Consumer Behaviour

Notes from the book of Schiffman, Wiesenblit & Ramesh Kumar

Chapter 1
Introduction
1. Consumer behavior is the study of consumers’ actions when searching for, purchasing, using,
evaluating, and disposing of products and services that they expect will satisfy their needs.
2. Consumer purchases are determined not by needs alone, but also by how the product helps
owners express their characteristics.

1. The Marketing Concept :Marketing and consumer behavior stem from the marketing concept,
which maintains that the essence of marketing consists of satisfying consumers’ needs, creating
value, and retaining customers.
2. The production concept focused on cheap, efficient production and intensive distribution.
a) It assumes consumers are mostly interested in product availability at low prices.
b) It works if consumers are more interested in obtaining the product than in getting the
features they really want.
3. The product concept assumes consumers will buy the product that offers the highest quality, the
best performance and the most features.
a) A product orientation leads companies to focus on quality and add features if feasible (vs. if
desired by the end consumer).
b) A product orientation may lead to marketing myopia, or a nearsighted focus on the product
and its direct competitors vs. the market’s needs.
4. The selling concept maintains that marketers should sell the products they have decided to
produce.

Consumer Research
1. Consumers are highly complex individuals, subject to a variety of psychological and social needs
quite apart from their basic functional needs.
a) The needs and priorities of different consumer segments differ dramatically.
b) The objectives of a company should be to target different products and services to different
market segments in order to better satisfy different needs.
c) In order to design new products and marketing strategies that would fulfill consumer needs,
they had to study consumers and their consumption behavior in depth.
2. The term consumer research represents the process and tools used to study consumer behavior.

Market Segmentation, Targeting, and Positioning

1. The focus of the marketing concept is satisfying consumer needs.

2. Market and consumer researchers seek to identify the many similarities and differences that exist
among the peoples of the world.
3. The marketer must adapt the image of its product so that each market segment perceives the
product as better fulfilling its specific needs than competitive products.
4. Market segmentation is the process of dividing a market into subsets of consumers with common
needs or characteristics.
5. Targeting is the selection of one or more of the segments identified as prospective customers for
the company to pursue.
6. Positioning refers to the development of a distinct image for the product or service in the mind
of the consumer
a) The image should differentiate the offering from competing ones and faithfully
communicate to the target audience that the particular product or service will fulfill their
needs better than competing brands.
b) Successful positioning focuses on the distinct benefits that the product will provide rather
than the product’s features.

The Marketing Mix

1. The marketing mix consists of a company’s service and/or product offerings to consumers and
the methods and tools it selects to accomplish the exchange.
2. Four basic elements (known as the four Ps) include:
a) The product or service —features, designs, brands, packaging, post-purchase benefits, etc.
b) The price—list price (including discounts, allowances, and payment methods).
c) The place—distribution of the product or service.
d) Promotion—advertising, sales promotion, public relations, and sales efforts designed to
build awareness of and demand for the product or service.
3. Socially responsible marketing suggests marketers would be better off if they integrated social
responsibility into their marketing strategies because companies prosper when society prospers.
a) The societal marketing concept requires marketers to fulfill the needs of the target audience
in ways that improve, preserve and enhance society’s well-being while simultaneously
meeting their business objectives.
b) Some marketers ignore laws and market potentially harmful products (e.g. Monster
Beverage Corp.)
c) Some companies incorporated social goals into their mission statements because they
believe it is important for organizational effectiveness.
d) Non-profit organizations also advance causes they believe are ethically and morally right.

Customer Value, Satisfaction, Trust, and Retention

Customer value is defined as the ratio between the customer’s perceived benefits
(economic, functional, and psychological) and the resources (monetary, time, effort,
psychological) used to obtain those benefits.
1. Customer satisfaction is the individual’s perception of the performance of the product or service
in relation to his or her expectations.
2. The overall objective of providing value to customers continuously and more effectively than the
competition is to have and to retain highly satisfied customers. This strategy of customer
retention makes it in the best interest of customers to stay with the company rather than switch
to another company.
3. is more expensive to win new customers than to retain existing ones for several reasons:
a) Loyal customers buy more products and constitute a ready-made market for new models of
existing products as well as new ones, and also represent an opportunity for cross-selling.
b) Long-term customers who are thoroughly familiar with the company’s products are an
important asset when new products and services are developed and tested.
 c) Loyal customers are less price-sensitive and pay less attention to competitors’ advertising.
Thus, they make it harder for competitors to enter markets.
d) Servicing existing customers, who are familiar with the firm’s offerings and processes, is
cheaper. It is expensive to “train” new customers and get them acquainted with a seller’s
processes and policies. The cost of acquisition occurs only at the beginning of a relationship,
so the longer the relationship, the lower the amortized cost.
e) Loyal customers spread positive word-of-mouth and refer other customers.
f) Marketing efforts aimed at attracting new customers are expensive; indeed, in saturated
markets, it may be impossible to find new customers. Low customer turnover is correlated
with higher profits.
g) Increased customer retention and loyalty make the employees’ jobs easier and more
satisfying. In turn, happy employees feed back into higher customer satisfaction by providing
good service and customer support systems.
4. Technologies often enhance customer relationships and retention by engaging consumers with
brands.
a) Emotional bonds represent a customer’s high level of personal commitment and
attachment to the company.
b) Transactional bonds are the mechanics and structures that facilitate exchanges between
consumers and sellers.
c) Social media include means of interaction among people in which they create, share and
exchange information and ideas in virtual communities and networks.
5. Emotional and transactional motives should be discerned to understand drivers of customer
satisfaction, which leads to retention and long-term relationships.
a) Determinants of customer satisfaction online include adaptation, interactivity, nurturing,
commitment, network, assortment, transaction ease, engagement, loyalty, inertia and trust.
b) Table 1.1 applies a four-way categorization of transaction-based and emotional bond-based
customer relationships with marketers to Amazon’s customers.
6. Customers who are highly satisfied or delighted keep purchasing the same products and brands,
provide positive and encouraging word-of-mouth to others, and often become life-long
customers.
7. With respect to customer satisfaction there might be several types of customers:
a) Loyalists—completely satisfied customers who keep purchasing.
b) Apostles—those whose experiences exceed their expectations and who provide very
positive word of mouth about the company to others.
c) Defectors—those who feel neutral or merely satisfied and are likely to stop doing business
with the company.
d) Terrorists—those who have had negative experiences with the company and who spread
negative word of mouth.
e) Hostages—unhappy customers who stay with the company because of no choice (or other
reasons).
f) Mercenaries—very satisfied customers but who have no real loyalty to the company and
may defect.
8. Companies must develop measures to assess customer retention strategies, which may include:
a) Customer Valuation
b) Retention Rates
c) Analyzing Defections
 Chapter 2
Segmentation, Targeting, and Positioning

INTRODUCTION

1. Market segmentation is the process of dividing a market into distinct subsets with common needs
and characteristics that are different from those shared by other groups.
2. Targeting consists of selecting the segments that the company views as prospective customers
and pursuing them.
3. Positioning is the process by which a company creates a distinct image and identity for its
products, services and brands in consumers’ minds.

Market Segmentation and Effective Targeting

1. Segmentation and targeting enable producers to avoid head-on competition in the marketplace
by differentiating their offerings on the basis of such features as price, styling, packaging,
promotional appeal, method of distribution, and level of service.
2. This approach is generally more profitable.
3. Services also segment their markets and target different offerings to different market segments.
4. Marketers use segmentation research to identify the most appropriate media in which to place
advertisements.
5. Criteria for Effective Targeting: To be an effective target, a market segment should be: identifiable,
sizeable, stable or growing, accessible, and congruent with the marketer’s objectives and
resources.
a) Identifiable: If segments are separated by common or shared needs or characteristics that
are relevant to the product or service, a marketer must be able to identify these
characteristics. Some segmentation variables such as demographics are easy to identify,
while others such as benefits sought, more difficult.
b) Sizeable: In order to be a viable market, a segment must consist of enough consumers to
make targeting it profitable.
c) Stable and Growing: Marketers prefer segments that are stable in terms of lifestyles and
consumption patterns and that are likely to grown larger and more viable in the future.
d) Reachable: To be targeted, a segment must be accessible, which means that marketers must
be able to reach that market segment in an economical way.
e) Congruent with the Company’s Objectives and Resources: Not every company is interested
or has the means to reach every market segment, even if that segment meets the four
preceding criteria.
6. Applying the Criteria: Perry & Swift, and investment management firm, used 2011 P$YCLE
Segments.

Bases for Segmentation

1. Characteristics used for segmentation can generally be classified into two types: behavioral and
cognitive.
a. Behavioral data is evidence-based and can be determined from direct questioning.
 i. Consumer-intrinsic factors include age, gender, marital status, income and
education
ii. Consumption-based factors include quantity of product purchased, frequency of
leisure activities, or frequency of buying a given product
b. Cognitive factors are abstracts reside in the consumer’s mind, do not have universal
definitions, and can only be determined via psychological and attitudinal questioning.
i. Consumer-intrinsic factors include personality traits, cultural values, and attitudes
towards politics and social issues
ii. Consumption-based factors include attitudes and preferences, such as benefits
sought from products and attitudes regarding shopping

2. Demographic segmentation divides consumers according to age, gender, ethnicity, income and
wealth, occupation, marital status, household type and size, and geographic location.
a. The core of almost all segmentations is demographics because:
i. Demographics are the easiest and most logical way to classify people and can be
measured more precisely than other segmentation bases.
ii. Demographics offer the most cost-effective way to locate and reach specific
segments because most of the secondary data compiled about any population
stems from demographics.
iii. Demographics enable marketers to identify business opportunities in the form of
shifts in age, income distribution, and populations of various regions.
iv. Many consumption behaviors, attitudes, and media exposure patterns are
directly related to demographics.
b. Age: product needs often vary with consumers’ age, and marketers commonly target age
groups.
c. Gender is a factual distinguishing segmentation variable, and many products and services
are inherently designed for either males or females. However, sex roles have become
blurred.
d. Families and Households: segmentation is based on the premise that many families pass
through similar phases in their formation, growth, and final dissolution. At each phase,
the family unit needs different products and services.
i. Family life cycle is a classification stemming from factual variables including
marital status, employment status, and the presence or absence of children in the
household.
ii. Each stage in the traditional family life cycle represents an important target
segment to many marketers.
e. Social class can indicate an ability or inability to pay for a product model or brand, and
consumers of different social classes vary in terms of values, product preferences and
buying habits.
i. Income is combined with other demographic variables to define target markets.
ii. Income, education, and occupation tend to be closely correlated.
iii. Social class can be measured as a weighted index of education, occupation and
income
f. Ethnicity: Marketers segment some populations on the basis of cultural heritage and
ethnicity due to shared values, beliefs, and customs. African Americans, Hispanic
Americans and Asian Americans are important subcultural market segments in the U.S.

3. Geodemographics: Where a person lives determines some aspects of consumption behavior, so

marketers frequently use geodemographics, a hybrid segmentation scheme based on the premise
 that people who live close to one another are likely to have similar financial means, tastes,
preferences, lifestyles, and consumption habits, in strategic targeting.
a. The primary commercial application of this technique is PRIZM, offered by Nielsen’s
MyBestSegments. This system uses the ZIP + 4 postal system to classify all of the nation’s
households into 66 segments.
b. Nielsen also uses P$YCLE (based on household wealth) and ConneXions (based on
household receptivity to new technologies.
4. Green Consumers: Ecologically-minded consumers have been segmented in several ways.
a. One study identified three types of green consumers: Environmental activists, Organic
eaters, and Economizers.
b. Another study identified four types of green consumers: True Greens, Donor Greens,
Learning Greens, and Non-Greens.
c. Another study divided consumers according to a spectrum of green, where the darkest
greens were willing to pay a premium for eco-friendly products to reduce global warming,
while the lightest greens were mostly concerned about saving money on energy bills, not
saving the planet.

5. Personality traits shape attitudes and consumption behavior.

a. Psychographic factors often overlap with personality traits.
b. Personality tests – which are generally in the form of questions or statements presented
to the respondent – can be used by researchers to determine one’s personality and use it
in segmentation.
c. Consumers who are open-minded and perceive less risk than others in trying new things
are likely to be innovators.

6. Lifestyles, also known as psychographics, consist of activities, interests, and opinions (AIOS).
a. The interests and opinions portions are cognitive constructs, which can be measured via
surveys but are not evidence-based.
b. Because of their versatility, psychographics are widely used in segmentation and are part
of almost any hybrid segmentation framework.
c. VALS (an acronym for “values and lifestyles”) is the most popular segmentation system
combining lifestyles and values.
d. VALS focuses explicitly on explaining consumer purchasing behavior.
i. VALS includes three primary motivations: ideals motivated, achievement
motivated and self-expression motivated.
ii. VALS also reflects a continuum in terms of resources and innovativeness (Figure
2.7)
7. Benefit segmentation is based on the benefits consumers seek from products and services.
a. Many believe benefits sought are the core of all segmentation strategies.
b. Sought benefits represent unfilled consumer needs whereas buyers’ perceptions that a
given brand delivers a unique and prominent benefit result in loyalty to the brand.
8. Media-based segmentation considers the benefits consumers seek from adopting communication
tools.
9. Usage rate segmentation stems from differences among heavy, medium and light users, and
nonusers of a specific product, service, or brand.
a. Marketers have found that within some product categories that a relatively small group
of heavy users account for a disproportionately large percentage of total product usage.
b. Targeting heavy users is a common marketing strategy, and it can be more profitable than
targeting other user categories.
 c. However, since all competitors are likely to target the same heavy users, trying to attract
these buyers requires a lot of expensive advertising.
d. Some marketers prefer to target light and medium users with products that are distinct
from those preferred by heavy users.
e. A sophisticated approach to usage rate involves identifying the factors that directly impact
the usage behavior.
f. Understanding nonusers is essential.
g. Consumers can also be segmented in terms of their awareness status and also level of
involvement.
h. Product involvement is also a segmentation factor.
10. The occasion or situation often determines what consumers will purchase or consume, so
marketers sometimes use usage situation segmentation. Many products are promoted for special
usage occasions.

Behavioral Targeting

1. Behavioral targeting consists of sending consumers personalized and prompt offers and
promotional messages designed to reach the right consumers and deliver to them highly relevant
messages at the right time and more accurately than when using conventional segmentation
techniques.
a. Tracking Online Navigation Includes:
i. Recording the websites that consumers visit.
ii. Measuring consumers’ levels of engagement with the sites (i.e., which pages
they look at, the length of their visits, and how often they return).
iii. Recording the visitors’ lifestyles and personalities (derived from the contents
of consumers’ blogs, tweets, and Facebook profiles).
iv. Keeping track of consumer’ purchases, almost purchases (i.e., abandoned
shopping carts), and returns or exchanges.
b. Geographic location and mobile targeting have been used effectively due to the
prevalence of smartphones and GPS devices.
2. Marketers are using predictive analytics: measures that predict consumers’ future purchases on
the bases of past buying information and other data, and also evaluate the impact of personalized
promotions stemming from the predictions.

Positioning and Repositioning

1. Positioning is the process by which a company creates a distinct image for its products, services
or brands in consumers’ minds.
2. Marketers have to persuade their target audiences to choose their products vs. competitive
products.
3. The positioning process includes the following steps:
a. Defining the market in which the product or brand competes, who the relevant
buyers are, and the offering’s competition.
b. Identifying the product’s key attributes and researching consumers’ perception
regarding each of the relevant attributes.
c. Researching how consumers perceive the competing offerings on the relevant
attributes.
d. Determining the target market’s preferred combination of attributes.
e. Developing a distinctive, differentiating, and value-based positioning concept that
communicates the applicable attributes as benefits.
f. Creating a positioning statement focused on the benefits and value that the product
provides and using it to communicate with the target audiences.
4. Positioning is especially difficult among commodities, where the physical characteristics of all
the brands are identical, such as water. Nevertheless, marketers offer many brands of mineral
water that range in price and are positioned differently. Table 2.8 describes the positioning
claims, unique benefits, and prices of several brands of bottled water.
5. Umbrella positioning is a statement or slogan that describes the universal benefit of the
company’s offering. At times, this statement does not refer to specific products. (Figure 2.11)
6. Premier positioning focuses on the brand’s exclusivity.
7. Positioning against the competition acknowledges competing brands. (Figure 2.12)
8. Key attribute positioning is based on a brand’s superiority on relevant attributes. (Figure 2.13)
9. Un-owned positioning is when a position is not associated with a product from the category.
(Figure 2.14)
10. Repositioning is the process by which a company strategically changes the distinct image and
identity that its product or brand occupies in consumers’ minds.
a. Companies do so when consumers get used to the original positioning and it no longer
stands out in their minds.
b. Similarly, when consumers begin to view the old positioning as dull, marketers must
freshen up their brands’ identities.
11. Perceptual mapping is constructing a map-like diagram representing consumers’ perceptions of
competing brands along relevant product attributes. Perceptual maps show marketers:
a. How consumers perceive their brand in relation to competition
b. How to determine the direction for altering undesirable consumer perceptions of
their brands
c. Gaps in the form or un-owned perceptual positions that offer opportunities for
developing new brands or products
 Chapter 3
Consumer Motivation & Personality

INTRODUCTION
1. Motivation is the driving force that impels people to act/represents the reasons one has for acting
or behaving in a particular way.
2. Needs are circumstances or things that are wanted or required, and they direct motivational
forces.
3. Physiological needs are biogenic needs; fulfilling them sustains physical existence.
4. After people satisfy physiological needs, they become driven by safety and security needs
(physical safety, order, stability, routine and control over one’s life and environment).
5. Personality consists of the inner psychological characteristics that both determine and reflect how
we think and act.
6. Brand personification occurs when consumers attribute human traits or characteristics to a
brand.
7. Anthropomorphism refers to attributing human characteristics to something that is not human.

The Dynamics of Motivation

1. Motivation is a driving force produced by a state of tension, which exists as the result of an unfilled
need.
a) Individuals strive both consciously and subconsciously to reduce this tension through
selecting goals and subsequent behavior that they anticipate will fulfill their needs and thus
relieve them of the tension they feel.
b) Whether gratification is actually achieved depends on the course of action pursued.
2. The foundation of marketing is identifying and satisfying needs.
a) Marketers do not create needs, but strive to make consumers more keenly aware of unfelt
or dormant needs.
b) A corporate focus on developing products that will satisfy consumers’ needs ensures that
the company stays in the forefront of the search for new and effective solutions.
c) Companies that define themselves in terms of products they make may go out of business
when products are replaced by competitive offerings that better satisfy consumers’ needs.
3. There are two types of human needs: physiological needs and psychological needs.
a) Physiological needs are innate (biogenic, primary) and include the need for food, water, air,
protection from the outside environment, and sex; they sustain biological existence.
b) Psychological needs are learned from our parents, social environment and interactions with
others (e.g. self-esteem, prestige, affection, power, learning and achievement).
4. Goals are the sought-after results of motivated behavior, and all human behavior is goal oriented.
There are two types of goals:
a) Generic goals are outcomes that consumers seek in order to satisfy physiological and
psychological needs. (e.g. I want a pair of pants.)
b) Product-specific goals are outcomes that consumers seek by using a given product or
service. (e.g. I want a pair of Calvin Klein jeans.)
5. Marketers try to understand the motivations for social media use because consumers are
spending time on social media and they listen to other consumers.
 a) The value of bloggers to marketers is undeniable – they post their experiences and
exposures to brands online where many other users or potential users can hear more about
the brands. Blogging motivations include:
i) Self-expression
ii) Documenting one’s life (i.e., keeping a diary)
iii) Identifying other influential bloggers
b) Facebook motivations include:
i) Information sharing
ii) Convenience and entertainment
iii) Passing time
iv) Interpersonal utility
v) Control
vi) Promoting work
6. Need arousal may be caused by internal stimuli, emotional or cognitive processes, or stimuli in the
outside environment.
7. Consumers set purchase-related goals that satisfy more than one need; people with different
needs may select the same goal; and people with the same needs may seek fulfillment via different
goals.
a) The motivation to select goals can be positive or negative.
b) We may feel a driving force toward or away from an object or condition.
i) Positive outcomes are called approach objects
ii) Negative outcomes are call avoidance objects
8. Needs and goals are interdependent.
a) Neither exists without the other
b) People are less aware of their needs than they are of their goals.
9. Needs are never fully satisfied
a) Needs and goals are constantly growing and changing.
b) As individuals attain their goals, they develop new ones.
c) If they do not attain their goals, they continue to strive for old goals or they develop
substitute goals.
d) People who achieve their goals set new and higher goals for themselves.
10. Frustration is the feeling that results from failure to achieve a goal, and defense mechanisms are
cognitive and behavioral ways to handle frustration. Defense mechanisms include:
a) Aggression
b) Rationalization
c) Regression
d) Withdrawal
e) Projection
f) Daydreaming
g) Identification
h) Repression (Table 3.2)

Systems of Needs

1. Although there is little disagreement about specific physiological needs, there is considerable
disagreement about specific psychological (i.e., psychogenic) needs.
 a) In 1938, the psychologist Henry Murray prepared a detailed list of 28 psychogenic needs that
have served as the basic constructs for a number of widely used personality tests and were
organized into five groups:
i) Ambition
ii) Materialistic
iii) Power
iv) Affection
v) Information
b) Allen Edwards developed a self-administered personality inventory.
c) Dr. Abraham Maslow formulated a widely accepted theory of human motivation. Maslow's
theory identifies five basic levels of human needs, which rank in order of importance from
low-level (biogenic) needs to higher-level (psychogenic) needs. Maslow’s hierarchy of needs
theory suggests that individuals seek to satisfy lower-level needs before higher-level needs
emerge.
i) Physiological needs are the first and most basic level of human needs.
a) Physiological needs are those things that are required to sustain biological life:
food, water, air, shelter, clothing, and sex.
b) Physiological needs are dominant when chronically unsatisfied.
ii) Safety and security needs become the driving force behind consumer behavior after
physiological needs have been satisfied.
a) Safety needs include order, stability, routine, familiarity, control over one’s life
and environment.
b) Health and the availability of health care are important safety concerns.
iii) Social needs relate to such things as love, affection, belonging, and acceptance.
iv) Egoistic needs can take an inward or outward orientation, or both.
a) Inwardly-directed ego needs reflect an individual’s need for self-acceptance,
for self-esteem, for success, for independence, and for personal satisfaction
with a job well done.
b) Outwardly-directed ego needs include the needs for prestige, for reputation,
for status, and for recognition from others.
v) Need for self-actualization refers to an individual’s desire to fulfill his or her potential
to become everything he or she is capable of becoming.
d) The major problem with Maslow’s theory is that it cannot be tested empirically; there is no
easy way to measure precisely how satisfied one need is before the next higher need
becomes operative.
e) Maslow’s hierarchy offers a useful, comprehensive framework for marketers trying to
develop appropriate advertising appeals for their products.
i) The hierarchy enables marketers to focus their advertising appeals on a need level that
is likely to be shared by a large segment of the prospective audience.
ii) The hierarchy facilitates product positioning or repositioning because different appeals
for the same product can be based on different needs included in this framework.
2. Another framework is the trio of basic needs: the needs for power, for affiliation, and for
achievement.
a) The power need relates to an individual’s desire to control his or her environment.
i) It includes the need to control other persons and various objects.
ii) This need appears to be closely related to the ego need.
b) The affiliation need suggests that behavior is highly influenced by the desire for friendship,
for acceptance, and for belonging.
i) People with high affiliation needs tend to be socially dependent on others.
ii) They often select goods they feel with meet with the approval of friends.
 c) Individuals with a strong achievement need often regard personal accomplishment as an
end in itself.
i) The achievement need is closely related to both the egoistic need and the self-
actualization need.
ii) People with a high need for achievement tend to be more self-confident, enjoy taking
calculated risks, actively research their environments, and value feedback.
iii) Monetary rewards provide an important type of feedback as to how they are doing.
iv) People with high achievement needs prefer situations in which they can take personal
responsibility for finding solutions.
v) Portraying achievement is a useful promotional strategy for many products and services
targeted to educated and affluent consumers.

The Measurement of Motives

1. Motives are hypothetical constructs — they cannot be seen or touched, handled, smelled, or
otherwise tangibly observed — so no single measurement method can be considered a reliable
index.
a. Because respondents are often unaware of their motives or are unwilling to reveal them
when asked directly, researchers use qualitative research to delve into consumer’s
unconscious or hidden motivations. (Methods in Table 3.4)
b. Many qualitative methods also are termed projective techniques because they require
respondents to interpret stimuli that do not have clear meanings, with the assumption that
the subjects will reveal or “project” their subconscious, hidden motives into the ambiguous
stimuli.
2. Motivational research, which should logically include all types of research into human motives,
has become a “term of art.”
a. It was first used by Dr. Ernest Dichter.to uncover consumers’ subconscious or hidden
motives.
b. Based on the premise that consumers are not always aware of the reasons for their actions,
motivational research attempts to discover underlying feelings, attitudes, and emotions
concerning product, service, or brand use.
c. Building on the contributions of Dr. Dichter and other earlier motivational researchers,
qualitative consumer research expanded from its focus on Freudian and neo-Freudian
concepts to a broader perspective that embraced not only other schools of psychology, but
included methodologies and concepts borrowed from sociology and anthropology.

The Nature and Theories of Personality

1. Personality is defined as those inner psychological characteristics that both determine and reflect
how a person responds to his or her environment.
a) The emphasis in this definition is on inner characteristics—those specific qualities,
attributes, traits, factors, and mannerisms that distinguish one individual from other
individuals.
b) The identification of specific personality characteristics associated with consumer behavior
has proven to be highly useful in the development of a firm’s market segmentation
strategies.
2. The facets of personality: heredity, early childhood experiences, and broader social and
environment influences are thought to influence personality development.
3. In the study of personality, three distinct properties are of central importance:
a) Personality reflects individual differences.
b) Personality is consistent and enduring.
 c) Personality can change.

4. Personality reflects individual differences

a) An individual’s personality is a unique combination of factors; no two individuals are exactly
alike.
b) Personality is a useful concept because it enables marketers to categorize consumers into
different groups on the basis of a single trait or a few traits.
5. Personality is consistent and enduring.
a) Marketers learn which personality characteristics influence specific consumer responses
and attempt to appeal to relevant traits inherent in their target group of consumers.
b) Even though an individual’s personality may be consistent, consumption behavior often
varies considerably because of psychological, sociocultural, situational and environmental
factors that affect behavior.
6. Personality Can Change
a) An individual’s personality may be altered by major life events, such as the birth of a child,
the death of a loved one, a divorce, or a major career change.
b) An individual’s personality also changes as part of a gradual maturing process.
i) Personality stereotypes may also change over time.
ii) There is a prediction, for example, that a personality convergence is occurring between
men and women.
iii) The reason for this shift is that women have been moving into occupations that have
been dominated by men and have increasingly been associated with masculine
personality attributes.
7. There are three major theories of personality: Freudian theory, neo-Freudian theory, and trait
theory.
a) Freudian theory: Sigmund Freud’s psychoanalytic theory of personality is one of the
cornerstones of modern psychology.
i) This theory was built on the premise that unconscious needs or drives, especially
biological and sexual drives, are at the heart of human motivation and personality.
ii) Freud proposed that the human personality consists of three interacting systems: the
id, the superego and the ego.
a) The id is the “warehouse” of primitive and impulsive drives, such as: thirst,
hunger, and sex, for which the individual seeks immediate satisfaction without
concern for the specific means of that satisfaction.
b) The superego is the individual’s internal expression of society’s moral and
ethical codes of conduct.
(1) The superego’s role is to see that the individual satisfies needs in a
socially acceptable fashion.
(2) The superego is a kind of “brake” that restrains or inhibits the impulsive
forces of the id.
c) The ego is the individual’s conscious control, which functions as an internal
monitor that attempts to balance the impulsive demands of the id and the
sociocultural constraints of the superego.
iii) Freud emphasized that an individual’s personality is formed as he or she passes through
a number of distinct stages of infant and childhood development: oral, anal, phallic,
latent, and genital stages.
b) Neo-Freudian personality theories come from Freud’s colleagues, who felt social
relationships play a crucial role in the development of personality and may have disagreed
with his contention that personality is primarily instinctual and sexual in nature.
i) Alfred Adler viewed human beings as seeking to attain various rational goals, which he
called style of life, placing emphasis on the individual’s efforts to overcome feelings of
inferiority.
 ii) Harry Stack Sullivan stressed that people continuously attempt to establish significant
and rewarding relationships with others, placing emphasis on efforts to reduce
tensions.
iii) Karen Horney focused on the impact of child-parent relationships, especially the
individual’s desire to conquer feelings of anxiety. She proposed three personality
groups: compliant, aggressive, and detached.
a) Compliant individuals are those who move toward others—they desire to be
loved, wanted, and appreciated.
b) Aggressive individuals move against others—they desire to excel and win
admiration.
c) Detached individuals move away from others—they desire independence, self-
sufficiency, and freedom from obligations.
d) A personality test based on Horney’s theory (the CAD) has been developed and
tested.
e) It reveals a number of tentative relationships between scores and product and
brand usage patterns.
iv) It is likely that many marketers have used some of these neo-Freudian theories
intuitively.
c) Trait theory is a significant departure from the earlier qualitative measures that are typical
of Freudian and neo-Freudian theory.
i) It is primarily quantitative or empirical, focusing on the measurement of personality in
terms of specific psychological characteristics called traits.
ii) A trait is defined as any distinguishing, relatively enduring way in which one individual
differs from another.
iii) Selected single-trait personality tests increasingly are being developed specifically for
use in consumer behavior studies. Types of traits measured include:
a) Innovativeness—how receptive a person is to new experiences
b) Materialism—the degree of the consumer’s attachment to “worldly
possessions”
c) Ethnocentrism—the consumer’s likelihood to accept or reject foreign-made
products
iv) Researchers have learned to expect personality to be linked to how consumers make
their choices, and to the purchase or consumption of a broad product category rather
than a specific brand.

