Consumer Motivation

Why Do People Buy Our Product?

 Consumer Motivation
Represents the drive to satisfy physiological and
psychological needs through product purchase and
consumption

Gives insight why people buy?

Industries built around basic human needs

Could we name some/all basic needs?

Model of the Motivation Process

4
 Types of Needs
• Innate Needs
– Physiological (or biogenic) needs that are
considered primary needs or motives
• Acquired Needs
– Learned in response to our culture or
environment. Are generally psychological and
considered secondary needs
• Needs extrinsic and intrinsic
• Needs positive or negative direction
– Exercise (look attractive or avoid health problems) 5
 Goals
• The sought-after results of motivated behavior
• Generic goals are general categories of goals
that consumers see as a way to fulfill their
needs (become an Entrepreneur)
• Product-specific goals are specifically branded
products or services that consumers select as
their goals (Particular B-school)

6
 Motivations and Goals

Positive Negative

• Motivation • Motivation
• A driving force • A driving force away
toward some object from some object or
or condition condition
• Approach Goal • Avoidance Goal
• A positive goal • A negative goal from
toward which which behavior is
behavior is directed directed away
• White teeth • Prevents decay

7
 The Selection of Goals
• The goals selected by an individual depend on
their:
– Personal experiences
– Physical capacity
– Prevailing cultural norms and values
– Goal’s accessibility in the physical and social
environment
• Prevention focus (security and safety)
Promotion focus (growth and development)
• Utilitarian product features (prevention goals)
hedonic features (promotion goals) 8
• People not aware of their needs as they are of
their goals
• Aware of their physiological needs compared
to psychological needs

9
 Rational versus Emotional Motives

• Rationality implies that consumers select

goals based on totally objective criteria, such
as size, weight, price, or miles per gallon
• Emotional motives imply the selection of
goals according to personal or subjective
criteria
– Blissful ignorance effect

10
 The Dynamics of Motivation

• Needs are never fully satisfied

• New needs emerge as old needs are satisfied
• People who achieve their goals set new and
higher goals for themselves

11
 Substitute Goals

• Are used when a consumer cannot attain a

specific goal he/she anticipates will satisfy a
need
• The substitute goal will dispel tension
• Substitute goals may actually replace the
primary goal over time

12
 Frustration

• Failure to achieve a goal may result in

frustration.
• Some adapt; others adopt defense
mechanisms to protect their ego.

13
 Defense Mechanisms- Table 4.2 (excerpt)
Construct Items
Aggression In response to frustration, individuals may resort to aggressive behavior
in attempting to protect their self-esteem. The tennis pro
who slams his tennis racket to the ground when disappointed with
his game or the baseball player who physically intimidates an umpire
for his call are examples of such conduct. So are consumer
boycotts of companies or stores.
Rationalization People sometimes resolve frustration by inventing plausible reasons
for being unable to attain their goals (e.g., not having enough
time to practice) or deciding that the goal is not really worth pursuing
(e.g., how important is it to achieve a high bowling score?).
Regression An individual may react to a frustrating situation with childish or
immature behavior. A shopper attending a bargain sale, for example,
may fight over merchandise and even rip a garment that another
shopper will not relinquish rather than allow the other
person to have it.
Withdrawal Frustration may be resolved by simply withdrawing from the situation.
For instance, a person who has difficulty achieving officer
status in an organization may decide he can use his time more
constructively in other activities and simply quit that organization.
14
 Arousal of Motives

• Needs are dormant, but aroused by signals

– Physiological arousal
– Emotional arousal
– Cognitive arousal
– Environmental arousal

15
 Philosophies Concerned with
Arousal of Motives
• Behaviorist School
– Behavior is response to stimulus
– Elements of conscious thoughts are to be ignored
– Consumer does not act, but reacts
• Cognitive School
– Behavior is directed at goal achievement
– Needs and past experiences are reasoned, categorized,
and transformed into attitudes and beliefs

16
 Types and Systems of Needs

• McGuire’s Psychological needs

• Henry Murray’s 28 psychogenic needs
• Abraham Maslow’s hierarchy of needs
• A trio of needs

17
 McGuire’s Psychological Motives

• Classification System with 16 categories

• Two criteria determine 4 major categories:
– Is mode of motivation cognitive or affective?
– Is the motive focused on preservation or
growth?
• Four categories subdivided further:
– Is the behavior initiated or a response?
– Is this behavior internal or external?
 McGuire’s Cognitive Motives
• Cognitive Preservation Motives
– Need for Consistency (active, internal)
• Parts consistent, cognition, affect, behaviour,
• cognitive dissonance
– Need for Attribution (active, external)
• Attribute causes to fav/unfav/ourself/outside
– Need to Categorize (passive, internal)
• organize array of information
– Need for Objectification (passive, external)
• Observable cues/symbols to infer feel/know
• Clothes
McGuire’s Cognitive Motives (cont..)

• Cognitive Growth Motives

– Need for Autonomy (active, internal)
– Need for Stimulation (active, external)
• Seek variety; variety seeking beh
– Teleological Need (passive, internal)
• Images of desired outcomes (Good guy wins)
– Utilitarian Need (passive, external)
• Problem solver, opportunity to acquire info & skill

20
 McGuire’s Affective Motives

• Affective Preservation Motives:

– Need for Tension Reduction (active, internal)
• Recreational activities
– Need for Expression (active, external)
– Need for Ego Defense (passive, internal)
• Insecure; rely on well known brands socially visible
– Need for Reinforcement (passive, external)
• Positive strokes; products
 McGuire’s Affective Motives

• Affective Growth Motives:

– Need for Assertion (active, internal)
• Success, admiration, dominance
• Power esteem and accomplishment important
– Need for Affiliation (active, external)
• Seeking affection and acceptance in interpersonal rel
– Need for Identification (passive, internal)
• Playing number of roles pleasure, satisfaction
– Need for Modeling (passive, external)
• Tendency of base behaviours on that of others
• Children learn shopping
• Rolex ads, Raymond 22
 Murray’s List of Psychogenic Needs
Needs Reflecting
Needs Associated Needs Connected
Ambition, Power,
with Inanimate with Human
Accomplishment,
Objects Power
and Prestige
Acquisition Superiority Dominance
Conservancy Achievement Deferrence
Order Recognition Similance
Retention Exhibition Autonomy
Construction Infavoidance Contrariance

23
 Murray’s List of Psychogenic Needs
(continued)
Needs Concerned Needs Concerned
Sado-Masochistic
with Affection with Social
Needs
between People Intercourse

Affiliation
Aggression Cognizance
Rejection
Nurturance
Succorance
Abasement Exposition
Play
24
Maslow’s Hierarchy of Needs

25
Kellogs Iron Shakti Corn.mpg

Kellogs
 A Trio of Needs

• Power
– individual’s desire to control environment
• Affiliation
– need for friendship, acceptance, and belonging
• Achievement
– need for personal accomplishment
– closely related to egoistic and self-actualization
needs

27
Measurement of Motives

• Researchers rely on a
combination of
techniques
• Qualitative research is
widely used
• Projective techniques are
often very successful in
identifying motives.
28
Qualitative Measures of Motives
Table 4.7 (excerpt)
• This method, including the tool termed
METAPHOR ZMET, was discussed in detail in Chapter 2.
ANALYSIS • DuPont used this method to study women’s
emotions regarding pantyhose.

• This method consists of having customers

tell real-life stories regarding their use of
STORYTELLING the product under study.
• Kimberly-Clark used this method to develop
pull-ups.

WORD ASSOCIATION • In this method, respondents are presented

AND SENTENCE with words, one at a time, and asked to say
COMPLETION the first word that comes to mind.

