CONSUMER BEHAVIOR II MARKING GUIDE(SECOND SET)

Q1a, Brand loyalty is the loyalty or faithfulness which a customer develops for a brand. Brand loyalty is developed
in the mind of a consumer after finding the product or service useful. Brand loyalty is an important aspect of
marketing as it helps companies build a strong brand and get the customers again.

b,Four Types Of Brand Loyalty

1. Hard-Core Loyalty: is the type of brand loyalty where customers who buy the same brand over and over again &
are strong brand advocates.

2. Split loyalty: is the type of brand loyalty where customers have a strong product preference and are loyal to 2 or
3 companies or brands only.

3. Shifting Loyalty: Is the type of brand loyalty where customers who keep moving from one brand to anothers

4. Switching loyalty: is the type of brand loyalty where customers are not loyal towards any brand. They simply
look for the cheapest or best or most effective product irrespective of the brand or company.

C, FIVE ADVANTAGES OF BRAND LOYALTY

1.Brand loyalty gives an edge over competitors by a higher brand recall.

2.Creates positive brand value and word of mouth helps in positive marketing.
3.Customers are willing to pay a premium also for their brand.
4.Saves costs on customer retention and helps get new customers onboard.
5.More products under the same brand get popular with loyal customers.

Q2a, Cognitive dissonance occurs when your customer feels unsatisfied or their state of mind becomes uneasy
after making a purchase from your store. It happens mainly after the customer finds out the better option of the
product and brand.

b, FIVE WAYS TO REDUCE COGNITIVE DISSONANCE

1. Offer detailed Information: Before making any purchase, there is a group of customers who conduct in-depth
research and analysis of the product they are looking to buy. The good thing is that conducting research and
analysis about a product reduces the chances of experiencing post-purchase dissonance. Because they have
already evaluated the product which means your customers know what they are buying and what they are paying
for.

2 Focus on product appearance and quality:This type of action can help you to improve your sales.
Without this, there are chances that your customer will pace the return request. And they may reach out
to various social media platforms to discuss the issue they faced after purchasing from you. It will directly
harm your reputation.

3. Offer Seamless Communication :Many businesses think that once the customers successfully make a purchase
from their store their job is over. In reality, sales never end with sales. If you want to build a strong relationship
with your customers then it is important for you to engage them after they successfully make a purchase from your
store. Nowadays every savvy shopper knows that their order details with all the tracking id and transaction detail
will land in their emails. So after placing an order, customers check their emails about those details. SMS can help
you in providing all the details but email will help you to give in-depth details will all the tracking links and other
product recommendation links.
4. Analyze what may go wrong :A successful business always anticipates things that might go wrong in the
customer buying process. Imagine yourself as a customer and think through the whole customer Journey starting
from visiting your product page to reading the product description, refund policies, checkout page, payment
processing and more.

5. Offer various refund option :Make sure that your business is offering flexibility in selecting the refund method.
You can offer various ways to get a refund for the product. Many customers will look to transfer money directly
into their bank account. Few customers may want the same money in the form of store credit or gift card.

c, SOME CAUSES OF COGNITIVE DISSONANCE

1, If your customer finds a cheaper price then they could think they paid an extra amount for that product.

2, Post-purchase dissonance may occur when your customer finds your competitor’s product and service better in
terms of pricing, features, and delivery than the product they bought from your store.

3, when your customer receives a damaged product, the product appearance totally differs from the product
image displayed on your website

Q3a, The Pavlovian Theory of the Classical Conditioning theory is a theory that relates to automotive or reflexive
learning. The theory was propounded by the Russian psychologist Ivan Pavlov in 1980s. The major focus of this
theory is to connect a stimulus with a conditioned response. In order to establish the theory of conditioned
learning, Pavlov conducted an experiment on a dog when he found that it would salivate when food was brought
to him.Later on, Pavlov found that the dog would salivate when at the sight of the person who would bring food to
it. Thus, the food would become the stimulus here and the salivation of the dog became the conditioned response
to this stimulus . Pavlovian

b, Theory can be used to explain consumer behaviour. When this theory is applied into marketing strategies, the
marketers use a specific brand image, themes and endorser’s image as a stimulus to influence the purchase and
repurchase decision of the target consumers.

c,i, Consonance is the strong satisfactory feeling which buyer has towards the product purchased.

ii, The American Marketing Association (AMA) defines marketing as "the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy
individual and organizational objectives.

iii, An opinion leader is someone who has mastered a specific market or industry and has established trust within a
community as an industry insider or decision-maker

iv, A target market is a group of customers with shared demographics who have been identified as the most likely
buyers of a company's product or service.

V, Consumer behavior is the analysis of how consumers make decisions about what to buy, when to buy it, and
how to do so.

Q4,a, Marshallian Model:

This model is based on the assumption that consumers have complete knowledge of their wants and of all
available means to satisfy them. This model is based on the law of diminishing marginal utility. This model states
that expenditures vary directly with income (price effect); (substitution effect); and (income effect).The main
criticism of this model is that it assumes the homogeneity of the market and similarity of buyer behaviour. It
ignores the aspects such as motivation, perception, learning, attitude and socio cultural factors.

b, Economic model is based on certain predictions of buying behaviour.

1. Price effect – Lesser the price of the product, more will be the quantity purchased.

2. Substitution effect – Lesser the price of the substitute product, lesser will be the quantity of the original product
bought.

