----------------------
----------------------
Fill in the blanks.
----------------------
1. Consumers who seek the secular aspects of consumption are attracted to
products that improve control over one’s life. ----------------------
----------------------
Suggested Reading
----------------------
Western College. ----------------------
2. Chaudari, Arjun. 2006. Emotion and Reason in Consumer Behaviour. ----------------------
Taylor & Francis.
----------------------
Publishing Group. ----------------------
----------------------

Notes
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----------------------

Retail Consumer and Outlet Selection
UNIT
10
Structure:
10.1 Introduction
10.2 Retail Outlet Selection
10.3 Consumer Characteristics and Outlet Choice
10.4 In-store Influences on Brand Choices
10.5 Outlet Choice vs. Brand Choice
10.6 Internet Retailing
Summary
Key words
Suggested Reading
Retail Consumer and Outlet Selection 175

Notes
Objectives
----------------------
----------------------
• Describe the process of selecting a retail outlet
----------------------
• Relate consumer characteristics to outlet choice
---------------------- • Assess the in-store impact on outlet choice
---------------------- • Discuss Internet retailing
---------------------- 10.1 INTRODUCTION

----------------------
The behaviour of retail shoppers is a subject of study across the world. The
---------------------- basic difference however continues to be the maturity of markets and formats.
While retail in the West has evolved in terms of formats over the past 100 years,
---------------------- organized retail in India is still a recent phenomenon. Shopping has infact, been
termed as a science by Paco Underhill. In India, retailers and retail formats are
----------------------
still evolving. Ten years ago, if a consumer wanted to buy a detergent, his only
---------------------- option was the local Kirana store or the Sahakari Bhandar or the fair price shops
run by the Government. Today, he can still buy the detergent from the same
---------------------- places, but he also has an option of buying it from a Spencer’s, Big Bazaar,
Food Land, an Apollo Pharmacy or from the neighbourhood Kirana store who
----------------------
has developed a new self service store. Where he will buy will depend on a
---------------------- number of factors that are being discussed in this topic.
---------------------- Understanding the reasons behind consumers choosing or patronizing a

store is important for the retailing sector. This is true for retailers across the
---------------------- globe. In India, while new formats keep emerging, in many cases, the product
offerings are similar. Consider this, most of the department stores that exist
---------------------- in India today, house a menswear, womenswear, children’s wear and home
---------------------- section. The menswear section in most of the stores displays various national
brands like Peter England, Van Heusen, Louis Phillip, Allan Solly, Cottons etc.
---------------------- and some private labels made by the store. At the same time, all these brands
have their own exclusive retail outlets. The range available at the stores is also
---------------------- similar. A consumer has a choice to select any of these outlets. Depending on
---------------------- the factors that influence each individual, he may choose one retailer over the
other. By studying the reasons of such a choice, a retailer can evolve his own
---------------------- strategy to create store loyalty among his consumers.
---------------------- The factors that influence the consumer’s choice are as under:
1. Range of Merchandise :
----------------------
The range of merchandize is perhaps the most important for the consumer
---------------------- to patronize a particular outlet. The initial curiosity about the store may
draw a consumer to a retail store, but to convert him into a buyer and
----------------------
to retain him over a period of time is largely dependant on the quality
---------------------- and the range of merchandize offered by the store. If the merchandize

is similar to that of another store, or what is commonly available, the Notes
consumer may not see any reason why he should not switch stores. The
range of merchandize plays an important role in the case of categories ----------------------
like durables, books and music, apparel and other life style products.
----------------------
2. Convenience of Shopping :
----------------------
The element of convenience is fast gaining prominence in the world of
organized retail. This is especially true in case of items like grocery, fruits ----------------------
and chemists. For example, while buying medicines, most patients would
prefer to buy from the chemist near the doctor’s clinic or near the hospital. ----------------------
3. Time to Travel : ----------------------
The time required to reach a particular retail location is again a very ----------------------
critical factor. This is especially true in the case of large cities and metros
where travel time is reasonably high. This has resulted in many local ----------------------
areas developing in terms of shopping, to facilitate buying. We see the
appearance of multiple outlets for a brand, departmental stores and malls ----------------------
making their appearance across most Indian cities. ----------------------
4. Socio-Economic Background and Culture :
----------------------
The socio-economic background of the consumer largely determines his
life style. This influences the kind of store that he may be comfortable ----------------------
shopping in. Consumer buying behaviour varies from market to market
and is largely influenced by the culture of the region. The need hierarchy ----------------------
is different for each market. This will not help him in determining the ----------------------
right merchandize mix, but it will also help him in evolving an effective
communication strategy. It would be important for retailers to consider ----------------------
socio-economic changes in a geographic region over a period of time as
it would be an indicator of the facilities available at various levels and the ----------------------
quality of life of the population, which would indirectly be related to the ----------------------
spread of organized retail.
----------------------
5. The stage of Family Life Cycle :
The stage of family life cycle that the consumer belongs to, also largely ----------------------
influences his need. For example, the needs of a young bachelor will be
----------------------
different from the needs of a family with children in their teens, which
will again be different from the requirements of an elderly retired couple. ----------------------
The retailer needs to be clear about the target market that he is catering to,
as he cannot be everything to every body. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 10.1
---------------------- 10.2 RETAIL OUTLET SELECTION

---------------------- The selection of a specific retail outlet, whether online or traditional,
involves a comparison of the alternative outlets on the consumer’s evaluative
----------------------
criteria. This may involve selecting an outlet type such as the internet, a catalogue,
---------------------- or a store and then a specific outlet within an outlet type such as Buybooks.
com versus Amazon.com. This section considers a number of evaluative criteria
---------------------- commonly used by consumers to select retail outlets. Unfortunately, virtually
all of these materials relate most directly to choosing from among stores, as
----------------------
little research is available on how consumers select online outlets.
---------------------- Evaluative Criteria :
---------------------- 1. Outlet image :
---------------------- A given consumer’s or target market’s perception of all the attributes
associated with a retail outlet is generally referred to as the store image.
---------------------- This is the same as the concept of brand image discussed earlier. One study
found the following nine dimensions and twenty three components of these
---------------------- nine dimensions of store image are given in Table 10.1. Notice that the store
---------------------- atmosphere component is primarily affective or feeling in nature.
Table 10.1
----------------------
Dimension Components
---------------------- Merchandize Quality, selection, style, and price
Service Layaway plan, sales personnel, easy return, credit, and
----------------------
delivery
---------------------- Clientele Customers
Physical facilities Cleanliness, store layout, shopping ease, and
---------------------- attractiveness
Convenience Location and parking
----------------------
Promotion Store Advertising
---------------------- atmosphere Congeniality, fun, excitement, and comfort
Institutional Store reputation
---------------------- Post-transaction Satisfaction

2. Retailer Brands Notes
Closely related to store image are store brands. At the extreme, the store
or outlet is the brand. Gap, Victoria’s Secret, and Body Shop International ----------------------
are examples. All the items carried in the store are the store’s own brand. ----------------------
Traditionally, retailers carried only manufacturers’ brands, and only
a few, such as Sears and Wards, developed their own house or store ----------------------
brands. In the 1970s, many stores began to develop store brands as
low-price alternatives to national brands, and many continue with this ----------------------
approach. Increasingly, however, retailers such as Wal-Mart and Target
----------------------
are developing and promoting high-quality brands with either the stores
name or an independent name. Sears have been very active and effective ----------------------
in this area. Such brands not only provide attractive margins for these
outlets; if they are developed appropriately, they become an important ----------------------
attribute of the outlet. That is, they are another reason for the consumer
to shop that store. And importantly, no other outlet can carry this brand. ----------------------
Thus, Kenmore and Craftsman brands are important features of a Sears’s
----------------------
store. The key to success of store brands seems clear-high quality at a
reasonable price. The traditional pattern of providing reasonable quality ----------------------
at a low price is no longer necessarily optimal. Infact, emphasizing quality
over price may be particularly beneficial if the brand carries the store’s ----------------------
name or will become associated with the store.
----------------------
3. Retail Advertising
----------------------
Retailers use advertising to communicate their attributes, particularly
sale prices, to consumers. It is clear that price advertising can attract ----------------------
people to stores. Revealing results were obtained in a majority study
involving newspaper ads in 7 cities for a range of product categories ----------------------
(motor oil, sheets, digital watches, pants, suits, coffeemakers, dresses,
and mattresses). The impact of the retail advertisements varied widely ----------------------
by product category. For example, 88% of those who came to the store in
----------------------
response to the ad for motor oil purchased the advertised item, compared
with only 16% of those responding to the dress ad. Approximately 50% ----------------------
of the shoppers overall purchased the advertised item that attracted them
to the store. Retailers evaluating the benefits of price or other promotions ----------------------
consider the impact on overall store sales and profits, not just those of the
advertised item. Although a large percentage of retail advertising stresses ----------------------
price, particularly sales price, studies continue to show that price is ----------------------
frequently the prime reason consumers select a retail outlet. This suggests
that many retailers could benefit by emphasizing service, selection, or the ----------------------
affective benefits of their outlets.
----------------------
Table 10.2
Purchase profile Percentage ----------------------
Purchased the advertised item and one or more additional items 34 ----------------------
Purchased only the advertised item 26
Did not purchase the advertised item but purchased one or more 21 ----------------------
other items
----------------------
Did not purchase anything 19

Notes 4. Outlet location and size
The location of a retail outlet plays an important role in consumer store
----------------------
choice. If all other things are approximately equal, the consumer generally
---------------------- will select the closest store. Likewise, the size of an outlet is an important
factor in store choice. Unless a consumer is particularly interested in fast
---------------------- service or convenience, he would tend to prefer larger stores over smaller
ones, all other things remaining equal. The retail attraction model or retail
----------------------
gravitation mode, is used to calculate the level of store attraction based on
---------------------- store size and distance from the consumer. In the retail gravitation model,
store size is measured in square footage and assumed to be a measure of
---------------------- breadth of merchandise. The distance or travel time to a store is assumed
to be a measure of the effort, both physical and psychological, to reach a
----------------------
given retail area. The effect of distance or travel time varies by product.
---------------------- For a convenience item or minor shopping item, distance is important,
since shoppers are unwilling to travel very far for such items. However,
---------------------- major high-involvement purchase such as an automobile or specialty
items like a wedding dress generates greater willingness to travel.
----------------------
Willingness to travel also varies with the size of the shopping list for
---------------------- that trip. Thus, a consumer who would not be willing to travel very far to
purchase three or four convenience items may willingly go much farther
----------------------
if 20 or 30 such items are to be purchased in the same trip. Consumers
---------------------- often combine shopping trips and purposes. Thus, a consumer may visit
a health club, have lunch with a friend, pick up the laundry, shop for
---------------------- food for the next few days and pick up a prescription on one trip. Thus,
retail patronage is in part a function of an outlet’s location in relation to
----------------------
other outlets and consumers’ travel patterns. Combining outlets or adding
---------------------- departments in response to shopping patterns can produce value for
customers and increased revenue for the firm. For example, super markets
---------------------- such as Safeway and Albertsons’ have added pharmacies to their outlets.
----------------------
----------------------
Fill in the blanks.
----------------------
1. The selection of a , whether online or traditional, involves a comparison
---------------------- of the alternative outlets on the consumer’s evaluative criteria.
----------------------
Activity 1
----------------------
---------------------- Mention the names of a few popular retail brands of Indian origin.
----------------------
----------------------
----------------------

10.3 CONSUMER CHARACTERISTICS AND OUTLET Notes
CHOICE
----------------------
1. Perceived risk :
----------------------
The purchase of products involves the risk that they may not perform
as expected. As discussed earlier in the Unit on Consumer Perception, such a ----------------------
failure may result in high risk perceptions.
----------------------
a) Social cost: For example, a hair style that is not appreciated by one’s
peers. ----------------------
b) Financial cost: For example, an expensive pair of shoes that becomes too ----------------------
uncomfortable to wear.
----------------------
c) Time cost: For example, a TV repair that required the set to be taken to the
shop, left, and then picked up later. ----------------------
d) Effort cost: For example, a computer disk that is loaded with several hours
----------------------
of work before it fails.
e) Physical cost: For example, a new medicine that produced a harmful side ----------------------
effect.
----------------------
The first of these is generally termed as social risk; the next three are
often considered to be economic risk. The perception of these risks differs ----------------------
among consumers, depending in part on their past experiences and lifestyles.
----------------------
For this reason, perceived risk is considered a consumer characteristic as well
as a product characteristic. Like product categories, retail outlets are perceived ----------------------
as having varying degrees of risk. Traditional outlets are perceived low in risk
whereas more innovative outlets such as online stores are viewed as higher risks. ----------------------
These findings lead to a number of insights into retailing strategy, including the
----------------------
ones mentioned in Table 10.3.
Table 10.3 : The Economic and Social Risk of Various Types of Products ----------------------
Economic Risks ----------------------

Social Risk Low High
----------------------
Low Wine (personal use) Personal Computer Auto
Kitchen supplies Pens / repairs Clothes washer ----------------------
pencils Insurance
Petrol / Diesel ----------------------
High Fashion accessories Business suits
----------------------
Hairstyles Living room furniture
Gifts (inexpensive) Wine Automobile House Travel ----------------------
(entertaining) Deodorant plan
----------------------
a) Nontraditional stores need to minimize the perceived risk of shopping
particularly if they sell items with either high economic or social risk ----------------------
b) Nontraditional outlets need brand-name merchandise in those product ----------------------
categories with high perceived risk. Most internet retailers feature such
items. ----------------------

Notes c) Traditional outlets and websites of well-known retailers have a major
advantage with high-perceived-risk product lines. These lines should
---------------------- generally be their primary strategy focus. Low-risk items can be used to
round out the overall assortment.
----------------------
d) Economic risks can be reduced through warranties and similar policies.
---------------------- Social risk is harder to reduce. A skilled sales force, known brands, and
satisfaction guaranties can help reduce this type of risk.
----------------------
2. Shopping orientation :
----------------------
Individuals go shopping for more complex reasons than simply acquiring
---------------------- a product or set of products. Diversion from routine activities, exercise,
sensory stimulation, social interactions, learning about new trends, and
---------------------- even acquiring interpersonal power are non-purchase reasons of shopping.
The relative importance of these motives varies both across individuals
----------------------
and within individuals over time as the situation changes. A shopping
---------------------- style that puts particular emphasis on certain activities or shopping
motivations is called a shopping orientation. Shopping orientations are
---------------------- closely related to general life style and are subject to similar influences.
A recent study used projective techniques to ascertain the ways college
----------------------
students approach shopping. It had consumers “Think about an animal
---------------------- that best describes you as a shopper…and explain what it is about your
behaviour that makes this animal an appropriate metaphor.” One response
---------------------- was, in part, “The reason I chose a hawk is basically the speed and grace
in which my shopping is done. I glide through the mall and when I see
----------------------
what I want I dive in and attack it”. To extend this metaphor, the trip to the
---------------------- mall is short and to the point. “Just as a hawk swoops down on its prey, I
see the item and grab it.”
----------------------
Using this projective research, the study uncovered six shopping
---------------------- orientations:
---------------------- a) Chameleons indicated that there shopping styles are situation-

specific or constantly changing. Their shopping approach is based
---------------------- on product type, shopping impetus, and purchase task.
---------------------- b) Collectors / gatherers are characterized by their propensity to
stockpile the items and to purchase large quantities to either save
---------------------- money or alleviate the need for shopping. They attempt to get the
best price and take advantage of retailer guaranties.
----------------------
c) Foragers are particular and are motivated to purchase only the
---------------------- desired items. They are willing to search extensively and have little
store loyalty. They like to shop alone.
----------------------
d) Hibernants are indifferent toward shopping. Their shopping
---------------------- patterns are opportunistic rather than need driven and they will
often postpone even required purchases.
----------------------
----------------------

e) Predators are purposive and speed oriented in their shopping. They Notes
plan before shopping and like to shop alone. They do not enjoy
shopping and tend to shop outlets where they are assured of getting ----------------------
the items they need quickly.
----------------------
f) Scavengers enjoy shopping to make purchases and as an activity.
----------------------
They like to go to sales and consider shopping to be entertainment.
They make numerous unplanned purchases. ----------------------
The opportunities for developing segment-specific marketing
----------------------
strategy are clearly evident. For example, Predators might respond
to home delivery. Scavengers would respond well to entertainment- ----------------------
focused malls and outlets. However, as a single store attempts to
target more of the segments, the risk of failure with all groups ----------------------
increases, as many of their desires are, if not mutually exclusive,
----------------------
difficult to meet within the same outlet.
----------------------
----------------------
1. Traditional outlets are perceived low in risk whereas more innovative
outlets such as online stores are viewed to have higher risks. ----------------------
----------------------
10.4 IN-STORE INFLUENCES ON BRAND CHOICES ----------------------
It is not uncommon to enter a retail outlet with the intention of purchasing ----------------------
a particular brand but to leave with a different brand or additional items.
Influences operating within the store include additional information processing ----------------------
and subsequently affect the final purchase decision. We will consider six
variables that singularly and in combination influence brand decisions inside ----------------------
a retail outlet: Point-of-purchase displays, price reductions, outlet atmosphere, ----------------------
stockout situations, website design, and sales personnel.
1. The nature of unplanned purchases : ----------------------
The fact that consumers often purchase brands different from or in addition ----------------------
to those planned has led to an interest in unplanned purchases. They are
----------------------
defined as purchases made in a store that are different from those the
consumer planned to make prior to entering store. The term ‘unplanned ----------------------
purchase’ implies a lack of rationality or alternative evaluation. However,
this is not necessarily true always. Considering most in-store purchase ----------------------
decisions as the result of additional information processing within the
----------------------
store, leads to more useful marketing strategies than does considering
these purchases to be random or illogical. This approach allows the ----------------------
marketer to utilize knowledge of the target market, its motives, and the
perception process to increase sales of specific items. The following are ----------------------
worth noting:
----------------------