Thematic apperception test Henry Murray (Story about each picture)

Drawing Pictures And Photo Sorts 29
How Do We Motivate Customers?
 Motivating with Money
• Concerns
– Sales may increase but profitability may not
– Price conscious customers may be attracted
– Signal of quality
 Providing Other Incentives
• McDonald’s offer of Beanie Babies free with
Happy meals
– Caution: Value-discounting hypothesis
• Contests & Sweepstakes
 Altering Perceived Risk
• Facilitating in search behaviour
• Educating in risk involved & suggesting ways
to mitigate
 Arousing Consumer’s Curiosity
• Something novel in market offering
• Campaigns
– Jaago Re
– Sunsilk Gang Of Girls
– IKEA Facebook Showroom
Customer Loyalty Programs

35
 Motivational Conflict

• Satisfying a need at expense of other

• Types
– Approach-approach (Cog disso)
– Approach-avoidance (Guilt of desire)
– Avoidance-avoidance (Choice undesirable alt)
• Need priorities and benefit segmentation
• Motivational intensity and involvement
determine amount of efforts exerted for one
need
36
Personality
 Personality and
The Nature of Personality
• The inner psychological characteristics that
both determine and reflect how a person
responds to his or her environment
• The Nature of Personality:
– Personality reflects individual differences
– Personality is consistent and enduring
– Personality can change by life events

2
 Theories of Personality

• Freudian theory
– Unconscious needs or drives are at the heart of
human motivation
• Neo-Freudian personality theory
– Social relationships are fundamental to the
formation and development of personality
• Trait theory
– Quantitative approach to personality as a set of
psychological traits

3
 Freudian Theory
• Id
– Warehouse of primitive or
instinctual needs for which
individual seeks immediate
satisfaction
• Superego
– Individual’s internal
expression of society’s
moral and ethical codes of
conduct
• Ego
– Individual’s conscious control
that balances the demands of
the id and superego

Tamsik, Sattvik and Rajsik

4
 Neo-Freudian Personality Theory

• Social relationships are fundamental to personality

• Alfred Adler:
– Style of life (seek rational goals)
– Feelings of inferiority (striving for superiority)
• Harry Stack Sullivan
– We establish relationships with others to reduce tensions
• Karen Horney’s three personality groups
– Compliant: move toward others (desire to be loved,
appreciated) like name-brand products: Bayer aspirin
– Aggressive: move against others (desire to excel & win
admiration) prefer Old Spice
– Detached: move away from others (Desire independence,
self-sufficiency, freedom from obligation) less brand loyal
5
 Trait Theory

• Focus on measurement of personality in terms

of traits
• Trait - any distinguishing, relatively enduring
way in which one individual differs from
another
• Personality is linked to broad product
categories and NOT specific brands

6
 Personality and Understanding
Consumer Behavior

Consumer Social
Dogmatism
innovativeness character

Optimum
Need for Sensation
stimulation
uniqueness seeking
level

Variety-
novelty
Personality Traits seeking
Innovators & Non-innovators
7
 Consumer Innovativeness

• Willingness to innovate
– Need for stimulation
– Novelty seeking
– Need for uniqueness
• Further broken down for hi-tech products
– Global innovativeness
– Domain-specific innovativeness
– Innovative behavior

8
 Consumer Motivation Scales

A “GENERAL” CONSUMER INNOVATIVENESS SCALE

1. I would rather stick to a brand I usually buy than try
something I am not very sure of.
2. When I go to a restaurant, I feel it is safer to order dishes I am
familiar with.
A DOMAIN-SPECIFIC CONSUMER INNOVATIVENESS SCALE
1. Compared to my friends, I own few rock albums.
2. In general, I am the last in my circle of friends to know the
titles of the latest rock albums.

Imp for brand extensions & new products

9
 Dogmatism

• A personality trait that reflects the degree of

rigidity a person displays toward the
unfamiliar and toward information that is
contrary to his or her own established beliefs

• HOW DO WE DEAL WITH DOGMATISM?

10
 Dogmatism

• A personality trait that reflects the degree of

rigidity a person displays toward the
unfamiliar and toward information that is
contrary to his or her own established beliefs
DEALING WITH DOGMATISM
Researching dogmatic beliefs
Getting involvement of customers
Demonstration, Research results, Credibility models Customizing communication
Reducing dogmatism & changing
beliefs
Triggering WOM
McDonald’s “Be open to new possibilities”
High on dogma listen Authoritative figures
Low on dogma factual differences
11
 Social Character

• Ranges on a continuum for inner-directedness

to other-directedness
• Inner-directedness
– rely on own values when evaluating products
– Innovators Peter England “honest shirt” Product features

• Other-directedness
Corolla Altis car “The only known cure for envy”
– look to others Approving social environment;
Neighbours envy, owners pride
– less likely to be innovators

12
 Need for Uniqueness

• Consumers who avoid conforming to

expectations or standards of others

13
 Optimum Stimulation Level

• A personality trait that measures the level or

amount of novelty or complexity that
individuals seek in their personal experiences
• High OSL consumers tend to accept risky and
novel products more readily than low OSL
consumers.

Vacation: Adventurous to offering tranquility & peace

Offering product variants in FMCG category

14
 Sensation Seeking

• The need for varied, novel, and complex

sensations and experience. And the willingness to
take social and physical risks for the sensations.

Engage in heavy metal music listening and dangerous activity

15
 Variety-Novelty Seeking

• Measures a consumer’s degree of variety

seeking
• Examples include:
– Exploratory Purchase Behavior
– Use Innovativeness
– Vicarious Exploration
FMCG product variants
Using washing machines for making lassi; Paints/dyes to paint cows; High
Definition Tv with more features // simple tv

High variety seeking scores: prefer HD TV more featrues; follower brand

Low scores: seek leader brands 16
 Cognitive Personality Factors

• Need for cognition (NFC)

– A person’s craving for enjoyment of thinking
– Individual with high NFC more likely to respond to
ads rich in product information
.
Indica
Santro comparative advt

17
 Cognitive Personality Factors

• Visualizers
• Verbalizers

Dalda light vanaspathi, Dalda Activ; Visual advertisement

Object visualisers: visualise single integrated unit
Spatial visualisers: piece by piece

18
From Consumer Materialism to
Compulsive Consumption

Acquire and show Self centered and

off possessions selfish

Materialistic
People

Do not get greater

Seek lifestyle full of
personal satisfaction
possessions
from possessions

19
 From Consumer Materialism to
Compulsive Consumption
• Consumer materialism scale (success, centrality and
happiness) Spendthrift-Tightwad scale
• Fixated consumption behavior
– Consumers fixated on certain products or categories of
products
Barbie dolls, antique teddy bears, stamps
– Characteristics
• Passionate interest in a product category
• Willingness to go to great lengths to secure objects
• Dedication of time and money to collecting
• Compulsive consumption behavior
– “Addicted” or “out-of-control” consumers
– Chocoholics and Oniomania (shopping)

20
 Consumer Ethnocentrism and
Cosmopolitanism
• Ethnocentric consumers feel it is wrong to
purchase foreign-made products because of the
impact on the economy (CETSCALE scale)
• They can be targeted by stressing nationalistic
themes
• A cosmopolitan orientation would consider the
word to be their marketplace and would be
attracted to products from other cultures and
countries.

21
 Brand Personality

• Personality-like traits associated with brands

• Examples
– BMW is performance driven
– Raymond .mp4
• Brand personality which is strong and favorable will
strengthen a brand but not necessarily demand a
price premium
• Any other examples that comes to your mind?

