Unit 1

Introduction

Concept of Consumer Behavior.

Any individual who purchases goods and services from the market for his/her
end-use is called a consumer.

Consumer behavior is the study of how individual customers, groups or

organizations select, buy, use, and dispose ideas, goods, and services to satisfy
their needs and wants. It refers to the actions of the consumers in the
marketplace and the underlying motives for those actions. Marketers expect that
by understanding what causes the consumers to buy particular goods and
services, they will be able to determine which products are needed in the
marketplace, which are obsolete, and how best to present the goods to the
consumers.

Definition:

1. According to Engel, Blackwell, and Mansard, ‘Consumer behavior is the

actions and decision processes of people who purchase goods and services for
personal consumption’.

2. According to Louden and Bitta, ‘Consumer behavior is the decision process

and physical activity, which individuals engage in when evaluating, acquiring,
using or disposing of goods and services.

Importance of Consumer Behavior

Understanding consumer behavior is essential for a company to find success for

its current products as well as new product launches. Every consumer has a
different thought process and attitude towards buying a particular product. If a
company fails to understand the reaction of a consumer towards a product, there
are high chances of product failure.

Due to the changing fashion, technology, trends, living style, disposable

income, and similar other factors, consumer behavior also changes. A marketer
has to understand the factors that are changing so that the marketing efforts can
be aligned accordingly.

What is the importance of consumer buying behavior? This article outlines

several of them.

1. Consumer Differentiation:

In marketing, consumer differentiation is a way to distinguish a consumer from

several other consumers. This helps to make a target group of consumers with
the same or similar behavior.

Though you have a targeted customer demographic in your business, you can
still have variations between individual customers. Each group of consumers are
different and their needs and wants differ from other groups.  When a marketer
is knowledgeable about differentiation of each group of consumers, he can
design separate marketing programes.

Consumer differentiation will help to tailor your strategies to the needs of

varying customer groups. When consumer differentiation is done, you can
expand the width and breadth of your services. You will be able to effectively
serve a wider group of people.

2. Retention of Consumers:
“Consumer behavior is of most importance to marketers in business studies as
the main aim is to create and retain customers” says Professor Theodore Levitt
(Kumar, 2004). 

Consumer behavior is not just important to attract new customers, but it is very
important to retain existing customers as well. When a customer is happy about
a particular product, he/she will repeat the purchase. Therefore, marketing the
product should be done in such a way that it will convince customers to buy the
product again and again.

Thus, it is very evident that creating customer and retaining them is very
important. This can be done only by understanding and paying attention towards
the consumer’s buying behavior.

3. Design Relevant Marketing Programe:

Understanding consumer behavior allows you to create effective marketing

campaigns. Each campaign can speak specifically to the separate group of
consumers based on their behavior.

For example, while targeting kids market, you may have to look out for venues
such as TV ads, school programes and blogs targeting young mothers. You will
need to take different messaging approaches for different consumer groups. 

A study of consumer behavior enables the marketers to understand what

motives consumers to make purchases. Furthermore, the same  motive can be
utilized in advertising media to stir the desire to make a purchase.
Moreover, marketers should take decisions regarding the brand logo, coupons,
packing and gifts on the basis of consumer behavior. 

4. Predicting Market Trend:

Consumer behavior analysis will be the first to indicate a shift in market trend.
For example,  the recent trend of consumers is towards environment friendliness
and healthy food.  This changing market trend was observed by many brands
including McDonalds.  Based on the consumer behavior, McDonald’s brought
healthy food options. 

By conducting consumer behavior study, a company saves a lot of resources

that might otherwise be allocated to produce a product that will not be sold in
the market. For example, in summer a brand will not waste its resources for
producing a product that will not sell in summer. Based on consumer behavior
the company decides on production strategy which will save on warehouse costs
and marketing costs.

5. Competition:

One of the most important reasons to study consumer behavior is to find out
answers to some of the questions:

 Is the customer buying from your competitor?

 Why is a consumer buying from your competitor?
 What features attracts a consumer to your competitor products?
 What gaps are your consumers identifying in your products when
compared to your competitors? 

Studying consumer behavior facilitates in understanding and facing

competition. Based on consumers’ expectations, your brand can offer
competitive advantages. 

6. Innovate New Products:

We all know some of the big names such as New Coke, Crystal Pepsi, Colgate
Kitchen Entrées, Earring Magic Ken Doll, and Wheaties Dunk-a-Balls Cereal.
Can you see the similarities in these products? Yes, they all failed!!

The sad truth is that most new products and new ideas end up in failure. There
is an estimate of new product failures – they range from 33% to 90% based on
the kind of industry.

Companies consistently strive hard to improve the success rate of their new

products or new ideas. One of the most important ways is to conduct sound and
thoughtful consumer behavior study. 

With the help of consumer behavior analysis, Nike realized that most of its

target audience is not professional athletes, but many of them were striving to
be more like them. So at the 2012 Olympics in London, Nike introduced a
campaign to encourage athletics called  ‘Find Your Greatness’. It aimed to
promote the aspirations of being an athlete, not just with high-performing
athletes, but wanted to include all people regardless of their physical capability.
The campaign was well planned and was data-driven, of course, carefully
analyzed before taking any action. This message inspired many consumers and
had enormous appeal for target consumers.  

7. Stay Relevant in the Market

When the world is changing as rapidly as it is happening today, the biggest

challenge we all face is staying relevant to our target market. And do you know
what is the main reason behind the rapid changes? It is the ever-changing
behavior of our customers.

Today’s consumers have greater choices and opportunities, which means they
can easily switch to a company that offers better products and services.  
“The pre-eminent skill required to shift ahead in the twenty-first century is the
ability to see and seize.” -Adamson and Steckel, authors of Shift Ahead.

Losing relevance will only cost the company its market share. Haven’t we
seen Sony Walkman failing to stay relevant in the digital music era, and the taxi
industry doom with no preparedness to battle the UBER uprise!!

8. Improve Customer Service

Consumers require different levels of customer service, and understanding the

differences within your customer base will help you provide the most
appropriate service for individual needs.

For example, if you own an electronics store, high school or college students
who buy a new laptop are more likely to understand the features they’re looking
for than a person buying his first computer. With the first demographic, your
service goal will be to provide information about the latest trends in technology,
while with the second demographic, you’ll need to spend more time educating
the customer, finding out what his specific needs are, and even teaching him
how to use the features of his new electronic device.

Difference between Consumer Buying Behavior and Organizational Buying

Behavior

Organizational Buying
Bases Consumer Buying Behavior
Behavior
Purpose of The individual consumers buy The organizations buy goods
Buying goods and services for ultimate and services for their business
use or satisfy their needs. The needs. The buying purpose of
buying purpose of such them is to earn profit by using
consumers is not to earn profit and reselling the goods and
 Organizational Buying
Bases Consumer Buying Behavior
Behavior
by reselling the goods and
services.
services.
Organizational buying is done
in large quantities. There are
several reasons why
Although consumers buy organizations must buy the
various kinds of goods, the goods they need in bulk. In the
quantity of goods remains first place, they use large
Quantity small. They buy only the quantities of each item and
necessary quantity of goods, must maintain inventories at a
which they need for regular level high enough that they will
use. not run out of stock. Secondly,
it is cheaper and more efficient
to make large-volume
purchases.
Organizational purchasing is a
Consumer buying takes
rational process because the
decision by consumers
purchasing behavior of
themselves. Sometimes they
Purchase organizations is guided by
can consult with family
Decision objective factors having to do
members and friends. They
with production and
need not fulfill any formality
distribution. It takes long time
like organizational buying.
than consumer buying.
Market Most of the consumers may not Organizational purchase
Knowledge have adequate knowledge and criteria are specifically defined.
information about market Organizational buyers usually
 Organizational Buying
Bases Consumer Buying Behavior
Behavior
have fewer brands to choose
from than do individuals, and
their purchases must be
situation, available goods and
evaluated on the basis of
services, etc. The educated
criteria that are specific to the
customers may be aware and
overall needs of the
have knowledge about market
organization. The
and goods.
organizational buyers have full
knowledge of market and
suppliers.
Consumers buy many goods to Organizational buyers buy
Types of
use to satisfy personal or limited goods to use to conduct
Goods
family needs. business.
Many individuals are involved
in the buying process. Within
large organizations, rarely is
one individual solely
Consumer buying behavior is
responsible for the purchase of
effected by age, occupation,
Effect products for the purchase of
income level, education,
products or services. Instead,
gender etc. of consumers.
many individuals and
departments may be involved
and departments may be
involved in the buying process.
Buying Process The consumer buying process Buyers and sellers in the
is very simple. No need to organizational market must
 Organizational Buying
Bases Consumer Buying Behavior
Behavior
fulfill any formality. There is
also no need to maintain maintain extensive contact.
extensive contact with sellers.

Scope of Consumer Behavior:

1) Consumer behavior and marketing management: Effective business

managers realize the importance of marketing to the success of their firm. A
sound understanding of consumer behavior is essential to the long run success
of any marketing program. In fact, it is seen as a cornerstone of the Marketing
concept, an important orientation of philosophy of many marketing managers.
The essence of the Marketing concept is captured in three interrelated
orientations - consumers’ needs and wants, company integrated strategy.

2) Consumer behaviour - Non-profit and social marketing: In today's world

even the non-profit organisations like government agencies, religious sectors,
universities and charitable institutions have to market their services for ideas to
the "target group of consumers or institution." At other times these groups are
required to appeal to the general public for support of certain causes or ideas.
Also they make their contribution towards eradication of the problems of the
society. Thus a clear understanding of the consumer behaviour and decision
making process will assist these efforts.

3) Consumer behaviour and government decision making: In recent years

the relevance of consumer behaviour principles to government decision making.
Two major areas of activities have been affected:
i) Government services: It is increasingly and that government provision of
public services can benefit significantly from an understanding of the
consumers, or users, of these services.

ii) consumer protection: Many Agencies at all levels of government are

involved with regulating business practices for the purpose of protecting
consumer’s welfare.

4) Consumer behavior and DE marketing: It has become increasingly clear

that consumers are entering an era of scarcity in terms of some natural gas and
water. These scarcities have led to promotions stressing conservation rather than
consumption. In other circumstances, consumers have been encouraged to
decrease or stop their use of particular goods believed to have harmful effects.
Programs designed to reduce drug abuse, gambling, and similar types of
conception examples. These actions have been undertaken by government
agencies non-profit organizations, and other private groups. The term "DE
marketing" refers to all such efforts to encourage consumers to reduce their
consumption of a particular product or services.

5) Consumer behavior and consumer education: Consumer also stands to

benefit directly from orderly investigations of their own behavior. This can
occur on an individual basis or as part of more formal educational programs.
For example, when consumers learn that a large proportion of the billions spend
annually on grocery products is used for impulse purchases and not spend
according to pre-planned shopping list, consumers may be more willing to plan
effort to save money. In general, as marketers that can influence consumers'
purchases, consumers have the opportunity to understand better how they affect
their own behavior.

Applications of consumer behavior:

1) Analyzing market opportunity: Consumer behavior study help in
identifying the unfulfilled needs and wants of consumers. This requires
examining the friends and conditions operating in the Marketplace, consumer’s
lifestyle, income levels and energy influences. This may reveal unsatisfied
needs and wants. Mosquito repellents have been marketed in response to a
genuine and unfulfilled consumer need.

2) Selecting target market: Review of market opportunities often helps in

identifying district consumer segments with very distinct and unique wants and
needs. Identifying these groups, behave and how they make purchase decisions
enable the marketer to design and market products or services particularly
suited to their wants and needs. For example, please sleep revealed that many
existing and potential shampoo users did not want to buy shampoo fax price at
rate 60 for more and would rather prefer a low price package containing enough
quantity for one or two washers. This finding LED companies to introduce the
shampoos sachet, which become a good seller.

3) Marketing-mix decisions: Once unsatisfied needs and wants are identified,

the marketer has to determine the right mix of product, price, distribution and
promotion. Where too, consumer behavior study is very helpful in finding
answers too many perplexing questions. The factors of marketing mix decisions
are: i) product ii) price iii) promotion iv) distribution

4) Use in social and non-profits marketing: Consumer behavior studies are

useful to design marketing strategies by social, governmental and not for profit
organizations to make their programs more effective such as family planning,
awareness about AIDS.

DE Marketing

Demarketing is a process in which a company develops strategies to reduce the

consumption of a product. While traditional marketing often encourages
customers to purchase more products, demarketing aims to limit a product's
reach. Companies can use it in a variety of situations to control product use,
price or demand. They may use these strategies for many reasons, including to
conserve resources or increase demand. These marketing strategies are aimed at
reducing demand but not destroying it. These strategies can be adopted by either
private or public organizations.

Factors or Reasons for demarketing can be one or more of the following:

1. There are not enough resources, especially in case of natural resources, and
hence must be preserved

2. The company cannot supply large quantities to match the demand

3. The cost of selling in a particular region is unusually high

4. Poor distribution channel/ no distribution channel available

5. The cost of promotion is unusually high

The last three can lead to reduced profit margin for the company; hence it would
be in the company’s interest to avoid selling in such scenarios.

Demarketing Strategies

Some of the common demarketing strategies are

1. Increased prices

Increase in price can lead to reduction in demand.

2. Decreased advertising/ promotional spend

Reduced promotion can lower the demand for product offering

3. Product redesigning

Redesigning and changing the value proposition of the product can lead to
demand reduction

4. Providing lesser margins (to retailers etc.)

A product goes through the supply chain where different stakeholders are
involved. If the margin and value for some of the stakeholders is controlled then
the demand can reduce.

Demarketing Example

IPCL-Indian Petrochemicals Corporation Limited uses the demarketing strategy

to encourage people to use oil judiciously by the tagline “Save Oil, Save India”.

A very common example of demarketing is followed by five-star hotels that

aspire to maintain exclusivity. Right from having two wheeler parking lots at a
distance to having impeccably dressed guest associates to the high priced menu;
maximum efforts are made to discourage the common man from using their
services and thus maintain their exclusivity.

Another example of demarketing would be the efforts made by the TATA group
to discourage consumers from buying Tata Nano. Since the demand for Tata
Nano far outweighed the supply, Tata Group completely stopped the promotion
of Tata Nano and rather started promoting other products by the Tata group.
Similar was the case when customers were discouraged by Maruti from buying
the Maruti Xtillo and rather opt for Maruti A-Star – which was recently
launched.

Importance of consumer behaviour in marketing management

The importance of consumer behaviour in marketing management is also known
as the significance of consumer behaviour. It includes various points such as:

1. To design production policies,

2. Know the effect of price on buying,
3. Exploit the market opportunities,
4. Design marketing mix,
5. Implement STP strategies,
6. Helps in understanding diversified preference,
7. Understanding of various roles played by consumer,
8. Results in consumer satisfaction.

1. To design production policies-

This is the first importance of consumer behaviour and it means that all the
production policies have designed taking into consideration the consumer
preference so that product can be successful in the market.

In every business, the main motive is to enhance the production and as well as
sales of the company and to do all these, any company or business has to win
the trust of its customers and studying about their tastes, likings, and
preferences.

2. Know the effect of price on buying-

This is the second consumer behaviour importance and it means that consumer

behavior can help in understanding the effect of price on buying. Whenever the
price is moderate on cheap more and more customer will buy the product.

After the time of production, there comes a time in which the company has to
decide what the price of our product will be because it helps to divide the
categories of the customer and also helps to attain more sales.
3. Exploit the market opportunities-

This is the third importance or significance of consumer behaviour and it means

that the change in consumer preference can be a good opportunity for the mark
to bring something which cannot as a revaluation in the market. For Example–
When palm pops introduced in the market, it was successful due to the stylish
and sleek design.

4. Design marketing mix-

This is the fourth importance of consumer behaviour and it means that

consumer behavior is very much vital in designing and approaching marketing
mix to be chosen (product, price, place, and promotion).

The product should be valuable, the price should be moderate, place distribution
should be intensive and an appropriate. Promotion mechanism should be there.

5. Implement STP Strategies-

This is the fifth importance of consumer behaviour and it means that the
segmentation, targeting, and positioning strategies are implemented by
understanding the behaviour of consumers towards the various brands.

The products are targeted grouping the customers having common taste and
preference and finally positioned in the market. Thus, building a positive image
of the product of a company related to the competitors and as well as help to
beat them also.

6. Helps in understanding diversified preferences-

This is the sixth importance of consumer behaviour and it means that the
consumer preferences are diversified in nature and their keep on changing over
a particular period of time. Nowadays consumers are more value conscious and
they want to extract the maximum benefits from a particular product of a brand.

7. Understanding of various roles played by consumers-

This is the seventh importance and it means that there are various roles played
by the consumers in the consumer decision-making process. These roles are
initiators, influencers, decider, users, buyers, and gatekeeper. The steps of the
consumer decision-making process can be described are as follows: -

1. Need Recognition,
2. Information Search,
3. Evaluation of Alternatives,
4. Purchase Decisions,
5. Post Purchase Behaviour.

8. Results in customers satisfaction-

This is the eighth importance of consumer behaviour and it means when the
designed product is matching the expectations of the customer than they result
in customer satisfaction. In case the product is exceeding the expectations of the
customer then its result in customer delight.

In an organization, there are various departments like purchase, personnel,

finance, production, marketing and all departments have a motive to satisfy the
customer needs and wants.
 Unit 2:

Consumer Purchase Decision Process

Consumer Decision Process in High-involvement and Low involvement

Purchase Situations.

As you have seen, many factors influence a consumer’s behavior. Depending on

a consumer’s experience and knowledge, some consumers may be able to make
quick purchase decisions and other consumers may need to get information and
be more involved in the decision process before making a purchase. The level of
involvement reflects how personally important or interested you are in
consuming a product and how much information you need to make a decision.
The level of involvement in buying decisions may be considered a continuum
from decisions that are fairly routine (consumers are not very involved) to
decisions that require extensive thought and a high level of involvement.
Whether a decision is low, high, or limited, involvement varies by consumer,
not by product, although some products such as purchasing a house typically
require a high-involvement for all consumers. Consumers with no experience
purchasing a product may have more involvement than someone who is
replacing a product. You have probably thought about many products you want
or need but never did much more than that. At other times, you’ve probably
looked at dozens of products, compared them, and then decided not to purchase
any one of them. When you run out of products such as milk or bread that you
buy on a regular basis, you may buy the product as soon as you recognize the
need because you do not need to search for information or evaluate alternatives.

Low-involvement decisions are more straightforward, require little risk, are

repetitive, and often lead to a habit. In effect, these purchases are not very
important to the consumer. Financial, social, and psychological risks are not
nearly as great. Consumers often engage in routine response behavior when they
make low-involvement decisions—that is, they make automatic purchase
decisions based on limited information or information they have gathered in the
past. For example, if you always order a Diet Coke at lunch, you’re engaging in
routine response behavior. You may not even think about other drink options at
lunch because your routine is to order a Diet Coke, and you simply do it.
Similarly, if you run out of Diet Coke at home, you may buy more without any
information search. Some low-involvement purchases are made with no
planning or previous thought. These buying decisions are called impulse
buying.

High-involvement decisions carry a higher risk to buyers if they fail, are

complex, and/or have high price tags. These decisions are closely tied to the
consumer’s ego and self-image. They also involve some risk to the consumer.
This may include financial risk (highly priced items), social risk (products that
are important to the peer group), or psychological risk (the wrong decision may
cause the consumer some concern and anxiety). In making these decisions,
consumers generally feel it is worth the time and energy needed to do research
and consider solution alternatives carefully. A car, a house, and an insurance
policy are examples. These items are not purchased often but are relevant and
important to the buyer. Buyers don’t engage in routine response behavior when
purchasing high-involvement products. Instead, consumers engage in what’s
called extended problem solving, where they spend a lot of time comparing
different aspects such as the features of the products, prices, and warranties.
High-involvement decisions can cause buyers a great deal of post purchase
dissonance (anxiety) if they are unsure about their purchases or if they had a
difficult time deciding between two alternatives. Companies that sell high-
involvement products are aware that post purchase dissonance can be a
problem. Frequently, they try to offer consumers a lot of information about their
products, including why they are superior to competing brands and how they
won’t let the consumer down. Salespeople may be utilized to answer questions
and do a lot of customers “hand-holding.”

There are general patterns about what constitutes a high-involvement decision

(buying cars, homes, engagement rings, pets, computers, etc.) versus a low-
involvement decision (buying bread, chewing gum, toothpaste, dishwasher
detergent, trash bags, etc.). However, the real determinant is the individual
consumer and how involved they choose to be in solving the problem or need
they have identified.

Limited problem-solving falls somewhere between low-involvement (routine)

and high-involvement (extended problem solving) decisions. Consumers engage
in limited problem solving when they already have some information about a
good or service but continue to search for a little more information.
Distinguishing Between Low Involvement and High Involvement

Low Involvement High Involvement

Toilet paper
Wedding dress
Hand soap
Luxury vehicle
Light Bulbs
Product Cruise/Vacation
Chewing gum
Designer sneakers
Photo copy paper
Vacation property

Wide distribution
Place Exclusive/Limited distribution

Competitive/Low
Price Luxury/High

Push marketing; mass

Pull marketing; personal
advertising; TV; radio;
selling; email marketing;
Promotion billboards; coupons; sales
WOM; personalized
promotions
communications

Information None/Minimal
Extensive
Search
Evaluation of None/Minimal
Considerable/Extensive
Alternatives
 Routine-response; automatic;
Purchasing
impulsive Extended problem-solving
Behaviour

Purchasing High/Regular basis

Low-seldom/Special occasion
Frequency
Problem/ Need recognition:

This is the first stage of the Consumer Decision Process in which the consumer
is able to recognize what the problem or need is and subsequently, what product
or kind of product would be able to meet this need. It is oftentimes recognized
as the first and most crucial step in the process because if consumers do not
perceive a problem or need, they generally will not move forward with
considering a product purchase. When a consumer becomes aware that there is a
difference between a desired state and an actual condition, then problem
recognition occurs for that consumer. Every individual has unsatisfied needs
and wants that create tension or discomfort. Certain needs can be satisfied by
purchasing and consuming goods and services. The process of deciding what to
buy starts when a need that can be satisfied through consumption becomes
strong enough to stimulate a person. Thus, a problem is recognized, when
consumer has an unmet need, and, every day consumers recognize purchase or
consumption related problems. Consumers may have routine problems when
they run out of daily necessities, and may have unexpected problems when
major appliances suddenly go out of order. In addition to these two, there is
another type of problem, that is subtle and evolve slowly over time, such as a
desire to buy a washing machine. Question of consumer decision making arises
when an individual recognizes a problem or need that is not met. A problem or
need exists when there is a discrepancy between a consumer’s actual state and
the desired state.

After the problem is identified, the buyer has to define it in some meaningful
term to help him to initiate an action that can solve his problem. For example,
one may recognize that he is having a status related problem. This is problem
recognition. Now he has to define it in some meaningful term, that is, what is
causing the status problem. A consumer may recognize both an active as well as
inactive problem that he is having. An active problem is that of which he is
aware of or will become aware of, and, on the other hand, an inactive problem is
one of which he is not aware of.

Importance of Problem Recognition

Problem recognition is the most important part of the consumer decisioning

process as this is the point where a person becomes a potential customer and can
start the process of buying a new product or a service. This is not only important
for customers but also for the organizations, manufacturers and marketers. The
entire product lifecycle revolves around the problem statement of the customers.
If the problems ceases to exist so would be the need for the product.

Features phone still function but not many people want them as now the
problem recognition is just not about being able to talk but also to have a
multimedia device which can give many additional features like internet
connectivity, social media, apps. If a company does not recognize the changing
customer behavior they would never be able to define the problem statement
and may become obsolete. 

With technological advancements the problem recognition keeps getting refined

and now may be solved with an improved product or an entirely new product.
Paper based documentation was very critical few years back and many products
like printers, scanners etc. were solving the problem. As technology improved
and automated solutions cut down the need for papers and work started
happening digitally, for the same need, paper based documentation became not
a problem anymore.

Types of Problem Recognition

There are multiple types of problem recognition. The two most important are:

1. Expected and Active Problems

These are the problems about which the customers are actively aware and plan
to solve it themselves by looking out for a potential product or a solution which
resolved the problem. These are expected like broadband plan getting expired,
need to enroll for a college course after schooling, buying a refill for printer,
buying a bus ticket to travel to another town to meet a friend. These are
examples of expected and active problems which are to be solved by the
customer while being aware of them. The marketers normally present the
product which can solve the problem without defining the problem again to
customer as he or she is already aware. The benefits and resolution is what the
customer is interested in.

2. Unexpected and Inactive Problems

These are the ones where the customer does not know if they require to solve
them or not. An example can be insurance policy in which a customer has to be
made aware that there is a need which is fulfilled by buying an insurance policy
and will eventually solve a future problem if it arises. 

In B2B sales especially in technology, we see this problem recognition state.

Many customers have been working in the same way since many years but the
new technology sellers convince them that the new digital and automated
solutions are much better for them as that would help in cutting a lot of costs
and increase efficiency. The customers were not aware until explained and also
were not expecting to solve them immediately. But once a customer is
convinced about solving the issue, then it becomes an active problem.

Many times, there can be some unexpected events in life which can lead to
immediate problems that require you to buy new products or services.

Situations Leading to Problem Recognition

There could be many situations that may lead a consumer to recognize a

problem to exist. Major situations leading to problem recognition are;

 Insufficient Stock of Goods

 Dissatisfaction or Discontentment with the Stock
 Changes in the Environmental Characteristics
 Changes in the Financial Status
 Promotional Activities
  Consumer’s Previous Decisions
 Individual Development
 Efforts of Consumer Groups and Governmental Agencies
 Availability of Products

Insufficient Stock of Goods

The most common situation leading to problem recognition by a consumer is

the depletion of the stock of goods that he uses. If, for example, an individual
runs out of necessities that he uses, he will identify a problem to exist.

Dissatisfaction or Discontentment with the Stock

If a consumer becomes dissatisfied with the goods he owns or uses, he will

recognize that he is having a problem.

A family having a ten year’s old car may be willing to buy a late model car.
Such a feeling will lead to discontent, and as a result, the family will recognize
a car-related problem.

Changes in the Environmental Characteristics

With the change in an individual’s or family’s environmental characteristics, the

individual or the family may recognize a problem.

For example, when a family moves from one stage of its life cycle to another
stage, it requires different types of products and services, and as a result,
problems occur.

More so, friends and reference groups’ influence may demand new and different
products to be bought by an individual or a family. Such a situation also leads to
the recognition of a problem.
Changes in the Financial Status

Changes in the financial status or position of an individual or a family may also

lead to problem recognition.

For example, if an individual’s financial position improves or worsens or

anticipates an improvement or deterioration, he may recognize a problem
associated with his actual or anticipated changing financial position.

Promotional Activities

By promotional activities, marketers try to trigger drives in consumers. Through

different promotional activities, marketers try to create a discrepancy between
actual and desired states of consumers. Such a situation will trigger problem
recognition in consumers.

Consumer’s Previous Decisions

Other purchases made by a consumer may also lead to problem recognition.

For example, if an individual buys a television, it may trigger buying an antenna

or a voltage stabilizer. The purchase of a computer may lead to the recognition
of the problem of not having a printer.

Individual Development

With an individual’s mental development and change in outlook, he may

recognize not having certain products.

Efforts of Consumer Groups and Governmental Agencies

Activities of different consumer interest groups and different government
agencies may also lead to problem recognition. For example, if consumer
groups advocate environmentally friendly products, they may feel the need for
such products creating problems.

If the government puts an embargo on using private vehicles on the city’s main
roads, consumers can buy bicycles, thus causing a problem.

Availability of Products

The availability of a product makes customers aware of it, making them feel to
have one of those. Such a feeling may also lead to problem recognition.

Results of Problem Recognition:

Once the consumer becomes aware of a problem, two basic outcomes are
possible. One result is for the consumer, in effect, not to pursue any further
problem-solving behavior, which might occur if the difference between the
consumer’s perceived desired and actual states is not great enough to cause him
to act to resolve the difference. Another situation in which problem recognition
may not lead to further stages of consumer decision making occurs when certain
environmental elements preclude it.

Marketing Implications of Problem Recognition:

Recognition of problems by consumers bears important marketing implications.

They should first identify the problems that consumers face, and, in the second
stage, they should develop a marketing mix aiming at consumers’ problem
solutions.

Marketers may also create situations where consumers look for problems or
create situations that may suppress the consumers’ problem recognition.
Measuring Problem Recognition

The fast task is to identify the problems faced by the consumers or the
problems they recognize. A marketer can take many approaches in measuring
problems recognized by the consumers. One such approach is “intuition.”

By evaluating his product, a marketer can determine whether he should

improve his product, and if so, how can he do so. Second, he can conduct
surveys to identify the problems recognized by his customers.

A marketer can also conduct activity analysis focusing on consumers’

particular activity, such as how breakfast items are prepared. A product analysis
may also be undertaken to identify consumers’ problems or problems using a
particular product.

Another technique used in identifying problems consumers recognize to

undertake problem analysis. Here, consumers are requested to identify the
problems they face and give suggestions relating to such problems.

Marketing Mix Decision Aiming at Problem Solution

After the consumers’ problem is identified, a marketer may adjust their

marketing mix variables to help consumers overcome problems. This may be
done through product modification, changing the distribution strategy
channel, adjusting prices, or changing advertising or communication
strategy.

Activating Problem Recognition

Marketers themselves may activate problem recognition by the consumers.

Marketers may activate problem recognition, first, by influencing the desired
state. By emphasizing the benefits of products, marketers may encourage people
to buy a particular product they lack actively.

Through advertising, personal selling, and sales promotion activities, marketers

can influence consumers’ desired state, causing them to recognize problems.
Marketers may also activate problem recognition by influencing perceptions of
consumers’ actual state.

For example, an individual buying a particular brand of a product may be given

the idea that another alternative is better than one he is having or using. This
may also lead to problem recognition by a consumer. Marketers may also
activate problem recognition by influencing the timing of problem recognition.

If a consumer thinks of buying a refrigerator before “Eid- Ul-Azha,” he may be

given the idea that refrigerators’ prices will rise during Eid time, causing him to
recognize the problem now instead of buying later.