Notes a) Specifically planned: A specific brand or item decided on before
visiting the store and purchased as planned
----------------------
b) generally planned: A pre-store decision to purchase a product
---------------------- category such as vegetables but not the specific item.
c) Substitute: A change from a specifically or generally planned item
----------------------
to a functional substitute.
---------------------- d) Unplanned: An item bought that the shopper did not have in mind
on entering the store.
----------------------
e) In-store decisions: The sum of generally planned, substitute, and
---------------------- unplanned purchases.
---------------------- Unplanned purchases have been divided into two categories, namely,
reminder purchases and impulse purchases.
----------------------
Table 10.4 : Supermarket decisions: Two-thirds are made in-store
----------------------
Type of Purchase Percentage Type of Store
---------------------- Specifically planned 30.26 SupermarketsMass merchandise store
Generally planned 06.18 SupermarketsMass merchandise store
---------------------- Substitute 04.03 SupermarketsMass merchandise store
---------------------- Unplanned 60.53 SupermarketsMass merchandise store
2. Point-of-Purchase displays :
----------------------
Point-of-purchase (P-O-P) displays are common in the retailing of many
---------------------- products, and the impact these displays have on brand sales is often
tremendous. Table 10.5 indicates the impact of P-O-P Displays. The
----------------------
effect of P-O-P also varies with the location of material as shown in the
---------------------- next figure.
---------------------- Table 10.5 : P-O-P Sales viz. a viz. the product location
Product % Increase in Sales Location % Increase in Sales
----------------------
Paper towels 610 On the shelf 11
---------------------- Shampoo 38 Rear end 141
Toothpaste 96 Front end 162
---------------------- Deodorant 28
---------------------- Coffee 534
Fabric Softener 70
---------------------- Although sales impact of displays varies widely by product type and
---------------------- location and between brands within a product category, there is generally
a strong increase in sales.
----------------------
3. Price reductions and promotional deals :
---------------------- Price reductions and promotional deals like coupons, multiple-item
discounts, and gifts are generally accompanied by the use of some
----------------------
point-of- purchase materials. Therefore, the relative impact of each is
---------------------- sometimes not clear. Nonetheless, there is ample evidence that in-store

price reductions affect brand decisions. The general pattern, observed in Notes
the US, UK, Japan and Germany, is a sharp increase in sales when the
price is first reduced, followed by a return to near-normal sales over time ----------------------
or after the price reduction ends.
----------------------
Sales increase in response to price reductions comes from four sources :
----------------------
a) Current brand users may buy ahead of their anticipated needs.
Stockpiling often leads to increased consumption of the brand, ----------------------
since it is readily available.
----------------------
b) Users of competing brands may switch to the reduced price brand.
These new brand buyers may or may not become repeat buyers of ----------------------
the brand.
----------------------
c) Non-product category buyers may buy the brand because it is now
a superior value to the substitute product or to “doing without.” ----------------------
d) Consumers who do not normally shop at the store may come to the ----------------------
store to buy the brand.
High quality brands tend to benefit more than brands from lower quality ----------------------
tiers when prices are reduced, and they suffer less when prices are raised. ----------------------
Retailers need to carefully evaluate the price reductions since they are
bound to impact both, the sales as well as the image of the store. ----------------------
4. Outlet atmosphere (Ambience) : ----------------------
Stores atmosphere is influenced by such attributes as lighting, layout, and
----------------------
presentation of merchandise, fixtures, floor coverings, colours, sounds,
odours, and the dress and behaviour of sales personnel. Atmosphere is ----------------------
referred to as servicscape when describing a service business such as a
hospital, bank, or restaurant. Atmospherics is the process managers use ----------------------
to manipulate the physical retail or service environment to create specific
----------------------
moods responses in shoppers. Internet retailers also have atmospheres
that are determined by graphics, colours, layout, content, features, ----------------------
interactivity, tone, and so forth. A store’s atmosphere affects shopper’s
mood and willingness to visit and linger. It also influences the consumer’s ----------------------
judgments of the quality of the store and the store’s image. Perhaps more
----------------------
important, a positive mood induced while in the store increases satisfaction
with the store, which can produce repeat visits and store loyalty. A major ----------------------
component of atmosphere is the number, characteristics, and behaviour
of customers. Entertainment parks spend substantial time, effort, and ----------------------
resources training their staff.
----------------------
Music can have a major impact on store environment. It has been shown
to influence the time spent in the store or restaurant, the mood of the ----------------------
consumer, and the overall impression of the outlet. It also enhances ----------------------
perceptions of waiting time for services. However, it is important to
match the music to the target audience. Baby boomers respond positively ----------------------
to classic rock music in a supermarket setting, but older adults do not.
----------------------

Notes Findings such as these suggest the possibility of using different music
styles during different times of the day, week, or month if customers
---------------------- with specific music preferences shop at distinct times. Marketers are also
beginning to investigate the impact of odours on shopping behaviours.
----------------------
Early studies suggest that odours can have a positive effect on the
---------------------- shopping experience, particularly if they are consistent with other aspects
of atmosphere such as the music being played. However, like music,
----------------------
odour preference varies across customers, so caution must be used to
---------------------- ensure that the aroma is not offensive to target customers. In addition,
many consumers do not want anything artificial or unnecessary added to
---------------------- the air they breathe. A firm “spiking” the air with artificial aromas could
irritate some consumers as well as risk adverse publicity.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 10.2
----------------------
5. Stock outs :
----------------------
Stockouts, the store being temporarily out of a particular brand, obviously
---------------------- affect a consumer’s purchase decision. The customer then must decide
whether to buy the same brand but at another store, switch brands, delay
---------------------- the purchase and buy the desired brand later at the same store, or forego

the purchase altogether. In addition, the consumer’s verbal behaviours Notes
and attitudes may change. Three types of perceived costs affect the likely
response of a consumer to a stockout. Substitution costs refer to the ----------------------
reduction in satisfaction the consumer believes a replacement size, brand,
or product will provide. This is a function of consumer’s commitment or ----------------------
loyalty to the preferred brand and the perceived similarity of potential ----------------------
substitutes. Transaction costs refer to the mental, physical, time, and
financial costs of purchasing a substitute product or brand. Opportunity ----------------------
costs are the reduction in satisfaction associated with foregoing or
reducing consumption of the product. How these costs will be perceived ----------------------
and thus which of the outcomes, or combinations of outcomes, will occur ----------------------
depends on the particular consumer, product, and situation.
----------------------
6. Sales personnel :
For most low-involvement purchases in the US, self-service is ----------------------
predominant. As purchase involvement increases, the likelihood of
----------------------
interaction with a sales person also increases. Thus, most studies of
effectiveness in sales transactions have focused on high-involvement ----------------------
purchases such as automobiles, consumer durables or industrial products.
There is no simple explanation for effective sales interactions. Instead, ----------------------
the effectiveness of sales efforts is influences by the interactions of
----------------------
1. The sales person’s knowledge, skill, and authority.
----------------------
2. The nature of customer’s buying task.
3. The customer-sales person relationship. ----------------------
Thus, specific research is required for each target market and product
----------------------
category to determine the optimal personnel selling strategy. It is clear
----------------------
that knowledge, helpful sales people enhance the shopping experience,
while those who are not have the opposite effect. ----------------------
----------------------
Fill in the blanks.
1.
Unplanned purchases have been divided into two categories: ----------------------
____________ and impulse purchases.
----------------------
----------------------
Activity 2
----------------------
Visit few shops and observe the deals offered there. ----------------------
----------------------
----------------------
----------------------

Notes 10.5 OUTLET CHOICE vs. BRAND CHOICE
---------------------- There are three basic sequences a consumer can follow when making a purchase
---------------------- decision:
1. Brand first, outlet second
----------------------
2. Outlet first, brand second
----------------------
3. Brand and outlet simultaneously
---------------------- To illustrate this, a consumer considering buying a notebook computer
may look in relevant consumer publications and talk with knowledgeable
----------------------
individuals. On the basis of this information, the consumer may select a brand
---------------------- and purchase it from the outlet with the lowest price. However, for many
individuals and product categories, stores rather than brands form the evoked
---------------------- set. In our example above, the consumer might be familiar with one store. He
or she may decide to visit that store and select a computer from the brands
----------------------
available there. A third strategy is to compare the brands in one’s evoked
---------------------- set at the stores in the evoked set. The decision would involve simultaneous
evaluation of both store and product attributes. Thus, a consumer may choose
---------------------- between a second preferred computer at a store with friendly personnel and
excellent service facilities versus a favorite computer at an impersonal outlet
----------------------
with no service facilities.
---------------------- Table 10.6 : Level in the channel
---------------------- Decision sequence Retailer Manufacturer
---------------------- Outlet first, brand Image advertising Distribution in key outlets
second Margin management Point-of-purchase, shelf space,
---------------------- on shelf space, and position Programs to
displays strengthen existing outlets
---------------------- Location analysis
---------------------- Appropriate pricing
Brand first, outlet Many or key brands More exclusive distribution
---------------------- second Ads featuring brands Brand availability advertising
Price specials on Brand image management
----------------------
brands
---------------------- Yellow pages listing
Simultaneous Margin training for Programs targeted at retail
---------------------- sales sales personnel Distribution in
---------------------- personnel Multiple/ key outlets Co-op advertising
key brands High-
---------------------- service or low price
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. The decision would involve simultaneous evaluation of both store
and product attributes. ----------------------
----------------------
Activity 3 ----------------------
Have you ever ordered any product through the Internet? What has been ----------------------
your experience? Explain in brief.
----------------------
----------------------
10.6 INTERNET RETAILING
----------------------
Increasingly, internet buying also referred to as online shopping or in-
home shopping is fast catching up not only in developed markets but also in ----------------------
India. One reason is probably paucity of time. The other is convenience and still
other may be to get rid of parking problems. Sites like Amazon.com, ebay.com, ----------------------
and Indiatimes.com are rapidly becoming popular especially in urban places ----------------------
where connectivity is not a major issue.
----------------------
Related to internet buying, three categories of product purchase can be done.
They are : ----------------------
1. Convenience items: Low-risk discretionary items that are characterized ----------------------
by large choice and deep discounts with easy shipping facility. For
example, books, CDs, flowers and tickets. ----------------------
2. Researched items: High-information, big-ticket planned purchases that ----------------------
are characterized by low style content and “touch” not very relevant. For
example, leisure travel, computer hardware, low end durables like Irons, ----------------------
toasters etc. ----------------------
3. Replenishment items: Moderate cost, high-frequency purchases. Items
that are relatively expensive and easy to ship will be most successful. ----------------------
Examples include health care items such as vitamins, beauty aids, and ----------------------
gourmet foods.
----------------------
The reasons for choosing the Internet as an alternate channel source can
be listed as follows: ----------------------
• Convenience
----------------------
• Right Price
----------------------
• Unique merchandise
• Past experience ----------------------
• Products door-delivered ----------------------

Notes • No time to go to store
• Recommendation from friend
----------------------
• Impulse
----------------------
Barriers to Internet shopping :
---------------------- Although online buying is becoming acceptable and successful, it does face
---------------------- some shortcomings that are listed below:
1. No internet access for all
----------------------
2. Consumers do not trust ordering online
----------------------
3. Lack of touch
---------------------- 4. Consumers cannot see what they want
---------------------- 5. Cannot wait for delivery
---------------------- 6. Service support may not be reliable

7. Privacy concerns i.e. credit card details being misused
----------------------
8. Use of private information against the buyer
----------------------
9. Bombardment of ads to consumer’s email id.
---------------------- 10. Loss of identity
----------------------
Summary
----------------------
• Retailing is undergoing a sea-change especially in India and is becoming
---------------------- a highly challenging industry where innovation seems to be the need of
the hour. The traditional Kirana stores may be wiped out in the near future
----------------------
and will be replaced by professional organized retailers. The changing
---------------------- buying patterns are forcing retailers to change their business practices.
Factors that influencing the retail shopper include range of merchandize,
---------------------- convenience of shopping, time to travel, socio-economic background and
culture, and the stage of family life cycle.
----------------------
• Attributes affecting retail outlet selection include outlet image, retailer
---------------------- brands, retailer advertising, and outlet location and size. In-store influences
that affect brand choice include p-o-p displays, outlet atmosphere, stock-
----------------------
outs, sales personnel, and price deals. Internet as a retailing channel is
---------------------- fast emerging as a major player particularly for products that need not be
touched and felt. Paucity of time, parking problems, and increasing fuel
---------------------- costs are motivating people to buy on the net and get it door-delivered.
----------------------
Keywords
----------------------
• Atmospherics : The process managers use to manipulate the physical
---------------------- retail or service environment to create specific moods responses in
---------------------- shoppers.