22
 Product Anthropomorphism and
Brand Personification
• Product Anthropomorphism
– Attributing human characteristics to objects
– Zoozoos Vodafone.mp4
• Brand Personification
– Consumer’s perception of brand’s attributes for a
human-like character
– Mr. Coffee is seen as dependable, friendly,
efficient, intelligent and smart.
– Harley Davidson owners
– Mac v/s PC 23
A Brand Personality Framework

24
 Product Personality Issues

• Gender
– Some products perceived as masculine (coffee and toothpaste)
while others as feminine (bath soap and shampoo)
• Geography
– Actual locations, like Kesar mangoes from Talala (Junagadh);
Spices (India)
– Fictitious names also used, such as Hidden Valley and Bear
Creek; Basmati Rice
• Color
– Color combinations in packaging and products denotes
personality
– Coke (red)

25
 Self and Self-Image

• Consumers have a
variety of enduring
images of themselves
• These images are
associated with
personality in that
individuals’
consumption relates
to self-image
 One or Multiple Selves

• A single consumer will act differently in

different situations or with different people
• We have a variety of social roles
– University, Market, parents, friends
• Marketers can target products to a particular
“self”

27
 Makeup of the Self-Image

• Contains traits, skills, habits, possessions,

relationships, and way of behavior
• Developed through background, experience,
and interaction with others
• Consumers select products congruent with this
image
– Mahindra Duro.mp4

28
 Different Self-Images
Actual Self-Image • How consumers see themselves

• How consumer would like to see

Ideal Self-Image
themselves

Social Self-Image • How consumers feel others see them

Ideal Social • How consumers would like others to

Self-Image see them
Expected • How consumers expect to see
Self-Image themselves in the future
• Traits an individual believes are in her
Out-to self
Ought-to-self duty to possess
Household products: actual self; conspicuous products: social self image;
goal: ideal self image
 Extended Self

• Branded apparels Levi jeans

• Possessions can extend self in a number of ways:
– Actually (computer; problem solving)
– Symbolically (feeling better; employee award
excellence)
– Conferring status or rank (of rare items)
– Bestowing feelings of immortality (leaving valued
possessions to young ones)
– Endowing with magical powers (objects related to
worship given by grand parents)
 Altering the Self-Image

• Clothes, grooming aids/cosmetics, accessories

line sun glasses jewelry, contact lenses
• Consumers use self-altering products to
express individualism by:
– Creating new self
– Maintaining the existing self
– Extending the self Personal vanity
– Conforming Achievement Vanity
Tattoo
Hair restyling
Eyeglass to contact lenses
Cosmetic surgery
Lawyer, doctor, professor, business executive 31
 Virtual Personality

• You can be anyone…

– Gender swapping
– Age differences
– Mild-mannered to aggressive

32
Consumer Perception
 Perception

• The process by which an

individual selects, organizes,
and interprets stimuli into a
meaningful and coherent
picture of the world
• Elements of Perception
– Sensation
– Absolute threshold
– Differential threshold
– Subliminal perception

2
 Sensation

• Sensation is the immediate and direct

response of the sensory organs to stimuli
– A stimulus is any unit of input to any of the
senses.
 Absolute threshold
• Minimum strength of stimuli needed to create
a sensation
 Differential Threshold
(Just Noticeable Difference – j.n.d.)
• Minimal difference that can be detected
between two similar stimuli
• Weber’s law
– The j.n.d. between two stimuli is not an absolute
amount but an amount relative to the intensity of
the first stimulus
– The stronger the initial stimulus, the greater the
additional intensity needed for the second
stimulus to be perceived as different.
 Marketing Applications
of the J.N.D.
• Marketers need to
determine the
relevant j.n.d. for
their products
– so that negative
changes are not
readily discernible to
the public
– so that product
improvements are
very apparent to Rs 5/- price point
consumers

6
 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

7
 Discussion Question

• How might your business

use the j.n.d. for products
or services in terms of:
– Product decisions
– Packaging decisions
– Advertising decisions
– Sales promotion decisions

8
 Subliminal Perception

• 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.
• Is it effective?
– Extensive research has shown no evidence that
subliminal advertising can cause behavior changes
– Some evidence that subliminal stimuli may
influence affective reactions
 Aspects of Perception

Selection

Organization

Interpretation
 Perceptual Selection
Selection Depends Upon:
Nature of the • Includes the product’s physical attributes,
package design, brand name, advertising and
stimulus more…

• Based on familiarity, previous experience or

Expectations expectations.

Motives • Needs or wants for a product or service.

 Perceptual Selection
Important Concepts
Selective Selective Perceptual Perceptual
Exposure Attention Defense Blocking
• Consumers • Heightened • Screening out • Consumers
seek out awareness of stimuli avoid being
messages when stimuli which are bombarded by:
which: meet their threatening • Tuning out
• Are pleasant needs • TiVo
• They can • Consumers
sympathize prefer different
• Reassure messages and
them of good medium
purchases • Unexpected
stimuli results
in more
attention

The talking window.flv Test Your Awareness_ Do The Test.mp4

 Organization

Principles
• People tend to organize
perceptions into figure-
• Figure and ground and-ground relationships.
• Grouping • The ground is usually hazy.
• Closure • Marketers usually design
so the figure is the noticed
stimuli.
 Organization

Principles

• Figure and ground • People group stimuli to

• Grouping form a unified
• Closure impression or concept.
• Grouping helps memory
and recall.

Chunks of information rather than

discrete piece of information
 Organization

Principles • People have a need for

closure and organize
• Figure and ground perceptions to form a
• Grouping complete picture.
• Will often fill in missing
• Closure
pieces
• Incomplete messages
remembered more than
complete
 Discussion Question

• Do you agree you remember more of what

you have NOT completed?
• How might a local bank use this in their
advertising?
• How might your business use this in their
promotion?
 Interpretation

• People hold meanings

Stereotypes
Stereotypes related to stimuli
• Could you provide
Physical Appearances examples of
stereotypes?
Descriptive Terms

First Impressions United Colours Of Benetton

Halo Effect

Surf Commercial - Doordarshan.flv

 Interpretation

• Positive attributes of
Stereotypes
Stereotypes people they know to
Physical Appearances
Appearances those who resemble
them
Descriptive
Descriptive Terms
Terms • Important for model
selection
First
First Impressions
Impressions
Appearance of juice colour variations
Halo
Halo Effect
Effect had impact on perceived taste

Shape of package: round (abundance)

 Interpretation

• Verbal messages reflect

Stereotypes stereotypes

Physical Appearances
Succulent Italian seafood filet
Descriptive Terms Seafood filet
(elaborate name is positive)
First Impressions

Halo Effect
 Interpretation

• First impressions are

Stereotypes
Stereotypes lasting
Physical Appearances
Appearances • The perceiver is trying
Physical
to determine which
Terms
Descriptive Terms stimuli are relevant,
important, or predictive
First Impressions

Halo Effect
Effect
 Interpretation

• Consumers perceive and

Stereotypes
Stereotypes evaluate multiple
Physical Appearances
Appearances objects based on just
Physical
one dimension
Terms
Descriptive Terms
Righa Royal Hotel
First Impressions Marriott Hotel, New York

Halo Effect Licensing

 Product Positioning

• Establishing a specific image for a brand in the

consumer’s mind in relation to competing
brands
• Conveys the product in terms of how it fulfills
a need
• Successful positioning creates a distinctive,
positive brand image
 Packaging as a Positioning Element

• Packaging conveys the image that the brand

communicates to the buyer.
• Color, weight, image, and shape are all
important.
• Repositioning might be necessary because:
– Increased competition
– Changing consumer tastes
 Perceptual Mapping

• An analytical technique that enables

marketers to plot graphically consumers’
perceptions concerning product attributes of
specific brands
Perceptual Mapping
 Positioning of Services

• Image is a key factor for services

• Services often want a differentiated
positioning strategy to market several
versions of their service to different markets.
Perceived Price and Perceived Quality

• Reference prices – used as a basis for

comparison in judging another price
– Internal
– External
• Perceived Quality of Products
– Intrinsic vs. Extrinsic Cues
– WHY WE BUY .mp4
 Three Pricing Strategies
Focused on Perceived Value
Pricing Strategy Provides Value By… Implemented As…

Satisfaction-based Recognizing and reducing Service guarantees

pricing customers’ perceptions of
uncertainty, which the intangible
nature of services magnifies
Relationship pricing Encouraging long-term
relationships with the company
that customers view as beneficial
Benefit-driven pricing
Flat-rate pricing
Long-term contracts
Price bundling

Efficiency pricing Sharing with customers the cost Cost-leader pricing

savings that the company has
achieved by understanding,
managing, and reducing the costs
of providing the service
Measuring Perceptions of
Brand Luxury
 Perceived Quality of Services
• Difficult due to
characteristics of
services
– Intangible
– Variable
– Perishable
– Simultaneously
Produced and
Consumed
• SERVQUAL scale used to
measure gap between
customers’ expectation
of service and
perceptions of actual
service
 Price/Quality Relationship

The perception of price as an indicator of

product quality (e.g., the higher the price,
the higher the perceived quality of the
product.)
 Discussion Questions