Suppressing Problem Recognition

By this time, you are aware of the situations that trigger problems in consumers.
Some of the problems recognized by consumers may create problems for certain
marketers. In such a situation, marketers try to suppress the problem to be
recognized by consumers.

A tobacco marketer may suppress problem recognition by the tobacco users

caused by consumer groups or other agencies by developing an advertisement
that shows tobacco users in a lively mood.

Information search:

The second stage of the purchasing process is searching for information. After
the recognition of needs, the consumers try to find goods for satisfying such
needs. Such a search may focus on numerous dimensions, such as the
availability of brands, product features, characteristics of sellers, after sales
service, warranties, prices, quality, and using instructions. The amount of
searching a consumer will depend on the strength of his drive, the amount of
information he starts with, the ease of obtaining more information, the value he
places on additional information, and the satisfaction he gets from searching.

Information search can be categorized as internal or external research:

Internal research refers to a consumer’s memory or recollection of a product,

oftentimes triggered or guided by personal experience. This is when a person
tries to search their memory to see whether they recall past experiences with a
product, brand, or service. If the product is considered a staple or something that
is frequently purchased, internal information search may be enough to trigger a
purchase. Marketers can influence internal search through different marketing
activities, such as advertising and personal selling, or sales promotion that may
remind consumers of the brand he bought last time.

External research is conducted when a person has no prior knowledge about a

product, which then leads them to seek information from personal sources (e.g.,
word of mouth from friends/family) and/or public sources (e.g. online forums,
consumer reports) or marketer dominated sources (e.g. sales persons,
advertising) especially when a person’s previous experience is limited or
deemed inefficient. Externally, he may take friends’, neighbors’, and relatives’
opinions; may rely on information provided by the marketers through different
advertising materials; he may go for sampling and gather first-hand experience;
or he may gather information reading articles, books, or company brochures,
pamphlets, or leaflets.

Sources Used by Consumers in Gathering Information

Buyers or customers can get information about goods from different sources.

Personal Experience: Personal experience with a product may provide selected

kinds of information to the consumer. This is most vital because such a selected
kind of information may not be acquired in any other way by a consumer. In
acquiring information through personal experience, marketers can help
consumers significantly. This may be done by distributing free samples,
arranging a demonstration of the product, or allowing consumers to use the
product temporarily with or without charging any price.

Personal sources: Personal source is important as well as confidential

information. Such source of information about goods or services becomes very
impressive to the consumers. This includes family, friends, neighbors,
acquaintance etc.

Commercial source: The other important source to get information about

goods or service is commercial source. Such source also provides ample
information about goods and services. Some consumers get much influenced by
commercial source. This includes advertising, sales people, dealers, packaging,
display etc.

Public sources: Public sources are the other important sources to get
information about goods and services. This includes mass media, consumer
rating organizations etc. They also become confidential to provide information.

Experimental sources: Experimental source is also an important source of

information about goods and services. This includes handling, examining, using
etc. Such information becomes decisive and confidential.

Public or independent sources of information: Consumers can also use public

or independent sources of information. They include government reports, news
presentations, reports from product testing information, and reports published
by different consumer groups. These sources are considered most credible as
they are independent sources and are likely to provide the most neutral and
factual information.

Memory Search: Another most widely used source is the memory search. Here
consumer tries to recollect his memory to find any relevant information if there
is any stored in his memory. If a consumer can successfully search for
information, it can yield him a group of brands that he may view as possible
alternatives.

Factors Influencing the Level of External Search

A consumer goes for an external search if an internal search cannot provide him
with sufficient information to solve his recognized problem.

S/He also goes for an external search if he perceives that the external search
benefits will offset its costs. Several factors determine a consumer’s level of
external search.

They are;

a. marketplace characteristics;
b. product characteristics;
c. consumer characteristics; and,
d. situational characteristics.

Marketplace Characteristics Influencing the Level of External Search

Certain characteristics of the marketplace determine the level of external search

of a consumer. These characteristics affect the level of external search as they
determine the costs involved in search and the corresponding benefits that a
consumer may derive from such a search.

They include an available number of alternatives, price range, store distribution,

and information availability. If there is only one brand available in a particular
product category, the consumer does not require an external search regarding
that product.

But, if the number of alternative products, brands, and stores is numerous, there
will be an extensive external search that a consumer will go for.

The consumer goes for extensive external search if prices of alternatives vary
greatly as he intends to make the best utilization of his money being spent on a
product. If the stores selling a particular type of product are clustered, the
external search will be intense.

But, if stores selling a particular product are situated in dispersed locations, it

will reduce the external search level because it involves consumers’ time and
money to move around stores.

Instant availability of external information may also increase the level of

external search. It provides convenience to the consumer looking at and
comparing many alternatives, which helps him make the most appropriate
decision to solve his recognized problem.

Product Characteristics Influencing the Level of External Search

Product characteristics such as price level and product differentiation also

influence the level of external search of consumers. The consumer will do a
limited external search if a product’s price is considered insignificant or very
low.
On the contrary, if the price level is high from the consumer’s point of view, he
will go for an extensive external search. Product differentiation is another
product related characteristic that influences the level of consumer’s external
search.

If a consumer perceives many differences between alternative brands, he will

heavily be involved in the external search. He may consider competing brands
differ in quality, features, design, appearance, or style.

Consumer Characteristics Influencing the Level of External Search

Consumer characteristics, such as learning and experience, personality and self-

concept, social class, age and stage in the family life cycle, and perceived risk,
may also influence the level of a consumer’s external search of information.

If a consumer is satisfied with his prior purchase and consumption of a

particular brand in a product category, he will go for repeat purchase instead of
searching externally for more information on that product category (applies in
case of habitual or routine purchase).

One’s personality characteristics and self-concept also influence his level of

external search of information.

An individual who considers himself a deliberate information seeker will go for

extensive external search. A person of an authoritarian type of personality will
go for less external search. The social class of a consumer is another
determinant of the level of external search.

Generally, lower and middle-class people go for more external searches than
upper-class people. The level of information search decreases with an
individual’s age as his learning and maturity increase. Families in the earlier
stages of the life cycle involve them heavily in external information search.
With the increase in risk perception, the level of external search increases as the
consumer tries to minimize his dissatisfaction with the purchase and
consumption.

Situational Characteristics Influencing the Level of External Search

Situations surrounding consumers influence his level or intensity of external

search. If a consumer, for example, is time-pressed, he will go for a limited
external search.

A consumer will reduce his search if he finds shops are overcrowded that he
visits. He may also search less for information if he considers a desirable
purchase offer made by a seller.

The physical and mental conditions of a consumer may also influence his level
of external search. If he is not physically or mentally energetic, he will reduce
his level of external search.

Marketing Strategies Based on Information Search Patterns

While developing marketing strategies, a marketer should actively consider the

information search patterns of his target consumers. The following discussion
will illustrate the strategy implication concerning the information search
patterns of consumers.

If a marketer finds that his brand falls in the routinely purchased product
category, he should reinforce consumers’ existing behavior patterns.

He can maintain product quality, ensure regular distribution, and reinforce

consumers through persuasive advertising. He should also combat competitive,
disruptive activities immediately.
If a marketer finds that his brand is not included in the buyer’s evoked set of
alternatives, he may try to disrupt the existing decision pattern by product
improvement and persuasive marketing communication that attracts target
consumers’ attention to his brand.

He may also disrupt the existing decision pattern by distributing free samples,
reducing price and announcing price cuts, or offering coupons or other
inducements to customers.

Where consumers search for limited information, a marketer can identify the
places where consumers search for information and then provide them with
sufficient attention-getting and influencing information to capture a large
market size as possible.

Evaluation:

Evaluation of alternatives is the third stage of buying process. “The evaluation

phase of the consumer decision model is the most complex and least understood
part of the process.” Various points of information collected from different
sources are used in evaluating different alternatives and their attractiveness.
While evaluating goods and services, different consumers use different bases.
Generally, the buyer evaluates the alternatives based on the product’s attributes,
the degree of importance, belief in the brand, satisfaction, etc. to choose
correctly.

 Product attribute: Products are of different attributes. For example,

quality, simplicity in use, size, price, service, warranty, packaging,
labeling etc. Consumers become eager to know the attributes of product
at this stage of evaluation and make these attributes the base of selection.
 Degree of importance: Products have different attributes. Generally, the
consumers do not concern with all attributes. They become interested
 only in some important attributes. They evaluate the important attributes
of the goods which they want to buy. So, they evaluate the products on
the basis of the degree of importance.
 Brand belief: Consumers have belief in attribute of certain brand of
goods. They set belief in certain brand being influenced by own
experience, suggestions, family neighbor and friends etc. Such belief may
or may not be the actual features of the products.
 Satisfaction: Total satisfaction becomes different according to the
attributes of any products. This means that satisfaction depends on the
attribute of the goods. So, the consumers evaluate the goods on the basis
of the degree of satisfaction and select more satisfactory goods while
selecting alternatives.

All the consumers do not base their evaluation on the same thing. They evaluate
alternatives by focusing their attention on their satisfaction and priority.
Consumers’ income level, experience, thought, perception, information
abundance, information analyzing ability etc. influence the evaluation of
alternatives.

The search for alternatives and the methods used in the search are influenced by
such factors as: (a) time and money costs; (b) how much information the
consumer already has; (c) the amount of the perceived risk if a wrong selection
is made; and (d) the consumer’s predisposition toward particular choices as
influenced by the attitude of the individual toward choice behavior. That is,
there are individuals who find the selection process to be difficult and
disturbing. For these people there is a tendency to keep the number of
alternatives to a minimum, even if they have not gone through an extensive
information search to find that their alternatives appear to be the very best. On
the other hand, there are individuals who feel it necessary to collect a long list
of alternatives. This tendency can appreciably slow down the decision-making
function.

The evaluation of alternatives often involves consumers drawing on their evoke,

inept, and insert sets to help them in the decision-making process.

Evoke Set

The brands and products that consumers compare their evoked set represent the
alternatives being considered by consumers during the problem-solving process.
Sometimes known as a “consideration” set, the evoked set tends to be small
relative to the total number of options available. When a consumer commits
significant time to the comparative process and reviews price, warranties, terms
and condition of sale and other features it is said that they are involved in
extended problem solving. Unlike routine problem solving, extended or
extensive problem solving comprises external research and the evaluation of
alternatives. Whereas, routine problem solving is low-involvement,
inexpensive, and has limited risk if purchased, extended problem solving
justifies the additional effort with a high-priced or scarce product, service, or
benefit (e.g., the purchase of a car). Likewise, consumers use extensive problem
solving for infrequently purchased, expensive, high-risk, or new goods or
services.

Inept Set

As opposed to the evoked set, a consumer’s inept set represent those brands that
they would not give any consideration too. For a consumer who is shopping
around for an electric vehicle, for example, they would not even remotely
consider gas-guzzling vehicles like large SUVs.
Inert Set

The inert set represents those brands or products a consumer is aware of, but is
indifferent to and doesn’t consider them either desirable or relevant enough to
be among the evoke set. Marketers have an opportunity here to position their
brands appropriately so consumers move these items from their insert to evoke
set when evaluation alternatives.

People aren’t necessarily skilled at making judgments about product attributes.

Some features are difficult to judge (sound quality, durability). Consumers
sometimes use surrogate indicators that are observable characteristics that
are used as indicators of hidden attributes. Such things as price, brand, or
country of origin are often surrogate indicators of quality.

It is important for you to understand the decision rules used by consumers in

attribute-based choice situations. Recall that attribute-based decisions involve
the comparison of brands on the relevant evaluative criteria.

Despite the fact that the choice rules we describe are not precise representations
of consumer decisions, they do enhance our understanding of how consumers
make decisions and provide guidance for marketing strategy.

Suppose you have evaluated a particular model of each of the six notebook
computer brands in your evoked set on six evaluative criteria: price, weight,
processor, battery life, after-sale support and display quality. Further, suppose
that each brand excels on one attribute but falls short on one or more of the
remaining attributes.

Which brand would you select? The answer would depend on the decision rule
you utilize. Consumers use five decision rules: conjunctive, disjunctive,
elimination-by-aspects, lexicographic, and compensatory. Consumers frequently
use more than one rule to make a single decision. The most common instance of
this is using a relatively simple rule to reduce the number of alternatives
considered and then to apply a more complex rule to choose among the
remaining options. An example would be eliminating from consideration all
those apartments that are too far from campus or that rent for more than $700
per month (conjunctive decision rule). The choice from among the remaining
apartments might involve carefully trading-off among features such as
convenience of location, price, presence of a pool, size of rooms, and so forth
(compensatory rule).

The first four rules we will describe are non-compensatory rules. This means
that a high level of one attribute cannot offset a low level of another. In the
apartment example, the consumer described would not consider an apartment
that was right next to campus if it cost more than $700 per month. An excellent
location cannot compensate for an inappropriate price. In contrast, the last rule
is a compensatory rule, in which consumers average across attribute levels. This
allows a high level of one value to offset a low value of another.

Finally note that the conjunctive and disjunctive decision rules my produce a set
of acceptable alternatives, while the remaining rules generally produce a single
best alternative.

Conjunctive Decision Rule

The conjunctive decision rule establishes minimum required performance
standards for each evaluative criterion and selects the first or all brands that
surpass these minimum standards. Because individuals have limited ability to
process information, the conjunctive rule is frequently used to reduce the size of
the information processing task to some manageable level. It first eliminates
those alternatives that do not meet minimum standards. This is often done in the
purchase of such products as homes, computers, and bicycles; in the rental of
apartments; or the selection of vacation options. A conjunctive rule is used to
eliminate alternatives that are out of a consumer's price range, outside the
location preferred, or that do not offer other desired features. Once alternatives
not providing these features are eliminated, another decision rule may be used
to make a brand choice among those alternatives that satisfy these minimum
standards.

The conjunctive decision rule is commonly used in many low-involvement

purchases as well. In such a purchase, the consumer evaluates a set of brands
one at a time and selects the first brand that meets all the minimum
requirements.

Disjunctive Decision Rule

The disjunctive decision rule establishes a minimum level of performance for
each important attribute (often a fairly high level). All brands that surpass the
performance level for any key attribute are considered acceptable. If the
conjunctive decision rule is used by a target market, it is critical to surpass the
consumers' minimum requirement on each criteria. Since the first brand the
consumer evaluates that does so is often purchased, extensive distribution and
dominant shelf space are important. It is also necessary to understand how
consumers "break ties" if the first satisfactory option is not chosen. As with the
conjunctive decision rule, you might purchase the first brand you find
acceptable, use another decision rule to choose among the three, or add
additional criteria to your list. When the disjunctive decision rule is used by a
target market, it is critical to surpass the consumers' requirements on at least one
of the key criteria. This should be stressed in advertising messages and on the
product package. Since the first brand the consumer evaluates that exceeds one
of the requirements is often purchased, again extensive distribution and
dominant shelf space are important, as is understanding how consumers "break
ties" if the first satisfactory option is not chosen.

Elimination-by-Aspects Decision Rule

The elimination-by-aspects rule requires the consumer to rank the evaluative
criteria in terms of their importance and to establish a cutoff point for each
criterion. All brands are first considered on the most important criterion. Those
that do not surpass the cutoff point are dropped from consideration. If more than
one brand passes the cutoff point, the process is repeated on those brands for the
second most important criterion. This continues until only one brand remains.
Thus, the consumer's logic is: "I want to buy the brand that has a high level of
an important attribute that other brands do not have." Using the elimination-by-
aspects rule, we end up with a choice that has all the desired features of all the
other alternatives, plus one more. For a target market using the elimination-by-
aspects rule, it is critical to surpass the consumers' requirements on one more (in
order) of the criteria used than the competition. This competitive superiority
should be stressed in advertising messages and on the product package. Firms
can also attempt to alter the relative importance that consumers assign to the
evaluative criteria.

Lexicographic Decision Rule

The lexicographic decision rule requires the consumer to rank the criteria in
order of importance. The consumer then selects the brand that performs best on
the most important attribute. If two or more brands tie on this attribute, they are
evaluated on the second most important attribute. This continues through the
attributes until one brand outperforms the others. The consumer's thinking is
something like this: "I want to get the brand that does best on the attribute of
most importance to me. If there is a tie, I'll break it by choosing the one that
does best on my second most important criterion."

The lexicographic decision rule is very similar to the elimination-by-aspects

rule. The difference is that the lexicographic rule seeks maximum performance
at each stage while the elimination-by-aspects seeks satisfactory performance at
each stage. When this rule is being used by a target market, the firm should try
to be superior to the competition on the key attribute. This competitive
superiority should be emphasized in advertising. It is essential that the product
at least equal the performance of all other competitors on the most important
criteria. Outstanding performance on lesser criteria will not matter if a
competitor is superior on the most important attribute. If a competitive
advantage is not possible on the most important feature, attention should be
shifted to the second most important (assuming equal performance on the most
important one). If it is not possible to meet or beat the competition on the key
attribute, the firm must attempt to make another attribute more important.

Compensatory Decision Rule

The four previous rules are non-compensatory decision rules, since very good
performance on one evaluative criterion cannot compensate for poor
performance on another evaluative criterion. On occasion, consumers may wish
to average out some very good features with some less attractive features of a
product in determining overall brand preference. Therefore, the compensatory
decision rule states that the brand that rates highest on the sum of the
consumer's judgments of the relevant evaluative criteria will be chosen.
Products and services targeting consumers likely to use a compensatory rule can
offset relatively low performance on some features with relatively high
performance on others. However, it is important to have a performance level at
or near the competition on the more important features since they receive more
weight in the decision than do other attributes.

LEVELS OF CONSUMER DECISION MAKING

The consumer decision making process is complex with varying degree. All
purchase decisions do not require extensive effort. On continuum of effort
ranging from very high to very low, it can be distinguished into three specific
levels of consumer decision making:

1) Extensive Problem Solving (EPS)

2) Limited Problem Solving (LPS)

3) Routine Problem Solving (RPS)

1.Extensive Problem Solving (EPS): When consumers buy a new or

unfamiliar product it usually involves the need to obtain substantial information
and a long time to choose. They must form the concept of a new product
category and determine the criteria to be used in choosing the product or brand.

2.Limited Problem Solving (LPS): Sometimes consumers are familiar with

both product category and various brands in that category, but they have not
fully established brand preferences. They search for additional information
helped them to discriminate among various brands.

3.Routine Problem Solving (RPS) : When consumers have already purchased

a product or brand , they require little or no information to choose the product.
Consumers involve in habitual and automatic purchases.

Importance of Decision rule in marketing

Marketers must understand which decision rules are being used by target buyers
in order to position a product within this decision framework. We cannot
specify with precision which rules are used by consumers in which situations.
However, research clearly indicates that people do use the rules. Low-
involvement purchases generally involve relatively simple decision rules
(conjunctive, disjunctive, elimination-by-aspects, or lexicographic), since
consumers will attempt to minimize the mental "cost" of such decisions. High-
involvement decisions and purchases involving considerable perceived risk tend
to increase evaluation efforts and often may involve not only more complex
rules (compensatory) but stages of decision making, with different attributes
being evaluated using different rules at each stage. Of course, individual,
product, and situational characteristics also influence the type of decision rule
used. A marketing manager must determine, for the market segment under
consideration, which is the most likely rule or combination of rules and then
develop appropriate marketing strategy.

In developing marketing strategy, it is vital for a marketer to identify the

number and type of evaluative criteria that his target consumers use, and also
know the relative importance placed on each of the considered criteria.

He may measure these, we mean identifying the number and type of criteria as
well as their importance, by undertaking research and using techniques such as
direct questioning, projective techniques, and multidimensional scaling. Some
of the criteria such as, price, color, and size, that consumers use can easily be
measured, while others such as, quality, durability, and physical benefits, are
very difficult to measure. A marketer should recognize that, a consumer rates
and ranks the brands in his evoked set of alternatives, using the evaluative
criteria and considering the importance of each criterion. A consumer’s
evaluation may yield him no brand that he is willing to buy. In such a situation,
the consumer may go for further search. If his evaluation yields him one or
more brands that he is willing to buy, he is ready to move on to the next step of
the purchase decision making process.

Purchase

Purchasing processes involve the purchasing decision as well as activities

directly related to purchase. Information search and evaluation leads to purchase
intentions. Consumer’s mind may change, even in case of a most well informed
consumer, as he moves from awareness of the product to deciding to buy it. His
alternative evaluation may be erroneous which may lead him to wrong decision.
By misunderstanding promotion or other sources of information one may
wrongly include or exclude products from his evoked set of alternatives. In
addition, the situational factors may cause a consumer to alter his purchase
decision. A marketer should try to minimize the impacts of situational factors
by undertaking pre-selling activities, so that, consumers do not change their
minds by the latter events. He may also exploit the situational factors causing
consumers to buy his products. However, once a consumer has selected a
product alternative after evaluating them, the next step in purchasing process is
to complete the
purchase. He may also decide not to purchase, if alternatives evaluated by him
are not considered desirable. If he decides to buy, a series of related decisions
must be made regarding features, prices, warranties, installation, credit where
and when to make the actual purchase (store selection), how to take delivery,
the method of payment, and other related issues. Therefore, purchase decision
is, in fact, the beginning of an entirely new series of decisions. Selection of
store is one of the purchase decisions. Consumers prefer shops where they feel
comfortable or which correspond with their liking and values as well as status.
The purchase part is facilitated through making the product readily available,
and arranging for the positive situational factors. In the following few sections,
we shall discuss different aspects involved in the purchasing process. The first
thing that we shall discuss is the reasons for consumers to shop.

Reasons for Which Consumers Shop?

It is imperative to understand the reasons for consumers to shop before

discussing where and how do they shop. Consumers shop in order to satisfy
certain motives. Motives could be either personal or social. Personal motives
include, among others, role playing, diversion, self- satisfaction, learning about
new trends, physical activity, and sensory stimulation. Social motives, on the
other hand, include, basically, the social experience outside the home,
communication with others having a similar interest, peer group attraction,
status and authority, and pleasure of bargaining.

An individual consumer may shop in order to display his or her role to others.
Consumers may also shop to get rid off the routine life that entertain them.
Though economic theories explain buying activity as problem solving in nature
that provides certain utility to the consumer, but he may shop purely for self-
gratification. Consumers may also shop to learn new trend or to display a
different lifestyle. Some consumers prefer shopping as it can substitute the
physical exercise they need to do. Consumers may also shop to provide
satisfaction to their senses, such as, hearing sound or handling goods providing
tactile stimuli.

One of the social motives for which consumers shop is, to have social
experience outside the home. When you go for shopping, you have the
opportunity of mixing up with new people and having experience on new
situations. One may also shop to interact with people sharing same needs,
feelings, beliefs, and attitudes. An individual may also go for shopping to meet
his friends and associates. It not surprising to find individuals who go for
shopping just to display their power and status. The other social motive, that
drive people toward shopping, is exploiting the bargaining opportunity. Some
believe that bargaining may help them to purchase products at low prices
providing costs savings.

Factors Determining Store Selection

The next important thing that a marketer should know is, the factors that
determine store selection of consumers. Consumers select stores using certain
evaluative criteria. A consumer undergoes the same process in store selection
that he undergoes in evaluating alternative brands in a product class. A
consumer generally uses the following evaluative criteria in store selection. One
of such criteria is store attributes or characteristics, and the other is consumer
characteristics. Let us now discuss them in turn. Store Attributes or
Characteristics Influencing Store Choice Consumers select store comparing
different stores in terms of certain store-related characteristics. Some of the
commonly used store-related attributes are: location of the store, store image,
retail advertising, store design and physical facilities, store size, product variety
available, and, behavior of store salespeople as well as customer services
provided by the store. It is to mention here that the influence of these attributes
differs depending on the type of product to be purchased, the type of store, and
the consumer characteristics.

Location of the store is one of the most important store-related attributes that
influence store selection of a consumer. Consumers normally prefer to buy form
the nearby store – near either to home or office. Store image is another attribute
influencing consumer’s store selection. Store image is the target
market’s/consumers’ perception of all the attributes associated with a retail
outlet. Virtually, all of the store-related attributes may determine the image of a
store. Most of the consumers prefer to shop from stores renowned for their
images in terms of different attributes.

Consumers seek store-related information through advertisements published by

the stores. Thus, stores that advertise more will be able to draw more
consumers’ attention, which may drive consumers to stores whose
advertisements they see. Moreover, stores that advertise heavily can give
consumers an idea that they are well established and sound in doing business.
Thus, consumers prefer to buy from stores that advertise extensively. In
addition, price advertising of stores may draw people toward the stores with the
hope of getting bargain.

Some of the consumers select stores only for their décor and physical facilities
they provide to the customers. Design includes, among others, the layout, aisle
placement and width, carpeting, and architecture. Physical facilities mainly
include elevators, escalators, lighting, air conditioning, children’s corner, and
washing facilities. These may influence consumers’ mood, which make them to
select the store.
Size of the store is another store-related attribute that influences consumers’
store choice. Most consumers prefer larger stores than smaller stores, as they
facilitate movement inside the store. Moreover, larger stores can display a wide
range of products along with wider assortments, which help consumers to select
the most preferred product and brand.

Variety of products and assortment also influence the selection of store by

consumers. Consumers prefer to shop from stores that make available a larger
variety and assortment. The reason is that consumers can avoid the hassle of
moving around different stores for different products. If a store stocks different
categories of products that consumers buy frequently (or infrequently), it will be
able to attract more customers than stores stocking limited range of products.

Consumers also expect to be well treated by the sales people. Thus, they prefer
to select those stores where they are likely to get warm and friendly as well as
courteous treatment. They also expect the salespeople to be knowledgeable.
Thus, they prefer to select stores that they perceive having qualified sales
personnel.

Consumers not only buy physical products; they as well buy certain services
along with products. They at times expect credit, replacement facilities,
information, installment facilities, delivery, parking facilities, free wrapping
facilities and so on from the store. Thus, in store selection, a consumer may
decide on the above-mentioned factors as well.

Consumer Characteristics Influencing Store Choice

Selection or choice of store by consumers is not only determined by attributes

relating to stores, but also by some of the consumer-related characteristics.
There are four dominant consumer characteristics that influence consumers’
store selection. They are: perceived risk, consumer confidence, family
characteristics, and shopping orientation. Consumers prefer to select those
stores that are likely to reduce their social risks, as well as product’s
performance risk. It is observed that consumers of higher social classes prefer to
shop from status stores to reduce social risks, where lower middle-class people
avoid status stores to reduce financial risks. Selection of store is also influenced
by the level of consumer’s confidence. Highly confident consumers do not mind
purchasing from new shops, where less confident customers prefer to buy from
stores established long ago and are well-established. Characteristics of family
and the degree of involvement of family members in purchase decisions also
influence a family’s store selection. In some families, husbands dominate the
purchase decisions, and as a result he selects the stores. You were given an idea
on consumers’ buying motives in the beginning of this lesson. Different motives
may influence the purchase decisions of different categories of products. A
consumer’s purchase motivations for a product category determine his shopping
orientation for that product category. Consumers with different shopping
orientations prefer to shop at different stores. Consumers, who derive little or no
pleasure from shopping for example, prefer convenience stores.

Nature of In-Store Buying Behavior

Some of the consumers are found to visit a store with the intention to buy a
particular brand of product, but come out with different brand that he did not
plan to buy. Why consumers do so? In-store environment may be the simple
answer for such a deviation in their behavior. Some of the in- store variables
responsible for deviation in consumer behavior are: store layout and traffic
patterns, store atmosphere, point-of-purchase displays (POP), product shelving,
pricing strategies of the store, stockouts, sales personnel, and packaging. Layout
of the store is one store-related variable that may influence a consumer’s store
selection and purchase behavior. If products in a store are found to be more
visible, it may influence a consumer’s store selection and purchase decision.
Layout of the store has a major influence on the traffic flow through the store. If
the traffic flow of a store can create a mood, a consumer will be more willing to
buy from that store, because the environment will be perceived positively by the
consumer.

The atmosphere of the store is another in-store variable influencing consumers’

store selection. Atmosphere of a store is influenced by such factors as, lighting,
presentation of merchandise, fixtures, floor coverings, colors, sounds, odors,
dress and behavior of salespeople, and the characteristics and behavior of other
customers visiting the store. These may have positive impact on consumers
causing them to purchase from a particular store or buy a particular product.

Point-of-purchase displays play an important role in consumers’ store selection

and purchasing behavior. Point-of-purchase displays are used to attract and
influence shoppers. A lady, for example, may decide to buy a particular
“sharee” being influenced by its display instead of one she planned to buy.

The place where a product is kept may also have an impact in attracting
consumers. Products that cover a wider shelf space draw more attention.
Moreover, products that are kept on shelves parallel to eye level of people of
normal height draw more attention, and as a result influence consumer purchase
behavior.