Personality Traits and Consumer Behavior

1. Marketers are interested in understanding how personality influences consumption behavior

because such knowledge enables them to better understand consumers and to segment and
target those consumers who are likely to respond positively to their product or service
communications.
2. Innovativeness is the degree of a consumer’s willingness to adopt new products and services
shortly after the products are introduced.
a) Motivational factors that inspire consumer innovativeness include:
i) Functional factors – interest in the performance of an innovation
ii) Hedonic factors – feeling gratified by using the innovation
iii) Social factors – desire to be recognized by others because of one’s pursuit of
innovations
iv) Cognitive factors – mental stimulation experience by using an innovation
b) A study identified three levels of innovativeness:
 i) Global innovativeness – a personal trait that exists independent of any context; one
that represents the “very nature” of consumers’ innovativeness.
ii) Domain-specific innovativeness – a more narrowly defined activity within a specific
domain or product category.
iii) Innovative behavior – a pattern of actions or responses that indicate early acceptance
of change and adoption of innovations.
c) Research indicates a positive relationship between innovative use of the Internet and new
technologies.
3. Dogmatism is a personality trait that measures the degree of rigidity an individual displays toward
the unfamiliar and toward information that is contrary to their established beliefs.
a) A person who is highly dogmatic approaches the unfamiliar defensively and with
considerable discomfort and uncertainty.
b) A person who is low dogmatic will readily consider the unfamiliar or opposing beliefs.
c) Consumers low in dogmatism (open-minded) are more likely to prefer innovative products
to established ones and tend to be more receptive to messages that stress factual
differences, product benefits, and other forms of product-usage information.
d) Consumers high in dogmatism (closed-minded) are more likely to choose established
product innovations and tend to be more receptive to ads for new products or services that
contain an appeal from an authoritative figure.
4. Social character is a personality trait that ranges on a continuum from inner-directed to other-
directed.
a) Inner-directed consumers tend to rely on their own “inner” values or standards in evaluating
new products and are likely to be consumer innovators. They also prefer ads stressing
product features and personal benefits.
b) Other-directed consumers tend to look to others for direction and are not innovators. They
prefer ads that feature social environment and social acceptance.
5. Need for uniqueness is defined as an individual’s pursuit of differentness relative to others that is
achieved through the acquisition of consumer goods in order to enhance one’s personal and social
identity.
a) Consumers with high need for uniqueness adopt new products and brands quicker than
others.
b) Consumers with high need for uniqueness prefer creative products that counter conformity
and are outside group norms, and avoid similarity reflected in buying mainstream products.
6. Persons with high optimum stimulation levels (OSLs) are willing to take risks, to try new products,
to be innovative, to seek purchase-related information, and to accept new retail facilities.
a) High OSL people prefer an environment crammed with novel, complex, and unusual
experiences
b) OSL scores also reflect a person’s desired level of lifestyle stimulation.
i) Consumers whose actual lifestyles are equivalent to their OSL scores appear to be quite
satisfied.
ii) Those whose lifestyles are understimulated are likely to be bored.
iii) Those whose lifestyles are overstimulated are likely to seek rest or relief.
7. Sensation seeking (SS) is closely related to OSL and defined as “a trait characterized by the need
for varied, novel, and complex sensations and experience, and the willingness to take physical and
social risks for the sake of such experience.”
8. Variety and novelty seeking is also related to OSL.
a) Different types of variety seeking include:
i) Exploratory purchase behavior (e.g., switching brands to experience new and possibly
better alternatives)
ii) Vicarious exploration (e.g., where the consumer secures information about a new or
different alternative and then contemplates or even daydreams about the option)
 iii) Use innovativeness (e.g., where the consumer uses an already adopted product in a
new or novel way).
b) High variety-seeking consumers are likely to purchase the latest smartphones/ technological
products with functions.
9. Need for cognition (NFC) is the measurement of a person’s craving for or enjoyment of thinking.
a) Consumers who are high in NFC are more likely to be responsive to the part of an
advertisement that is rich in product-related information of description.
b) They are also more responsive to cool colors.
c) Consumers who are relatively low in NFC are more likely to be attracted to the background
or peripheral aspects of an ad.
d) They spend more time on print content and have much stronger brand recall.
e) Need for cognition seems to play a role in an individual’s use of the Internet.
i) High-NFC people concentrate on planned online activities, seek product information,
current events and educational resources
ii) Low-NFC people are distracted by options and unable to focus on intended online
activities
10. Some people prefer written information, while others are influenced by images.
a) Visualizers are consumers who prefer visual information and products that stress the visual.
There are two distinctly different types of visualizers.
i) Object visualizers encode and process images as a single perceptual unit.
ii) Spatial visualizers process images piece by piece.
b) Verbalizers are consumers who prefer written or verbal information and products that stress
the verbal.
c) This distinction helps marketers know whether to stress visual or written elements in their
ads.
11. Materialism is a trait of people who feel their possessions are essential to their identity.
a) They value acquiring and showing off possessions
b) They are self-centered and selfish
c) They seek lifestyles full of possessions
d) Their possessions do not give them greater happiness.
12. Fixated consumption behavior is in the realm of normal and socially acceptable behavior, and
refers to collectors’ and hobbyists’ tendency to accumulate items that are related to their interest
and show them off to friends and others with similar interests. Fixated consumers’ characteristics:
a) A deep (possibly “passionate”) interest in a particular object or product category.
b) A willingness to go to considerable lengths to secure additional examples of the object or
product category of interest.
c) The dedication of a considerable amount of discretionary time and money to searching out
the object or product.
13. Compulsive consumption is in the realm of abnormal behavior, and describes addictive and out-
of-control buying that may have damaging consequences to the shopper and those around them.
14. Ethnocentrism is the consumer’s willingness to buy (or not buy) foreign-made products
a) Nonethnocentric consumers evaluate foreign products for extrinsic characteristics
b) Ethnocentric consumers feel it is inappropriate or wrong to purchase foreign-made products
c) Marketers can appeal to ethnocentric consumers by stressing nationalistic themes in their
promotional efforts.
15. Consumers also tend to associate personality factors with specific colors.

Product and Brand Personification

1. Brand personification recasts consumers’ perception of the attributes of a product or service into
the form of a “human-like character.”
 a) It appears that consumers tend to ascribe various descriptive “personality-like” traits or
characteristics—the ingredients of brand personalities—to different brands in a wide variety
of product categories.
b) A brand personality provides an emotional identity for a brand, and encourages consumers
to respond with feelings and emotions toward the brand.
c) A brand’s personality can either be functional (“dependable and rugged”) or symbolic (“the
athlete in all of us”).
d) Research studies have found that a strong, positive brand personality leads to more
favorable attitudes toward the brand, brand preference, higher purchase intentions, and
brand loyalty, and is a way for consumers to differentiate among competing brands
2. Anthropomorphism is loosely defined as attributing human characteristics to something that is
not human.
a) A recent study found that the ease with which consumers could anthropomorphize an
offering was a function of how the product was presented to the public and the inclusion or
absence of human-like product features.
b) Products presented as human but which lack human features tend to be evaluated less
favorably by consumers than products that are presented as human and have human-like
attributes.
3. There are five defining dimensions of a brand’s personality and fifteen facets of personality that
flow out of these five dimensions (e.g., “down-to-earth,” “daring,” “reliable,” “upper class,” and
“outdoors”):
a) Sincerity
b) Excitement
c) Competence
d) Sophistication
e) Ruggedness
4. Consumers sometimes develop a relationship with a brand that is similar to the relationships they
have with other humans.
5. A product personality, or persona, frequently means that the product or brand has a “gender.”
6. Consumers associate some brands with geographic locations.
7. Websites have been characterized with four personality traits
a) Intelligent
b) Fun
c) Organized
d) Sincere

The Self and Self-Image

1. Self-image represents the way a person views him or herself.

a) Consumers select products that are consistent with their self-images and enhance them
b) One’s self-image originates in a person’s background and experience
c) Four aspects of self-image are:
i) Actual self-image—how consumers see themselves
ii) Ideal self-image—how consumers would like to see themselves
iii) Social self-image—how consumers feel others see them
iv) Ideal social self-image—how consumers would like others to see them
2. Consumers’ possessions can be seen to “confirm” or “extend” their self-images using possessions
in a number of ways:
 i) Actually: by allowing the person to do things that otherwise would be very difficult or
impossible to accomplish (e.g., problem-solving by using a computer)
ii) Symbolically: by making the person feel better or “bigger” (e.g., receiving an employee
award for excellence)
iii) By conferring status or rank: (e.g., status among collectors of rare works of art because
of the ownership of a particular masterpiece)
iv) By bestowing feelings of immortality: by leaving valued possessions to young family
members (this also has the potential of extending the recipients’ “selves”)
3. Consumers often wish to change themselves—to become a different or improved self.
a) In using self-altering products, consumers are frequently attempting to express their
individualism or uniqueness by creating a new self or take on the appearance of another
type of person.
b) Clothing, cosmetics, jewelry, grooming aids, and all kinds of accessories offer consumers the
opportunity to modify their appearance and thereby to alter their selves
c) Personal vanity and self-image and alteration of the self are closely related.
i) Physical vanity is excessive concern with or inflated view of one’s physical appearance
ii) Achievement vanity is excessive concern with or inflated view of one’s personal
achievements
 Chapter 4
Consumer Perception

Introduction

1. Perception is the process by which individuals select, organize and interpret stimuli into a
meaningful and coherent picture of the world.
2. Two individuals may be exposed to the same stimuli, but each person recognizes, selects,
organizes and interprets the stimuli based on their own needs, values and expectations.
3. Individuals act and react on the basis of their perceptions, not on the basis of objective reality.
a) Reality is a totally personal phenomenon, based on that person’s needs, wants, values, and
personal experiences.
b) Therefore, consumers’ perceptions are more important to a marketer than their knowledge
of objective reality because people make decisions based on their perceptions.

The Elements of Perception

1. Perception is all about consumers’ subjective understandings and not objective realities.
2. Changing a brand’s image, or repositioning, is sometimes necessary when consumers’ subjective
understandings, or perceptions, do not match objective realities or indicate the products meet
the consumers’ needs.
3. Raw sensory input does not produce or explain the coherent picture of the world that most adults
possess.
a) We subconsciously add to or subtract from sensory inputs to produce our own private
picture of the world.
b) Intensive stimulation bounces off most individuals.
c) Physical stimuli from the outside environment are one type of input into perceptions.
d) People’s motives, expectations, and what they learned from previous experiences are the
other type of input.
4. Sensation is the immediate and direct response of the sensory organs to stimuli.
a) A stimulus is any unit of input to any of the senses (e.g. products, packaging, brand names,
advertisements, commercials).
b) Sensory receptors are human organs that receive sensory inputs.
c) Human sensory sensitivity refers to the experience of sensation.
d) Sensation itself depends on energy change, or the differentiation of input.
e) As sensory input decreases, the ability to detect changes increases.
5. The lowest level at which an individual can experience a sensation is called the absolute threshold.
a) The point at which a person can detect the difference between “something” and “nothing”
is that person’s absolute threshold for the stimulus.
b) For example, the distance at which a driver can note a specific billboard on a highway is that
individual’s absolute threshold.
c) Under conditions of constant stimulation, such as driving through a “corridor” of billboards,
the absolute threshold increases (that is, the senses tend to become increasingly dulled).
6. Sensory adaptation refers specifically to “getting used to” certain sensations, or becoming
accustomed to a certain level of stimulation. Sensory adaptation is a problem that causes many
advertisers to change their advertising campaigns regularly.
7. Ambush marketing consists of placing ads in places where consumers do not expect to see them
and cannot readily avoid them.
8. Experiential marketing allows customers to engage and interact with brands, products and
services in sensory ways to create emotional bonds between consumers and marketing offerings.
9. The minimal difference that can be detected between two stimuli is called the differential
threshold or the JND (just noticeable difference).
a) A nineteenth-century German scientist named Ernst Weber discovered that the JND
between two stimuli was not an absolute amount, but an amount relative to the intensity of
the first stimulus.
b) Weber’s law states that the stronger the initial stimulus, the greater the additional intensity
needed for the second stimulus to be perceived as different.
c) Manufacturers and marketers endeavor to determine the relevant JND for their products so
that negative changes—reductions or increases in product size, or reduced quality—are not
readily discernible to the public, so that product improvements are readily discernible to the
consumer without being wastefully extravagant.
d) Marketers use the JND to determine the amount of change or updating they should make in
their products to avoid losing the readily recognized aspects of their products.
e) Marketers want to meet or exceed the consumers’ differential threshold so that they readily
perceive the improvements made in the original product.
i) Less than the JND is wasted effort because the improvement will not be perceived.
ii) More than the JND is wasteful because it reduces the level of repeat sales.
10. People are also stimulated below their level of conscious awareness—they can perceive stimuli
without being consciously aware of it via a process called subliminal perception (because the
stimulus is beneath the threshold, or “limen,” of conscious awareness, though obviously not
beneath the absolute threshold of the receptors involved).
a) Over the years, there have been sporadic reports of marketers using subliminal messages in
their efforts to influence consumption behavior.
b) There is no evidence that subliminal advertising persuades people to buy goods or services.
c) As for sexual embeds, most researchers are of the opinion that “What you see is what you
get.”

Perceptual Selection

1. Consumers subconsciously exercise selectivity as to the stimuli they perceive.

2. Which stimuli get selected depends on two major factors in addition to the nature of the stimulus
itself:
a) Consumers’ previous experience as it affects their expectations.
b) Their motives at the time (their needs, desires, interests, and so on).
3. Marketing stimuli that affect perceptions include:
a) Nature of the product
b) Its physical attributes
c) The package design
d) The brand name
e) The advertisements and commercials
f) The position of a print ad or commercial
g) The editorial environment
2. Contrast is one of the most attention-compelling attributes of a stimulus.
a) Advertisers use extreme attention-getting devices to get maximum contrast and penetrate
the consumer’s perceptual screen.
b) Advertisers use color contrasts, size, unexpected and unrealistic images to create stopping
power and gain attention.
3. People see what they expect to see based on familiarity, previous experience, or preconditioned
set expectations.
a) Stimuli that conflict sharply with expectations often receive more attention than those that
conform to expectations.
b) For years, certain advertisers have used blatant sexuality in advertisements for products to
which sex was not relevant in the belief that such advertisements would attract a high
degree of attention.
c) Ads with irrelevant sexuality often defeat the marketer’s objectives, because readers tend
to remember the sexual aspects of the ad, not the product or brand advertised.
4. People tend to perceive things they need or want; the stronger the need, the greater the tendency
to ignore unrelated stimuli in the environment.
a) An individual’s perceptual process attunes itself more closely to those elements of the
environment that are important to that person.
b) Marketing managers recognize the efficiency of targeting their products to the perceived
needs of consumers.

5. The consumer’s “selection” of stimuli (selective perception) from the environment is based on
the interaction of expectations and motives with the stimulus itself. These factors give rise to four
important concepts concerning perception.
a) Selective exposure—consumers actively seek out messages they find pleasant or with which
they are sympathetic and actively avoid painful or threatening messages.
b) Selective attention—consumers have a heightened awareness of the stimuli that meet their
needs or interests and minimal interest in stimuli irrelevant to their needs.
c) Perceptual defense—threatening or otherwise damaging stimuli are less likely to be
perceived than are neutral stimuli. Individuals unconsciously may distort information that is
not consistent with their needs, values, and beliefs.
d) Perceptual blocking—consumers screen out enormous amounts of advertising by simply
“tuning out.”

Perceptual Organization

1. People do not experience the numerous stimuli they select from the environment as separate and
discrete sensations; they tend to organize stimuli into groups and perceive them as unified wholes.
2. Gestalt psychology (Gestalt, in German, means pattern or configuration) is the name of the school
of psychology that first developed the basic principles of perceptual organization.
3. Three of the most basic principles of perceptual organization are figure and ground, grouping,
and closure.
a) Stimuli that contrast with their environment are more likely to be noticed; an example is the
contrast between a figure and the ground on which it is placed.
i) The figure is usually perceived clearly.
ii) The ground is usually perceived as indefinite, hazy, and continuous.
iii) The figure is more clearly perceived because it appears to be dominant—the ground
appears to be subordinate and less important.
iv) Advertisers have to plan their advertisements carefully to make sure that the stimulus
they want noted is seen as figure and not as ground.
v) A marketing technique experience growth and stems from the figure-and-ground
concepts is product placement (or “branded entertainment”).
b) Grouping, or a tendency to group stimuli into chunks, can be used advantageously by
marketers to imply certain desired meanings in connection with their products.
i) Consumers naturally chunk social security numbers, phone numbers and zip codes
 ii) Grouping has implications for product placement within retailers
c) Closure is people’s instinct to organize pieces of sensory input into a complete image or
feeling.
i) Promotional messages that require consumers to fill in information gain higher
involvement from consumers.
ii) Consumers who hear the soundtrack from a television commercial on the radio play
back the visual content from memory to “complete” the ad.

Perceptual Interpretation: Stereotyping

1. Stimuli are often highly ambiguous.

a) When stimuli are highly ambiguous, individuals usually interpret them in such a way that
they serve to fulfill personal needs, wishes, and interests.
b) How close a person’s interpretations are to reality depends on the clarity of the stimulus,
the past experiences of the perceiver, and his or her motives and interests at the time of
perception.
2. Stereotypes are the biased “pictures” consumers carry in their minds of the meaning of various
kinds of stimuli.
a) Sometimes, when presented with sensory stimuli, people “add” these biases to what they
see or hear and form distorted impressions.
b) Marketers must be aware of possible stereotypes because these images reflect people’s
expectations and influence how stimuli are subsequently perceived.
c) The main factors that can trigger stereotypes are:
i) Physical Appearances—people tend to attribute the qualities they associate with
certain people to others who may resemble them. Culturally attractive models are likely
to be more persuasive and have a more positive influence on consumer attitudes and
behavior than do average-looking models.
ii) Descriptive Terms—stereotypes are often reflected in verbal messages. Distinct brand
names are important to all products or services, associations that consumers make with
certain names are particularly crucial in marketing services due to the abstract and
intangible nature of many services.
iii) First Impressions—these tend to be lasting.
iv) Halo Effect—describes situations where the evaluation of a single object or person on
a multitude of dimensions is based on the evaluation of just one or a few dimensions.
Consumers often evaluate an entire product line on the basis of the one product within
the product line. Licensing also is based on the halo effect—associating products with
a well-known celebrity or designer name.

Consumer Imagery

1. Consumer imagery is consumers’ perceptions of all the components of products, services and
brands and how consumers evaluate the quality of marketers’ offerings.
a) Products and brands have symbolic value for individuals who evaluate them on the basis of
their consistency with their personal pictures of themselves.
b) Imagery affects perceptions of products, brands, services, prices, product quality, retail
stores, and manufacturers.
2. Positioning is the distinct image that a product has in the mind of the consumer.
a) How a product is positioned in the mind of the consumer is more important to the product’s
success than are the product’s actual characteristics.
 b) Marketers try to differentiate their products by stressing benefits that their brand provides
rather than their products’ physical features.
c) Brand images may be updated to create emotional bonds between brands and consumers
or to help differentiate the product in an increasingly competitive market.
3. Packaging must convey the image that the brand communicates to buyers.

4. Compared with manufacturing firms, service marketers face several unique problems in
positioning and promoting their offerings.
a) Services are intangible, so image becomes a key factor in differentiating a service from its
competition.
b) The marketing objective is to enable the consumer to link a specific image with a specific
brand name (using painted delivery vehicles, restaurant matchbooks, packaged hotel soaps
and shampoos, and a variety of other specialty items).
c) Sometimes companies market several versions of their service to different market segments
by using a differentiated positioning strategy.
d) The design of the service environment is an important aspect of service positioning strategy
and sharply influences consumer impressions.
e) The arousal level within the store environment must match the expectations of the
shopppers in order to avoid perceived over- or understimulation.
5. Perceived price is the customer’s view of the value that the customer receives from the purchase.
a) How a consumer perceives a price —as high, as low, as fair—has a strong influence on both
purchase intentions and purchase satisfaction.
b) Perception of price unfairness—customers pay attention to the prices paid by other
customers (e.g., senior citizens, frequent fliers, affinity club members) – affect customer
satisfaction, perceptions of product value and willingness to patronize a store or service.
c. A reference price is any price that a consumer uses as a basis for comparison in judging
another price.
a. An advertiser generally uses a higher external reference price (“sold elsewhere
at...”) in an ad in which a lower sales price is being offered to persuade the
consumer that the product advertised is a really good buy.
b. Internal reference prices are those prices (or price ranges) retrieved by the
consumer from memory.
c. Internal reference prices are thought to play a major role in consumers’
evaluations and perceptions of value of an advertised (i.e., external) price deal, as
well as in the believability of any advertised reference price.
d. Consumers’ internal reference prices change.
e. When an advertised reference price is within a given consumer’s acceptable price
range, it is considered plausible and credible.
f. If the advertised reference point is outside the range of acceptable prices (i.e.,
implausible), it will be contrasted and thus will not be perceived as a valid
reference point.
6. Consumers often judge the quality of a product (perceived quality) on the basis of a variety of
intrinsic and extrinsic informational cues.
a) Intrinsic cues are concerned with physical characteristics of the product itself: size, color,
flavor or aroma.
i) Consumers like to think they base quality evaluations on intrinsic cues because that
enables them to justify their product decisions as being “rational” or “objective.”
ii) More often than not, however, they use extrinsic characteristics to judge quality.
iii) In the absence of actual experience with a product, consumers often evaluate quality
on the basis of extrinsic cues, price, brand image, store image, etc.
b) Extrinsic cues are characteristics that are not inherent to the product.
7. It is more difficult for consumers to evaluate the quality of services than the quality of products.
a) Service characteristics include—intangibility, variability, perishability, simultaneously
produced and consumed.
b) Consumers are unable to compare services side-by-side as they do products, so consumers
rely on surrogate or extrinsic cues when purchasing services.
c) Marketers try to standardize their services in order to provide consistency of quality.
d) Researchers have concluded that the service quality that a customer perceives is a function
of the magnitude and direction of the gap between expected service and the customer’s
assessment of the service actually delivered.
e) The expectations of a given service vary widely among different consumers of the same
service.
f) SERVQUAL, measures the gap between customers’ expectations of services and their
perceptions of the actual service.
i) These perceptions are based on the dimensions of tangibles, reliability, responsiveness,
assurance, and empathy and tangibility.
ii) Two dimensions used to measure service quality are outcome dimensions—the reliable
delivery of the core service—and process dimensions—how the core service is
delivered.
8. A price/quality relationship forms when consumers rely on price as an indicator of product
quality.
a) Because price is so often considered to be an indicator of quality, some products deliberately
emphasize a high price to underscore their claims of quality.
b) Consumers also use cues such as the brand and the store in which the product is bought to
evaluate quality.
c) Consumers rely on the price and brand name when evaluating the product’s prestige and
symbolic value and use more concrete attributes of a product, such as performance and
durability, to judge its overall performance.
d) Marketers must understand all the attributes that customers use to evaluate a given product
and include all applicable information in order to counter any perceptions of negative quality
associated with a lower price.
e) Consumers use price as a surrogate indicator of quality if they have little information or little
confidence in their ability to make a choice.
9. Retail stores have images of their own that serve to influence the perceived quality of products
they carry and the decisions of consumers as to where to shop.
a) These images stem from the merchandise they carry, the brands sold and their prices, the
level of service, the store’s physical environment and ambiance, and its typical clientele.
b) The width and type of product assortment affects retail store image.
c) The unique benefit that a store provides is more important than the number of items it
carries in forming a favorable store image in consumers’ minds.
d) Customers often use brand, store image, and price together as a product’s quality indicators.
e) When brand and retailer images become associated, the less favorable image becomes
enhanced at the expense of the more favorable image.
f) Pricing discounts impact retail store image.Stores that offer frequent, small discounts on
large numbers of items are more likely to be perceived as “discount stores” and less
prestigious than stores offering larger discounts on a smaller number of products.
10. Manufacturers who enjoy a favorable image generally find that their new products are accepted
more readily than those of manufacturers who have a less favorable or even a “neutral” image.
a) Consumers generally have favorable perceptions of brands that are the first in a product
category and are more likely to purchase.
b) Today, companies are using institutional advertising, exhibits, and sponsorship of
community events to enhance their images.
Perceived Risk

1. Perceived risk is the uncertainty that consumers face when they cannot foresee the consequences
of their purchase decision.
a) The degree of risk that consumers perceive and their own tolerance for risk taking are factors
that influence their purchase strategies.
b) Consumers are influenced by risks that they perceive, whether or not such risks actually
exist. Risk that is not perceived will not influence consumer behavior.
c) Types of risk include: functional risk, physical risk, financial risk, social risk, psychological
risk, and time risk.
2. The amount of risk perceived depends on the specific consumer, the product, the situation, and
the culture.
a) High-risk perceivers are narrow categorizers because they limit their choices.
b) Low-risk perceivers are broad categorizers because they make their choice from a wide
range of alternatives.
3. Consumers characteristically develop their own strategies for reducing perceived risk.
a) These risk-reduction strategies enable them to act with increased confidence when making
product decisions, even though the consequences of such decisions remain somewhat
uncertain.
i) Seek information
ii) Remain brand loyal
iii) Rely on brand image
iv) Rely on store image
v) Buy the most expensive model or brand
b) Marketers need to provide consumers with persuasive risk-reduction strategies such as:
i) A well-known brand name
ii) Distribution through reputable retail outlets
iii) Informative advertising
iv) Publicity
v) Impartial test results
vi) Free samples
vii) Money-back guarantees
 Chapter 5
Consumer Learning

INTRODUCTION

1. Learning is applying one’s past knowledge and experience to present circumstances and behavior.
2. Repeating advertising messages about brands and their benefits, rewarding people for purchase
behavior be selling products that provide superior benefits, getting consumers to make
associations among different offerings under the same brand name, and developing brand loyalty
are all elements of consumer learning.
3. Marketers are concerned with how individuals learn because they want to teach them, in their
roles as consumers, about products, product attributes, and potential consumer benefits; about
where to buy their products, how to use them, how to maintain them, even how to dispose of
them.

The Elements of Consumer Learning

1. Consumer learning is a process; that continually evolves and changes as a result of newly acquired
knowledge or from actual experience.
a) Both newly acquired knowledge and personal experience serve as feedback to the individual
and provide the basis for future behavior in similar situations.
b) The role of experience in learning does not mean that all learning is deliberately sought. A
great deal of learning is also incidental, acquired by accident or without much effort.
c) Despite their different viewpoints, learning theorists in general agree that in order for learning
to occur, certain basic elements must be present—motivation, cues, response, and
reinforcement.
2. Unfulfilled needs lead to motivation, which spurs learning. The degree of relevance of the goal is
critical to how motivated the consumer is to search for knowledge or information about a product
or service.
3. If motives serve to stimulate learning, cues (price, styling, packaging, advertising, and store
displays) are the stimuli that give direction to the motives.
4. How individuals react to a cue—how they behave—constitutes their response.
a) A response is not tied to a need in a one-to-one fashion.
b) A need or motive may evoke a whole variety of responses.
c) The response a consumer makes depends heavily on previous learning that, in turn, depends
on how related responses were reinforced previously.
5. Reinforcement, the reward (pleasure, enjoyment and benefits) that the consumer receives after
buying and using a product or service, increases the likelihood that a specific response (e.g. loyal
repurchase behavior) will occur in the future as the result of particular cues or stimuli.

Classical Conditioning

1. Behavioral learning is sometimes called stimulus-response learning because it is based on the

premise that observable responses to specific external stimuli signal that learning has taken place.
a) Behavioral theories are most concerned with the inputs and outcomes of learning, not the
process.
b) Three forms of behavioral learning are classical conditioning, instrumental (or operant)
conditioning, and behavioral learning (or modeling).
2. Classical conditioning is viewed as an automatic response that builds up through repeated
exposure and reinforcement.
a) Early classical conditioning theorists regarded all organisms as passive recipients that could
be taught certain behaviors through repetition (i.e., conditioning).
b) Conditioning involved building automatic responses to stimuli. (Ivan Pavlov was the first to
describe conditioning and to propose it as a general model of how learning occurs.)
c) Conditioned learning results when a stimulus that is paired with another stimulus elicits a
known response and serves to produce the same response when used alone.
d) In a consumer behavior context, an unconditioned stimulus might consist of a well-known
brand symbol and previously acquired consumer perception of a brand is the unconditioned
response.
e) Conditioned stimuli might consist of new products under an existing brand name.
f) The conditioned response would be consumers trying these products because of the belief
that they embody the same attributes with which the brand name is associated.
3. Cognitive associative learning suggests learning is not a reflexive action, but rather the acquisition
of new knowledge due to learning associations among events that allow the organism to
anticipate and “represent” its environment.
4. Repetition works by increasing the strength of the association between a conditioned stimulus
and an unconditioned stimulus and slows the process of forgetting.
a) After a certain number of repetitions, attention and retention declines.
b) This effect is known as advertising wear-out and can be decreased by varying the advertising
messages.
c) Wear-out may be avoided by varying the message through cosmetic variation or substantive
variation.
d) The three-hit theory states that the optimum number of exposures to an ad is three.
i) One to make the consumer aware of the product.
ii) A second to show consumers the relevance of the product.
iii) A third to remind them of its benefits.
e) Others think it may take 11 to 12 repetitions to achieve the three objectives
5. Making the same response to slightly different stimuli is called stimulus generalization.
a) Stimulus generalization explains why imitative “me too” products succeed in the
marketplace: consumers confuse them with the original product they have seen advertised.
b) It also explains why manufacturers of private label brands try to make their packaging closely
resemble the national brand leaders.
c) In product line extensions, the marketer adds related products to an already established
brand, knowing that the new product is more likely to be adopted when it is associated with
a known and trusted brand name.
d) Marketers offer product form extensions that include different sizes, different colors, and
even different flavors.
e) Family branding—the practice of marketing a whole line of company products under the
same brand name—is another strategy that capitalizes on the consumer’s ability to
generalize favorable brand associations from one product to the next.
f) Licensing—allowing a well-known brand name to be affixed to products of another
manufacturer—is another marketing strategy that operates on the principle of stimulus
generalization.
6. Stimulus discrimination is the opposite of stimulus generalization and results in the selection of
specific stimulus from among similar stimuli.
a) The consumer’s ability to discriminate among similar stimuli is the basis of positioning
strategy, which seeks to establish a unique image for a brand in the consumer’s mind.
 b) Unlike the imitator who hopes consumers will generalize their perceptions and attribute
special characteristics of the market leader’s products to their own products, market leaders
want the consumer to discriminate among similar stimuli.
c) Most product differentiation strategies are designed to distinguish a product or brand from
that of competitors on the basis of an attribute that is relevant, meaningful, and valuable to
consumers.
d) It often is quite difficult to unseat a brand leader once stimulus discrimination has occurred.
e) In general, the longer the period of learning—of associating a brand name with a specific
product—the more likely the consumer is to discriminate, and the less likely to generalize
the stimulus.