• Shopping orientation : A shopping style that puts particular emphasis on Notes
certain activities or shopping motivations.
----------------------
1. What is retail marketing? What are the factors that affect retail outlet ----------------------
selection?
----------------------
2. What are the variables that influence brand decisions inside a retail outlet?
3. What is Internet retailing? What are its advantages and disadvantages? ----------------------
----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. The selection of a specific retail outlet, whether online or traditional,
involves a comparison of the alternative outlets on the consumer’s ----------------------
evaluative criteria.
----------------------
1. True ----------------------
Fill in the blanks.
----------------------
1. Unplanned purchases have been divided into two categories: reminder
purchases and impulse purchases. ----------------------
1. True
----------------------

Western College.
----------------------
Taylor & Francis. ----------------------
Publishing Group.
----------------------
----------------------

Notes
----------------------
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----------------------
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Consumerism
UNIT
11
Structure:
11.1 Introduction
11.2 History of Consumerism
11.3 Consumerism in India
11.4 Types of Restrictive Trade Practices
11.5 Social Responsibility
11.6 The Rise of Consumerism
11.7 Benefits of Consumerism
Summary
Key words
Suggested Reading
Consumerism 193
Notes
Objectives
----------------------
----------------------
• Describe how marketing decisions should be taken keeping the
---------------------- consumer’s and society’s long-term interests in mind
---------------------- • State the moral responsibility of business besides earning profits
• List the reasons for the rise of consumerism
----------------------
---------------------- 11.1 INTRODUCTION

---------------------- Consumerism is defined as the organized movement of the citizens and the
Government to enhance the rights and power of consumers in relation to the sellers.
----------------------
All products and services are created to enhance the quality of life for the
---------------------- members of a society. All marketing transactions should be beneficial to the
society. Very often firms are seen engaging themselves in questionable marketing
---------------------- practices and transactions that have a profound impact on the society at large.
---------------------- With the changes in the socio economic environment, very often market place
abuses are brought to the notice of the policy decision makers either through the
---------------------- media, consumer awareness groups or consumer themselves.
---------------------- The basis of consumerism is to protect the consumers from the immoral
practices conducted by the marketers. Such practices may be high prices, high-
---------------------- pressure selling, unsafe products, planned obsolescence and poor services.
Marketers have been using deceptive advertisements to influence people.
---------------------- Such advertisements are often against the morals and decency standards of the
---------------------- society. For example, the recent ads of ‘Fair & Lovely’ where a father says
“Kash mujhe ladka hota”, which reinforces sex discrimination or the ‘Kundali’
---------------------- ad, which creates a negative feeling among women.
----------------------
11.2 HISTORY OF CONSUMERISM
----------------------
Consumers all over the world, have, by and large been exploited by a large
---------------------- number of restrictive and unfair trade practices. The consumer movement first
started in US in the early 1900s but was quite nascent. The second movement
---------------------- started in 1962 and was propagated by the then President of US, John.F.Kennedy
---------------------- and subsequently in 1965 by Ralph Nader, considered by many as the “Father
of modern Consumer movement”. Nader wrote a book that crystallized many
---------------------- issues and he documented the auto deaths arising out of faulty car designs. The
rights were then tilted completely in favour of the sellers.
----------------------
The rights of the sellers include :
---------------------- Right to introduce products in any size and style provided they are not
•
---------------------- hazardous to health and safety.
• Right to price the product at any level, provided there is no discrimination
---------------------- among similar class of buyers.

Right to spend any amount of money to promote the product, provided it
• Notes
is not defined as unfair.
----------------------
• Right to formulate any product message, provided it is not misleading or
dishonest in content or execution. ----------------------
• Right to introduce any buying incentive schemes.
----------------------
In view of the growing awareness amongst the consumers, the American
Congress passed a number of legislations and established various independent ----------------------
regulatory agencies to prevent the sellers from exploiting the consumers through
----------------------
restrictive and unfair trade practices. Such legislations gave an impetus to the
consumer movement in US. ----------------------
The rights included the following : ----------------------
• Protection against exploitation by unfair trade practices.
----------------------
• Protection against questionable products.
----------------------
• Right to influence products and marketing practices in directions that will
enhance the “quality of life”. ----------------------
• Right to be adequately informed about the more important aspects of the
----------------------
products like contents, performance standards etc.
• Right to voice grievances or suggestions. ----------------------
• Right to get redressal of their grievances. ----------------------
• Right to select the best product. ----------------------
Right to a clean and healthy physical environment that will protect and
•
----------------------
enhance quality of life.
----------------------
----------------------
Fill in the blanks.
----------------------
1. _________________ all over the world have, by and large, been
exploited by a large number of restrictive and unfair trade practices. ----------------------
----------------------
11.3 CONSUMERISM IN INDIA ----------------------
In the words of Peter Drucker, “Consumerism is the shame of the total ----------------------
marketing concept”. Every organization should take marketing decisions
keeping in mind the organization’s long-term interests, the consumer’s long- ----------------------
term interests, and society’s long-term interests. It would be preferable if ----------------------
companies recognize societal problems as presenting opportunities. As stated
by Drucker “Consumerism actually should be, must be, and I hope will be the ----------------------
opportunity of marketing. This is what we in marketing are waiting for”.
----------------------
In India, as a developing economy, the plight of the consumers is not
different from that of their counterparts in the rest of the world. Indian consumers ----------------------
Consumerism 195
Notes are not all well educated and hence are unable to comprehend and understand
the complex methods of marketing. They are exploited and very often become
---------------------- victims of false claims of products, misled by deceptive advertisements, mislead
by packaging and poor after sales services. Because of the above felt abuses, it
---------------------- is observed and seen a growing consumer awareness leading to the growth of
---------------------- consumerism and an increasing demand for consumer protection in India.
Consumerism can be said to be still in its infancy stage. But the consumer
----------------------
movement is slowly gathering momentum. At times, there is deliberate attempt
---------------------- on the part of the marketer to adopt misleading, false or deceptive advertisements,
where only half truths are offered to the consumers, so as to give a different
---------------------- impression and create a different image as compared to the actual fact. A recent
research indicates that the Indian consumers are cheated to a tune of Rs 2,000
----------------------
crores annually, through various devices invented by the clever marketers.
---------------------- In the pre-liberalization era, consumers in India had hardly any voice as
regards to their rights in relation to the sellers. The inadequate competition and
----------------------
the absolute monopolies created by the protection provided by the Government
---------------------- only increased consumer’s problems. Since the mid ‘80s, there have been
rapid changes taking place in the socio-economical environments. The market
---------------------- has been flooded with goods and services and it has become difficult for the
consumers to ascertain the quality or utility of these goods and services.
----------------------
Consumerism in India has not progressed because of various reasons, which are
---------------------- as under:
---------------------- Vastness of the country, imbalance in distribution of wealth, backwardness.
•
---------------------- • The high rate of illiteracy and ignorance.

• Traditional outlook of the people to suffer in silence, lack of information
---------------------- and education.
---------------------- Inability to understand the technical complexity of the goods and accepting
•
manufacturers at face value.
----------------------
• Consumer’s tendency to get carried away by the clever advertising and
---------------------- promotion tactics.
---------------------- • Consumerism is still in its infancy stage and hence is not developed and
organized. The existing laws are incapable of effectively implementing
---------------------- and enforcing the objectives.
---------------------- The Government of India has been instrumental in creating an environment
through legislation to give a protection to the consumers. There have been
---------------------- various measures taken by the Government in this regard including:
---------------------- • Statutory regulations.
---------------------- • Development and expansion of the public sector.
The statutory regulations enforced by the Government to protect the consumer
----------------------
interests are as follows:
---------------------- • Sale of Goods Act, 1935.

• Drugs Control Act, 1950. Notes
• Prevention of Food Adulteration Act, 1954.
----------------------
• Essential Commodities Act, 1955.
----------------------
• Trade Marks and Merchandise Marks Act, 1958.
• The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969. ----------------------
• Packaged Commodities (Regulation) Order, 1975. ----------------------

The above statutory regulations were incapable of handling the problems of ----------------------
consumers in the post liberalization era. Consumers had to use the same
channels in the judiciary to get justice, and this was considered to be a major ----------------------
drawback in providing speedy justice to consumers. In view of this, and the post
liberalization problems, the Government of India passed an important statutory ----------------------
regulation in the form of Consumer Protection Act, 1986. Further, various ----------------------
amendments were made to this act, to further improve the effectiveness of this
act. Consumer Protection Act, 1986 is an act of Parliament of India enacted in 1986 ----------------------
to protect interests of consumers in India. It makes provision for the establishment of
consumer councils and other authorities for the settlement of consumers’ disputes and ----------------------
for matters connected therewith. ----------------------
Rights of consumer as given in the consumer protection act 1986 –
----------------------
1. The right to be protected against the marketing of goods and services
which are hazardous to life and property. ----------------------
2. The right to be informed about the quality, quantity, potency, purity, ----------------------
standard and price of goods or services, as the case may be so as to protect
the consumer against unfair trade practices. ----------------------
3. The right to be assured, wherever possible, access to a variety of goods ----------------------
and services at competitive prices.
----------------------
4. The right to be heard and to be assured that consumer’s interests will
receive due consideration at appropriate forums. ----------------------
5. The right to seek redressal against unfair trade practices or restrictive ----------------------
trade practices or unscrupulous exploitation of consumers
----------------------
6. The right to consumer education.
7. The right against consumer exploitation. ----------------------
The objectives of this act were: ----------------------
• To provide for the better protection of the interests of the consumers ----------------------
• To fulfill the above objective by establishment of consumer councils and
authorities for the settlement of consumers’ disputes. ----------------------
----------------------
----------------------
----------------------
Consumerism 197
Notes
----------------------
----------------------
1. The market has been flooded with goods and services and it has
---------------------- become difficult for the consumers to ascertain the quality or utility
of these goods and services.
----------------------
----------------------
Activity 1
----------------------
Have you ever been exploited by a seller in any form? What action have you
---------------------- taken to stop the seller from harassing other consumers in future?
----------------------
---------------------- 11.4 TYPES OF RESTRICTIVE TRADE PRACTICES
---------------------- 1. Collusion or concert :

A collusion action by the suppliers or manufacturers by fixing prices or
----------------------
terms of sale so as to lessen competition, or concert against the suppliers
---------------------- or manufacturers so as to divide markets and eliminate competition.
---------------------- 2. Exclusive dealing arrangement :

Under this, the supplier or manufacturer insists, that the dealer should
---------------------- exclusively deal in their products, that is an agreement entered into,
---------------------- whereby restricting the dealer to acquire or deal in the products of the
competitors.
---------------------- 3. Full-time forcing :
---------------------- This is a drastic variation of tie-up sales. Under this practice, the buyer is
required to purchase quantities of each item in a product range, in order
----------------------
to purchase one of them.
---------------------- 4. Price discrimination :
---------------------- This is the practice of selling good or services, with no or only nominal
cost differences at various effective prices, to distinct/exclusive and
---------------------- separate group of customers.
---------------------- 5. Predatory pricing :
---------------------- To ward off competition or drive out existing competition, marketers
indulge in temporary sales at prices below cost. Such practice will also
---------------------- ensure that the market power of the marketer resorting to such a trade
practice is enhanced or maintained.
----------------------
6. Resale price maintenance :
----------------------
Under this trade practice, the manufacturer fixes a price at which retail
---------------------- shop, not owned by him, must resell his product to the consumers.

7. Area restriction : Notes
Here, the manufacturer puts restriction on the dealer to make supplies
----------------------
only in a fixed area or territory and not to sell beyond that area.
----------------------
----------------------
Fill in the blanks.
----------------------
1. _______________ is a type of restrictive trade practices.
----------------------
11.5 SOCIAL RESPONSIBILITY ----------------------
Traditionally, business organizations were involved in commercial ----------------------

activities aimed at making a profit. However, today business is considered to
----------------------
be a social institution forming an integral part of the social system. Because
of the social responsibility of the business, it is the moral responsibility of ----------------------
businessmen to be bound by certain ethical principles and rules of conduct,
which reflects its responsibility, authority, and dignity. Few of the important ----------------------
ethical principles are as under:
----------------------
1. Do not deceive or cheat customers by selling sub-standard or defective
products by under measurement or by any other means. ----------------------
2. Do not resort to black marketing or profiteering. ----------------------
3. Do not destroy or distort competition. ----------------------
4. Do not tarnish the image of competitors by unfair practices.
----------------------
5. Be precise, accurate and sincere in the advertising labeling and packaging
of goods and services. ----------------------
A growing number of organizations are looking beyond profits and trying ----------------------
to achieve improvement in lives of the poorer sections of the society. There are
companies that are finding out new ways of protecting the environment. A large ----------------------
number of companies have been striving to achieve international standards like
----------------------
ISO 14000. In India, groups like the Tata’s have been striving to achieve social
responsibilities right from their inception in India. Tata Iron and Steel Co. Ltd, ----------------------
has been pioneering in the field of social welfare in India. Another example that
can be given here is of Gillette, which manufactures alkaline batteries. Earlier, ----------------------
Mercury was an essential ingredient of these batteries and is extremely for the
----------------------
environment. Gillette spent huge amounts in R&D to replace Mercury and were
eventually successful. The new batteries were not only Mercury free, but gave ----------------------
75 percent more life at just 25 percent extra prices.
----------------------
Business world in India, has instituted an award called ‘Business world-
Social Responsibility Award” to recognize and felicitate Indian companies with a ----------------------
social conscience. In order to uphold the social responsibilities, The Advertising
Club of India formulated a regulatory code of conduct for the profession and is ----------------------
applicable to all concerned in advertising. The code is as under:
----------------------
Consumerism 199
Notes The concerned people in advertising have to make honest claims and
•
should not mislead the consumer.
----------------------
• The portrayal of the advertisements should be within the accepted standards
---------------------- of public decency.
• Ensure and safeguard against excessive promotion of products, which are
----------------------
considered to be dangerous or hazardous to the society or individual.
----------------------
----------------------
Fill in the blanks.
----------------------
1. The Advertising Club of India formulated a ______________for the
---------------------- profession, which is applicable to all concerned in advertising.
----------------------
---------------------- Activity 2
---------------------- What role can you, as an aware citizen, play in spreading the benefits of
consumerism at the grassroots level in India?
----------------------
---------------------- 11.6 THE RISE OF CONSUMERISM

---------------------- Consumerism as a social force can help to:
---------------------- • Make the business community more honest, efficient, responsive and
responsible. The manufacturers and sellers will be compelled to adopt
---------------------- fair trade practices, when consumers learn to exercise their rights and are
---------------------- not taken for granted.
• Consumerism can also be viewed as an opportunity for business
----------------------
community to serve the consumers in a better and more efficient manner.
---------------------- It will prove to be a weapon for marketers to effectively implement the
societal concept of marketing.
----------------------
In case of imperfections in the demand and supply situation in the market,
•
---------------------- concerned marketers can help the consumers to get rid of the traders who
resort to practices such as hoarding, black marketing etc.
----------------------
Consumerism will also ensure that the Government takes the necessary
•
---------------------- measures to protect consumer interest by guarantying their legitimate
rights.
----------------------
----------------------
----------------------
----------------------
----------------------

Table 11.1 : Complaints received against ads by the Advertising Notes
Standards Council of India and MRTP Commission
----------------------
Advertiser Product Nature of complaint
Weekender Kids Clothes Ad implies superiority of rich ----------------------
children over poor and promotes ----------------------
violence.
Kinetic Engineering Kinetic Safari V2 Ad shows riders driving ----------------------
dangerously through traffic.
Videocon Bazooka 21 TV The greatest offer of the century ----------------------
International – own a Bazooka 21 free is ----------------------
misleading.
Paras Pharma Moov The ad claim that moov is better ----------------------
than iodex, is unsubstantiated.
----------------------
Nivaran Herbal Memory Plus Claims that the product gets rid of
wrinkles, due to age are untrue. ----------------------
RCI Lizol disinfectant Ad claims Lizol is a true germ-
cleaner, is unsubstantiated. ----------------------
Pidilite Industries Fevikwick Ad showing the secretary sticking ----------------------
the boss’s fingers shows unsafe
practice. ----------------------
HLL Clinic All Clear Claims that ZPTO moisturizes
shampoo hair, is unsubstantiated. ----------------------
Colgate Palmolive Colgate dental Claim of being 2.5 times ----------------------
cream superior over any toothpaste is
unsubstantiated. ----------------------
----------------------
11.7 BENEFITS OF CONSUMERISM
----------------------
It is necessary to have a well-developed consumerism in India, for the
benefit and to protect the consumer rights. In spite of best efforts by various ----------------------
consumer organizations, not much consumerism with practical utility has taken
place in the country. This is partly because of the lack of consumer education ----------------------
and partly because of the mass consumer protests demonstrated against market ----------------------
imperfections having the involvement of the vested interests of political parties.
Further, the consumer movement has generally been confined to urban cities ----------------------
and towns, whereas there is a huge majority of consumers in the rural areas,
who have not been involved in such movements. ----------------------
If organized well, with involvement of many more consumers, consumerism ----------------------

will gain momentum and benefit the consumers in the following ways:
----------------------
1. Consumer Education
----------------------
Consumers need to be informed and educated about their rights and to
make them capable of making wise purchase decisions. It is observed ----------------------
that, the presence of Government regulations and consumer action groups
cannot always protect the consumers against all the marketing abuses. So ----------------------
Consumerism 201
Notes the best weapon in the hands of the consumers will be more information
and knowledge about the product, company, packaging, etc. This is
---------------------- possible only if the consumers are educated in the real sense. Even the
marketing firms could help by providing the necessary education material
---------------------- to consumers. The saying goes, “Educated consumers make better
---------------------- customers”.
2. Liaison with government and the Producer
----------------------

