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Chapter 6
Learning and Consumer Involvement
Objectives
By the end of this chapter, you should be able:
• To understand what is consumer behaviour
• To understand the nature and classification of consumer behaviour
• To understand the importance of consumer behaviour
• To understand the forces that drive change in consumer behaviour
• To understand the application of consumer behaviour principles to
strategic marketing
• To take an overview of the consumer behaviour scene in India
Structure:
6.1 Introduction
6.2 What is learning?
6.3 Behavioural Learning Theories
6.4 Storage, Retention and Retrieval of Information
6.5 Involvement Theory
6.6 Advertising Effect
6.7 Learning in an online environment
6.8 What have you Learnt – A Summary
6.9 Self-Assessment Questions
6.10 Multiple Choice Questions (MCQ)
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6.1 INTRODUCTION
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Intentionally
OR
Incidentally
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Characteristics of a Learner
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Many attempts have been made by academicians and others to map and
explain the learning processes. It is generally recognized that learning
takes place in a repetitive cycle - an ongoing series of processes.
The diagram below represents a generic learning cycle and uses the
acronym PACT. The cycle is relevant to all types of learning.
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To show that motivation affects the performance of what has been learned
is not the same as demonstrating its effect on the process of learning itself.
This would require that individuals learn under various levels of motivation
and be tested under the same incentive levels. (This is to control the
effects of motivation on performance alone.) And indeed, the best-
controlled experiments of this design indicate learning effects to be the
same under different levels of motivation.
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Cues serve to direct the consumer drive when they are consistent with
consumer expectations. Marketers must ensure that cues continue to meet
expectations. High-end consumer products must ensure that they are
stylized well, advertised in an exclusive manner, sold through exclusive
outlets, represented through recognized brand ambassadors and likewise.
Each aspect of the marketing mix must reinforce the others if cues are to
serve as the stimuli that guide consumer actions in the direction desired by
the marketer.
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Activity A
This perspective was first articulated in 1913 by John Watson, who argued
that psychology should be the study of observable phenomena, not the
study of consciousness or the mind. Watson believed that objective
measurement of observable phenomena was the only way to advance the
science of psychology.
The second type of learning theory argues that intervening variables are
appropriate and necessary components for understanding the processes of
learning. This perspective falls under the broad rubric of cognitive
learning theory, and it was first articulated by Wilhelm Wundt, the
acknowledged "father of psychology." He used introspection as a means of
studying thought processes.
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There are two main types of learning in the behaviourist tradition. The first
is classical conditioning, which is associated with the work of Ivan Pavlov
(1849–1936), a Russian physiologist who studied the digestive processes
of dogs. Pavlov noticed that dogs salivated in the absence of food if a
particular stimulus was present that had previously been paired with the
presentation of food. Pavlov investigated how an association between a
neutral stimulus (e.g., a lab technician who fed the dogs), an
unconditioned stimulus (food), and an unconditioned reflex (salivation) was
made. Pavlov's classic experiment involved the conditioning of salivation to
the ringing of a bell and other stimuli that were not likely to make a dog
salivate without a previously learned association with food.
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1.THE US
It is the unconditional stimulus that is capable of eliciting a reflex-like
response on its own, e.g., food. It is certain to arouse a response.
2.UR
It is the unconditional response, i.e., a response to the US, spontaneous,
natural, and unlearned.
For example, salivation by a dog
3.CS
It is the conditional stimulus.
It is neutral.
It is the learnt response in the experiment.
4.CR
This is the conditional response to the CS
It is learnt, e.g., salivation
Implications of Classical Conditioning
1. Led to numerous RESEARCH in the field of learning.
2. Most of our responses are the result of CONDITIONING.
3. PHOBIAS and milder forms of NEUROSIS are also the results of
conditioning.
4. Most of our likes and dislikes that relate to PEOPLE, PLACES, and
EVENTS OR THINGS are the result of conditioning. For example, an
exam evokes fear and also that of evaluation, of exam-failure.
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This theory is not sufficient to explain the entire learning process although
it is extensively used in advertising, brand management and marketing.
This theory assumes consumers as passive beings. This theory considers
consumers as information seekers. It only touches on one aspect of
influencing consumer behaviour by exposure and thus frequencies of ads
are considered essential. However, it does not account for other purchase
behaviour which evaluates different products’ alternatives. As per this
theory, product evaluation is based on our rewards after using the product
which means the theory of instrumental conditioning.