Pricing strategies of stores is another in-store variable influencing store

selection and purchase behavior. Special price offers and promotional deals
attract a group of customers toward the store. In-store price cut and special price
inducements such as, coupons, discounts, and gifts may make a buyer to decide
to buy from a particular store or buy particular product.
If a consumer cannot find his preferred brand in a preferred store, he may
decide to switch to another brand or store, delay the purchase, or in extreme
case postpone the purchase temporarily or permanently.
Characteristics of sales person may also affect in-store purchase behavior of
consumers. An aggressive and convincing salesperson may even make a sale to
someone having negative attitude toward a particular product. A knowledgeable
and smart salesperson can provide required information to consumers that may
make them inclined toward the store or the products sold in the particular store.
Packaging is the other in-store variable influencing consumer behavior.
Packaging provides convenience, conveys status symbol, and aids in sales
promotion. Packaging sometimes can substitute a salesperson. Some of the
consumers decide to buy a particular brand only because of its attractive and
outstanding package. Thus, attractively designed package may influence
customers visiting a store and performs the sales task.
To do a better marketing job at this stage of the buying process, a seller needs to
know answers to many questions about consumers’ shopping behaviour. For
instance, how much effort is the consumer willing to spend in shopping for the
product? What factors influence when the consumer will actually purchase? Are
there any conditions that would prohibit or delay purchase? Providing basic
product, price, and location information through labels, advertising, personal
selling, and public relations is an obvious starting point. Product sampling,
coupons, and rebates may also provide an extra incentive to buy.
Brand Loyals: These consumers are highly involved with both the product
category and with particular brand. For example, cigarette smokers and paper
readers fall in this category.
Information Seekers: These buyers are involved more with product category
but may not have preferred brand. They are likely to see information to decide a
particular brand. For examples, air-conditioners and washing machine buyers
fall under this category.
Routine Brand Buyers: These consumers are not highly involved with the
product category but may be involved with the particular brand with in that
category. They have low emotional attachment with the product category and
tied mainly with their brand. For example, users of particular brand of soap for
years, regular visitors to particular restaurant fall in this category. Brand
Switching: Consumers in this category have no emotional attachment either
with product category or any brand with in it. They typically respond to price.
For example, stationery items, fashion products come under this category.
Impulse Buying Behavior: Impulsive buying is the tendency of a customer to
buy goods and services without planning in advance. When a customer takes
such buying decisions at the spur of the moment, it is usually triggered by
emotions and feelings.
Non-Store purchasing:
Today, in most countries non-store buying has emerged as a major route for
shopping. Popularly known as direct marketing, non-store buying too has an
important place in the consumer purchase process. "Direct (response) marketing
is the total of activities by which products and services are offered to market
segment in one or more media for information purposes, or to solicit a direct
response from a present or prospective customer or contributor by
mail, telephone or other access." The non-store marketing owes its prominence
to a variety of reasons. These reasons are:
 Greater importance to comfort in consumer life style
 Higher discretionary incomes
 Demand for convenience in shopping
 Option of credit facilities through credit or charge cards
 In-store crowd and long queues in delivery and payment
 Under-informed and little-trained store personnel
 Pressure for spot decision under stress of store personnel
The non-store buying option has become stronger not because of the sudden fad
or fascination on the part of marketers or consumers. The economic
environment also plays an important role in it. The development of non-store
buying in a country is dependent upon several economic and social factors some
of these are as follows:
 general economic development
 availability of logistics and infrastructure
 nature of product
 consumer awareness
 freedom enjoyed by marketing forces
 desire of marketers to reach new and uncovered market segments.
However, we find varying degrees of direct marketing practiced in different
countries. Be that as it may, direct marketing and its interaction with consumer
buying process is of special significance but largely undeveloped because direct
marketing itself is growing only recently.
There are five best known routes of direct or non-store buying. These are:
 The in-home buyer
 Tele Marketing
 Mail-order buying
 Direct in-home sales
 Interactive video selling
Post purchase behavior:

In the final stage of the buyer decision process, post purchase behavior, the
consumer takes action based on satisfaction or dissatisfaction. In this stage, the
consumer determines if they are satisfied or dissatisfied with the purchasing
outcome. Here is where cognitive dissonance occurs, “Did I make the right
decision.” Consumers go through the 5 stages of the buyer decision process in
taking the decision to purchase any goods or services.

It is important for the marketer to know whether his product is liked by the
consumer or not. He wants the feedback about his product so that corrective
action, if necessary, can be taken, and the marketing mix be modified
accordingly.

Post purchase behviour in Consumer Buying process

Post-purchase behavior is the reaction of the consumer, it gives an idea of his

likes and dislikes, preferences and attitudes and satisfaction towards the
product. It indicates whether or not the purchase motives have been achieved.

Purchase is the means, and post purchase is the end. Post purchase behavior
indicates whether or not repeat purchases will be made. Whether the customer
will recommend the product to others or not. It indicates whether long-term
profits can or cannot be expected. All this can be found out by the post-purchase
behavior of the customers. Post purchase is the last phase in the decision-
making process.

After purchasing a product, a customer is either satisfied or dissatisfied and his

satisfaction or dissatisfaction depends on his expectation and the difference
between the performance. Expectation gives the degree of customer’s
satisfaction/dissatisfaction with the product.

Satisfaction is the expected outcome. It signifies "a confirmation that

performance of the chosen alternative is consistent with its prior beliefs and
expectations." Dissatisfaction, on the other hand, signifies an absence of such
confirmation with reference to the outcome. Satisfaction or dissatisfaction
cannot be generalized, i.e., there is no accepted definition of satisfaction or
dissatisfaction. It depends on a number of factors outlined below:

1. The presence of a particular factor may cause dissatisfaction. If the same

factor is removed, it may not unnecessarily lead to satisfaction, i.e.,
greasy snacks may lead to dissatisfaction but, the absence of greasiness in
the same snacks may not lead to satisfaction
2. If is a cumulative effect of many factors put together, the effect of
individual factors cannot be gauged easily.
 3. Dissatisfaction may as such not lead to any complaint, but the
dissatisfaction of a high degree may lead to complaint making of a
complaint and, handling of satisfaction or dissatisfaction is a logical
process. A person will not complain if he sees no use of doing so or feels
that the complaint will not entertain. Also, consumers complain if it is
convenient for them to do so. They may not go out of their way to make
complaints. Complaining also requires resources, i.e., time, money,
knowledge, expertise,etc. which one may not possess.

The dissatisfaction by a consumer towards product may lead to:

1. Discontinuing purchase of those products or brands by which a customer

is dissatisfied. If he had been patronizing that product which has led to his
dissatisfaction, he may change to a new brand or a new product.
2. Negative Word of mouth He speaks negatively about the product to his
friends, peers and associates. Instead of propagating the positive aspects,
he starts defaming the product/brand and shows his dissatisfaction
openly.
3. Lodges a complaint to the concerned authorities. Consumer Forum is one
such agency that entertains such complaints. It may be a time-consuming
process and difficult for all dissatisfied customers to resort to.
4. Complaints directly to the seller and gets his claim settled or the
product/brand change according to his liking or agrees for any such
settlement.

It is the effort of every firm to produce satisfied customers. This is essential

to fight increasing competition. Some dissatisfied customers however remain
repeat purchasers, as they do not find a suitable alternative or, find that brand
readily available and buy it due to force of habit or, because of low price.
These purchasers may not be brand loyal. A brand loyal or a committed
customer is attached to the brand emotionally. He believes in the firm and
trusts the brand. Brand loyalty increases if the performance of the brand is
more than the expected performance. In case of committed customers, they
believe and have faith in line extension and brand extension of the firm.
Committed customers also promote the product by positive word of mouth.’

The marketer has to watch that the customer is not dissatisfied. Through
dissatisfaction, a lot of customers or clientele is lost and the marketer suffers
losses. To avoid this, a marketer has to be on the lookout for causes of
dissatisfaction and maintain and build consumer satisfaction. This can be
done by regularly monitoring consumer reaction. It can be done by
interviewing the consumer or serving questionnaires and analyzing and
interpreting them carefully. Besides this, a strict vigil is to be kept on the
quality of the product. The quality should be the joint responsibility of
marketing and production. If necessary, other departments should also be
involved, and an integrated marketing procedure be followed.

In case of complaints, they must be given proper attention and redressal be

made as soon as possible. All complaints must also be acknowledged to
satisfy and assure the customer that appropriate action will be taken as soon
as possible. While registering complaints, due courtesy should be shown to
visiting customers and their complaints be entertained in a proper manner.
To avoid dissatisfaction of the consumer, only realistic claims be madei.e.,
advertisement of a scooter giving 55 km. per litre may be unrealistic when it
can give a maximum of 40 km. This unrealistic claim made by the
manufacturer may lead to dissatisfaction of the consumer. The marketer
must also help train the consumer for the proper use of the product.If the
product is not used in the way it is meant to be used, it gets spoilt, and does
not perform up to expectation leading to a discrepancy between the actual
and the desired which leads to dissatisfaction of the consumer. A marketer
must also assure after sales service and keep in touch with the consumer
 even after purchase, to give him the promised after sales facility, as well as,
importance to the consumer. A marketer must also sell solutions instead of
the product.He should emphasize upon the felt need and fulfill it, rather than
emphasize the product.He should take care of the marketing concept. If this
is not taken care of, it becomes injurious in the long run. In case of
dissatisfaction, post-purchase dissonance occurs which creates anxiety and
the consumer feels psychologically uncomfortable. The consumer reduces
the negative information received by the following methods:

 Ignoring the dissonance information.

 By selectively interpreting the information.
 By lowering the level of expectation.
 By seeking positive information about the brand.
 By convincing themselves that the purchase was right.

Product Disposition Behavior

Marketer should also monitor how the buyers use and dispose of product. If
consumers find a new use for the product that should interest the marketer
because this use can be advertised. If consumers store the product (not using it)
that indicates that the product is not very satisfying and word of mouth would
not be strong. If they sell or trade the product, new product sales will be
depressed. If they throw the product, the marketer needs to study how they
dispose of it, especially if it can hurt the environment. The formation of
satisfaction or dissatisfaction is, however, a function of many factors. These
factors are:

 Use, occasion of Product/Brand

 Cost/Investment involved in choice making
 Number of outcomes and their desirability
 Prior experience of product/brand
  Personal expectations and norms
 Group expectations and norms
 Cultural forms
 Outcome endurance - the duration for which the outcome persists
 Time lag between the choice and use of the product

Marketing Implications of the Post Purchase Outcomes.

It may be noted here that although post-purchase evaluation is strictly

concerning the buyer and seller, several other parties too get involved in case
the consumer decides to approach the outside intervention mechanism
against product failure or dissatisfaction. The intervention by the government
and consumer protection organization is a case in point. Thus, a marketer has
to design appropriate responses to post-purchase activities that will not only
keep the consumer satisfied but also avoid the intervention of other parties in
the matter. Following are the prominent responses that a marketer should
consider in order to:

 build consumer satisfaction

 maintain consumer satisfaction
 avoid consumer dissatisfaction

Monitor Regularly the Consumer Reactions

A marketer should initiate and encourage a regular monitoring of consumer

reactions towards itself, its product range and a particular brand. A continuous
inflow of such monitoring data will develop into an information system and
serve as early warning signals. Such monitoring is of particular significance
where products are sold through non-store purchasing route.

Bring product Quality under Marketing Responsibility

Though we hear a lot these days about improving product quality, nothing. can
substantially change until maintenance of product quality is brought under
marketing responsibilities. Thus, quality control will upgrade itself from being
an isolated function of production department to a joint mission of marketing
and manufacturing
departments.

Handle Complaints Quickly and Responsibly

Marketers must go beyond the usual lip-service to handling of customer

complaints. They should be taken up at the earliest opportunity and action
notified to the complaint without delay. Even acknowledgement of the receipt
of complaint contributes to reducing dissatisfaction.

Be a Courteous and Helpful Host

Most of consumer dissatisfaction is attributable to poor service at the point of

purchase. It may arise out of unhelpful or discourteous sales personnel, poor
availability of product and inadequate service to customers. Marketers may note
that even in standard products, considerable differentiation and competitive
edge can be generated by being a courteous and 'helpful host to visiting
customers.

State only Realistic Product Claims

The previous explanations between product performance and expectation

require a marketer to state only realistic product claims. Factual promotion-
executed with creativity, brings about lasting customer loyalty and goodwill.

Help Consumer on Product Use

The manner in which the product is used can be crucial to customer satisfaction/
dissatisfaction. It is in the interest of marketers themselves to help consumer in
proper use of the product - especially those which may fail if wrongly opened or
used blindly. Adequate instructions or information could be given to reduce
potential consumer dissatisfaction.

Sell `Solution' instead of Product

Nobody buys a product what consumer buy is `solution' through products. Thus,
promotional attempts should focus on the solution or performance of product
rather than the product. This will signify the desire of marketers to provide
satisfaction to customers.

Assure Even after the Purchase is Over

Marketers must assure the buyers, even after the purchase is concluded of their
commitment to customers' satisfaction. A thank-you letter or a visit to
customers enquiring about their post-purchase feelings can go a long way in
building a healthy and satisfying relationship for both customers and marketers.

Unit 3

Individual Determinants of Consumer Behavior

Personality:

Usually personality is defined, as what a person is that is his personality.

However, personality is not a single concept rather multidimensional in nature.
Personality is unique to each individual. Our personality influences our
responses to our environment. Personality can be defined as the qualities and
traits, that define the character or behavior of a specific person. From our own
experience, we may see that others behave differently in different circumstances
or around different people. Also, people have always made judgments about the
personalities of other in terms of the degree to which they an aggressive,
adventuresome, sociable, charismatic, and so on. Studies back up this idea.
Because we see people in limited circumstances, we tend to see consistency.
Psychologists look at personality by looking at what traits people report or
demonstrate, but also, they look at the context of the behaviour. Marketers want
to understand personality so they can segment consumers as far as activities,
tastes and lifestyles (psychographics). The better they understand the consumer
the more accurate a marketing campaign could be.

Objective:

– to identify personality variables that distinguish large groups of

people from each other.
– To describe through individual difference variables how one
person varies from another in his or her distinctive patterns of
behavior: include personality, self-concept, psychographic, and
even demographic variables.

The Nature of Personality

a) Personality reflects individual differences.

b) Personality is consistent and enduring.

c) Personality can change.

Personality Reflects Individual Differences

1. An individual‘s personality is a unique combination of factors; no two

individuals are exactly alike.

2. Personality is a useful concept because it enables us to categorize consumers

into different groups on the basis of a single trait or a few traits.

Personality is Consistent and Enduring

1. Marketers learn which personality characteristics influence specific consumer
responses and attempt to appeal to relevant traits inherent in their target group
of consumers.

2. Even though an individual‘s personality may be consistent, consumption

behavior often varies considerably because of psychological, socio-cultural, and
environmental factors that affect behavior.

Personality can Change

1. 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.
2. An individual‘s personality also changes as part of a gradual maturing
process.
a) Personality stereotypes may also change over time.
b) There is a prediction, for example, that a personality convergence is
occurring between men and women.

Theories of personality

There are several theories that have been proposed on personality. While there
is no agreement on exactly how personality influences behaviour, there are at
least four distinct approaches that are known to have implications for
developing the marketing mix and for segmentation. Each of these theories has
played a prominent role in studying the relationship between consumer
personalities and their behaviour. These theories are:

 The Psychoanalytic Theory of Freud

 Social-Psychological Neo-Freudian Theory
 Trait Theory
 Self-Concept Theory
The Psychoanalytic Theory of Freud

Sigmund Freud‘s psychoanalytic theory of personality is the cornerstone of

modern psychology. 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. Freud proposed that every individual's
personality is the product of a struggle among three interacting forces: the id,
the ego and the superego. According to this theory, these three systems are
fully developed and are in a state of balance in a normal healthy person.
However, when one or more of these systems is underdeveloped then the
internal balance is disturbed. This disturbance leads to maladjustment and
dissatisfaction with the self and the world in general.

Id is the source of strong inborn drives and urges such as aggression and sex.
The function of the id is discharge tension and it frequently does this by
demanding instant gratification, even at the cost of violating the norms of
society. The id
therefore operates on what is called the pleasure principle. Psychologically, the
id is the source of all desires and wishes that exist in the form of unconscious
images and fantasies. Since all tensions are not immediately satisfied, the
human being encounters frustration. For example, when an individual is hot
and thirsty his id would urge him to grab something cold to drink. There would
no concern about how the drink was acquired or whether it belongs to someone
else.

Since it operates on a very subjective level, the id is not capable of dealing with
objective reality. The ego comes into being because of the limitations of the id
in dealing with reality and operates, therefore, on what is called the reality
principle. It seeks to achieve the pleasurable demands of the id in as realistic a
way as possible. Since many of the id's demands may be unrealistic, the ego
develops ways to postpone, deflect or substitute feasible alternatives to satisfy
the id. To take a simple example, let us assume that an individual sees an
attractive object in a shop window and wants it immediately. The ego
recognizes the consequences such as the financial constraints, a need for the
product, and accordingly restrains activity. It thus helps to develop cognition
and controls impulsive behaviour. Thus, while the id engages in daydreams and
fantasy, which exist as pleasurable imaginations, the ego can distinguish
between these and reality.

The superego strives for perfection. It develops through the reinforcement of

approved behaviour patterns and results from the internalization of societal and
parental standards of what is good and bad. The superego is, therefore, the
individual's moral code and helps in striving for perfection. Its primary purpose
is, accordingly, to restrain aggressive impulses of the id rather than seek to
postpone them, as does the ego.

It is believed that the id and superego operate to create to unconscious motives

for purchasing certain products. Although these motives would be extremely
hard to determine, they might be central to explaining certain purchasing
behaviours.

Applications of Psychoanalytic Theory.

Psychoanalytic theory has been used occasionally by marketers as a basis for

influencing consumers. According to psychoanalytic theory, consumers are seen
as having conflicting desires as they are confronted with products to gratify
wants. And according to Freudian theory, anxiety is a key concept emerging out
of this conflict system. One application, therefore, is for consumers to minimize
the anxiety arising out of this conflict system by appealing to their tendencies of
fantasizing, wish fulfilment, aggressive impulses and the need to escape from
life's pressures. Marketers therefore use flights of fantasy to propel people to
buy products. Thus, hedonism is an appeal to the pleasure principle and, this
approach underlies many of the products designed for an affluent society.

Psychoanalytic theory has, however, caused marketers to realize that, while it is

possible to appeal subconsciously to buyers' dreams, hopes and fears, there are
other occasions when it is necessary to provide buyers with socially acceptable
rational for making purchases.

Social-psychological or neo-freudian theory

Some social-psychologists have forwarded the view that, social relationships are
fundamental to the formations and development of personality. On the basis of
their orientations in relating to others, individual consumers tend to develop
methods to cope with their anxieties, Consumers have consequently been
classified into three personality groups using what is called the `CAD model'
where CAD is an acronym that stands for compliance, aggression and
detachment. The CAD model was developed by using the concept of
`interpersonal man' and considers all consumers as having one of three basic
orientations so that they may be described as belonging to one of the following
categories of individuals:

i) Compliant Individuals: These individuals tend to move toward others.

Compliant people have a need for love, affection, approval and the desire to be
appreciated. They are essentially conformists.

ii) Aggressive Individuals: They tend to move against others. Their

interpersonal orientations display the ability to manipulate others. Such
individuals also appear to have a need to achieve success, to excel, to gain
admiration and to be in a power position.

iii) Detached Individuals: This category of persons tends to move away from
others. Their relationships emphasize the need for self-reliance, independence,
and freedom.
Application of Social-psychological Theory

It has been found that individuals having different personality types tend to use
different products and brands. The CAD model was, in fact, developed for the
specific purpose of studying buying behaviour and it emphasizes the effect of
social influences on the personality. Thus, studies have shown that compliant
types have been found to prefer known products and brands while aggressive
types have been found to prefer specific brands out of a desire to be noticed, and
also to use more of aftershave lotions and colognes. In contrast, detached types
appear to have the least awareness of brands. The CAD approach is used by
marketers to predict which consumers may be more or less prone to group
influence.

The most important application of social-psychological theory is its emphasis

on the social nature of consumption. In fact, you will see this in advertising
copy in which social interaction is stressed more than the products themselves.
Advertising for personal care products, for instance, emphasizes the fear of
offending others. Social interaction is also highlighted in the case of products
advertised for occasions for being together.

Trait theory of personality

Trait theory of personality is one of the recent and slightly `implementable

theory of personality. The approach here is to focus on the quantitative
measurement of traits, or identifiable characteristics that define a person.
For example, people can be distinguished by the degree to which they are
socially outgoing (the trait of extroversion). Some specific traits that are
relevant to consumer behaviour include innovativeness (the degree to which a
person likes to try new things), materialism (amount of emphasis placed on
acquiring and owning products), self-consciousness (the degree to which a
person deliberately monitors and controls the image of the self that is
projected to others), ethnocentrism (the consumer‘s likelihood to accept or
reject foreign-made products) and, need for cognition (the degree to which a
person likes to think about things and by extension expend the necessary
effort to process brand information). Thus, the approach tires to identify the
dimensions and make up the personality of the consumer. This way,
comparisons can be made over the segments as well cultures. Marketers have
used the approach quite often. For this purpose, a variety of personality scales
have developed and employed. Trait theory attempts to describe people in terms
of their predispositions on a series of adjectives.

Trait theory is based on certain assumptions namely that:

1) Traits are relatively stable characteristics.

2) There are a limited number of traits common to most people. People differ in
the extent to which they possess these common traits.

3) The degrees to which individuals possess certain traits can be measured by

using a questionnaire.

Factor theories involve the application of Trait theory by subjecting large

numbers of individuals to personality tests the results of which are subsequently
analysed by a statistical technique called factor analysis. This enables common
factors or traits to be identified in groups of people who constitute market
segments.

This approach is however not without its limitations as given below:

a) The theory requires a scale to measure these traits. Many of the scales are not
sufficiently valid or reliable, and they do not adequately measure what they are
supposed to measure, and their results may not be stable over time.
b) Personality tests are often developed for specific populations (e.g., mentally
ill people), these tests are then "borrowed" and applied to the general population
where their relevance is questionable.

c) The tests often are not administered under the appropriate conditions.
Instance have been reported in the literature that often these tests have been
given in a classroom or over a kitchen table by people who are not properly
trained.

d) The researchers often make changes in the instruments to adapt them to their
own situations, in the process deleting or adding items and renaming variables.
These ad hoc changes dilute the validity of the measures and also reduce
researchers' ability to compare results across consumer samples.

e) Many trait scales are intended to measure gross, overall tendencies (e.g.,
emotional stability or introversion), these results are then used to make
predictions about purchases of specific brands. Such attempts may be termed at
best, ambitious.

f) In many cases, a number of scales are given with no advance thought about
how these measures should be related to consumer behaviour. The researchers
then use a shotgun approach-- following up on anything that happens to look
interesting.

Big five personality traits

Openness

This trait features characteristics such as imagination and insight. People who
are high in this trait also tend to have a broad range of interests. They are
curious about the world and other people and eager to learn new things and
enjoy new experiences. People who are high in this trait tend to be more
adventurous and creative. People low in this trait are often much more
traditional and may struggle with abstract thinking.

Conscientiousness

Standard features of this dimension include high levels of thoughtfulness, good

impulse control, and goaldirected behaviours. Highly conscientious people tend
to be organized and mindful of details. They plan ahead, think about how their
behaviour affects others, and are mindful of deadlines.

Extraversion

Extraversion (or extroversion) is characterized by excitability, sociability,

talkativeness, assertiveness, and high amounts of emotional expressiveness.
People who are high in extraversion are outgoing and tend to gain energy in
social situations. Being around other people helps them feel energized and
excited. People who are low in extraversion (or introverted) tend to be more
reserved and have less energy to expend in social settings. Social events can feel
draining and introverts often require a period of solitude and quiet in order to
"recharge."

Agreeableness

This personality dimension includes attributes such as trust, altruism, kindness,

affection, and other prosocial behaviours. People who are high in agreeableness
tend to be more cooperative while those low in this trait tend to be more
competitive and sometimes even manipulative.

Neuroticism

Neuroticism is a trait characterized by sadness, moodiness, and emotional

instability. Individuals who are high in this trait tend to experience mood
swings, anxiety, irritability, and sadness. Those low in this trait tend to be more
stable and emotionally resilient.

Personality & Consumer Diversity

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.

Consumer Innovativeness and Related Personality Traits.

Marketing practitioners must learn all they can about consumer innovators those
who are likely to try new products. Those innovators are often crucial to the
success of new products. Personality traits have proved useful in differentiating
between consumer innovators and non-innovators.

Personality traits to be discussed include:

 Consumer innovativeness.
 Dogmatism.
 Social character.
 Need for uniqueness.
 Optimum stimulation level.
 Variety-novelty seeking.

Consumer Innovativeness

How receptive are consumers to new products, new services, or new practices?
Recent consumer research indicates a positive relationship between innovative
use of the Internet and buying online.

Dogmatism

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. Consumers low in dogmatism are more
likely to prefer innovative products to established ones. Consumers high in
dogmatism are more accepting of authority- based ads for new products.
Social Character

Social character is a personality trait that ranges on a continuum from inner

directed to other-directed. Inner-directed consumers tend to rely on their own
inner values or standards in evaluating new products and are innovators. They
also prefer ads stressing product features and personal benefits. Other-directed
consumers tend to look to others for direction and are not innovators. They
prefer ads that feature social environment and social acceptance.

Need for Uniqueness

These people avoid conformity are the ones who seek to be unique!

Optimum Stimulation Level

Some people prefer a simple, uncluttered, and calm existence, although others
seem to prefer an environment crammed with novel, complex, and unusual
experiences. Persons with optimum stimulation levels (OSL s) are willing to
take risks, to try new products, to be innovative, to seek purchase-related
information, and to accept new retail facilities. The correspondence between an
individual ‘s OSL and their actual circumstances has a direct relationship to the
amount of stimulation individual ‘s desire. If the two are equivalent, they tend
to be satisfied. If bored, they are under stimulated, and vice versa.

Variety-Novelty Seeking.

This is similar to OSL. Primary types are variety or novelty seeking. There
appear to be many different types of variety seeking: exploratory purchase
behavior (e.g., switching brands to experience new and possibly better
alternatives), vicarious exploration (e.g., where the consumer secures
information about a new or different alternative and then contemplates or even
daydreams about the option), and use innovativeness (e.g., where the consumer
uses an already adopted product in a new or novel way).
The third form of variety or novelty seeking use innovativeness is particularly
relevant to technological changes. Consumers with high variety seeking scores
might also be attracted to brands that claim to have novel or multiple uses or
applications. Marketers, up to a point, benefit from thinking in terms of offering
additional options to consumers seeking more product variety. Ultimately,
marketers must walk the fine line between offering consumers too little and too
much choice. The stream of research examined here indicates that the consumer
innovator differs from the non-innovator in terms of personality orientation.

Cognitive Personality Factors

Market researchers want to understand how cognitive personality influences

consumer behavior. Two cognitive personality traits have been useful in
understanding selected aspects of consumer behavior. They are:

a) Need for cognition.

b) Visualizers versus verbalizers.

Need for Cognition

This is the measurement of a person ‘s craving for or enjoyment of thinking.

Consumers who are high in NC (need for cognition) are more likely to be
responsive to the part of an advertisement that is rich in product-related
information of description. They are also more responsive to cool colors.
Consumers who are relatively low in NC are more likely to be attracted to the
background or peripheral aspects of an ad. They spend more time on print
content and have much stronger brand recall. Need for cognition seems to play a
role in an individual ‘s use of the Internet.

Visualizers versus Verbalizers

Visualizers are consumers who prefer visual information and products that
stress the visual. Verbalizers are consumers who prefer written or verbal
information and products that stress the verbal. This distinction helps marketers
know whether to stress visual or written elements in their ads. From Consumer
Materialism to Compulsive Consumption.

Consumer Materialism

Materialism is a trait of people who feel their possessions are essential to their
identity. They value acquiring and showing off possessions, they are self-
centered and selfish, they seek lifestyles full of possessions, and their
possessions do not give them greater happiness.

Fixated Consumption Behavior

Somewhere between being materialistic and being compulsive is being fixated

with regard to consuming or possessing. Like materialism, fixated consumption
behavior is in the realm of normal and socially acceptable behavior. Fixated
consumers ‘characteristics: include – 1. A deep (possibly: ―passionate‖)
interest in a particular object or product category. 2. A willingness to go to
considerable lengths to secure additional examples of the object or product
category of interest. 3. The dedication of a considerable amount of discretionary
time and money to searching out the object or product. This profile of the
fixated consumer describes many collectors or hobbyists (e.g., coin, stamp,
antique collectors, vintage wristwatch, or fountain pen collectors).

Compulsive Consumption Behavior

Compulsive consumption is in the realm of abnormal behavior. Consumers who

are compulsive have an addiction; in some respects, they are out of control, and
their actions may have damaging consequences to them and those around them.

Brand Personality

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. A brand ‘s personality can either be
functional (provides safety) or symbolic (the athlete in all of us).

Self-concept

Self-concept is defined as the way, in which we think, our preferences, our

beliefs, our attitudes, our opinions arranged in a systematic manner and also
how we should behave and react in various roles of life. Self-concept is a
complex subject as we know the understanding of someone’s psychology, traits,
abilities sometimes are really difficult. Consumers buy and use products and
services and patronize retailers whose personalities or images relate in some
way or other to their own self-images.

Traditionally, individuals are considered to be having a single self-image which

they normally exhibit. Such type of consumers is interested in those products
and services which match or satisfy these single selves. However, as the world
became more and more complex, it has become more appropriate to think of
consumers as having multiple selves.

Self-Concept theory

This theory holds that individuals have a concept of self-based on who they
think they are (the actual self) and a concept of who they think they would like
to be (the ideal self). Self-concept theory is related to psychoanalytic theory
since the actual self is similar to the ego and the ideal self is similar to the
superego. Self-concept theory is governed by the desire to attain self-
consistency and the desire to enhance one's self esteem. Generally, consumers
buy products that confirm to their actual self-image. But if they are low in self-
esteem, they are more likely to buy based on what they would like to be rather
than what they are.

Another dimension of self-concept theory is the extended self. Certain products

have symbolic value and are considered an extension of our personality (eg, a
car). This extension of self-concept theory in fact has been called symbolic
interactionism because it emphasizes the interaction between individuals and
the symbols in their environment.

Advertisers have understood the symbolic role of products in influencing self-

image. Advertising for jewellery, cosmetics, automobiles and clothing
frequently communicates an image of the user.

Self-concept and Consumer behavior:

Consumers’ self-perceptions can have a strong influence on their behavior in

the marketplace. The way an individual perceive various products could be
affected by the image he has of himself. In fact, preferences might actually
develop for certain brands because the consumer perceives them as reflecting
his own self-image.
Self-Image-Product Image Congruence

Because many consumption activities are related self-definition, it is not

surprising to learn that consumers demonstrate consistency between their values
and attitudes and the things they buy. Self-image congruence models predict
that products will be chosen when their attributes match some aspect of the self.
These models assume a process of cognitive matching between these attributes
and the consumer's self- image. While results are somewhat mixed, the ideal
self appears to be more relevant as a comparison standard for highly expressive
social products such as perfume. In contrast, actual self is more relevant for
every day, functional products. These standards are also likely to vary by usage
situation. For example, a consumer might want a functional, reliable car to
commute to work every day, but a flashier model with more "zing" when going
out on a social date in the evening.