Consumer advocates who are organizing the various consumer
---------------------- movements should realize that, in a developing economy like India,
where consumerism is still in its infancy stage, Government efforts can
----------------------
go a long way in meeting consumer needs. Thus they can play the key
---------------------- role by maintaining liaison with the Government on one hand and the
manufacturers on the other.
----------------------
3. Product Research and Information to Consumers
---------------------- Product research is a part of the broader term, consumer research, which is
---------------------- a part of marketing research. Product research will help in the generation
of more product knowledge, in terms of its various attributes, information
---------------------- related to prices, ingredients, competing brands, utility value and so on.
There are various research organizations in India, which conduct research
---------------------- on an on-going basis. At times, such findings get published in various
---------------------- leading magazines. Similarly, product ratings enable consumers in making
a right choice. The consumers can use such information to ascertain the
---------------------- merits of the products, in terms of convenience, style, comfort, durability
and so on. When consumers make a purchase decision based on such
---------------------- information, it is less likely that they will be mislead or taken for a ride
---------------------- by the marketers.
---------------------- Summary
---------------------- Consumerism is defined as the organized movement of the citizens
•
and the Government to enhance the rights and power of consumers
----------------------
in relation to the sellers. The movement started in U.S.A and has
---------------------- since spread across the globe. The real impetus on consumerism in
India came after the introduction of Consumer Protection Act of 1984.
---------------------- However, due to the vastness of the country, economic imbalance, lack of
awareness, illiteracy, and attitude of people to suffer in silence has led
----------------------
to consumerism remaining restricted to urban India and that too not in a
---------------------- big way. Government and some bodies have been pushing for the cause
of late. Marketing always should aim at enhancing the life style of the
---------------------- society as a whole and hence the rights of buyers need to be protected at
all costs.
----------------------
----------------------
----------------------

Keywords Notes
----------------------
• Consumerism : Organized movement of the citizens and the Government
to enhance the rights and power of consumers in relation to the sellers. ----------------------
----------------------
----------------------
1. Explain the meaning of Consumerism. What were the efforts taken by the
Government of India towards protection of Consumer rights? ----------------------
2. What are the limitations for the growth of Consumerism in India? ----------------------
3. Write short notes on:
----------------------
a) Social responsibility
----------------------
b) Restrictive trade practices
c) Benefits of Consumerism ----------------------
----------------------
----------------------
----------------------
Fill in the blanks.
1.
Consumers all over the world have, by and large, been exploited by a ----------------------
large number of restrictive and unfair trade practices. ----------------------
----------------------
----------------------
1. True
1. Full-time forcing is a type of restrictive trade practices. ----------------------
----------------------
Fill in the blanks.
----------------------
1. The Advertising Club of India formulated a regulatory code of conduct
for the profession, which is applicable to all concerned in advertising. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Consumerism 203
Notes
Suggested Reading
----------------------
---------------------- Western College.
----------------------
Taylor & Francis.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Consumer Satisfaction
UNIT
12
Structure:
12.1 Introduction
12.2 Customer Orientation
12.3 Consumer Expectations
12.4 Enhancing Consumer Satisfaction
12.5 Sources of Customer Dissatisfaction
12.6 Customer Complaint Mechanism
Summary
Key words
Suggested Reading
Consumer Satisfaction 205

Notes
Objectives
----------------------
----------------------
• Analyse how enhanced consumer satisfaction leads to increase in
---------------------- sales
---------------------- • List the various sources of customer dissatisfaction
• Describe the concept of value by marketers to match customer
----------------------
requirements
---------------------- • Suggest a customer complaint mechanism
----------------------
12.1 INTRODUCTION
----------------------
When the expected needs of the consumer are met, ‘Consumer Satisfaction’
---------------------- occurs. When the consumer gets a value from the product or service in excess
---------------------- of his expectations, ‘Customer Delight’ occurs.
Let us have a look at a variety of products that dominated the Indian
---------------------- markets for a long time. These are:
---------------------- • Premier Padmini from Premier Automobiles Ltd.
---------------------- • Ambassador from Hindustan Motors Ltd.
• HMT watches.
----------------------
• Vijay Super and Allwyn Pushpak from API.
----------------------
• ECTV from Bharat Electronics Ltd.
---------------------- These are some of the brands that had an absolute monopoly in India.
---------------------- None of these models are visible in the Indian markets. Infact, many of them
have become extinct or are on the way to become extinct. What must be the
---------------------- reason for this?
---------------------- One of the important reasons for the extinction of these brands is the total
lack of customer satisfaction. These brands from the pre-liberalization era did
---------------------- little to understand the needs of the consumers and their changing demands and
expectations. All organizations have realized that marketing is the core element
----------------------
of management philosophy and the key to success lies in focusing more and
---------------------- more on the customer. The real challenge today before the marketers is to
ensure that they satisfy every customer. The quality of service should meet the
---------------------- expectations of the customers.
----------------------
12.2 CUSTOMER ORIENTATION
----------------------
The consumer today is looking for value for his money. The challenge
---------------------- before the marketer is to identify that value which would appeal and convince
the consumer. Marketers are trying to enhance the concept of value through
---------------------- unique delivery methods. They have realized that product service characteristics,

customer’s aspirations and perceptions and the availability of competing Notes
alternatives can be used to enhance customer value. Here the objective of every
marketer is to look at everything from the customer’s perspective. A marketer ----------------------
may feel that he has the best product or service in the world but the critical
issue is whether the customer also perceives it similarly. Hence the focus and ----------------------
challenge before all marketers is to rebuild themselves around their customers. ----------------------
Customer Orientation refers to the process wherein all the employees of
----------------------
the firm are required to interact directly with the customer and the end user.
They can have access to every person and function within the organization, be ----------------------
involved in designing and fine tuning key products and processes, and turn every
interaction with the customer into a platform of interactive communication, so ----------------------
as to add value and increase customer satisfaction.
----------------------
Such an orientation towards the needs of the customers will help a firm in:
----------------------
• Providing the quality of service to match the customer requirement.
Help to focus on consumer needs so as to add value and offer benefits to
• ----------------------
the customer. ----------------------
To identify new customers, new market segments and new applications
•
for existing products. ----------------------
Work towards total customer satisfaction and maximum customer delight.

• ----------------------
Manufacturing : ----------------------
• Manufacture low-cost customized product.
----------------------
• Reduce cycle-times at shop floor level.
----------------------
Developing :
• Customer Focused Products. ----------------------
• Reduce Development Period. ----------------------

Marketing : ----------------------
• Target individual customer.
----------------------
• Reduce order-processing time.
----------------------
Customer Interaction :
Delivering ----------------------
• Deliver customized products to individual customer. ----------------------

• Reduce delivery period. ----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 12.1 : New customized chain to ensure customer satisfaction
----------------------
In order to increase the customer satisfaction levels, a marketer has to give due
---------------------- consideration to the following factors:
---------------------- • Market size.
---------------------- • Rate of growth of the market.

• Stability of demand.
----------------------
• Importance of price in decision-making.
----------------------
• Importance given by customers to quality aspect.
---------------------- • Consumers’ pre and post sales expectations.
---------------------- • Customer desire for innovation.
---------------------- • The level of competition including the potential competition.

• The firm’s competitive strength in terms of price and product performance.
----------------------

---------------------- 1. Customer orientation refers to the process wherein all the employees
of the firm are required to interact directly with the customer and the
---------------------- end user.
----------------------
----------------------

12.3 CONSUMER EXPECTATIONS Notes
Consumer expectations can exist at four levels that are as under: ----------------------
1. Expectations at the general level :
----------------------
This level of expectation refers to the general expectations related to the
reliability, durability, style etc. A consumer will intend to buy only that ----------------------
product which has these minimum attributes as stated above.
----------------------
2. Expectations at the category level :
----------------------
Here the consumers expectation is associated or built up from the particular
class of products. For example, customers would expect a high level of ----------------------
comfort, style, luxury and safety from cars that belong to the luxury class
like the BMW, Mercedes Benz, and Volvo etc. ----------------------
3. Expectations at the brand level : ----------------------
Here the consumer expectations are built up based upon his knowledge ----------------------
and information about a particular brand and the organization owning
that brand. Brands like Cadbury’s, Xerox, and Dalda have become ----------------------
synonymous with the products like chocolates, photocopying machines,
vegetable oil respectively. ----------------------
4. Expectations at the transaction level : ----------------------
It refers to the expectations that are built up at the time of the transaction ----------------------
between the firm and the consumer. For instance, British Airways has
come to be known as the world’s most favourite airline because of its ----------------------
offerings to customers of services that are much ahead of the time. Due
to this brand image, expectation is built up while boarding the British ----------------------
Airways for the first time i.e. at the transaction level. ----------------------
Often, consumers compare their expectations from a product or service
with their post-purchase experience. If the outcome of the post-purchase ----------------------
experience is in line with the expectation, then it is referred to as positive ----------------------
discrepancy else it is referred to as negative discrepancy. This discrepancy
will lead to either satisfaction or dissatisfaction. ----------------------
----------------------
Fill in the blanks.
1. Consumers frequently compare their expectations from a product or ----------------------
service with their _____________experience. ----------------------
----------------------
12.4 ENHANCING CONSUMER SATISFACTION
----------------------
Customer satisfaction is a continuous process, which does not begin, or
end with a purchase. It covers the entire ‘ownership experience’ from selecting ----------------------
a product, to purchase, through after sales service to repeat purchase. Customer
satisfaction process has three phases, which are as under: ----------------------

Notes 1. Pre-sales :
During this stage the customer’s expectations start developing through
----------------------
the various marketing stimuli like advertising, word of mouth, product,
---------------------- packaging, etc. Here the critical issue is the availability of clear and useful
information on:
----------------------
• The product or service.
---------------------- • Its quality aspects.
---------------------- • Core benefits.
---------------------- • Price.
• Availability at sales outlets.
----------------------
• How to obtain it.
---------------------- 2. During sales :
---------------------- This refers to the time when the customer is experiencing the use of the
product (customized preferably to his specific needs) through the product
----------------------
catalogue or a sales talk of a sales person. For this to happen, the following
---------------------- needs to exist:
• Opportunity to inspect the product.
----------------------
• Attractive sales environment.
----------------------
• Courteous and attentive service.
---------------------- • Reasonable and reliable delivery.
---------------------- • Enhancing the quality of goods or services.
---------------------- • Prompt redressal in case of complaint receipt.

• Freedom to choose without undue sales pressure.
----------------------
3. After Sales :
----------------------
It refers to the period when the customer has started using the product or
---------------------- service to meet his specific needs. This will include the following:
a. Necessary support or advice to be provided.
----------------------
b. Prompt replacement or refund if necessary.
----------------------
c. A smooth and straight forward complaints procedure.
---------------------- d. Efficient repair and maintenance service.
---------------------- e. Efficient and effective consumer follow-up process.
---------------------- Importance of Regular Research

Regular research is necessary to keep a track of the changing levels of
----------------------
customer satisfaction. Market research gives excellent clues to the firm about
---------------------- what existing or prospective customers think. At the same time such research
provides insight about the customer’s perceptions about the competition. This
---------------------- will indicate the firm about its competitive position. Such activity needs to be

done as a regular process so that there will be a continuous dialogue with the Notes
customers and helps the firm to avoid loosing the sight of the consumers.
----------------------
There are many cases of brands and companies that have witnessed a
downward swing in their business only on account of forgetting their customers ----------------------
and not doing anything to enhance their customer satisfaction. For example,
the Ford motor company, which got into deep trouble twice for not listening ----------------------
to their customer. For 17 years, Ford had dominated and revolutionized the
----------------------
American market by providing no frill, low priced models. However, after
17 years the same customers rejected Ford in favour of options like General ----------------------
Motors. This was essentially because Ford lost the sight of the customers and
did not recognize the new value providers and the changing customer choices. ----------------------
Many companies are encouraging their customers to give a regular feedback
----------------------
and use this as a means of maintaining regular contact and dialogue. Feedback
encourages the customers to talk about the company and the product rather than ----------------------
encouraging them to comment. Such feedback is especially critical for service-
oriented industries. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 12.2 : Adding value and increasing the level of Consumer Satisfaction ----------------------
Factors identified as unique for enhancing Customer Satisfaction in Service ----------------------

industry:
----------------------
1. The communication ability of the staff especially in listening and in
giving proper response to the customers. ----------------------
2. The feeling of courtesy conveyed by the staff while dealing with all types ----------------------
of customers and their problems.
----------------------
3. A genuine sense of caring for the customer.
4. The credibility of information communicated. ----------------------
5. The information and knowledge exhibited by staff concerning all ----------------------

theaspects of the organizations, policies and service provision procedures.
----------------------
6. A genuine feeling, concern and willingness of the staff to respond to
customer needs. ----------------------
7. Reliability with which service is provided. ----------------------
8. The tangible evidence of service seen in the physical appearance of
----------------------
facilities and staff.