• When have you used price as an indicator of

quality?
• Were you correct?
 Retail Store Image

Brands Level of
Prices
carried service

Store Product
Clientele
ambiance assortment

Discounts
 Manufacturer’s Image

• Favorable image tied to new product

acceptance
• Companies sponsor community events to
enhance images
• Product and institutional images
 Perceived Risk

• The degree of uncertainty perceived by the

consumer as to the consequences (outcome) of a
specific purchase decision
• Types
– Functional Risk
– Physical Risk
– Financial Risk
– Social Risk
– Psychological Risk
– Time Risk
 How Consumers Handle Risk

• Seek Information
• Stay Brand Loyal
• Select by Brand Image
• Rely on Store Image
• Buy the Most Expensive Model
• Seek Reassurance
• http://www.nytimes.com/2009/01/31/busine
ss/media/31coke.html
• http://www.nytimes.com/2009/02/17/busine
ss/media/17adnewsletter1.html
Consumer Learning
 Learning

• The process by which individuals acquire the

purchase and consumption knowledge and
experience that they apply to future related
behavior

• A process which evolves

2
 Elements Of Learning Theories

• Physical exercise Need

– Bicycle
– Gym workout
– Jogging
– Playing favorite game
– Morning walk

Cues
 Elements Of Learning Theories

• Motivation: Unfilled needs lead to motivation

• Cues: Stimuli that directs motives
• Response: Consumer reaction to a drive or cue
• Reinforcement: Increases the likelihood that a
response will occur in the future as a result of
a cue

4
 Two Major Learning Theories

Behavioral Learning Cognitive Learning

• Based on • Learning based on

observable mental
behaviors information
(responses) that processing
occur as the result • Often in response
of exposure to to problem solving
stimuli

5
 Behavioral Learning

• Classical Conditioning
• Instrumental (Operant) Conditioning

6
 Behavioral Learning

• Classical Conditioning
– Humans & animals passive entities that could be
taught behavior through repetition
– Repetition is conditioning,
– referred as knee jerk or automatic response in
every day speech
• Classical music; DD documentary

7
 Classical Conditioning

• A behavioral learning theory according to

which a stimulus is paired with another
stimulus
• that elicits a known response
• that serves to produce the same response
when used alone.
 Cognitive Associative Learning

• Classical conditioning is seen as cognitive

associative rather than being a reflexive action
• Neo-Pavlovian conditioning
• A consumer is seen an information seeker
who uses logical and perceptual relations
among events, his/her preconceptions
• Preconditions:
– Forward conditioning ( CS precede US)
– Repeated pairings
– CS & US logically belong together
– CS novel & unfamiliar
 Strategic Applications of
Classical Conditioning
Basic Concepts
• Increases the
• Repetition association between the
• Stimulus conditioned and
generalization unconditioned stimulus
• Slows the pace of
• Stimulus forgetting
discrimination • How many repetitions?
• Advertising wear out is a
problem
– Cosmetic variation
Three hit theory (Absolut Vodka)
– Substantive variation
10
 Strategic Applications of
Classical Conditioning
Basic Concepts • Having the same response
to slightly different stimuli
• Useful in:
• Repetition – Why me-too products
• Stimulus succeed?
– Why pvt label is similar to
generalization national brands?
– product extensions
• Stimulus – family branding (LG,
discrimination Samsung)
– Licensing
Eg. Calvin Klein,

Counterfeit and look alikes

 Strategic Applications of
Classical Conditioning
Basic Concepts
• Selection of a specific
stimulus from similar
• Repetition stimuli
• Stimulus • Opposite of stimulus
generalization generalization
• Stimulus – Basis of positioning
discrimination unique ways to fill needs
– Product differentiation
by attribute that is
relevant, meaningful and
valuable to consumer
12
 Instrumental (Operant Conditioning)

• A behavioral theory of learning based on a trial-and-

error process,
• with habits forced as the result of positive
experiences (reinforcement) resulting from certain
responses or behaviors.
• Purchase: like/satisfied/Repeat/Loyalty
• A favourable experience is instrumental in learning

13
 A Model of Instrumental Conditioning

Any examples?
Reinforcement of Behavior

Positive Negative

• Positive • Negative
satisfactory unpleasant
outcome outcome
• Strengthen • Encourages
likelihood behavior
Are u Missing What’s Imp?
Fear Appeals
Punishment: Discourages beh; penalty
15
Reinforcement of Behavior

Extinction Forgetting

• A learned • The
response is no reinforcement is
longer reinforced forgotten
• The link (+ve CS) • Lack of use and
is eliminated not lack of
between reinforcement
stimulus and
reward

16
 Strategic Applications of
Instrumental Conditioning
• Customer Satisfaction (Reinforcement)
– Relationship marketing
• Reinforcement Schedules
– Total (continuous) Free ice-cream after dinner
– Systematic (fixed ratio) nth time (credit voucher/3
months)
– Random (variable ratio) lottery, sweepstakes &
contests
• Engender high rates of desired behaviour;
• resistant to extinction as hope eternal
17
 Strategic Applications of
Instrumental Conditioning
• Shaping
– Reinforcement performed before desired consumer beh
takes place
– Loss leader
– Car dealer gifts people
– Test drive
• Massed versus Distributed Learning
– Massed is concentrated in terms of time
– Initial learning is more and immediate impact
– Introduction of product
• Brand relationships Mont Blanc.mp4
18
 Modeling Or Observational Learning

Vicarious learning
A process by which individuals learn behavior
by observing the behavior of others and the
consequences of such behavior
Application:
Celebrity endorsement
Testimonial by common person
Child

19
 Information Processing and
Cognitive Learning
• Cognitive Learning
– Learning by thinking
and problem solving
– Learning involves
complex mental
processing of
information
– Emphasizes the role
of motivation and
memory
20
 Information Processing and
Cognitive Learning
• Individuals process information by attributes, brands,
comparison with brands
• Individuals differ in terms of imagery
– Ability to form mental images, affects ability to recall
information
• Measured with tests of imagery vividness (ability to evoke
clear images), processing style (visual or verbal), and
daydream content and frequency
• High cognitive ability individuals
– More attributes, alternatives
• More experience or familiarity with a product category
• Learn by analogy (familiar to judge not familiar)
21
 How consumers store, retain and
retrieve information?
• Short term store (working memory)
– Info is processed, held for brief period (30 sec)
– If rehearsal, is transferred in LT memory (2-10)
– 4-5 items can be stored; experiment pedestrian
• Long Term Store
– Possible to forget in few minutes after info
reaches L/T storage, generally, days/weeks/years
– A recent study of 3 generations of auto customers
discovered that people’s earliest memory
choice/preference; first impressions; examples
22
 How consumers store, retain and
retrieve information?
• Rehearsal and Encoding
– Amount of info available for delivery from ST to LT
memory depends on amount of rehearsal it is
given
– Failure to rehearsal leads to fading or loss of
information
– Competition of info also leads to fade or loss
– Purpose of rehearsal is to hold info long for
encoding to take place
– Encoding word/image to represent object (brand)
– Learning a picture less time than verbal info 23
Information Processing and Memory Stores

24
 Some Studies on Rehearsal & Encoding

• Encoding: word or visual image for perceived object

– Brand names, logos, characters
• A print ad with illustration & body copy
• Effect of visual & verbal ad
• High imagery copy
• Encoding of commercial is related to context of
programme
– Dramatic programme setting- low cognitive processing
commercials
• Viewers involved with prog respond positively to ads
 Retention
• Information is organized, reorganized as new links: Activation
• Long term store: network of nodes with links between them
• Total package of associations brought to mind when a cue is
activated is schema
• Consumers recode previously encoded to accommodate
additional information (chunking)
• Encoding and Retention
– Brand’s Sound symbolism (sound coveys meaning)
– Linguistic characteristics (unusual spelling)
• Information stored in long term memory
– Episodically (Order of occurrence)
– Semantically (Concepts)
• Organised in framework we integrate new data with
previous
 Retrieval
• Process by which we recover information from long-
term memory
• Marketers believe that consumer’s remember
benefits rather than attributes (Advt. Impli)
• Incongruent (or unexpected) message elements
relevant to ad message
– pierce consumer’s perceptual screens,
– Improve memorability of advt.
• Daag Achche hay
• Interference: Greater the number of competitive ads
– A distinctive brand image can reduce
Limited And Extended Information
Processing