Instrumental Conditioning
1. Instrumental conditioning is based on the notion that learning occurs through trial-and-error, and
the stimulus that results in the most satisfactory response is the one that is learned.
a) According to American psychologist B. F. Skinner, most individual learning occurs in a
controlled environment in which individuals are “rewarded” for choosing an appropriate
behavior.
b) A favorable experience is instrumental in teaching the individual to repeat a specific
behavior.
2. Skinner distinguished two types of reinforcement (or reward) influence, which provided that the
likelihood for a response would be repeated.
a) The first type, positive reinforcement, consists of events that strengthen the likelihood of a
specific response.
b) Negative reinforcement is an unpleasant or negative outcome that also serves to encourage
a specific behavior.
c) Either positive or negative reinforcement can be used to elicit a desired response.
d) Negative reinforcement should not be confused with punishment, which is designed to
discourage behavior.
3. When a learned response is no longer reinforced, it diminishes to the point of extinction; that is,
to the point at which the link between the stimulus and the expected reward is eliminated.
a) Forgetting is often related to the passage of time; this is known as the process of decay.
b) Marketers can overcome forgetting through repetition and can combat extinction through
the deliberate enhancement of consumer satisfaction.
4. The objective of all marketing efforts should be to maximize customer satisfaction.
a) Aside from the experience of using the product itself, consumers can receive reinforcement
from other elements in the purchase situation, such as the environment in which the
transaction or service takes place, the attention and service provided by employees, and the
amenities provided.
b) Some hotels provide reinforcement to guests in the form of small amenities.
c) Companies that create personal connections with customers and offer diverse product lines
and competitive prices are the ones providing the best reinforcement, resulting in
satisfaction and repeat patronage.
d) Most frequent shopper programs are based on enhancing positive reinforcement and
encouraging continued patronage.
e) Marketers have found that product quality must be consistently high and provide customer
satisfaction with each use for desired consumer behavior to continue.
5. Marketers have identified three types of reinforcement schedules: continuous reinforcement,
fixed ratio reinforcement, and variable ratio reinforcement.
a) Continuous reinforcement offers a reward after each transaction.
 b) Fixed ratio reinforcement provides a reward every nth time the product or service is
purchased.
c) Variable ratios reward consumers on a random basis and tend to engender high rates of
desired behavior and are somewhat resistant to extinction.
6. The reinforcement of behaviors that must be performed by consumers before the desired
behavior can be performed is called shaping, which increases the probability that desired
consumer behavior will occur.
7. Timing has an important influence on consumer learning.
a) Question—should a learning schedule be spread out over a period of time (distributed
learning), or should it be “bunched up” all at once (massed learning)?
i) Massed advertising produces more initial learning
ii) A distributed schedule usually results in learning that persists longer
b) When advertisers want an immediate impact (e.g., to introduce a new product or to counter
a competitors blitz campaign), they generally use a massed schedule to hasten consumer
learning.
c) A distributed scheduler with ads repeated on a regular basis usually results in more long-
term learning and is relatively immune to extinction.

Observational Learning
1. Observational learning (also called modeling) is the process through which individuals learn
behavior by observing the behavior of others and the consequences of such behavior.
2. Their role models are usually people they admire because of such traits as appearance,
accomplishment, skill, and even social class.
3. Children learn much of their social behavior and consumer behavior by observing their older
siblings or their parents.

Information Processing

1. Cognitive learning is based on mental activity; it consists of mental processing of data rather than
instinctive responses to stimuli.
a) Cognitive learning theory holds that the kind of learning most characteristic of human beings
is problem solving, and it gives some control over their environment.
b) The human mind processes the information it receives.
c) Consumers process product information by attributes, brands, comparisons between
brands, or a combination of these factors.
d) Consumers with higher cognitive ability generally acquire more product information and
consider more product attributes and alternatives that consumer with lesser abilities.
e) The more experience a consumer has with a product category, the greater his or her ability
to make use of product information.

2. The components of information processing are storing, retaining and retrieving information; this
takes place in process that uses a sensory store, a short-term store, and a long-term store.
a) Sensory store—all data comes to us through our senses, however, our senses do not
transmit information as whole images.
i) The separate pieces of information are synchronized as a single image.
ii) This sensory store holds the image of a sensory input for just a second or two.
iii) This suggests that it’s easy for marketers to get information into the consumer’s sensory
store, but hard to make a lasting impression.
b) Short-term store—if the data survives the sensory store, it is moved to the short-term store.
i) This is our working memory.
 ii) If rehearsal—the silent, mental repetition of material—takes place, then the data is
transferred to the long-term store.
iii) If data is not rehearsed and transferred, it is lost in a few seconds.
c) Long-term store—once data is transferred to the long-term store it can last for days, weeks,
or even years.
d) Encoding is the process by which we select and assign a word or visual image to represent a
perceived object.
e) Information overload takes place when the consumer is presented with too much
information and leads to frustration, confusion, and poor purchase decisions.
3. Retention—information is constantly organized and reorganized as new links between chunks of
information are forged.
a) Studies show that a brand’s sound symbolism and the brand’s linguistic characteristics
impacted the encoding and retention of the brand name.
b) Consumers recode what they have already encoded to include larger amounts of
information (chunking).
c) The degree of prior knowledge is an important consideration.
d) Knowledgeable consumers can take in more complex chunks of information than those who
are less knowledgeable in the product category.
4. Retrieval is the process by which we recover information from long-term storage.

Cognitive Learning

1. Cognitive learning is the systematic evaluation of information and alternatives needed to solve a
recognized but unfulfilled need or unsolved problem.
a. It occurs when a person has a goal and must search for and process data in order to make
a decision or solve a problem.
b. The tricomponent attitude model consists of three stages:
i. The cognitive stage – the person’s knowledge and beliefs about a product
ii. The affective stage – the person’s feeling toward and evaluations of a product as
“favorable” or “unfavorable”; and
iii. The conative stage – the person’s level of intention to buy the product.
c. For a long time, consumer researchers believed that the complex processing of
information by consumers depicted in the cognitive learning model was applicable to all
purchase decisions.
d. Some theorists began to realize that there were some purchase situations that simply did
not call for extensive information processing and evaluation.
e. Purchases of minimal personal importance were called low-involvement purchases, and
complex, search-oriented purchases were considered high-involvement purchases.

Consumer Involvement and Hemispheric Lateralization

1. Consumer involvement is focused on the degree of personal relevance that the product or
purchase hold for that consumer.
a) High-involvement purchases are those that are very important to the consumer and thus
provoke extensive problem solving and information processing.
b) Low-involvement purchases are purchases that are not very important to the consumer,
hold little relevance, and have little perceived risk, and thus, provoke very limited
information processing.
 c) Involvement has been conceptualized and measured in a variety of ways, including product
involvement, brand involvement, and advertising involvement.
d) The most sensible approach to measuring involvement is using self-administered surveys
that assess the consumer’s cognitions or behaviors regarding a particular product or product
category, and where involvement is measured on a continuum (using semantic differential
scales) rather than as a dichotomy consisting of two mutually exclusive categories of “high”
and “low” involvement.
2. A marketer aspires to have consumers who are involved with the purchase also view its brand
as unique.
a) Many studies showed that high purchase involvement coupled with perceived brand
differences lead to a high favorable attitude toward the brand, which in turn leads to less
variety seeking and brand switching and to strong brand loyalty.
b) Online, many advertisers use avatars – animated, virtual reality graphical figures
representing people – in their Web sites to increase involvement.
i) Attractive avatar sales agents were effective in selling to consumers with moderate
product involvement
ii) Expert avatars were more effective sales agents for products with high involvement
levels.
3. Hemispheric lateralization or split-brain theory, originated in the 1960’s.
a) The premise is that the right and left hemispheres of the brain specialize in the kinds of
information they process.
i) The left hemisphere is the center of human language; it is the linear side of the brain
and primarily responsible for reading, speaking, and attributional information
processing.
ii) The right hemisphere of the brain is the home of spatial perception and nonverbal
concepts; it is nonlinear and the source of imagination and pleasure.
b) The left side of the brain is rational, active, and realistic.
c) The right side is emotional, metaphoric, impulsive, and intuitive.
4. Passive learning is thought to occur through repeated exposures to low-involvement
information processing.
a) Right-brain theory is consistent with classical conditioning and stresses the importance of
the visual component of advertising, so it affects processing of TV commercials
b) Printed information is verbal information and is processed on the brain’s left side.
c) Recent research suggests that pictorial cues help recall and familiarity, although verbal cues
trigger cognitive functions, encouraging evaluation.

Outcomes and Measures of Consumer Learning

1. Market share and the number of brand-loyal consumers are the interdependent goals of
consumer learning, so it is important for marketers to measure how effectively consumers have
learned its message.
2. Recognition and recall tests are conducted to determine whether consumers remember seeing
an ad, the extent to which they have read it or seen it and can recall its content, their resulting
attitudes toward the product and the brand, and their purchase intentions.
a) Recognition tests are based on aided recall and recall tests use unaided recall.
b) In recognition tests, the consumer is shown an ad and asked whether he or she remembers
seeing it and can remember any of its salient points.
c) In recall tests, the consumer is asked whether he or she has read a specific magazine or
watched a specific television show, and if so, can recall any ads or commercials seen, the
product advertised, the brand, and any salient points about the product.
 d) Starch Readership Ad Studies evaluate the effectiveness of magazine advertisements based
on three criteria:
i) Noticing the ad
ii) Associating the ad with advertised brand
iii) Involvement with the ad (reading most ad text)
3. Brand loyalty is the ultimate desired outcome of consumer learning, and measures purchase
frequency, brand switching, and commitment to buy the brand.
a) Attitudinal measures are concerned with consumers’ overall feelings (i.e., evaluation) about
the product and the brand, and their purchase intentions.
b) Behavioral measures are based on observable responses to promotional stimuli—purchase
behavior, rather than attitude toward the product or brand.
4. A basic issue among researchers is whether to define brand loyalty in terms of consumer behavior
or consumer attitudes.
a) Behavioral scientists who favor the theory of instrumental conditioning believe that brand
loyalty results from an initial product trial that is reinforced through satisfaction, leading to
repeat purchase.
b) Cognitive researchers, on the other hand, emphasize the role of mental processes in building
brand loyalty. They believe that consumers engage in extensive problem-solving behavior
involving brand and attribute comparisons, leading to a strong brand preference and repeat
purchase behavior.
c) To cognitive learning theorists, behavioral definitions (e.g., frequency of purchase or
proportion of total purchases) lack precision, because they do not distinguish the “real”
brand-loyal buyer.
5. An integrated conceptual framework views consumer loyalty as the function of three groups of
influences: (1) personal degree of risk aversion or variety seeing; (2) the brand’s reputation and
availability of substitute brands; and (3) social group influences and peers’ recommendations.
6. Their influences produce three types of loyalty: (1) covetous loyalty, (2) inertia loyalty, and (3)
premium loyalty.
7. Brand equity refers to the value inherent in a well-known brand name.
a) This value stems from the consumer’s perception of the brand’s superiority, the social
esteem that using it provides, and the customer’s trust and identification with the brand.
b) For many companies, their most valuable assets are their brand names.
c) Brand equity enables companies to charge a price premium—an additional amount over and
above the price of an identical store brand.
 Chapter 6
Consumer Attitude Formation & Change
Introduction

1. An attitude is a learned predisposition to behave in a consistently favorable or unfavorable way

with respect to a given object.
a) Attitudes are learned from direct experience with the product, word-of-mouth, exposure to
mass media and other information sources.
b) Attitudes reflect favorable or unfavorable evaluations of the attitude object.
2. People are often unreceptive to the unfamiliar.
3. Attitudes can be related to social or cultural events.

Attitudes and Their Formation

1. Attitudes are directed at objects.

a) Object refers to such things as: product, product category, brand, service, possessions,
product use, causes or issues, people advertisement price, Internet site, price, medium, or
retailer.
b) Attitude “can be conceptualized as a summary evaluation of an object.”
c) Attitudes might or might not lead to behavior
2. Attitudes are learned.
a) Attitudes are formed as a result of direct experience with the product, information acquired
from others, and exposure to mass media, the Internet, and various forms of direct
marketing.
b) Personality traits significantly influence the formation of attitudes.
i) Consumers with a high need for cognition are likely to form positive attitudes in
response to promotions that include a lot of detailed, product-related information.
ii) Innovativeness also affects attitudes (especially toward new products)
3. Attitudes are relatively consistent with the behavior they reflect.
a) Attitudes are not necessarily permanent; they do change.
b) We should consider situational influences on consumer attitudes and behavior.
4. Consumer attitudes occur within, and are affected by, the situation.

The Tri-Component Attitude Model

1. Psychologists have sought to construct models that capture the underlying dimensions of an
attitude. The focus has been on specifying the composition of an attitude to better explain or
predict behavior.
2. According to the tri-component attitude model, attitudes consist of three major components: the
cognitive component, the affective component and the conative component.
a) Cognitions are knowledge and perceptions that are acquired by a combination of direct
experience with the attitude object and related information from various sources.
i) This previous knowledge and perceptions commonly take the form of beliefs
ii) The consumer believes that the attitude object possesses various attributes and that
specific behavior will lead to specific outcomes.
b) The affective component of an attitude consists of the consumer’s emotions or feelings
which are considered evaluations.
i) Affect-laden experiences manifest themselves as emotionally charged states (such as
happiness or sadness).
 ii) These states may enhance positive or negative experiences (and recollections of those
experiences) for the consumer.
iii) A semantic differential scale, which has bi-polar adjectives as anchors and asks the
respondent to rate on a continuum, is often used to measure affect.
c) Conation, the final component of the tri-component attitude model, is concerned with the
likelihood or tendency that an individual will undertake a specific action or behave in a
particular way with regard to the attitude object.
i) The conative component may include the actual behavior itself.
ii) In marketing and consumer research, the conative component is frequently treated as
an expression of the consumer’s intention to buy.
iii) Intention to buy scales are used to assess the likelihood of a consumer purchasing a
product or behaving in a certain way.
3. Altering consumer attitudes is an important marketing strategy.
a) In these market situations, marketers have an opportunity to persuade consumer’s to
“crossover,” or to shift their favorable attitude toward another version of the product.
b) Changing beliefs about products is the most common form of advertising appeal.
i) Advertisers constantly remind us that their product has “more,” or is “better,” or “best”
in terms of some important product attribute.
ii) Information suggesting a change in attitude needs to be compelling and repeated
enough to overcome the natural resistance to letting go of established attitudes.
c) Changing brand image attempts to alter consumers’ overall assessment of the brand.
d) Changing consumer beliefs about competitive brands or product categories is another
attitude-change strategy.
i) One tool is comparative advertising.
ii) Another tool is a two-sided message.

Multi-Attribute Attitude Models

1. Multi-attribute attitude models portray consumers’ attitudes with regard to an attitude object as
a function of consumers’ perception and assessment of the key attributes or beliefs held with
regard to the particular attitude object.
2. There are many variations of the attitude model, five to consider are: attitude-toward-object
model, attitude-toward-behavior model, the theory-of-reasoned-action model, the theory of
trying-to-consume, and the attitude-toward-the-ad-model.
a) According to the attitude-toward-object model, the consumer’s attitude toward a product
or specific brands of a product is a function of
i) the presence (or absence) and evaluation of certain product-specific beliefs and/or
attributes.
ii) The importance of each of these attributes
b) Attitudes can be changed by
i) Adding a previously ignored attribute or adding an attribute that reflects an actual
product or technological innovation.
a) Adding an attribute reflects an actual product change or technological
innovation is easier to accomplish than stressing a previously ignored attribute.
b) Sometimes eliminating a characteristic or feature has the same enhancing
outcome as adding a characteristic or attribute.
ii) Changing the perceived importance of attributes
iii) Developing new products
c) The attitude-toward-behavior model is designed to capture the individual’s attitude toward
behaving or acting with respect to an object, rather than the attitude toward the object itself
 (so attitudes correspond somewhat more closely to actual behavior than the attitude-
toward-object model).
d) The theory-of-reasoned-action incorporates a cognitive component, an affective
component, and a conative component arranged in a pattern different from that of the tri-
component model.
i) It includes subjective norms that influence an individual’s intention to act before
measuring intentions.
ii) Subjective norms are based on normative beliefs and motivation to comply with the
preferences of relevant others.
e) The theory of trying-to-consume is designed to account for the cases where the action or
outcome is not certain but reflects the consumer’s efforts to consume. Sometimes personal
impediments or environmental impediments prevent the desired outcome.
f) As the attitude-toward-the-ad model depicts, the consumer forms various feelings as the
result of exposure to an ad that impact attitudes towards the brands advertised.

Changing the Motivational Functions of Attitudes

1. An effective strategy for changing consumer attitudes toward a product or brand is to make
particular needs prominent.
2. One method for doing this is called the functional approach and suggests attitudes can be
classified into four functions: the utilitarian function, the ego-defensive function, the value-
expressive function, and the knowledge function.
a) The utilitarian function stems from the belief that consumers’ attitudes reflect the utilities
that brands provide.
i) When a product has been useful or helped us n the past, our attitude toward it tends
to be favorable.
ii) One way of changing attitudes in favor of a product is by showing people that it can
serve a utilitarian purpose they may not have considered.
b) The ego-defensive function maintains that people want to protect their self-images from
inner feelings of doubt – they want to replace their uncertainty with a sense of security and
personal confidence.
c) The value-expressive function suggests attitudes are an expression or reflection of the
consumer’s values and beliefs.
d) The knowledge function holds that individuals generally have a strong need to know and
understand the people and things they encounter.
3. It is possible to alter attitudes toward products by pointing out their relationships to worthy
objects or causes.

The Elaboration Likelihood Model

1. The elaboration likelihood model (ELM) involves a more global view that two different persuasive
routes change attitudes.
a) The central route to persuasion is particularly relevant to attitude change when a
consumer’s motivation or ability to assess the attitude object is high; that is, attitude change
occurs because the consumer actively seeks out information relevant to the attitude object
itself.
b) When consumers are willing to exert the effort to comprehend, learn, or evaluate the
available information about the attitude object, learning and attitude change occur via the
central route.
 c) In contrast, when a consumer’s motivation or assessment skills are low (e.g., low-
involvement), learning and attitude change tend to occur via the peripheral route to
persuasion, without the consumer focusing on information relevant to the attitude object
itself.
d) In such cases, attitude change often is an outcome of secondary inducements (e.g., cents-
off coupons, free samples, beautiful background scenery, great package, or the
encouragement of a celebrity endorsement).
2. Research indicates that even in low-involvement conditions (e.g., like exposure to most
advertising), where both central and secondary inducements are initially equal in their ability to
evoke similar attitudes, it is the central inducement that has the greatest “staying power”—that
is, over time it is more persistent.

Cognitive Dissonance Theory

1. According to cognitive dissonance theory, discomfort or dissonance occurs when a consumer

holds conflicting thoughts about a belief or an attitude object.
2. Post-purchase dissonance occurs after the purchase.
a) Purchase decisions often require compromise.
b) Post-purchase dissonance is quite normal.
c) Dissonance gives consumers an uneasy feeling about their prior beliefs or actions – a feeling
that they seek to resolve by changing their attitudes to conform to their behavior.
d) Attitude change is frequently an outcome of an action or behavior.
e) Conflicting thoughts and dissonant information following a purchase are prime factors that
induce consumers to change their attitudes so that they will be consonant with their actual
purchase behavior.
f) Dissonance propels consumers to reduce the unpleasant feelings created by the rival
thoughts.
3. Tactics that consumers can use to reduce dissonance include reduction:
a) By rationalizing the decision as being wise
b) By seeking out advertisements that support the original reason for choosing the product
c) By trying to “sell” friends on the positive features of the brand
d) By looking to known satisfied owners for reassurance
4. Marketers can help reduce postpurchase uncertainty by aiming specific messages at reinforcing
consumer decisions by complimenting their wisdom, offering stronger guarantees or warranties,
increasing the number and effectiveness of its services, or providing detailed brochures on how
to use its products correctly.
5. Attitude-change strategies are designed to resolve actual or potential cognitive conflicts between
two attitudes.

Assigning Causality and Attribution Theory

1. Attribution theory attempts to explain how people assign causality to events on the basis of either
their own behavior or the behavior of others.
2. Self-perception attribution addresses individuals’ inferences or judgments as to the cause of their
own behavior.
a) Attitudes develop as consumers look at and make judgments about their own behavior.
b) These judgments can be divided into internal, external, and defensive attributions.
c) Internal attribution—giving yourself credit for the outcomes—your ability, your skill, or your
effort.
 d) External attribution—the purchase was good because of factors beyond your control—luck,
etc.
e) Defensive attribution—consumers are likely to accept credit personally for success, and to
credit failure to others or to outside events.
3. Foot-in-the-door technique—the foot-in-the-door technique is based on the premise that
individuals look at their prior behaviors (e.g., compliance with a minor request) and conclude that
they are the kind of person who says “Yes” to such requests (i.e., an internal attribution).
a) Such self-attribution serves to increase the likelihood that they will agree to a similar, more
substantial request.
b) Research into the foot-in-the-door technique has concentrated on understanding how
specific incentives (e.g., cents-off coupons of varying amounts) ultimately influence
consumer attitudes and subsequent purchase behavior.
c) It appears that different size incentives create different degrees of internal attribution that,
in turn, lead to different amounts of attitude change.
i) It is not the biggest incentive that is most likely to lead to positive attitude change.
ii) What seems most effective is a moderate incentive, one that is just big enough to
stimulate initial purchase of the brand but still small enough to encourage consumers
to internalize their positive usage experience and allow a positive attitude change to
occur.
4. In contrast with the foot-in-the-door technique is the door-in-the-face technique, in which a large,
costly first request that is probably refused is followed by a second, more realistic, less costly
request.
5. Every time a person asks “Why?” about a statement or action of another or “others”—a family
member, a friend, a salesperson, a direct marketer, a shipping company— attributions toward
others theory is relevant.
6. It is in the area of judging product performance that consumers are most likely to form product
attributions toward objects.
a) Specifically, they want to find out why a product meets or fails to meet their expectations.
a) In this regard, they could attribute the product’s successful performance (or failure) to the
product itself, to themselves, to other people or situations, or to some combination of these
factors.
7. Individuals acquire conviction about attributions by collecting additional information in an
attempt to confirm (or disconfirm) prior inferences.
 Chapter 7
Resuading Consumers

INTRODUCTION
1. Communication is the transmission of a message from a sender to a receiver via a medium of
transmission.
2. The five basic components of communications are: sender, receiver, medium, message and
feedback.
a) Senders encode their messages using words, pictures, symbols, spokespersons and
persuasive appeals.
b) Receivers decode the messages; to be persuasive, the messages must be decoded as the
senders intended.
c) Advertising appeals are the encoding used by marketers, and include humor, fear, sex, and
comparative appeals.

The Communication Process

1. Communications can be either impersonal or interpersonal.

a) The sources of impersonal communications are organizations that develop and transmit
appropriate messages through their marketing departments, advertising or public relations
agencies and spokespersons.
b) The sources of interpersonal communications can be either formal or informal.
i) A formal communications source represents either a for-profit or not-for-profit
organization (e.g. a salesperson).
ii) An informal source might be a parent or a friend who gives product information or
advice.
c) The key factor underlying the persuasive impact of messages is the source’s credibility (the
extent to which the receiver trusts/believes the source sending the message.
d) A key advantage of interpersonal communications is their ability to obtain immediate
feedback.
2. Media are the channels for transmitting communications.
a) Traditional media are the original communications channels that advertisers have used
and are generally classified as print and broadcast.
b) New media are online channels, social networks and mobile electronic devices.
3. Selective exposure refers to consumers’ selectivity in paying attention to advertising messages.
a) Technology provides consumers with greater ability to control their exposure to media.
b) Viewers can time shift by recording TV shows and may skip commercials when they watch
them at their leisure.
4. Psychological noise includes competing advertising messages or distracting thoughts that can
affect the reception of the promotional message.
a) Strategies to overcome or limit psychological noise include:
i) Repeated exposure to an advertising message (principle of redundancy)
ii) Using contrast: featuring an unexpected outcome, increasing sensory input,
identifying message appeals that attract more attention.
iii) Customizing messages via monitoring on digital technologies
b) Positioning and providing value are the most effective ways to ensure that a promotional
message stands out and is received and decoded appropriately by the target audience.
Broadcasting versus Narrowcasting

1. The term traditional media is synonymous with broadcast media (or mass media) and consists of
channels where all receivers receive the same one-way messages from marketers (i.e., they
cannot send direct responses to the message sources).
2. New media are channels of narrowcasting, defined as means that permit marketers to send
messages that are:
a) Addressable and directed to specific persons rather than groups of consumers.
b) Customized, and based on data gathered from tracing consumers’ surfing and clicks online,
in combination with other information, to either small groups or individual consumers.
c) Interactive because, in most narrowcasts, an action by the consumer—in the form of a click
on a link or banner—triggers the transmission of a message.
d) More response-measurable than traditional broadcasted ads because communication
feedback is more accurate and received sooner.
3. Addressable advertising consists of customized messages sent to particular consumers.
a) These messages are based mostly on the consumers’ prior shopping behavior, which
marketers have observed and analyzed.
b) Some of this data comes from data aggregators that use data from users’ browsers,
Google, Yahoo!, and Facebook to build models that marketers in turn use to design the
different ads customers see, which are also a function of the viewers’ demographics and
past advertising exposure.

Designing Persuasive Messages

1. The message (thought, idea, attitude, image, or other information that the sender wishes to
convey to the intended audience) can be verbal, (spoken or written) or nonverbal (a photograph,
an illustration, or a symbol), or a combination of the two.
2. The sponsor, who may be an individual or an organization, must first establish the objectives of
the message, select an appropriate medium for sending it, and design (encode) the message in a
manner that is appropriate to each medium and to each audience.
a) The objectives of a persuasive message include creating awareness of a service, promoting
sales of a product, encouraging (or discouraging) certain practices, attracting retail
patronage, reducing post-purchase dissonance, creating goodwill or a favorable image, or
any combination of these and other communications objectives.
b) Marketers encode messages by using words, pictures, symbols, spokespersons, and special
channels.
c) The message receivers decode the messages they receive on the basis of their personal
experiences, characteristics, and motives.
d) Cognitive learning models suggest message exposure leads to interest, desire and buying
behavior.
3. Some of the decisions that marketers must make in designing the message include selecting
images, creating ad copy, positive or negative message framing, one-sided or two-sided messages,
and the order of presentation.
a) Messages that depict images are often more effective that those with text only.
Advertisements are visually complex when they contain dense perceptual features and/or
when they have elaborate creative designs.
i) A study found that feature complexity hurts attention to the brand and attitude toward
the ad, whereas design complexity enhances paying attention to the ad, raises its
comprehensibility, and improves attitude toward the ad
ii) The study demonstrated that marketers must assess the visual complexity of
advertisements and use their findings to enhance their ads’ “stopping power.”
 b) Message framing: whether a marketer should stress the benefits to be gained by using a
specific product (positive message framing), or the benefits to be lost by not using the
product (negative message framing) depends on the consumer’s attitudes and
characteristics as well as the product itself.
c) One-sided messages tell consumers only the good points (benefits).
i) This is most effectively used if the audience is friendly, if it initially favors the
communicator’s position, or if it is not likely to hear an opposing argument.
ii) Two-sided messages tell consumers both good (benefits) and bad (disadvantages)
points of the product.
iii) These are most effectively used when the target audience is critical or unfriendly, if it
is well educated, or if it is likely to hear opposing claims.
d) Order Effects—communications researchers have found that the order in which a message
is presented affects audience receptivity.
i) The television commercials shown first are recalled best, those in the middle the least.
ii) Magazine publishers recognize the impact of order effects by charging more for ads on
the front, back, and inside covers of magazines than for the inside magazine pages,
because of their greater visibility and recall.
iii) Order is also important in listing product benefits within an ad.
iv) If audience interest is low, the most important point should be made first to attract
attention (primacy effect).
v) If interest is high, however, it is not necessary to pique curiosity, and so product benefits
can be arranged in ascending order, with the most important point mentioned last
(recency effect).
e) When both favorable information and unfavorable information are to be presented (e.g., in
an annual stockholders’ report), placing the favorable material first often produces greater
tolerance for the unfavorable news.
f) It also produces greater acceptance and better understanding of the total message.