Notes From the above it is quite clear that the bundle of services must include certain
vital aspects, which are as under:
----------------------
The formal product- the image, quality, elegance etc. of the organization
•
---------------------- setup.
• The core products- All the services which is bought by the consumer.
----------------------
• The augmented product- In total all the consumer benefits and experience
---------------------- of the service felt by them.
----------------------
Activity 1
----------------------
According to you, which phase of the customer satisfaction process is the
----------------------
most important?
---------------------- Give reasons for it.
----------------------
---------------------- 12.5 SOURCES OF CUSTOMER DISSATISFACTION
---------------------- Customer dissatisfaction results out of mismatch between customer expectations

and realizations. At times the nature of expectations may be ambiguous.
----------------------
Such situations of ambiguity may occur due to various reasons, which are as
---------------------- under:
• Lack of experience with an existing product. For example, when a
----------------------
customer buys a CR-ROM package, he may not know what to expect,
---------------------- since this may be his first experience at buying the package.
• The product under consideration may be a new product or an innovation.
----------------------
For instance, doing marketing on the Internet.
---------------------- • While making the purchase decision, the service may not be physically
---------------------- present as in the case of tele shopping.
• The quality of service varies spontaneously. For example, many customers
---------------------- having air travel fright expect that the plane should land smoothly every
---------------------- time. But this may not be possible every time since it depends on the
climate, mood of the pilot etc.
---------------------- • Sometimes expectations are built up due to comparisons, which may lead
---------------------- to dissatisfaction. For example, the effect of a music system in a music
shop or a hotel may not be there when the same system is brought home.
---------------------- This is because the acoustics in the hotel or the shop are totally different
than those available at home. This leads to dissatisfaction towards the
---------------------- music system.
----------------------
----------------------
----------------------

12.6 CUSTOMER COMPLAINT MECHANISM Notes
It is well known fact that retaining existing customers is much more ----------------------
economical than getting new customers. Getting a new customer is almost ----------------------
five times expensive than retaining a customer. For doing this, a firm needs
to have a proactive model of complaint handling where conscious efforts are ----------------------
made to handle customer complaints at every stage. The traditional view of the
organization had no place for complaints in the loop. However, now firms have ----------------------
realized that to keep pace with the changes taking place in the market place, ----------------------
listening to customer needs, views, suggestions, handling their complaints etc.
will go a long way in communicating that they care for their customers. ----------------------
The way in which an organization handles complaints will reflect its ----------------------
commitment to the service offerings. Problems that get identified through
complaints will prove to be a valuable element of market research and addressing ----------------------
such problems before they begin to make a measurable impact on the company’s
market share will be a key to success. Moreover, the firm can also identify ----------------------
analysis of complaints as positive opportunities for service improvements. ----------------------
The complaint resolution mechanism, to be effective, needs to be integrated
into the decision making level at the topmost authority in an organization. ----------------------
A firm that has a genuine urge for customer concern and effective response ----------------------
needs to probe and take decisions to effect changes addressing the root cause of
complaints. Sometimes, the complaints look to be superficial. The cause of such ----------------------
complaints may lie somewhere else and for this the top management needs to
get involved in the systemization of customer resolution process. An integrated ----------------------
approach is necessary to make complaint handling effective. This means ----------------------
that the system should include all those functions that directly or indirectly
contribute to making of the product. For example, a leading car manufacturer in ----------------------
India has a system with representation of various functions such as production,
vendor development, R&D, maintenance etc. This is because a total approach ----------------------
is necessary to resolve complaints to the entire satisfaction of the customers and ----------------------
to ensure that the same complaints do not repeat.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig 12.3 : Role of Complaint Handling in a Proactive Organization

---------------------- 1. Customer____________results out of mismatch between custome
expectations and realisations.
----------------------
----------------------
Activity 2
----------------------
Give your own personal experience of any incident when you were
---------------------- dissatisfied with a product.
----------------------
----------------------
Summary
---------------------- • When the expected needs of the consumer are met, consumer satisfaction
occurs. When the consumer gets a value from the product or service in
---------------------- excess of his expectation we say customer delight occurs. Consumer
expectation can exist at four levels that are expectation at the general
---------------------- level, category level, brand level, and expectations at the transaction level.
---------------------- The consumer today is looking for value for his money. The challenge
before the marketer is to identify that value which would appeal and
---------------------- convince the consumer. Marketers are trying to enhance the concept of
value through unique delivery methods. The objective of every marketer
---------------------- is to look at everything from the customer’s perspective. Hence the focus
---------------------- and challenge before all marketers is to rebuild themselves around their
customers.
----------------------

• Customer Orientation refers to the process wherein all the employees Notes
of the firm are required to interact directly with the customer and the
end user. They can have access to every person and function within the ----------------------
organization, be involved in designing and fine tuning key products and
processes, and turn every interaction with the customer into a platform ----------------------
of interactive communication, so as to add value and increase customer ----------------------
satisfaction. Such an orientation towards the needs of the customers
will help a firm to survive and grow in this highly competitive business ----------------------
scenario.
----------------------
• Every firm needs to continuous research to understand what dissatisfies
the customers and what can delight them. The attributes that cause ----------------------
dissatisfaction need to be worked upon immediately. Care should be
----------------------
taken to ensure satisfaction at the pre-sales stage, during sales, and after
sales. Service industry needs to look at conducting Customer Satisfaction ----------------------
Index Studies regularly and the salaries of all individuals to some extent
need to be based on increase or decrease in satisfaction levels. ----------------------
----------------------
Keywords
----------------------
• Consumer Satisfaction : It occurs when expected needs of consumers
are met. ----------------------
• Consumer delight : It occurs when the consumer gets a value from the ----------------------
product or service in excess of his expectation.
----------------------
• Customer Orientation : It is a process wherein all the employees of the
firm are required to interact directly with the customer and the end user. ----------------------
----------------------
----------------------
1. Explain with suitable examples the importance of Customer Satisfaction
in today’s environment. ----------------------
2. Describe the various sources of customer dissatisfaction. ----------------------
3. Explain the various measures that can be used for enhancing customer ----------------------
satisfaction.
----------------------
Answers to Check your Progress ----------------------
----------------------
1. True
----------------------
----------------------
----------------------

Fill in the blanks.
----------------------
1. Consumers frequently compare their expectations from a product or
---------------------- service with their post-purchase experience.

1. Customer dissatisfaction results out of mismatch between customer
---------------------- expectations and realisations.
----------------------
Suggested Reading
----------------------
----------------------
Western College.
---------------------- 2. Chaudari, Arjun. 2006. Emotion and Reason in Consumer Behaviour.
---------------------- Taylor & Francis.
---------------------- 4. Nair, Suja R. 2013. Consumer Behaviour: Text and Cases. Mumbai:
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Organizational Buying Behaviour
UNIT
13
Structure:
13.1 Introduction
13.2 Buyer Characteristics
13.3 Decision Process and Buying Patterns
13.4 Constituents of Professional Buying
13.5 Factors affecting Organizational Buying Behaviour
13.6 Attributes used to Evaluate Suppliers
13.7 Buying Decision Process
13.8 Attributes Necessary to Improve Salespeople
Summary
Key words
Suggested Reading
Organizational Buying Behaviour 217

Notes
Objectives
----------------------
----------------------
• Describe how consumers actually make their buying decisions
----------------------
• Identify who makes the buying decision and the type of buying
---------------------- decision that is involved
• List the steps in the buying process
----------------------
---------------------- 13.1 INTRODUCTION

---------------------- Organizational buying differs largely from consumer buying. One of the
salient features of organizational buying is that it is basically a rational buying
---------------------- process. This means that organizational buying is based purely on utilitarian
---------------------- concept. There is nothing called hedonic buying. By principle, organizational
buyers do not bring in emotions in their buying process and as such emotional
---------------------- appeals do not make any impact on their buying process. Besides this, there are
a few more distinctions, which are as under:
----------------------
1. Geographical Concentration
----------------------
Organizational buyers are concentrated in specific locations. Such
---------------------- concentration can be due to a number of reasons like infrastructure
availability, nearness to port, closeness to raw material supply points, tax
---------------------- benefits for locating in specific areas etc. This is a universal phenomenon
and is applicable to all organizational buyers across the globe. For example,
----------------------
automotive manufacturers in India are concentrated in places like Pune,
---------------------- Delhi and Chennai. In US, automotive manufacturers are concentrated in
and around Pittsburgh often called as the Detroit. Similarly, the software
---------------------- companies in India are located at places like Bangalore, Hydrebad,
Chennai and Mumbai. In US, such companies are concentrated in the
----------------------
Silicon Valley. Metal industries are concentrated in Bihar and Jharkhand
---------------------- in India.
2. Fewer, Larger Buyers
----------------------
Organizational buyers are considerably fewer in number than the individual
---------------------- consumers. But at the same time, these are very high volume buyers. In
India, companies like Bajaj Auto, Telco, Maruti, Ashok Leyland, BHEL
----------------------
etc. are huge buyers having purchases running in hundreds of crores. This
---------------------- has its own advantages and disadvantages. Fewer buyers mean the sellers
can concentrate and focus all their efforts to limited buyers. The service
---------------------- levels can be maintained at the highest levels and customer management
becomes simplified. The sellers will have detailed information on their
----------------------
customers and their needs are effectively understood.
---------------------- Large buyers will be extremely price sensitive. The sheer volume of
---------------------- purchasing gives them unlimited powers over the sellers. Such a power
with the buyers gives them the authority to twist the arms of the suppliers.
The problem further gets complicated with the product differentiation Notes
becoming extinct. Further, the concentrations of these buyers give them
added benefit of being well connected at the minimum communication ----------------------
costs. This often leads to the buyers forming an informal association to
further enhance their purchasing powers. ----------------------
3. Vertical or Horizontal Markets ----------------------

When the product of the seller is such that it has a universal application, ----------------------
then it can cater to a large number of buyers in diverse industries. For
example, computers are used in automotive, chemical, pharmaceutical, ----------------------
textile and other industries. Similar is the case with sellers of generating
----------------------
sets, transformers, stapler pins and so on. These are referred to as horizontal
markets. Sellers who cater to the needs of buyers in one particular industry ----------------------
will have vertical markets. For example, manufacturers of tyres, engine
parts, gearbox etc. will be only catering to automotive manufacturers. ----------------------
There are advantages and disadvantages of vertical and horizontal markets. ----------------------
In case of horizontal markets, sellers are at a lower risk if one particular
industry is going through a bad phase. But the selling process becomes ----------------------
complicated and the sales management becomes difficult. In case of
----------------------
vertical markets, the sales process, customer management becomes quite
simplified but there is always a threat of being hit by fluctuations in that ----------------------
particular industry.
----------------------
4. derived demand : derived from consumer demand
Organizational buyers depend completely on the consumer demands. For ----------------------
example, in India the entire industry depends on the rainfall and the crop ----------------------
situation. If the agricultural industry is down, the entire industry is hit. If
there is recession in the market, consumers tend to reduce their buying ----------------------
and postpone buying of high value items. This directly and indirectly
affects the organizational buying decisions. ----------------------
5. Price Inelasticity : Unaffected by price changes in the short run ----------------------

Consumers tend to go in for high volume buying when price cuts ----------------------
are offered in the short term. They do not mind investing more and
stocking the products in case of promotional scheme offers. But in ----------------------
case of organizational buyers such promotional schemes do not change
----------------------
their buying patterns. This is because buying in larger volumes to
take advantage of price cuts in the short run does not really mean cost ----------------------
saving for organizational buyers, also because their working capital gets
unnecessarily locked in and their inventory carrying costs start rising. In ----------------------
many companies it becomes extremely difficult to enter a product in the
----------------------
stores and inventory systems if the product is bought on the basis of a
promotional scheme like one free with another. ----------------------
6. Fluctuating demand
----------------------
Organizational buyers do not have a uniform demand. This is because their
demands are directly related to consumer demands. In India for example, ----------------------

Notes the industrial demand goes up just before the festival seasons. Lot many
organizational buyers buy during September and March. This is to take
---------------------- depreciation benefits. Automotive manufacturers, consumer durables
buyers start buying in huge quantities in the months of July to October.
---------------------- The festival season in India starts from October and the organizational
---------------------- buyers have maximum sales during these months.

----------------------
---------------------- 1.
The decision-making process in organisational buyers is always
concentrated in an individual.
----------------------
----------------------
Activity 1
----------------------
Explain the roles of initiator, end user, purchaser, decision-maker and
---------------------- influencer in a family of four who were to buy a car. How would this differ
---------------------- from an organization, which was thinking of buying cars?
----------------------
13.2 BUYER CHARACTERISTICS
----------------------
1. Group involvement
----------------------
The decision making process in organizational buyers is never concentrated
---------------------- with an individual. There are various reasons for group involvement. The
first and foremost reason is to use the expertise of various individuals in
---------------------- their respective fields. The purchaser is an expert in finding out various
sources of suppliers. They are very effective in negotiation skills and
----------------------
are capable of bringing down the overall costs. The finance expert in the
---------------------- company has his expertise in getting the finance from most cost effective
sources and can influence the sellers to give additional benefits like longer
---------------------- credit period etc.
---------------------- The group of organizational buyers has five basic levels that include
the initiator, the end user, the purchaser, the influencer, and the decision
---------------------- maker. To understand this, let us take an example where a company is in
the market for a split air conditioner. Let us assume that this is required
----------------------
in the chemical laboratory of the company. Here, the in-charge of the
---------------------- chemical lab is the end user, while the chief of the entire testing department
will be the initiator. The purchase executive will be the purchaser. The
---------------------- General Manager and The Finance Manager are the decision makers. The
maintenance chief of the company will be the influencer. Usually, in all
----------------------
organizational buyers, there exists a purchase committee that evaluates all
---------------------- options and finally decides the type of the product, the seller, the terms and
conditions, the scope of supply and so on. The other reason to create such
---------------------- a team is to avoid any malpractices in the buying process. For example,

a leading automotive manufacturer has a system wherein each purchase Notes
order needs to be signed by at least five authorities before such order is
formalized and updated on the system. ----------------------
2. Technical knowledge ----------------------
Organizational buying is characterized by a very high technical and product
----------------------
knowledge. This means the sellers need to know their products in depth
and in addition should know the competition products thoroughly. Larger ----------------------
the buying organization, greater is the technical knowledge. Many a times
it happens that these buyers know the sellers products much more than ----------------------
the sellers themselves. The sales people need to upgrade their knowledge
----------------------
continuously. As a matter of fact, if the sales people fall short in technical
knowledge, their acceptance becomes a big question mark. Further, the ----------------------
organizations that do not have the requisite technical knowledge tend to
hire technical consultants to evaluate product and services rather than ----------------------
depending upon the sales people.
----------------------
3. Rational Motivation
----------------------
Organizational buying is always based on rational buying. There are
no emotional buying decisions. Such decisions are always based on the ----------------------
concept of value for money in terms of utilitarian needs. If at all brand
loyalty exists, it is purely because of utility factors. The manufacturers ----------------------
of such brands having loyal customers are extremely competitive, offer ----------------------
optimum price-value prepositions, give the best possible service and
remain continuously focused towards the customer, offer tailor-made ----------------------
solutions, maintain high quality standards, and work towards continuous
improvement. In today’s world, organizational buyers look for those ----------------------
suppliers who enhance their customers’ competitiveness. The promotion ----------------------
mix, hence, incase of organizational buyers, should essentially focus at
these requirements and not at the hedonic appeals. ----------------------
----------------------
13.3 DECISION PROCESS AND BUYING PATTERNS
----------------------
1. Formality
As it has already been discussed above, organizational buying involves a ----------------------
team effort. The value and volumes of purchases are very high. Further, ----------------------
the decision-making is highly systemized and individuals do not really
matter. The product usage may involve a large number of people who ----------------------
may or may not be the part of the buying team and hence everything
needs to be systemized. All dealings need to be transparent within the ----------------------
organization and hence all dealings are extremely formalized. All offers ----------------------
need to be in black and white. All discussions are also put on paper in
the form of minutes. Quotations, negotiations, price revisions, product ----------------------
revisions are also formalized. The formal buying is also represented by
an official and formal purchase order. The supplier needs to acknowledge ----------------------
his acceptance of the purchase order through an order acknowledgement ----------------------
that is also in the form of a document. Such an act of acceptance on the

Notes part of the supplier is a legal document and becomes a contract within the
meaning of the Indian Contract Act.
----------------------
2. Complexity: Technical and Financial
---------------------- Organizational purchases are often very complex involving huge amounts.
Many a times, such purchases affect the very survival of the business
----------------------
organizations. Typically, the bought outs and raw material costs form
---------------------- 60 to 70 percent of the sales price. Even a fraction of a percent saved
in buying can critically affect the profitability of the companies. Hence,
---------------------- such buying is complex in terms of technical and financial terms.
---------------------- 3. Lengthy Negotiations
---------------------- Every purchase process goes through various stages of negotiations.