•Low Involvement purchases

•High Involvement purchases

28
 Theoretical Models of Cognitive Learning

Decision- Innovation
Innovation
Generic Promotional Tricompetent Making Adoption Decision
Framework Model Model Model Model Process
Knowledge Attention Cognitive Awareness Awareness
Knowledge Knowledge
Evaluation Interest Affective Interest
Desire Evaluation Evaluation Persuasion
Behavior Action Conative Purchase Trial Decision
Postpurchase Adoption Confirmation
Evaluation

29
 Involvement
• Degree of personal relevance that the
product or purchase holds for that
customer.
• High involvement purchases are very
important to the consumer
• Low-involvement hold little relevance,
have little perceived risk, and have
limited information processing

30
 Hemispheral Lateralization and
Passive Learning
• Hemispheral lateralization
– Also called split-brain theory
• Left Brain
– Rational
The Right Brain vs Left Brain test.3gp
– Active
Left Brain Vs Right Brain.3gp
– Realistic
• Right Brain
– Emotional
– Metaphoric
– Impulsive
– Intuitive

31
 Involvement Theory & Consumer Relevance

• High Involvement Products

– Important to consumers
– High personal relevance
– Perceived risk is high
– Provokes extensive problem solving
• Automobile
• Dandruff Shampoo (high social risk)
– Narrow categorizers (fewer brands acceptable)
 Central and Peripheral Routes
to Persuasion

Central route to persuasion

• For high involvement purchases
• Requires cognitive processing
Peripheral route to persuasion
• Low involvement
• Consumer less motivated to think
• Learning through repetition, visual cues, and
holistic perception
 The Elaboration Liklihood Model
(ELM)

•Involvement is critical in determining which

route to persuasion will be effective
• High involvement leads to central route

34
 Measuring Involvement
• Involvement as cognitive measure as ego involvement,
risk perception and purchase importance
• Involvement as behavioral measure search for and
evaluation of product information
• Others argue for measure of degree of importance the
product has to the buyer
• Hence, It is measured on self administered measures
containing cognition, behavior on continuum and not
dichotomous scale
• Implication of involvement is high use central route
35
 Measuring Involvement with an Advertisement

Subjects respond to the following statements on a 7-point Likert scale ranging

from “Strongly Agree” to “Strongly Disagree.”
The message in the slogan was important to me
The slogan didn’t have anything to do with my needs
The slogan made me think about joining the military
The slogan made me want to join the military
While reading the slogan, I thought about how the military might be useful for me
The slogan did not show me anything that would make me join the military
I have a more favorable view of the military after seeing the slogan
The slogan showed me the military has certain advantages
The slogan was meaningful to me
The slogan was worth remembering
36
 Measures of Consumer Learning
Brand Loyalty
• Recognition and Recall Measures
• Brand Loyalty

37
 Measures of Consumer Learning
Brand Loyalty

Three groups of factors Four types of loyalty

• Personal degree of risk aversion or • No loyalty
variety seeking
• Covetous loyalty
• The brand’s reputation and availability
of substitutes • Inertia loyalty
• Social group influences • Premium loyalty

Brand Equity – the value inherent in

a well-known brand name

38
Consumer Attitude Formation and
Change

1
• As consumers we have large number of
attitudes towards products, advertisements,
direct mail, web site and retail stores
• When we are asked whether we like/dislike
we are asked to express our attitude

2
• Consumer researchers assess attitudes
– Questions
– Observing behaviors
• Not directly observable, inferred from what people say
and do
– All consumer behaviors like
• Consistency of purchases/recommend/belief
/evaluation/intention are related to attitudes
– What are Attitudes?

3
 A learned
predisposition to
behave in a
consistently
Attitude
favorable or
unfavorable manner
with respect to a
given object.

4
 What Are Attitudes?

• The attitude “object”

• Attitudes are a learned predisposition
• Attitudes have consistency
• Attitudes occur within a situation
Beliefs, Values And Attitudes

6
 Attitude
• Attitude formation and change
– Girl Child
– Safe Driving
– Helmet
– Jaago Re campaign
– Attitude towards life
• Conservative
• liberal
 Attitude
• How would you build positive attitude for a
simple saree?

• Sell commodity on reason but brands on

involvement
 Structural Models of Attitudes

• Tricomponent Attitude Model

• Multiattribute Attitude Model
• The Trying-to-Consume Model
• Attitude-Toward-the-Ad Model

Linkages in attitude formation

Mental predisposition: favourable/unfavourable; positive/negative
Person, concept, product, brand, service, idea, beliefs

Values are convictions about his/her mode of living 9

A Simple Representation of the Tricomponent
Attitude Model

Cognition

10
 The Tricomponent Model

Components The knowledge and

perceptions that are
• Cognitive acquired by a combination
of direct experience with
• Affective the attitude object and
related information from
• Conative various sources
Gold Plus
Himalayan brand
Horlicks lite
 The Tricomponent Model

Components A consumer’s
• Cognitive emotions or feelings
about a particular
• Affective product or brand
• Conative
Pond’s
Lakme
Garnier
 The Tricomponent Model

Components
The likelihood or
• Cognitive tendency that an
• Affective individual will
undertake a specific
• Conative action or behave in a
particular way with
regard to the attitude
object
 Attitude models that
examine the
Multiattribute composition of
Attitude consumer attitudes
Models in terms of selected
product attributes or
beliefs.
 Multiattribute Attitude Models

Types
• The attitude-toward- • Attitude is function of
object model the presence of certain
• The attitude-toward- beliefs or attributes.
behavior model • Useful to measure
• Theory-of-reasoned- attitudes toward
action model product and service
categories or specific
brands.
 Multiattribute Attitude Models

Types
• The attitude-toward- • Is the attitude toward
object model behaving or acting with
• The attitude-toward- respect to an object,
behavior model rather than the attitude
• Theory-of-reasoned- toward the object itself
action model • Corresponds closely to
actual behavior
Consumer Characteristics, Attitude,
and Online Shopping

Effectiveness & modern

Purchase con
Information abundance
Safe
Service quality
Delivery speed
Homepage design
Selection freedom
Company name familiarity
 Multiattribute Attitude Models

Types
• The attitude-toward- • Includes cognitive,
object model affective, and conative
• The attitude-toward- components
behavior model • Includes subjective
• Theory-of-reasoned- norms in addition to
action model attitude
A Simplified Version of the Theory of
Reasoned Action
 An attitude theory
designed to account
for the many cases
Theory of where the action or
Trying to outcome is not certain
Consume but instead reflects
the consumer’s
attempt to consume
(or purchase).

20
Selected Examples of Potential Impediments
That Might Impact Trying
POTENTIAL PERSONAL IMPEDIMENTS
• “I wonder whether my hair will be longer by the time of my wedding.”
• “I want to try to lose two inches off my waist by my birthday.”
• “I’m going to try to get tickets for the Rolling Stones concert for our anniversary.”
• “I’m going to attempt to give up smoking by my birthday.”
• “I am going to increase how often I run two miles from three to five times a week.”
• “Tonight, I’m not going to have dessert at the restaurant.”

POTENTIAL ENVIRONMENTAL IMPEDIMENTS

• “The first 1,000 people at the baseball game will receive a team cap.”
• “Sorry, the car you ordered didn’t come in from Japan on the ship that docked
yesterday.”
• “There are only two cases of chardonnay in our stockroom. You better come in
sometime today.”
• “I am sorry. We cannot serve you. We are closing the restaurant because of an
electrical problem.”