Persuasive Advertising Appeals

1. Several factors influence ad persuasiveness/appropriateness of different promotional appeals.

a) Informational appeals are more effective in high-consumer involvement situations;
emotional appeals did better in low-involvement situations.
b) Promotional appeal impact is greater for new brands than brand extensions.
c) People with higher need for cognition (NFC) are less likely to consider peripheral cues.
2. Comparative advertising claims product superiority for its brand over one or more explicitly
named or implicitly identified competitors, either on an overall basis or on selected product
attributes.
a) Comparative advertising is useful in exerting positive effects on brand attitudes, purchase
intentions, and actual purchases. .
b) A downside to comparative ads may be that they assist recall of the competitor’s brand at the
expense of the advertised brand.
c) Among more sophisticated consumers, comparative ads elicit higher levels of cognitive
processing and better recall, and are likely to be perceived as more relevant than
noncomparative ads.
d) A study that tested the degree of negativity in comparative messages (by using positive,
negative, and mildly negative comparative messages) for several products reported that
negative elements in an ad contributed to its effectiveness as long as they were believable or
were offset by some elements that made the ad appear neutral.
e) Another study uncovered gender differences in response to comparative ads; comparative
ads generated greater levels of brand-evaluation involvement among men but not among
 women. Among women, attention-getting comparative appeals produced inferences
regarding the ads’ manipulative intentions and reduced purchase likelihood.
f) Yet another study found that “promotion-focused” consumers (i.e., those focused on the
aspirational aspects and the likely positive consequences of a purchase) reacted to
comparative messages differently than “prevention-focused” consumers (i.e., those focused
on the presence or absence of negative outcomes such as safety). In comparative ads,
negative framing led prevention-focused consumers to evaluate the advertised brand
positively and the other brand negatively. Among promotion-focused consumers, positive
framing led to positive evaluation of the advertised brand but did not affect evaluations of the
comparison brand.
g) The law requires companies to produce “reasonable factual evidence” in support of
comparative claims, deciding what constitutes such evidence is difficult.
3. Fear appeals are often used in marketing communications.
a) Some researchers have found a negative relationship between the intensity of fear appeals
and their ability to persuade, so strong fear appeals tend to be less effective than mild fear
appeals.
b) Issue familiarity affects the persuasiveness of fear appeals.
c) Fear appeals are unlikely to be effective among persons who score high on the personality
variable termed sensation seeking.
d) Males and females may have different responses to fear appeals.
e) Several studies showed that adding disgust to a fear appeal enhanced message persuasion
and compliance beyond that of appeals that elicited only fear.
f) Marketers should follow several guidelines:
i) Understand the audience’s reaction to a fear appeal and its previous experiences.
ii) Beware the boomerang effect.
iii) Realize changing behavior is a long and complex process.
iv) Study the extent to which the fear appeal encourages people to take action without
arousing too much anxiety, which may cause message rejection/avoidance.
v) Determine whether to use a rational or emotional fear appeal.
vi) Plan to repeat advertising using fear appeals over the long term, but recognize repetition
may damage credibility.
vii) Accept that some addicts may not respond to fear appeals.
viii) Consider alternatives to fear appeals.
4. A significant portion of ads use humor because marketers believe it increases the acceptance and
persuasiveness of the communication
a) Humor is the most widely used of all advertising appeals; by some estimates, it is used in 80
percent of all ads.
b) Humor attracts attention and enhances liking of the product advertised.
c) Humor does not harm the comprehension of ads, and, in some cases, it actually aids
comprehension.
d) Humor does not always increase an ad’s persuasive impact or a source’s credibility, and might
actually distract from cognitive processing of the central benefits of the brand.
e) Humor that is relevant to the product is more effective than humor unrelated to the product.
f) Humor is more effective in ads for existing products than in ads for new products, and more
effective in targeting consumers who already have a positive attitude toward the product.
g) Using humor is more appropriate for advertising low-involvement than high-involvement
products.
h) The effects of humorous ads vary by the audience demographics.
i) The impact of humor is related to the receiver’s personality. For example, higher sensation
seekers were found to be more receptive to humorous appeals than lower sensation seekers
 j) A study developed a measure of a personality trait, named need for humor that is focused on
a person’s tendency to enjoy, engage, or seek out amusement and suggested that these
cognitive factors can better explain how consumers respond to humorous advertisements.
k) Another study discovered that ad recall was damaged when the humor was expected, and this
adverse effect was more pronounced in individuals with low need for humor.
5. Punning is wordplay, often consisting of a humorous “double meaning.”
a) The Start Ad Readership Studies suggest consumers are more likely to read ads that employ
puns than those that do not.
b) Punning can be used in imagery
6. Sexual appeals have attention-getting value, but studies show that they rarely encourage actual
consumption behavior and are only effective with sex-related products.
a) Often, sexual advertising appeals detract consumers from the message content and tend to
interfere with message comprehension, particularly when there is substantial information to
be processed.
b) Nudity may negatively affect the product message.
c) Receptivity to sexual appeals varies among consumers.
i) “Sexual self-schema,” which is one’s cognitive view of the self with regard to sexuality,
originates in persons’ past experiences and influences their reactions to sex-related
promotional themes.
ii) Sensation seeking, which is the pursuit of novel and exciting sensations and experiences,
may increase favorable responses to nudity in advertising.
iii) Extroverted people may be more receptive to sexual appeals and that such appeals should
not be used in targeting consumers who are quiet, shy, and reserved.
7. Timeliness appeals: During and following the financial crisis of September 2008, many marketers
came up with advertising appeals designed specifically for tough economic times.

Measures of Message Effectiveness

1. Communication feedback is an essential component of both interpersonal and impersonal

communications because it enables the sender to reinforce or change the message to ensure that
it is understood in the intended way.
2. An important advantage of interpersonal communications is the ability to obtain immediate
feedback through verbal as well as nonverbal cues.
a) Because of the high cost of space and time in mass media, it has always been very important
for sponsors of impersonal communications to obtain feedback as promptly as possible, so
that they could revise a message if its meaning is not being received as intended or if the
messages did not reach the intended audience.
3. In evaluating the impact of their advertising messages, marketers must measure media exposure
effects (i.e., how many consumers were exposed to the message?), the persuasion effects (i.e.,
was the message received, understood, and interpreted correctly?), and the sales effects (i.e., did
the ad increase sales?) of their advertising messages.
a) Advertisers gauge the exposure and persuasion effects of their messages by buying data
from firms monitoring media audiences and conducting audience research to find out which
media are read, which television programs are viewed, and which advertisements were
remembered by their target audience(s).
b) Physiological measures track bodily responses to stimuli.
c) Attitudinal measures gauge consumers’ cognitive responses to messages
i) Researchers measure levels of engagement and involvement with messages tested.
 ii) Marketers use semantic differential scales and Likert scales to test ads and find out
whether they were liked and understood.
d) Researchers use recall and recognition tests and day-after recall tests in which viewers of
TV shows or listeners to radio broadcasts are interviewed a day after watching or listening
to a given program
 Chapter 9
Reference Groups & Word-of-mouth

Introduction

1. Reference groups are groups that serve as sources of comparison, influence and norms for
peoples’ opinion, values and behaviors.
a. People are strongly influenced by what others think and how they behave.
b. The most important reference group is the family because it provides children with
the skills, knowledge, attitudes, and experiences necessary to function as consumers, a
process called consumer socialization.

Source Credibility and Reference Groups

1. Reference groups, particularly informal ones, have a high degree of source credibility,
defined as a source’s persuasive impact, stemming from its perceived expertise,
trustworthiness, and believability.
2. When the source of communications about a product is well respected and highly thought
of by the intended audience, the message is much more likely to be believed.
a. A formal source is either a person or medium providing consumption-related
information and hired and paid by an organization.
b. An informal source is a person whom the message receiver knows personally,
such as a parent or friend who gives product information or advice, or an
individual met and respected online.
3. Source credibility: A source’s persuasive impact, stemming from its perceived expertise,
trustworthiness, and believability.
4. Reference groups are groups that serve as frames of reference for individuals in their
consumption decisions because they are perceived as credible sources
a. Reference groups influencing broadly defined values or behavior are called
normative reference groups.
b. Reference groups serving as benchmarks for specific or narrowly defined attitudes or
behavior are called comparative reference groups.
c. A group to which a person either belongs or would qualify for membership is called a
membership group.
d. There are groups in which an individual is not likely to receive membership, despite
acting like a member by adopting the group’s values, attitudes, and behavior. This is
called a symbolic group.
5. The consumption-related groups that influence consumers’ attitudes and behavior include
friendship groups, shopping groups, virtual communities, and advocacy groups.
a. Friends fulfill a wide range of needs: They provide companionship, security, and
opportunities to discuss problems that an individual may be reluctant to discuss with
family members.
i. They may be a credible source of information about purchases.
ii. People may shop together just to enjoy shopping or to reduce their perceived
risk; that is, they may bring someone along whose expertise regarding a
particular product category will reduce their chances of making incorrect
purchases.
iii. Referral programs are an important element of shopping groups.
 iv. Another example of a shopping group is the shared experience of waiting in
line. Retail experts say that by standing in a crowd, shoppers see themselves as
making the right buying decision—a concept known as “social proof.”
v. Many websites encourage consumers to leave comments and have others
respond to them.
vi. Most young adults have extensive “buddy lists” and regularly communicate
with people whom they have met online but never in person.
vii. The fact that people can share their interests, hobbies, and opinions with
thousands of peers online has benefited marketers.
b. There are two types of advocacy groups: entities organized to correct a specific
consumer abuse and then disband, and groups whose purpose is to address broader,
more pervasive problem areas and operate over an extended period of time.
c. The degree of influence that a reference group exerts on an individual’s behavior
depends on the individual, product, and social factors.
d. These factors include conformity, the group’s power and expertise, the individual’s
experience and personality, and the conspicuousness of the product.
e. To influence its members, a reference group must:
i. Inform or make members aware that the brand or product exists.
ii. Provide the individual with the opportunity to compare his or her own thinking
with the attitudes and behavior of the group.
iii. Influence the individual to adopt attitudes and behavior that are consistent
with the group’s norms.
iv. Legitimize the member’s decision to use the same products as other members.
6. Different reference groups may influence the beliefs, attitudes, and behaviors of
individuals at different times or under different circumstances.
7. Consumers who are primarily concerned with approval from others usually adopt the
same products and brands as those group members who have status.
a. When consumers are preoccupied with the power that a person or group can exert
over them, they often adopt products that conform to the norms of that person or
group in order to be complimented on their choices.
b. Unlike reference groups that are not power based, “power groups” may bring about
behaviors, but not changes in attitudes.
8. People who are compliant, have a tendency to conform and a high need for affiliation,
need to be liked by others, and are other-directed are more receptive to group influences.
9. Competitive people who desire to control other people and events and are inner-directed
are less likely to look for guidance from reference groups.

Credibility of Spokespersons, Endorsers and Other Formal Sources

1. Source credibility is the believability of the endorser, spokesperson, or individual in an

advertisement.
a. A spokesperson can be an actual customer, a company employee, a celebrity, or a
model.
b. Researchers have identified the following dimensions in measuring the credibility of a
person or organization: expertise, trustworthiness, attractiveness, and likability.
2. Consumers recognize that the intentions of commercial sources (e.g., manufacturers,
service companies, financial institutions, retailers) are clearly profit and view them as less
credible than informal reference groups.
a. Companies can convey their credibility through solid past performance, good
reputation, product quality, and good service.
 b. Their perceived credibility is also a function of the image and attractiveness of their
spokespersons, the reputation of the retailers that carry their offerings, and the media
where they advertise.
c. Marketers also use institutional advertising, which consists of promoting a
company’s image without referring to any of its specific offerings.
d. The greater the fit between the celebrity and the product endorsed, the higher the
persuasiveness of the message.
e. Endorsers whose demographic characteristics (e.g., age and ethnicity) are similar to
those of the target audiences are viewed as more credible and persuasive than those
whose characteristics are not.
i. Although consumers may like an ad featuring a famous endorser, they will
buy the product advertised only if they trust the marketer as well.
ii. Marketers who use celebrities in testimonials or endorsements must ensure
that the message contents are congruent with spokespersons’
qualifications.
iii. Marketers must ensure that there is a synergy among the celebrity’s
trustworthiness, expertise, physical attractiveness, and the product or brand
endorsed.
iv. They must also take into account the celebrity’s number of prior
endorsements, because consumers perceive celebrities who appear in
commercials too often as less credible than celebs with lesser commercial
exposure.
f. Celebrities, particularly movie stars, TV personalities, popular entertainers, and sports
icons, are a symbolic reference group because they are liked, admired, and often have
a high degree of perceived credibility.
g. Credibility is the most important thing the celebrity offers – the audience’s perception
of both the celebrity’s expertise (how much the celebrity knows about the product
area) and trustworthiness (how honest the celebrity is about what he or she says about
the product).
h. Marketers employ celebrities in promotion in the following ways:
i. Celebrity testimonial—Based on personal usage, the celebrity attests to
the product’s quality.
ii. Celebrity endorsement—Celebrities appear on behalf of products, with
which they may or may not have direct experience or familiarity, for
extended periods.
iii. Celebrity actor—The celebrity plays a part in a commercial for the
product.
iv. Celebrity spokesperson—The celebrity represents the brand or company
over an extended period.
3. Salespeople who engender confidence and who give the impression of honesty and
integrity are most persuasive.
a. A salesperson who “looks you in the eye” often is perceived as more honest than one
who evades direct eye contact.
b. For many products, a sales representative who dresses well and drives an expensive,
late-model car may have more credibility than one without such outward signs of
success.
c. For other products, a salesperson may achieve more credibility by dressing in the role
of an expert.
4. The reputation of the retailer who sells the product has a major influence on message
credibility.
 a. Products sold by well-known, quality stores carry the added endorsement (and
implicit guarantee) of the store itself.
b. The consumer’s previous experience with the product or vendor has a major
impact on the credibility of the message.
5. Fulfilled product expectations increase the credibility accorded to future messages by the
same advertiser; unfulfilled product claims or disappointing product experiences reduce
the credibility of future messages.
6. The reputation of the medium that carries the advertisement also enhances the credibility
of the message.
a. Most consumers believe that a respectable medium would only advertise products
that it “knows” to be of good quality.
b. Because specialization in an area implies knowledge and expertise, consumers
regard advertising they see in special-interest magazines and websites as more
credible than ads in general-interest sources.
7. One’s disassociation of the message from its source over time, and remembering only the
message content but not its source, is called the sleeper effect.
8. The theory of differential decay suggests that the memory of a negative cue (e.g., a low
credibility source) simply decays faster than the message itself, leaving behind the
primary message content.
 Chapter 10
The Family & its Social Standing
INTRODUCTION
1. Family and social class are two reference groups that have a powerful impact on consumer
behavior.
2. Family is a basic concept, but it is not easy to define because family composition and structure, as
well as the roles played by family members, are almost always in transition.
a) Traditionally, family is defined as two or more persons related by blood, marriage, or
adoption who reside together.
b) There are three types of families in Western societies: married couples, nuclear families and
extended families.
i) A married couple and one or more children constitute a nuclear family.
ii) A nuclear family, together with at least one grandparent or other relation living in the
household, is called an extended family.
c) A family life cycle is a composite variable that combines marital status, size of family, age of
family members, and employment status of the head of household and classifies families
into stages.
3. Social class is the division of members of a society into a hierarchy of distinct status classes, in
which members of a class have relatively the same status and members of all other classes have
more or less status.

The Family as a Socialization Agent

1. Socialization refers to the process of making people behave in a way that is acceptable to their
society
a) In the case of young children, this process includes imparting to children the basic values
and modes of behavior consistent with the culture (moral principles, interpersonal skills,
dress and grooming standards, appropriate manners and speech, and the selection of
suitable educational and occupational or career goals).
b) Parental socialization responsibility seems to be constantly expanding.
2. The aspect of childhood socialization that is particularly relevant to the study of consumer
behavior is consumer socialization, which is defined as the process by which children acquire the
skills, knowledge, and attitudes and experiences necessary to function as consumers.
a) Many preadolescent children acquire their consumer behavior norms through observation
of their parents and older siblings who function as role models and sources of cues for basic
consumption learning.
b) In contrast, adolescents and teenagers are likely to look to their friends for models of
acceptable consumption behavior.
c) Shared shopping experiences (i.e., co-shopping is when mother and child shop together) also
gives children the opportunity to acquire in-store shopping skills.
3. A socialization agent is a person or organization involved in the socialization process “because of
frequency of contact with the individual and control over the rewards and punishments given to
the individual. “
a) Mothers are generally considered to be stronger consumer socialization agents than their
husbands, because they tend to be more involved with their children, and are more likely to
mediate their children’s exposure to commercial messages.
B) Consumer socialization of children does not function identically in all families.
4. Parental styles influence children’s development and consumer socialization.
a) Parental styles are classified along two dimensions:
 i) permissive vs restrictive.
ii) very nurturing vs. non-nurturing.
b) Four parental styles include:
i) Indulgent parents
ii) Neglecting parents
iii) Authoritative parents
iv) Authoritarian parents
5. Consumer socialization is learning.
a) Materialism increases from middle childhood to early adolescence then declines from early
to late adolescence.
b) There is an inverse relationship between self-esteem and materialism in children and
adolescents.
6. Socialization begins in early childhood and extends throughout a person’s life.
a) Adolescents may become skeptical about marketing.
b) Life changes (marriages, births, pet adoptions) also affect socialization.
7. Product preferences and brand loyalties are often transferred from one generation to another,
which is known as intergenerational brand transfer.
8. Families have supportive functions: economic well-being, emotional support, and suitable family
lifestyles.
a) Economic well-being: Providing financial means to its dependents is unquestionably a basic
family function.
b) Emotional support: The provision of emotional nourishment (including love, affection, and
intimacy) to its members is an important core function of the contemporary family.
c) Suitable Family Lifestyles: Another important family function in terms of consumer behavior
is the establishment of a suitable lifestyle for the family

Family Decision-Making and Consumption-Related Roles

1. Marketers recognize that families operate as units in terms of consumption behavior.

2. Marketers study the dynamics of family decision making and how family members affect
purchase, use and maintenance of possessions.
3. Marketers are interested in the relative amount of influence that a husband and a wife have when
it comes to family consumption choices.
a) Family consumption decisions can be classified as:
i) Husband dominated
ii) Wife dominated
iii) Joint—equal or syncratic
iv) Autonomic—solitary or unilateral
b) The relative influence of a husband and wife on a particular consumer decision depends in
part on the product and service category.
c) The relative influence has changed over time.
d) Husband-wife decision-making also appears to be related to cultural influence.
i) In the People’s Republic of China, there were substantially fewer “joint” decisions and
more “husband-dominated” decisions for many household purchases than among
Chinese in the United States.
ii) Rural couples were less likely to share equally in purchase decisions; urban couples were
more likely to share.
4. Over the past several decades, there has been a trend toward children playing a more active role
in what the family buys, as well as in the family decision-making process.
 a) This shift in influence has occurred as a result of families having fewer children, more dual-
income couples who can afford to permit their children to make a greater number of the
choices, and the encourage of the media to allow children to “express themselves.”
b) Research evidence supports the notion that the extent to which children influence a family’s
purchases is related to family communications patterns.
c) Research has explored the notion of the teen Internet maven—teenagers who spend
considerable time on the Internet and know how to search for and find information, and
respond to requests from others to provide information.
d) The strategies used by children to influence their parents’ food purchasing decisions included
such persuasive strategies as: pressure, exchange, rational, consultation and ingratiation.
5. Children are three markets; marketers can apply the framework in Table 10.4.
6. An instrument designed to measure family decision-making is shown in Table 10.5.
7. Table 10.6 shows another perspective on family decision-making which consists of roles that
members play in buying decisions.
a) Parents are gatekeepers
b) Children might be influencers, deciders, buyers and preparers depending on the product
category.

The Family Life Cycle

1. The family life cycle (FLC) is a progression of stages through which many families pass.
a) FLC analysis enables marketers to segment families in terms of a series of stages spanning the
life course of a family unit.
b) The FLC is a composite variable created by systematically combining such commonly used
demographic variables as marital status, size of family, age of family members (focusing on
the age of the oldest or youngest child), and employment status of the head of household.
2. The model has five basic stages.
a) Bachelorhood. Young single adult living apart from parents.
b) Honeymooners. Young married couple.
c) Parenthood. Married couple with at least one child living at home.
d) Post-parenthood. An older married couple with no children living at home.
e) Dissolution. One surviving spouse.

Nontraditional Families and Non-Family Households

1. Marketers distinguish between two type of families or households that are not typical.
a) Nontraditional families do not readily fit into the family life cycle
b) Non-family households are not legally defined as families
2. When households undergo status changes, they become attractive targets for many marketers.
3. Marketers have to be careful not to alienate conservative members of traditional families as they
try to target nontraditional households.
4. Dual spousal work involvement is a composite index that uses occupational status and the career
commitment of both spouses as a basis for segmentation. The result is an eight-category schema:
a. Retired couples
b. Nonworking wife, low husband-occupation status couples
c. Nonworking wife, high husband-occupation status couples
d. Dual low occupation status, blue-collar husband couples
e. Dual low occupation status, low white-collar husband couples
f. High husband, low wife-occupation status couples
g. Medium-high wife-occupation status couples
h. Dual-very high occupation status career couples
2. Empirical research has shown that this model can explain both attitudes/motivations and
consumer spending.

Social Standing and Consumer Behavior

1. Social class 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 status.
a. Some form of class structure or social stratification has existed in all societies throughout
the history of human existence.
b. Social class can be thought of as a continuum – a range of social positions on which each
member of society can be placed – researchers have preferred to divide the continuum
into a small number of specific social classes, or stratum.
2. Researchers define each social class by the amount of social status or prestige the members of
that class have in comparison to members of other social classes. Status is composed of:
a. Wealth (economic assets)
b. Power (degree of influence over others)
c. Esteem
3. To secure an understanding of how status operates within the minds of consumers, researchers
have explored the idea of social comparison theory: individuals quite normally compare their own
material possessions with those owned by others in order to determine their relative social
standing.
4. There is no general agreement as to how to measure social class.
a. The choice of how many separate classes to use depends on the amount of detail that the
researcher believes is necessary to explain adequately the attitudes or behavior under
study.
b. The result is a wide variety of measurement techniques, which may be classified into
subjective measures and objective measures of social class.
i. In the subjective approach to measuring social class, individuals are asked to
estimate their own social class positions.
1. The resulting classification of social class membership is based on the
participants’ self-perceptions or self-images.
2. Social class is treated as a “personal” phenomenon, one that reflects an
individual’s sense of belonging or identification with others.
3. This feeling of social-group membership is often referred to as class
consciousness.
4. Subjective measures of social class membership tend to produce an
overabundance of people who classify themselves as middle class.
ii. Objective measures consist of selected demographic or socioeconomic variables
concerning the individual(s) under study.
1. These are measured through questionnaires of factual questions.
2. The most frequently used questions are about occupation, amount of
income, and education.
3. Sometimes geo-demographic data in the form of zip codes and residence-
neighborhood information is added.
4. Occupation is a widely accepted and probably the best documented
measure of social class, because it reflects occupational prestige.
5. The level of a person’s formal education is another commonly accepted
approximation of social class standing (the more education a person has,
the more likely it is that the person is well paid).
 6. Researchers who favor income as a measure of social class use either
amount or source of income.
a. A recent effort to differentiate between “income” and “wealth,”
points that wealth, not income, is the primary driver to financial
freedom.
b. Wealth and money are not the same; for wealth you need to
network and build personal alliances.
7. You need to find ways to minimize your taxes because taxes reduce your
ability to create wealth.
5. A multivariable index systematically combine a number of socioeconomic variables to form one
overall measure of social-class standing.
a. They seem to better reflect social class complexity than single element indicators.
b. Two of the more important composite indexes are:
i. Index of Status Characteristics—the Warner Index of Status Characteristics
(ISC)—is a classic composite measure of social class that weighs occupation,
source of income, house type, and dwelling area equality of neighborhood.
ii. Socioeconomic Status Scores—the United States Bureau of Census developed the
Socioeconomic Status Score (SES) that combines the socioeconomic variables of
occupation, family income, and educational attainment.

Social Classes’ Characteristics and Consumer Behavior

1. Lifestyle factors (shared beliefs, attitudes, activities, and behaviors) distinguish members of a
social class from members of other social classes.
2. Individuals can move either up or down in social class standing from the class position held by
their parents.
3. Most Americans think of upward mobility.
a) This results in the upper classes being the reference group for many ambitious men and
women in America.
b) Recognizing these aspirations, marketers frequently incorporate higher-class symbols into
their advertising.
4. Social class mobility also contributes to products and services filtering down from a higher level
to a lower one (trickle-down effect).
5. Affluent households are attractive target segments because its members have incomes that
provide them with a disproportionately larger share of all discretionary income, making them a
lucrative market for luxury goods.
a) For over 30 years, Ipsos Mendelsohn (formerly Mendelsohn Media Research) has conducted
an annual study of the affluent market—currently defined in terms of three affluent
segments:
i) Those with household incomes of $100,000 to $149,000 per year—the “least affluent.”
ii) Those with incomes of $150,000 to $249,000 per year—the “medium affluent.”
iii) Those with incomes of $250,000 or more per year—the “most affluent.”
b) Although the affluent market consists of only 20 percent of all households, this upscale
market accounted for over half of all U.S. household income.
6. Affluent customers have different media habits and characteristics, and have been segmented as
follows:
a) Well-feathered nests—households that have at least one high-income earner and children
present. (37.3 percent of the Upper Deck).
b) No strings attached—households that have at least one high-income earner and no children.
(35.1 percent of the Upper Deck).
 c) Nanny’s in charge—households that have two or more earners, neither earning high
incomes, and children present. (8.3 percent of the Upper Deck).
d) Two careers—households that have two or more earners, neither earning high incomes and
no children present. (9.4 percent of the Upper Deck).
e) The good life—households that have a high degree of affluence with no person employed,
or with the head-of-household not employed. (10.0 percent of the Upper Deck)
7. It is not easy to define the borders of what is meant by “middle class.”
a) Middle market has been defined as the “middle” 50 percent of household incomes –
that is about 57 million households earning between $25,000 and $85,000.
b) The dynamic nature of social class in the United States has been working against the
middle class.
c) There is mounting evidence that the “middle class” is shrinking in America.
8. Lower-income, or downscale consumers are households earning $35,000 or less.
a) Downscale consumers are more brand loyal than wealthier consumers because they can not
afford to make mistakes in switching to unfamiliar brands.
b) Marketers need to be sensitive to the reality that downscale consumers often spend a higher
percentage of their available incomes on food than do their middle-class counterparts.
c) Food is an important purchase area for low-income consumers because it represent an area
of “indulgence.”
9. Most people dress to fit their self-images, which include their perceptions of their own social class
membership.
a) Lower middle-class consumers have a strong preference for T-shirts, caps, and other clothing
that offer an external point of identification.
b) Upper-class consumers are likely to buy clothing that is free from such supporting
associations; they seek clothing with a more subtle look.
c) Social class is also an important variable in determining where a consumer shops.
10. Saving, spending, and credit card usage all seem to be related to social class standing.
a) Upper-class consumers are more future-oriented and confident of their financial acumen;
they are more willing to invest in insurance, stocks, and real estate.
b) In comparison, lower-class consumers are generally more concerned with immediate
gratification; when they do save, they are primarily interested in safety and security.
11. Social class groupings differ in terms of how they transmit and receive communications.
a) When it comes to describing their world, lower-class consumers tend to portray it in rather
personal and concrete terms, although middle-class consumers are able to describe their
experiences from a number of different perspectives.
b) Such variations in response indicate that middle-class consumers have a broader or more
general view of the world, although lower-class consumers tend to have a narrow or
personal view, seeing the world through their own immediate experiences.
12. Downward mobility, defined as moving down, rather than up the social ladder, is taking place
with today’s second youngest generation; they will experience lower living standards than their
parents.

Geo-demography and Social Class

1. Marketers use geo-demography to identify the geographic locations of consumers belonging to

various social classes.
a) Birds of a feather flock together
b) Geo-demographic segments have been classified and described according to zip codes and
data from census sources.
c) PRIZM is the most sophisticated geodemographic segmentation, as it combines
socioeconomic and demographic factors with buying and media habits.
 Chapter 11
Culture’s Influence on Consumer Behaviour
Introduction

1. Culture is the collective values, customs, norms, arts, social institutions and intellectual
achievements of a particular society.
a) Cultural values express the collective principles, standards and priorities of a community.
b) Promotional messages often reflect the target audiences’ cultural values.
2. The study of culture is a challenging undertaking because its primary focus is on the broadest
component of social behavior in an entire society.

Culture’s Role and Dynamics

1. Culture, the sum total of learned beliefs, values, and customs that serve to direct the consumer
behavior of members of a particular society, is often referred to as an “invisible hand” that guides
the actions of people of a particular society.
2. There are three “levels” of cultural norms:
a) Supranational level – reflects the underlying dimensions of culture that impact multiple
cultures or different societies. A lifestyle matrix for four segments of global youth (14-24)
includes:
i) In-crowd – privileged and seeking approval from others
ii) Pop mavericks – word-of-mouth spreads rapidly; passion, individuality, instant
gratification and personalization important
iii) Networked intelligentsia – hub of online social networks; revolution, creativity,
deconstruction
iv) Thrill renegades – infamy, adrenaline, anarchy
b) National level factors – such as shared core values, customs, personalities, and
predispositional factors that tend to capture the essence of the “national character” of the
citizens of a particular country.
c) Group Level factors – are concerned with various subdivisions of a country or society. They
might include subcultures’ difference, and membership and reference group differences.
3. Marketers should periodically reconsider why consumers are doing what they do, who are the
purchasers and users, when they shop, how and where they can be reached by the media, and
what new product and service needs are emerging.
4. Culture expresses and satisfies the needs of societies.
a) It offers order, direction and guidance for problem solving by providing methods of satisfying
physiological, personal, and social needs.
b) Culture determines whether a product is a necessity or discretionary luxury.
c) Culture dictates which clothes are suitable for different occasions.
d) When a specific standard no longer satisfies the members of a society or reflects its needs,
it is modified or replaced.

Learning Cultural Values

1. Culture is a series of norms that guide personal and group conduct and link individuals into a
largely cohesive group.
2. There are three distinct forms of learning:
 a. Formal learning—adults and older siblings teach a young family member “how to
behave.”
b. Informal learning—a child learns primarily by imitating the behavior of selected others.
c. Technical learning—teachers instruct the child in an educational environment as to what,
how, and why it should be done.
3. The learning of one’s own culture is known as enculturation.
a. Key components of one’s enculturation are the family and consumer socialization.
b. Educational institutions teach arts, sciences, civics and skills.
c. Religious institutions provide spiritual and moral guidance and values.
4. The learning of a new or foreign culture is known as acculturation.
5. A consumer can be a “foreigner” in his or her own country.
6. Promotional messages are powerful vehicles for imparting cultural values.
7. Products can become cultural icons and help provide a cultural identity.
8. Social media conveys and shapes cultural values; influential people communicate.
9. A symbol is used to convey desired product images or characteristics; it is anything that stands
for something else.
a) Symbols can be verbal or nonverbal.
b) Symbols may have several, even contradictory, meanings.
c) Marketers use symbols to convey desired product images or characteristics.
d) Price and channels of distribution (including the type of store where the product is sold) are
symbols of the marketer and the marketer’s product.
10. A ritual is a type of symbolic activity consisting of a series of steps occurring in a fixed sequence
and repeated over time.
a. They can be public or private, elaborate, religious, or civil ceremonies, or they can be
mundane.
b. Rituals tend to include ritual artifacts (products) that are associated with, or somehow
enhance, performance of the ritual.
c. Ritualistic behavior is any behavior that is made into a ritual.

Measuring Cultural Values

1. There are a variety of measures of culture, including: content analysis, consumer field observation,
and value measurement instruments.
2. Content analysis focuses on the content of verbal, written, and pictorial communications. It can
be used to:
a) Identify the intentions, focus, or communication trends of an individual, group or institution.
b) Describe attitudinal and behavioral responses to communications.
c) Determine psychological or emotional state of persons or groups.
3. When examining a specific society, anthropologists frequently study cultures through field
observation, which consists of observing the daily behavior or selected members of a society and
has the following characteristics:
a) It takes place within a natural environment.
b) It is performed sometimes without the subjects’ awareness.
c) It focuses on observation of behavior.
d) Instead of just observing behavior, researchers sometimes become participant-observers,
or active members of the environment they are studying.
4. In addition to fieldwork methods, depth interviews and focus groups are also quite often
employed by marketers to study social and cultural changes.
5. Recently there has been a gradual shift away from inferring characteristics about culture via
observation to directly measuring values by means of survey research.
a) Value instruments ask people how they feel about such basic personal and social concepts
as freedom, comfort, national security, and peace.
b) The Rokeach Value Survey is a self-administered value inventory, which is divided into two
parts.
i) Part one consists of 18 terminal value items, designed to measure the relative
importance of end-states of existence (personal goals).
ii) Part two consists of 18 instrumental value items, designed to measure the basic
approaches an individual might take to reach end-state values.
c) Gordon’s Surveys of Personal and Interpersonal Values measures values that determine
how people cope with their daily lives.
i) One survey is for personal values.
ii) One survey is for interpersonal values. Both achievement and success influence
consumption. They often serve as social and moral justification for the acquisition of
goods and services and the conspicuous consumption of symbols of personal
accomplishments.
a) Time and Activity
i) Americans consider time valuable and feel it is important to be active and involved.
ii) The premium on time affects consumption of convenience goods, including fast food.
b) Efficiency and Practicality
i) In terms of efficiency, Americans admire anything that saves time and effort.
ii) In terms of practicality, Americans are generally receptive to any new product that
makes tasks easier and can help solve problems.
c) Progress is linked to the values reviewed earlier and the central belief that people can always
improve themselves and change should be accepted, including new products or services
designed to fulfill previously under- or unsatisfied needs.
d) Materialism (comfort and pleasure) leads to the perception that material comfort and
possessions signify attainment of “the good life”
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Buyer Behaviour
Lecture 1
Introduction

Prof Rajesh Prasad

Buyer Behaviour Prof. Rajesh Prasad 1

Consumer Behaviour
The study of consumer behavior describes
• what products and brands consumers buy,
• why they buy them,
• when they buy them,
• where they buy them,
• how often they buy them,
• how often they use them,
• how they evaluate them after the purchase, and
• whether or not they buy them repeatedly.