Firstly, the technical acceptance is crystallized. Thereafter, there are initial
---------------------- discussions on commercial matters. Such discussions are often followed
by a series of meetings wherein the buyers and sellers use various tactics
---------------------- to get the best out of the deal. In case of high capital cost purchases, a final
---------------------- negotiation meeting is held where the top management of both sides gets
involved. Higher the value of purchase, lengthy is the negotiation process.
---------------------- 4. Multiple Suppliers
---------------------- Organizational buyers cannot accept stock outs because the costs of such
stock outs can be massive. There is always a possibility of the supplier
---------------------- failure. This may be due to reasons totally out of control of the supplier like
---------------------- labour problems, strike of workmen, strike of transporters in a particular
region, natural disasters and so on. Hence organizational buyers do not
---------------------- like to depend on a few suppliers. They will have multiple suppliers.
---------------------- 5. Large Orders
Organizational buyers are often mass production units. They buy in huge
----------------------
quantities and also sell in huge quantities. This means their orders are very
---------------------- large in size. Sellers need to have the capability to meet the large volumes
and generally at a very short notice. The recent cost cutting measures
---------------------- like Just In Time (JIT) put additional pressures on the suppliers to meet
the large demands at a short notice. Such orders are not large merely
----------------------
in volume but also large in value. Such large buying gives tremendous
---------------------- powers to the buyers to twist the arms of the suppliers.
---------------------- 6. Infrequent Purchase

It has been already mentioned above that the buying patterns of organized
---------------------- buyers are not uniform. They are often cyclic and seasonal in nature. The
---------------------- recent extraordinary increase in competition in the post-liberalization
era has further complicated this issue. The supply schedules finalized
---------------------- at the beginning of the month are seldom maintained. There is sudden
increase or decrease in the volume. Such a thing may totally disrupt the
---------------------- production schedules of the suppliers and their inventory costs start rising
---------------------- phenomenally. In India, this problem is becoming more serious because
of the poor planning and estimation.
7. Direct Buying Notes
Organizational buyers prefer to buy products and services directly from
----------------------
the manufacturers or service providers. Usually, they do not like to deal
with dealers and agents. There are essentially three reasons for this. Firstly, ----------------------
the volumes are very large and hence the prices offered to these buyers by
the sellers are much lower than the prices offered to dealers. Secondly, the ----------------------
infrastructure available at the manufacturers is always going to be better
----------------------
than that of the dealers. It is often observed that organizations prefer
to deal with suppliers who are of their size or bigger than themselves. ----------------------
Thirdly, organizational buyers are extremely quality conscious and do not
like to have pilferages in their supplies. ----------------------
8. Reciprocity ----------------------
Organizational buyers often select suppliers who buy from them. For
----------------------
example, a paper manufacturer would buy chemicals from a chemical
manufacturer who is buying a considerable amount of its paper. ----------------------
9. Importance of Service ----------------------
The costs of breakdowns can be exorbitant. Organizational buyers have
been rapidly moving to the concepts of Total Preventive Maintenance ----------------------
(TPM). Breakdowns, not only result in loss of man-hours but lead to ----------------------
high opportunity costs. One customer lost due to delivery problems can
mean huge losses. Hence, suppliers need to provide the best of the service ----------------------
possible to organizational buyers.
----------------------

1. The formal buying is represented by an official and a _____________. ----------------------
----------------------
13.4 CONSTITUENTS OF PROFESSIONAL BUYING
----------------------
• Visit the operations of the potential vendor.
----------------------
• Collect feedback of present customers of the vendor.
----------------------
• Multisource the order to ensure a backup supply.
• Penalty clause provisions in the contract. ----------------------
• Obtain the opinion of colleagues. ----------------------

• Choose a vendor whom you are familiar with. ----------------------
• Confirm that top management is in favour of the vendor.
----------------------
• Limit the search to vendors of good repute.
----------------------
• Obtain opinion of a majority of co-workers.
----------------------

Notes 13.5 FACTORS AFFECTING ORGANIZATIONAL BUYER
BEHAVIOUR
----------------------
1. Environmental Factors :
----------------------
a) Physical: Climate, Geographical location.
----------------------
b) Technological: Procurement related to inventory.
---------------------- c) Economic: Price, credit, cost, inventory etc.
---------------------- d) Political: Tariff barriers, defense spending, lobbying.
---------------------- e) Legal: Local, state, central regulations.

f) Ethical: Guidelines by Institute of materials management.
----------------------
g) Cultural: Corporate cultures.
----------------------
2. Organizational Factors :
---------------------- a) Tasks: Buying task performed to achieve corporate goals.
---------------------- b) Structure.
---------------------- c) Technology.
d) People.
----------------------
3. Interpersonal Factors :
----------------------
a) The Buying Centre: Comprises of those people who interact during
---------------------- the buying process (Decision Makers).
---------------------- b) Buying-Centre Roles i.e., initiators, influencers, buyers, deciders,

gatekeepers.
---------------------- c)
Power Relationships: Invisible nature of power wielded by
---------------------- individuals in an organization.
4. Individual Factors :
----------------------
a) Motivation of Buying Personnel
----------------------
It is a well-known fact that the buyer’s overall responsibility is to
---------------------- buy efficiently and at the best possible terms and conditions so as
to reduce overall costs of purchase. The purchase department has
---------------------- targets set for them at the beginning of every year. Their personal
evaluation is based on how much do they save for the company.
----------------------
Their growth in the organization is also dependant on this. Hence
---------------------- buying becomes a professional activity.
---------------------- b) Perceptions of Buying Personnel

It is to be clearly understood that although the personnel involved
---------------------- in the buying professional are rational, being human beings, they
---------------------- have their own perceptions. Sellers need to work around these
perceptions to effectively achieve their goals. It is a known fact
---------------------- that sellers try to collect as much information about the buyers

so that they are in a better position to understand their points of Notes
view and help them at the time of negotiations. Further, the persons
involved in purchasing activities in various organizations are very ----------------------
well connected to each other and their sharing of information on
suppliers does affect their perceptions. ----------------------
c) Learning of Buying Personnel ----------------------

As it has already been mentioned earlier, buying is a profession. ----------------------
Organizations take special efforts to train their personnel in
improving their buying skill sets. Often, such personnel are sent for ----------------------
advanced training programs to sharpen their skills. Such programs
----------------------
are being conducted by leading management institutions in India.
New information channels like the Internet further improves the ----------------------
abilities of these professionals.
----------------------
1. Task, structure, technology and people are_____________in buying ----------------------
behaviour.
----------------------
13.6 ATTRIBUTES USED TO EVALUATE SUPPLIERS ----------------------
• Overall reputation of the supplier. ----------------------

• Financing terms. ----------------------
• Supplier’s flexibility in adjusting to the company’s needs.
----------------------
• Experience with the supplier in analogous situations.
----------------------
• Technical services offered.
----------------------
• Confidence in the salespeople.
• Convenience of placing the order. ----------------------
• Data on the reliability of the product. ----------------------
• Price. ----------------------
• Technical specifications.
----------------------
• Ease of operation.
----------------------
• Preferences of the principal user of the product.
• Training offered by the supplier. ----------------------
• Reliability of delivery date promised. ----------------------
• Ease of maintenance. ----------------------
• Sales service expected after date of purchase.
----------------------

Notes 13.7 BUYING DECISION PROCESS
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 13.1 : Buying Decision Process
----------------------
---------------------- Activity 2
---------------------- Out of all the stages mentioned in the buying process, which stage do you
think is the most important and why?
----------------------
----------------------
13.8 ATTRIBUTES NECESSARY TO IMPROVE
----------------------
SALESPEOPLE
----------------------
• Understanding of other people.
---------------------- • Willingness to stretch for the buyer within supplier firm.
---------------------- • Listening skills.
---------------------- • Knowledge of buyer’s product line.
• Application skills.
----------------------
• Confidence and self-reliance.
----------------------
• Product knowledge and presentation skills.
---------------------- • Understanding of buyer’s problems.
---------------------- • Follow-up on deliveries.
---------------------- • Regularity of sales visits.
• Personalized approach for each buyer.
----------------------
• Technical assistance.
----------------------
• Presenting new ideas to the buyer.
---------------------- • Willingness to handle rush orders.
----------------------
----------------------
----------------------

Summary Notes
• One of the salient features of organizational buying is that it is basically ----------------------

a rational buying process. Organizational buying differs from consumer
----------------------
buying as regards to geographical concentration, fewer, larger buyers,
vertical or horizontal markets, derived demand, price inelasticity, and ----------------------
fluctuating demand. Buyer characteristics also differ largely and are
characterized by group involvement, technical knowledge, and rational ----------------------
motivation.
----------------------
• Decision process and buying patterns are influenced by factors like
formality, complexity, lengthy negotiations, multiple suppliers, large ----------------------
orders, infrequent purchase, direct buying, reciprocity, and importance of ----------------------
service. Various factors like environment, organization, interpersonal, and
individual factors also contribute to the buying behaviour. Organizational ----------------------
sellers need to take all these into account. This topic has also discussed
in brief the points that are often used by organizational buyers for the ----------------------
evaluation of suppliers. No product can sell by itself. It is the hand behind ----------------------
the product that sells a product. This is true in both individual as well as
organizational buying. Salesman can improve his skills by looking at a ----------------------
few tips provided in the topic.
----------------------
Keywords ----------------------
• Horizontal market : When the product of the seller is such that it has ----------------------
a universal application, then it can cater to a large number of buyers in
diverse industries. This is called horizontal market. ----------------------
• Vertical market : Sellers who cater to the needs of buyers in one particular ----------------------
industry will have vertical market.
----------------------
1. What are the differences between organisational buying and consumer ----------------------
buying? Support your answer with examples. ----------------------
2. Describe the stages in organisational buying decision process with the
help of a diagram. ----------------------
3. What are the characteristics of organisational buyers? State the factors ----------------------
affecting organisational buying behaviour.
----------------------
----------------------
----------------------
----------------------
----------------------

Notes Answers to Check your Progress
---------------------- 1. False
----------------------
Fill in the blanks.
----------------------
1. The formal buying is represented by an official and a formal purchase
---------------------- order.

Fill in the blanks.
----------------------
1. Task, structure, technology and people are organisational factors in buying
---------------------- behaviour.
----------------------
Suggested Reading
----------------------
---------------------- Western College.
Taylor & Francis.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Consumer Modeling
UNIT
14
Structure:
14.1 Introduction
14.2 Engel, Blackwell and Miniard Model
14.3 J. N. Sheth Model
14.4 Nicosia Model
Summary
Key Words
Suggested Reading
Consumer Modeling 229

Notes
Objectives
----------------------
----------------------
• Analyse various consumer and industrial models to understand
---------------------- buyer behaviour
---------------------- • Describe the social, individual and situational factors that influence
the buyer’s decision process
----------------------
---------------------- 14.1 INTRODUCTION

---------------------- In this unit, we will be discussing the Engel, Blackwell and Miniard model,
Nicosia model and lastly, the J. N. Sheth model of organizational buying.
----------------------
---------------------- 14.2 ENGEL, BLACKWELL AND MINIARD MODEL

---------------------- The core of the Engel, Blackwell and Miniard (EBM) Model is a decision
process, which is augmented with inputs from information processing and other
---------------------- influencing factors. The model has four distinctive sections, namely Input,
---------------------- Information Processing, Decision Process and Variables influencing decision
process.
---------------------- 1. Information Input
---------------------- Information from marketing and non-marketing sources is fed into the
information processing section of the model. The model also suggests
---------------------- additional information to be collected is available from memory or when
---------------------- post-purchase dissonance occurs.
2. Information Processing
----------------------
Before information can be used in the rest of the model, the consumer will
---------------------- first be exposed to the information processing. That is, the consumer must
get exposed to the information, attend to it, comprehend and understand
----------------------
it, accept it and finally maintain it in the memory. Any selective attention
---------------------- or exposure mechanisms that may occur in post purchase dissonance
would operate at this stage.
----------------------
3. Decision Process
---------------------- a) Need Recognition: This acknowledges the fact that there exists a problem.
---------------------- That is, the individual is aware that there exists a need to be satisfied.
b) Search: When enough information is available in memory to take a
---------------------- decision, then only internal search will be required. If internal information
---------------------- is limited, an external search for information is undertaken.
c) Alternative Evaluation: An evaluation of the alternatives found during
----------------------
the search is undertaken. It is observed from the model that the attitudes
---------------------- and beliefs are taken into account during this process.

d) Purchase: A purchase is made on the chosen alternative. Notes
e) Outcomes: The outcome can be either positive or negative depending on
----------------------
whether the purchase satisfies the original perceived need. Dissatisfaction
can lead to post-purchase dissonance. ----------------------
4. Variables Influencing Decision Process
----------------------
This section considers the individual, social, and situational factors that
influence the decision processes. ----------------------
he EBM model is very flexible and more coherent model of consumer
T ----------------------
behaviour. It also includes human processes like memory, information
processing and considers both the positive and negative purchase ----------------------
outcomes. However the model has been criticized on two aspects. Firstly, ----------------------
on the somewhat vague definition of the role of the influencing variables
and secondly, it is felt that the separation of information search and ----------------------
alternative evaluation is somewhat artificial.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 14.1 : Engel, Blackwell and Miniard (EBM) Model

----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. ny selective attention or exposure mechanisms that may occur in
A
post-purchase dissonance would operate at information input stage. ----------------------
----------------------
Activity 1
----------------------
Are your major purchase decisions taken on impulse or they are based on ----------------------
some reasons?
----------------------
14.3 J.N. SHETH MODEL ----------------------
This model concentrates on the purchasing process and highlights the importance ----------------------
of four main factors:
----------------------
1. he expectations of the individuals making up the Decision Making Unit
T
(DMU). ----------------------
These elements are represented by the block in Fig 14.2 marked as (1).
----------------------
According to this model, every person in the DMU brings with them,
their own unique set of attitudes and orientations. The individual ----------------------
background like education, role orientation, and life style will condition
their expectations. The following will also influence their expectations: ----------------------
• The various sources of information like sales people, exhibitions ----------------------
and trade shows, direct mail, press releases etc.
----------------------
• Perceptual distortion (1d in block diagram).
• The person’s previous experience (1e in block diagram). ----------------------
• The active search (1c in block diagram).
----------------------
2. The characteristics of both the product and the organization.
----------------------
The model refers to the actual buying process and contends that it is
affected by the following: ----------------------
• The product specific factors (2a) like:
----------------------
• Time pressure: Group decision will take a longer time as compared
to individual ones. ----------------------
• Perceived risk: More the risk, more the members involved in DMU.
----------------------
• Type of purchase: When the type of problem is an extensive
problem, more members will be involved in the DMU. ----------------------
• Company specific problems (2b) which include the following:
----------------------
• Organizational orientation.
• Organization size. ----------------------
• Degree of centralization. ----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 14.2 : J.N. Sheth Model

----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

3. The nature of the decision making process. Notes
The model differentiates between autonomous decisions and joint
----------------------
decisions. It also considers the following:
• Problem solving. ----------------------
• Persuasion. ----------------------
• Bargaining. ----------------------
• Politicking. ----------------------
4. The situation variables. ----------------------
These variables are coded (4) in the model. Here the model refers to
----------------------
unforeseen factors, those which fall outside the control of the DMU and
could affect the purchasing organization or supplies and can include, ----------------------
for example, labour problems, major breakdowns, cash flow problems,
bankruptcy etc. ----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. The________________concentrates on the purchasing process and
highlights the importance of it. ----------------------
----------------------
14.4 THE NICOSIA MODEL
----------------------
In the recent years marketing scholars have built buyer behaviour models
----------------------
taking into consideration the marketing man’s view point. The Nicosia model is
one such model. It is also said to be a system model, because the human being ----------------------
is analysed as a system, with stimuli as the input to the system and the human
behaviour as the output. ----------------------
This model developed by Francesco Nicosia, tries to explain buyer ----------------------
behaviour by establishing a link between the organization and its prospective
consumer. The model suggests that messages from the organization first ----------------------
influence the predisposition of the consumer towards the product or service.
----------------------
Based on the situation, the consumer will have a certain attitude towards the
product. This may result in a search for the product or an evaluation of the ----------------------
product attributes by the consumer. If the above step satisfies the consumer, it
may result in a positive response, with a decision to buy the product otherwise ----------------------
the reverse may occur.
----------------------
----------------------
----------------------
----------------------

Notes
---------------------- MASSAGE ATTITUDE

EXPOSURE
----------------------
----------------------
----------------------
Field 2
----------------------
---------------------- Field 4 The

feed back
---------------------- MOTIVATION
----------------------
---------------------- Decision
(action)
----------------------
Fig. 14.3 : Nicosia Model
----------------------
The Nicosia model groups the activities into four basic areas that are as under:
----------------------
1. Field 1 has two-sub areas- the consumer’s attributes and the organization’s
---------------------- attributes. The advertising message sent from the company will reach the
consumer’s attributes. Depending on the way the message is received
---------------------- by the consumer, a certain attribute may develop. This newly developed
attribute becomes the input for area two.
----------------------
2. The second area or area two - is related to the search and evaluation,
---------------------- undertaken by the consumer, of the advertised product and also to verify
if other alternatives are available. In case this step results in a motivation
---------------------- to buy the product or service, it becomes the input to the third area.
---------------------- 3. The third area explains how the consumer actually buys the product.
4. The area four is related to the uses of the purchased items. This fourth
---------------------- area may also be used as an input to receive feedback on sales results to
---------------------- the organization.