21
 A model that proposes
that a consumer forms
various feelings (affects)
and judgments
Attitude- (cognitions) as the result
of exposure to an
Toward-the-
advertisement, which, in
Ad Model turn, affect the
consumer’s attitude
toward the ad and
attitude toward the
brand.
 A Conception of the Relationship Among
Elements in an Attitude-Toward-the-Ad Model

23
 Issues in Attitude Formation

• How attitudes are learned

– Conditioning and experience
• Unconditioned stimulus is new product; estd brand is
conditioned stimulus; eg Marico’s After shower
– Knowledge and beliefs

24
 Issues in Attitude Formation

• Sources of influence on attitude formation

– Personal experience
– Influence of family
– Direct marketing and mass media
• Personality factors
– Need for cognition is high/low
– Heider’s balance theory of attitude
• Consumer
• Celebrity
• Brand associated
 Strategies of Attitude Change

Changing the Basic Motivational Function

Associating the Product with an Admired Group or Event

Resolving Two Conflicting Attitudes

Altering Components of the Multi attribute Model

Changing Beliefs about Competitors’ Brands

26
Changing the Basic Motivational Function

Ego-
Utilitarian
defensive

Value-
Knowledge
expressive

Nokia.mp4
Lifebuoy.mp4
Raymond .mp4
Colgate Total .mp4 27
 Attitude Change
• Altering Components of the Multi attribute
Model
– Changing relative evaluation of attributes
– Changing brand beliefs
– Adding an attribute
– Changing the overall brand rating
• Changing Beliefs about Competitors’
Brands

28
 Customer attitudes are
Elaboration changed by two
Likelihood distinctly different
Model routes to persuasion:
(ELM) a central route or a
peripheral route.

29
Elaboration Likelihood Model

30
 Behavior Can Precede or Follow
Attitude Formation

Cognitive Dissonance
Attribution Theory
Theory
• Holds that discomfort • A theory concerned
or dissonance occurs with how people assign
when a consumer holds causality to events and
conflicting thoughts form or alter their
about a belief or an attitudes as an outcome
attitude object. of assessing their own
or other people’s
behavior.

31
 Issues in Attribution Theory

• Self-Perception Theory
– Foot-in-the-Door Technique
– Door in the Face Technique
• Attributions toward Others
• Attributions toward Things
• How We Test Our Attributions
– Distinctiveness
– Consistency over time
– Consistency over modality
– Consensus

32
Reference Groups

Jayesh Aagja
 Reference Groups
Basic assumption:
“…our desire to “fit in” or to identify with
desirable individuals or groups is the primary
motivation for many of our purchases and
activities”

As a result:
“Reference groups strongly influence consumer
behavior”
 Reference Groups
Reference Groups:
“a person or a group of individuals who serve as a
point of reference with regard to the formation of
one’s beliefs, values, attitudes, aspirations and
behavior”

“any external influence that provides social cues”

 Personal & Group Influence

Influences: Types Of Influence Degree Of Influence

Groups Normative High Desire for Social acceptance
Transmission
Primary & Secondary Value expressive Little experience in situation
Formal Vs Informal Informational Conspicuousness
Aspirational vs Dissocative Complex product or luxury items

Low

Lifestyles
Behaviours
Purchases
Consumption
 Reference Groups
• Normative reference groups – Influence
development of referent's overall values
and behaviour. (e.g. family)

• Comparative reference groups – the

ones that the referent looks up to as a
role model for values, norms, and
behaviour (e.g. cricket players )
 Reference Groups
• Direct reference groups – the ones with
whom the referent has personal interaction
(e.g. friends)
• Indirect reference groups or aspirational
group– the ones with whom the referent has
no personal interaction (e.g. celebrities )
• Positive reference groups – the ones whose
influence on the referent is positive (e.g.
friends)
• Negative reference groups or avoidance
group– the ones whose influence on the
referent is negative (e.g. smokers )
 Forms of influence
• Information influence- Referent seeks information on
product, brand, service etc, to take informed decision.
Referent is unlikely to be influenced if he already has
information.
• Utilitarian influence- Referent is influenced by the
preferences of family or friends in terms of product,
brand, service etc, to be in conformity. There may be
implicit or explicit reward/punishment for
compliance/non-compliance
• Value expressive influence- Referent is influenced by
what he sees in terms of usage of product, brand,
service etc by his role model, celebrities etc. There is
no reward/punishment for compliance/non-compliance
 Three Types of Group Influence

Normative Informational Identification

Conformity

High High High

Neutral Neutral Neutral

Low Low Low

Importance of Degree to
Degree of reward
information which group
or sanction from
provided by attitudes/values
group
group guide individual
Normative: Utilitarian attitudes/values
Identification: Value-expressive
 Consumption Situations and
Reference Group Influences

Situation Behavioral response Type of influence

A friend mentions that Needing a new suit,

Brooks Brothers has a Tim visits a Brooks
good selection of suits. Brothers store.

At several friends’ homes, Tim decides to give Informational

Maxwell House coffee is Maxwell House a try.
served.

The best skier in the Tim buys a set of

group uses TRAK skis. TRAK skis.
 Consumption Situations and
Reference Group Influences

Two neighbors joke about Tim washes and

Tim’s car being dirty. waxes his car.

Tim notices that his For parties, but

friends buy premium beers not for home use,
though he can’t taste the Tim buys some Normative
difference. premium beers.

An ad stresses that “Even

your friends won’t tell Tim buys the
recommended
you” if you have bad mouthwash.
breath — they will just
ignore you.
 Consumption Situations and
Reference Group Influences

Over time, Tim notices Tim believes that a

that successful conservative image is
executives dress appropriate for execu-
conservatively. tives and develops a
conservative wardrobe.

Tim sees an ad showing Tim begins to serve

“smart young people
Identification
Spring Water.
on the way up” serving
Spring Water. Tim decides that health
foods are good for you
Many of Tim’s friends and begins to consume
them regularly.
regularly consume
health foods.
Reference Groups Change as
the Situation Changes
Reference group
influencing behavior
at Thanksgiving Day
Co- dinner celebration
workers at Immediate
weekend family
job

Intramural
Hometown
Individual basketball
friends
team

Friends from Consumer

apartment behavior Reference group
complex classmates influencing behavior
at “After the final
exam” celebration
 Reference Groups and conformity
When are RG most influential?
Product characteristics:
– Necessity vs. Luxury
Consumption characteristics:
– Public vs. Private consumption
Individual characteristics:
– Personality traits
Group characteristics:
– Coercive power - Ability to apply sanctions
Social characteristics
– Social restrictions
 Reference Groups and conformity

• When are RG most influential?

• Conspicuous Usage
• High relevance of product
• Low individual confidence
• Strong individual commitment to group
• Non-necessity/luxury product
 Reference Groups
When are RG most influential?
Necessity Luxury

HIGH
High

RG Influence on the brand purchased

visibility
(Conspicuo
us
products)

Low
visibility
(Less
conspicuou
s products)

LOW
LOW HIGH
RG influence on whether the product is
purchased
 Important reference groups
• Friends
• Shopping group or purchase pals
• Workgroups (Formal and Informal)
• Virtual communities (www.myspace.com)
• Brand communities (www.pepsizone.com)
• Consumer action groups (Investors
Association, consumers Forum etc)
 Virtual Communities
Virtual Communities: collection of consumers
whose online interactions are based upon
shared enthusiasm for and knowledge of a
specific consumption activity.

Jaago Re?
 Brand Communities
Brand community: A specialized, non-geographically
bound community, based on a structured set of
social admirers of a brand.

Harley Davidson
Sunsilk Gang Of Girls
A virtual community
Pepsi online community site
Coca Cola’s online community site
 Reference group appeals
• Celebrity appeal (Sania Mirza)
• Expert appeal (Sanjeev kapoor for Tata
salt)
• Common man (Chintamani in ICICI
Prudential)
• Employee spokesman (NR Murthy for
Infosys)
• Spokes character (Animated or fictional
character)
• Others (Specialty magazines, Indian
Dental Association etc)
 Opinion Leader
• A person who filters, interprets or provides
information for other group members
• Generalized opinion leaders are
individuals who do this consistently
across products and groups
• No evidence that such GOL exists, though
there tends to be correlation across
products and similar groups
Characteristics Of Opinion Leaders
• Most Personality Traits
• Demographics
• Social Class
Characteristics Of Opinion Leaders
• Differences
– Types of information source they rely on
– Involvement with mass media
– Gregariousness
– Associations with clubs/formal groups
– Price and style conscious
Features of Opinion Leadership
• High credibility
• Source of information and advice
• Limited to specific areas