Marketing Applications:
Different interpretations of the concept can create uncertainty regarding its use
in understanding consumers. Self-image is a powerful concept, which has many
implications and applications in the field of consumer behavior. The concept
has been used in market segmentation, advertising, packaging, personal selling,
product development, and retailing. Some people have suggested that
companies can segment markets into more homogenous sets of self-image
profiles. The self-image concept is quite heavily used in a variety of aspects of
promotion.
This is clearly demonstrated in the area of clothing. Analysis of consumer self-
images and their images of brands can also aid marketers in developing
products. New brands can be created based on consumer self-image profiles for
which there are no matching brand images existing. Product categories having
particular promise in this area include those that generate high ego involvement
and have high social visibility among upper social classes. This can be an
important predictor of consumers’ brand preferences. However, brand
preferences are not necessarily translated directly into purchase. Prices and
other individual factors can modify these brand preferences before they are
acted upon.
Lifestyle:

The Lifestyle of individuals has always been of great interest to marketers. They
deal with everyday behaviorally oriented facets of people as well as their
feelings, attitudes, interests and opinion. A lifestyle marketing perspective
recognizes that people sort themselves into groups on the basis of the things
they like to do, how they like to spend their leisure time and how they choose to
spend their disposable income. Lifestyle is an important concept used in
segmenting markets and understanding target customers, which is not provided
by the study of demographics alone. Many researchers have focused on
identifying the lifestyle of the consumers to have better information about them.
Lifestyle marketing is a process of establishing relationships between products
offered in the market and targeted lifestyle groups. It involves segmenting the
market on the basis of lifestyle dimensions, positioning the product in a way
that appeals to the activities, interests and opinions of the targeted market and
undertaking specific promotional campaigns which exploit lifestyle appeals to
enhance the market value of the offered product. The Marketing Dictionary of
Rona Ostrow and Sweetman R. Smith describes lifestyle as "a distinctive mode
of behaviour centered around activities, interests, opinions, attitudes and
demographic characteristics distinguishing one segment of a population from
another. A consumer's lifestyle is seen as the sum of his interactions with his
environment. Lifestyle studies are a component of the broader behavioural
concept called psychographics."
Lifestyle theory:
 The theory of lifestyles is based on the idea that people try to predict and
control their lives.
 Lifestyles are shaped by the interaction of social and personal variables.
 A popular way to measure lifestyles is called psychographics.
Characteristics of lifestyle
Feldman and Theil bar describe lifestyle by the following characteristics:
1. Lifestyle is a group phenomenon
A person's lifestyle bears the influence of his/her participation in social groups
and of his/her relationships with others. Two clerks in the same office may
exhibit different lifestyles.
2. Lifestyle pervades various aspects of life
An individual's lifestyle may result in certain consistency of behaviour.
Knowing a person’s conduct in one aspect of life may enable us to predict how
he/she may behave in other areas.
3. Lifestyle implies a central life interest
For every individual there are many central life interests like family, work,
leisure,
sexual exploits, religion, politics etc. that may fashion his interaction with the
environment.
4. Lifestyles vary according to sociologically relevant variables
The rate of social change in a society has a great deal to do with variations in
lifestyles. So do age, sex, religion, ethnicity and social class. The increase in
the number of double income families and that of working women have resulted
in completely different lifestyles in the 1980's in India.
Approaches to study lifestyle
The study of lifestyle is interdisciplinary. It draws on a variety of disciplines
such as anthropology, psychology, sociology and economics. Marketing uses
this eclectic approach for segmenting, targeting and positioning which forms the
core of marketing strategy. Because lifestyle refers to the way in which people
live and spend money, consumers psychographic profiles are derived by
measuring different aspects of consumer behaviour such as:
1 Products and services consumed
2 Activities, interests and opinions (AIO model)
3 Value and Lifestyles systems (VALs Model)
4 Personality traits and self-conception
5 Attitude towards various product classes

Activities, interests and opinions (AIO model)

The product we consume are a part of our lifestyle. Therefore, our lifestyle can
be determined on the basis of our consumption pattern. Lifestyle segmentation
is based on activities, interests and opinions of a group. Marketers use AIO
model to find out about the life styles of the consumers.
Activities: How one spends his/her time (Sports, Work, Religious, studying,
social, Vacation, Club member, shopping, entertainment)
Interests: A person’s priorities and preferences make up their interest (Family,
Home, job, recreation, Fashions, food, music, book)
Opinion: One’s feelings towards different event of life (Business, Politics,
Education, Past and Future, products, Economics)
Value and Lifestyles systems (VALs Model)
Another widely used lifestyle classification system is the Values and Lifestyle
classification developed by Arnold Mitchell. The VALS system of classification
classifies adults (18 +) in the US into distinctive lifestyle groups. Each group is
based on inner psychological needs (values) and behaviour response patterns
(lifestyles) which their values predict. The psychological theory used in VALS
draws heavily on Abraham Maslow's Hierarchy, on Needs. The VALS theory
and database were first applied to markets in 1978. VALS provides a dynamic
framework of values and lifestyles; which helps to explain why people act as
they do as social groups and as consumers. VALS, unlike some other
approaches, waves together:
1. Demographics,
2. Attitudes,
3. Activities,
4. Consumption patterns,
5. Brand preferences.
6. Media graphics.
The VALS study leads to the identification of four major groups i.e. the need
driven (the poor and uneducated), the outer directed (the middle or upper
income class consumer whose lifestyle is directed by external criteria) and the
inner directed (people who are motivated more by inner needs than by the
expectations of others. The fourth segment, called integrated represents
individuals who have been able to combine the best of both outer directed and
inner-directed values.
Applications of VALs Classification
Marketers have put to good use this concept which is based on the idea that
individuals pass through a number of developmental stages" with each stage
affecting the person’s attitudes, behaviour and psychological needs.
As the preceding portraits have revealed, VALS can be used to
1 Identify target market characteristics and usage.
2 Guide executional and strategic approaches.
3 Identify key media for target groups.
4 Guide merchandising efforts.
The new advertising appeals being tried for products in India and the
convenience-oriented retailing emerging in the country namely fast-food
restaurants, specialty shops for apparel as well as other products, etc. are
representative of the marketing thrust resulting from targeting at selected
lifestyle groups for niche Manship.
VALS (Value & lifestyle) Segmentation based on value & lifestyle
orientation
 Actualizers - successful, many resources
 Fulfilled - career oriented, practical, principles
 Achievers - career-oriented, predictability
 Experiencers - impulsive, young, action
 Believers - strong principles, proven brands
 Strivers - like achievers, fewer resources
 Makers - action, DIY Strugglers: difficult life
Application of life styled Marketing

1. Positioning of New Products

Positioning comprises finding the most profitable niche for a new product in
terms of target: market. Lifestyle research, for example, an AIO portrait, of
heavy users for any given consumer product not only tells us how old they are,
where they live and to what socio-economic group they belong, it also tells us
what products are they likely to buy, what their interests and opinions are. This
provides an unusually rich body of data for use in marketing decisions related to
the positioning of a new product. Decisions concerning the precise target group
at which the product is to be aimed, the product image to be designed, the media
vehicle and the type of promotion strategy to be taken so that the complete
product package is in conformity with a particular lifestyle/style.
2. Repositioning an Old/Existing Product
Sometimes existing products may sell well below their forecast potential or the
company may discover a new, more profitable niche, nearer to the core market
where it may now want to position the product. Repositioning is often a
contingency planned for in the new product development process, primarily as a
remedial measure. Generally, in markets where the competitive activity is high,
the need while positioning the product for the fixed time is to get a foot hold in
the market. After gaining market penetration, establishing distribution and
creating a certain degree of market acceptability, the manufacturer may, through
repositioning, or a series of repositioning’s move the product closer to the core
market. Lifestyle marketing strategies help considerably in reducing the amount
of `market grouping' that repositioning may entail.
3. Developing New Product Concepts
Study of existing market segments and analysis of their needs have typically
been used to conceptualise on new product opportunities. Traditionally,
demographic segmentation, or standard consumer classification of major groups
like the educated youth, the young collegiate, the urban housewife etc. have
been used to define and study the segments. Lifestyle studies on the other hand
can be used to complement the demographic studies in terms of market needs,
customer and non-customer attitudes, the opinions related to product usage and
the interests of the target customers, to be able to define the product attributes
which may be congenial to certain lifestyles. For example, users of fluoride
toothpaste may have different expectations from it. Some use it as a medicinal
aid to oral hygiene; others feel it should give cosmetic benefit. Even among
these who use it as a medicine, there are two sets of expectations, some
believing that a medicine ought to taste like a medicine while others strongly
feel that just because the fluoride toothpaste has a medicinal ingredient, it need
not taste like one. In developing the concept of a new fluoride toothpaste, you
will find that a complete inventory of Attitudes, Interests and Opinions of the
consumers will help you in defining the attributes of the final product, as you
can define the requirements of the different lifestyle segment and then
conceptualize as to which segment you wish to aim the product at.
4. Creating Promotional Strategies
Lifestyle information is helpful in developing promotional strategies in a
number of ways. It gives the decision maker a much more complete profile of
the type of consumer who will be at the receiving end of the communication.
Lifestyle data suggests the style of language, the tone of voice and even the
appeal that may be utilized to reach that kind of consumer. Further, lifestyle
information indicates how the product or service fits into people’s lives, how
they feel about it and how they may be using the product or service to
communicate with others. This information can be utilized by the marketer to
decide upon the kind of image he wants to imbue the product with.
Motivation and consumer behavior
People are motivated by many things, some positive others not. Some
motivating factors can move people only a short time, like hunger which will
last only until you are fed. Others can drive a person onward for years.
Motivation is the driving force within individuals that impels them to action.
Motivation is the activation or energization of goal-oriented behavior.
Motivation may be intrinsic or extrinsic. The term is generally used for humans
but, theoretically, it can also be used to describe the causes for animal behavior
as well. According to various theories, motivation may be rooted in the basic
need to minimize physical pain and maximize pleasure, or it may include
specific needs such as eating and resting, or a desired object, hobby, goal, state
of being, ideal, or it may be attributed to less-apparent reasons such as altruism,
morality, or avoiding mortality.
Needs: Needs are the essence of the marketing concept. Marketers do not create
needs but can make consumers aware of needs. A need is something that is
necessary for humans to live a healthy life. Needs are distinguished from wants
because a deficiency would cause a clear negative outcome, such as dysfunction
or death. Needs can be objective and physical, such as food and water, or they
can be subjective and psychological, such as the need for self-esteem. On a
societal level, needs are sometimes controversial, such as the need for a
nationalized health care system. Understanding needs and wants is an issue in
the fields of politics, social science, and philosophy.
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
Goals: A goal or objective is a projected state of affairs that a person or a
system plans or intends to achieve a personal or organizational desired end-
point in some sort of assumed development. It is the sought-after results of
motivated behavior.
Types of goals:
Generic goals: are general categories of goals that consumers see as a way to
fulfill their needs
 Product-specific goals: Are specifically branded products or services that
consumers select as their goals
Positive and negative motivation:
Positive motivation is a response which includes enjoyment and optimism
about the tasks that you are involved in. Positive motivation induces people to
do work in the best possible manner and to improve their performance. Under
these better facilities and rewards are provided for their better performance.
Such rewards and facilities may be financial and non-financial.
Negative motivation aims at controlling the negative efforts of the work and
seeks to create a sense of fear for the worker, which he has to suffer for lack of
good performance. It is based on the concept that if a worker fails in achieving
the desired results, he should be punished. Negative motivation involves
undertaking tasks because there will be undesirable outcomes, eg. failing a
subject, if tasks are not completed.
Rational versus Emotional Motives
Rationality implies that consumers select goals based on totally objective
criteria such as size, weight, price, or miles per gallon. A conscious, logical
reason for a purchase. A motive that can be defended by reasoning or logical
argument.
Emotional motives imply the selection of goals according to personal or
subjective criteria. A feeling experienced by a customer through association
with a product.
The Dynamic Nature 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
Model of the Motivation Process:
The motivational process is the steps that you take to get motivated. It is a
process, that when followed produces incredible results. It is amazing what you
can do if you are properly motivated, and getting properly motivated is a matter
of following the motivational process. Like any other process it takes a little
work and foresight and planning on your part. However, the return on your
investment of time is significant, and it is important when needing extra
motivation that you apply the motivational process.

In the initiation a person starts feeling lacknesses. There is an arousal of need so

urgent, that the bearer has to venture in search to satisfy it. This leads to
creation of tension, which urges the person to forget everything else and cater to
the aroused need first. This tension also creates drives and attitudes regarding
the type of satisfaction that is desired. This leads a person to venture into the
search of information. This ultimately leads to evaluation of alternatives where
the best alternative is chosen. After choosing the alternative, an action is taken.
Because of the performance of the activity satisfaction is achieved which than
relieves the tension in the individual.
Arousal of Motives:
The arousal of any particular set of needs at a specific moment in time may be
caused by internal stimuli found in the individual’s physiological condition, by
emotional or cognitive processes or by stimuli in outside environment.
 Physiological arousal
 Emotional arousal
  Cognitive arousal
 Environmental arousal
 Physiological Arousal Bodily needs at any one specific moment in time
are based on the individual physiological condition at the moment. Ex..A
drop in blood sugar level or stomach contractions will trigger awareness
of a hunger need. Ex..A decrease in body temperature will induce
shivering, which makes individual aware of the need for warmth this type
of thing, they arouse related needs that cause uncomfortable tensions until
they are satisfied. Ex..Medicine, low fat and diet.
 Emotional Arousal Sometime daydreaming results in the arousal
(autistic thinking) or stimulation of latent needs. People who are board or
who are frustrated in trying to achieve their goals or often engage in
daydreaming, in which they imagine themselves in all sorts of desirable
situations. Ex.A young woman who may spend her free time in internet
single chat room.
 Cognitive arousal Sometime random thoughts can lead to a cognitive
awareness of needs. An advertisement that provides reminders of home
might trigger instant yearning to speak with one’s parents.
 Environment arousal The set of needs an individual experiences at
particular time are often activated by specific cues in the environment.
Without these cues the needs might remain dormant. ex. The 8’o clock
news, the sight or smell of bakery goods, fast food commercials on
television, all these may arouse the need for food Ex..New cell phone
model display in the store window.
Theories of Motivation
Maslow’s Theory of Need Hierarchy
Based on the notion of a universal hierarchy of human needs Dr Abraham
Maslow, a clinical psychologist formulated a widely accepted theory of human
motivation. This identifies five basic levels of human need which rank in order
of importance from lower-level needs to higher level needs.
This theory signifies the importance of satisfying the lower-level needs before
higher level needs arise. According to this theory, dissatisfaction motivates the
consumer.
Following are the levels of human needs –
As per his theory this needs are:

(i) Physiological needs: These are important needs for sustaining the human
life. Food, water, warmth, shelter, sleep, medicine and education are the basic
physiological needs which fall in the primary list of need satisfaction. Maslow
was of an opinion that until these needs were satisfied to a degree to maintain
life, no other motivating factors can work.

(ii) Security or Safety needs: These are the needs to be free of physical danger
and of the fear of losing a job, property, food or shelter. It also includes
protection against any emotional harm.

(iii) Social needs: Since people are social beings, they need to belong and be
accepted by others. People try to satisfy their need for affection, acceptance and
friendship.

(iv) Esteem needs: According to Maslow, once people begin to satisfy their
need to belong, they tend to want to be held in esteem both by themselves and
by others. This kind of need produces such satisfaction as power, prestige status
and self-confidence. It includes both internal esteem factors like self-respect,
autonomy and achievements and external esteem factors such as states,
recognition and attention.

(v) Need for self-actualization: Maslow regards this as the highest need in his
hierarchy. It is the drive to become what one is capable of becoming, it includes
growth, achieving one’s potential and self-fulfillment. It is to maximize one’s
potential and to accomplish something.

As each of these needs are substantially satisfied, the next need becomes
dominant. From the standpoint of motivation, the theory would say that
although no need is ever fully gratified, a substantially satisfied need no longer
motivates. So, if you want to motivate someone, you need to understand what
level of the hierarchy that person is on and focus on satisfying those needs or
needs above that level.

Maslow’s need theory has received wide recognition, particularly among

practicing managers. This can be attributed to the theory’s intuitive logic and
ease of understanding. However, research does not validate this theory. Maslow
provided no empirical evidence and other several studies that sought to validate
the theory found no support for it.

Maslow’s hierarchy of needs in marketing (application)

To help with training of Maslow's theory look for Maslow's Hierarchy of Needs
motivators in advertising. This is a great basis for Maslow and motivation
training exercises:

Biological and Physiological needs - wife/child-abuse help-lines, social

security benefits, Samaritans, roadside recovery.

Safety needs - home security products (alarms, etc), house an contents

insurance, life assurance, schools.
Belongingness and Love needs - dating and match-making services, chat-lines,
clubs and membership societies, Macdonalds, 'family' themes.

Esteem needs - cosmetics, fast cars, home improvements, furniture, fashion

clothes, drinks, lifestyle products and services.

Self-Actualization needs - Open University, and that's about it; little else in
mainstream media because only 2% of population are self-actualizers, so they
don't constitute a very big part of the mainstream market.

McGuire’s Psychological Motives

McGuire’s developed a classification system that organizes these various
theories into 16 categories. The 16 categories of basic motives divided into 4
basic groups. Based on 4 categories on two broad criteria.
 Is the mode of motivation cognitive or affective?
 Is the motive focused on preservation or growth?
Cognitive motive focuses on a person’s needs for being oriented towards the
environment and achieving a sense of meaning. Affective motive focuses on
achieving a satisfaction state. Preservation motive focuses on achieving a state
of equilibrium. While, Growth motive emphasizes development.
Further subdivided using two more criteria
 Is the behavior actively initiated or a response to an environment?
 Is this behavior helps the individuals to achieve internal or external
relationship to the environment?
The third criterion distinguishes between motives that are actively or internally
aroused versus those that are a more passive response to circumstances. The
final criterion is used to categorize outcomes that are internal to the individual
and those focused on a relationship with the environment. There are 16
McGuire’s Psychological Motives and their implications for marketing are
briefly described as;
 1. Cognitive Preservation Motives

a. Need for Consistency (active, internal): The need for internal equilibrium
and balance. People have a basic desire to have all parts of themselves
consistent and they purchase products that fulfill this need. For example, An
elite products is higher priced and available at exclusive stores as it shows that
internal balance of a person is maintained at exclusive stores because they
keeping products affordable by elite class.

b. Need for Attribution (active, external): This set of motives deals with our
need to determine who or what causes things to happens to us and relates to an
area of research called attribution theory. Need for attribution is extremely
relevant to consumers reactions to promotional messages. For example, our
friend recommending certain product is likely to be believed more than a
salesperson effort.

c. Need to categorize (passive, internal): Categories allow people to process

and organize information and experiences in a meaningful way. For example,
Vehicles are categorized into cars, light trucks , heavy duty trucks, van , sporty
mid-size, hybrid and so on. This helps consumers quickly narrow down their
choices when purchasing a vehicle. Another example is price points such as
fragrance over $100 and fragrance under $100.

d. Need for objectification or cues (passive, external): These motives reflect

needs for observable cues , symbols or signs that allow us to know that what is
happening. For example , Clothing plays an important role in presenting image
of a person . People quickly judge others by the clothing they are wearing and
the vehicle they drive. Another example , The tick from the Heart Foundation
lets us know the product is good for us.

2. Cognitive Growth Motives

a. Need for Autonomy (active, internal): The need for independence and
individuality. All individuals in all cultures have this need at some level. Owing
or using products and services that are unique is one-way consumers express
their autonomy. Marketers have responded to this motive by developing
products and providing wide variety and customization options. In addition,
many products are advertised and positioned with independence, uniqueness, or
individuality themes.

Americans strive for individuality and self-expression and many products are
marketed as “limited edition” or being different and unique. In contrast, with the
Japanese culture discourages individuality and focuses on affiliation, and
behavior that enhances family and culture.

b. Need for Stimulation (active, external): People often seek variety and
difference out of a need for stimulation. Such variety seeking behavior may be a
prime reason for brand switching and so-called impulse purchasing. The need
for stimulation is curvilinear and changes over time. That is, individuals
experiencing rapid change generally desire stability, whereas individuals in
stable environments become bored and desire change.
c. Teleological Need (passive, internal): Consumer are pattern matchers who
have images of desired outcomes or end states with which they compare their
current situation. This motive propels people to prefer mass media such as
movies, television programs, and books with outcomes that match their view of
how the world should work. This has obvious implications for advertising
messages.
d. Utilitarian Need (passive, external): The need to approach any problem
logically and rationally. This need views the consumer as a problem solver who
approaches situations as opportunity to acquire useful information or new skills.
Thus, a consumer watching a situation comedy on television not only is being to
entertained but is learning clothing styles, lifestyle options, and so forth.
Likewise, consumers may approach ads and salespeople as a source of learning
for future decisions as well as for the current one.

3. Affective Preservation Motives

a. Need for Tension Reduction: People encounter situations in their daily lives
that create uncomfortable levels of stress. In order to effectively manage tension
and stress, people are motivated to seek ways to reduce arousal. Recreational
products and activities are often promoted in terms of tension relief.
b. Need for Expression (active, external): This motive deals with the need to
express one’s identity to others. People feel the need to let others know who and
what they are by their actions, which include the purchase and use of goods.
The purchase of many products, such as clothing and automobiles, allows
consumers to express an identity to others, because the products have symbolic
meanings. For example, fashion-oriented watches satisfy more than the
functional need to tell time—they allow consumers to express who they are.
c. Need for Ego Defense (passive, internal): The need to defend or protect
one’s identity or egos. When one’s identity is threatened, the person is
motivated to protect his or her self-concept and utilize defensive behaviors and
attitudes. Many products can provide ego defense. A consumer who feels
insecure may rely on well-known brands for socially visible products to avoid
any chance of making a socially incorrect purchase. For example, purchase the
right brand of drink at a night club so we appear cool.
d. Need for Reinforcement (passive, external): People are often motivated to
act in certain way because they were rewarded for doing it. For example,
samples and prizes by marketers encourage consumers to buy promoted brands.

4. Affective Growth Motives

a. Need for Assertion (active, internal): Customer’s need to engage in
activities that will increase self-esteem and self-esteem in the eyes of others.
Most consumers respond positively to ads that appeal to this need. Example;
Slogans such as ‘be what you want to be’ appeal to these needs.
b. Need for Affiliation (active, external): Affiliation is the need to develop
mutually helpful and satisfying relationships with others, that are accepted by
others. Marketers use such affiliation themes in advertisements which arouse
emotions and sentiments in the minds of the consumers for their children and
families. as “Your kids will love you for it” in advertisements.
c. Need for Identification (passive, internal): The need for identification
results in the consumer’s playing various roles. A need to adopt new roles.
People have variety seeking-behavior and this may be a reason for brand
switching, but that depends on the person. The travel industry uses this by
changing up their ads and showing adventure vacations where people are
actively having fun and some ads showing relaxing vacations where people are
swinging in a hammock.
d. Need for Modeling (passive, external): The need for modelling reflects a
tendency to base behavior on that of others. Our desire to be like other or be
model role for others. Modelling is a major means by which children learn to
become consumers. Marketer’s use these themes for selling their product, For
example, use of celebrities in ads. This is the major motivation of children (8–
12-year-olds), and especially teenagers-and in their social world conformity.
Marketing Strategies Based on Motivation Conflict
With (he many motives consumers have and the many situations in which these
motives are activated, (here are frequent conflicts between motives. The
resolution of a motivational conflict often affects consumption patterns. In
many instances, the marketer can analyze situations that are likely to result in a
motivational conflict, provide a solution to the conflict, and attract the
patronage of those consumers facing the motivational conflict. There are three
types of motivational conflict of importance to marketing managers:
 Approach-Approach Conflict
 Approach-Avoidance Conflict
 Avoidance-Avoidance Conflict
Approach-Approach Motivational Conflict: A consumer who must choose
between two attractive alternatives faces approach-approach conflict. The more
equal this attraction, the greater the conflict. A consumer who recently received
a large cash gift for graduation (situational variable) might be ton) between a
trip to Hawaii (perhaps powered by a need for stimulation) and a new mountain
bike (perhaps driven by the need for assertion). This conflict could be resolved
by a timely advertisement designed to encourage one or the other action. Or a
price modification, such as "buy now, pay later." could result in a resolution
whereby both alternatives are selected.
Approach-Avoidance Motivational Conflict: A consumer facing a purchase
choice with both positive and negative consequences confronts approach-
avoidance conflict. A person who is concerned about gaining weight yet likes
snack foods faces this type of problem. He or she may want the taste and
emotional satisfaction associated with the snacks (approach) but does not want
to gain weight (avoidance). The development of lower-caloric snack foods
reduces this conflict and allows the weight-sensitive consumer to enjoy snacks
and also control calorie intake.
Avoidance-Avoidance Motivational Conflict: A choice involving only
undesirable outcomes produces avoidance-avoidance conflict. When a
consumer's old washing machine fails, this conflict may occur. The person may
not want to spend money on a new washing machine, or pay to have the old one
repaired, or go without one. The availability of credit is one way of reducing
this motivational conflict. Advertisements emphasizing the importance of
regular maintenance for cars, such as oil tiller changes, also use this type of
motive conflict: "Pay me now. or pay me (more) later."

Consumer Information Processing and Perception:

“Perception in marketing is described as a process by which a consumer
identifies, organizes, and interprets information to create meaning.”
Marketing management is concerned with the understanding of the process of
perception because, perception leads to thought and thought leads to action.
Perception is the process whereby stimuli are received and interpreted by the
individual and translated into a response.
In other words, Perception is the process of selecting, organizing and
interpreting information inputs to produce meaning. To perceive is to see,
hear, touch, taste, smell and sense internally something or some event or some
relation.
Perception is selective because, and individual cannot possibly perceive all
stimulus objects within his perceptional field; hence, he perceives selectively.
Perception is organized because, perceptions have meaning for the individual
and they do not represent a buzzing confusion. Perception depends upon
stimulus factors. That is, the nature of physical stimulus itself is a determinant
of perception.
The variables like color size, contrast, intensity, frequency and movement are of
this kind. Again, perception depends on the personal factors. What the
individual brings to the situation governs perception his ability to see or hear the
message, his needs, his moods, memory, expressions and values all these
modify the message reception. The personal factor of perception is his self-
concept, need, span of apprehension, mental set and the past experiences.
Information processing
It is often helpful to view consumers as problem solvers who use information in
an attempt to satisfy their consumption goals. From this perspective, consumer
information processing may be thought of as the acquisition of stimulus inputs,
the manipulation of these inputs to derive meaning from them, and the use of
this information to think about products or services. More specifically, five of
the major ways in which consumers use information derived from their
environment are:
 To understand and evaluate products and services.
 To attempt to justify previous product choices.
 To resolve the conflict between buying or postponing purchases.
 To satisfy a need for being informed about products and services in the
marketplace.
 To solve as a reminder to purchase products that must be regularly
replenished (soap, beverages, and the like).
Information Acquisition:
The term information acquisition describes the set of activities or means by
which consumers are exposed to various environmental stimuli and begin to
process them. Exposure occurs in two major ways: when consumers are
motivated to actively seek information and when they passively receive these
stimuli that are confronted in daily activities.
 Active search:
Consumers often actively seek and selectively acquire information that has
potential usefulness for achieving their consumption goals. The first stage in
this process appears to be internal search, because of the relative ease with
which it can be accomplished compared to external search. Internal search
involves scanning memory for stored information that is relevant to the
purchase situation under consideration. This available information has been
previously acquired from passive reception experiences as well as through
active external search.
 Consequently, it can include information derived from advertising claims,
personal experiences, product test reports, previous solutions to similar
purchase problems, and interactions with other consumers. If the consumer is
not satisfied with his existing knowledge, he becomes sufficiently motivated
to engage in external search. The amount of external search varies
considerably across individuals and different purchase situations.
Factors affecting this include: (i) market conditions such as price, and feature
differences between brands, (ii) situational factors including conditions of store
crowding and urgency of need, (iii) buying strategies that consumers may adopt
such as brand or store loyalty patterns, and (iv) individual factors including the
level of involvement and self-confidence.
Passive reception: In this mode, consumers confront and acquire information in
the process of living their daily lives. For example, when watching a TV
program, casually talking to a friend, or search for a literature, one can be
exposed to some kind or relevant information. This information might be stored
away for a future time when the need to address the particular issue arises.
Sensation: The exposure mechanisms of active search and passive reception
produce many more stimuli than the consumer is capable of processing.
Sensation is the immediate and direct response of the sensory organs to stimuli.
A stimulus may be any unit of input to any of these senses. Examples of stimuli
include products, packages, brand names, advertisements and commercials.
Sensory receptors are the human organs that receive sensory inputs. Their
sensory functions are to see, hear, smell, taste and feel. All of these functions
are called into play, either singly or in combinations, in the evaluation and use
of most consumer products. The Absolute Threshold:
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.
he absolute threshold explains why you don’t smell the cologne someone is
wearing in a classroom unless they are somewhat close to you.
Differential thresholds: The minimal difference that can be detected between
two similar stimuli is called the differential threshold or the just noticeable
difference also referred to as “JND”. Many sellers have made changes in their
offerings only to find that they are unnoticed in the marketplace.
Attention: One consumer may expose to thousands of stimuli in a day, but
sensory processes selectively filter stimuli for information processing. Such
filtering mechanism is attention. Generally, the more processing capacity that is
devoted to a stimulus, the greater will be the consumer’s awareness and
comprehension of it. Voluntary attention: in voluntary attention, stimuli are
deliberately focused on because of their relevance to the task at hand.
Involuntary attention: Involuntary attention occurs when the consumer
confronts novel or unexpected stimuli that seem interesting or distinctive in
some way, even though they may be unrelated to the current goal or activity at
hand.
Characteristics of Attention: (i) Consumers can only attend to a limited number
of items at any one time. This limit appears to be form five to seven chunks of
information in which a chunk is an organized grouping of data or informational
inputs. (ii) Many stimuli require attention to be processed, while other that are
very familiar to the consumer do not. Because of the span of attention is limited,
those stimuli that require attention cannot all be processed at the same time. (iii)
Attention can be allocated to stimuli on a rapid basis.
Selective Attention: stimulus factors: Certain characteristics of stimuli
themselves attract attention. Generally, these include emotion-arousing
properties (like colors, pleasant phrases), physically intense values (such as loud
noises, bright colors), and novel or surprising characteristics. More specifically,
color, novelty and contrast, size and position, humor and a wide variety of other
stimulus factors have been employed to attract consumers’ attention.
Selective attention: Individual factors: In addition to stimulus characteristics,
individual attributes of consumers themselves also influence whether a given
stimulus will receive attention. Some of these individual factors are attention
span (number of items processed at any time), adaptation (gradual adjustment of
stimuli), perceptual vigilance (consumers’ heightened sensitivity to stimuli that
are capable of satisfying motives or stimuli that are personally relevant and
generate higher levels of involvement) and defense (decreasing the awareness of
threatening stimuli).
Perceptual Encoding:
Sensation generated by stimuli are only a series of electrical impulses, they
must be transformed into a type of language that is understandable to the
consumer. The process is perceptual encoding, which is the process of assigning
mental symbols to sensations. These symbols can be words, numbers, pictorial
images, or other representations that consumer use to interpret or assign
meaning to their sensations. The manner in which stimuli are encoded will be
influenced by a number of factors including the individual’s ability to process
the sensations, his motivation to process them, and the opportunity (adequate
time etc.) to process them.
Stages in the Encoding Process: Two major activities involved in encoding
appear to be feature analysis and a synthesis stages. In feature analysis, the
consumer identifies main stimulus features and assesses how they are
organized. In the synthesis stage, organized stimulus elements are combined
with other information available in the environment and in memory to develop
an interpretation of the stimulus.
Major aspects of the stimulus will influence the interpretation process. To this
must be added the stimulus contest. That is, the stimulus being focused on in
any particular situation is surrounded by a wide variety of other stimuli, which
form a contest that can significantly influence our interpretation of the so-called
focal stimuli. The consumer’s knowledge and experience will also strongly
influence how he interprets a stimulus situation.
Factors Influencing Feature Analysis: A wide variety of factors influence the
encoding process. Much of the feature analysis involves mentally arranging
sensations into a coherent pattern.
(i) Figure-ground: The figure appears to stand out as being in front of the more
distant background and the figure is perceived to have form and to be more
substantial than the ground. Print advertisements frequently employ figure-
ground techniques to assist readers in organizing symbols and other material
that the marketer deems most important.
(ii) Proximity: In this process, items close to each other in time or space tend to
be perceived as being related, while separated item are viewed as being
different. Soft drinks and fast foods are usually shown being enjoyed in active,
fun-oriented settings.
(iii) Similarity: Items that are perceived as being similar to one another will tend
to be grouped together. Thus, in turn, can influence the pattern one perceives in
a conglomeration of items. Some companies attempt to have developed certain
style similarities between their products and their competitors.
(iv) Closure: Frequently, consumers’ organized incomplete stimuli by
perceiving the as complete figures. A figure such as an open circle would tend
to be filled in by the individual to result in perception of a whole.
Factors Influencing Synthesis Stage: Many additional factors influences how
consumers develop meaning from stimuli that have undergone feature analysis.
The major effect of these influences is to predispose the individual toward
interpreting stimuli in a certain way.
(i) Learning: Learning influences consumers to categorize stimuli by
developing their abilities to identify stimulus attributes used in discrimination
and leveling.
(ii) Personality and motivation: Study findings explain that certain products
may be highly valued by some groups of consumers and deemed rather useless
by others because of personality and motivation.
(iii) Attitudes: Attitudes act as frames of references, which affect consumers’
tendencies to interpret stimuli from the environment.
(iv) Adoption level: Consumer tends to adopt rather than constant stimulus
levels.
Marketing Implications:
(i) Product factors: We would expect that product evaluations are at least in
part based on consumers’ attempt to directly evaluate physical product
attributes, often called intrinsic cues, such as size, shape, and grade of
ingredients.
(ii) Price consideration: Psychological pricing and price vs product quality are
important. Consumers appear to use price as an indicator of product quality.
Buyers tend to develop a range of acceptable prices around the standard.
(iii) Company and store image: A store and company image can increase
consumers’ confidence in its products and predisposition to purchase them.
(iv) Advertising issues: The use of sexually attractive models and sexually
suggestive themes in advertising has a long history. This issue is an alarming
concern for the marketers. 
The perceptual process begins when our sensory receptors (eyes, ears, tongue,
nose, and skin) come in contact with sensory stimuli (sights, sounds, tastes,
odours, and textiles) around us. Through our sensory system, we are exposed to
an infinite amount of stimuli, some of which we pay attention to, and some we
tune out completely. Those that receive our attention we evaluate and interpret
their meaning based on our methods of cognitive and behavioural processing.
After time, some of these stimuli become adapted and we seize to remark on
their significance.
Perception Influencers
The following are the factors/theories, which can influence our perception
Exposure
Exposure is the extent to which it encounters stimulus. Exposure is not enough
to significantly impact the individual. For example, in our daily life, we come
across a number of hoardings, advertisements, banners etc. However, we don’t
pay much attention to them or tend to seek it out, but, if we want to purchase
something, say, a motorbike, we may deliberately take effort and seek out such
advertisements. Attention is a matter of degree. Our attention may be quite high
when we read the directions mentioned on a road map and quite low when a
commercial comes on the T.V.
Weber’s Law
Weber’s law gives a theory concerning the perceived differences between
similar stimuli of varying intensities. The stronger is the initial stimulus, the
greater is the additional intensity needed for the second stimulus to be perceived
as different.
For example, If there is a one and half inch reduction in the size of a five inch
candy bar, it won’t get noticed a bit but if the two inch long chewing gum gets
reduced, then it would be noticed.
As an example, if you have a cup of coffee that has only a very little bit of sugar
in it (say one teaspoon), adding another teaspoon of sugar will make a big
difference in taste. But if you added that same teaspoon to a cup of coffee that
already had five teaspoons of sugar in it, then you probably wouldn’t taste the
difference as much (in fact, according to Weber’s Law, you would have to add
five more teaspoons to make the same difference in taste).
Another interesting application of Weber’s Law is in our everyday shopping
behaviour. Our tendency to perceive cost differences between products is
dependent not only on the amount of money we will spend or save, but also on
the amount of money saved relative to the price of the purchase. For example, if
you were about to buy a soda or candy bar in a convenience store, and the price
of the items ranged from $1 to $3, you would likely think that the $3 item cost
“a lot more” than the $1 item. But now imagine that you were comparing
between two music systems, one that cost $397 and one that cost $399.
Probably you would think that the cost of the two systems was “about the
same,” even though buying the cheaper one would still save you $2.
Subliminal Stimuli Subliminal
Subliminal perception is defined as a concept where it is easy to achieve mind
control without actual or conscious awareness. It is the stage when the
perception is more robust and powerful than the awareness or understanding
about a product, service or situation. A subliminal message, also called a hidden
message, is one that’s designed to pass below the normal limits of perception.
Two basic types of subliminal messages can be sent to the unconscious-
auditory & visual. An organization message is called effective when it sticks in
consumers’ minds and influences them to buy. Thus marketing messages that
influence them unconsciously are called subliminal perception of customer’s
experience.
For example, in 1957 in a drive-in theater in New Jersey, messages such as
"Drink Coke" and "Eat Popcorn" were flashed on the screen and sales of these
refreshments increased considerably as a result.
Embedding a message in a song, either in the higher or lower frequencies or by
singing something backwards
Words and images briefly flashing in between frames of film, usually at one
tenth of a second
Drawings or photos that contain hidden or subtle images, such as words spelled
out in clouds in the background
Perception has its own impact on consumer behaviour or consumer
decision-making. Let us take some such cases:
Perception and communication:
It is estimated that 90 per cent of the stimuli that the individuals perceive come
through sight and rest from hearing. That is why, advertisements bank heavily
audio on visual stimuli. However, it does not mean that loud noises, bright
colours and large ads themselves guarantee consumer attention and response.
Contrary to this, it is the use of haunting melodies, pastel shades, regional
accents and careful adjustment of ad size in relation to the total page or poster
size all affect perception and these factors may give better results.
Product and brand perception:
Good many studies have been made of the ways in which the consumers
perceive the products and the brands they choose regularly. It is brand images
and the brand differentiation that play vital role in perception in addition to the
physical characteristics of the product. Therefore, it is a must for a marketer to
examine all the factors that impinge on the construction of a brand image to
ascertain their effects on consumer perception of the company’s marketing mix.

Price perception:
Price is another element of marketing mix where perception has its
implications. Studies have proved beyond doubt that consumers judge product
or service quality by price. ‘Higher the price better the quality’ that goes. This
goes on establishing that there is going to the direct or positive relationship
between price and demand where marketer is cared to gain. Another aspect of
this price perception is psychological pricing. The reasoning behind such
pricing strategies is that consumers are likely to perceive used in cut-price sales
promotions to increase the feeling that a price has been drastically reduced.
Store perception:
There are five major components of stores image namely, location design-
product assortment-services and personnel each of which contributes to
consumer perception of the place from which he or she buys. Mere physical
attributes do to talk of a store image. Other intangible factors, too, influence
consumer perception of stores image such as advertising, inter-personal
communication and experience. Consumer perceptions of stores are greatly
influenced by consumer’s own self-perception and motives. Further, consumer’s
self-images influence the places in which they shop.
Consumer Learning and Memory:
Learning refers to the relatively permanent change in knowledge or behaviour
that is the result of experience. Learning is the process of acquiring knowledge.
Learning results in relatively permanent changes in behavior excluding the
effects of physical damage or to the body or brain and of natural human growth.
Consumer behaviour is a process of learning because; it is modified according
to the customer’s past experience and the objectives he or she has set.
As most consumer behaviour is learnt behaviour, it has deep impact on
consumer buying process. Prior experience and learning acts as buying guide.
In-spite of such habitual behaviour, one can think of reasonable amount of
brand switching, trying new products, does take place. The strong tendency of
most consumers to develop brand loyalties definitely benefits the makers of
established brands. This makes the manufacturer of a new brand to face
difficulty in breaking such loyalties and encouraging brand switching.
Types of Learned Behavior:
(i) Physical behavior: We learn many physical behavior patterns useful in
responding to a variety of situations faced in everyday life. For example, we
learn to walk, talk, and interact with others. As a consumer we learn methods of
responding to various situations as result satisfactions and dissatisfactions may
occur.
(ii) Symbolic learning and problem solving: People learn symbolic meanings
that enable highly efficient communication through the development of
languages. Symbolic also allows the marketer to communicate with the
consumers through such vehicles as brand names (Sony, Kodak etc.)
(iii) Active learning: Consumers learn many of their wants, goals, and motives
as well as products satisfy these needs. Learning also influences consumers’
development of favorable or unfavorable attitudes toward a company and its
products. These attitudes will affect the tendency to purchase various brands.
Principal Elements of Learning:
Consumers learn in several basic ways. However, four elements seem to be
fundamental. The extent nature and strength of these components influence
what will be learned, how it will be learned, and the rate it which learning will
occur.
Motivation: Motivation is the driving force of all important things to be learnt.
Motives allow individuals to increase their readiness to respond to learning. It
also helps in activating the energy to do so. Thus, the degree of involvement
usually determines the motivation to search information about a product.
For example, showing advertisements for summer products just before summer
season or for winter clothes before winters.
Uncovering consumer motives is one of the prime tasks of marketers, who then
try to teach motivated consumer segments why and how the products will fulfil
the consumer’s needs.
Cues: Motives encourage learning and cues stimulate the direction to these
motives. Cues are not strong as motives, but their influence in which the
consumer responds to these motives.
For example, in a market, the styling, packaging, the store display, prices all
serve as cues to help consumers to decide on a particular product, but this can
happen only if the consumer has the motive to buy. Thus, marketers need to be
careful while providing cues, especially to consumers who have expectations
driven by motives.
Response: Response signifies how a consumer reacts to the motives or even
cues. The response can be shown or hidden, but in either of the cases learning
takes place. Often marketers may not succeed in stimulating a purchase but the
learning takes place over a period of time and then they may succeed in forming
a particular image of the brand or product in the consumer’s mind.
For example: The auto mobile manufacturer that provides consistent queues to a
consumer may not always succeed in stimulating a purchase. However, if the
manufacturer succeeds in forming a favourable image of a particular auto
mobile model in the consumers mind, it is likely that the consumer will consider
that make or model when he or she is ready to buy.
Reinforcement: Reinforcement is very important as it increases the
probability of a particular response in the future driven by motives and cues.
Consumer Behavioral Learning Theories

There are various theories which are developed to explain the learning theories.
The below are the major theories related to consumer behavior.

Behavioural Learning Theories

 Classical Conditioning
 Instrumental Conditioning

Cognitive Learning Theories

 Modeling or Observational Learning

Behavioural Learning Theories

Behavioural Learning Theories assume that learning takes place as the result
of responses to external events. For example, if a song we remember fondly
from high school gets repeatedly paired with a brand name, over time our warm
memories about the tune will rub off onto the advertised product. Can you think
of any advertisements that feature a favourite song from your teenage years?
According to this perspective, the feedback we receive as we go through life
shapes our experiences. Similarly, we respond to brand names, scents, “jingles”
(a short song used in advertisements), and other marketing stimuli because of
the learned connections we form over time. People also learn that actions they
take result in rewards and punishments; this feedback influences the way they
will respond in similar situations in the future. Consumers who receive
compliments on a product choice will be more likely to buy that brand again,
but those who get food poisoning at a new restaurant are not likely to return to it
in the future.
  Classical Conditioning

Classical Conditioning theory refers to learning through repetition. This is

referred to as a spontaneous response to particular situation achieved by
repetitive exposure. It is such a kind of a behavioral theory which says, when a
stimulus is connected to or paired with another stimulus, it serves to produce the
same response even when used alone.

Pavlov demonstrated what he meant by conditional learning in studies with

dogs. The dogs were hungry and highly motivated to eat. In his experiments,
Pavlov sounded a bell and then immediately applied a meat paste to the dog’s
tongues, which cost them to salivate. Learning occurred when, after a sufficient
number of repetitions of the bell sound followed almost immediately by the
food, the bell sound alone cost the dogs to salivate. The dog associated the bell
sound (conditioned stimulus) with the meat paste (the unconditioned
stimulus) and after a number of pairings, gave the same unconditioned response
(salivation) to the bell.

For example, if you usually listen news at 9 pm and have dinner too at 9 pm
while watching the news then eventually the sound of news at 9pm may make
you hungry even though you are not actually hungry or even if the dinner is not
ready.

Classical conditioning has long been, and continues to be, an effective tool in
marketing and advertising. The general idea is to create an advertisement that
has positive features such that the ad creates enjoyment in the person exposed to
it. The enjoyable ad serves as the unconditioned stimulus (US), and the
enjoyment is the unconditioned response (UR). Because the product being
advertised is mentioned in the ad, it becomes associated with the US, and then
becomes the conditioned stimulus (CS). In the end, if everything has gone well,
seeing the product online or in the store will then create a positive response in
the buyer, leading them to be more likely to purchase the product.

A similar strategy is used by corporations that sponsor teams or events. For

instance, if people enjoy watching a university basketball team playing
basketball, and if that team is sponsored by a product, such as Red Bull, then
people may end up experiencing positive feelings when they view a can of Red
Bull. Of course, the sponsor wants to sponsor only good teams and good
athletes because these create more pleasurable responses.

Advertisers use a variety of techniques to create positive advertisements,

including enjoyable music, cute babies, attractive models, and funny
spokespeople.

Another type of ad that is based on principles of classical conditioning is one

that associates fear with the use of a product or behaviour, such as those that
show pictures of deadly automobile accidents to encourage seat belt use or
images of lung cancer surgery on cigarette boxes to discourage smoking.

Strategic applications of classical conditioning:

Three basic concepts derived from classical conditioning – reputation, stimulus

generalization and stimulus discrimination.

1) Repetition: repetition increases the strength of the association between a

condition stimulus and an unconditioned stimulus and slows the process
of forgetting. However, the research suggests that there is a limit to the
amount of repetitions that will aid retention. At some point, an individual
can become satiated with numerous exposures, and both attention and
retention will decline this effect known as advertising where out, can be
moderated by wearing the advertising message. Some marketers avoid
 wear out by using cosmetic variations in their ads while repeating the
same advertising theme. Ex: Zoo Zoo ads by Vodafone.
2) Stimulus generalization: Learning depends not only on reputation but
also on the ability of individuals to generalize. The ability to generalize
has important evolutionary significance. If we eat some red berries and
they make us sick, it would be a good idea to think twice before we eat
some purple berries. Although the berries are not exactly the same, they
nevertheless are similar and may have the same negative properties.
Pavlov, for example, that a dog could not to salivate not only to the sound
of a bell but also to somewhat similar sound of jangling keys. Stimulus
generalization explains why some imitative me too products succeed in
the marketplace consumers confuse them with a original product they
have seen advertised. It also explains why private brands try to make their
packaging closely resemble the national brand leaders. They are hoping
that the consumers will confuse their packages with a leading brand and
buy their product rather than the leading brand.
3) Stimulus discrimination: The flip side of stimulus generalization is
stimulus discrimination the tendency to respond differently to stimuli that
are similar but not identical. 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.
i) Positioning: in our over communicated society, the key to stimulus
discrimination in effective positioning, a major competitive advantage.
Unlike the imitator hopes consumers will generalize the perceptions
and attribute special characteristics of the market leader’s products to
its own products, market leaders want the consumer to discriminate
among similar stimuli. They want their products to be reorganized as
uniquely fulfilling consumer needs.
ii) Product differentiation: 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.

Operant/ Instrumental Conditioning:

Instrumental Theory is developed by B F SKINNER, an American psychologist,

he was the first to develop this model of learning. Instrumental theory suggests
that human beings learn by trial-and-error method and then find out a particular
stimulus that can yield best results. Then, this is subsequently formed as a habit
This theory is very important and applies to many common situations in the
context of consumer behavior. It suggests that consumers learn by means of
trial-and-error method in which some purchase behaviors result in a more
favorable outcome. In instrumental conditioning, reinforcement or punishment
are used to either increase or decrease the probability that a behavior will occur
again in the future. This model of learning applies to many situations in which
consumers learn about products, services and retail stores.

For example, consumers learn which stores carry the type of clothing they
prefer at prices they can afford to pay by shopping in a number of stores. Once
they find a store that carries clothing that meet their needs, they are likely to
patronize the store to the exclusion of the others. Every time the purchase the
shirt that they really like, their store loyalty is rewarded and their patronage of
that store is more likely to be repeated.

For example, if a student is rewarded with praise every time, she raises her hand
in class, she becomes more likely to raise her hand again in the future. If she is
also scolded when she speaks out of turn, she becomes less likely to interrupt
the class. In these examples, the teacher is using reinforcement to strengthen the
hand-raising behavior and punishment to weaken the talking out of turn
behavior. Instrumental conditioning is often used in animal training as well. For
example, training a dog to shake hands would involve offering a
reward every time the desired behavior occurs.

Reinforcement of behavior: two types of reinforcement or reward that

influence the likelihood that a response will be repeated.

The first type, positive reinforcement, consists of events that strengthen the
likelihood of a specific response. Using a sample at least your hair feeling silky
and clean is likely to result in a repeat purchase of the shampoo.

Negative reinforcement is an unpleasant or negative outcome that also serves

to encourage a specific behavior. An advertisement that shows a model with
wrinkled skin is designed to encourage consumers to buy a news that would
raise skin cream. Fear appeals in add messages are examples of negative
reinforcement. Many life Insurance advertisements rely on negative
reinforcement to encourage the purchase of life insurance.

Creating Loyal Customers Through Instrumental Conditioning

Marketers have developed a number of sales and marketing techniques based on

the principles of instrumental conditioning and specifically positive
reinforcement. Each of these commonly known tactics encourages consumers to
be loyal, frequent, and high-spending shoppers:

 Discounts
 Rebates
 Rewards Programs
 Frequency Marketing Programs
 Gifts & Giveaways

What about marketing techniques designed to avoid negative consequences?

Well, most notably would be furniture companies and auto dealerships who
launch “inventory blow-out” advertising campaigns encouraging shoppers to
“avoid taxes” and other perceived penalties if they buy within a specific time
period.

Strategic applications of instrumental conditioning:

 Customer satisfaction: 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 then the amenities
provided. The more a consumer uses a service, the greater the reward.

 Service: developing a closed personalized relationship with customers is

another form of non-product reinforcement. Knowing that they will be advised
of a forthcoming sale or that selected merchandise will be set aside for the next
visit cements the loyalty that a consumer may have for a retail store.

 Total buying experience: marketers should make sure that the total buying
experience of the consumer right from the start of visiting the store till the
product is delivered to the consumer, he’s still I think the consumers with this
approach of selling the product. The buying experience of the consumer should
exceed the expectations set by him towards the marketer.

Cognitive Learning Theories

In contrast to behavioural theories of learning, cognitive learning theory

approaches stress the importance of internal mental processes. This perspective
views people as problem solvers who actively use information from the world
around them to master their environments. Supporters of this view also stress
the role of creativity and insight during the learning process. One important
aspect of a cognitive learning perspective is observational learning; this occurs
when people change their own attitudes or behaviours simply by watching the
actions of others learning occurs as a result of vicarious rather than direct
experience. This type of learning is a complex process; people store these
observations in memory as they accumulate knowledge, perhaps using this
information at a later point to guide their own behaviour. Model is the process
of imitating the behaviour of others. You should have no trouble thinking of
advertisements you’ve seen that encourage you to model an actor’s behaviours
at a later point in time.

 Modeling or Observational Learning

There are many different ways that we learn new behaviors. We often learn
through direct experiences, such as when a child is rewarded with stickers
during potty training. This type of learning is called associative learning. A lot
of learning also happens indirectly through a process of watching others and
then imitating their behavior, in which the imitation is known as modeling. This
type of learning is called observational learning. Modeling is not quite as
simple as ''monkey see, monkey do.'' It's actually a complex process that
involves observing a behavior performed by another person (for example a
''model''), retaining what you've observed, and then reproducing the behavior on
your own.

Social Model are typically of higher status or authority compared to the

observer, examples of which include parents, teachers, and public health
officers. In the example above, the children who already know how to play the
game could be thought of as being authorities—and are therefore social models
—even though they are the same age as the observer. By observing how the
social models behave, an individual is able to learn how to act in a certain
situation. Other examples of observational learning might include a child
learning to place their napkin in their lap by watching their parents at the dinner
table, or a customer learning where to find the washroom after observing where
other customers have gone when leaving their tables. Observational learning is
particularly common during childhood. Children often learn new behaviors by
modeling the behaviors of authority figures and their peers. However, adults
often learn through modeling too. Think of the first time you visited your
favorite coffee shop. How did you learn where to find the cream and sugar? If
you learned this by watching other customers locate the cream and sugar, then
you learned through modeling. We learn new behaviors through modeling all
the time.

Bandura theorizes that the observational learning process consists of four parts.
The first is attention—as, quite simply, one must pay attention to what they are
observing in order to learn. The second part is retention: to learn one must be
able to retain the behaviour they are observing in memory. The third part of
observational learning, initiation, acknowledges that the learner must be able to
execute (or initiate) the learned behaviour. Lastly, the observer must possess the
motivation to engage in observational learning.

Modeling

Modeling is the process of imitating the behaviour of others. This is a

particularly common form of learning for young consumers, who often observe
the behaviour of others (often individuals who they look up to or admire, such
as an online influencer) and imitate their behaviour. Naturally, when speaking
of young consumers, the negative effects of this learning model are clear:
smoking, high-risk behaviour, violence, self-harm, etc. are behaviours that
children are not only observing in others, but also learning how to copy and
perform on their own. The responsibility of advertisers with regard to their
influence and impact on children and young consumers has brought into
question, what should be marketed to kids and what should not? Remember
advertisements for smoking? No? I do – but that’s because I grew up at a time
when there was little consideration about the effects (role) models had on
children. Often seen in smoking commercials and billboards, attractive and
idealized adults modeled to a young audience the perceived joy and
sophistication that came along with being a smoker. After years of scrutiny,
activism, and eventually legislation, tobacco companies were no longer
permitted to advertise their products to children and young consumers.

Memory:
As everyone’s experience has demonstrated, material that consumers have
learned is not always readily retrievable by them. Some information, such as
popular brand names or the location of merchandise in a supermarket, is easily
remembered. Other information appears to end up lost, or at least it does not
appear to be readily obtainable.
Memory processes are of considerable importance to the understanding of
consumers. Basically, this is so because to a large extent, consumers act on the
basis of their cognitions, or their knowledge or beliefs about the word. These
cognitions are stores in memory and they influence how incoming stimuli are
interpreted. They also form the basis for attitudes, behavioral intentions, and
brand choice.
A representation of memory system: Several views exist regarding the structure
of memory and its operation. One termed the multiple store approach, views
memory as viewing composed of three distinctive storage registers (sensory,
short-term, long-term) which differ in capacity, storage duration and
functioning.
(i) Sensory memory: information is first received by sensory memory.
Sensory Memory permits storage of the information we receive from
our senses. This storage is very temporary; it lasts a couple of seconds
at most. For example, when walking to work you pass by a French
bistro cafe and you get a quick, aromatic whiff of espresso and fresh
croissants. Although this sensation lasts only a few seconds, it is
 sufficient to allow you to consider whether you should investigate
further. If you retain this information for further processing, it passes
into short-term memory.
(ii) Short term Memory (STM) : the short-term store known as working
memory is the stage of real memory in which information is processed
and held for just a brief period. Anyone who has ever looked up a
number in a telephone book, only to forget it just before dialing,
knows how briefly information last in short-term storage. If
information in the short-term store undergoes a process known as
rehearsal (i.e., 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.
(iii) Long-Term Store: In contrast to the short-term store, where
information last only for a few seconds, the longterm store retains
information for relatively extended periods of time. Although it is
possible to forget something within a few minutes after the
information has reached long-term storage, it is more common for data
and longterm storage to last for days, weeks or even years. Ex: We
remember our primary school teacher names.
Rehearsal: The amount of information available for delivery from short-term
storage to long-term storage depends upon the amount of reversal it is given
failure to rehearse and input can result in loss of information.
Encoding: Encoding is the process by which we place the things that we
experience into memory. Unless information is encoded, it cannot be
remembered. is the process by which we place the things that we experience
into memory. Unless information is encoded, it cannot be remembered.
Retention: Product information stored in memory tends to be brand based.
Consumers are confronted with thousands of new products each year and their
information search is often dependent upon how similar artist similar these
products are two product categories already stored in memory. Therefore,
consumers are more likely to recall the information they receive on new
products bearing a familiar brand name and their memory is less affected by
exposure to competitive ads.
Retrieval: retriever is the process by which we recover information from long-
term storage. Marketers maintain that consumers tend to remember the product
benefits rather than its attributes, suggesting that advertising messages are most
effective when they link the products attributes with the benefits that consumer
seek from the product.
Advertising Applications of memory:
(i) Advertising messages with unique aspects have a greater potential for being
remembered. Because material with unusual aspects is least affected by the
process of forgetting.
(ii) The order in which material is presented seems to influence how well it will
be retained, with the middle portion being most easily forgotten. The beginning
and ending message stand out the most in remembering event.
(iii) Messages that encourage immediate rehearsal of material stimulate its
retention. Maintenance rehearsal keeps material in short-term memory, and
elaborative rehearsal will encourage the transfer to long-term memory.
(iv) More information can be processed and retained if it is chunked. The
capacity of short-term memory is approximately seven items.
(v) The amount of information that can be transferred to long-term memory is a
function of the time available for processing.
(vi) Memory is cue-depended, and presentation of relevant cues will stimulate
recall. Certain cues present during the learning context associated with the
material in the memory.
(vii) Material retained in long-term memory can be quite different from the
information presented in a leaning situation. Some information will be lost from
the short-term memory.
(viii) Material that is meaningful to the individual is leaned more quickly and
therefore has a greater chance of being retained than does non-meaningful
material. Some methods may be visual material, interactive imagery, showing
mistakes, incomplete message, may be helpful for the marketer to increase
individual learning more quickly.
Again, it should be stressed that the above list of general guidelines regarding
consumers’ memory is not by any means exhaustive. In addition, the specific
situation must be considered for employing any of them. However, the list is
illustrative of the potential benefits of applying such concepts to the design of
marketing communications.
Consumer Attitude:
The concept of attitude occupies a central position in the consumer behaviour
studies in particular and social psychology in general because; attitude
measurements help in understanding and prediction of consumer behaviour.
Consumer attitude may be defined as a feeling of favorableness or
unfavorableness that an individual has towards an object. As we, all know that
an individual with a positive attitude is more likely to buy a product and this
result in the possibility of liking or disliking a product. Attitudes develop
gradually as a result of experience; they emerge from interaction of a person
with family, friends, and reference groups.
Components of Attitude

1. Cognitive component: Cognitive’ component is what an individual

believes about an object, thing or an event whether it is good or bad,
necessary or unnecessary, useful or useless. For example, some may say
tea is good and relieves tension, others may say too much of tea is not
 good for health. Human beliefs are not accurate and can change according
to situations.
2. Affective component: Affective component of attitude is associated with
individual feelings about another person, which may be positive,
neutral or negative. Consumers have certain specific feelings towards
some products or brands. Sometimes these feelings are based on certain
beliefs and sometimes they are not. For example, an individual feels
uneasy when he thinks about cheese burst pizza, because of the
tremendous amount of cheese or fat it has.
3. Behavioral component: Intention is the behavioral component of
consumer attitude. Behavioral component of attitude is associated with
the impact of various condition or situations that lead to person
behavior based on cognitive and affective components. Behavioral
intentions show the plans of consumers with respect to the products. This
is sometimes a logical result of beliefs or feelings, but not always. For
example, an individual personally might not like a restaurant, but may
visit it because it is the hangout place for his friends.

Two research models demonstrate the relationship between intention to

purchase and actual purchase and consumption.

 The theories of reasoned action explain purchasing behavior as a direct

result of intention, influenced by attitude toward purchase and by
subjective norms.

 The theory of trying to consume explains actual consumption behavior of

purchasers. It provides insight into the establishment and maintenance of
long-term relationship with consumers.
Characteristics of Attitude

Characteristics of attitude are discussed below:

 Attitude are predispositions

Attitude are predispositions of purpose, interest or opinion of the person to

assess some objects in a favourable or an unfavourable manner.