----------------------
Fill in the blanks.
---------------------- 1. The Nicosia model is said to be a ________________, because the
human being is analysed as a system.
----------------------
----------------------
Activity 2
----------------------
Out of all the three models discussed above, which model do you identify
---------------------- with and why?

Summary Notes
• EBM model has four distinctive sections, namely Input, Information ----------------------
processing, Decision process and variables influencing decision process.
----------------------
Before information can be used in the rest of the model, the consumer will
first be exposed to the information processing. That is, the consumer must ----------------------
get exposed to the information, attend to it, comprehend and understand
it, accept it and finally maintain it in the memory. The Sheth model ----------------------
concentrates on the purchasing process and highlights the importance
----------------------
of four main factors: The expectations of the individuals making up the
decision making unit, the characteristics of both the product and the ----------------------
organization, the nature of the decision making process and the situation
variables. Nicosia model is also said to be a system model, because the ----------------------
human being is analysed as a system, with stimuli as the input to the
----------------------
system and the human behaviour as the output.
----------------------
Keywords ----------------------
• Feedback : It ensures that the sender understands the message in the ----------------------
intended way.
• Motivation : The driving force within individuals that impels them to ----------------------
action. ----------------------
• Attitude : Expression of inner feeling that reflect whether a person is
----------------------
favourably or unfavourably predisposed to some product, brand, service
etc. ----------------------
----------------------
----------------------
1. xplain with neat block diagrams various consumer models studied by
E
you. ----------------------
----------------------
----------------------
1. False ----------------------
Fill in the blanks.
----------------------
1. The J.N. Sheth model concentrates on the purchasing process and
highlights the importance of it. ----------------------
----------------------
----------------------

Fill in the blanks.
----------------------
1. The Nicosia model is said to be a system model, because the human being
---------------------- is analysed as a system.
----------------------
Suggested Reading
----------------------
---------------------- Western College.
Taylor & Francis.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Rural Buying Behaviour
UNIT
15
Structure:
15.1 Introduction
15.2 Rising Rural Prosperity
15.3 Lifestyle Changes
15.4 Characteristics of Rural Markets
15.5 Marketing Research
15.6 Marketing Strategies
Summary
Key words
Suggested Reading
Rural Buying Behaviour 239

Notes
Objectives
----------------------
----------------------
• Analyse the differences in marketing approaches between rural and
---------------------- urban markets
---------------------- • Describe product usage patterns, rural buying behaviour and its
implications on marketing strategies
----------------------
---------------------- 15.1 INRODUCTION

---------------------- The vast population in the rural India has motivated many marketers to look at
these markets more seriously. Rural marketing has really gained importance in
---------------------- last ten to fifteen years. For a long time, marketers were satisfied catering to the
---------------------- urban markets. There was a huge demand supply gap and as a result, marketers
did not have to work beyond the urban markets. Last fifteen years have seen
---------------------- intense competition building in the urban markets and many product segments
have reached a plateau of growth in urban markets. As a result, many marketers
---------------------- have started exploring the rural markets to meet the growth targets. There has
---------------------- been very limited research of buying behaviour of rural consumers. The intense
diversity in India has also led to this limited research. There are no uniform
---------------------- patterns.
---------------------- The disparities between urban and rural markets can be broadly divided as
under:
----------------------
1. Disparity in income level.
---------------------- 2. Disparity in the basic sources of income.
---------------------- 3. Disparity in the patterns of consumption expenditure.
---------------------- 4. Social indicators.

Table 15.1 : Percentage distribution of households, population and income
----------------------
Households Population Income
----------------------
Rural 16.8 Cr 70.5% 16327
----------------------
Urban 7.9 Cr 29.5% 44223
---------------------- All India 24.7 Cr 100% 60550
---------------------- The share of rural income of the total national income is 55.6% whereas the
share in population is 70.5%. The share of income of rural population has gone
---------------------- down in last two decades.
----------------------
----------------------
----------------------

The disparity in the average income per household is quite obvious. The Notes
per capita income in rural India is 16327 while in urban India it is 44223. The
per capita expenditure in rural India is Rs. 1281.45 while that in urban India it is ----------------------
Rs. 2401.68. Further, 50% of rural population has no formal education. The 100
crore population of India is almost equally divided between haves and have- ----------------------
nots. An expanding middle class of 250 crore consumers will provide a vast ----------------------
market and give further rise to consumerism. However, the other 100 crores,
a vast majority of them in rural areas shall still be living below or around the ----------------------
poverty line. The Human Development Index is a much more comprehensive
indicator of human development that considers various aspects of human life ----------------------
and indicates about the status of rural prosperity. At the time of independence, ----------------------
the rank of India in terms of poverty, unemployment and level of development
was 86 in the world but in 1991 it reached 123. The situation has further ----------------------
worsened and a recent report shows that India ranks 136th in 156 countries in
Human Development. ----------------------
Diagnosis of the Failures : ----------------------

The reasons for the urban-rural disparities can be noted as below: ----------------------
1. Low priority to agriculture: The importance of agriculture in total
----------------------
economy has steadily declined from 56 in 1950-51 to 29 percent in 1995-
96. Growth rate in agricultural production is quite low compared to other ----------------------
sectors of the economy. India has only 30 percent of its agricultural land
irrigated and 70% of the land is dependant on rains. ----------------------
2.
Subsistence orientation of agriculture: Agriculture is mainly ----------------------
subsistence oriented. The productivity is quite low. There is not enough
value addition leading to low cost benefit ratio. Increasing input costs ----------------------
have made agriculture less and less profitable. The increased subsidies ----------------------
since mid seventies led to inefficient use of land and water resources.
There are increasing number of problems like land degradation, ----------------------
chemicalization of agriculture, water logging and ground water depletion ----------------------
due to indiscriminate use of land, water resources and chemical fertilizers.
3. Failure of land reforms: Land reforms both in the form of redistribution ----------------------
of land in favour of the poor and tenancy reforms are largely failures, ----------------------
except in Kerala, West Bengal and Maharashtra. More than 70% farmers
have land lower than 2.5 acres. ----------------------
4. Inadequate food supplies: Although India is self-sufficient in food grains ----------------------
at the national level; it continues to be inadequate at the household level.
The increase in food production was mainly due to a few crops, namely, ----------------------
wheat and rice. The area and production of other crops like sorghum,
----------------------
pearl millet, barley, ragi etc. have gone down. This might adversely affect
food security of rural poor. ----------------------
5. Slow growth of infrastructure: The growth of infrastructure has not
----------------------
been satisfactory. About 40 percent of villages in India are without proper
roads, 1.8 lakh villages have no primary school within 1 km radius. About ----------------------

Notes 4.5 lakh villages have drinking water problems and there is a shortage of
140 lakh rural dwelling units.
----------------------
6. Inadequate inputs: The research and extension systems are very weak
---------------------- and suffer from lack of adequate funds and organizational weaknesses.
There is no direct link between scientists, extension personnel and farmers.
---------------------- Timely availability of inputs like improved quality of seeds, fertilizers,
and pesticides in required quantity is another major problem faced by
----------------------
farmers. Credit is also a major problem that adversely affects adoption
---------------------- of new technology especially by small farmers. Information about new
technology and marketing of their products is yet to be within the reach
---------------------- of small farmers.
---------------------- 7. Slow down of rural industrialization: Industry growth in rural India
has slowed down. The Khadi and Gramodyog industries started during
---------------------- independence have not been able to achieve growth. One reason is the
reduction in planned outlays for this purpose. The percentage outlay for
----------------------
rural industry vis-à-vis the public sector that was 2.1 in 1960 has gone
---------------------- down to 1.6 in the seventh plan.
Areas of Concern : Regional skew
----------------------
Worst governed states like Bihar, Jharkhand, U.P, M.P and Orissa account
•
---------------------- for 40% of unemployed youth.
---------------------- • Every seventh youngster in Bihar, Assam and West Bengal is unemployed.
---------------------- • One of two residents of Bihar is illiterate and 9 out of 10 villages have no
electricity.
----------------------
• Per capita of Bihar is $100 as against national average of $480.
---------------------- • Industry has shed 1 Million jobs since 1996- 0.421 M in central PSUs,
0.15 M in Banks and 0.39 M in textile sector
----------------------
• Employment growth in agriculture is as low as 0.01%.
----------------------
• India already has 41.6 Million jobless. We will add 35.29 M to the labour
---------------------- force by 2007. Most of them in the rural India.
---------------------- At 7 % growth, we will add 27 M jobs and at 8%, 30 M. This still would
•
leave 40 M jobless.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. Low priority to agriculture, subsistence orientation of agriculture and
failure of land reforms are the reasons for the _______________. ----------------------
----------------------
Activity 1 ----------------------
From your point of view, what products and brands are likely to be more ----------------------
used by rural consumers as compared to urban consumers? Give the names
of at least five products along with the brand names. ----------------------
----------------------
15.2 RISING RURAL PROSPERITY ----------------------
Table 15.3 : Rising Rural Prosperity ----------------------
Income Groups 1994-95 2000-01 ----------------------
Above Rs.1, 00,000 1.6 3.8
----------------------
Rs.77001-1, 00,000 2.7 4.7
----------------------
Rs.50, 001-77,000 8.3 13.0
Rs.25, 001-50,000 26.0 41.1 ----------------------
Rs.25, 000 & below 61.4 37.4 ----------------------
Table 15.4 : Per capita Household Expenditure (in rupees) ----------------------
Level No. States Expenditure
----------------------
High 7 Punjab 614
(Above Rs.382) Kerala 604 ----------------------
Haryana 546
----------------------
Rajasthan 452
Gujarat 416 ----------------------
Andhra Pradesh 386 ----------------------
Maharashtra 384
Average 5 West Bengal 382 ----------------------
(Upto Rs.382) Orissa 381 ----------------------
Tamil Nadu 381
----------------------
Uttar Pradesh 373
Karnataka 365 ----------------------
Low 3 Assam 338
----------------------
(Below Rs.350) Madhya Pradesh 326
Bihar 289 ----------------------

Notes Table 15.5 : Spend Patterns
---------------------- Item Percent Rich Poor Average (Rs.)

Food articles 44 147 73 95
---------------------- Toiletries 20 67 33 43
---------------------- Washing material 13 43 22 28
Cosmetics 10 33 17 21
----------------------
OTC products 4 13 6 9
---------------------- Others 9 30 15 19
Total 333 166 215
----------------------
The average rural household spend on consumables excluding food
---------------------- grains, milk and vegetables is Rs.215 with the most affluent households i.e. the
rich spending around Rs.333 and the least affluent ones spending about Rs.166.
----------------------
---------------------- 15.3 LIFE-STYLE CHANGES

---------------------- Life-style changes are witnessed in the rural areas. Contrary to popular
perception, the potential rural market is not confined to a few million large farmer
----------------------
households. The boom in the rural market is not due to sporadic indulgence by
---------------------- a privileged rural minority but reflects instead the changing priorities sweeping
the entire hinterland. It is true that the less privileged have a low purchasing
---------------------- power, but their rising aspirations should not be underestimated. For certain
products, usage is high even among agricultural labourers, the bulk of who fall
----------------------
below the poverty line.
---------------------- Table 15.6 : Income Vs Usage of Packed Consumer Goods
(% of households using)
----------------------
Goods Monthly Household Income (Rs.)
----------------------
Upto 350 351-750 751-1500 1501+
---------------------- Washing cakes 60 78 86 91
Toilet soaps 57 72 89 96
----------------------
Toothpaste/toothpowder 22 36 65 85
---------------------- Talcum Powder 20 25 41 63
---------------------- Tea (packaged) 22 30 48 64
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Table 15.7 : Population Strata at which Brands are available Notes
Category Category Penetration Brand with higher
----------------------
(%) penetration
Toilet soap 91 Lifebuoy ----------------------
Washing cakes/bars 88 Wheel ----------------------
Edible oil 84 Double Herian Mustard
Tea 77 Lipton ----------------------
Washing powder/liquid 70 Nirma ----------------------
Salt 64 Tata salt
----------------------
Biscuits 61 Parle G
Table 15.8 : Stages in Life cycle ----------------------
Product Urban Market Rural Market ----------------------

growth rate growth rate
(%) (%) ----------------------
Popular soaps Maturity 2 Growth 40 ----------------------
Premium soaps Late growth 11 Early growth 67
----------------------
Washing powders Late growth 6 Early growth 60
Skin creams Maturity 1.1 Early growth 9.9 ----------------------
Talcum powder Maturity 4 Growth 3.1 ----------------------
15.4 CHARACTERISTICS OF RURAL MARKETS ----------------------
1. Environment ----------------------
• Small contiguous settlement units of villages widely dispersed ----------------------
• Low infrastructural level such as roads and electricity ----------------------
• Low density of population per square kilometer of space
----------------------
• Poor physical connectivity with other villages and towns, low
mobility. ----------------------
2. Social Relations Peculiarity ----------------------
• Less number of interpersonal interactions, more frequent interactions ----------------------
between the same people
• Individual better known, and identified ----------------------
• Social norms influencing individuals are more visible ----------------------

• Status is ascribed, determined by birth in a family ----------------------
• Caste influence is direct and strong.
----------------------
----------------------
----------------------

Notes 3. Low Exposure to Marketing Stimuli
• Low product exposure, low exposure to branded products
----------------------
• Low ad exposure, low comprehension of ads, low brand awareness
----------------------
• Low exposure to marketing researchers, limited sources of
---------------------- information and learning
---------------------- • Less convenient buying, low rate of retail outlets per 1000
population and low market reach, availability of limited range of
---------------------- branded products along with imitation products.
---------------------- 4. Dependence on Nature

Abundance of natural resources and high dependence on them for a
•
---------------------- large number of household needs
---------------------- • Differential access to resources based on caste, political and money
power
----------------------
High dependence on livelihoods/employment and income on
•
---------------------- natural factors.
---------------------- 5. Employment and Income Seasonality
---------------------- Mostly agrarian based, small land holdings per household (two
•
hectares or less) and more than 70% people in small agricultural
---------------------- occupations
---------------------- Acute seasonality in income receipts; high chance element in

•
income receipts because of the dependence on agriculture and
---------------------- natural resources.
---------------------- Table 15.9
---------------------- Soaps (high Vol.) No. of Hhlds. users 100% loyal % of loyal
Lifebuoy 3,49,95,691 25,41,981 7.01
----------------------
Lux 3,01,92,762 11,17,049 3.70
----------------------
Nirma 1,84,23,515 06,45,373 3.50
---------------------- Breeze 1,28,78,921 02,32,976 1.81
----------------------
Soaps (high Vol.) No. of Hhlds. users 100% loyal % of loyal
---------------------- Rexona 84,71,697 02,25,614 2.66
---------------------- Jai 72,91,207 30,905 0.42
---------------------- Hamam 65,03,391 03,38,878 5.21