E.g.. Car Mechanic for second hand cars

 Motives behind Opinion leader’s
role
• Self involvement (seeking attention, have
expertise)
• Product involvement (Have used the
product and hence have a view)
• Social involvement (wants to use his
knowledge for others’ benefit)
• Message involvement (Advts. Becoming
the focus of discussion)
 Types of Opinion leaders
• Generalised opinion leader (multi
subject/product knowledge –Financial services
consultant)
• Market maven (market knowledge rather than
product knowledge – Forex dealer)
• Surrogate buyer (Do some steps in the
consumer decision making process including
purchase- Portfolio managers, house brokers)
• Purchase pals (Those whose company is sought
for purchase)
 Techniques to identity opinion
leaders
• Self designating method (By talking to the
person concerned to measure his self
perception)
• Sociometric method (By asking opinion
seekers/respondents to identify them)
• Objective method (By including them in your
marketing activities and then decide after seeing
their impact on the sales from the circle of their
influence)
• Key informant method – By asking a key person
who may not be a member of the group but have
a good knowledge of the group. E.g.. Teacher in
a village
 Types of Communication Flow

Direct Flow Message

Source

Message Intended
Receiver
Message
2 Step Flow Source

Message

Opinion Intended
Leader Receiver
How Marketers Utilize Opinion Leaders

FREE SAMPLES

DIRECT CONTESTS AND/OR

PROMOTIONS TO THEM

FOCUS ON GREGARIOUS TYPES, CREATE

CURIOUSITY / INTEREST IN A PRODUCT OR BRAND.
 Creating Buzz
• Influencing opinion leaders
• Rationing the supply
• Exploiting icons (Bombay Marathon
involving stars)
• Being in the category list (Top 10, best
sellers list)
• Nurturing the grass roots (Bullet club by
Enfield)
Demographics And Social Class
 Population Statistics

Current Population of India in 2013 1,270,272,105 (1.27 billion)

Total Male Population in India 655,875,026 (655.8 million)
Total Female Population in India 614,397,079 (614.4 million)
Sex Ratio 940 females per 1,000 males
Age structure
0 to 25 years 50% of India's current population

Implications ???
By 2025, 65% population
 Demographic Dividend
• Demographic dividend accrues through several mechanisms:
1. Workers are more productive than dependants
2. Workers save more than dependants
3. Fertility decline that induces increased WAR can also
increase resources devoted to primary education and
health (Joshi and Schultz 2006).
 Demographic Dividend
• Bloom (U.S.), 20 % GDP growth 1970-2000
• Japan, 10%an estimated 10 percent
• In East Asia as a whole, Bloom suggests, the
demographic dividend drove one-third of the
region’s economic growth between 1965 and
1990
• England Industrial revolution
 Most Populous States
• UP 200 households (16%)
• Maharashtra 112 households (9%)
• Bihar 103 households (nearly 9%)
 Most Populous Urban States
• Maharashtra 50.8 million 13.5% urban
• Uttar Pradesh 44.4 million 11.8%
• Tamil Nadu 34.9 million 9.3%
 Most Populous Rural States
• Uttar Pradesh 155.1 million 18.6%
• Bihar 92.07 million 11.1 %
• West Bengal 62. 21 million 7.5%

Rural-urban composition
• 1901 89. 2 % 10.8%
• 1951 82.7% 17.3%
• 2011 68.8% 31. 2%
 Population growth rates
• Total 17.64%
• Males 17.19%
• Females 18.12%
• Source: NCAER “The Great Indian Middle
Class”; McKinsey Global Institute

Source: NCAER “The Great Indian Middle

Class”; McKinsey Global Institute
• The Indian urban growth story was until now
driven by metros
• This is now moving beyond metros into
smaller towns
Classification of Cities and Towns

Source: The Great Indian Middle Class, NCAER; McKinsey Global Institute
What do we mean by Social Class?
How It Relates to Consumer Behavior?
 The division of
members of a society
into a hierarchy of
distinct status classes,
Social Class so that members of
each class have either
higher or lower status
than members of other
classes.
 Social Classes in India
• Upper class
• Upper middle class
• Middle middle class
• Lower middle class
• Lower class
 Social Class Measurement

• Subjective Measures
– individuals are asked to estimate their own social-
class positions
• Objective Measures
– individuals answer specific socioeconomic questions
and then are categorized according to answers
• Reputational approach
– Based on information given by key community
members or informants.

17
 Social Class measurement - Objective
approach
• Single variable index – Based on one of the
socioeconomic variables such as education,
occupation, income, possessions
• Composite variable index – Based on
– Index of status characteristics - Occupation,
income source, house type and type of
neighbourhood
– Index of social position – Occupation and
education
– Index of socioeconomic status - Occupation,
income and education
 Problems in measurement
• Changes in demographic and family structures
• Difficulty in clubbing people in social class hierarchy
based on their education, income etc
• Pressure to maintain one’s lifestyle w.r.to their social
class irrespective income (e.g. Underprivileged
household)
• Intergenerational shift in social class
• Measurement of variables only w.r.to male and not
working wife
 Objective Measures
• Occupation
• Education
• Income Or wealth ?
 Objective Measures
• Composite Measures
– Urban Area
– Rural Area
 SEC In India
• SEC_old_U.htm
• SEC_R.htm SEC.docx

22
New SEC

23
• How Do We Classify a Household in new
system?

24
25
The Grid

26
The Grid

27
 Social Class Mobility

• Upward mobility Deccan Airlines

• Downward mobility
• Rags to riches?

28
 A composite
segmentation
strategy that uses
both geographic
variables (zip codes,
Geodemographic
Clusters
neighborhoods) and
demographic
variables (e.g.,
income, occupation)
to identify target
markets.
29
 Households Classification
• Globals > Rs 20 Lakhs
• Strivers Rs 10-20 Lakhs
• Seekers Rs 5-10 Lakhs
• Aspirers Rs 2-5 Lakhs
• Deprived Rs < 2 Lakhs

Source : Mckinsey Global Institute India; Urbanisation Econometric Model 2010

 Rethink
• Building intimacy and fostering loyalty
• Innovating future offerings
• Rethink engagement models
• Mass personalization
 Schizophrenic India
• Consumer India has five consumer classes
• Urban and rural India are different worlds evolving at
different speeds
• Different states are totally different from one another
• There are four age cohorts with two distinct
consumption ideologies and shades in between: India’s
pre-independence generation, first post-independence
generation, both within socialist ethos. Now children
post liberalization and the next generation confident
about its path
• 5 economies: Agriculture, Manufacturing, Services,
Government and IT
 The Affluent Consumer
• Growing number of households can be
classified as “mass affluent” after PLG
post 1991
• Some researchers are defining affluent
to include lifestyle and psychographic
factors in addition to income

33
 The Working Class?

• Households earning less than middle class

• These consumers tend to be more brand loyal
than wealthier consumers.

34
 Household Potential Index
• What is premium? A car or a Video Camera? Colour TV or a
handy cam?
• Right, it is Video Camera or a handy cam
• Something “wanted by many” but “consumed by few”
definition of Premiumness

Premuimness is defined as the inverse of penetration.