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Reinforcement
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Reinforcement and punishment are the core tools through which operant
behaviour is modified. These terms are defined by their effect on
behaviour. It may either be positive or negative, as described below.
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Operant Conditioning
Experiment
• The box contained a lever on the side and as the rat moved about the
box it would accidentally knock the lever. When it did so, immediately
a food pellet would drop into a container next to the lever. The rats
quickly learned to go straight to the lever after a few times of being
put in the box. The consequence of receiving food if they pressed the
lever ensured that they would keep repeating the action.
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It is important to note that actors (e.g., rat) are not spoken of as being
reinforced, punished, or extinguished; it is the actions (e.g., lever press)
that are reinforced, punished, or extinguished. Also, reinforcement,
punishment, and extinction are not terming whose use is restricted to the
laboratory. Naturally occurring consequences can also reinforce, punish, or
extinguish behaviour and are not always planned or delivered by people.
Factors that alter the effectiveness of reinforcement and
punishment
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optimum level the taste of sugar becomes less effective, perhaps even
aversive.
Shaping
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Use of this by marketers is during their media planning. A high pitch dose
of advertising is necessary to educate the customers about the new
product being launched or counter a market share threatening
advertisement by your competitor. As against this, for established products
expected to be bought repeatedly, we have a distributed advertising
schedule. In an intensely competitive market, even a combination of
concentrated and distributed scheduling is used.
The difference between human beings and animals is that humans can
think through acquired knowledge. Humans learn by solving problems they
face or by observation or by the knowledge they have. We have often seen
that some solutions come to our mind instantly whereas some problems
need careful collection and evaluation of information to make decisions and
some issues haunt us as we are unable to resolve them. We have also
observed that we do not get into solving every problem we have, we do
not observe what is not relevant to us and we do not know everything
(doctors require a professional financial planner to manage their money). It
is therefore believed that learning is thus a function of exerting the mind.
This is called cognitive learning. A consumer buys and continues to buy a
specific brand as through his past experiences he has realized that it works
the way he wants. He buys it again and again as this brand continues to
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satisfy his expectations. For him thus, changing the brand may be difficult
because he visualizes a risk in strange things.
Sensory memory holds sensory information less than one second after an
item is perceived. The ability to look at an item and remember what it
looked like with just a split second of observation, or memorization, is an
example of sensory memory. E.g.: When we see Amitabh Bacchhan
anchoring a show and enact something, we remember that enactment lives
in our memory, for a split second.
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it for only a few seconds before forgetting, suggesting it was stored in our
short-term memory. On the other hand, we can remember telephone
numbers for many years through repetition. This information is said to be
stored in long-term memory.
From the information processing perspective there are three main stages in
the formation and retrieval of memory:
• Encoding or registration: receiving, processing, and combining of
received information.
• Storage: Creation of a permanent record of the encoded information in
the short term or long-term memory, and
• Retrieval recall or recollection: calling back the stored information in
response to some cue for use in a process or activity.
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Level of Processing
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Activity B
This theory has got more to do with the functioning of the brain and how
learning happens. The human brain has two hemispheres – the left and the
right and each has unique information processing capabilities. This theory
is therefore also called (1) Hemispheral Lateralization or (2) Split Brain
Theory.
The basic premise of the split-brain theory is that the Right and Left
hemispheres of the brain specialize in the kinds of information they
process. The Left hemisphere is primarily responsible for cognitive
activities such as reading, speaking and attributional information
processing.
Put another way, the left side of the brain is supposed to be rational,
active, and realistic; the right side of the brain is emotional, metaphoric,
impulsive, and intuitive.
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High involvement media: To extend this line of thought, print media are
high involvement media (newspapers and magazine) because cognitive
(verbal) information is processed by the left side of the brain. According to
this theory, print advertising is processed in the complex sequence of
cognitive stages as follows:
Tri--Component Model
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The key point of the Social Judgment Theory is that attitude change