3. Income effect – More the purchasing power, more will be the quantity purchased

c, FOUR IMPORTANCE OF CONSUMER BEHAVIOR

1. Achievement of Goals:The key to a company’s survival, profitability, and growth in a highly competitive
marketing environment is its ability to identify and satisfy unfulfilled consumer needs better and sooner than the
competitors. Thus, consumer behaviour helps in achieving marketing goals.

2. Useful for Dealers and Salesmen:The study of consumer behaviour is not useful for the company alone.
Knowledge of consumer behaviour is equally useful for middlemen and salesmen to perform their tasks effectively
in meeting consumers needs and wants successfully. Consumer behaviour, thus, improves performance of the
entire distribution system.

3. More Relevant Marketing Programme:Marketing programme, consisting of product, price, promotion, and
distribution decisions, can be prepared more objectively. The programme can be more relevant if it is based on the
study of consumer behaviour. Meaningful marketing programme is instrumental in realizing marketing goals.

4. Adjusting Marketing Programme over Time:Consumer behaviour studies the consumer response pattern on a
continuous basis. So, a marketer can easily come to know the changes taking place in the market. Based on the
current market trend, the marketer can make necessary changes in marketing programme to adjust with the
market.

5. Predicting Market Trend:Consumer behaviour can also aid in projecting the future market trends. Marketer
finds enough time to prepare for exploiting the emerging opportunities, and/or facing challenges and threats.

Q5, Factors That Drive The Needs Of Consumers According To Vablem

The Veblenian socio-psychological model states that consumers’ social and cultural backgrounds are important
determinants of their buying behaviour. According to Veblen, consumer purchases are driven primarily by their
need to maintain a social class and prestige rather than intrinsic needs. There are six important factors in this
model:

Social class: Social class refers to the division of society based on social and economic status (Woodward, 2003).
Numerous studies have found that people from different social classes have different preferences, desires and
purchasing patterns. This is due to their difference in purchasing power. Therefore most marketing efforts are
tailored to suit the needs of different social classes. Today, people from all classes of society are making use of
online shopping.

Level of income: Consumers’ willingness to explore and make purchases also depends on their level of income
according to Veblem. people belonging to higher income groups will shop for expensive items more frequently
than those from lower-income.

Culture & subculture: Culture has a deep influence on consumer buying behaviour. It consists of various features
such as religion, nationality, geographical location, racial groups and ethnicity. Since culture is dynamic, marketers
need to analyse it continuously to target consumers appropriately. Sub-culture also plays a crucial role in assessing
the patterns of buying behaviour.

Family: Family background and number of family members also matter in the context of shopping according to the
Veblenian model. Buying behaviour depends on family roles, family dynamics, number of members and life cycle
stage of the members. Kaur & Kochar (2018), assert that lesser the income of the family, lower will be their
inclination to purchase online.

Reference group: A reference group refers to a group or an individual who has a sizeable influence on the
preferences and attitude of a consumer. They affect consumers in two ways;value expression and,information
utility according to Veblem. The influence of reference groups manifests though public consumption. Thus,
reference group influence requires the presence of social meetings or interactions.

bi, An unconditioned stimulus is a stimulus that leads to an automatic response

ii, A conditioned stimulus is a stimulus that can eventually trigger a conditioned response

iii, An unconditioned response is a response that is reflexive and involuntary in nature, which is reliably induced
every time an organism comes across to biologically significant stimuli.

Q6a, Psychoanalytical theory by Sigmund Freud

In Freud’s conceptualization of personality, the most important motivations are both out of site and unconscious,
just like the majority of an iceberg which sits under water hidden from view. In comparison, our consciousness,
which is visible, only represents a smaller portion of who we are, based on what we are willing to reveal to others
Freud proposed that the mind is divided into three components: id, ego, and superego, and that the interactions
and conflicts among the components create personality (Freud, 1923/1949). According to Freudian theory, the id is
the component of personality that forms the basis of our most primitive impulses. The id is entirely unconscious,
and it drives our most important motivations, including the sexual drive (libido) and the aggressive or destructive
drive (Thanatos). According to Freud, the id is driven by the pleasure principle the desire for immediate
gratification of our sexual and aggressive urges. The id is why we smoke cigarettes, drink alcohol, view
pornography, tell mean jokes about people, and engage in other fun, harmful, risky, or “taboo” behaviours, often
at the cost of doing more productive activities.

b, A social class is a hierarchical division of a society into relatively distinct and homogeneous groups with respect
to attitudes, values, lifestyles, etc

ci,Economic Condition
ii,Lifestyle
iii,Personality
i,Economic Condition:The buying tendency of an individual is directly proportional to his income/earnings per
month. How much an individual brings home decides how much he spends and on which products?
Individuals with high income would buy expensive and premium products as compared to individuals from middle
and lower income group who would spend mostly on necessary items. You would hardly find an individual from a
low income group spending money on designer clothes and watches. He would be more interested in buying
grocery items or products necessary for his survival.

ii,Lifestyle:Lifestyle, a term proposed by Austrian psychologist Alfred Adler in 1929, refers to the way an individual
stays in the society. It is really important for some people to wear branded clothes whereas some individuals are
really not brand conscious. An individual staying in a posh locality needs to maintain his status and image. An
individual’s lifestyle is something to do with his style, attitude, perception, his social relations and immediate
surroundings.

iii,Personality:An individual’s personality also affects his buying behaviour. Every individual has his/her own
characteristic personality traits which reflect in his/her buying behaviour. A fitness freak would always look for
fitness equipments whereas a music lover would happily spend on musical instruments, CDs, concerts, musical
shows etc.

d, 2 FACTORS THAT INFLUENCE 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.

(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.