• The concept of HPI allocates high scores for less penetrated
product categories and services. On the other hand, lower
scores to higher penetrated categories or mass consumed
categories
 Household Potential Index
50 Variables used to construct the HPI
Categories Description
18 Durables Entertainment 3
Transportation 2
Kitchen Durables 7
Others 6
22 FMCG s Personal Products 8
Household Products 4
Food Products 10
4 Services Telephone, C&S, Internet and Banking
6 Demographic Variables Education 3
House 2
Working members
 The Techno Class

• Having competency with technology

• Those without are referred to as
“technologically underclassed”
• Parents are seeking computer exposure for
their children
• Geeks now viewed as friendly and fun

39
 Defining Rural India
Organisation Definition Limitations
NSSO ( Population less than 5000 • rural not defined
Census) • Population density < 400 / Sq Km
• 75 percent of the male working population
is engaged in agriculture
•No Municipal corporation / board

Planning • Towns upto 15,000 population are Town characteristics

Commission considered rural not defined
 Cont’d
LG Electronics All places other than the 7 Only clarifies what are the
metros cities

NABARD All locations with a Village & town

population upto 10, 000 characteristics not
considered “ rural” defined

Sahara Commercial Population characteristics

establishments located in unknown
areas servicing less than
1000 population
FMCG COS Any area with primarily
agricultural based
occupation and with a
population of less than
20,000 as rural

Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S (
2007)
 (Cont.)
Durables & Population upto
Agri-input cos 20,000 is rural

Marketing Organised
Parlance distribution &
media reach
ends
Jha, 2003 Urban, Rural & Rurban being
Rurban the overlap
between urban
& rural
 Defining Rural Marketing
National Commission NGOs Corporate Rural
on Agriculture Marketing Definition
Decisions to produce Marketing products Function that
saleable farm produced in rural manages all activities
commodities areas to urban areas involved in assessing,
involving all the stimulating and
aspects of the market Marketing products converting the
system or structure, produced in rural purchasing power of
both functional and areas in rural markets rural consumers into
institutional, based effective demand for
on technical & specific products and
economic services to create
considerations and satisfaction & a
includes the pre & better standard of
post harvest living for achieving
operations. organisational goals.
 Consumer Behavior and
Social Class
• Values, Attitude and Behavior
• Clothing, Fashion, and Shopping (avoid stores)
• The Pursuit of Leisure
• Social Class and Communication
– See world through personal experience
whereas upper see broader view of world
– Regional difference in terminology

Could you give some Indian Examples

44
 Social Class

• Each Class tend to behave more alike.

• People are perceived to be occupying
superior or inferior positions.
• Social class is indicated by a cluster of
variables rather than one variable
– occupation, income, wealth, education, & value
orientation
• Individuals can move up or down the social
class ladder during their lifetimes.
• This mobility depends on how rigid the
stratification in a society.
 Social Class

• Social Classes show distinct product and brand

preferences in many areas, including
» Clothing,
» Home Furnishings,
» Leisure Activities,
» Media Preferences etc.
 Call Centre Couple Trend
• 1947
• 1991
• New Middle Class (NMC)
– Call Centre Couple
– Impact on family structure, markets and
workplace
• Democratization
 Call Centre Couple Trend
• Young family
• College degrees
• Have to work to economically survive and meet
aspirations
• Neither wants to have their parents with them
• Like DINKS
• Time scarce
• Cannot live without cell or texting
• 08.00 to 08.00
• Sunday very very imp
 Implications
• Outsourcing comes home
– What about hobbies?
• Goodbye to neighborhood traditional store
• When wants becomes needs
• Blurring roles and responsibilities
• Friendship will replace kinship
• Spiritualism coexists with materialism
Influence Of Culture on Consumer
Behaviour
 The sum total of learned
beliefs, values, and
customs that serve to
Culture
regulate the consumer
behavior of members of
a particular society.

2
 Culture
• ‘Belief and values’: accumulated feelings and
priorities: things and possessions.
• Beliefs: mental/verbal statements: person’s
particular knowledge and assessment (product,
person, store, brand)
• Values: are beliefs but
– Relatively few
– Guide for culturally appropriate behaviour
– Enduring/difficult to change
– Tied to specific objects/situations
– Widely accepted by members of society

Beliefs and values Specific attitudes General and specific values

Customs: overt: acceptable behaviour; any examples ???

 Culture
• Three levels of subjective culture relevant for
consumer behaviour
• Supranational level: cross cultural: regional S
Asia
• National : shared core values, customs,
personality and factors captures “’national
character’
• Group level: Sub cultures, reference group
level differences
A Theoretical Model of Culture’s Influence on
Behavior

5
 The Invisible Hand of Culture

Each individual perceives the

world through his own
cultural lens

6
 Culture Satisfies Needs

• It offers order, direction and guidance in

all stages of problem solving
• Provides rules about when to eat, where
to eat; what is appropriate to eat for
breakfast, lunch and dinner
• Food and Clothing
• Needs vs. Luxury

7
 How Culture is Learned?
• Three ways
– Formal
– Informal
– Technical

– Marketing influences cultural learning (how???)

 Culture Is Learned
Issues

• Enculturation and • Enculturation

acculturation – The learning of one’s
own culture
• Language and
• Acculturation
symbols – The learning of a new or
• Ritual foreign culture
• Sharing of culture

9
 Culture Is Learned
Issues • Without a common
language ,shared meaning
could not exist
• Enculturation and
acculturation • Marketers must choose
appropriate symbols in
• Language and
advertising
symbols
• Marketers can use
• Ritual
“known” symbols for
• Sharing of culture associations
Semiotics
10
 Culture Is Learned
Issues
• A ritual is a type of
symbolic activity consisting
• Enculturation and of a series of steps
acculturation • Rituals extend over the
• Language and human life cycle
symbols • Marketers realize that
• Ritual rituals often involve
• Sharing of culture products (artifacts)

11
 Selected Rituals and Associated Artifacts
SELECTED RITUALS TYPICAL ARTIFACTS

Wedding White gown (something old, something

new, something borrowed, something
blue)
Birth of child U.S. Savings Bond, silver baby spoon
Birthday Card, present, cake with candles

50th Wedding anniversary Catered party, card and gift, display of

photos of the couple’s life together
Graduation Pen, U.S. Savings Bond, card, wristwatch

Valentine’s Day Candy, card, flowers

New Year’s Eve Champagne, party, fancy dress

12
 Culture Is Learned

Issues • To be a cultural
• Enculturation and characteristic, a belief,
acculturation value, or practice must be
shared by a significant
• Language and
portion of the society
symbols
• Culture is transferred
• Ritual
through family, schools,
• Sharing of Culture houses of worship, and
media, also virtual
community
 Culture is Dynamic

• Evolves because it fills needs

• Certain factors change culture
– Technology
– Population shifts
– Resource shortages
– Wars
– Changing values
– Customs from other countries

14
 The Measurement of Culture

• Content Analysis
• Consumer Fieldwork
• Value Measurement
Instruments

15
 A method for
systematically analyzing
the content of verbal
and/or pictorial
Content
communication. The
Analysis
method is frequently
used to determine
prevailing social values
of a society.

16
 Consumer Fieldwork

• Field Observation
– Natural setting
– Subject unaware
– Focus on observation of behavior
• Participant Observation

17
 Value Measurement Survey Instruments

Rokeach Value Survey Values and Lifestyles

List of Values (LOV)
(RVS) (VALS)
• A self-administered • A value • A value
inventory measurement measurement based
consisting of instrument that asks on two categories:
eighteen consumers to self-definition and
“terminal” values identify their two resources
(i.e., personal most important
goals) and eighteen values from a nine-
“instrumental” value list that is
based on the
values (i.e., ways of
terminal values of
reaching personal the Rokeach Value
goals) Survey

18
Values in the
Rokeach
Survey
(cont’d)

19
20
 Mean Value Rankings of
Executives, Union
Members, and Activists

Source: Based on W. C. Frederick and J. Weber, “The Values of

Corporate Managers and Their Critics: An Empirical Description and
Normative Implications,” in W. C. Frederick and L. E. Preston (eds.)
Business Ethics: Research Issues and Empirical Studies (Greenwich,
CT: JAI Press, 1990), pp. 123–44.
EXHIBIT
4-4
 Criteria for Value Selection

• The value must be pervasive.

• The value must be enduring.
• The value must be consumer-related.

22
Means End Chain

23
 Means End Chain

• the full range of attributes (A), consequences

(C), and values (V)
• Ladder from respondent in diet soft drink
study
– (V) self esteem
– (C) look good in clothes
– (C) maintain my figure
– (A) less calories
– (A) not syrupy
24
 Means End Chain

• Ladder from respondent in luxury car study

– (V) self esteem
– (C) prestige
– (C) willing to pay a little more
– (A) quality
– (A) sleek look

25
 Indian Core Values
• Family Orientation
• Savings Orientation
• Festivities
– Navratri, Diwali & Uttarayan (Gujarat)
– Durga Puja (W Bengal)
– Pongal (Tamil Nadu)
– Onam (Kerala)
– Raksha Bandhan
 Indian Core Values (Cont.)
• Mythology
– Branded toys with cultural themes
• Food habits
 Toward a Shopping Culture

• Is shopping what we do to create value in our

lives?
• The younger generation is shopping more
• This has an effect on credit card debt

28
Thank You