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Learning Objective 1.1

1.1 To understand the evolution of the marketing concept, the most

prominent tools used to implement marketing strategies, the
relationship between value and customer retention, and the objectives
of socially responsible marketing.

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Marketing Concept

The essence of marketing consists

of satisfying consumers’ needs,
creating value, and retaining
customers.

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Development of the Marketing

Concept

Production Product Selling Marketing

Concept Concept Concept Concept

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Development of the Marketing

Concept
Production concept: Product availability at low price
• consumers are mostly interested in product availability at low prices
• Implicit marketing objectives are cheap, efficient production and
intensive distribution.
• Popular when demand was higher than the supply
• Consumers were content to get a product and were not focused on
product variation.

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Production Concept
• Business approach conceived by Henry Ford – “Product
availability at low price”.
• Earlier, only wealthy could buy automobiles
• 1908 - Ford Launched Model T at $850 – cheap at that time
• Demand became very high – unable to meet
• 1913 – introduced assembly line concept
• 1916 – Model T price came to $360
• Sale of 1916 = 100 X Sale of 1908

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Product Concept
• Assumes that consumers will buy the product that offers them the
highest quality, the best performance, and the most features.
• A company that drives marketing through a product concept strives for
continuous quality improvement and adds new features if feasible
• But sometimes consumers may not want the features.
• The focus on the product rather than the needs of the market is
known as marketing myopia.
• Example: while Ford continued selling Model T, General Motors came
with the strategy “a car for every purse and purpose”. Offered variety of
Models – gradually became the largest auto company in US.

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Marketing Myopia
• The focus on the product rather than the needs of the market is
known as marketing myopia.
• When companies ignore crucial changes in the marketplace and “look
in the mirror rather than through the window”.
• Example: Apple bundled its software and hardware together and
ignored customers who wanted them separately.
• In contrast, Microsoft licensed DOS – less efficient and difficult to
operate – became more popular.

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Selling Concept
• Focus on selling the products that the marketer has decided to
produce.
• Assumes that consumers are unlikely to buy the product unless they
are aggressively persuaded to do so – and
• The approach does not consider customer satisfaction or customer
retention.

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Marketing Concept Requirements

Satisfying consumers’ needs, creating value,

and retaining customers.
•Consumer Research
•Market Segmentation, Targeting and Positioning
•The Marketing Mix (4 Ps)
– Product or service
– Price
– Place
– Promotion

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Learning Objective

To understand the interrelationships among

customer value, satisfaction, and retention, and
technology’s revolutionary role in designing
effective retention measures and strategies.

Successful Relationships
High level of
Customer
Customer value customer
retention
satisfaction

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The goal of all marketers is to build and maintain successful

relationships with their consumers.

• This occurs by offering a product which has benefits that the consumer
values.
• Perceived value of those benefits exceeding the cost of the product – the
cost in terms of money, time, and opportunity costs.
• If a product delivers value, the company is likely to have a high level of
customer satisfaction.
• They will tell others about the product and speak highly of it when asked
or when reviewing the product online.
• A company with strong customer relationships will be able to achieve a
high level of customer retention – their customers will not defect to the
competitor or stop using their product.
• They will retain these customer over time and will be more profitable due
to these valuable loyal customers.

• Example: Fine Dine Vs Mc Donalds

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Successful Relationships
•Definedas the ratio between the
Value, Satisfaction, customer’s perceived benefits and the
and Retention resources used to obtain those benefits
•Customer Value

•Customer Satisfaction •Perceived value is relative and

subjective
•Customer Retention

•Developing a value proposition is critical

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Discussion Questions

•How does McDonald’s create value

for the consumer?
•How do they communicate this
value?

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1. Theycreate bundled meals and dollar menus to create value for price-
conscious consumers. In addition, they create value to the health-
conscious consumer by offering salads, fruit, and healthy options for
Happy Meals.

2. Theycommunicate this value through television ads, in-store signage,

and their website.

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Successful Relationships
•The individual's perception of the
Value, Satisfaction, performance of the product or service in
and Retention relation to his or her expectations.

•Customer Value
•Customer groups based on loyalty include
•Customer –loyalists,
Satisfaction –apostles,

•Customer Retention –defectors,

–terrorists,
–hostages,and
–mercenaries

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When customers are highly satisfied, they can become

• loyalists who continue to purchase or
• apostles, who provide very positive word-of-mouth.

When customers are disappointed, they can become

• defectors and move to the competition or
• terrorists, who spread negative word-of-mouth.

Some dissatisfied customers become hostages and stay with the

company but are very unhappy.

Mercenaries are satisfied but are not really considered loyal and will move
from company to company.

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Customer Loyalty & Profitability

• All Customers are not equal
• “Selective” relationship
• Banks
• Restaurants
• Airlines

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Successful Relationships

Value, Satisfaction, •The objective of providing value is

to retain highly satisfied customers.
and Retention
•Loyal customers are key
•Customer Value – They buy more products
– They are less price sensitive
•Customer Satisfaction
– Servicing them is cheaper
•Customer Retention
– They spread positive word of mouth
– Marketing efforts aimed at attracting
new customers are expensive;
– Increased customer retention and
loyalty make the employees’ jobs
easier and more satisfying.

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Technology as Customer Relationship

Enabler

P&G
• Offering handbooks on beauty / scalp care
• Shaving care for Gillette users

Amazon
• Offers suggestions on books / products of your interest.

Has Consumer Behaviour changed due to Social Media ??

– Reference Groups

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Learning Objective

To understand consumer behavior as an interdisciplinary

area

Psychology

Sociology Communication

Anthropology

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Consumer Decision Making

•Inputs
– Firm marketing efforts
– Sociocultural influences

•Process
– Psychological factors
– Need Recognition, Decision Type, Prepurchase Search,
Evaluation of Alternatives
– Learning

•Outputs
– Purchase
– Post-purchase evaluation
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Consumer Decision Making

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Buyer Behaviour
Lecture 2
Segmentation, Targeting &
Positioning

Prof Rajesh Prasad

Buyer Behaviour Prof. Rajesh Prasad 1

Chapter 2 Learning Objectives

2.1 To understand the interrelationship among market

segmentation, targeting, and positioning and how to select the
best target markets.
2.2 To understand the bases used to segment consumers,
including demographics, psychographics, product benefits
sought, and product usage-related factors.
2.3 To understand behavioral targeting and its key role in today’s
marketing.
2.4 To understand how to position, differentiate, and reposition
products.

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Learning Objective 2.1

2.1 To understand the interrelationship among

market segmentation, targeting, and positioning
and how to select the best target markets.

Buyer Behaviour Prof. Rajesh Prasad

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S-T-P
Market segmentation is the process of dividing a market into subsets of
consumers with common needs or characteristics that are different from
those shared by other groups.
Targeting consists of selecting the segments that the company views as
prospective customers and pursuing them.
Positioning is the process by which a company creates a distinct image
and identity for its products, services, and brands in consumers’ minds.
The image differentiates the company’s offering from competition by
communicating to the target audience that the product, service or brand
fulfills their needs better than alternatives.

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To be an effective target…

a market segment must be:

• Identifiable
• Sizeable
• Stable and growing
• Reachable
• Congruent with the
– marketer’s objectives
– and resources

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Segmentation: An Application

how Perry & Swift, an investment management firm, applied the criteria for
effective targeting to two segments: the Wealth Market and the Business Class
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Learning Objective 2.2

2.2 To understand the bases used to segment

consumers, including demographics,
psychographics, product benefits sought, and
product usage-related factors.

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Two Types of Shared Characteristics

•Behavioral data:
– Consumer-intrinsic
– Consumption-based

•Cognitive factors:
– Consumer-intrinsic
– Consumption-specific

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• Behavioral data is evidence-based; it can be determined from direct

questioning (or observation), categorized using objective and
measurable criteria, such as demographics, and consists of:
• 1. Consumer-intrinsic factors, such as a person’s age, gender, marital
status, income, and education.
• 2. Consumption-based factors, such as the quantity of product
purchased, frequency of leisure activities, or frequency of buying a given
product.
• Cognitive factors are abstracts that “reside” in the consumer’s mind,
can be determined only through psychological and attitudinal
questioning, and generally have no single, universal definitions. It
consists of:
• 1. Consumer-intrinsic factors, such as personality traits, cultural values,
and attitudes towards politics and social issues.
• 2. Consumption-specific attitudes and preferences, such as the benefits
sought in products and attitudes regarding shopping.

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Demographic Segmentation

Age Gender Demographics are the core of almost all

segmentation because they are easy and
logical. In addition, they are a cost-effective
way to reach segments and demographic
Marital Household shifts are easier to identify than other types of
Status type and Size shifts. Income, education, and occupation
tend to tie together and lead to segmentation
based on social class.
Income and
Geographical
Wealth;
location
Occupation

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Who is the target of this ad?

The ad targets women. Gender

is a demographic variable. The
ad addresses changing gender
roles and overcomes stereotypes
that women cannot change their
own oil.
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Geodemographic Segmentation

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Psychographics

Consumers’ lifestyles, which

include consumers’ activities,
interests, and opinions

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Discussion Question

Which segmentation bases

could be used to describe the
target audience for the ad?

The ad targets affluent people

(demographic) who like to travel
and try new cuisines
(psychographic).
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VALSTM

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VALS™ (an acronym for “values and lifestyles”) is the most popular segmentation
system combining lifestyles and values.

Examining the diagram from left to right, there are three primary motivations:
• the ideals motivated (these consumer segments are guided by knowledge and
principles),
• the achievement motivated (these consumer segments are looking for products
and services that demonstrate success to their peers), and
• the self-expression motivated (these consumer segments desire social or
physical activity, variety, and risk).
Furthermore, each of these three major self-motivations represents distinct
attitudes, lifestyles, and decision-making styles.

Examining the figure from top to bottom, the diagram reveals a kind of continuum
in terms of resources and innovation—that is, high resources-high innovation (on
the top) to low resources-low innovation (on the bottom). This range of
resources/innovation (again, from most to least) includes the range of
psychological, physical, demographic, and material means
and capacities consumers have to draw upon, including education, income, self-
confidence, health, eagerness to buy, and energy level, as well as the consumer’s
propensity to try new products.

Integrated Marketing Communications Prof. Rajesh Prasad 17

Provi
de an
exam
ple:
how
could
this
infor
matio
n be
used?

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Benefit Segmentation

• Benefits sought represent

consumer needs
• Important for positioning
Benefit segmentation is based on the
benefits that consumers seek from
products and services. The benefits that
consumers look for represent unfilled
needs, whereas buyers’ perceptions that a
given brand delivers a unique and
prominent benefit result in loyalty to that
brand. Marketers of personal care
products, such as shampoos, soaps, and
toothpastes, create different offerings
designed to deliver specific benefits.
Buyer Behaviour Prof. Rajesh Prasad
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What segmentation base is used?

Usage occasion segmentation

recognizes that consumers
purchase some products for
specific occasions. The usage
occasion in the ad is spring break.

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Learning Objective 2.3

2.3 To understand behavioral targeting and its key

role in today’s marketing.

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Behavioral Targeting

sending consumers personalized and

prompt offers and promotional messages
designed to reach the right consumers and
deliver to them highly relevant messages at
the right time and more accurately than
when using conventional segmentation
techniques

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Tracking Online Navigation

Includes:
• Websites visited
• Engagement on sites
• Lifestyles and personalities
•Purchases, almost purchases, returns,
exchanges

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Predictive Analytics

Measures that predict consumers’

future purchases on the bases of past
buying information and other data,
and also evaluate the impact of
personalized promotions stemming
from the predictions.

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Application: Target
Target developed a model that
detects changes in women’s
buying pattern to identify their
pregnancy early on. Figure 2.8
describes how this model was
used to market baby-related
products to Susan, a hypothetical
Target shopper. After Susan
started buying several products
that she had never bought before,
Target’s predictive analytics
signaled that these purchases
strongly indicate that Susan is
expecting a baby. Using this data
and a lot of additional information,
Target then started sending
Susan applicable promotional
offers and also took steps to
conceal its spying on her.
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Learning Objective 2.4

2.4 To understand how to position, differentiate,

and reposition products.

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Positioning

The process by which a company

creates a distinct image and identity
for its products, services, or brands in
consumers’ minds.

Positioning Process
1. Define the market, buyers and competition.
2. Identify key attributes and research consumers’
perceptions
3. Research consumers’ perceptions on
competing offerings.
4. Determine preferred combination of attributes.
5. Develop positioning concept that
communicates attributes as benefits.
6. Create a positioning statement and use it to
communicate with the target audiences.
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Positioning Application

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Umbrella Positioning

Umbrella positioning is a statement

or slogan that describes the universal
benefit of the company’s offering. At
times, this statement does nor refer to
specific products. For example,
Campbell’s slogan, “Soup is good
food,” promotes all soups without any
reference to the Campbell’s brands.

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Other Types of Positioning

• Premier positioning: focuses on the brand’s
exclusivity
• Positioning against the competition:
acknowledges competing brands.
• Key attribute Positioning: based on a brand’s
superiority on relevant attributes.
• Un-owned positioning: when a position is not
associated with a product from the category.

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Repositioning
Repositioning is the process by which a company
strategically changes the distinct image and identity
that its product or brand occupies in consumers’
minds. Companies do so when consumers get used
to the original positioning and it no longer stands out
in their minds. Similarly, when consumers
begin to view the old positioning as dull, marketers
must freshen up their brands’ identities.

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Repositioning

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Perceptual Map

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Buyer Behaviour
Lecture 3&4
Consumer Motivation & Personality

Prof Rajesh Prasad

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Chapter 3 Learning Objectives

3.1 To understand the dynamics of motives, needs, and

goals and how they shape consumer behavior.
3.2 To understand motivation theories and their
applications to consumer behavior.
3.3 To understand how to identify and measure
motives.
3.4 To understand the scope of personality and theories
of its development.

Chapter 3 Learning Objectives

3.5 To understand how innovativeness and other

personality traits influence consumer behavior.
3.6 To understand the personification of products and
brands and its strategic applications.
3.7 To understand self-image and its impact on
consumer behavior.

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Motivation is the driving force that impels people to act. It

represents the reasons one has for acting or behaving in a
particular way.

Needs are circumstances or things that that are wanted or

required, and they direct the motivational forces.
Motivation drives consumers to buy and is triggered by
psychological tension caused by unfulfilled needs.

Goals are the sought-after results of motivated behavior,

and all human behavior is goal oriented.

Personality Consists of inner psychological

characteristics that both determine and reflect how we
think and act, which together form an individual’s
distinctive character.
Integrated Marketing Communications Prof. Rajesh Prasad 5

Learning Objective 3.1

3.1 To understand the dynamics of motives, needs, and

goals and how they shape consumer behavior.

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The Dynamics of Motivation

• The foundation of marketing is identifying and satisfying
needs
• Marketers do not create needs
• They strive to make to make customers more keenly
aware of unfelt or dormant needs
• Savvy companies define their business in terms of
consumer needs they satisfy rather than the products
they produce and sell

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The Motivation Process

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The Motivation Process

Individuals strive both consciously and subconsciously to reduce tension
that is created by unfulfilled needs through selecting goals and
subsequent behavior that they anticipate will fulfill their needs and thus
relieve them of the tension they feel. Whether gratification is actually
achieved depends on the course of action pursued.

Personality characteristics guide the goals that people set and the courses
of action they take to attain these goals.

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Needs and Goals

•Needs:
– Physiological
– Psychological

•Goals:
– Generic
– Product-specific

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Physiological needs are innate (biogenic, primary) and fulfilling them

sustains biological existence. They include the need for food, water, air,
protection of the body from the outside environment (i.e., clothing and
shelter), and sex. Psychological needs are learned from our parents, social
environment, and interactions with others. Among many others, they include
the needs for self-esteem, prestige, affection, power, learning, and
achievement.

Goals are the sought-after results of motivated behavior, and all human
behavior is goal oriented. There are two types of goals: Generic goals are
outcomes that consumers seek in order to satisfy physiological and
psychological needs. Product-specific goals are outcomes that consumers
seek by using a given product or service. When a consumer states they want
a pair of jeans, they have stated a generic goal. When they announce they
really want a pair of Calvin Klein jeans, then they have stated product-
specific goals.

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Motivations: Technology Use

What motivates you to share

information on Facebook? To
blog?

Motivations of Bloggers
(1) self-expression
(2) documenting one’s life (i.e.,
keeping a diary)
(3) identifying other influential
bloggers

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Marketers try to understand the motivations for social media use

because consumers are spending time on social media and they
listen to other consumers.

The value of bloggers to marketers is undeniable – they post their

experiences and exposures to brands online where many other
users or potential users can hear more about the brands.

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Need Arousal and Selecting Goals

Need Arousal Selecting Goals

• Internal stimuli • Factors
 personal experiences and
• Emotional or cognitive
knowledge
processes  physical capacity
 cultural norms and values
• External stimuli
 goal accessibility

• Approach objects
• Avoidance objects

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Need Arousal
Needs can be aroused by
• internal stimuli found in the individual’s physiological condition,
• emotional or cognitive processes, or
• stimuli in the outside environment.

Many promotional messages are cues designed to arouse consumer

needs. Creative marketing messages arouse needs by stimulating a
psychological desire or imbalance in consumers’ minds. The goal then
becomes to act on the desire, and reduce the felt imbalance by buying
products.

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Selecting Goals
Purchase-related goals usually satisfy more than one need. And, for any given
need, there are many different and appropriate goals.

The goals that individuals select depend on those individuals’ personal

experiences and knowledge, physical capacity, prevailing cultural norms and
values, and the goal’s accessibility in the individuals’ physical and social
environments.

The goal object has to be both socially acceptable and physically accessible.

The motivation to select goals can be either positive or negative. We may feel a
driving force toward some object or condition or a driving force away from some
object or condition. Positive outcomes that we seek are called approach objects;
negative outcomes that we want to prevent are called avoidance objects.

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Needs and Goals

• Needs and goals are interdependent

• Needs are never fully satisfied
• New needs emerge as old ones are
satisfied
• Success and failure influence goals

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Frustration and Defense

Mechanisms

Frustration is the feeling that results

from failure to achieve a goal, and
defense mechanisms are cognitive
and behavioral ways to handle
frustration.

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Defence Mechanism
Defense mechanisms are used when people cannot cope with frustration.
• Way around the obstacle
• Substitue goals
• Treat as a personal failure
• Use defence mechanism

They are often developed to protect one’s ego from feelings of failure
when goals are not achieved.

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Defense Mechanisms

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Learning Objective 3.2

3.2 To understand motivation theories and their

applications to consumer behavior.

Motivation Theories
There is no single, comprehensive, and commonly accepted list of human
needs. Psychologists seem to agree about physiological needs, but they
do not agree about how to define and categorize psychological (or
psychogenic) needs (needs with nonphysical origins).

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Murray’s list of Psychogenic needs

Murray believed that needs can be interrelated, can support other needs,
and can conflict with other needs.
He also believed that environmental circumstances strongly influence how
psychogenic needs are displayed in behavior.
Murray organized his needs into five groups: ambition, materialistic,
power, affection, and information needs. Later, psychologist Allen
Edwards developed a self-administered personality inventory that
became one of the most widely used tools in the study of personality traits.

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Maslow’s Hierarchy of Needs

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To Which of Maslow’s Needs Does This Ad

Appeal?

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Discussion Questions

• What are three types of products related to more

than one level of Maslow’s Hierarchy of
Needs? For each type of product, consider
two brands.

• How do marketers attempt to differentiate their

product from the competition?

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Trio of Needs

• Power
• Affiliation
• Achievement

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The power need is an individual’s desire to control his or her environment. It

includes the need to control other persons and various objects. This need
appears to be closely related to the ego need, in that many individuals
experience increased self-esteem when they exercise power over objects
or people.

The affiliation need is very similar to Maslow’s social need and suggests that
behavior is strongly influenced by the desire for friendship, acceptance, and
belonging.

Individuals with a strong achievement need often regard personal

accomplishment as an end in itself. They are self-confident, enjoy taking
calculated risks, actively research their environments, and value feedback,
often in the form of monetary rewards.

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Learning Objective 3.3

3.3 To understand how to identify and measure

motives.

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The Measurement of Motives

Motives are hypothetical constructs (they cannot be seen or touched,
handled, smelled, or otherwise tangibly observed)

so no single measurement method can be considered a reliable index of

motivation. Researchers usually rely on a combination of research
techniques when trying to establish the presence and/or the strength of
various motives, e.g. responses to questionnaires or survey data (i.e., self-
reports of opinions and behaviors) and insights from focus group sessions
and depth interviews (i.e., to discover underlying motives).

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The Measurement of Motives

• Self reports
• Qualitative Research
• Motivational Research

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Self-reported measures of motives consist of written statements which

ask respondents to indicate how relevant each statement is to them.

When respondents are unwilling or unable to report their motives,

researchers use qualitative research to delve into the consumer’s
unconscious or hidden motivations. Many qualitative methods also are
termed projective techniques because they require respondents to
interpret stimuli that do not have clear meanings, based on the assumption
that the subjects will “reveal” or “project” their subconscious, hidden
motives into (or onto) the ambiguous stimuli.

Table 3.4 provides examples of different qualitative measures of motives.

Motivation research is also qualitative and seeks to tap into the

subconscious by adapting Freud’s psychoanalytical techniques.

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Motivational Research

• Dr. Ernest Dichter

• Based on Sigmund Freud’s psychoanalytic theory of
personality
 Unconscious needs are at the heart of human motivation
and personality
 Drives are likely to be biological and sexual

How would an advertiser use this information?

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Dichter told marketers that consumers bought cigarettes and Life Saver
candies because of their sexual symbolism,

that men regarded convertible cars as surrogate mistresses, and

that women baked cakes to fulfill their reproductive yearnings.

Before long, almost every major advertising agency in the country had a
psychologist on staff to conduct motivational research studies. Table 3.5
includes a sample of product profiles created by Dichter and his
colleagues.

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Learning Objective 3.4

3.4 To understand the scope of personality and theories

of its development.

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Personality

The inner psychological characteristics

(the specific qualities, attributes,
traits, factors, and mannerisms that
distinguish one individual from other
individuals) that both determine and
reflect how we think and act.

Although research does not agree regarding the role of heredity and
early childhood experiences on personality development vs. the role of
broader social and environmental influences or on whether personality
should be viewed ad a unified whole or as specific traits, researchers
agree that:

(1) personality reflects individual differences;

(2) personality is generally consistent and enduring; and
(3) although it is enduring, personality can sometimes change.

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Theories of Personality

• Freudian theory

• Neo-Freudian
• personality theory
• Trait theory

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These are the three major theories of personalities. There are many
more but these three have been chosen because they are important to
the relationship between personality and consumer behavior.

Freudian theory suggests unconscious needs or drives are at the

heart of human motivation.

Neo-Freudian theory suggests social relationships are fundamental to

the formation and development of personality.

Trait theory takes a quantitative approach to personality as a set of

psychological traits. A trait is any distinguishing, relatively enduring way
in which one individual differs from another.

According to Freud, human personality consists of these three systems,

the id, super ego and the ego. The Id is the “warehouse” of primitive
drives, basic physiological needs such as hunger, thirst, and sex. The
superego drives the individual to fulfill their needs in a socially
acceptable function. Finally, the ego is the internal monitor that
balances the needs of the id and the superego.

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Neo-Fruedians believe social relationships are

fundamental to personality (vs. Freud’s theories,
which were based heavily on development).
These relationships are formed to reduce feelings
of inferiority (Adler) or tension (Sullivan).
Furthermore, people can be classified as to how
they interact with others – are they compliant,
aggressive, or detached (Horney). A compliant
individual desires attention, an aggressive desires
admirations, and a detached person desires
independence and freedom from obligation. What
is particularly interesting is how research has
shown that these different personality groups differ
in their brand usage.

Integrated Marketing Communications Prof. Rajesh Prasad 43

How Does This Marketing Message Apply the

Notion of the Id?

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Learning Objective 3.5

3.5 To understand how innovativeness and other

personality traits influence consumer behavior.

Innovativeness

•Motivational factors
•Levels of innovativeness
•Personality
Dogmatism
Social character
Need for uniqueness
Optimum stimulation level (OSL)
Sensation-seeking
Variety and novelty-seeking
Need for Cognition

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Four motivational factors:

1. Functional factors reflect interest in the performance of an innovation.
2. Hedonic factors relate to feeling gratified by using the innovation.
3. Social factors reflect the desire to be recognized by others because of one’s
pursuit of innovations.
4. Cognitive factors express the mental stimulation experienced by using an
innovation.

Levels of innovativeness
1. Global innovativeness—a trait that exists independent of any product-related
context and represents the “very nature” of consumers’ innovativeness
2. Domain-specific innovativeness—a narrowly defined activity within a specific
domain or product category
3. Innovative behavior—actions or responses that indicate early acceptance of
change and adoption of innovations (e.g., being among the first to purchase new
and different products or services).

Integrated Marketing Communications Prof. Rajesh Prasad 47

Dogmatism is one’s degree of rigidity—the opposite of

being open-minded—toward information and opinion
contradictory to one’s beliefs and views (i.e., closed-
mindedness). Dogmatic individuals are less likely to be
innovators.

Social character describes an individual’s inner or other-

directedness. Inner-directed consumers rely on their
own inner values or standards in evaluating new products
and are likely to be consumer innovators. Conversely,
other-directed consumers look to others for guidance as
to what is appropriate or inappropriate and are unlikely to
be consumer innovators.

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Need for uniqueness is defined as an individual’s pursuit of differentness

relative to others that is achieved through the acquisition of consumer goods in
order to enhance one’s personal and social identity.

Optimum stimulation level (OSL) is the degree to which people like novel,
complex, and unusual experiences (i.e., high OSL) or prefer a simple,
uncluttered, and calm existence (i.e., low OSL).

Sensation seeking is one’s need for varied, novel, and complex sensations and
experiences, and the willingness to take risks for the sake of such experiences.

Variety and novelty seeking consists of: 1. Exploratory purchase behavior

includes switching brands to experience new, different, and possibly better
alternatives. 2. Vicarious exploration consists of gathering information about
new and different product alternatives and contemplating buying them.
3. Use innovativeness means using an already adopted product in a new or
novel way.

Need for cognition (NFC) measures a person’s craving for or enjoyment of

thinking.

Integrated Marketing Communications Prof. Rajesh Prasad 49

Other Personality Factors

• Visualizers vs.
Verbalizers
• Materialism
• Ethnocentrism

Is the ad trying to
appeal to visualizers
or verbalizers?
Explain.
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Verbalizers prefer promotional messages containing a lot of written,

textual, and verbal information. Visualizers are more receptive to
pictorial images, and include: 1. Object visualizers, who encode and
process images as a single perceptual unit. 2. Spatial visualizers, who
process images piece by piece.

Materialism gauges the extent to which an individual is preoccupied

with purchasing and showing off physical possessions that are mostly
nonessential and often conspicuous luxury goods.

Ethnocentrism is the consumer’s willingness to buy or not buy foreign-

made products.

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Discussion Question

What is the difference between fixated

consumption and compulsive consumption?

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Fixated consumption refers to collectors’ and hobbyists’ tendency to

accumulate items that are related to their interests and show them off to
friends and others with similar interests. Fixated consumers share the
following characteristics:
1. A passion for and interest in the category of what they collect. 2.
Willingness to invest a lot of effort in adding to their collections. 3. Spending
a lot of time and discretionary income searching and buying more items for
their collections. 4. Aggressively competing in auctions.

Compulsive consumption is addictive and out-of-control buying that often

has damaging consequences for both the compulsive shopper and those
around him or her. Examples of compulsive consumption problems are
uncontrollable shopping, gambling, drug addiction, alcoholism, and even
eating disorders.

Integrated Marketing Communications Prof. Rajesh Prasad 53

Learning Objective 3.6

3.6 To understand the personification of products and

brands and its strategic applications.

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Brand personification occurs when consumers attribute

human traits or characteristics to a brand. A “brand personality”
provides an emotional identity for a brand, which produces
sentiments and feelings toward the brand among consumers.

Product personality has been associated with gender and

geography, and consumers have given websites personalities
as well.

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Brand Personality Framework

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Learning Objective 3.7

3.7 To understand self-image and its impact on

consumer behavior.

Consumer behavior researchers identified four components of

self-image:
1. Actual self-image is the way consumers see themselves;
2. Ideal self-image is how consumers would like to see
themselves;
3. Social self-image is how consumers feel others see them; and
4. Ideal social self-image is how consumers would like others to
see them.

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Discussion Questions

• How are possessions an extension of the self?

• How do consumers use self-altering products?
• What are the two types of vanity?
• How does vanity shape consumption behavior?

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Possessions represent an extension of the self:

1. Actually, by allowing the person to do things that otherwise would be very difficult
or impossible to accomplish (e.g., problem solving by using a computer).
2. Symbolically, by making the person feel better (e.g., being considered the “best
dressed” at work).
3. Conferring status or rank, for example, among collectors of rare works of art
because of the ownership of a particular masterpiece).
4. Feelings of immortality because of leaving valuable bequests after death.

Consumers use self-altering products to express their new selves or take on the
appearances of particular types of people (e.g., a military person, physician,
business executive, or college professor).

Researchers discovered two types of vanity: (1) physical vanity, which is excessive
concern with or inflated view of one’s physical appearance; and (2) achievement
vanity, which is excessive concern with or inflated view of one’s personal
achievements.