 Attitude are evaluative statement

Attitude are evaluative statements: either favourable or unfavourable concerning

the objects, people or events.

 Attitude influence human behavior

A positive attitude towards a thing will influence human behavior towards the
thing favorably and vice-versa.

 Attitude have intensity

It refers to the strength of the effective component. For example, we may dislike
an individual but the extent of our disliking would determine the intensity of our
attitude towards the person.

 Attitude are learnt

Attitude is not inborn phenomenon. Attitude are learnt through social

interaction and experience.

Function of Attitude

Four important functions of attitude which are crucial in organizational behavior

viewpoint are:
1. Adjustment Function: Attitudes helps people to adjust to different
situations and circumstances. Consumers hold certain brand attitudes
partly because of the brand utility. If a product has helped us in the past
even in a small way, our attitude towards it tends to be favorable. One
way of changing attitude in favor of a product is by showing people that it
can solve utilitarian goals. They may not have considered some
advertisement which stresses the utilitarian benefits of a product.
Example: Well-treated employees tend to develop a positive attitude
towards their management or job.
2. Ego-Defensive Function: Attitudes are formed to protect the ego or self-
image. We all are bothered about our self-esteem and image so the
product boosting our ego is the target of such a kind of attitude. Cosmetic
and personal hygiene products, by acknowledging this need, increase
their relevance to the consumer and have the possibility of a favorable
attitude by offering reassurance to the consumers self-concept. Example:
Older faculty might feel somewhat threatened by a young and new
faculty member who is full of fresh ideas and enthusiasm
3. Value-Expressive Function: Attitudes usually represent the values the
individual possess. We gain values, though our upbringing and training.
Our value system encourages or discourages us to buy certain products.
For example, our value system allows or disallows us to purchase
products such as cigarettes, alcohol, drugs, etc. If a consumer segment
generally holds a positive attitude towards being in a fashion segment,
consumer may treat high fashion clothing and accessories as symbols of
that lifestyle. Example, a manager who values honest and sincere work
will be more vocal against an employee who is having a very casual
approach towards work.
4. Knowledge Function: Individuals continuously seeks knowledge and
information. When an individual gets information about a particular
 product, he creates and modifies his attitude towards that product.
Example, If a student has a strong negative attitude towards the college,
whatever the college does, the student will be perceived as something
‘bad’ and as actually against them.

Attitude Development

Experiences

Our personal experiences with people and situations develop our attitude
towards such persons and situations. Through job experience, people develop
attitudes towards working conditions, salaries, supervision, group dynamics and
so on.

Perceptual biases

Perception is the result of a complex interaction of various senses such as

feelings, seeing, hearing and so on and plays an important part in our attitude
and behavioural formation. For example, if a manager perceives a subordinate’s
ability as limited, he will give him limited responsibility. Similarly, we lose
many good friends due to our changed perception about them.

Observation of other person attitude

When we like someone, we try to emulate that person’s attitude. For example,
when we are impressed by someone keeping calm under stressful circumstances
and we appreciate such calmness, we might try to do the same.

Association
Our association with the group we belong to strongly influences our attitude.
Our close association with a group would encourage us to be consistent with the
attitude of the group

Personality

Personality is a set of traits and characteristics, habit patterns and conditioned

responses to certain stimuli that formulate the impression that a person makes
upon others and this impression is a function of a person’s attitude

Influence of Family & Friends

Family and friends are a major influence on our values, beliefs and attitudes.
We carry over into adulthood many of the attitudes we developed as children.
Our peer and social groups also influence our attitudes

Direct Marketing & Mass Media

Direct marketers are able to use new technologies to target smaller and smaller
market segments. As a result, many solicitations are highly personalized and
have the capacity to create favorable attitudes towards their products.
Television, radio, newspapers and magazines provide marketers with unlimited
opportunities to create positive attitudes towards their products

Consumer Attitude Formation

Attitudes are learned though there are different approaches on how learning
works as is acquired by individuals. Following factors lead to consumer attitude
formation:

 Economic Factors
 Family Factors
 Social Factors
  Political Factors
 Psychological Factors
 Personality Factors
 Reference Group Factors

Attitude Theories and Models

The Balance Theory of Attitudes

Fritz Heider’s Balance Theory is a conceptual framework that demonstrates

how consistency as a motivational force predicts attitude change and behaviour.
The theory is basically concerned with the consistency in the judgment of
people and/or issues that are linked by some form of relationship. According to
this theory there are three elements in attitude formation the person, the other
person and the impersonal entity. Between these three elements two generic
types of relationships are considered to exist: Sentiment relations and unit
relations. The sentiment or linking relations include all form of sentiments or
effect and the unit relations express the fact that two elements are perceived as
belonging together. Both sentiment relations and the unit relations can be
positive and negative.

In this three elements system balance exists if all three relations are positive or
two relations are negative and one positive. There will be imbalance if all three
relations are negative or if two relations are positive and one is negative. People
tend to perceive others and objects linked to them so that the system is
balanced. This theory assumes that balanced states are stable and imbalanced
states are unstable. When imbalanced state occurs, the psychological tension
which is created motivates the person to restore the balance cognitively by
changing the relations. Thus a person’s attitude towards an object depends on
his attitudes towards a source who is linked with the object.

The model can be used to predict the behaviour of consumers in situations

where a celebrity endorser may be involved. If the audience (consumers) have a
favourable attitude towards a celebrity and perceive that the celebrity likes a
particular brand (communicated through an endorsement deal), the consumer is
more likely to develop a positive attitude towards the brand – thus providing
“balance” between all three components in the triad (the consumer, the
celebrity, and the brand). However, imbalance can occur if a consumer develops
a dislike towards the celebrity (e.g. due to scandal), which could then result in
the same negative attitude being extended to the brand if they continue to
maintain positive ties with the celebrity. Many brands will “drop” a celebrity in
order to maintain a positive relationship with consumers.

Congruity Theory:

C.E. Os good and P.H. Tannenbaum have proposed the congruity theory of
attitudes which is similar to the balance theory. This theory focuses on the
changes in the evaluation of a source and a concept that are linked by an
associative or dissociative assertion. Congruity exists when a source and
concept that are positively associated have exactly the same evaluations and
when a source and concept that are negatively associated have exactly the
opposite evaluations attached to them. Congruity is a stable state and
incongruity is an unstable one. As a result, incongruity leads to a change of
attitude. This theory states that how much change should be there in the
attitudes towards the source and the concept so that incongruity is resolved.

The congruity principle is used frequently in marketing. Advertisers often use

hired celebrities to endorse brands, services, organizations, and causes. Athletes
speak against drug use among young people. The intent is to have consumers
who hold positive attitudes toward a source to develop a positive value
association between the source and the object.

Cognitive Dissonance Theory:

Leon Festinger, in the late 1950s proposed the theory of cognitive dissonance.
Dissonance means an inconsistency. Cognitive dissonance refers to
psychological discomfort arising from holding two or more inconsistent
attitudes, behaviours, or cognitions (thoughts, beliefs, or opinions). Festinger
argued that any form of inconsistency is uncomfortable and that individuals will
attempt to reduce the dissonance and hence the discomfort. For example, if you
believe smoking is bad for your health but you continue to smoke, you
experience conflict between your belief and behaviour. When we experience
cognitive dissonance, we are motivated to decrease it because it is
psychologically, physically, and mentally uncomfortable. Therefore, individuals
will seek a stable state where there is a minimum of dissonance, because an
individual cannot completely avoid dissonance.

The desire to reduce dissonance is determined by three factors:

(i) Importance of the elements creating the dissonance

(ii) The degree of influence the individual believes he has over the elements.

(iii) The rewards that may be involved in dissonance.

If the elements creating the dissonance are relatively unimportant, the pressure
to correct this imbalance will be low. But if the elements are important then a
person will have to correct this imbalance. He can either change his behaviour,
or he can change his dissonance, or he can change his attitude. Another choice
can be to find out more consonant elements to outweigh the dissonant ones.
The degree of influence the individuals believe they have over the elements will
have an impact on how they will react to the dissonance. If they perceive the
dissonance to be an uncontrollable result, something over which they have no
choice, they are less likely to be receptive to attitude change. While dissonance
exists, it can be rationalized and justified.

Rewards also influence the degree to which individuals are motivated to reduce
dissonance. High rewards accompanying high dissonance tend to reduce the
discomfort inherent in the dissonance because it increases the consistency side
of the individual’s balance sheet.

These factors suggest that just because individual experiences dissonance, they
will not necessarily move directly toward consistency, that is, toward reduction
of this dissonance. This theory helps to predict the propensity of an individual to
engage in attitude and behavioural change, if individuals are required.

For example, by the demands of their jobs to do or say things which contradict
their personal attitude, they will tend to modify their attitude in order to make it
compatible with the cognition of what they have said or done.

Further, the greater the dissonance, after it has been moderated by the above
mentioned factors, the greater the pressures to reduce it.

Fishbeins multi-attribute model

Multi-attribute models say that we form attitudes about a product based on

several attributes of that product, our beliefs about those attributes, and the
relative importance we assign to those attributes. The multi-attribute attitude
model provides a framework for understanding and assessing consumers’
attitudes about a product, brand, or firm. Marketers measure and assess
consumer attitudes, using the multi-attribute attitude model, to improve the
positioning of products and brands and firms. To begin, the model has three
components: attributes, beliefs, and weights.

Attributes are the characteristics of the product or brand or firm. Beliefs reflect
how much a consumer believes that the product or brand or firm will deliver the
attribute. For instance, if a toothpaste brand advertises that it freshens breath
(attribute), a consumer may judge that to be true or untrue or even true on a
relative scale compared to other toothpastes (belief). Simply, the manufacturer
is making a claim and the consumer is reflecting how much they believe the
claim is credible. Weights are the significance of the attribute. So, in the case of
our example, consumers could strongly agree (belief) that a toothpaste freshens
breath (attribute), but prioritize that lower than brightens teeth or protects teeth
from gingivitis (weight). In this case, the multiple attributes (freshens breath,
brightens teeth and protects gums from gingivitis) are weighted differently.

By weighting assessing beliefs and weights for each attribute, the multi-attribute
attitude model can help marketers understand how to position the attributes of
their product or brand or firm more effectively to differentiate for a given
market segment.

Attribute as Differentiator = Beliefs (1 – 10 Scale) x Weight (1- 10 Scale)

That is, if consumers have lower belief in an attribute, compared to a competing

brand, then the marketers could choose to downplay the significance of that
attribute, emphasizing the attribute that is more credible for them. For example,
Burger King cannot compete with McDonald’s operational excellence, which
makes it highly effective in mass-producing standardized hamburgers. So, as
alternative, Burger King promotes customization, wherein customers can select
toppings to make the hamburger they prefer. This is an important differentiator
for consumers who value customization.

Further, the results of the multi-attribute attitude model can also help marketers
understand how well marketing messages are being understood or their
relevance for a segment. That is, much marketing communication is intended to
differentiation products or brands or firms from their competitive set. If the
output of the multi-attribute attitude model implies that consumers don’t believe
or value the differentiation, it may imply that a change needs to be made to the
messaging or strategy, such as points of differentiation or target consumer
segment.

Not only does it help reflect the multiple dimensions, against which consumers
make inferences and judgments, but it also helps show how consumers value
elements of differentiation. And, with this perspective, marketers can make
changes to their communication and positioning strategies.

Attitude Change – Low and high-involvement strategies.

• Attitude change is an issue for every marketer

• New entrants into the market need to change the attitude of consumers
that support purchases from market leaders
• Market leaders need to strengthen the positive attitudes of their customers
to retain their market share

Attitude change strategies

Competitors can try to change the attitudes of the market leaders’ customers in
several ways:

• Comparative advertising
 • Emphasizing brand attributes
• Adding new attributes
• Providing knowledge of alternatives
• Changing the relative value of attributes

1. Comparative Advertising

• Identifying a major competitor and explaining why your product is

superior in one or more ways

2. Emphasizing Brand Attributes

• Identifies and highlights features of the product that consumers may not
be familiar with or that may be new or innovative

3. Adding attributes

• Can involve Stressing an attribute that has been ignored; or Adding an

attribute that represents an improvement or technological innovation

4. Providing knowledge of alternatives or consequences

• Providing consumers with evidence, facts or figures enable them to make

informed choices between competing brands

5. Changing the relative value of attributes

• Often a market for a particular type of product is divided so that different

market segments are offered different brands, each with different features
or benefits

• When this occurs, marketers have an opportunity to persuade consumers

to “cross over” to their brand
Persuasion

Persuasion has been defined as “the process by which a message induces

change in beliefs, attitudes, or behaviours” (Myers, 2011). Persuasion can take
many forms. It may, for example, differ in whether it targets public compliance
or private acceptance, is short-term or long-term, whether it involves slowly
escalating commitments or sudden interventions and, most of all, in the
benevolence of its intentions. When persuasion is well-meaning, we might call
it education. When it is manipulative, it might be called mind control (Levine,
2003).

The Source of Persuasion: The Triad of Trustworthiness

Effective persuasion requires trusting the source of the communication. Studies

have identified three characteristics that lead to trust: perceived authority,
honesty, and likability.

1. Perceived Authority: From earliest childhood, we learn to rely on

authority figures for sound decision making because their authority
signifies status and power, as well as expertise. These two facets often
work together. Authorities such as parents and teachers are not only our
primary sources of wisdom while we grow up, but they control us and our
access to the things we want. In addition, we have been taught to believe
that respect for authority is a moral virtue. As adults, it is natural to
transfer this respect to society’s designated authorities, such as judges,
doctors, bosses, and religious leaders. We assume their positions give
them special access to information and power. Usually we are correct, so
that our willingness to defer to authorities becomes a convenient shortcut
to sound decision making. Uncritical trust in authority may, however,
lead to bad decisions. Uncritical trust in authority can be problematic for
several reasons. First, even if the source of the message is a legitimate,
 well-intentioned authority, they may not always be correct. Second, when
respect for authority becomes mindless, expertise in one domain may be
confused with expertise in general. To assume there is credibility when a
successful actor promotes a cold remedy, or when a psychology professor
offers his views about politics, can lead to problems. Third, the authority
may not be legitimate. It is not difficult to fake a college degree or
professional credential or to buy an official-looking badge or uniform.
2. Honesty: Honesty is the moral dimension of trustworthiness. Persuasion
professionals have long understood how critical it is to their efforts.
Marketers, for example, dedicate exorbitant resources to developing and
maintaining an image of honesty. A trusted brand or company name
becomes a mental shortcut for consumers. It is estimated that some
50,000 new products come out each year. Forrester Research, a marketing
research company, calculates that children have seen almost six million
ads by the age of 16. An established brand name helps us cut through this
volume of information. It signals we are in safe territory. “The real
suggestion to convey,” advertising leader Theodore MacManus observed
in 1910, “is that the man manufacturing the product is an honest man, and
the product is an honest product, to be preferred above all others” (Fox,
1997).
3. Likability: People tend to favour products that are associated with people
they like. This is the key ingredient to celebrity endorsements. While
there are a lot of factors that can contribute to likability, being physically
attractive is one of the most influential. If we know that celebrities aren’t
really experts, and that they are being paid to say what they’re saying,
why do their endorsements sell so many products? Ultimately, it is
because we like them. More than any single quality, we trust people we
like. The mix of qualities that make a person likable are complex and
often do not generalize from one situation to another. One clear finding,
 however, is that physically attractive people tend to be liked more. In
fact, we prefer them to a disturbing extent: Various studies have shown
we perceive attractive people as smarter, kinder, stronger, more
successful, more socially skilled, better poised, better adjusted, more
exciting, more nurturing, and, most important, of higher moral character.
All of this is based on no other information than their physical appearance
(e.g., Dion, Berscheid & Walster, 1972).

When the source appears to have any or all of these characteristics, people not
only are more willing to agree to their request but are willing to do so without
carefully considering the facts. We assume we are on safe ground and are happy
to shortcut the tedious process of informed decision making. As a result, we are
more susceptible to messages and requests, no matter their particular content or
how peripheral they may be.

Source Credibility

Source Credibility means that consumers perceive the source (or spokesperson)
as an expert who is objective and trustworthy (“I’m not a doctor, but I play one
on TV”). A credible source will provide information on competing products, not
just one product, to help the consumer make a more informed choice. We also
see the impact of credibility in Web sites like eBay or Wikipedia and numerous
blogs, where readers rate the quality of others’ submissions to enable the entire
audience to judge whose posts are worth reading.

Source Attractiveness

Source Attractiveness refers to the source’s perceived social value, not just his
or her physical appearance. High social value comes partly from physical
attractiveness but also from personality, social status, or similarity to the
receiver. We like to listen to people who are like us, which is why “typical”
consumers are effective when they endorse everyday products. So, when we
think about source attractiveness, it’s important to keep in mind that
“attractiveness” is not just physical beauty. The advertising that is most
effective isn’t necessarily the one that pairs a Hollywood idol with a product.
Indeed, one study found that many students were more convinced by an
endorsement from a fictional fellow student than from a celebrity. As a
researcher explained, “They [students] like to make sure their product is
fashionable and trendy among people who resemble them, rather than approved
by celebrities like David Beckham, Brad Pitt or Scarlett Johansson. So they are
more influenced by an endorsement from an ordinary person like them”
(“Celebrity Ads…”, 2007).

Unit 4
Socio-environmental Determinants of Consumer Behavior
Culture and Sub-culture:
Culture:
Culture is defined as the sum total of learned beliefs, values and customs that
serve to direct the consumer behavior of members of a particular society.
Cultural factors comprise of set of values and ideologies of a particular
community or group of individuals. It is the culture of an individual which
decides the way he/she behaves. In simpler words, culture is nothing but values
of an individual. What an individual learns from his parents and relatives as a
child becomes his culture.
Example - In India, people still value joint family system and family ties.
Children in India are conditioned to stay with their parents till they get married
as compared to foreign countries where children are more independent and
leave their parents once they start earning a living for themselves.
Cultural factors have a significant effect on an individual’s buying decision.
Every individual has different sets of habits, beliefs and principles which he/she
develops from his family status and background. What they see from their
childhood becomes their culture.
Culture exists to satisfy the needs of the people within a society. It offers order,
direction and guidance in all phases of human problem solving by providing
tried and true methods of satisfying physiological, personal and social needs.
For example, culture provides standards and rules about
when to eat – time
where to eat – in a famous restaurant
what is appropriate to eat for breakfast, lunch and dinner.
What to serve two guests at a dinner party, at a picnic,
at a wedding – champagne / Veg / Non veg.

Characteristics of culture
1. Culture is learned: Culture is a learned behavior that is transmitted from one
member of society to another. As an individual grows in a particular
environment he learns about different aspects of culture through his interaction
with other members of the society. Culture isn’t biologically passed from older
generations to the newer ones. It’s learned through expertise. People share
culture and ideas from their lives. The longer-term generations learn to follow
an equivalent culture. Culture propagates through generations; that adopt their
recent customs and traditions as a neighborhood of their culture. This is one of
the most important characteristics of culture.
2. Culture is adaptive: Culture is adaptive because culture is a learned
behavior. As any businessman stays in a particular region/country he or she
absorbs himself/herself in that culture.
3. Culture is shared: A bunch of individuals shares every culture, sometimes
inhabiting an equivalent a part of the globe. The region they board, the
geographical conditions around them, their country’s past, the idea system and
values of its folks, and therefore the heritage they’re happy with, represent their
culture. These aspects develop a way of unity and happiness among the folks of
that cluster. Members of a particular society share culture. Cultural values,
beliefs, norms, etc. are shared by the majority of the members of a given
society.
4. Culture is a symbol: Culture is a kind of sign or symbol. By observing the
pattern of the culture of people we can easily understand the region or country
from which they come.
5. Culture is dynamic: No culture is static. Cultural swings take place. As the
environment is changing culture has to be changed in order to survive.
6. Culture Changes: Cultures gradual amendment. With passing time, some
beliefs, traditions, language, and mannerisms are changes. Migration and
economic process result in a mix of cultures.
7. Culture takes years to create: It’s true that we have a tendency to influence
all the cultures. In fact, culture evolves over time and takes years to develop.
It’s not a group of rules created by one or a lot of folks and originally followed
by all generations. The geographical location and weather conditions of an area
have a right away impact on the living situation of the inhabitants. The climate,
as an example, could influence the regular wear and food habits of the folks
living there. The geographic of an area has an effect on the occupations of its
inhabitants, and therefore their lifestyle. It influences the art forms, sports, and
alternative activities the folks have interaction in, therefore shaping their
culture.
8. Culture cannot be isolated: Studies have brought out the very fact that no
culture will stay in isolation. There’s hardly any social community that’s fully
isolated from the remainder of the globe. Each culture is influenced by cultures
of the encompassing regions. Years ago, there have been social group societies
that stayed in seclusion, unaware of the globe outside. Today, most of those
once-secluded group connected to the planet. And there’s hardly any
community, and thereby any culture that is completely isolated. The cultural
values {of folks of individuals} in a specific country stricken by neighboring
countries. Once folks from completely different geographical locations move,
they influence every other’s cultures.
9. Culture is transmitted across generations: Cultural values transferred
across generations within the style of symbols and stories that create them easier
to know. Most of the time, values, and spiritual beliefs also created and
transmitted through the generation. The art, music, and dance forms which are
representative of culture also are transmitted across generations.
Sub culture:
The members of a specific subculture possess beliefs, values and customs that
set them apart from other members of the same society. In addition, they adhere
to most of the dominant cultural beliefs, values and behavior patterns of the
larger society. Subculture can be defined as a distinct cultural group that exist as
an identifiable segment within a larger, more complex society.
Ethnic Subculture:
three functions that an ethnic subculture may serve. They are:
Ethnic subculture provides a psychological source of group identification. An
individual gains a sense of identity as he interacts with other members of the
same ethnic group. The interaction increases intimacy among the members and
they feel good to identify themselves with a distinct group.
 It also offers a patterned network of groups and organizations, and a member
of the said subculture may maintain cordial and intimate relationship with other
members as long as he wishes.
 An individual migrating to a new culture may find it difficult to understand
many aspects of that culture. Here the ethnic subculture to which he belongs
may help him to view the new culture by providing him a guideline on the new
culture. Each of the ethnic subculture has unique traditions and behaviors that
have potential influence on product preferences and consumption behavior. A
particular market consisting of ethnic subcultures may be the focus of a
marketer. But, it is not very easy to reach effectively a particular ethnic
subculture with a particular type of product.
Ex: An Indian, for example, migrated to US from one State ‘X’ will not have
the same food habit as one migrated to the same country from State ‘Y’. It
means that, to be effective, marketers should further study ethnic subcultures on
the basis of demographic and other aspects. Based on the results of such study,
the same ethnic market may be further segmented and different offers should be
made for different sub-segments.
Religious Subculture:
An individual’s religious affiliation influences to a great extent his consumption
pattern. Those who belong to a particular religion may buy/not buy and use/not
use certain goods and services. Members of a particular religion constitute what
we call religious subculture. Religious beliefs and rituals may dictate the use of
certain items and may discourage the consumption of others. Muslims for
example, buy and consume certain specific food items heavily during the month
of ‘Ramadan’ and buy lot of gifts during the ‘Eid-Ul-Fitr”. Again, Islam
discourages its followers the consumption of certain items such as alcoholic
beverages, pork etc.
Regional Subculture:
The way people lead their lifestyles may also vary according to where they live
or from which part of the country they have moved to the other part of the
country. People from a particular part of the country or people living in a
particular part constitute what we call regional or geographic subculture. On this
basis, there could be two different types of regional or geographic subculture.
One could be based on geographic region of the country and other could be
based on urban, suburban or rural distinction.
“Different geographic regions of the country pose different problems that
consumers must solve. The most obvious of these are the climatic conditions.
Climatic conditions influence home construction, clothing requirements, and
recreational opportunities to name but a few. In addition, different regions of the
country have different age distributions and different social histories.
Subculture Based on Age:
Subcultures may also be based on the age differences of people living in the
same country and belonging to the same main culture. It is likely that those who
belong to the teen age group will behave quite differently than those of middle
age or elderly. Because the outlooks, experiences, attitudes and other aspects
vary among people of different age groups, their consumption patterns are likely
to vary. The teen-agers are likely to be influenced more by popular heroes and
heroines and will display more materialistic life styles. The youth market is a
significant subculture for the marketer. It is important to marketers not only
because it is lucrative, but also because many consumption patterns held
throughout life are formed at this time. The youth, as they start their career in
this age are flaunt with more luxury items. Since they have little obligation at
this age, they can spend whatever they are. Their consumption patterns lean
toward personal care and luxury items. The middle-aged group, on the contrary,
are matured, worried about the future and careful in making purchase decisions.
As an attempt to build a reserve for the future, they are likely to be conservative
in buying many material goods, and are found to spend money on protective
investments. The elderly people display quite different consumption behaviours
with that of teen-agers and middle aged people. The elderly subculture consists
of people who have gone on retirements or whose regular income generating
activities have ceased.
Singles Subculture:
The singles subculture consists of unmarried individuals. This subculture is
found to be increasing particularly in the urban and semi-urban areas. The size
of this subculture is gradually becoming prominent to call a special marketing
attention. Quite a few reasons are associated with the growing size of the
subculture of the singles. They could be delaying marriage; postponement of
marriage; higher divorce rates; inability to find a suitable source of earning to
bear family expenditures and so on. The singles have some special needs, which
cannot be met through normal social interaction. Marketers who can recognize
their specific needs and can develop products aimed at meeting those specific
needs can reap a considerable benefit. Singles night clubs, exotic telephone talk
services, bachelors’ hostels/mess, product that promise sex appeals,
convenience foods, restaurants, sports equipment, etc., could be some of the
examples of products and services aimed at the subculture of singles.
Subculture Based on Gender Difference Subculture may also be formed based
on gender difference, such as subculture of males and subculture of females:
Since every society emphasizes distinct, specific roles for men and women, they
are likely to behave differently. As their behaviours vary, they consume
different types of products and respond differently to marketing appeals. Men
for example, are influenced more by aggressiveness, competitiveness,
independence, self-confidence, and masculinity. Women on the other hand, are
influenced by neatness, gentleness, tactfulness, talkativeness, and feminity.
There are products which are equally used by men and women. But, different
appeals in the same product are needed for these two groups. Cosmetics,
perfumes, clothing, bicycles etc., are used both by men and women. But, you
know that different designs, colors, sizes, shapes, and fragrances are provided
for by the marketers to appeal people of different sex. Bicycle, for example, is
designed differently for men and women.
Occupational Subculture:
People display different patterns of purchase behaviours according to their
occupational involvement. People of different occupations may constitute
occupational subcultures, such as subculture of the doctors, subculture of the
lawyers, subculture of the teachers, subculture of the engineers, subculture of
the defense personnel. A defence officer, for example, will show different
purchase behaviour than someone belonging to the civilians’ society. Doctors
for example, may look at the nutritional aspect while buying a food item.
Marketers should recognize the differences in attitudes and behaviours among
people of different occupations and formulate marketing strategies accordingly
to be successful in each specific subculture.
Subculture Based on Social Class:
Social class may also be used as a determinant of subcultural differences. There
could be subculture of the well-offs, subculture of the middle class and
subculture of the poverty. People belonging to the subculture of the rich will
display altogether different buying behaviour than those of middle class and
poor. Rich will be very selective in their purchases; people of the middle class
will have substantial control over their consumption decisions; poor on the other
hand will be very careful and cautious in taking their purchase decisions. The
subculture of poverty consists of people living below the poverty line. Because
of their low incomes, they will avoid buying pre-packed, instant, frozen food
items as they are likely to be costlier than the fresh staple ones. As they have
limited educational opportunities, they develop different attitudes, outlooks, and
motivation resulting in different buying behaviours on the part of them.
Cultural Influence on Consumer Behaviour
There are several factors which influence the buying decision of consumers,
cultural factors being one of the most important factors. Cultural factors
comprise of set of values and ideologies of a particular community or group of
individuals. It is the culture of an individual which decides the way he/she
behaves. In simpler words, culture is nothing but values of an individual. What
an individual learns from his parents and relatives as a child becomes his
culture.
Example - In India, people still value joint family system and family ties.
Children in India are conditioned to stay with their parents till they get married
as compared to foreign countries where children are more independent and
leave their parents once they start earning a living for themselves.
Cultural factors have a significant effect on an individual’s buying decision.
Every individual has different sets of habits, beliefs and principles which he/she
develops from his family status and background. What they see from their
childhood becomes their culture.
Let us understand the influence of cultural factors on buying decision of
individuals with the help of various examples.
Females staying in West Bengal or Assam would prefer buying sarees as
compared to Westerns. Similarly a male consumer would prefer a Dhoti Kurta
during auspicious ceremonies in Eastern India as this is what their culture is.
Girls in South India wear skirts and blouses as compared to girls in north India
who are more into SalwarKameez. Our culture says that we need to wear
traditional attire on marriages and this is what we have been following since
years. People in North India prefer breads over rice which is a favorite with
people in South India and East India.
Cultural Influences and Marketing Strategy
Due to globalisation of business environment, companies have to face
increasing haste, occurrence and magnitude of competitors. It is not easy for any
corporation to start and expand their business for a long duration without
implementing marketing strategies. International market has also resulted to
change in consumers taste and preferences. For example, customers do not wait
for a single product because there are many alternatives available in the market
and they can easily shift to another product without compromising with their
taste. This is the main reason that today’s business environment is consumer
oriented. Marketers always consider it that how they can satisfy consumers. The
most important factors that a marketer keeps in mind are to offer best quality,
less prices and easily excess to consumers but all these concepts are considered
by almost all the marketing managers. Only those companies stay for along
duration which implements new strategies and they do not ignore the
importance of culture in product promotion. Companies are facing many
problems regarding marketing and culture, the most important challenge is
culture. To achieve continuous growth and competitive success, it is necessary
for companies to understand the diversity and complexity of marketing
activities. Consumers have different choices in different countries. These
differences are result of diversified culture, attitude, values and norms. Culture
has a deep influence on product choice, motivation and life style of customers.
Cultural influence is shown by how many customers preferto purchase same
product. Due to the increase in international trade there is a need to redesign the
marketing strategies of a product. The increase in cross-border trading has led to
the emergence of international marketing. The companies which are moving
towards the concept of international marketing face the problems of difference
between the countries and one of the major problems they face is designing the
marketing strategies according to the cultural diversification. Only those
companies are more successful now a day’s which are exporting their products
to cope with the specific demands of a particular culture.
Sub cultural and Cross cultural Influence
While culture is defined as the “personality of a society”, (inclusive of
language, customs and traditions, norms and laws, religion, art and music, etc),
it is not entirely homogenous in nature. Not all people within a social system
share the same language, religion, customs and traditions. Every society is
composed of smaller sub-units, homogenous within, and heterogeneous outside,
all of which when put together make a complex society. Such sub-units or sub-
groups are known as sub-cultures; people within sub-cultures possess distinctive
sets of values, beliefs, customs and traditions etc. The members of a subculture
possess such values and beliefs, as also customs and traditions that set them
apart from people belonging to other sub-cultures.For example, while we are all
Indians, and our culture is Indian (with a common national language, Hindi, and
common festivals like Diwali), North Indians are different from South Indians.
While North Indians celebrate Lohri, as a harvest festival in January, the South
Indians celebrate Pongal as their harvest festival at the same time. In other
words, people within smaller units share the same language, religion, customs
and traditions; and, this would be different in smaller or larger magnitude to
people in other sub-units.
Cross cultural Marketing
Globalization is an inevitable process in the 21st Century, and so is the cross
culturalization. The world is becoming more and more homogeneous, and
distinctions between national markets are not only fading but for some products
it’s disappearing. This means that marketing is now becoming a world common
discipline. However, on the other hand, the differences among nations, regions,
language, regulatory environment, past heritage, ethnic groups, etc. in terms of
cultural factors still exist in the market place and having obvious impact on the
marketing practices of the business organizations. From a marketing point of
view it is very important for marketers to realize that the markets in the 21st
century are cross-cultural markets and to be aware of and sensitive to the
cultural differences is a major premise for the success in the 21st Century
marketplace. The following aspects should be vital to be considered by a
business: cultural impacts on marketing (international versus domestic) cross-
cultural dimensions of marketing research cross-cultural aspects of marketing
mix (products, price, promotion, and distribution) cross-cultural marketing
education and professional training cross-cultural practice in electronic
marketing. Cross-cultural marketing can be seen as the strategic process of
marketing among consumers whose culture differs from that of the marketer’s
own culture at least in one of the fundamental cultural aspects, such as
language, religion, social norms and values, education, and the living style.
From the anthropological perspective all market behaviours are culture bound.
Therefore, in order to match the marketing mix with consumer preferences,
purchasing behavior, and product-use patterns in a potential market, marketers
must have a thorough understanding of the cultural environment of that market.
Social Class Stratification
In all societies some system of social stratification exists whereby the members
of the society are differentiated. Throughout the world, inequality in social
structure and position exist. Buying behaviour of individuals is also influenced
by the social class and the caste to which they belong. Social class is a relatively
permanent and homogeneous division of a society into which individuals or
families sharing similar values, life-style, interests and behaviour can be
categorized. Social class is a larger group than intimate group in structure.
Constitution of a social class is determined by the income, authority, power,
ownership, lifestyles, education, consumption patterns, occupation, type and
place of residence of the individual members. In our country, we can think of
three classes are as ‘rich’, ‘middle’ and ‘poor’. Within a social class, people
share the same values and beliefs and tend to purchase similar kinds of
products. Their choice of residence, type of holiday, entertainment, leisure all
seem to be alike. The knowledge of social class and their consumer behavior is
of great value to a marketeer.
Loudon and Bitta defined social stratification as “the general term whereby
people in a society are ranked by other members of a society into higher and
lower social positions, which produces a hierarchy of respect or prestige”. This
stratification brings with its social inequality that is, persons in lower strata have
fewer access to money, power, prestige and privilege. For example, secretaries
are highly regarded and rewarded in our society, but ministerial staffs are not,
even though both groups contribute to the wellbeing of public.