(persuasion) is mediated by judgmental processes and effects. Put
differently, persuasion occurs at the end of the process where a person
understands a message, then compares the position it advocates his
position on that issue. A person's position on an issue is dependent on
1. the person's most preferred position (their anchor point),
2. the person's judgment of the various alternatives (spread across their
latitudes of acceptance, rejection, and non-commitment), and
3. The person's level of ego-involvement with the issue.
Consider the course choices available to you in the next term. For the sake
of argument, let's say you have four required courses to finish but have
one course needing a science background in which you are weak. What
courses open to you would you not enrol in, no matter what? Those
courses fall in your Latitude of Rejection. Do you think anyone could
persuade you to take a class that falls in that latitude? Not likely. And the
more ego-involved you are in the decision to enrol in your course (the
more you care about that decision) the larger your Latitude of Rejection
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Now consider the courses that you don't have an opinion about, that you
don't have positive or negative feelings toward. Those courses fall in your
Latitude of Non-commitment. It's possible that someone could persuade
you to enrol in one of those courses, but you'd have to learn more about
the course first, at least enough until you have an opinion or judgment
about it.
Now, consider all those courses you would consider enrolling in. Those
courses fall in your Latitude of Acceptance. A person with good arguments
might be able to persuade you to take one of those courses, especially if,
in your judgment, the course is similar to your anchor point course.
Persuasive messages that advocate positions in your Latitude of
Acceptance will be assimilated by you. That is, they will appear to be closer
to your anchor point than they are. That's good news for the would-be
persuader.
If you are persuaded, then the further a message's position is away from
your anchor point, the larger your attitude change will be. But remember
that it is very unlikely that you will be persuaded out of your Latitude of
Rejection. So, once a message enters that region and moves away from
your anchor point, the amount of your attitude change decreases.
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Edward Thorndike put forward a “Law of effect” which stated that any
behaviour that is followed by pleasant consequences is likely to be
repeated, and any behaviour followed by unpleasant consequences is likely
to be stopped.
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Decision Process
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(c)Tap the voice of the customers – Digital media has various platforms
and creative feasibility to tap the voice of the customers. Social media
offers your reach and viral promotion possibility, and creativity will
compel people to not only engage but also share inputs (like, reforward,
ranking). From the learning point of view, it is easy for prospective
customers to believe what other customers or others are conveying
about the product/brand rather than what the company has to say.
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3. There are two types of learning theories. The first perspective argues
that learning can be studied by observation and manipulation of
______________. The second type of learning theory argues that
intervening variables are appropriate and necessary components for
understanding the processes of learning. This perspective falls under the
broad rubric of cognitive learning theory. Fill in the blank.
(a) cue-reinforcement association
(b) learner-knowledge association
(c) practice-experience association
(d) stimulus-response association
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Answers:
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
Chapter 7
The Nature of Consumer Attitudes and
Change
Objectives
Structure:
7.1 Introduction
7.2 What are Attitudes?
7.3 Components of Attitude
7.4 Learning Process
7.5 What have you Learnt – A Summary
7.6 Self-Assessment Questions
7.7 Multiple Choice Questions (MCQ)
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7.1 INTRODUCTION
We need to discuss the reasons why attitude research has had such a
pervasive impact on consumer behaviour. We will also discuss the
properties that have made attitudes so attractive to consumer researchers,
and several important models depicting the structure and composition of
attitudes. Finally, we will review the approaches frequently employed to
measure consumer attitudes.
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It is not immediately evident from our definition that attitudes occur within
and are affected by the situation. Situations are events or circumstances
that, at a point in time, influence the relationship between attitudes and
behaviour. A situation can cause consumers to behave in a manner
seemingly inconsistent with their attitudes. For instance, let us assume
that a consumer purchases a different brand of coffee each time his
inventory runs low. Although his brand switching may seem to reflect a
negative attitude or dissatisfaction, it actually may have been influenced by
a specific situation – for example, the need to economize. Although the
consumer may have a strong preference for Nescafe coffee, a tight budget
may influence him to purchase whatever brand is on “special discount” at
the supermarket.
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is coming home late one night, feels exhausted and hungry, and spots a
South Indian restaurant, he may just decide to have “dinner” there. Why?
Because it is late, he is tired and hungry, and a South Indian restaurant is
convenient. Has he changed his attitude? Probably not.
You may not like ‘Protinex’ like biscuits, but you continue to buy them due
to medical advice.
Salience
Under different conditions, our attitude does not hold the same relevance
or salience for the product or an individual. Our negative attitude towards
the public display of affection (PDA), may not bother us much when we see
actor and actresses do the same in a movie. This is because our negative
attitude towards the PDA has no relevance when we have gone to watch a
movie.