Vain consumers: (1) are a lucrative market for personal care and beauty products;
(2) welcome promotional messages showing that they attract others’ attention; and
(3) are receptive to promotional messages featuring personal achievement.

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Buyer Behaviour
Lecture 5 & 6
Consumer Perception

Prof Rajesh Prasad

Buyer Behaviour Prof. Rajesh Prasad 1

Chapter 4 Learning Objectives

4.1 To understand the elements of perception and their

role in consumer behavior.
4.2 To understand why consumers process only a small
amount of the information they receive.
4.3 To understand how consumers organize
consumption-related information.
4.4 To understand why and how consumers
“add” biases to stimuli and the implications of this
tendency for marketing.

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Chapter 4 Learning Objectives

4.5 To understand the elements of consumers’ imagery.

4.6 To understand how consumers determine the
quality of products and services.
4.7 To understand consumers’ perceived risks and how
they handle and reduce those risks.

Perception

The process by which individuals

select, organize, and interpret stimuli
into a meaningful and coherent
picture of the world. It can be
described as “how we see the world
around us.”

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Learning Objective 4.1

4.1 To understand the elements of perception and their

role in consumer behavior.

Sensation

The immediate and direct response of

the sensory organs to stimuli (units of
input to the senses, as captured by
the sensory receptors).

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Examples of stimuli (i.e., sensory inputs) include

products, packages, brand names,
advertisements, and commercials. Sensory
receptors are the human organs (the eyes, ears,
nose, mouth, and skin) that receive sensory inputs.

As sensory input decreases, however, our ability

to detect changes in input or intensity increases,
to the point that we attain maximum sensitivity
under conditions of minimal stimulation.

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Audio Sensory Input

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Discussion Questions

What is the difference

between the absolute
threshold and the
differential threshold
(JND)?

Why do marketers care

about sensory
adaptation?

The lowest level at which an individual can experience a

sensation is called the absolute threshold. The point at which
a person can detect a difference between “something” and
“nothing” is that person’s absolute threshold for that stimulus.

The minimal difference that can be detected between two

similar stimuli is called the differential threshold or the just
noticeable difference (JND). Weber’s Law suggests the
minimum amount of change that can be detected depends on
the size of the initial stimulus.

The image shows how Pepsi logo changed over the years.

Sensory adaptation is becoming accommodated to a certain

level of stimulation and becoming less able to notice a particular
stimulus. Marketers care because consumers stop paying
attention to their communications when they adapt to them.

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Discussion Question

 How might a cereal

manufacturer such as Kellogg’s
use the j.n.d. for Frosted
Flakes in terms of:
– Product decisions
– Packaging decisions
– Advertising decisions
– Sales promotion decisions

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Kellogg’s might want to change their ingredients,

either to make the product healthier or because they
have secured lower-priced raw materials.

They might want to reduce package size to avoid a

price increase and they would not want this to be
noticed.

At one point, Pillsbury made a decision to make the

Pillsbury Dough Boy a bit thinner. They wanted to
make sure he still was cute but looked a bit more fit
and lean.

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Ambush Marketing
Placing ads in places where consumers do
not expect to see them and cannot
readily avoid them.
Experiential Marketing
Allows customers to engage and interact
with offerings in sensory ways in order to
create emotional bonds between
consumers and marketing offerings

Subliminal Perception

•What is subliminal perception?

•Is it effective?

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Stimuli that are too weak or too brief to be consciously seen

or heard. They may be strong enough to be perceived by
one or more receptor cells. People have been fascinated by
subliminal perception for over 50 years. The question is
whether stimuli that are not consciously sensed can still be
perceived and are therefore capable of altering behavior.

At this point, there is no research that shows that it directly

changes attitudes or purchase behavior. Extensive research
has shown no evidence that subliminal advertising can
cause behavior changes.

There is some evidence that subliminal stimuli may nfluence

affective reactions.

No doubt, there will continue to be research on this subject

as many feel that there is indeed an effect from subliminal
perception.
Buyer Behaviour Prof. Rajesh Prasad 15

Learning Objective 4.2

4.2 To understand why consumers process only a small

amount of the information they receive.

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Subconsciously, consumers are very selective when

exposed to stimuli. An individual may look at some
things, ignore others, and turn away from still others.

In actuality, people receive (i.e., perceive) only a small

fraction of the stimuli to which they are exposed.

Which stimuli get selected depends on two major factors,

in addition to the nature of the stimulus itself:

(1)consumers’ previous experience as it affects their

expectations (what they are prepared, or “set,” to see),
and

(2) their motives at the time (their needs, desires,

interests, and so on).
Buyer Behaviour Prof. Rajesh Prasad 17

The Stimulus

• Contrast
• Shocking or unrealistic images

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Physical stimuli that affect consumers’ perceptions of products

and evoke attention include the product itself, its attributes,
package design, brand name, advertisements, and
commercials (including copy claims, choice and sex of model,
positioning of model, size of ad, and typography), and
placement of promotional messages within the advertising
space.

Ads that contrast with their environments are very likely to be

noticed. Contrast is one of the most attention-compelling
attributes of a stimulus. Shocking and unrealistic images
provoke attention.

The ads are from a campaign created by the Children’s

Defense Fund, an advocacy group. It depicts the potential
tragic, long-term costs of cutting government-financed
initiatives for children. The images combining infant faces with
adult bodies are shocking and make the ads highly noticeable.
Buyer Behaviour Prof. Rajesh Prasad 19

Discussion Questions

•What marketing stimuli do you remember from

your day so far?
• Why do you think you selected these stimuli to
perceive and remember?

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Perceptions are affected by…

• Expectations
• Motives
• Selective Perception
Selective Exposure
Selective Attention
Perceptual Defense
Perceptual Blocking

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Expectations: People usually see what they expect to see, and

what they expect to see is usually based on familiarity, previous
experience, or a preconditioned set of expectations. In a marketing
context, a person tends to perceive products and product attributes
according to his or her own expectations.

Motives: People tend to perceive the things they need or want:

The stronger the need, the greater the tendency to ignore
unrelated stimuli in the environment.

The consumer’s selection of stimuli from the environment is based

on the interaction of expectations and motives with the stimulus
itself. Selective exposure occurs when consumers tune out
messages that they find pleasant or with which they are
sympathetic, and they actively avoid painful or threatening ones.
They also selectively expose themselves to advertisements that
reassure them of the wisdom of their purchase decisions.

Buyer Behaviour Prof. Rajesh Prasad 22

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Selective attention is consumers’ heightened awareness of

stimuli that meet their needs or interests and minimal awareness
of stimuli irrelevant to their needs. Thus, consumers are likely to
note ads for products that would satisfy their needs and disregard
those in which they have no interest. People also vary in terms of
the kinds of information in which they are interested and the form
of message and type of medium they prefer.

Perceptual defense takes place when consumers

subconsciously screen out stimuli that they find psychologically
threatening, even though exposure has already taken place.
Furthermore, individuals sometimes unconsciously distort
information that is not consistent with their needs, values, and
beliefs. Consumers often protect themselves from being
bombarded with stimuli by simply “tuning out”—blocking such
stimuli from conscious awareness. They do so out of self-
protection, because of the visually overwhelming nature of the
world in which we live.
Buyer Behaviour Prof. Rajesh Prasad 23

Learning Objective 4.3

4.3 To understand how consumers organize

consumption-related information.

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Perceptual Organization

People do not experience the numerous stimuli

they select from the environment as separate
and discrete sensations; rather, they tend to
organize them into groups and perceive them
as unified wholes.

Thus, the perceived characteristics of even the

simplest stimulus are viewed as a function of
the whole to which the stimulus appears to
belong.
Buyer Behaviour Prof. Rajesh Prasad
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Perceptual Organization

•Gestalt psychology
•Figure and ground
•Grouping
•Closure

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Gestalt psychology suggests the whole is greater than

the sum of its parts, and it looks for patterns and
configurations that affect the interpretation of
information. Three principles that affect how patterns
are perceived are figure and ground, grouping, and
closure.

Figure and ground refers to the interrelationship

between the stimulus itself (i.e., figure) and the
environment or context within which it appears (i.e.,
ground). Contrast is an application of figure and
ground. Product placement tries to obscure the
difference between figure and ground.

Buyer Behaviour Prof. Rajesh Prasad 27

Grouping refers to people’s instinctive tendency to

group stimuli together so that they become a unified
picture or impression. The perception of stimuli as
groups or chunks of information, rather than as discrete
bits of information, facilitates memory and recall.

Closure is people’s instinct to organize pieces of

sensory input into a complete image or feeling.
Individuals need closure, which means that if they
perceive a stimulus as incomplete, they are compelled
to figure out its complete meaning. If a message they
receive is incomplete, they consciously or
subconsciously fill in the missing pieces (like answering
the questions in the ad shown in Figure 4.10).

Buyer Behaviour Prof. Rajesh Prasad 28

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Perceptual Organization Application

What Element of
Perceptual Organization
Is Featured in This Ad?

Learning Objective 4.4

4.4 To understand why and how consumers

“add” biases to stimuli and the implications of this
tendency for marketing.

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The interpretation of stimuli is uniquely individual

because it is shaped by the individual’s
experiences, motives, expectations, and external
stimuli.

When stimuli are highly ambiguous, an individual

will usually interpret them in such a way that
they serve to fulfill personal needs, wishes,
interests, and so on.

Buyer Behaviour Prof. Rajesh Prasad 31

Perceptual Interpretation

•Stereotyping
•Triggers
Physical appearance
Descriptive terms
First impressions
Halo Effect

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Individuals carry biased pictures in their minds of the meanings of

various stimuli, which are termed stereotypes. Sometimes, when
presented with sensory stimuli, people “add” these biases to what they
see or hear and thus form distorted impressions.

Generally, people stereotype because it makes the processing of

sensory input quicker and easier.

The triggers of stereotyping are physical appearance, descriptive

terms, first impressions, and the halo effect. We often make
decisions based on how people or products appear. A beautiful
spokesperson might be perceived as possessing expertise for beauty
products. A certain color to a food might make us think it is healthier.
Stereotypes are often reflected in verbal messages/descriptive terms.
First impressions are lasting so a marketer should be careful how they
advertise new products. The perceiver is trying to determine which
stimuli are relevant, important, or predictive. The Halo effect refers to
the overall evaluation of an object that is based on the evaluation of just
one or a few dimensions. In marketing, the term refers to a prestigious
image of a product “rubbing off on” other products marketed under the
same brand name.
Buyer Behaviour Prof. Rajesh Prasad 33

Learning Objective 4.5

4.5 To understand the elements of consumers’

imagery.

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Consumer imagery

Consumer imagery refers to consumers’

perceptions of all the components of products,
services, and brands, and to how consumers
evaluate the quality of marketers’ offerings.

Products and brands have images and symbolic

values for consumers based on the unique
benefits that these products claim they provide.

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Brand Image

•Positioning :
The desired outcome of effective positioning is a distinct
“position” (or image) that a brand occupies in consumers’
minds. This mental “position” must be unique and represent the
core benefit the brand provides. Table 4.2 shows the positioning
of different detergent brands.
•Brand image updates:
Occasionally, a brand’s image must be updated. Consumers
often view products that have been around for a long time as
boring, especially when newer alternatives are introduced.

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Buyer Behaviour Prof. Rajesh Prasad 37

Brand Image
•Package image:
In addition to the product’s name, appearance,
and features, packaging also conveys the
brand’s image. For example, to buyers of
perfumes, the only tangible evidence of the
product’s nature and quality is the packaging,
the cost of which often accounts for up to 50%
of the total cost of the perfume.

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Brand Image
•Service image:
Because services are intangible, image becomes a key
factor in differentiating a service from its competition.
Thus, the marketing objective is to enable the consumer to
link a specific image with a specific brand name. Many
service marketers have developed strategies to provide
customers with visual images and tangible reminders of
their service offerings (e.g. distinctive service
environments, delivery vehicles painted in distinct colors,
restaurant matchbooks, packaged hotel soaps and
shampoos, featuring real service employees in their ads (as
tangible cues) and using people-focused themes to
differentiate themselves).

Perceived Price
Perceived price is the customer’s view of the value that he or
she receives from the purchase. How a consumer perceives a
price—as high, low, or fair—strongly influences both purchase
intentions and post-purchase satisfaction.

A reference price is any price that a consumer uses as a

basis for comparison in judging another price. Reference
prices can be external or internal. Internal reference prices
are those prices (or price ranges) retrieved by the consumer
from memory.

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Buyer Behaviour Prof. Rajesh Prasad 41

Learning Objective 4.6

4.6 To understand how consumers determine the

quality of products and services.

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Quality
•Product quality
Intrinsic cues: physical characteristics of the product
itself, such as size, color, flavor, or aroma. In some cases,
consumers use physical characteristics (e.g., the flavor of
ice cream or cake) to judge product quality. Consumers
like to believe that they base their evaluations of product
quality on intrinsic cues, because that enables them to
justify their product decisions (either positive or negative)
as being “rational” or “objective” choices.
Extrinsic cues: characteristics that are not inherent in the
product (e.g. color, packaging, brand image, price,
manufacturer’s image, country of origin)—to judge quality.
Buyer Behaviour Prof. Rajesh Prasad
43

• Service quality: Services are intangible, they are variable,

they are perishable, and they are simultaneously produced
and consumed. Consumers often rely on surrogate cues
(i.e., extrinsic cues) to evaluate service quality. The most
widely accepted framework for researching service quality
stems from the premise that a consumer’s evaluation of
service quality is a function of the magnitude and direction of
the gap between the customer’s expectations of service and
the customer’s assessment (perception) of the service
actually delivered. The SERVQUAL scale measures the
“gaps” between customers’ expectations of the services that
they had purchased and their perceptions of the services
that they had actually received on two factors: outcomes and
processes.

Buyer Behaviour Prof. Rajesh Prasad 44

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 Price/quality relationship: A price/quality relationship

forms when consumers rely on price as an indicator of
product quality; in short, they believe more expensive
products are better (you get what you pay for). Some
consumers who decide according to a price/quality
relationship are actually relying on a well-known (and,
hence, more expensive) brand name as an indicator of
quality without actually relying directly on price.

 Store image: Store image stems from the merchandise it

carries, the brands sold and their prices, the level of
service, the store’s physical environment and ambiance,
and its typical clientele (this can often be determined from
the cars parked in the store’s parking lot). The width and
type of product assortment affect retail store image.
Customers often use brand, store image, and price
together as a product quality indicators.
Buyer Behaviour Prof. Rajesh Prasad 45

Manufacturer image

Manufacturers who enjoy a favorable image generally find

that their new products are accepted more readily than
those of manufacturers
who have a less favorable or even a “neutral” image.
Consumers also associate certain attributes with
manufacturers.

Institutional advertising is promotion that is designed to

promote a company’s overall image without overtly
referring to specific products.

Buyer Behaviour Prof. Rajesh Prasad 46

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Learning Objective 4.7

4.7 To understand consumers’ perceived risks and how

they handle and reduce those risks.

Perceived Risk
The degree of uncertainty perceived by the
consumer as to the consequences (outcome) of a
specific purchase decision

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Consumer purchase decisions are determined by the

degree of risk that consumers perceive, and their tolerance
for risk. The major types of risk are listed in this slide.

The first, functional risk, deals with the risk that the
product will not perform as expected.

Physical risk is the risk to self and others.

Financial risk is that the product will not be worth its cost
and social risk is that the choice of the product might lead to
social embarrassment.

Psychological risk is that a poor product choice will hurt

the consumer's ego and time risk is that the time has been
wasted in purchasing this product.
Buyer Behaviour Prof. Rajesh Prasad 49

How Consumers Handle Risk

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How consumers handle risk will differ by their own

individual strategy.

That being said, there are a handful of strategies that

people tend to use when dealing with risk.

The first of these is to seek information so that they

have more knowledge when they purchase.

Consumers can also stay brand loyal, thereby

avoiding risk by sticking with a known product.

Buyer Behaviour Prof. Rajesh Prasad 51

Consumers can select by brand image to reduce

their risk because they may already know and trust
the brand, perhaps from buying a different product
by the same brand or company.

Some consumers will rely on store image to help

them reduce risk.

Some customers buy the most expensive model

assuming that the price/quality relationship will
safely deliver them the best product.

Finally, consumers seek reassurance through

money-back guarantees, warranties, seals of
approval and free trials.

Buyer Behaviour Prof. Rajesh Prasad 52

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Buyer Behaviour
Lecture 7 & 8
Consumer Learning

Prof Rajesh Prasad

Buyer Behaviour Prof. Rajesh Prasad 1

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Chapter 5 Learning Objectives

5.1 To understand the elements of learning in the

context of consumer behavior.
5.2 To understand behavioral learning, classical
conditioning, and the roles of stimulus generalization
and discrimination in developing and branding new
products.
5.3 To understand instrumental conditioning and the
objectives and methods of reinforcement.
5.4 To understand the role of observational learning in
consumer behavior.

Chapter 5 Learning Objectives

5.5 To understand the elements of information processing,

including receiving, storing, and retrieving consumption-related
information.
5.6 To understand cognitive learning as a framework for
consumer decision-making.
5.7 To understand consumer involvement and passive learning,
and their impact on purchase decisions and the retention and
recall of promotional communications.
5.8 To understand how to measure the results of consumer
learning.

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Learning Objective 5.1

5.1 To understand the elements of learning in the

context of consumer behavior.

Learning
Learning is the process by which individuals acquire the
purchase and consumption knowledge and experience they
apply to future, related behavior.
Consumer learning is a process that evolves and changes as
consumers acquire knowledge from experience, observation,
and interactions with others and newly acquired knowledge
affects future behavior. It ranges from simple and often
reflexive responses to marketing stimuli (such as packaging,
product colors, and promotional messages), to learning
abstract concepts and making decisions about purchasing
complex and expensive products.

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Learning

• Intentional vs.
incidental
learning
• Four elements:
Motives
Cues
Responses
Reinforcement

Compare the two

introductions of
Febreze.

Intentional learning is acquired as the result of a search for

information, while incidental learning is acquired by accident or
without much effort.

Learning consists of four elements: motives, cues, responses, and

reinforcement.

Unfilled needs lead to motivation, which spurs learning.

Cues are stimuli that direct motivated behavior.

Response is an individual’s reaction to a drive or cue.

Reinforcement is the reward—the pleasure, enjoyment, and

benefits—that the consumer receives after buying and using a
product or service.

The figure applies the four elements to the introduction of Febreze.

Buyer Behaviour Prof. Rajesh Prasad 8

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Learning Objective 5.2

5.2 To understand behavioral learning, classical

conditioning, and the roles of stimulus generalization
and discrimination in developing and branding new
products.

Behavioral learning
Behavioral learning (aka stimulus-response learning) is
concerned with the inputs and outcomes of learning (the
stimuli that consumers select from the environment and
the observable behaviors that result).

Three forms of behavioral learning with great relevance to

marketing are
classical conditioning,
instrumental (or operant) conditioning, and
behavioral (or modeling) learning.

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Classical Conditioning

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Classical Conditioning
Classical conditioning is viewed as a “knee-jerk” (or
automatic) response that builds up through repeated
exposure and reinforcement. The unconditioned stimulus
occurs naturally in response to given circumstances, the
conditioned stimulus becomes associated with a particular
event or feeling as a result of repetition, and the conditioned
response is a response to the conditioned stimulus. The
strategic applications of classical conditioning to consumer
behavior are associative learning, the need for repetition,
stimulus generalization, and stimulus discrimination.

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Contemporary behavioral scientists view classical conditioning as

learning of associations among events that enable consumers to
expect and anticipate events. Repetition is the key to forming
associations between brands and fulfillment of needs.
Advertising wear-out is the point at which an individual becomes
satiated with numerous exposures, and both attention and retention
decline.
Some marketing scholars believe that just three exposures to an
advertisement are needed:
one to make consumers aware of the product,
a second to show consumers the relevance of the product, and
a third to remind them of its benefits.
This exposure pattern is called the three-hit theory. The Fresh Step
ad restates the same message in different formats to reduce the
likelihood of advertising wear-out.

Buyer Behaviour Prof. Rajesh Prasad 13

Applications of Classical Conditioning

•Associative learning
•Need for repetition
 Advertising wear-out
 Three-hit theory

Why does Fresh

Step use different
versions of its ad?

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Stimulus Generalization

• Product line extensions

• Product form extensions
• Family branding
• Licensing

Responding the same way to slightly different stimuli is called stimulus

generalization.

Product line extensions are additions of related items to an established brand;

these are likely to be adopted because they come under a known and trusted
brand name. V8 soups are product line extensions. In learning terms, consumers
will apply what they already know about V8 to its new product and probably try
the new item.

Offering the same product in a different form but under the same brand is a
product form extension.

Family branding consists of marketing different products under the same brand
name. The extension of the V8 line to other products is also a form of family
branding.

Licensing is contractually allowing a well-known brand name to be affixed to the

products of another manufacturer. The names of designers, manufacturers,
celebrities, corporations, and even cartoon characters are attached, for a fee (i.e.,
“rented out”) to a variety of products, enabling
the licensees to achieve instant recognition and implied quality for the licensed
products.
Buyer Behaviour Prof. Rajesh Prasad 16

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Stimulus Discrimination
Stimulus discrimination is the opposite of stimulus generalization. Its
purpose is the selection of a specific stimulus from among similar stimuli.

The core objective of positioning is to “teach” consumers to discriminate

among similar products (i.e., similar stimuli) and form a unique image for a
brand in their minds.

The ad for Fage yogurt wants to differentiate it from other yogurts based
on its thickness.

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Stimulus Discrimination

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Learning Objective 5.3

5.3 To understand instrumental conditioning and the

objectives and methods of reinforcement.

Instrumental Conditioning
Instrumental conditioning (or operant
conditioning) is based on the notion that learning
occurs through a trial-and-error process, with habits
formed as a result of rewards received for certain
responses or behaviors.

Instrumental conditioning requires a link between a

stimulus and a response where the stimulus that
results in the most rewarded response is the one
that is learned.

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Instrumental Conditioning

Buyer Behaviour Prof. Rajesh Prasad

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The consumer who tries several brands

and styles of jeans before finding a style
that fits her figure (i.e., reinforcement) has
engaged in instrumental learning.
Presumably, the brand that fits best is the
one she will continue to buy.

Buyer Behaviour Prof. Rajesh Prasad 22

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Discussion Questions

• What is the difference between positive

reinforcement and negative reinforcement?
• What is the difference between negative
reinforcement and punishment?
• What is the difference between extinction and
forgetting?

Buyer Behaviour Prof. Rajesh Prasad

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Positive reinforcement rewards a particular behavior

and thus strengthens the likelihood of a specific response
during the same or similar situation.

Negative reinforcement is the removal of an unpleasant

stimulus and it strengthens the likelihood of a given
response during the same or similar circumstances. On
the other hand, punishment is designed to discourage
behavior.

Extinction occurs when a learned response is no longer

reinforced and the link between the stimulus and the
expected reward breaks down. Forgetting is often
related to the passage of time, and thus is often called
decay.
Buyer Behaviour Prof. Rajesh Prasad 24

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Reinforcement Schedules

Continuous Fixed ratio

Variable
ratio

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Reinforcement Schedules
With continuous reinforcement, a reward is provided
after each transaction.

A fixed ratio reinforcement schedule provides

reinforcement every nth time the product or service is
purchased (say, every third time).

A variable ratio reinforcement schedule rewards

consumers on a random basis. Gambling casinos
operate on the basis of variable ratios. Variable ratios
tend to engender high rates of desired behavior and
are somewhat resistant to extinction.
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Other Applications of Instrumental

Learning
• Shaping
• Mass vs. distributed learning

When is a distributed learning schedule

preferred?

Buyer Behaviour Prof. Rajesh Prasad

27

Shaping occurs by having the reinforcement BEFORE

the behavior occurs. In this situation, the consumer
can be given the offer of a reward before they actually
make their decision and purchase a product.

Marketers also have the choice between massed

versus distributed learning. Should the learning and
the exposure to the stimuli happen in a relatively short
period of time or be drawn out? Media planners are
often faced with this decision when putting together an
advertising campaign. when the goal is long-term
repeat buying on a regular basis, a distributed
schedule is preferable. A distributed schedule, with ads
repeated on a regular basis, usually results in more
long-term learning that is relatively immune to
extinction.
Buyer Behaviour Prof. Rajesh Prasad 28

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Learning Objective 5.4

5.4 To understand the role of observational learning in

consumer behavior.

Observational Learning

Observational learning (or modeling) is the

process through which individuals learn
behavior by observing the behavior of others
and the consequences of such behavior. For
this type of learning to occur, reinforcement
must take place.

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Observational Learning

Buyer Behaviour Prof. Rajesh Prasad

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Observational Learning
Children learn much of their social behavior and
consumer behavior by observing their older
siblings and their parents. They imitate the
behavior of those they see rewarded, expecting
to be rewarded similarly if they adopt the same
behavior.

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Learning Objective 5.5

5.5 To understand the elements of information

processing, including receiving, storing, and retrieving
consumption-related information.

Cognitive Learning

A lot of learning occurs through consumer

thinking and problem solving. Sometimes we
resolve purchase-related dilemmas instantly.
In other situations, we search for information
and carefully evaluate what we learned. This
kind of learning, called cognitive learning,
consists of mental processing of data rather
than instinctive responses to stimuli.

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Cognitive Learning

Buyer Behaviour Prof. Rajesh Prasad

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Cognitive Learning
The human mind processes the information it receives. Consumers
process product information by attributes, brands, comparisons between
brands, or a combination of these factors.
The number and complexity of the relevant attributes and available
alternatives influence the intensity or degree of information processing.
Consumers with higher cognitive abilities acquire more product information
and consider more product attributes and alternatives than consumers
with lesser ability.
Information processing occurs in stages and in three sequential
“storehouses” where information is kept:
the sensory,
short-term, and
long-term stores.

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Information Processing

•Storing information
Sensory store
Short-term storage
Long-term storage

•Rehearsal
Encoding
Information Retrieval
•Retention
Chunking
Retrieval

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Information Processing
The sensory store is the mental “space” in the human
mind where sensory input lasts for just a second or two.
If it is not processed immediately, it is lost.

The short-term store is where information is processed

and held for just a brief period. If information in the
short-term store undergoes the process known as
rehearsal, which is the silent, mental repetition of
information, it is then transferred to the long-term store.
The transfer process takes from 2 to 10 seconds. If
information is not rehearsed and transferred, it is lost in
about 30 seconds or less. The amount of information
that can be held in short-term storage is limited to about
four or five items.
Buyer Behaviour Prof. Rajesh Prasad
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Information Processing

The long-term store is the mental “space” where

information is retained for extended periods of time, in
contrast to the short-term store, where information lasts
only a few seconds. Although it is possible to forget
something within a few minutes after the information
reaches long-term storage, it is more common for data
in long-term storage to last for days, weeks, or even
years.

Buyer Behaviour Prof. Rajesh Prasad

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Information Processing
The purpose of rehearsal is to hold information in short-
term storage long enough for encoding to take place.
Encoding is the process by which we select a word or
visual image to represent a perceived object.

Processing and remembering a picture takes less time

than learning verbal information, but both types of
information are important in forming an overall mental
image.

When consumers receive too much information and then

have difficulty encoding and storing it, information
overload occurs.
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Information Processing
Information does not merely remain in long-term storage
waiting to be retrieved. It is constantly organized and
reorganized, as new chunks of information are received
and new links among those chunks are created. A key
component of retention is called chunking, defined as
the process during which consumers recode what they
have already encoded; this process often results in
recalling additional relevant information.

Retrieval is the process by which people recover

information from the long-term store; it is frequently
triggered by external cues.

Buyer Behaviour Prof. Rajesh Prasad

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Learning Objective 5.6

5.6 To understand cognitive learning as a framework

for consumer decision-making.

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Cognitive Learning

Cognitive learning is the systematic evaluation of

information and alternatives needed to solve a
recognized but unfilled need or unsolved problem.

Unlike behavioral learning, which consists of instinctive

responses to stimuli, cognitive learning involves
deliberate mental processing of information.

Buyer Behaviour Prof. Rajesh Prasad

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Cognitive Learning
Cognitive learning occurs when a person has a goal and
must search for and process data in order to make a
decision or solve a problem. For a long time, consumer
researchers believed that all consumers passed through a
complex series of mental and behavioral stages in arriving
at a purchase decision. These stages ranged from
awareness of the purchase options (exposure to
information), to evaluation and preferences regarding the
alternatives available, to possibly trying one or more
versions of the product, and then buying or not buying it
(behavior expressed as adoption or rejection). Now, there
are several models depicting sequential information
processing and cognitive learning, which are featured in
Table 5.1.
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Cognitive Learning

Buyer Behaviour Prof. Rajesh Prasad

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Discussion Question

How would the ad

influence the behavior of
an individual who was
engaged in a cognitive
learning process?

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If a consumer was facing a problem with his/her

teeth, looked for a solution, read the ad that
indicated the benefits of Crest Pro-Health, used the
product, and had less problems, the consumer
would have been engaged in a cognitive learning
process.

Buyer Behaviour Prof. Rajesh Prasad 47

Learning Objective 5.7

5.7 To understand consumer involvement and passive

learning, and their impact on purchase decisions and
the retention and recall of promotional
communications.

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Consumer involvement
Consumer involvement is the degree of personal
relevance that the product or purchase holds for the
consumer.

High-involvement purchases are very important to the

consumer (e.g., in terms of perceived risk) and thus
provoke extensive problem solving and information
processing.

Low-involvement purchases are not very important,

hold little relevance, have little perceived risk, and
provoke limited information processing. There are
different ways to measure involvement.
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Hemispheric Lateralization

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Hemispheric lateralization (split-brain theory)

stems from medical research done in the 1960s; its
premise is that the human brain is divided into two
distinct cerebral hemispheres that operate together,
but “specialize” in processing different types of
cognitions.

The left hemisphere is the center of human language;

it is the linear side of the brain and primarily
responsible for reading, speaking, and reasoning.

The right hemisphere of the brain is the home of

spatial perception and nonverbal concepts; it is
nonlinear and the source of imagination and pleasure.

Buyer Behaviour Prof. Rajesh Prasad 51

A research suggested that when consumers watch

advertising on TV, they “passively” process right brain,
pictorial information, but text in print ads were primarily
processed using left brain. The researcher considered
TV a primarily pictorial medium, and TV viewing as a
right brain activity, consisting of passive and holistic
processing of images viewed on the screen. He also
maintained that TV is a low-involvement medium.

Cognitive learning models suggest that behavior follows

the cognitive processing of information. Advocates of
passive learning maintain that repeated exposure to
TV commercials, which is low-involvement information
processing, induces purchases prior to consumers’
information processing and the formation of attitudes.