Characteristics of social class

• Social classes are bounded: By bounded it is meant that there are clear
breaks between each social class. This break separates one social class from
another. Such a boundary clearly indicates who will be included and who will
be not in a particular class.
• They are Hierarchical: Social classes are ordered. It means that, they are
positioned vertically. One social class precedes the other, and the individuals
placed in different social classes have different statuses from high to low.
• They are Influential: Social classes are important determinants of consumer
behavior. Variations in consumption of goods and services indicate that social
classes are influential. But, the degree of such influence depends on an
individual's class awareness and class consciousness.
• Social Classes are Mutually Exclusive: Social class system indicated that an
individual can only belong one social class in a particular time period. It does
not mean that movement between the classes is restricted. An individual can
move from one class to another over time. But, generally, an individual is
placed in one social class at a particular time.
• They Exhibit Status: Status means one's position or rank in the social system
as perceived by others. Whether an individual will assume high or low status
depends on the class to which he belongs. Certain social class members assume
higher status than members of other social classes. One's status within the class
again depends on his personal characteristics. For example, all university
professors do not enjoy the same status as their personal characteristics vary.
Social Classes are Multidimensional: Social classes are not based on one
property or dimension. They are rather based on many, and, as a result they are
termed as multidimensional. We do not classify people according to one
criterion, such as income; rather numbers of other criteria are used for social
classification. Some of the other criteria as used in social classification are:
influence, occupation, education, heredity, and living area.
• Social Classes are Dynamic: The concept of social class is not a rigid one.
By this we mean that, individual may move among different social classes over
time- upward or downward. Again, status of one particular social class may also
change over time as the society reassesses social class status. Air hostesses'
status, for example, in our country has changed over time with the change in
people's attitudes toward this profession. This change has brought change in
their social class position.
• They Restrict Behavior: It is expected that members of a particular social
class will interact with members of their class except few exceptions. People
also feel comfortable interacting with people of the same class, mind and
mentality. Such a uni-dimensional interaction restricts interpersonal
communications about products, stores, and similar topics. People of upper
class, for example, may talk about a particular product whose name is not even
heard by the members of a lower class.
Determination of Social Class

(1) Wealth and Income:

Possession of substantial amounts of wealth is the main characteristic

distinguishing the upper class from other class groups in society. Persons having
more wealth and income generally have higher social position and respect in
society. Wealth and income (money), though necessary for upper-class position,
yet one’s class position is not directly proportional to his income.

A prostitute has less social status than a professor though her income is far
greater than the professor. In spite of all its weaknesses, wealth and income are
an important determinant of social class, partly because of the way of life it
permits or enforces (a social class is basically a way of life), and partly because
it suggests about one’s family life and way of life.

Upper-class children have a better chance, and for their grandchildren, a secure
upper-class status is practically assured. Wealth and income, over a period of
time, usually gains upper-class status. In his analysis of class divisions, Karl
Marx argued that social class is based entirely on wealth.
(2) Occupation:

Occupation is an exceedingly important aspect of social class and as such it is

another determinant of class status. It is a well-known fact that some kinds of
work are more honourable than others, e.g., doctors, engineers, administrators,
professors and lawyers hold a higher position than a car mechanic or manual
worker.

The high-prestige occupations generally receive the higher incomes, yet there
are many exceptions. Occupation is also one of the best clues to one’s way of
life, and therefore to one’s social class membership. It affects many other facets
of life (values, beliefs, marital relations) other than determining the social class.

(3) Education:

There is a close reciprocal relationship between social class and education. To

get a higher education one needs money plus motivation. Upper-class children
already have money for the finest schools and colleges. They also have family
tradition and social encouragement. One’s amount and kind of education affects
the class rank he will secure. Thus, education is one of the main levers of a
man’s social class.

(4) Prestige:

It refers to the respect and admiration with which an occupation is regarded by

society. Prestige is independent of the particular person who occupies a job.
Sociologists have tried to assign prestige rankings to various occupations.
Besides wealth, occupation and education, there are certain other criteria which
help a person to attain higher social status in the society.

These are family background, kinship relations, location of residence etc., but
education, occupation and expanded income are the most fairly visible clues of
social class. With these are associated most of the other behaviour
characteristics which make one ‘belong’. Most of the social scientists have used
these three criteria in dividing people into social classes for research purposes.

Social Class and Consumer Behavior:

For many products the group of interest to the marketer are the middle and
working classer- by far the largest segment of the market.
(i) Products and Services Consumed: Product choice and usage differ among
the social classes. There are items that are bought mainly by the upper classes.
However, many products are purchased by a wide variety of consumers so it
becomes difficult to distinguish class differences in purchasing patterns.
(ii) Shopping Behavior: A very close relation between store choice and social
class membership has been fond, indicating that it is wrong to assume that all
consumers want to shop at glamorous, high status stores. However, most
women enjoy shopping regardless of their class. Middle and upper class women
shopped more frequently than lower class.
(iii) Promotional Response Pattern: The social classes have different media
choice and usage patterns. Readers of English and Bangla newspaper differ
even for magazines. Even magazines in the same topic area may be aimed at
different social classes as target audiences. The basis of advertising differences
directed at the various classes should be founded on the differing
communication skills and interests of those groups.
(iv) Price Related Behavior: Lower class consumers are poorly informed
about price and product alternatives. They are more likely to buy
products on sale or priced lower. Regarding price perceptions among
the middle and working classes, a shopping simulation showed that
working class homemakers have a greater reliance on the general
belief that there is a price/quality association; that is higher the price
of a product is, the higher the quality.
Social Class Profiles

1. Upper-Class: Constitutes only a small percentage of population. It

consists of prominent families with wealth inherited through two or more
generations. Members of this group often live in large homes in exclusive
neighborhoods. Though upper-upper class people buy expensive items,
they do not conspicuously display their wealth and properties. People of
this group constitute a very good market for antiques, art, expensive and
rare jewelry, luxury travel, and uniquely designed products. While buying
different items, they expect special services from sellers. Their incomes
mostly come from inherited wealth. Upper-upper class people also
provide leadership and funds for social activities. They are found to serve
as trustees for hospitals, educational, social, charitable, and religious
institutions.
2. Lower-upper: This group is similar to upper-upper class in costly homes
in the best neighborhood and in lifestyles, but lacking in distinguished
ancestry. Their behaviors are not as polished as those of upper-upper
class people. These families are wealthy. The first generation parents in
lower-upper class give prominence to the education of their children.
Lower Uppers are persons who have earned high income or wealth
through exceptional ability in their profession or business. They usually
come from the middle-class. Founders of larger business, lawyers, and
wealthy doctors fall in this class. Members of lower upper class are ‘new
rich’ and the current generation’s new successful elite.
3. Upper-middle: Upper-middle class is composed of moderately
successful businessmen and professionals and the owners of medium
sized companies. Upper-middleclass people are usually highly educated
and have a strong desire for achievement. These families earn income
from a variety of sources and consist mainly of professionals like
 successful business mangers, lawyers, doctors, etc. They have a very
strong desire for professional success and recognition in the upper middle
class. They give importance to clothing, home decor etc., as signs of
social recognition.
4. Lower-middle: Basically, white collar workers who earn respectable
incomes and lead moderately comfortable lifestyles constitute this group.
People of this class are found to be very careful in spending their money.
Small businessmen, teachers, technicians, sales people, and, office
workers usually belong to this class. This is a relatively large class in any
society. They desire respectability, living in respectable neighbourhoods,
and send their wards to colleges. They avoid lower class living. People of
this class are home and family oriented, morally serious, and religious
oriented. They conform to the norms of the culture more than people of
any other class. They try for respectability by doing the right thing and
buying popular items. They save money to provide better education to
their children, thus alleviating their social class.
5. Upper-lower: The upper-lower class is perhaps the largest one in the
society. The families in the upper-lower class are similar to those of
lower middle class. Their main form of income is not salary but wages.
This class is popularly known as working class and includes skilled,
semi-skilled and manual labourers, construction, workers etc. They spend
a large portion of their income on food and shelter. This class does not
spend its income striving for middle class respectability. Their purchase
decisions are found to be impulsive in most of the times because of lack
of self-confidence. They rely more on sales people and advertising.
People of this class are least involved in civic activities and interact little
with others in the society except members of their same class. They
prefer to enjoy the pleasures of today rather than save for the future.
 6. Lower-lower: This class consists of unskilled laborers, people in non-
respectable occupation, unemployed people, and people who live on
welfare. As they live below the poverty line, they have very limited
income to support themselves. They tend to live on a day-today basis.
People of this class are poorly educated, and live in substandard houses
and neighborhoods. They lack an ambition or opportunity to improve
their lot. Most of the members of lower-lower class live below the
poverty line. Marketers make use of general lifestyles while making
product decisions, whether related to the product itself, or price, place and
promotion. This would include assessment of new product opportunities,
the segmentation, targeting and positioning and all other decisions related
to the marketing strategy. On the other hand, marketers make use of
specific lifestyles while making decisions related to a brand, be it its
positioning, pricing and any other decision related to brand management.

Social groups:

A group is a collection of individuals who share some consumer relationship,

attitudes and have the same interest. Such groups are prevalent in societies.
These groups could be primary where interaction takes place frequently and,
consists of family groups. These groups have a lot of interaction amongst
themselves and are well knit. Secondary groups are a collection of individuals
where relationship is more formal and less personal in nature. These could be
political groups, work group and study groups, service organisations like the
Lions, Rotary, etc. The behavior of a group is influenced by other member of
the group. An individual can be a member of various groups and can have
varied influences by different members of groups in his consumption behavior.
An individual can be an executive in a company, can be a member of a political
party. He may be a member of a service organisation and of entertainment clubs
and study circles. These exert different influences on his consumption.
Classification of Groups: Groups may be classified as:
(i) Content or Function: Most of us view the content of groups in terms of their
function. For example, we categorized them along such lines as students,
factory workers, mosque members and so on. Actually they are subtype of the
major kinds of groups that we encounter in a complex society, which could
generally be categorized along such lines as family, ethnic, age, sex, political,
religious, residential, educational occupational and so forth.
(ii) Degrees of personal involvement: Using this criterion groups can be
classified as primary and secondary. A primary group is that interpersonal
relationships take place usually on a face-to-face basis, with great frequency,
and on an intimate level. These groups have shared norms and interlocking
roles. Families, work groups etc are examples of such group. Secondary groups
are those in which the relationship among members is relatively impersonal and
formalized. Political parties, Unions, Associations occasional sports groups.
(iii) Degree of organization: Groups range from those that are relatively
unorganized to highly structured forms. We specify them into two categories:
(a) Formal groups are those with definite structure (e.g. they may have a
president, vice president, secretary etc.), they are likely to accomplish specific
goals, whether economic, social, political etc. (b) Informal groups are typically
primary groups, characterized by a relatively loose structure, a lack of clearly
defined goals or objectives, unstructured interaction and unwritten rules because
of the extent of their influence on individual values and activities.
Reference Group

Each person in the society is not only the member of his family but the member
of some group or groups outside the family circle. These groups can be called as
‘reference groups’.
‘Reference groups’ are those groups which an individual identifies with to the
extent that these groups become a standard or norm which influences his
behaviour.

Reference group is a social and professional group that influences the

individual’s opinions, beliefs and aspirations. It is one that provides an
individual with a sense of identity, accomplishment and stability.

Reference groups are of two types –

 Primary Groups : Primary reference groups are basically the set of people
whom you meet every day. They can be from your family, your close friends,
your roommates, etc. These people from primary groups may have a direct and
strong impact in your lives and your buying decisions since they are very
significant to you. Primary groups make you comfortable and give you a feeling
that they are with you when you are confused about a purchase. These people
give you very honest and clear advices as they are so close to you, due to which
you could be more confident about the purchase. Research shows that the bond
between people leads people to be effectively social and as satisfied consumers.

 Secondary Groups: Secondary reference groups are usually formal and they
speak less frequently. They might be professionals, your collogues, your seniors
at work or your acquaintance at club, etc. In secondary reference groups the
power to influence people is quite less as compared to primary reference groups
as people in these groups are not that comfortable in sharing their thoughts or
views on the purchase.

Aspirational Group: Aspirational group is the one to which a person may want
to become part of. They currently are not part of that group but wish to become
and get with that group. For doing the same, they try to dress, talk, act and even
think the way the members of that group do. For example, people who like
Madhuri Dixit wish to become like her and meet her and so start purchasing and
using all those products that she endorses.

Dissociative Group: The people in these groups are totally opposite to the
people in the aspirational group. Here people deny of becoming or getting
connected to a particular group. They just hate being related to that group.

For example, if people don’t like a particular community, they would never like
being connected to them. So they would try all the possible ways to avoid the
way in which they dress, think or act.

Thus marketers need to understand the likes and dislikes of the consumers and
also the groups to which they belong. Marketers should recognize the extent to
which a reference group influences the consumer and he should also understand
out of all the groups which group influences him the most.

Influence of Reference Groups on Consumer Behavior

How reference groups affect the buying behavior of consumers has been the
subject of many studies. These groups have been found to wield enormous
influence on buying behavior.

Reference groups greatly impact the products their members buy, although this
varies from group to group and from product to product. Reference group
influence is particularly potent in an informational vacuum.

Group influence is strongest when the individual consumer has little or no

knowledge about a product’s attributes. The influence of reference groups may
operate concerning both product and brand. Reference groups, then, influence
both the type of product purchased and the brand name selected.

They may also influence the selection of product type only or name only. What
product a person buys and what brand he buys is likely to be influenced by what
others in the reference groups do—a to be influenced by what others in the
reference groups do.

A consumer’s behavior may change to align with reference group members’

actions and beliefs.

For example, a person may stop buying one brand of paracetamol and switch to
another on the reference group’s advice. An individual may also seek
information from the reference group members about one or more factors
affecting purchase decisions, such as where, how, and when to buy a particular
product.

A reference group’s influence on a person’s purchase decision depends on that

person’s susceptibility to reference group influence and the group’s degree of
involvement.

Reference groups influence more in the purchase decisions of those products

that are visible to the group. Reference groups do not always influence
consumers’ decisions for a product or brand usage.

They can influence product categories, the type of product used, and the brand
used. Reference groups’ influence on consumer behavior basically depends on
the visibility of the usage situations, the person’s commitment to the group, the
importance of the product to the group, and the person’s confidence in the
purchase situation.

The real impact of reference group influence on purchasing behavior depends

on the buyer’s involvement with the group, how visible the product is, and how
conspicuously it is used.

Reference groups, thus, importantly influence consumer behavior.

If your reference group, for example, is your immediate neighbor, your levels of
aspiration and buying behavior will be influenced by their furniture, appliances,
carpets, etc. This group is not equally determinative of all products.

It can operate in various ways and can be effective on brands, services, and
products. The table below is an example of a reference group’s influence on an
individual’s products and brand selection. It may not be possible for an
individual to ascertain the precise influence of his reference groups.

But he can have some idea of their importance by noticing how many items he
has that are also possessed by the members of groups he belongs to, desire to
belong, and refer to.

Implications of Reference Group Influence for a Marketer

Marketers sometimes try to use reference group influence in advertisements by

suggesting that people in a specific group buy a product.

The advertisers hope that many people use the suggested group as a reference
group and buy or react more favorably to the product by making such an appeal.

The results of this kind of advertising depend on the advertisement’s

effectiveness in communicating the message, on the type of product, and on the
individual’s susceptibility to reference group influence.

A product or service compatible with a particular norm is probably best

promoted regarding the type of group that transmits the norm since the product
might be accepted if it is shown to be appropriate in the transmitting group
setting. Communication within reference groups is a major source of
information about certain products.
Since good word-of-mouth communication is a valuable marketing asset,
marketers attempt to identify or create opinion leaders in reference groups that
affect members’ within-group information acquisition.

If a marketer can reach opinion leaders, a multi-step flow of information may be

utilized by the firm, which directs marketing communications to opinion leaders
and opinion leaders then communicate this information to group members.

Opinion Leaders

Opinion leaders are people consumers look to for guidance in making purchase
decisions, usually someone with more knowledge of the subject. Our purchase
decisions are influenced by any number of people or groups. We often look to
opinion leaders for help in our consumer decisions. Opinion leaders are usually
people who are more knowledgeable about a certain product or service than the
average consumer. As such, opinion leaders can shape how a product is viewed.
Consumers are constantly seeking out the advice of knowledgeable friends or
acquaintances who can provide information, give advice, or actually make the
decision. For some product categories, there are professional opinion leaders
who are quite easy to identify–for instance, auto mechanics, beauticians, stock
brokers, and physicians. All these professionals can influence the decisions
consumers make within their area of expertise. Sometimes, these opinion
leaders can actually be groups, known as reference groups.

Characteristics of Opinion Leaders

Opinion leaders are generally people who have the ability to influence others.
They usually have deeper expertise in a certain area, and are often looked to for
help in making consumer decisions. For example, a local high school teacher
may be an opinion leader for parents in selecting colleges for their children.
Often, an opinion leader is among the first to use a new product or service, and
can then pass on his or her opinions of the product to others. Opinion leaders are
often trusted and unbiased and have the social network of friends, family, and
coworkers necessary to disperse information.

Opinion Leaders in Marketing

Opinion leaders are particularly useful in marketing. If a marketer can identify

key opinion leaders for a certain group, she can then direct her efforts towards
attracting these individuals. In marketing, celebrities are often used as opinion
leaders. Although they may not actually know more about a product or service,
there is usually the perception that they do. Celebrity endorsements in
marketing are a way to give clout to a product or service. Opinion leaders can
have a profound influence on the success of a product, and on one’s own
consumer purchases.

Influential and Influencers

Influencers are people who have a relatively large audience in which to tout
their beliefs. In the consumer world, influencers can impact the success or
failure of a product by using it or shunning it. A marketer often targets
influencers rather than the entire target market, because these influencers can
alter the behavior of other people. Influencers can be influential buyers,
retailers, or people, such as journalists or industry professionals (among others).
Influencers are sometimes ranked according to six criteria: market reach (how
many people the influencer will connect with), independence (no vested interest
in product), frequency of impact, expertise, persuasiveness, and thoroughness
(the extent to which influence is exerted across the decision lifecycle).Today the
largest social site for influencers is Instagram

Family influences: Families have a tremendous influence on consumer

purchasing. Many of the decisions made by consumers are taken within the
environment of the family and are affected by the desires, attitudes, and values
of the other family members.

Family, as a primary group, is vital because, it links the individual with a wider
society and it is through this that the individual learns the roles appropriate to
the adult life. The family can be ‘nuclear’ or ‘extended’. A ‘nuclear’ family is a
two generational family which consists, usually, a mother-father and children.
The ‘extended’ family is one that spans at-least three generations which consists
of mother-father- children-grandparents uncle-aunts, cousins-nephews and other
in-laws. In a joint family, many decisions are jointly made which also leave an
impression on the members of the family.

Influence of Family on Consumer Behavior

Families influence purchases in many ways. At first, the influence of parents is

significant because of how parents help their children to develop political and
religious beliefs, lifestyle choices, and consumer preferences. Most people are
who they are because of their parents. A spouse and children, however, can
exert an even more significant force on a consumer’s purchases. Interaction
between spouses and the number and ages of children play a particularly
powerful role on buying behaviors. These family influences affect how
consumers look at purchases more directly than most other social influences on
consumer purchasing.

TRADITIONAL FLC:

1. Bachelorhood — young and single.

2. Honeymooners - The newly married couples—young, no children.
3. Parenthood
Full nest 1—young, married, with child.
 Full nest 2—older, married, with children.

Full nest 3–older, married, with dependent children.

4. Post-parenthood - Empty nest—older, married, with no children living

with them.
5. Dissolution - Solitary survivor—older, single, retired people.
1. Bachelorhood - Young Singles :Young singles may live alone, with
their nuclear families, or with friends, or they may cohabitate with
partners-translating into a wide range of how much disposable income is
spent on furniture, rent, food, and other living expenses in this stage.
Although earnings tend to be relatively low, these consumers usually
don’t have many financial obligations and don’t feel the need to save for
their futures or retirement. Many of them find themselves spending as
much as they make on cars, furnishings for first residences away from
home, fashions, recreation, alcoholic beverages, food away from home,
vacations, and other products and services involved in the dating game.
Some of these singles may have young children, forcing them to give up.
2. Honeymooners - Newly married couples: Newly married couples
without children are usually better off financially than they were when
they were single, since they often have two incomes available to spend on
one household. These families tent to spend a substantial amount of their
income son cars, clothing, vacations, and other leisure activities. They
also have the highest purchase rate and highest average purchases of
durable good (particularly furniture and appliances) and appear to be
more susceptible to advertising.

3. PARENTHOOD:
1. Full Nest I: With the arrival of the first child, parents being to change their
roles in the family, and decide if one parent will stay to care for the child or if
they will both work and buy day-care services. Either route usually leads to a
decline in family disposable income and a change in how the family spends its
income. In this stage, families are likely to move into their first home; purchases
furniture and furnishings for the child; buy a washer and dryer and home
maintenance items; and purchase new items such as baby food, cough medicine,
vitamins, toys, sleds, and skates. These requirements reduce families’ ability to
save, and the husband and wife are often dissatisfied with their financial
position.

3. Full Nest II :In this stage, the youngest child has reached school age, the
employed spouse’s income has improved, and the other spouse often
returns to partor full-time work outside the home. Consequently, the
family’s financial position usually improves, but the family finds itself
consuming more and in larger quantities. Consumption patterns continue
to be heavily influenced by the children, since the family tends to buy
large-sized packages of food and cleaning suppliers, bicycles, music
lessons, clothing, sports equipment, and a computer. Discount department
stores (such as Cost co and Sam’s Club) are popular with consumers in
this stage.
3. Full Nest III :As the family grows older and parents enter their min-
40s, their financial position usually continues to improve because the
primary wage earner’s income rises, the second wage earner is receiving
a higher salary, and the children earn spending an education money from
occasional and part-time employment. The family typically replaces some
worn pieces of furniture, purchases another automobile, buys some
luxury appliances, and spends money on dental services (braces) and
education. Families also spend more on computers in this stage, buying
 additional PCs for their older children. Depending on where children go
to college and how many are seeking higher education, the financial
position of the family may be tighter than other instances

4. Postparenthood - Empty nest: Older married with no children living

with them. Financial position stabilizes and there is no expense on
children. The couple is free to enjoy their own pursuits and spend on
luxury or self-improvement items and medical care.

5. Dissolution - Solitary survivor: Older single retired people. Retired

people living alone after the death of a partner. Life becomes lonely and
income may reduce due to retirement. This again changes the consumption
pattern and living style of old people.

Another point to note, is that the family life cycle concept segments the families
on the basis of demographic variables, and ignores the psychographics
variables (families interest and opinions) of family members. Family life cycle
is also related to the spare time and the available income, education, etc. A
marketer has to take these elements into consideration.

The stages at which families find themselves, affect the nature of the goods and
services required, their wants and consumption patterns, as well as the volume
of consumption on specific products. The traditional view of the family life
cycle has been criticized for failing to recognize that a single-family unit may
not exist throughout the life of an individual. Families may be created by second
marriages, and these may involve children from prior marriages. The traditional
model also ignores the existence of single parent households. The modern
family lifecycle which takes into account the existence of working women, is a
more complex and more useful model than the traditional model.
Marketing strategy for family decision-making

It is realized that various purchasing tasks are performed by various members of

the family. The products are bought for joint use of the family. Refrigerator,
TV, sofa set, car, etc. The product is to be purchased by family funds where
more than one person may be contributing to the fund. Sometimes the funds are
not enough and other products may have to be sacrificed town an expensive
product. Some family members may not be agreeable to the choice made for the
product, and may consider it as a profligate expenditure. These are the main
influences in the family decision making, which are the outlets preferred by the
family members for the purchase of the product. All the above considerations
are important, and once all this is known strategy can be formulated in a better
manner

Consumption pattern of families in life cycle strategy

Family role structure and buying behaviour

In order to function as a cohesive unit, purchase roles or tasks are assigned and
carried out by one or more family members. When trying to reach families,
therefore, marketers need to realise that a set of purchase roles exist and come
into play within the family. These roles can be identified and they determine
how families make decisions.

The important buying roles include:

The Instigator (Initiator): This is the person who first suggests the idea of a
product or service and initiates the purchase process, to begin with. The Initiator
can even be a stranger. For example, you may see someone walking down the
street, wearing a new style of sweater or shirt, and decide tilt you would like a
similar one. Or, you may go over to a friend's house and notice a new stereo.
Your friend (the instigator), turns it on to demonstrate the sound quality. The
matter is then discussed at home with your family members (co-decision
makers) and you decide whether the brand suits your requirements.

The Influencer: This is someone whose opinion is valued in the decision-

making process. An influencer may b e a friend, brother, sister, spouse, doctor
or other influential person. All these persons have a direct or indirect influence
on the final purchase decision.

The Decider: This is the person who makes the final decision on what brand or
make to buy, after all aspects such as price, quality, servicing, have been
thought over.

The Purchaser (Buyer): This is the individual who actually purchases the
product, pays for it, takes it home or arranges for delivery. Very often, the
purchaser and the decider are the same person, particularly for big value items.

The Consumer: He is the user of the goods or service.

Although these five buying roles are performed whenever a purchase is made,
the individual performing each role may vary from purchase to purchase, and
from family to family. The number and identity of the family members who fill
these roles thus varies. In any given situation, the same member may take on
several or all roles.

Thus, in some cases, a single family member may independently assume a

number of roles, in which case, it is really an individual decision within a family
context. In other cases, a single role will be performed jointly by two or more
family members. Multiple roles, too, may be performed by one of the family
members. For example, in the purchase of household cleaning products, a single
person may perform all buying roles. In contrast, in purchasing cornflakes, the
mother may act as the decider and buyer, her children as influencers and users
and her husband as the evaluator. Thus, different persons may perform different
tasks in the purchase process. In all cases, family roles are usually appointed in
a way that ensures that they will be handled efficiently. Again, for example, the
person who purchases a loaf of bread may not be the same one who prepares the
toast or eats it. In fact, the purchaser may have been quite indifferent to the
various brands or makes and purchased it only because one or more family
members expressed preference.

Family Decision Stages

Just as there are different purchase roles, there are also a number of different
steps in the decision to buy a product or service. And the amount of influence
exerted by the husband, wife and children will vary, depending on the stage of
the decision process.

 Problem recognition
 Search for information
 Evaluation of alternatives
 Final decision
 Purchase

The role of husband, wife and children will differ across the stages. There can
thus be shifts in the husband-wife decision-making from stage one of problem
recognition, to stage two of search for information and finally, to the decision.
Marketers should therefore examine husband-wife decision-making in terms of
specific purchase factors.