What comes out from this understanding is that attitudes towards products
and brands are not salient to the average consumer. There is some
preference towards a specific brand. There may or may not be some
attitude. Even if there is some attitude, it is not relevant all the time – eg.,
we may not like Pepsi for its sweet taste but when you are with the family
for a weekend dinner where all want to have some soft drink at the end of
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the meal and your choice of soft drink is not available, you may allow Pepsi
and you may also drink with other family members.
Activity A
Identify four properties of attitude and give one example for each.
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Figure 7.3 illustrates just how complex a consumer’s belief system can be.
Though it captures only a part of a consumer’s belief system towards two
brands of mouthwash, it is interesting that, except for the attribute
“dentist”, the same basic attributes for both brands are included in the
consumer’s belief system. However, the beliefs about several of the
attributes are different. For instance, the consumer regards ‘Scope’ as
tasting “sweet like a soft drink”, whereas ‘Listerine’ is perceived as tasting
“like medicine”. Also, the consumer does not necessarily evaluate the same
basic belief similarly for each brand. For example, concerning long-lasting
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Product Mouthwash
Evaluation (+ + + ) (+ + + ) (+ +) (+) (- -) (+ + + ) (- -)
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Since the affective component assesses the overall feelings about the
attitude object, it is frequently considered the essential aspect of an
attitude. Indeed, as we will discuss later, some researchers treat the
affective component as the attitude itself, with the two other components
serving related or supportive functions.
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Table 7.1
The above three components can be better illustrated using the following
example.
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Table 7.2
Activity B
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Theory-of-reasoned-action Model
Behaviour can be traced back to intention to act which itself results from
the consumer’s attitude towards the behaviour and subjective norm.
Diagrammatically, it can be represented as follows:
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Attitude-towards-the-ad Model
The consumer comes to acquire various feelings and judgement about the
ad after exposure. This influences the attitude to the ad and the beliefs
about the brand. This consequently affects the attitude towards these
brands.
Affective responses describe what we feel after seeing the ad, e.g.,
amused, sad, inspired, joyous, etc. Cognitive evaluations describe our
judgement regarding the ad, e.g., humorous, interesting, believable,
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Attitude Formation
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Though peers and groups affect our attitudes, it is also true that we make
friends with those peers or join such a group that has a value system
similar to our own. Larger groups like social classes, ethnic groups and
entire cultures also influence our beliefs and attitudes. ‘Namaste as a
gesture is acceptable among Hindus but may not be in other religions.
Activity C
Identify attitude influencing sources and list your experiences for some of
those influencing factors.
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Attitude Change
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Under the learning process, we have learnt that we can shift attitudes
favourably towards an object when there is a condition of no attitude
towards an object in question. Learning is a medium that can cause this
shift or attitude formation. We have learnt different sources of influences
such as family, peer & group, experiences, direct marketing, mass media
and personality influence.
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Answers:
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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COMMUNICATION AND PERSUASION
Chapter 8
Communication and Persuasion
Objectives
By the end of this chapter, you should be able:
• To understand the importance and role of marketing communication
• To understand the relationship between advertising and personal selling,
sales promotion and publicity
• To understand what is a communication model
• To understand the objective and purpose of advertising
• To understand the meaning of advertising appeal
• To understand what is behind any buying motive
• To understand the meaning of appeals – direct and indirect – and the
advertising message
Structure:
8.1 Introduction
8.2 What is Communication?
8.3 The Communication Process and its Structure
8.4 Role of Marketing Communication
8.5 Marketing Communication
8.6 Different Marketing Communication Mix
8.7 Communication Model
8.8 Role of Marketing Communication
8.9 Advertising Objectives and Advertising Purpose
8.10 Advertising Appeals
8.11 What have you Learnt – A Summary
8.12 Self Assessment Questions
8.13 Multiple Choice Questions (MCQ)
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8.1 INTRODUCTION
However, this model leaves us with many open and unanswered questions.
Thus, we need to first understand the communication process.
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Brand Messages
A brand message is defined as “All the information and experiences that
impact how customers and other stakeholders perceive a brand”. Brand
messages need to engage the customer and build a better brand
positioning.
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Media Channels
It’s the method/mode by which the communication travels from the sender
to the receiver. Media channels link companies to their customers through
newspapers, magazines, TV, Radio including innovative mediums like In-
cinema, digital, etc. Word of mouth and packaging also play the role of a
media channel.