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Learning Objective 5.8

5.8 To understand how to measure the results of

consumer learning.

Recognition and Recall Measures

For marketers, the goals of consumer learning are

increased market share and brand-loyal consumers.

These goals are interdependent: Brand-loyal customers

are the core of a stable and growing market share, and
brands with larger market shares have proportionately
larger numbers of loyal buyers.

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Recognition and Recall Measures

•Aided recall (recognition)

•Unaided recall (recall)

How does the Starch Readership Ad Study

measure ad effectiveness?

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Recognition and recall tests measure whether

consumers remember seeing an ad and the extent to
which they have read it and can recall its content.
Recognition tests are based on aided recall,
whereas recall tests use unaided recall.

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The Starch Readership Ad Study evaluates the

effectiveness of magazine advertisements according to
three criteria: noticing the ad, associating the ad with the
brand advertised, and involvement with the ad (defined as
having read most of the ad text). Participants are shown
each ad from a magazine issue they read with the brand
name concealed—and asked questions that measure recall
and recognition of the ad.

The study output consists of tagged advertisements, with

the tags showing the percentage of readers who have
“noticed” each ad, were able to “associate” the ad with the
brand advertised, and “read most” of the ad’s copy. Starch
also appraises consumers’ intentions to buy and likelihood
to engaging in word-of-mouth about the product after
reading the ad.
Buyer Behaviour Prof. Rajesh Prasad 57

Brand Loyalty

•Depends on
Risk aversion/variety seeking
Brand reputation/ substitute
availability
Social influence

•Types
Covetous
Inertia
Premium

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Brand Loyalty
The degree of brand loyalty depends on three factors:
(1) the consumer’s risk aversion or variety seeking;
(2) the brand’s reputation and availability of substitute brands; and
(3) social group influences and peers’ recommendations.

There are three types of brand loyalty:

1. Covetous brand loyalty includes no consistent purchase of a given
brand, in spite of strong attachment to it.
2. Inertia brand loyalty is purchasing the brand because of habit and
convenience, but without any emotional attachment to it.
3. Premium brand loyalty means high attachment to the brand and
repeat purchase.

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Brand Equity

The intrinsic value of a brand name.

This value stems from the foundations
of brand loyalty: the consumer’s
perception of the brand’s superiority,
the social esteem that using it
provides, and the customer’s trust and
identification with the brand.

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Buyer Behaviour
Lecture 9 & 10
Attitude Formation & Change

Prof Rajesh Prasad

Buyer Behaviour Prof. Rajesh Prasad 1

Chapter 6 Learning Objectives

6.1 To understand what attitudes are, how they are

formed, and their role in consumer behavior.
6.2 To understand the tri-component attitude model
and its applications.
6.3 To understand the structures of multi-attribute
models and their use in altering consumers’ attitudes.
6.4 To understand how to alter consumers’ attitudes by
making particular needs prominent.

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Chapter 6 Learning Objectives

6.5 To understand the role of cognitive elaboration in

altering attitudes.
6.6 To understand how attitudes can precede behavior
in the form of cognitive dissonance and the resolution
of conflicting attitudes.

Learning Objective 6.1

6.1 To understand what attitudes are, how they are

formed, and their role in consumer behavior.

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Attitude

An attitude is a learned predisposition to behave in a

consistently favorable or unfavorable way toward a
given object (a product, brand, service, price, package,
advertisement, promotional medium, or the retailer selling
the product, etc.)

Attitudes reflect either favorable or unfavorable

evaluations of the object and are learned from direct
experience with the product, word-of-mouth, exposure to
mass media, and other information sources that
consumers are exposed to.

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Attitude Formation

• Consumers learn attitudes

• Sources of attitude formation
Experience
Family and friends
Media/Internet/Social Media
• Role of personality factors
Need for cognition
Innovativeness

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Consumers learn attitudes when they try new products,

product models, and different brands. If such trial purchases
meet or exceed their expectations, then they develop
favorable attitudes toward those objects. Generally, the more
information consumers have about a product or service, the
more likely they are to process information and form attitudes
about it, either positive or negative. Typically, only two or
three prominent beliefs about a product play a role in the
formation of attitudes, and less important beliefs carry little
weight.

Personal experience, family and friends, media, the Internet,

and (increasingly) social media strongly affect attitudes. A
primary source of attitudes toward products is the
consumers’ direct experiences in trying and evaluating them.

Buyer Behaviour Prof. Rajesh Prasad 7

Personality traits like need for cognition (craving

information and enjoyment of thinking) and
innovativeness affect consumer behavior.

Individuals with a high need for cognition are likely

to form positive attitudes in response to promotions
that include a lot of detailed, product-related
information, while consumers who are relatively low
in this need are more likely to form positive attitudes
in response to ads that feature attractive models or
celebrities, or other peripheral cues about the
products advertised.

Innovativeness is relevant in the context of new

product adoption.
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Role of Attitudes

• Attitudes are consistent with behavior

• How do situations affect attitudes?

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Category Beliefs, Brand Beliefs

Interesting shifts in category & Brand beliefs:
• Tea – commonly associated with refreshment. Many
brands have created new category belief by positioning
on health platform
• Similarly Biscuits.
• A brand may take the decision of sustaining or not
sustaining the traditional belief system.
Kellogg’s Cereals and cultural habit:
Hot milk Vs Cold milk

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Learning Objective 6.2

6.2 To understand the tri-component attitude model

and its applications.

The Cognitive Component

The Cognitive Component consists of a person’s
cognitions, that is, the knowledge and perceptions of the
features that the person has acquired from direct
experience and information from various sources.

Commonly expressed as Beliefs

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The Cognitive Component

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The Affective Component

The affective component represents the

consumer’s emotions and feelings regarding the
attitude object, or evaluations (i.e., the extent to
which the individual rates the attitude object as
“favorable” or “unfavorable,” “good” or “bad”).

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The Conative Component

The conative component reflects the likelihood that

an individual will undertake a specific action or
behave in a particular way with regard to the attitude
object - treated as an expression of the consumer’s
intention to buy in consumer research.

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Examples
Cognitive appeals
• Hero Honda: “Fill it, shut it, forget it”.
• Kinetic Honda, the first Gearless scooter, associated
itself with “Himalyan Rally” to build the belief that is
suitable for all roads
• Gold Plus Jewellery: Karatometer to enhance credibility

Affective Appeals:
• Onida: “Owner’s pride, neighbour’s envy”
• Red Bull: associated with consumption pleasure
• Fastack watches: “hip & cool”factor to appeal to youth

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Discussion Questions

Explain your attitude toward your college/university

based on the tricomponent attribute model.

Be sure to isolate the cognitive, affective, and

conative elements.

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You probably have an overall positive or negative

feeling toward your university. Try to break this
affective component down a bit more – what do you
like and not like?

You can now look to the cognitive to determine what

beliefs you have about these different parts of your
university.

Finally, how does this influence what you do? Will you
come back for a graduate degree? Recommend your
little brother or sister attend? Send your children
here? Donate money as an alumnus?

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Altering Consumer Attitudes

• Changing beliefs about products

• Changing brand image
• Changing beliefs about competing brands

Changing attitudes about products and brands is

difficult because consumers frequently resist
evidence that challenges strongly held attitudes or
beliefs and tend to interpret any ambiguous
information in ways that reinforce their preexisting
attitudes.

Marketers may try to change

1) beliefs or perceptions about the brand itself (the
most common form of advertising appeal);
2) alter consumers’ overall perceptions of the brand;
3) change beliefs about competing brands.

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Learning Objective 6.3

6.3 To understand the structures of multi-attribute

models and their use in altering consumers’ attitudes.

Multi-attribute Attitude Models

Multi-attribute Attitude Models portrays consumers’
attitudes as functions of their assessments of the objects’
prominent attributes

• Attitude-toward-object model
• Attitude-toward-behaviour model

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Attitude-Toward-Object Model
The attitude-toward-object model maintains that a
consumer’s evaluation of a product is a function of:
1. The extent to which the product has (or lacks) each
of a given set of attributes.
2. The importance of each of these attributes to the
consumer.
Consumers generally have more favorable attitudes
toward those brands that they believe have better
performance on the attributes that they view as
important than other brands.
Ex: Blackberry Vs I-phone

Attitude-Toward-Object Model

•Used to change attitudes

• Ways
Add an attribute: Marketers may add an attribute that
previously was ignored or one that represents an
improvement or innovation ( Ex: Yogurt has more
Potassium than Banana; Add innovation – like packaging,
form etc)
Change perceived importance of an attribute: (Ex- next
slide)
Develop new products

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Buyer Behaviour Prof. Rajesh Prasad 25

Developing New Products

Marketers often use the attitude-toward-object model

during the development of new products. Consider the
following hypothetical example:

The Tropicana company considered adding a new item to

its product line. The company’s market researchers
identified four attributes as the key determinants in
consumers’ attitudes toward orange juice: amount of pulp,
degree of sweetness, strength of flavor, and color.

Based on results, they developed a new product by adding

colour, pulp and reducing sweetness.

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Attitude-toward-behaviour Model
Attitude-toward-behaviour Model captures the Individual’s
attitude toward behaving or acting with respect to an object,
rather than merely the person’s attitude towards the object
itself.

Example: Consumer might like Lexus Cars (i.e., positive

attitude towards the object), but not ready or willing to buy an
expensive Lexus (i.e., a negative attitude towards the the
behaviour associated with the object)

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Other Multi-attribute Models

Theory of Reasoned Action:

Like the tri-component model, the theory of reasoned action
(TRA) incorporates the cognitive, affective, and conative
components. It adds the measurement of subjective norms
(feelings about what relevant others would think about the
action) that influence a person’s intention to act before gauging
the level of intention.
Ex: A student wanting to get a Tattoo , considers parents’ /
friends’ expected reaction.

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theory of trying-to-consume
•Theory of trying-to-consume: The theory of trying-to-
consume represents cases where the outcome of a
contemplated action (e.g., a purchase), stemming
from a positive attitude, is uncertain, but is still being
pursued by the consumer.
•A person trying to consume faces two types of
obstacles that may prevent the desired outcome:
1. Personal impediments and
2. Environmental impediments.
Consumers who fail to try to consume do not
recognize all the consumption options available or
prefer to self-sacrifice or delay gratification.

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Learning Objective 6.4

6.4 To understand how to alter consumers’ attitudes by

making particular needs prominent.

Functional Approach

Changing Attitudes by appealing to consumers’

motivations is known as Functional Approach
•Utilitarian function: stems from the belief that
consumers’ attitudes reflect the utilities that brands
provide. When a product has been useful or
enabled us to perform certain tasks in the past, our
attitude toward it tends to be favorable.

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Functional Approach
Ego-defensive function: ego-defensive function
maintains that people form attitudes in order to
protect themselves from sensing doubt and to replace
uncertainty with feelings of security and confidence.

Functional Approach
• Value-expressive function: The value-expressive function
maintains that attitudes reflect consumers’ values and
beliefs, and marketers can create ads that either support or
refute these notions.
Ex: Hero Pleasure – Why should boys have all the fun
• Knowledge function: The knowledge function holds that
people form attitudes because they have a strong need to
understand the characters of the people, events, and
objects they encounter.
• Associate brands with worthy causes and events
To which functions do the ad appeal?

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Buyer Behaviour Prof. Rajesh Prasad 35

Appealing to
Ego-Defensive &
Value-Expressive Functions

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Learning Objective 6.5

6.5 To understand the role of cognitive elaboration in

altering attitudes.

Elaboration Likelihood Model

The elaboration likelihood model (ELM) proposes
that attitudes can sometimes be changed by either
one of two different routes to persuasion—a central
route or a peripheral route—and that the cognitive
elaboration related to the processing of information
received via each route is different.

The premise of this model is that consumers carefully

evaluate the merits and weaknesses of a given
product when they consider the purchase to be very
relevant. Conversely, consumers engage in very
limited information search and evaluation (or cognitive
elaboration) when the purchase holds little relevance
or importance for them.
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Elaboration Likelihood Model

Central Route Peripheral Route

•High involvement
•Considered thought and
cognitive processing
•Learning through
 Attribute-based information
 High quality arguments
 Exertion of effort to learn,
comprehend, evaluate
•Low involvement
•Little thought and little
information processing
•Learning through
 Repetition
 Passive processing of visual cues
 Holistic processing

•Comparative ads •Non-comparative ads

•Objective knowledge •Subjective knowledge

Learning Objective 6.6

6.6 To understand how attitudes can precede behavior

in the form of cognitive dissonance and the resolution
of conflicting attitudes.

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Dissonance

•Cognitive dissonance: Cognitive dissonance occurs

when a consumer holds conflicting thoughts about a belief
or an attitude object.
•Post-purchase dissonance: When cognitive dissonance
occurs after a purchase, it is called post-purchase
dissonance. Because expensive and important purchases
require compromise and choice among similar alternatives
(e.g., similar homes in the same community), post-
purchase dissonance in such instances commonly occurs,
and leaves consumers with an uneasy feeling about their
behavior (the purchase decision).

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Post-purchase dissonance
•Ways to reduce post-purchase dissonance

– 1. Rationalize their decisions.

– 2. Seek advertisements that support their choices (while
avoiding dissonance-creating competitive ads).
– 3. Try to “sell” friends on the positive features of the
purchase made (i.e., “the consumer as a sales agent”).
– 4. Look to satisfied owners for reassurance (e.g., meet
homeowners in the community where the newly purchased
house is located).

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 Buyer Behaviour
Lecture 11 & 12
Persuading Consumer

Prof Rajesh Prasad

Buyer Behaviour Prof. Rajesh Prasad 1

Learning Objectives

7.1 To understand the elements and persuasive capabilities of

communication, as well as the barriers to effective
communication.
7.2 To understand the distinctions between broadcasting and
narrowcasting.
7.3 To understand how to design persuasive messages
effectively.
7.4 To understand the effectiveness and limitations of
prominent advertising appeals.
7.5 To understand how to measure the effectiveness of
advertising messages.
Humor and Fear Appeals

Humor Fear
Learning Objective 7.1

7.1 To understand the elements and persuasive

capabilities of communication, as well as the barriers to
effective communication.
Communications

Communication is the transmission of a message from a sender to a receiver

via a medium/channel, where the sender receives communication feedback,
which alerts the sender as to whether the intended message was received.
Senders encode their messages by using words, pictures, symbols,
spokespersons, and persuasive appeals, and then the receivers decode them.
If the messages are to be persuasive, the receivers must decode the messages
as the senders intended.
Communications

• Impersonal vs.
Interpersonal

• Formal vs. informal

Impersonal vs. Interpersonal

Communications can be either impersonal or interpersonal. In

marketing, the sources of impersonal communications are
messages that companies transmit through their marketing
departments, advertising or public relations agencies, and
spokespersons. The targets, or receivers, of such messages are
usually a specific audience or several audiences that the
organization is trying to inform, influence, or persuade. The
senders of interpersonal communications may be either formal
sources (e.g., a salesperson in a physical or virtual retail
location) or informal sources (e.g., peers with whom the
consumer communicates face-to-face or via electronic means).
Impersonal vs. Interpersonal

• Compared with impersonal communications in mass media, a

key advantage of interpersonal communications is their ability
to obtain immediate feedback through verbal as well as
nonverbal cues. The ad shows the importance of
interpersonal communications.
Media are the channels for transmitting communications.
Traditional media are the original communications channels
that advertisers have used and are generally classified as print
(news papers, magazines, billboards) and broadcast (radio,
television); these media are impersonal because all receivers
get the same message, and the communications are one-way
because the receivers cannot interact with the senders. New
media are online channels, social networks, and mobile
electronic devices. These media are drastically more advanced
than traditional media because they allow marketers to send
personalized messages to individual consumers who can
respond to the messages immediately. These responses
indicate to marketers whether or not their persuasive efforts
have been effective.
Communication Interference

• Selective exposure
• Time shift
• Psychological noise
• Overcoming psychological noise:
Repetition
Contrast
Digital technologies
Effective positioning and providing value

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Selective exposure refers to consumers’ selectivity in
paying attention to advertising messages. Viewers can also
time shift by recording TV shows and viewing them at their
leisure while skipping over commercials. Psychological
noise in the form of competing advertising messages or
distracting thoughts can affect the reception of a promotional
message.

1. Repeated exposure to an advertising message surmounts

psychological noise and facilitates message reception. The
principle of redundancy also is seen in advertisements that
use both illustrations and text copy to emphasize the same
points. To achieve even more advertising redundancy, many
marketers now place their messages in such places as video
games, movie theaters, elevators, supermarket floors,
baggage carousels, subway turnstiles, and even public
restrooms.
Buyer Behaviour Prof. Rajesh Prasad 11
2. Copywriters often use contrast to break through the
psychological noise and advertising clutter and attract
consumers’ attention. Contrast includes featuring an
unexpected outcome; increasing the amount of sensory
input (such as color, scent, or sound); and identifying,
through testing, message appeals that attract more
attention.
3. Digital technologies allow marketers to monitor the
consumer’s visits to websites, infer the person’s interests
from this data, and design and send customized promotional
messages to that person.
Effective positioning and providing value are the most
effective ways to ensure that a promotional message stands
out and is received and decoded appropriately by the target
audience.

Buyer Behaviour Prof. Rajesh Prasad 12

Learning Objective 7.2

7.2 To understand the distinctions between

broadcasting and narrowcasting.
Comparison

Traditional media New media

• Broadcast • Narrowcast

• One-way • Two-way
• Directed at groups • Addressable
• Not customized or • Customized
interactive • Interactive
• Less accurate feedback, • Response-measurable
delayed feedback
Learning Objective 7.3

7.3 To understand how to design persuasive messages

effectively.
Messages

•Verbal, nonverbal or both

•Steps for sponsor (individual or organization)
Establish objectives
 Create awareness
 Promote sales
 Encourage/discourage practices
 Attract patronage
 Reduce dissonance
 Create goodwill/favorable image

Selectmedium
Design (encode) message

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Message Decisions

• Images and text

• Message framing
• One-sided vs. two-sided messages
• Order of presentation

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Images and Text

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Message Framing

Discussion Question:
When should a marketer use positive
message framing? Negative message
framing?

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Message Framing
Should a marketer stress the benefits to be gained by using a specific
product, that is, positive message framing; or the benefits to be lost by
not using the product, that is, negative message framing?
Persons with a low need for cognition were more likely to be persuaded by
negatively framed messages. Another study found that individuals with an
independent self-image (i.e., who view themselves as defined by unique
characteristics) were more persuaded by messages stressing an approach
goal (positive framing); those with an interdependent self-view (i.e., who
view themselves as defined by others) found messages that stress
avoidance
goals more convincing (negative framing). A study of advertised products
that enabled the early detection of disease indicated that positively framed
anecdotal messages were less persuasive than negatively framed
anecdotal messages. Another study discovered that negative message
framing was more effective than positive framing when respondents had
less opportunity to process the information in the ad, but less effective
when respondents
Buyer Behaviour had more opportunity
Prof. Rajesh Prasadto process the ad content.
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One- vs. Two-Sided Messages
A one-sided message pretends that its products are the only ones of their
kind. A two-sided message acknowledges competing products. The
credibility of an advertised claim can often be enhanced by actually
disclaiming superiority of some product features in relation to a competing
brand or by not claiming that the product is a universal solution. If the
audience is friendly (e.g., if it uses the advertiser’s products), if it initially
favors the communicator’s position, or if it is not likely to hear an opposing
argument, then a one-sided (supportive) message that stresses only
favorable information is most effective. However, if the audience is critical
or unfriendly (e.g., if it uses competitive products), if it is well educated, or
if it is likely to hear opposing claims, then a two-sided message is likely to
be more effective.
The ad in Figure 7.9 is a two-sided message because it acknowledges the
product’s competitors (that is, butter brands).

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One- vs. Two-Sided Messages

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Order Effects
Is it better to present your commercial first or last ??
The primacy effect suggests material presented first is most effective. The
recency effect suggests material presented last is most effective. If
audience interest is low, the most important point should be made first to
attract attention.
However, if interest is high, it is not necessary to pique curiosity, so
product benefits can be arranged in ascending order, with the most
important point mentioned last. When both favorable information and
unfavorable information are to be presented (as in an annual stockholders’
report), placing the favorable material first often produces greater
tolerance for the unfavorable news. A study found that revealing the brand
name at the onset of a message enhances brand recall and message
persuasiveness.

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Order Effects

Discussion Question:
When should marketers rely on the primacy
effect? When should they rely on the
recency effect?

Buyer Behaviour Prof. Rajesh Prasad

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Learning Objective 7.4

7.4 To understand the effectiveness and limitations of

prominent advertising appeals.

Many researchers have studied the promotional appeals that marketers

can use and the factors that influence ad persuasiveness. For example,
one study showed that informational appeals were particularly effective
in high-involvement situations, whereas positive emotional appeals did
better in low-involvement situations. The study also found that different
promotional appeals should be used in extensions of existing brands as
opposed to new brands.

The most widely used advertising appeals are comparative, fear, humor,
sex, and timeliness.
Comparative Ads

• Sophistication
• Negativity
• Gender
• Promotion vs.
Prevention-focused
• Reasonable factual
• evidence
Comparative Ads
Comparative advertising is a widely used marketing strategy in which a
marketer claims product superiority for its brand over one or more explicitly
named or implicitly identified competitors, either on an overall basis or on
selected product attributes. Among more sophisticated consumers,
comparative ads elicit higher levels of cognitive processing and better
recall, and are likely to be perceived as more relevant than
noncomparative ads. A study that tested the degree of negativity in
comparative messages (by using positive, negative, and mildly negative
comparative messages) for several products reported that negative
elements in an ad contributed to its effectiveness as long as they were
believable or were offset by some elements that made the ad appear
neutral. Another study uncovered gender differences in response to
comparative ads; comparative ads generated greater levels of brand-
evaluation involvement among men but not among women. Among
women, attention-getting comparative appeals produced inferences
regarding the ads’ manipulative intentions and reduced purchase
likelihood.
Buyer Behaviour Prof. Rajesh Prasad
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Comparative Ads
Yet another study found that “promotion-focused” consumers (i.e., those
focused on the aspirational aspects and the likely positive consequences
of a purchase) reacted to comparative messages differently than
“prevention-focused” consumers (i.e., those focused on the presence or
absence of negative outcomes such as safety). In comparative ads,
negative framing led prevention-focused consumers to evaluate the
advertised brand positively and the other brand negatively. Among
promotion-focused consumers, positive framing led to positive evaluation
of the advertised brand but did not affect evaluations of the comparison
brand. The law requires companies to produce “reasonable factual
evidence” in support of comparative
claims, deciding what constitutes such evidence is difficult.

Buyer Behaviour Prof. Rajesh Prasad

28
Fear Appeals

• When do they work?

• When are they unlikely
• to work?
Fear Appeals
Fear is an effective appeal and is often used in marketing
communications. Some researchers have found a negative
relationship between the intensity of fear appeals and their ability to
persuade, so strong fear appeals tend to be less effective than mild
fear appeals.

Strong fear appeals are often employed to discourage distracted

driving caused by using mobile phones and texting, as well as
drunk driving. In one study, more females than males said that fear
appeals will change distracted driving and suggested using
interviews with people who had been affected by distracted driving
accidents in advertisements against this behavior. Also, more males
than females said that using legal action would discourage
distracted driving.
Buyer Behaviour Prof. Rajesh Prasad
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Fear Appeals
The ad employs a very graphic image in its fear appeal. One study
discovered that a strong graphic threat message had a greater
effect for an unfamiliar issue than for a familiar issue. For an issue
with which the subjects were very familiar, adding information to a
weak-threat fear appeal increased the perceived severity of the
undesired behavior. The perceived severity of threat and perceived
probability of occurrence significantly influenced people’s intentions
to adopt the recommended behavior.

Buyer Behaviour Prof. Rajesh Prasad

31
Fear Appeals
Fear appeals are unlikely to be effective among persons who score
high on the personality variable termed sensation seeking.

A five-month study of high school students discovered that short-

term cosmetic fear appeals (such as yellow teeth or bad breath)
used in ads to stop or reduce smoking were more persuasive for
males, whereas long-term health fear appeals (such as getting
cancer later in life) were more persuasive for females.

Several studies showed that adding disgust to a fear appeal

enhanced message persuasion and compliance beyond that of
appeals that elicited only fear.

Buyer Behaviour Prof. Rajesh Prasad

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Guidelines for Fear Appeals

1. Understand reaction 5. Determine whether

and previous rational or emotional
experiences fear appeal
2. Beware the 6. Repeat advertising
boomerang effect over the long term
3. Behavior change long 7. Accept that some
and complex process addicts may not
4. Study relationship respond
with action and 8. Consider alternatives
anxiety
Guidelines for Fear Appeals
1. Understand the target audience’s reaction to a fear appeal, as well as
its previous experiences. For example, those who are already following
the behavior recommended but are not yet fully “converted” are likely to
react differently than those who are fully “converted.” Similarly, different
age groups probably react differently to fear appeals, as do persons in
different subcultures. Also, people who tried to change their behavior and
failed will react differently than those trying to do so for the first time.
2. Beware the boomerang effect. When some persons are exposed to a
fear appeal that encourages them to eliminate a strong habit, such as
smoking, they may feel angry and resentful and immediately reach for a
cigarette in defiance.
3. Realize that changing behavior is a long and complex process.
Therefore, persons in different stages of this task react differently to fear
appeals.

Buyer Behaviour Prof. Rajesh Prasad

34
Guidelines for Fear Appeals
4. Study the extent to which the fear appeal encourages people to take
action but without arousing too much anxiety, because high levels of
anxiety may cause people to reject the message or avoid it altogether.
5. Determine whether to use a rational or emotional fear appeal.
6. Plan, over the long term, to repeat advertising using fear appeals.
Recognize, though, that repeating these messages too often may reduce
their credibility.
7. Accept that some addicts may not respond to fear appeals. For
example, many heavy smokers or drinkers do not respond to explicit,
clearly visible, and often very graphic warning labels.
8. Consider alternatives to fear appeals. For example, reward-focused
appeals or even portraying humor and happiness when trying to
discourage certain conduct may sometimes work better than using fear.

Buyer Behaviour Prof. Rajesh Prasad

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Humor Appeals

What are some key

findings related to the
effectiveness of humor
appeals?
Humor Appeals
Many marketers use humorous appeals in the belief that humor will
increase the acceptance and persuasiveness of their advertising
communications. Humor is the most widely used of all advertising appeals;
by some estimates, it is used in 80 percent of all ads.

1. Humor attracts attention and enhances liking of the product advertised.

2. Humor does not harm the comprehension of ads, and, in some cases, it
actually aids comprehension.
3. Humor does not always increase an ad’s persuasive impact or a
source’s credibility. For example, one study showed that humor might
actually distract from cognitive processing of the central benefits of the
brand.

Buyer Behaviour Prof. Rajesh Prasad

37
Humor Appeals
4. Humor that is relevant to the product is more effective than humor
unrelated to the product.
5. Humor is more effective in ads for existing products than in ads for new
products, and more effective in targeting consumers who already have a
positive attitude toward the product.
6. Using humor is more appropriate for advertising low-involvement than
high-involvement products.
7. The effects of humorous ads vary by the audience demographics.
8. The impact of humor is related to the receiver’s personality. For
example, higher sensation seekers were found to be more receptive to
humorous appeals than lower sensation seekers

Buyer Behaviour Prof. Rajesh Prasad

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Humor Appeals
A study developed a measure of a personality trait, named need for
humor that is focused on a person’s tendency to enjoy, engage, or seek
out amusement and suggested that these cognitive factors can better
explain how consumers respond to humorous advertisements.

Another study discovered that ad recall was damaged when the humor
was expected, and this adverse effect was more pronounced in individuals
with low need for humor. Humorous ads were found to be more
memorable when humor was strong and related to the message. Placing
products in humorous movie scenes evoked positive emotions.

Punning is wordplay, often consisting of a humorous “double meaning.”

Buyer Behaviour Prof. Rajesh Prasad

39
Humour in Indian Advertisements
Examples: Itchguard; Polo; Ericsson’s
Four ways in which it is used:
1. In family relationship
2. Relationships at an individual levels
3. In group associations
4. Use of celebrities

Buyer Behaviour Prof. Rajesh Prasad

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Sexual Appeals

Buyer Behaviour Prof. Rajesh Prasad

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Sexual Appeals
There is little doubt that sexual themes have attention-getting value, but
studies show that they rarely encourage actual consumption behavior and
are only effective with sex-related products. Often, sexual advertising
appeals detract consumers from the message content and tend to interfere
with message comprehension, particularly when there is substantial
information to be processed. Nudity may negatively affect the product
message.
Receptivity to sexual appeals varies among consumers. “Sexual self-
schema,” which is one’s cognitive view of the self with regard to sexuality,
originates in persons’ past experiences and influences their reactions to
sex-related promotional themes. Sensation seeking, which is the pursuit
of novel and exciting sensations and experiences may increase favorable
responses to nudity in advertising. Another study indicated that more
extroverted people were receptive to sexual appeals and that such
appeals should not be used in targeting consumers who are quiet, shy,
and reserved.
Buyer Behaviour Prof. Rajesh Prasad
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Timeliness Appeals

Buyer Behaviour Prof. Rajesh Prasad

43
Learning Objective 7.5

7.5 To understand how to measure the effectiveness of

advertising messages.

Because marketing communications are usually designed to persuade a target

audience to act in a desired way (e.g., to purchase a specific brand or product,
to vote for a specific candidate), their ultimate test is the receiver’s response.
Communication feedback is an essential component of both interpersonal
and impersonal communications because it enables the sender to reinforce or
change the message to ensure that it is understood in the intended way.
Measuring Feedback

• Interpersonal communications  immediate

feedback

How are sales effects different from persuasion

effects?

How are persuasion effects different from

media exposure effects?
Buyer Behaviour Prof. Rajesh Prasad
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Measuring Feedback
Compared with impersonal communications in mass media, a
key advantage of interpersonal communications is the ability
to obtain immediate feedback through verbal as well as
nonverbal cues. Immediate feedback is the factor that makes
personal selling so effective, because it enables the
salesperson to tailor the sales pitch to the expressed needs
and observed reactions of each prospect. Experienced
speakers are very attentive to feedback and constantly modify
their presentations based on what they see and hear from the
audience.