The dynamics of family 'decision-making: purchase influences and role

specialization

It has consistently been found that, most husband-wife influence studies classify
consumer decisions as husband-dominated, wife-dominated, joint or syncratic
and, autonomic or unilateral. This gives us four main decision type categories,
namely:

Wife-dominant decisions: Wives have been found to dominate decisions on

food purchase, groceries, household furniture and appliances.

Husband-dominant decisions: Husbands have been found to dominate the

decisions on purchases such as automobiles and life insurance.

Syncratic decisions (Joint decisions): These are decisions in which husbands

and wives share influence. Vacations, choice of schools for children, for
example, are jointly decided.

Autonomic decisions (Unilateral decisions): Decisions of lesser importance

that either the husband or wife make independently.

Nontraditional FLC:
Major Factors Influencing Consumer Behavior

Major Factors Influencing Consumer Behavior

1. Psychological Factors
2. Social Factors
3. Cultural Factors
4. Personal Factors
5. Economic Factors

Consumer behavior is influenced by many different factors. A marketer should

try to understand the factors that influence consumer behavior. Here are 5 major
factors that influence consumer behavior: 

1. Psychological Factors

Human psychology is a major determinant of consumer behavior. These factors

are difficult to measure but are powerful enough to influence a buying decision.

Some of the important psychological factors are:

i. Motivation

When a person is motivated enough, it influences the buying behaviour of the

person. A person has many needs such as the social needs, basic needs, security
needs, esteem needs and self-actualization needs. Out of all these needs, the
basic needs and security needs take a position above all other needs. Hence
basic needs and security needs have the power to motivate a consumer to buy
products and services.

ii. Perception
Consumer perception is a major factor that influences consumer behavior.
Customer perception is a process where a customer collects information about a
product and interprets the information to make a meaningful image about a
particular product.

When a customer sees advertisements, promotions, customer reviews, social

media feedback, etc. relating to a product, they develop an impression about the
product. Hence consumer perception becomes a great influence on the buying
decision of consumers. 

iii. Learning

When a person buys a product, he/she gets to learn something more about the
product. Learning comes over a period of time through experience. A
consumer’s learning depends on skills and knowledge. While a skill can be
gained through practice, knowledge can be acquired only through experience.

Learning can be either conditional or cognitive. In conditional learning the

consumer is exposed to a situation repeatedly, thereby making a consumer to
develop a response towards it.

Whereas in cognitive learning, the consumer will apply his knowledge and
skills to find satisfaction and a solution from the product that he buys.

iv. Attitudes and Beliefs

Consumers have certain attitude and beliefs which influence the buying
decisions of a consumer. Based on this attitude, the consumer behaves in a
particular way towards a product. This attitude plays a significant role in
defining the brand image of a product. Hence, the marketers try hard to
understand the attitude of a consumer to design their marketing campaigns.
2. Social Factors

Humans are social beings and they live around many people who influence their
buying behavior. Human try to imitate other humans and also wish to be
socially accepted in the society. Hence their buying behavior is influenced by
other people around them. These factors are considered as social factors. Some
of the social factors are:

i. Family

Family plays a significant role in shaping the buying behavior of a person. A

person develops preferences from his childhood by watching family buy
products and continues to buy the same products even when they grow up.

ii. Reference Groups

Reference group is a group of people with whom a person associates himself.

Generally, all the people in the reference group have common buying behavior
and influence each other.

iii. Roles and status

A person is influenced by the role that he holds in the society. If a person is in a

high position, his buying behavior will be influenced largely by his status. A
person who is a Chief Executive Officer in a company will buy according to his
status while a staff or an employee of the same company will have different
buying pattern. 

3. Cultural factors

A group of people are associated with a set of values and ideologies that belong
to a particular community. When a person comes from a particular community,
his/her behavior is highly influenced by the culture relating to that particular
community. Some of the cultural factors are:

i. Culture

Cultural Factors have strong influence on consumer buyer behavior.  Cultural

Factors include the basic values, needs, wants, preferences, perceptions, and
behaviors that are observed and learned by a consumer from their near family
members and other important people around them.

ii. Subculture

Within a cultural group, there exists many subcultures. These subcultural groups
share the same set of beliefs and values. Subcultures can consist of people from
different religion, caste, geographies and nationalities. These subcultures by
itself form a customer segment.

iii. Social Class

Each and every society across the globe has form of social class. The social
class is not just determined by the income, but also other factors such as the
occupation, family background, education and residence location. Social class is
important to predict the consumer behavior.

4. Personal Factors

Factors that are personal to the consumers influence their buying behavior.
These personal factors differ from person to person, thereby producing different
perceptions and consumer behavior.

Some of the personal factors are:

i. Age
Age is a major factor that influences buying behavior. The buying choices of
youth differ from that of middle-aged people. Elderly people have a totally
different buying behavior. Teenagers will be more interested in buying colorful
clothes and beauty products. Middle-aged are focused on house, property and
vehicle for the family.

ii. Income

Income has the ability to influence the buying behavior of a person. Higher
income gives higher purchasing power to consumers. When a consumer has
higher disposable income, it gives more opportunity for the consumer to spend
on luxurious products. Whereas low-income or middle-income group
consumers spend most of their income on basic needs such as groceries and
clothes.

iii. Occupation

Occupation of a consumer influences the buying behavior. A person tends to

buy things that are appropriate to this/her profession. For example, a doctor
would buy clothes according to this profession while a professor will have
different buying pattern.

iv. Lifestyle

Lifestyle is an attitude, and a way in which an individual stay in the society. The
buying behavior is highly influenced by the lifestyle of a consumer. For
example when a consumer leads a healthy lifestyle, then the products he buys
will relate to healthy alternatives to junk food.

5. Economic Factors
The consumer buying habits and decisions greatly depend on the economic
situation of a country or a market. When a nation is prosperous, the economy is
strong, which leads to the greater money supply in the market and higher
purchasing power for consumers. When consumers experience a positive
economic environment, they are more confident to spend on buying products.

Whereas, a weak economy reflects a struggling market that is impacted by

unemployment and lower purchasing power.

Economic factors bear a significant influence on the buying decision of a

consumer. Some of the important economic factors are:

i. Personal Income

When a person has a higher disposable income, the purchasing power increases
simultaneously. Disposable income refers to the money that is left after
spending towards the basic needs of a person.

When there is an increase in disposable income, it leads to higher expenditure

on various items. But when the disposable income reduces, parallelly the
spending on multiple items also reduced.

ii. Family Income

Family income is the total income from all the members of a family. When
more people are earning in the family, there is more income available for
shopping basic needs and luxuries. Higher family income influences the people
in the family to buy more. When there is a surplus income available for the
family, the tendency is to buy more luxury items which otherwise a person
might not have been able to buy.

iii. Consumer Credit

When a consumer is offered easy credit to purchase goods, it promotes higher
spending. Sellers are making it easy for the consumers to avail credit in the
form of credit cards, easy installments, bank loans, hire purchase, and many
such other credit options. When there is higher credit available to consumers,
the purchase of comfort and luxury items increases.

iv. Liquid Assets 

Consumers who have liquid assets tend to spend more on comfort and luxuries.
Liquid assets are those assets, which can be converted into cash very easily.
Cash in hand, bank savings and securities are some examples of liquid assets.
When a consumer has higher liquid assets, it gives him more confidence to buy
luxury goods.

v. Savings

A consumer is highly influenced by the amount of savings he/she wishes to set

aside from his income. If a consumer decided to save more, then his expenditure
on buying reduces. Whereas if a consumer is interested in saving more, then
most of his income will go towards buying products.
 Unit 5
Models of Consumer Behavior
INTRODUCTION
Consumers approach the marketplaces differently; they go through the buying
decision process differently as it gets impacted by internal and external forces.
Researchers have attempted to understand the dynamics of consumer decision
making and they have classified four varying views and perspectives, the
underlying forces operating within consumers that could be employed to
approach the marketplace. The heterogeneity among consumers makes
understanding consumer behavior to face challenge task by marketers. Hence
marketers felt the need to obtain an in-depth knowledge of consumers’ buying
behaviour. Finally this knowledge acted as an imperative tool in the hands of
marketers to forecast the future buying behaviour of consumers and devise four
marketing strategies in order to create long term customer relationship.
Consumer behaviour is broadly the study of individuals, or organizations and
the processes consumers use to search, select, use and dispose of products,
services, experience, or ideas to satisfy needs and its impact on the consumer
and society. consumers are very different, they are very unique; they are the
come with different needs, wants, backgrounds, different preferences and
although the decision making process is the same. The approach the process or
they basically, you know orient the process through their own perspectives.
ECONOMIC MODEL
According to the economic perspective of studying consumers, the consumer is
regarded as being rational. The model assumes that there exists in the market a
state of perfect competition; the consumer is aware of the various alternatives;
he has the knowledge and ability to rank all of these; and he finally takes a
rational decision. He takes a decision and makes a choice as after taking into
account the cost and benefit, and the overall value in economic terms.The
economic model explains buying behavior from an economic perspective. The
assumption is that resources are scarce viz. a viz unlimited needs; a consumer
seeks value: he wants maximum benefit at minimum cost. The economic
models showed concern as to how scarce resources were allotted to satisfy the
unlimited needs and wants. Economic models can be further classified into
Microeconomic models and Macroeconomic models.
Micro economic models:
The micro economic models focus on the act of purchasing; they focus on what
an average consumer would purchase and in what quantity; they also ignore
why and how the needs/wants get prioritized, and how the behavior is
underpinned. According to the micro economic view, consumers are rational in
nature and value utility. With resources being scarce, they would allocate
money on their purchases in a way that satisfies them maximally. The consumer
decisions are thus based on benefit to cost ratio; the consumer would settle on
an alternative that provides the highest ratio in terms of marginal utility.
Macroeconomic models:
The macroeconomic models focus on the overall trend in the economy that has
an impact and is also impacted upon by buying patterns. They focus on the
aggregate flows in the economy. Conclusion about consumer behavior is made
after analyzing such flows. This approach could also be studied with two
orientations:
a) Relative income hypothesis: A persons’ expenses are
influenced by his social surrounding and group. With his
income being constant, the relative expenses and the
resultant savings will not change, until and unless, there is a
big change in the total income. The hypothesis holds that
what and how much a consumer spends is not solely
dependent on income, but is influenced by peers.
b) Permanent income hypothesis: Even if the total income
increases, people initially exhibit inertia towards spending as
they want to accumulate wealth; so purchasing pattern does
not change immediately. The limitations of studying
consumer behavior with this orientation are that the view is
silent about other forces that operate during the buying
process.
Cognitive model (Behavioral Model)
The consumer is regarded as being a problem solver, who searches for products
to fulfill his needs/wants. Consumer decisions are based on information
gathering and processing. The consumer is believed to take decisions after a lot
of thought and deliberation, so as to get maximum benefit and value. The model
proposed by Leon Festinger, views the consumer as one who faces a feeling of
anxiety (dissonance), while he is making a purchase; this is because he is faced
with many alternatives, all of which seem desirable. Post-purchase, this
dissonance increases even further. There is an imbalance in the cognitive
structure; and the consumer tries to get out of this state as soon as he can. So a
buyer gathers information that supports his choice and avoids information that
goes against it.There are two major types of cognitive models of consumer
behaviour. Firstly, Analytical Models which provide a framework of the key
elements that are purported to explain the behaviour of consumers. These
Models identify a plethora of influencing factors, and intimate the broad
relationships between factors in consumer decision making.

Contemporary Models - Nicosia, Howard-Seth, EKB models.

Howard-Seth

Introduction
The Howard - Sheth Model shown in the figure next focuses on the element of
repeat buying and presents the dynamics of purchase behavior over a period of
time. The model shows that a person has motives and perceptions and that he
may make a purchase decision which leads to learning. The consumer has a set
of motives and several courses of action. With repeated purchases, the decision
process is simplified by the storing of information that has been fed back into
the system.

Design of the Model

The Howard and Sheth model of buyer behavior is an elaboration of a model

originally developed by Mr. John A. Howard. The figure (Fig. no. 3.3) shows
the simplified version of this model explaining the behavior of an individual
consumer. According to this model, buyer behavior consists of four sets of
constructs, frame or variables. They are:

 Input variables

 Output variables

 Hypothetical constructs, (consisting of learning and perceptual constructs)

 Exogenous variables

The above figure is a simplified version of the Howard-Sheth Model. The

exogenous variables are not shown in the diagram, because of their implied
influences. An exogenous variable such as culture, will have definite influence
on our behavior.

Description of the Constructs of the Model

Let us now describe the variables of the model in turn.

The Input Variables:

At any point in time, the hypothetical constructs are affected by numerous

stimuli from the environment. The environment is classified as

(ii) commercial and

 (iii) social.

The marketing activities of various firms by which they attempt to communicate

to the buyer constitute the commercial environment. From the buyer’s point of
view, these communications come by way of either the physical brand
themselves (significative) or some linguistic or pictorial representations
(symbolic) of the attributes of the brands. The two inputs are called significative
and symbolic stimuli. The third important variable is social stimuli. It refers to
the information that the buyer’s social environment provides regarding a
purchase decision. The most obvious is word of mouth communication.

The Output Variables The output variables are labeled as: (a) attention, (b)
brand comprehension, (c) attitude, (d) intention, and (e) purchase. They are
described below:

 Attention: It is a response of the buyer that indicates the magnitude of his

information intake. There are several methods of measuring attention such as
psychophysical method.

 Brand Comprehension: It refers to buyer’s verbal statement about his

knowledge of brands in a product class. It could vary from the buyer’s simply
being aware of a brand’s existence to a complete description of buyer’s
descriptive meaning of the brands.

 Attitude: Attitude is the buyer’s verbal evaluation of a brand’s potential to

satisfy his motives (his description of the connotative or implied meaning of a
brand).

 Intention: It is the buyer’s expectation, expressed verbally, that, given his

information about all the aspects of a buying situation and his predictions about
the future states of the environment, he will buy the brand he likes most next
time he is motivated to buy.
 Purchase: Purchase behavior refers to the overt act of buying or purchasing a
brand.

Hypothetical Constructs

We may classify the hypothetical constructs into two classes:

 Those having to do with learning (learning constructs).

 Those that have to do with perception (perceptual constructs).

Perceptual constructs serve the function of information processing, where the

learning constructs serve the function of concept formation. The following
paragraphs describe these two types of constructs:

 Learning Constructs Learning constructs are labeled as: (i) motives, (ii)
brand comprehension, (iii) choice criteria, (iv) attitude (toward the brand), (v)
intention (to buy the brand), (vi) confidence (in judging brands) and, (vii)
satisfaction (with the purchase of the brand). Let us now look at each of them in
turn:

 Motives: Motives are goals of the buyer impinging upon a buying situation.
They are derived from the biogenic and psychogenic needs, wants, and desires
of the buyer.

 Brand Comprehension: It refers to knowledge about the existence and

characteristics of those brands that form the buyer’s evoked set of alternatives.
The brands that become alternatives to the buyer’s choice decision are generally
small in number collectively called his evoked set.

 Choice Criteria serve the function of organizing and structuring the buyer’s
motives, so that motives that are relevant to this product class are interrelated
and ordered in terms of their relative importance to him. Choice criteria are the
buyer’s mental rule (a guiding principle) which he utilizes to evaluate brands as
goal objects. Their function is to generate appropriate attitudes toward brands,
so that the brand with the greatest favorable attitude is potentially most
satisfactory to him. Choice criteria are learned, and there are two broad sources
of learning. They are: actual experience and information from commercial and
social environment.

 Attitude: Attitude refers to buyer’s relative preferences of brands in his

evoked set based on his evaluative beliefs about these brands as goal objects.

 Intention: Intention refers to buyer’s forecast about as to when, where, and

how the buyer is likely to buy a brand. It includes possible modifications of
buyer’s attitude toward brands in terms of inhibitory contingencies that may be
presented if the buyer bought a brand. There are five inhibitory situations viz.
high price of brand, lack of availability of the brand, time pressure on buying,
the buyer’s financial status, and social influences.

 Confidence: Confidence refers to the degree of certainty the buyer perceives

toward a brand. This certainty may relate to his brand comprehension, his
attitude toward the brand, his intention to buy the brand and his post purchase
evaluation of the brand (purchase experience). So confidence is related to the
above.

 Satisfaction: Satisfaction refers to the degree of congruence (harmony)

between actual consequences from purchase and consumption of a brand and
what are expected from it. If expected is less than the actual, he will be satisfied.

 Perceptual Constructs Another set of constructs serves the function of

information procurement and processing relevant to a purchase decision.
Information can come from any one of the three inputs such as significative
commercial stimuli, symbolic commercial stimuli, and social stimuli. Perceptual
constructs are labeled as follows :
 Attention,

 Stimulus ambiguity,

 Perceptual bias, and

 Overt search.

 Attention: Attention refers to the opening and closing of sensory receptors

that control the intake of information. Attention acts as a gatekeeper to
information entering into the buyer’s mental state. It thus controls the quantity
of information input. In the figure, attention is a function of two other constructs
- stimulus ambiguity and attitude. In fact, however, several other constructs
such as confidence, goal conflict etc. are also its determinants. Most of these
mediate their influence by way of stimulus ambiguity.

 Stimulus Ambiguity: Stimulus ambiguity refers to the perceived uncertainty

and lack of meaningfulness of information received from the environment. It
affects attention and overt search constructs. Stimulus ambiguity may change in
a single communication, particularly if it is verbal as in radio and television
commercials.

 Perceptual Bias: The buyer not only selectively attends to information, but
actually distorts it once it enters his mental state. In other words, meaning of
information is altered by the buyer. This aspect of perceptual process is
summarized in perceptual bias. The buyer may distort the cognitive elements
contained in information to make them congruent (suitable) with his own frame
of references as determined by the amount of information he already has stored.
Most of the qualitative change in information arises because of feedback from
various learning constructs such as motives, attitude, brand comprehension, and
choice criteria.

 Overt Search: The active seeking of information can be termed as the overt
search. During the total buying phase, which extends over time and involves
several repeat purchases of a product class, there are stages when the buyer
actively seeks information. The active seeking of information occurs when the
buyer senses ambiguity of the brands in his evoked set. The ambiguity of brands
exists because the buyer is not certain of the outcomes from each brand. In other
words he has not yet learned enough about the alternatives to establish an
expectancy of potential of the brands to satisfy his motives. He may also find
that two brands are equally attractive and he is undecided which one to choose.
In all such situations, the buyer will search for information.

Exogenous Variables:

External variables are not directly part of the decision-making process and are
not shown in the model presented here. Relevant external variables include the
importance of the purchase, consumer personality traits, time pressure and
financial status.

Relationship among Hypothetical Constructs

Suppose that Mr. Ali Azam is observed to purchase State Express 555 filter
tipped cigarettes. This is incorporated in the output variable called
‘PURCHASE’. Our interest at this point is not the quantity, time or place of
purchase. Rather, we wish to find out why he chose 555 over more than 30
other brands. When asked, Mr. Azam states that he regularly buys 555 and does
so because he likes it. Pushed further, he states that he likes it, because it has a
combination of attributes that best provide what he is looking for in smoking.
Finally, he describes what he is looking for in cigarette buying and consuming
are mildness, smooth draw, convenience in packaging and availability and
reasonable price. When further asked, he states that he knows of 10 brands and
tried 5 and right now considers Gold Leaf and Benson and Hedges are other
brands that he would consider buying and consuming. Mr. Azam’s liking and
evaluation are part of ATTITUDE. His purchase criteria are the CHOICE
CRITERIA and his brand awareness and consideration are part of BRAND
COMPREHENSION. He also states that he does not always choose 555
because there are some occasions when he buys any of the three brands. The
occasions are lumped together as INHIBITORS and are a part of INTENTION.
Mr. Azam, however, is very CONFIDENT of his evaluations of various brands.
He is equally certain about his intention to buy 555. This degree of certainty is
captured in CONFIDENCE. Next, there are a number of questions about why
Mr. Azam is so confident, so certain of his evaluation, his criteria, and his
knowledge of various brands? He states that he has tried several brands and
based on his post-purchase evaluation (SATISFACTION) he has decided that
555 is satisfactory. Similarly, he has also learned from personal experiences that
he ought to look for four criteria set out earlier. Finally, he admits that several
years ago when he started smoking, he learned considerably about the brands
and what to look for in them by word of mouth as well as mass media
(STIMULUS DISPLAY). Furthermore, he does not actively seek any
information now, although he did when he begun smoking (OVERT SEARCH).

Evaluation of the Model

The Howard - Sheth Model has added a social negotiation process and has in
this respect extended the original model. Nevertheless, many of the problems of
the Howard-Sheth model remain. These include problems with insufficient
explanation. For example, it is not clear when causal relationships occur, how
they operate, or what weights are associated with the variables shown in the
model. The Howard - Sheth model is however, unique in its contribution of a
behavioral approach to industrial buyer behavior. This approach emphasizes the
similarity between all forms of group decision making, including family
purchases, purchases made by family-owned businesses, as well as purchases
made by buying groups in multinational organizations. Thus, this model is more
social in nature, that is, it considers interactions between people and
incorporates them into the model. This model appears to be a powerful tool for
explaining consumer behavior, especially for frequently purchased items, where
past experience is likely to influence future attitudes. While it works better
when used to guide research on the marketing of established products, rather
than new ones, It has been useful in planning, executing, and analyzing test
markets for new brands.

NICOSIA MODEL

This model has been developed by Francesco M. Nicosia. This model is

particularly used to simulate behavior electronically. According to Nicosia, a
consumer’s decision can best be understood by a flow chart diagram (shown in
the next figure).

Nicosia uses the technique of computer flow charting to show the various forces
involved and the relationship of those forces.

It is divided into four major fields

 (i) The Consumer Characteristics : Consumer’s Attitude based on the
Firm’s Messages:
The firm’s marketing environment and communication efforts affect
attitudes, such as product attributes, the competitive environment of
relevant mass media, the choice of copy appeal and characteristics of
the target market. It specifies various consumer characteristics
(personality experience) that mediate reception of the firm’s
promotional messages. The output is an attitude towards the product
based on consumer’s interpretation of the message.

(ii) Search and Evaluation

It deals with the search for relevant information and evaluation of the firm’s
brand in comparison with alternative brands .The output of this stage is
motivation to purchase the firm’s brand.

(ii) The Act of Purchase:

The consumer’s motivation towards the firm’s brand results in purchase of the
brand from a specific retailer.

iv) Feedback:

Two important types of feedback are obtained from the purchase experience.
One, to the firm in the form of sales data and the other, to the consumer in the
form of experience (satisfaction or dissatisfaction). The consumer experience
with the product affects the individual’s attitudes and predisposition concerning
future messages from the firm.

The Nicosia model has a number of strengths. First, the model recognizes the
many steps which lie between attitude formation and actual behavior. Such a
conceptualization helps us to understand the problems that researchers have
when they find that attitudes do not always predict behavior. The model,
however, does not present problems when used to make predictions. The
linkages shown in the diagram indicate flows rather than causation. The model
is strong in showing change in consumer attributes due to the experience of
considering, choosing, purchasing, and using a product. There is intra-person
feedback, i.e., consumers think of themselves and respond to their thoughts and
acts. The model is not very explicit, however, in describing how and when the
consumers’ or firms’ attributes function. To be truly explanatory, the model
needs more elaboration on this point.

ENGEL KOLLAT BLACKWELL MODEL

This model is also developed based on learning processes as the Howard Sheth
model. According to this model, different types of search behavior occur,
depending on how routine or unusual the purchase choice is. Emphasis is given,
in this model, on the information search process. This model is known as the
multi-meditational model because the interaction of quite a large number of
variables is shown between consumer’s exposure to the purchase related
stimulus and the final decision outcomes.

This model includes five principal stages: (1) problem recognition; (2)external
search; (3) alternative evaluation; (4) purchase processes; and (5) post-purchase
evaluation. This formulation attempts to describe the behavioral processes that
occur from the stage where consumers recognize that some decision is
necessary to the stage where post-purchase evaluation of the brand and its
attributes affects those attitudes, values, and personality characteristics stored in
the central control unit.

This model may also be described in another way. The basic components of the
model are, stimuli, processing of information, the decision process, and
environmental influence. The stimuli encourage the consumer to become aware
of information or a product. After filtering the information, the consumer
evaluates it and forms an attitude. When a problem situation arises (e.g., when a
person needs to find a marriage day gift for someone), the person searches
through the information stored in memory and evaluates the alternatives
(flowers, dinner set, ornaments etc.). If not enough information is stored, the
person searches for additional information before coming to a decision. If the
decision is routine, little or no external search or post-purchase evaluation takes
place. Environmental influences affect whether the person continues through the
output decision process. These influences include income, family, social class
etc. and physical factors. There are five distinct aspects of consumer decision
making according to the EKB model:

Input

Information Processing

Decision Process

Decision Process Variables

External Influences

The above aspects have been tried to be put to use to demonstrate the consumer
decision making process in buying a Mobile phone.

1. Input

The input stage is generally the data collection stage of the consumer
decision making process. The consumer is constantly exposed to various
stimuli and information about various products. These stimuli include
marketing ads in newspapers, TV, magazines, people around us and
feedback on websites, social media, etc., and are all part of the data that a
consumer receives. The input may be actively sought by the consumer if s/he
is already willing to buy a product or passively when s/he is involuntarily
exposed to marketing stimuli and information created by the marketers or by
the environment and people around. This information forms the ‘awareness
set’ of products for the individual.

2. Information Processing

This stage involves the assimilation and processing of data captured in the
input stage and aides in rational decision making. The consumer gets
exposed to various stimuli, some of which grab his attention. The stimuli
information and information which the consumer already has in his/her
memory from experience and past interactions forms the complete dataset
which the consumer uses to further processing. The information is filtered,
understood
and classified by the consumer which leads to his/her acceptance or rejection
of certain data and stimuli which do not cater to his needs and perception of
the product which he seeks. The data accepted leads to the consumer forming
an opinion about the product. This processed form of opinion is retained by
the consumer in his memory for further usage. In terms of mobile phones
purchase the information may be received from TV ads, magazines,
newspaper columns, from friends, websites and personal observation. All
this information along with the already existing knowledge in the
consumer’s memory forms the data set to be processed. This data set is then
evaluated according to some basic intuitive evaluation metrics which the
consumer subconsciously has in his mind and this leads to the person
rejecting
some information as not important and making a basic idea in his/her mind
about the product which s/he would like to purchase. This stage leads to the
formation of the ‘consideration set’ of products.
 3. Decision Process

As soon as the customer feels a need due to some problem he is facing and has
the ability to buy (at present or in probable near future), he starts external search
for information regarding the various options available in the market to satisfy
his need. The information collected externally along with processed information
stored in the memory lead to the consumer evaluating products according to his
evaluative criterion. Some products in the consideration set are rejected and the
remaining form the ‘choice set’ of the consumer from which to choose from
finally. Consumer’s beliefs, attitude and intention guide his evaluation. From
this choice set the consumer finally chooses a product which is bought. This
acquiring of the product and its usage subsequently may lead to satisfaction for
the customer or dissonance, in which case the consumer is not sure whether he
bought the right product and hence, s/he goes back to the gather information to
reassure himself of his purchase decision. The final choice of product may not
only be the result of person’s beliefs, attitude and intention but may well be
guided by some ‘unanticipated circumstance’ which forces the customer to buy
a particular product instead of the one s/he narrowed down upon. In case of
mobile phones, the consumer would want to know of the various brands
available in the market according to his buying capacity and needs. This would
be determined by various benefits that the consumer wants from the mobile like
suitable price, battery life, style, screen size, internet access capacity, handling,
etc. S/he would also look at various other features like the service network of
the companies.

4. Decision Process Variables

There are various decision process variables which influence the consumer’s
decision making process. The normative compliance and informational
influence is one of them. The person goes by what his/her peer group and
people around him think. The societal and peer group opinion is important to
the person and influences his choice. This variable also impacts the purchase
intent of the person, ultimately impacting product choice. The person also
follows a certain lifestyle which earns him/her status in the society and his
evaluative criteria are guided by his/her sense and understanding of his image
and the image s/he would want to portray in the society. These evaluative
criteria impact the person’s beliefs which in turn influence his choice and
search. The person’s motive of purchase is influenced by all the above variables
and ultimately results in the person’s understanding and recognition of the
problem he is facing. All these factors make the decision process more complex
and result in the person to choose a certain type of product which satisfies his
‘want’. A mobile phone purchaser would be influenced by the image the people
would create of him/her when they see him/her using a particular mobile.

5. External Influences

The model talks of three external influences which affect buying behavior of a
person. The ‘cultural norms and values’ along with ‘reference group/family’
impact a person’s normative compliance and lifestyle. The person has to abide
by the rules laid down by them and has to project a certain image to be received
the respect and status that he enjoys in the society. Often, new products are
bought with a view to increase one’s respect in the society and enhance one’s
self-image. Hence, these factors are critical in the person’s choice of the product
to be bought. Another important factor may be ‘unanticipated circumstances’
which may totally alter one’s purchasing decision. The impact of all these
factors are critical to the decision making process. Hence, the person is not only
influenced by the product attributes but is also guided by external factors to
make a choice of the product to be bought. The stimuli and constant information
received along with that stored in the memory is assimilated and processed to
arrive at the possible options from which to choose. Thus, all five aspects
holistically define the consumer’s decision making process.

SUMMARY
The consumer models refer to varying orientations and perspectives with which
consumers approach the marketplace and how/why they behave as they do.
They refer to how the varying orientations impact the buying decision process
and overall buyer behavior. Models believes that behavior is deeply affected by
the learning experiences of the buyers; and learning is a product of information
search, information processing, reasoning and perception. Reinforcement leads
to a habit formation and the decision process for an individual becomes
routinized, leading to brand loyalty. Consumers also learn through trial and
error and resultant experiences that get stored in our memory. Consumers
approach the marketplaces differently; they go through the buying decision
process differently as it gets impacted by internal and external forces.
Researchers have attempted to understand the dynamics of consumer decision
making and they have classified four varying views and perspectives, the
underlying forces operating within consumers that could be employed to
approach the marketplace.