Noise
The environment with distractions all around in which communication takes
place is considered as NOISE. Noise can be at the encoding stage or even
the decoding stage. Throughout the communication process, the message
is subject to extraneous factors that can distort transmission or reception.
It is essential in advertising to look at the noise as CLUTTER. Due to
clutter, a particular brand message has a threat to get lost, not noticed. It
is important to note that competition clutter needs to be understood –
what they are saying, when and where they are saying, noticeability, etc.
Feedback
Feedback is defined as “Receiver’s set of reactions to a marketing
message”, known as a response. Marketers are very keen on feedback. It
allows the sender to monitor how the intended message is being decoded
and received. Feedback also gives a chance to know how the noise is being
handled during the delivery process. The call of action also gives feedback
to the advertiser. Marketers also need to use other feedback determination
methods. Depending on feedback, success or failure in marketing
communication is concluded. Successful marketing communication is
accomplished when the marketers select an appropriate source, develop an
effective message, encode the message properly, select the channel to
reach the target audience and ensure delivery and decoding.
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Activity A
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In addition to the above, there are media in which time and space can be
bought to deliver messages to target audiences. An appropriate mix of
available tools needs to be utilized to reach out to different audiences.
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The five major modes (elements) of MCM/PM are personal selling, direct
and interactive marketing, advertising, sales promotion, publicity and
public relations.
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Personal Selling
It’s a one-to-one approach to have two-way communications, facilitate a
demo and maintain and establish a long-term relationship. The only tool in
which there is a possibility of feedback and evaluation. Here the
salesperson can adapt the message according to the type of customer he is
dealing with. In personal selling chances of misunderstandings are minimal
and negotiation is possible. The salesman also gets feedback which enables
him to redefine his approach or offer as the case may be. Thus, it is also
possible to measure the effectiveness of advertising. However, personal
selling incurs higher cost and has a higher turnaround. Also, reach and
frequency is lower due to higher cost.
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Advertising
Advertising is a non-personal form of communication. The prime objective
is to build/maintain awareness of a product/organization. It helps you to
develop a competitive advantage. It is a widely used marketing
communication tool to inform, persuade, strengthen the brand image and
reinforce buyer loyalty. Advertising helps you to reach your target
audience. All advertising requires a message and a carrier to deliver the
message to the receiver. It is a one-way process with no feedback
mechanism except the increase in sales. However, today various digital
marketing tools help you to get some feedback in the form of website hits,
social media likes, practice direct marketing and more.
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Sales Promotion
Sales promotion complements advertising and delivers a call to action. It
works in the short-term to create sales as against advertising which seeks
to work over the long-term to create awareness. Sales promotion takes
over at a point where advertisement leaves its footprint. It makes the
consumer take a favourable purchase decision by providing one or other
kind of direct inducement e.g., discount, price off, coupons, etc. Sales
promotions cost much lower than advertising.
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Activity B
Corporate Communications
Corporate Communications is an integrated communication structure
linking stakeholders to the organizations.
Corporate Communications encompasses different communications –
• Management Communication
• Marketing Communication
• Organizational Communication
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Several models depict the stages a consumer may pass through in moving
from the state of not being aware to actual purchase. However, in this
chapter, we will only cover the most popular model, known as the AIDA
model.
AIDA Model
The AIDA model represents the Personal Selling model in which a salesman
needs to take his customers through attention, interest, desire and action.
It starts with engagement with an advertisement. The Advertisement must
be attention-grabbing to gain interest in the product. Interest needs to be
first established post which customers must desire the product enough to
take the action desired. Interest can be crafted through a product demo,
information and advertisements. The message must be persuasive to build
desire. Lastly, make the customer take the expected call to action through
promotions, discounts and calling out of features or benefits.
We can now examine the 4 components of the AIDA model in more detail.
We examine this by considering the MOVE OINTMENT advertisement,
expressed briefly as follows. Here, husband and wife are shown in a very
playful mood and suddenly the wife gets a backache. Husband is shown
worried but quickly brings MOVE OINTMENT and is shown lovingly applying
it to wife’s affected area. The wife is shown enjoying his caring touch and is
relieved from back pain. Husband tries to get close to her and a kid moves
in, and the ad ends with the entire family being shown in a happy mood.
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• Action: CTA - Move the buyer to interact with your company and taking
the next step, i.e., downloading a brochure, making the phone call,
joining your newsletter, or engaging in live chat, etc.