Buyer Behaviour Prof. Rajesh Prasad

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Measuring Feedback
One type of feedback that companies seek from mass audiences is
the degree of customer satisfaction (or dissatisfaction) with a
product purchase. They try to discover—and correct as swiftly as
possible—any problems with the product in order to retain their
brand’s image of reliability (e.g., through hotlines and online
contacts). Marketers measure their communications’ persuasion
effects, that is, whether the message was received, understood,
and interpreted correctly; and their sales effects, that is, whether
the messages of a given campaign have generated the sales level
defined in the campaign’s objectives. In addition, advertisers gauge
the media exposure effects of their messages by buying data
from firms that monitor media audiences (e.g., Nielsen) and
conduct audience research to find out which media are read and
which television programs are viewed.
Buyer Behaviour Prof. Rajesh Prasad
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Chapter 9 Learning Objectives

9.1 To understand the credibility of reference groups and

their influence on consumer behavior.
9.2 To understand the persuasive power and credibility of
spokespersons, endorsers, celebrities, salespersons,
vendors, and media.
9.3 To understand the dynamics and measurement of
opinion leadership and word-of-mouth.
9.4 To understand the strategic applications, advantages,
and potential perils of word-of-mouth.
9.5 To understand the process for diffusion of innovations,
and adopter categories as distinct market segments.

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Learning Objective 9.1

9.1 To understand the credibility of reference

groups and their influence on consumer
behavior.

Source Credibility

A source’s persuasive impact,

stemming from its perceived
expertise, trustworthiness, and
believability.

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Reference groups, particularly informal ones, have a high degree of

source credibility, defined as a source’s persuasive impact,
stemming from its perceived expertise, trustworthiness, and
believability. When the source of communications about a
product is well respected and highly thought of by the intended
audience, the message is much more likely to be believed.

A formal source is either a person or medium providing

consumption-related information and hired and paid by an
organization. An informal source is a person whom the message
receiver knows personally, such as a parent or friend who gives
product information or advice, or an individual met and
respected online.

Reference Group Influence

•Normative influence
•Comparative influence

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Reference Group Influence

Reference groups serve as comparative and normative frames of reference

for a person’s values and behaviors.
Normative influence consists of learning and adopting a group’s norms,
values, and behaviors. The most pertinent normative influence comes
from groups to which people naturally belong, such as family, peers,
and other members of one’s community.
Comparative influence arises when people compare themselves to others
whom they respect and admire, and then adopt some of those people’s
values or imitate their behaviors.

A group to which a person belongs to, or realistically can join, is called a

membership group. A symbolic group is a group to which an individual
is unlikely to belong, but whose values and behaviors that person
adopts.

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Consumption-Related Reference Groups

•Friendship groups
•Shopping groups
•Virtual communities
•Advocacy groups

Consumption-Related Reference Groups

The consumption-related groups that influence consumers’

attitudes and behavior include friendship groups, shopping
groups, virtual communities, and advocacy groups.

Friends fulfill a wide range of needs: They provide

companionship, security, and opportunities to discuss
problems that an individual may be reluctant to discuss
with family members. They may be a credible source of
information about purchases.

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Consumption-Related Reference Groups

People may shop together just to enjoy shopping or to reduce

their perceived risk; that is, they may bring someone along
whose expertise regarding a particular product category
will reduce their chances of making incorrect purchases.
Referral programs are an important element of shopping
groups. Another example of a shopping group is the shared
experience of waiting in line. Retail experts say that by
standing in a crowd, shoppers see themselves as making
the right buying decision—a concept known as “social
proof.”

Consumption-Related Reference Groups

Many websites encourage consumers to leave comments and have
others respond to them. Most young adults have extensive
“buddy lists” and regularly communicate with people whom they
have met online but never in person. The fact that people can
share their interests, hobbies, and opinions with thousands of
peers online has benefited marketers.

The objective of consumption-focused advocacy groups is to assist

consumers in making consumption decisions and support their
rights. There are two types of advocacy groups: entities
organized to correct a specific consumer abuse and then disband,
and groups whose purpose is to address broader, more pervasive
problem areas and operate over an extended period of time.

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Factors Affecting Reference Group Influence

The degree of influence that a reference group exerts

on an individual’s behavior depends on the
1. individual,
2. product, and
3. social factors.
These factors include conformity, the group’s power
and expertise, the individual’s experience and
personality, and the conspicuousness of the product.

Factors Affecting Reference Group Influence

Conformity
To influence its members, a reference
group must:
• Inform members that the brand or
product exists.
• Provide opportunity to compare
thinking with the attitudes /behavior
of the group.
• Influence individual to adopt
attitudes and behavior that are
consistent with the group’s norms.
• Legitimize the member’s decision
to use the same products as other
members.

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Factors Affecting Reference Group Influence

•Group power and expertise

•Relevant information and experiences
•Product conspicuousness

Group power and expertise

Different reference groups may influence the beliefs, attitudes,

and behaviors of individuals at different times or under different
circumstances. Consumers who are primarily concerned with
approval from others usually adopt the same products and
brands as those group members who have status. When
consumers are preoccupied with the power that a person or
group can exert over them, they often adopt products that
conform to the norms of that person or group in order to be
complimented on their choices. However, unlike reference
groups that are not power based, “power groups” may bring
about behaviors, but not changes in attitudes.

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Relevant information and experiences;

Product conspicuousness
Individuals who have firsthand experience with a product or
service, or can easily obtain detailed information about it, are
less likely to be influenced by the advice or example of others.
In contrast, persons who have little or no experience with a
product or service, and do not trust advertising messages, are
more likely to seek out the advice or example of others.

The degree of reference group influence on purchase decisions

varies according to product conspicuousness. Products that
are especially conspicuous and status revealing are most likely
to be purchased with an eye to the reactions of relevant
others.

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Discussion Question

Which personality traits affect reference group

influence?

People who are compliant, have a tendency to conform and a

high need for affiliation, need to be liked by others, and are
other-directed are more receptive to group influences.
Competitive people who desire to control other people and
events and are inner-directed are less likely to look for guidance
from reference groups.

Learning Objective 9.2

9.2 To understand the persuasive power and credibility

of spokespersons, endorsers, celebrities, salespersons,
vendors, and media.

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Source credibility

Source credibility is the believability of the endorser,

spokesperson, or individual in an advertisement.

A spokesperson can be an actual customer, a company

employee, a celebrity, or a model.

Researchers have identified the following dimensions in

measuring the credibility of a person or organization:
expertise, trustworthiness, attractiveness, and likability.

Conveying Company Credibility

• Past performance •Reputation of

• Good Reputation retailers that carry
• Product Quality offerings
• Good Service • Media where they
• Image and advertise
attractiveness of • Institutional
spokespersons advertising

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Consumers recognize that the intentions of commercial sources

(e.g., manufacturers, service companies, financial institutions,
retailers) are clearly profit and view them as less credible than
informal reference groups. Companies can convey their credibility
through solid past performance, good reputation, product quality,
and good service. Their perceived credibility is also a function of the
image and attractiveness of their spokespersons, the reputation of
the retailers that carry their offerings, and the media where they
advertise.

Marketers also use institutional advertising, which consists of

promoting a company’s image without referring to any of its specific
offerings.

Endorsers and Spokespersons

• Synergy between endorser and type of
product/service advertised important
• Endorsers with demographics similar to target
audience more credible & persuasive
• Consumers must trust the marketer (even if they
like the endorser)
• Message contents must be congruent with
spokesperson’s qualifications

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Celebreties

Marketers must ensure that there is a synergy among

the celebrity’s trustworthiness, expertise, physical
attractiveness, and the product or brand endorsed.
They must also take into account the celebrity’s
number of prior endorsements, because
consumers perceive celebrities who appear in
commercials too often as less credible than celebs
with lesser commercial exposure.

Celebrity Uses in Advertisements

• Celebrity testimonials
• Celebrity endorsements
• Celebrity actors
• Celebrity spokespersons

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Celebrity Uses in Advertisements

Celebrities, particularly movie stars, TV personalities, popular
entertainers, and sports icons, are a symbolic reference group
because they are liked, admired, and often have a high degree of
perceived credibility. The “pitchman” (or woman) who appears in a
promotional message has enormous influence on the credibility of
the message. Credibility is the most important thing the celebrity
offers – the audience’s perception of both the celebrity’s expertise
(how much the celebrity knows about the product area) and
trustworthiness (how honest the celebrity is about what he or she
says about the product).
Marketers employ celebrities in promotion in the following ways:
1. Celebrity testimonial—Based on personal usage, the celebrity
attests to the product’s quality.

Celebrity Uses in Advertisements

2. Celebrity endorsement—Celebrities appear on behalf of
products, with which they may or may not have direct experience or
familiarity, for extended periods. Figure 9.6 features “K.J.” Noons—
a kickboxing and martial arts champion—as a spokesperson for a
not-for-profit organization named People for the Ethical Treatment
of Animals (PETA). “K.J.” is a tough fighter and he states that while
he and his opponents in the ring are equally matched, animals often
need protection from violence and abuse by bigger and stronger
humans.
3. Celebrity actor—The celebrity plays a part in a commercial for the
product.
4. Celebrity spokesperson—The celebrity represents the brand or
company over an extended period.

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Other Sources Credibility

•Salesperson credibility
•Vendor credibility
•Message credibility (previous experience)
•Medium credibility

How does time affect the influence of source

credibility on message persuasiveness?

Salespeople who engender confidence and who give the impression

of honesty and integrity are most persuasive. A salesperson who
“looks you in the eye” often is perceived as more honest than one
who evades direct eye contact. For many products, a sales
representative who dresses well and drives an expensive, late-
model car may have more credibility than one without such
outward signs of success. For other products, a salesperson may
achieve more credibility by dressing in the role of an expert.

The reputation of the retailer who sells the product has a major
influence on message credibility. Products sold by well-known,
quality stores carry the added endorsement (and implicit
guarantee) of the store itself.

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The consumer’s previous experience with the product or vendor has a

major impact on the credibility of the message. Fulfilled product
expectations increase the credibility accorded to future messages by the
same advertiser; unfulfilled product claims or disappointing product
experiences reduce the credibility of future messages. Thus, the key
basis for message credibility is the ability of the product, service, or
brand to deliver consistent quality, value, and satisfaction to consumers.

The reputation of the medium that carries the advertisement also

enhances the credibility of the message. Most consumers believe that a
respectable medium would only advertise products that it “knows” to
be of good quality. Because specialization in an area implies knowledge
and expertise, consumers regard advertising they see in special-interest
magazines and websites as more credible than ads in general-interest
sources.

When information is transferred from the short-term memory to

the cerebral cortex (where long-term memory is located), over
time, it is separated from the context in which it was learned.
One’s disassociation of the message from its source over time,
and remembering only the message content but not its source, is
called the sleeper effect. Thus, though a high-credibility source
is initially more influential than a low-credibility source, studies
show that both positive and negative credibility effects tend to
disappear after six weeks or so. Furthermore, the theory of
differential decay suggests that the memory of a negative cue
(e.g., a low credibility source) simply decays faster than the
message itself, leaving behind the primary message
content.

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Learning Objective 9.3

9.3 To understand the dynamics and

measurement of opinion leadership and word-
of-mouth.

Opinion leadership

Opinion leadership, defined as the process by which one

person—the opinion leader—informally influences others,
who might be either opinion seekers or recipients, occurs
between two or more people, neither of whom is or
represents a commercial seller or would gain directly from
providing advice or information.

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Opinion Leaders

•Information provided
Best brands
Use of brands
Where to buy

•Important for services

•Category specific
•Motivations

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Characteristics of Opinion Leaders

• Knowledgeable in product category
• Self-confident, outgoing, sociable
•Read special-interest publications and
websites
• Often same socioeconomic & age
group as receivers

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Measuring Opinion Leadership

• Self-designating method
• Sociometric method
• Key informant
• Klout score

The self-designating method employs a self-administered

questionnaire that requires respondents to evaluate the
extent to which they have provided others with
information about a product category or specific brand or
have otherwise influenced the purchase decisions of
others. The sociometric method measures the person-to-
person communications about a product or brand among
members of a community where most people know each
other by name (e.g., a college dormitory or sorority).
Respondents are asked to identify:

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1. The specific individuals (if any) to whom they provided advice or

information about the product or brand under study.
2. The specific individuals (if any) who provided them with advice or
information about the same product or brand. If respondents
identify one or more individuals to whom they have provided some
form of product information and those individuals confirm this
attribution, the respondents receive “opinion leadership points.”
On the basis of these interviews, respondents receive “opinion
receivership points.”
Researchers can also study opinion leadership by using a key
informant, that is, a person who is keenly knowledgeable about the
nature of social communications among members of a specific
group

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Learning Objective 9.4

9.4 To understand the strategic applications,

advantages, and potential perils of word-of-
mouth.

In marketing, word-of-mouth consists of transmitting advice

and other types of information about products, brands, and
shopping experiences. Word-of-mouth taking place online is
called e-wom and occurs in social networks, brand
communities, blogs, chat rooms, and tweets.

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E-WOM

•Factors affecting engagement

•Social networks
•Brand communities
•Blogs and microblogs

Three dimensions underly consumers’ engagement in e-wom: 1. Tie

strength—the degree of intimacy and frequency of contacts between the
information seeker and the source. 2. Similarity among the group’s
members in terms of demographics and lifestyles. 3. Source credibility—
the information seeker’s perceptions of the source’s expertise.

Negative reviews of hedonic (i.e., products used mainly for pleasure) products
where considered less useful/attributed to the reviewer; negative reviews
for utilitarian products were attributed to the product. Involved
consumers transfer and receive more rational product information than
information appealing to emotions.

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Online, social networks are virtual communities where people share

information about themselves with others, generally with similar
interests, with whom they have established relationships that, for the
most part, exist only in cyberspace. The major social networks are
Facebook, YouTube, Twitter, and MySpace.
A brand community is a specialized, nongeographically bound community
formed on the basis of attachment to a product or brand.
A blog is a discussion or informational site published on the Internet and
consists of discrete entries (“posts”). A microblog has less content than
the traditional blog and allow users to exchange small elements of
content, such as short sentences, individual images, and video links,
mostly via Twitter. Twitter is an online social networking service and
microblogging service that enables its users to send and read text-based
messages of up to 140 characters, known as “tweets.”

Stimulating Word of Mouth

• Viral marketing
• Motivations for passing along emails
• Buzz agents

Discussion Question:
Why do consumer share negative rumors
about companies and their products/services?

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Marketers long ago realized the power of word-of-mouth

communications between consumers, which it is almost
always more effective than promotional messages paid for
by advertisers, and they often encourage it in ads.

Viral marketing (viral advertising) is a marketing technique

that uses pre-existing social networks and other
technologies to produce increases in brand awareness or to
achieve other marketing objectives through encouraging
individuals to pass along messages.

Investigation of the motivations for passing along emails found that:1.

People were receptive only to emails from people they knew. The
kind of emails they received included jokes, virus alerts, inspirational
stories, requests to vote on certain issues, video clips, and links to
other websites.
2. The main reasons for not forwarding emails were outdated, dull, and
inappropriate contents. About one-third of the forwarded emails
included personalized notes from the forwarders, and most of the
senders did not alter the emails’ original subject lines. 3. The key
reasons for forwarding emails were enjoyment (e.g., fun,
entertaining, exciting) and helping others (i.e., let others know that
the senders care about them). The forwarders also reported that
they only passed along contents that they believed the receivers
would find interesting.

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Learning Objective 9.5

9.5 To understand the process for diffusion of

innovations, and adopter categories as distinct
market segments.

Adopter Categories

•Innovators
•Early Adopters
•Early Majority
•Late Majority
•Laggards

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Innovators

Adopter Categories – Non-Innovators

•Early adopters
•Early majority
•Late majority
•Laggards

•Prospective adopters
•Persistent non-adopters

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The early adopters are consumers who buy new products within a
relatively short period following introduction, but not as early as the
innovators. They are venturesome, likely to engage in word-of-
mouth, and also likely to assist others who are considering adopting
the new products.
The early majority consists of consumers who buy innovations after
the early adopters have done so. This segment is larger than the
preceding two groups combined. Risk aversion is defined as the
reluctance to take risks and low tolerance of ambiguous situations,
as illustrated by the consumption-related characteristics of risk-
averse consumers in Table 9.8. Members of the early majority are
somewhat risk averse, whereas the late majority and laggards are
highly risk-averse consumers.

Members of the late majority are risk averse and slow to adopt
innovation. They wait until most other consumers have adopted the
new product before buying it.

The laggards are the very last consumers to adopt innovations. By

the time they get around to purchasing their first electronic readers,
the innovators and early adopters are already switching to more
advanced models with advanced features. Laggards are generally
high-risk perceivers and the last
ones to recognize the value of innovative products.

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Marketers often “write off” non-adopters, but not all non-adopters

are the same, and understanding nonusers is important. For
instance, one study found two distinct segments among non-
adopters of Internet banking:
1. Prospective adopters, who could potentially become customers.
2. Persistent non-adopters, who are very unlikely to become
customers.
The study suggested that online banks should identify prospective
customers among nonusers rather than lump all nonusers into a
single category

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Chapter 10 Learning Objectives

10.1 To understand the family as a consumer

socialization agent.
10.2 To understand family decision-making and its
members’ consumption-related roles.
10.3 To understand the role of the family life cycle in
market segmentation and targeting.
10.4 To understand the consumption patterns of
nontraditional families and non-family households.

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Chapter 10 Learning Objectives

10.5 To understand the impact of social stratification on

consumer behavior.
10.6 To understand how to measure social class and
segment consumers accordingly.
10.7 To understand the demographics, lifestyles, and
consumption patterns
of America’s social classes.
10.8 To understand how to employ geo-demographics
to locate target markets.

Opening Vignette

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A family is defined as two or more persons related by blood, marriage, or

adoption residing together. In Western societies, there are three types
of families: married couples, nuclear families, and extended families. A
married couple and one or more children constitute a nuclear family.
The nuclear family, together with at least one grandparent or other
relation living within the household, is called an extended family.

The family life cycle is a composite variable that combines marital status,
size of family, age of family members (focusing on the age of the oldest
or youngest child), and employment status of the head of household,
and then classifies the family into a “typical” stage.

Learning Objective 10.1

10.1 To understand the family as a consumer

socialization agent.

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Socialization

Socialization refers to the process of making people behave in

a way that is acceptable to their society. In the context of
marketing, the most important role of the family is the
socialization of family members, ranging from young
children to adults. This process includes imparting to
children the basic values and modes of behavior consistent
with their culture, including moral principles, interpersonal
skills, dress and grooming standards, appropriate manners
and speech, and the selection of suitable educational and
occupational or career goals.

Consumer Socialization

•Pre-adolescent
Observe parents and older
siblings
Families more reliable than
advertising
•Teenagers
Peers most influential
Like products when
parents disapprove

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Socialization = Two Way Process

Socialization Agents

•Mothers stronger
socialization agents
than fathers
•Mothers usually:
more involved
control children’s
exposure to commercial
messages
regulate spending

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Mothers’ Socialization-Related Attitudes

Parental Styles and Socialization

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Consumer Socialization is Learning

Intergenerational Socialization

•Socialization is ongoing
Marriage
Retirement
Pet adoption

• Skepticism increases over time but varies by

demographics
• Preferences and loyalties are often transferred
between generations

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Family’s Supportive Roles

• Economic well being

• Emotional support

Discussion Question:
How does family shape
what people view as a
“suitable” lifestyle?

Learning Objective 10.2

10.2 To understand family decision-making and its

members’ consumption-related roles.

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Husband-Wife Decision-Making

•Husband-dominated decisions
•Wife-dominated decisions
•Joint decisions
•Autonomic decisions

What affects the relative influence of a husband and

wife on a particular consumer decision?

Children’s Influence

Tactics • Consultation
• Pressure • Ingratiation
• Exchange
• Rational

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Roles and Measurement

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Learning Objective 10.3

10.3 To understand the role of the family life cycle in

market segmentation and targeting.

The family life cycle is a composite variable that combines

marital status, size of family, age of family members (focusing
on the age of the oldest or youngest child), and employment
status of the head of household, and then classifies the family
into a “typical” stage. The ages of the parents and the relative
amount of disposable income are inferred from the family’s
stage in the cycle.

Family Life Cycle

•Bachelorhood •Post-parenthood
•Honeymooners •Dissolution
•Parenthood

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Which life-cycle stage is targeted with these two

ads?

Which life-cycle stage is targeted with this ad?

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Learning Objective 10.4

10.4 To understand the consumption patterns of

nontraditional families and non-family
households.

Nontraditional Households

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Targeting Nontraditional Families

•Changes in consumption behavior

•Advertising decisions
Recognize existence
Avoid alienating conservative traditional households

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Learning Objective 10.5

10.5 To understand the impact of social stratification on

consumer behavior.

Social class 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 status. Social class
stems from social status, which is the degree of prestige the members of one
social class have in comparison with members of other social classes. Status is
composed of several factors, including wealth (amount of economic assets),
power (the degree of influence over others), and the amount of esteem one
receives from others.

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Discussion Questions

How do material possessions relate to social status?

How does social comparison/social class affect

consumption patterns?

According to social comparison theory, individuals compare

their own material possessions with those owned by others
in order to determine their relative social standing. This is
especially apparent in a materialistic society, where status is
often associated with consumers’ purchasing power. Thus,
people with more purchasing power (and more possessions)
have more status and those with less money have less
status. The more expensive and exclusive one’s possessions
are, the more status one has. In addition, two other
demographics that determine social standing are
occupational status and educational attainment.

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Social-class categories are ranked in a hierarchy, ranging from

low to high status. Members of a specific social class
perceive members of other social classes as having either
more or less status than they do. When it comes to
consumption, people look for cues indicating that others
are either equal to them (about the same social class),
superior to them (higher social class), or inferior to them
(lower social class). Marketers often use social class to
segment consumers, because members of the same social
class share values, attitudes, and priorities regarding all the
aspects of their lives, including consumer behavior.

Social-class hierarchies are reflected in consumption patterns.

Consumers purchase certain products because these
products are favored by members of either their own or a
higher social class (e.g., a high-priced Swiss wristwatch),
but avoid products that they perceive as “lower-class”
products (e.g., a “no-name” brand of sneaker or off-the-
rack suits). Relationships between product usage and
social-class membership exist in all Western societies. Many
studies discovered that social class often determined
consumer attitudes toward adopting certain products or
not, and strongly influenced their purchases of product
types, services, and brands.

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Learning Objective 10.6

10.6 To understand how to measure social class and

segment consumers accordingly.

Subjective vs. Objective Measures

•Subjective – estimate your social class

•Objective
Occupation
Education
Income
Multivariable Index
– Index of status characteristics
– Socioeconomic status score

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Learning Objective

To understand how to employ geo-demographics to

locate target markets.

Geo-demographic Segmentation

PRIZM ®

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Chapter 11 Learning Objectives

11.1 To understand culture’s role, dynamics, evolution,

and impact on consumers’ priorities and behaviors.
11.2 To understand language, symbols, and rituals as
expressions of a learned culture.
11.3 To understand how to measure the influence of
culture on consumer behavior.
11.4 To understand Americans’ core values and how to
apply them to persuasive communications.
11.5 To understand green marketing and ecologically
responsible consumption.

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Learning Objective 11.1

11.1 To understand culture’s role, dynamics, evolution,

and impact on consumers’ priorities and behaviors.

Culture
We often refer to culture as an “invisible
hand” that guides the actions of people of a
particular society. When consumer
researchers ask people why they do certain
things, they frequently answer, “Because it’s
the right thing to do”—a response reflecting
the ingrained influence of culture on our
behavior.

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“Levels” of Cultural Norms

• Supranational

• National
• Group

At the supranational level, youth 14-24

segmented as:
• In-crowd • Networked intelligentsia
• Pop mavericks • Thrill renegades

Some researchers conceptualized different “levels” of cultural norms:

1. The supranational level reflects the underlying dimensions of culture that
affect multiple societies (i.e., subcultural cross-national or cross-cultural
boundaries).
2. The national level reflects shared core values, customs, and personalities
that represent the core of the “national character” of a particular
country.
3. The group level reflects the subdivisions of a country or society, such as
subcultures, and the influences of various reference groups.

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On the supranational level of culture, which crosses national boundaries,

researchers have developed a lifestyle matrix for four segments of
global youth aged 14 to 24:
1. In-crowd: It’s all about privilege and reinforcement; members of this
group seek approval from others and prefer classic brands like Nike and
Abercrombie & Fitch to uphold tradition.
2. Pop mavericks: Word-of-mouth spreads rapidly, and passion,
individuality, and instant gratification are important; members prefer
brands that they can personalize—brands like Diesel and Adidas.
3. Networked intelligentsia: They are the hub of online social networks, and
it’s all about revolution, creativity, and deconstruction; members prefer
cult brands, like Vespa (in America) and Vans, which add to their sense
of obscurity.
4. Thrill renegades: It’s all about infamy, adrenaline, and anarchy (and
pretending that law and order do not exist).

Culture and Marketing

• Culture’s continuous evolution

• Cultural beliefs reflect societal needs

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Culture’s continuous evolution

Marketers must always monitor cultural changes to

discover new opportunities and abandon markets
that have “dried up” because of cultural changes.
Marketers should periodically reconsider why
consumers are doing what they do, who are the
purchasers and the users of their offerings, when
they do their shopping, how and where they can be
reached by the media, and what new product and
service needs are emerging.

Cultural beliefs reflect societal needs

Culture expresses and satisfies the needs of societies.
It offers order, direction, and guidance for problem
solving by providing “tried-and-true” methods of
satisfying physiological, personal, and social needs.
Culture determines whether a product is a
necessity or discretionary luxury. Culture also
dictates which clothes are suitable for different
occasions (such as what to wear around the house,
and what to wear to school, to work, to church, at
a fast-food restaurant, or to a movie theater).

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At times, society’s collective interest contradicts an

emerging custom. For instance, because most
young Americans are now electronically connected
all the time and at almost any place, distracted
driving because of texting or calling on mobile
phones is directly causing more car accidents.

Learning Objective 11.2

11.2 To understand language, symbols, and rituals as

expressions of a learned culture.

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Cultural Values
To be considered a cultural value, a belief or custom
must be shared by a significant portion of the society,
because culture is essentially a series of norms that
guide personal and group conduct and link individuals
into a largely cohesive group.

Generally, members of a society share their values

and customs through a common language, although
some cultures include more than one language.

Learning Cultural Values

• Formal learning
• Informal learning
• Technical learning
• Enculturation (consumer socialization) vs.
acculturation
• Marketing’s influence

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Formal learning takes place when parents, older siblings, and other
family members teach younger members “how to behave.”
Informal learning takes place when children imitate the behaviors
of selected others, such as family, friends, or TV and movie
heroes and characters.
Technical learning happens when teachers instruct children, in
educational environments, about what should be done, how it
should be done, and why it should be done, in social as well as
personal settings.

Our ethical values (e.g., the importance of kindness, honesty, and

responsibility) are also formed during childhood as we learn them
from parents, teachers, and other significant adults.

Enculturation is learning one’s own culture. Acculturation is

learning new or foreign cultures.

The contents of media, advertising, and marketing reflect cultural

values and convey them to all members of society very
effectively. The repetition of marketing messages both conveys
and reinforces cultural beliefs and values. In advertisements,
cultural values are not only depicted in the advertising copy, but
are also coded in the visual imagery, colors, movements, music,
and other nonverbal elements of an advertisement. Marketers
also transmit a lot of information that enables consumers to
express shared cultural values.

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Language and Symbols

• Verbal symbols
• Nonverbal symbols
Product
Promotion
Price
Stores at which product is available

Cultural values are reflected in the languages,

symbols, communications, and artifacts of a
society. A symbol is anything that represents
something else, and symbols can be either verbal
or nonverbal. Words are verbal symbols, so the
text of any ad is a composition of symbols.
Nonverbal symbols, such as figures, colors, shapes,
and even textures, are cultural cues that appear
within advertisements, trademarks, packaging, and
product designs.

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Prices and channels of distribution are symbols and

reflect cultural meanings of products. For instance,
the stores where clothes are sold (and also the
prices of the items) symbolize their quality. In fact,
all the elements of the marketing mix—the
product, its promotion, price, and the stores at
which it is available—are symbols that
communicate the quality, value, and image of the
offering.

Ritual
A type of symbolic activity consisting of
a series of steps (multiple behaviors)
occurring in a fixed sequence and
repeated periodically.

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Rituals can be public, elaborate, or ceremonial (e.g., weddings), or

mundane routines (e.g., daily grooming). Typically, ritualized
behavior is formal and often scripted (e.g., a religious service or
proper conduct in a court of law), and occurs repeatedly (e.g.,
singing the national anthem before the start of a sports event).
Many rituals include artifacts, and some products are marketed
specifically for certain rituals. For instance, turkey, stuffing, and
cranberries are part of the ritual of Thanksgiving Day. Rituals such
as graduations, weekly card games, or visits to beauty salons
include artifacts.

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Ritualistic behavior is an action or series of steps that

have become a ritual. For example, golfers who
take a few practice swings before actually hitting
the ball display a ritualistic behavior. Personal-care
activities are often ritualized; Table 11.2 describes
the daily ritual of a woman’s facial care.

Ritualistic Behavior

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Discussion Questions

• What are some rituals (religious, educational,

social) that you have experienced?
• What artifacts or products were part of that
ritual?
• How did marketers influence the choice of
these artifacts?

Learning Objective 11.3

11.3 To understand how to measure the

influence of culture on consumer behavior.

Culture reflects a society’s values, customs, and rituals,

which in turn reflect how we live and communicate.
The most widely used measurements of cultural values
are content analysis, consumer field observation, and
value measurement instruments.

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Measuring Cultural Values

• Content analysis
• Field observation
• Depth interviews
• Focus groups
• Questionnaires

Content analysis, as the name implies, focuses on the content of

societies’ verbal, written, and pictorial communications, including
promotional messages. Content analysis can determine what social
and cultural changes have occurred in a specific society or compare
different cultures.
Field observation consists of observing the daily behavior of selected
members of a society. Based on their observations, researchers draw
conclusions about the values, beliefs, and customs of the society
under investigation.
In some cases, researchers become participant-observers; that is, they
become active members of the environment that they are studying
and engage in the same behaviors, rituals, and customs that they
study.

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Marketers have used depth interviews and focus groups to study

social and cultural changes. In focus group discussions,
consumers are apt to reveal attitudes and behaviors that signal
shifts in values that may affect, for example, the acceptance of
new products and services. Focus groups have been used to
generate ideas for persuasive strategies designed to reinforce
customer loyalty and retention.

Self-administered questionnaires measure individuals’ cultural

values, such as the Rokeach Value Survey, the Values and
Lifestyles VALS measure, and Gordon’s survey of personal and
interpersonal values.

Impact of Indian Core values

Family Orientation
Savings Orientation
Festivities
Shopping as a Ritual
Mythology
Food Habbits

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Changing Cultural Trends in Urban Market

Achievement Orientation
Work Ethic
Material Success
Middle of the Road Approach to Tradition
Impulse Gratification
Use of Hi-Tech products

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