Nirma Lime 60,46,797 30,211 0.50
----------------------
Liril 42,81,039 44,823 1.05
----------------------
Lifebuoy Gold 40,82,549 11,969 0.29
---------------------- (Hhlds = households)

Buying Evaluation Models : Notes
1. Expectancy-Value model :
----------------------
• Consumer identifies the attributes of the products/brands in which
he is interested. For example, an educated farmer is interested in ----------------------
buying a moped. He identifies the attributes like resale value, fuel
----------------------
economy, speed, load carrying capacity, low maintenance and price.
• He assigns weightages to the attributes. More important attributes ----------------------
will have a higher weightage. For example, resale value(2), fuel
----------------------
economy(2), speed(1), load carrying capacity(2), maintenance(2)
and price(1). ----------------------
• Hethen identifies his consideration set of brands. Here, the farmer ----------------------
has three brands, Hero Majestic, Kinetic and TVS.
• He then states his expectations about the three brands based on their ----------------------
attributes. He then uses a 10-point rating scale to evaluate each ----------------------
brand on the attributes.
• The
weighted scores are computed for each brand and decision is ----------------------
made on the basis of this score. ----------------------
2. Lexicographic model :
----------------------
In this model, a brand is selected if it excels in respect of one of the
attributes arranged in order of priority. ----------------------
• The buyer prepares a list of attributes ----------------------
• Prioritises the attributes. ----------------------
• Compares the brands on the first attribute. If there is a tie, he goes
on to the next attribute. ----------------------
• Compares the brands on the second attribute. If one is better than ----------------------
the other he selects it.
----------------------
• Otherwise, he will proceed to the next attribute till he finds a suitable
one to select. ----------------------
3. Conjunctive model : ----------------------
In this model, a consumer may select a product that satisfies few attributes, ----------------------
which he considers important.
• Identifying the important attributes. ----------------------
Determining the minimum acceptable attribute levels that the brand

• ----------------------
should possess.
----------------------
• Evaluating the available brands.
----------------------
• Selecting the one that possesses the minimum attribute levels.
----------------------
----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. In ________________ model, a brand is selected if it excels in respect
---------------------- to one of the attributes arranged in order of priority.
----------------------
----------------------
15.5 MARKETING RESEARCH
---------------------- Differences in approaches, methods and tools :

Respondents
----------------------
• Rural respondents are often semi-literate or illiterate
----------------------
• They cannot understand urban sophisticated tools
---------------------- • Less exposed to brand offers
---------------------- • Cannot verbalize their responses with ease and efficiency
---------------------- • Generally, they cannot be interviewed individually.

Time
----------------------
• Hesitant but flexible
----------------------
• Devote time for researchers.
---------------------- Accessibility
---------------------- • Relatively difficult to reach because of physical distances and
apprehensions about researchers
----------------------
• Researcher and respondent find difficulty to interact incase of psychological
---------------------- questions
---------------------- • Inability to value marketing research
• Role and expectations are not clear.
----------------------
Secondary data Sources
----------------------
• Lack of internal data and syndicated research
---------------------- Few magazines like Kurukshetra, Annadata, and Khadi-Gramodyog
•
---------------------- dealing with rural issues and rural data.
Sampling
----------------------
Cultural differences, lack of infrastructure, geo-physical differences, and
•
---------------------- literacy levels increase heterogeneity
---------------------- • Differences in lifestyles and utility value are different.
----------------------
----------------------

Data collection Notes
• Simple tools are necessary.
----------------------
• Tools like a ladder, images of faces and colours are suitable
----------------------
Rural Research Business
Main Players : ----------------------
• NCAER ----------------------
• ORG-MARG ----------------------
• NFO-MBL
----------------------
• Sampark
----------------------
• MART lead by Pradeep Kashyap
• ORCN (Ogilvy Rural Communication Network) ----------------------
• Rural Communication & Marketing (RC&M) ----------------------

• Initiative Media ----------------------
• Anurag-Madison
----------------------
Large organizations have neglected rural research for reasons
----------------------
• Size is small
• Rural marketers do not look for nation-wide data but on profitable pockets ----------------------
• Big agencies have researchers primarily from urban areas ----------------------

• Big players find it difficult to do research in rural areas ----------------------
Core strength of big players has been quantitative research. Rural
•
----------------------
marketers are in market development hence need qualitative data
Marketers have sales force in the field and rely more on their feedback.
• ----------------------
Advantages of small Research firms ----------------------
NFO-MBL has a report called ‘A day in the life of farmer’. Their
• ----------------------
researchers wake up at 5.00 am with farmers, go to their fields, hang
around the chaupals, noting down what is going on. Clients find it eye ----------------------
opening.
----------------------
• MART has a permanent staff of 10 employees, with relevant qualifications.
They are from rural background, lived in villages working with NGOs ----------------------
and thus gained acceptance. It has also added graduates from IRMA to
----------------------
give the professional edge.
Small agencies are cheaper, do localized research and have low overheads
• ----------------------
and deliver value for money.
----------------------
----------------------
----------------------

Notes
Activity 2
----------------------
What problems can a researcher face while interviewing a rural consumer?
----------------------
Do these problems occur when an urban consumer is interviewed?
----------------------
---------------------- 15.6 MARKETING STRATEGIES

---------------------- In view of the above-discussed issues, the rural consumers are prone to very
high risk perceptions and a result of which they tend to screen products at the
----------------------
lower price ends. Marketers have been following three approaches to penetrate
---------------------- in the rural markets. They are as under:
---------------------- 1. Trickle-down approach: This approach is based on the assumption

that rural buyers observe their urban counterparts and have similar
---------------------- aspirations. Rural consumers will also adopt the products that are
successful in urban markets. Here, the brand strategies and all other
---------------------- marketing strategies remain the same in urban and rural markets. The
---------------------- followers of this approach are national and multi-national brands like
Coke, Pepsi and others.
----------------------
2. Undifferentiated approach: When the rural markets started growing
---------------------- some companies found the above approach and its assumptions invalid.
They considered it was high time that the largely ignored but valuable
---------------------- rural population be given attention. To do this they believed that the
strategies in urban markets need to be modified. In this approach, the
----------------------
brand strategies remain unchanged but changes are made in one of the
---------------------- four Ps. Here the core product remains the same but the value prepositions
may be altered to suit the rural needs. For example, Colgate introduced a
---------------------- combi-pack of 30 mg toothpaste with a toothbrush at a price of Rs.8.50.
Philips used different communication strategies in various states to attract
----------------------
the rural consumers.
---------------------- 3. Differentiated approach: Here the marketers consider rural markets to
---------------------- be totally different from the rural. They offer different products, brands
that are suitable to rural consumers. The brands for urban and rural
---------------------- markets are different. For example, TV marketers always positioned a 14
inch black and white TV for the rural markets. But it was LG Electronics
---------------------- which found out through rural consumer research that rural buyers have
---------------------- larger families. Further, in rural India, neighbours walk into the houses to
watch TV. Hence, rural buyers needed larger screens. Further, it was also
---------------------- found that one in every three TV sets in rural India is gifted (probably
as a part of dowry) and in such cases, price becomes secondary. TV is a
---------------------- utilitarian product but when gifted it becomes a hedonic product. Hence,
---------------------- LG designed a TV called ‘Sampoorna’ for rural buyers. The name was
also unique in that it has the same meaning of being ‘complete’ in all
---------------------- languages in India. The brand was so successful that it added Rs.114

crores to the revenues of LG. Today, ‘Sampoorna’ has garnered a sizeable Notes
share in urban markets too.
----------------------
Below are some more examples of products created for rural markets and
that have been successful: ----------------------
• Escorts launched ‘Rajdoot 223’, priced at Rs. 33,300 to meet rural ----------------------
needs
----------------------
• Escorts launched 175cc ‘Ace’ priced at Rs.37, 560 for rural market
• Tata Tea launched ‘Agni’ at Rs.130 per kg to target loose tea in rural ----------------------
market
----------------------
• Maharaja appliances launched no frills ‘Bonus’ brand specially for
rural & semi-urban market gaining 40 % share ----------------------
• Koshika telecom set up cell booths in 1500 villages in eastern U.P ----------------------
covering 3846 km. The 17 base transreceiving stations ranged
----------------------
between Gorakhpur and Lucknow helped zero cost entry in villages.
• JT Mobile and Tata Tele Services penetrated into 60 % 0f 26,586 ----------------------
villages in A.P ----------------------
• Bajaj Electricals is offering cost effective base models for rural
----------------------
India
• Videocon is pushing walkmans into markets with a population ----------------------
under 50,000 ----------------------
• M & M developing a rural transporter
----------------------
• Apollo Hospitals has set up 50 bed multispeciality rural hospital at
Aragonda in A.P ----------------------
• Titan has launched a pilot project for low-priced watches based on ----------------------
NCAER study.
----------------------
• Green cards launched by Allahabad and Andhra Bank for farmers.
Diamond, Gold & Silver ----------------------
• Nyle Shampoo used green colour for rural India ----------------------

• JK Dairy introduced 50 gm sachet of Dairy whitener at Rs. 6.50 ----------------------
• P & G introduced Vicks VapoRub in a tiny 5 gm tin and Tide ----------------------
detergent in 30 gm sachets priced at Rs.3
----------------------
• Godrej sells its Velvette shampoo in sachets priced at Rs.1.25
----------------------
• Marico launched low price sachets of hair oil
• Kothari Products introduced Pan Parag in sachets. ----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. Marketers have been following two approaches to penetrate the rural
---------------------- markets.
----------------------
----------------------
Summary
---------------------- • The intense competition in the urban markets has been driving marketers
to the rural India. The huge population in rural India is definitely a great
---------------------- attraction to marketers. The rising aspirations especially among rural
youth make marketers interested. But the rural India is untapped and very
---------------------- little information is really available to us. Many theories that apply to
---------------------- urban buyers are at times irrelevant in rural India. Rural economy is a
dominant force in influencing rural buying behaviour. The fact that rural
---------------------- buyers are more rational arises due to paucity of money. Rural economy
is in shackles and very slow development of infrastructure, low priority
---------------------- to agriculture, and no growth in rural employment has made rural markets
---------------------- very challenging. In this topic, we have tried to analyse rural buying
behaviour from various angles and have tried to apply universal theories
---------------------- to find out how much of these theories really apply to rural markets.
----------------------
Keywords
----------------------
• Lexicographic model : A brand is selected if it excels in respect of one
---------------------- of the attributes arranged in order of priority.
---------------------- • Conjunctive model : A consumer may select a product that satisfies few
attributes, which he considers important.
----------------------
Expectancy-Value model : Consumer identifies the attributes of the
•
---------------------- products/ brands in which he is interested and then assigns weightages to
the attributes
----------------------

---------------------- 1. Write short notes on:
---------------------- a) Trickle down approach
---------------------- b) Expectancy-value model

c) Research approaches for rural market
----------------------
2. What are the reasons for disparities between rural and urban consumer? 3.
---------------------- Discuss the characteristics of rural buying behaviour. What are the factors
affecting it?
----------------------


1. Low priority to agriculture, subsistence orientation of agriculture and ----------------------
failure of land reforms are the reasons for the urban-rural disparities.
----------------------
1. In lexicographic model, a brand is selected if it excels in respect to one of ----------------------
the attributes arranged in order of priority. ----------------------
----------------------
----------------------
1. False
----------------------
Western College.
----------------------
Taylor & Francis. ----------------------
----------------------
Publishing Group.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes References
----------------------
---------------------- 1. Consumer Behaviour – Suja Nair
---------------------- 2. Consumer Behaviour – Henry Assael
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
254 References

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CONSUMER BEHAVIOUR

(FOR PRIVATE CIRCULATION ONLY)

COURSE DESIGN AND REVIEW COMMITTEE

Published by Symbiosis Centre for Distance Learning (SCDL), Pune

Copyright © 2019 Symbiosis Open Education Society

Mr. Pushkar T. Phadtare

Unit No. TITLE Page No.

---------------------- 1.1 INTRODUCTION

---------------------- l Where do they buy these products?

1.3 IMPORTANCE OF CONSUMER BEHAVIOUR ----------------------

During the days of protected economy in India, companies rarely ----------------------

State True or False. ----------------------

---------------------- l What influences shopping, purchase, and consumption.

1. A Managerial Approach ----------------------

---------------------- 1.6 PROBLEMS IN CONSUMER BEHAVIOUR

---------------------- Consumer Behaviour and Marketing Strategy

State True or False. ----------------------

---------------------- Researchers identified teenagers as the major consumers at that time.

Check your Progress 2 ----------------------

1. Consumer behaviour involves exchanges between human beings. ----------------------

Check your Progress 5 ----------------------

---------------------- 2.2 RELEVANCE OF CONSUMER RESEARCH

Marketers are often interested in the feedback of consumers. As it has ----------------------

l Why consumers are more interested or involved in some products or ----------------------

---------------------- Mention any five ways of collecting data from customers.

---------------------- 2.4 WHAT CONSTITUTES GOOD CONSUMER

---------------------- 2.6 TYPES OF DATA

---------------------- l Detailed information on corporate sector by stock exchanges.

Fill in the blanks. ----------------------

l Consumer Research : Systematic collection and analysis of consumer ----------------------

Self-Assessment Questions ----------------------

Answer the following questions : ----------------------

---------------------- Suggested Reading

Motivation, Personality and Emotion 25

---------------------- Water is inexpensive from municipal agencies, yet millions of consumers

---------------------- 3.2 THEORIES OF MOTIVATION

---------------------- It is based on four premises:

Motivation, Personality and Emotion 27

Motivation, Personality and Emotion 29

---------------------- 3.3 MOTIVATION THEORY AND MARKETING STRATEGY

---------------------- Heineken and Beck’s are imported beers, consumed primarily by

Motivation, Personality and Emotion 31

---------------------- 2. Approach - Avoidance conflict: A consumer who is faced with both

---------------------- 3.4 PERSONALITY

Check your Progress 2 ----------------------

Motivation, Personality and Emotion 33

---------------------- Table 3.2

3.6 THEORIES OF PERSONALITY ----------------------

1. Freud’s Psychoanalytical Theory : ----------------------

Motivation, Personality and Emotion 35

---------------------- a) Repression: It represses one of the forces to eliminate conflict.

---------------------- d) Reaction formation: Unconscious feelings held towards others are

Motivation, Personality and Emotion 37

---------------------- 14. Psychoticism (personality pattern typified by aggressiveness and

l Individuals possess relatively stable behavioural tendencies. ----------------------

Motivation, Personality and Emotion 39

Motivation, Personality and Emotion 41

Motivation, Personality and Emotion 43

Motivation, Personality and Emotion 45

Motivation, Personality and Emotion 47

3.7 EMOTION ----------------------

Emotion is defined as strong, relatively uncontrolled feelings that affect ----------------------

Motivation, Personality and Emotion 49

Motivation, Personality and Emotion 51

l Why consumers are more interested or involved in some products or ----------------------

l Consumer Research : Systematic collection and analysis of consumer ----------------------

---------------------- 2. Approach - Avoidance conflict: A consumer who is faced with both

---------------------- d) Reaction formation: Unconscious feelings held towards others are

---------------------- 14. Psychoticism (personality pattern typified by aggressiveness and

1. Assael, Henry. 2003. Consumer Behaviour: A Strategic Approach. South- ----------------------

3. Goleman, Daniel. 1996. Emotional Intelligence. Bantam Doubleday Dell ----------------------

---------------------- 1. ________________is often termed as family branding, brand

It involves developing a category of a broader category. Let’s take ----------------------

---------------------- 1. Marketers often use intriguing headlines or attractive models to attract

---------------------- 1. What do you understand by Perception? How can we use the

---------------------- 6. Introduce an important characteristic in the product. This considers the

1. Assael, Henry. 2003. Consumer Behaviour: A Strategic Approach. South- ----------------------

1. Market conditions such as price and feature differences between ----------------------