Interest: Once you've gained the prospects' attention, the next step is to
maintain interest in your product or service to keep the recipients engaged.
Explain to the recipients how the problem you've identified in the attention
step is adversely affecting their lives. A demonstration or illustration can
help the recipients to further identify with the problem and want to actively
seek possible solutions. By personalizing the problem, you're making it hit
closer to home.
As the belief goes – An ad seen does not mean an ad read. Thus, the
creative needs to focus on illustrations, and headlines to induce further
reading of the copy which also needs to be crisp, meaningful and self-
understanding or easy to decode.
In the MOVE advertisement, the sudden back pain with a freezing moment
induces interest as to what will happen next. In print advertising, it is the
headline, sub-title, etc., that can do this task. Copy allows interest
building.
Desire: In the desired stage, your objective is to show the prospects how
your product or service can solve their problem. Explain the features of the
product or service and the related benefits and demonstrate how the
benefits fulfil the need. A common advertising process is the "before and
after" technique, such as when a cleaning product makes a soiled item look
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brand new. If done effectively, the prospects should now have the desire to
make a purchase.
Action: Now that you've created the desire to make a purchase, the final
step is to persuade the prospects to take immediate action. In a one-on-
one sales process, this is the time to ask for the sale. In the advertising
world, techniques involve creating a sense of urgency by extending an
offer for a limited time or including a bonus or special gift to those who act
within a specific time frame. Without a specific call to action, the prospect
may simply forget about your offer and move on.
In the MOVE advertisement, the closing line compels individuals to buy one
Move ointment immediately.
So, using this to help plan your tailored and targeted communication
campaign may be a start.
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• Action: What are the calls to action and where do we place them? Is it
easy for consumers to connect and where would they expect to find it?
Think about which marketing channel/platform you are using and how to
engage, i.e., across emails, website, landing pages, inbound phone calls,
etc.
Video Link 1
Video Link 2
AIDA model has four stages and at times found to be not complete to
accommodate consumer response and during promotional planning. Thus,
a six-step model known as ‘Hierarchy of Effects’ was developed by Robert
Lavidge and Grey Steiner in 1961, found to be effective in setting and
measuring advertising/communication objectives. It highlights six steps
from noticing an advertisement to a product purchase. Consumer passes
through a series of steps sequentially. It is known as ‘hierarchy’ because
the number of consumers moving from one stage to the next reduces.
AIDA and Hierarchy of Effects are interrelated with the concept of three
psychological stages namely – Cognitive, Affective and Behavioural.
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The basic premise of this model is that advertising effects occur over some
time. Advertising communication may not lead to immediate behavioural
response; series of effects must occur; each step needs to be fulfilled
sequentially.
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Table 8.1
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Marketer-Buyer Dyad
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Marketer-Market Dyad
Marketing communication is not restricted to buyers alone. It also
addresses itself to business intermediaries, suppliers and other institutions.
It also gets directed to opinion leaders and pressure groups. Each of these
needs a different message. The distributors are not interested in the looks
of the product. They are more concerned about the dealer’s schemes, the
margins available, and how the products fare with the competitive
products. Thus business-to-business communication is an important branch
of marketing communication.
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help tell a brand's overall story, with IMC the marketing leverages each
communication channel's intrinsic strengths to achieve a greater impact
together than each channel could achieve individually. It requires the
marketer to understand each medium's limitation, including the audience's
ability/willingness to absorb messaging from that medium. This
understanding is integrated into a campaign's strategic plan from the very
beginning of planning - so that the brand no longer simply speaks with
consistency but speaks with planned efficacy. This concept inherently
provides added benefits that include: a singular/synchronized brand voice
and experience, cost efficiencies generated through creativity and
production, and opportunities for added value and bonus.
Interiors
PR Internet Marketing
Solutions
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Video Link 1
Video Link 2
We have understood what IMC is, but this section highlights the role of
marketing under the IMC era. As we understand, IMC strives to promote
one central idea as a message; thus, marketing must do things in such a
way that various initiatives/options available to them are used not only to
deliver this central message but also to grow the idea bigger for better
impact. If we consider the launch of Kajal Pencil for black linings around
eyes by Lakme, we can notice the popular and extremely attractive heroine
Kareena Kapoor used for advertising in which she establishes how practical
it is to look beautiful. Lakme also did more to take this further by launching
an online contest allowing beautiful girls to share their picture with Lakme
Kajal being used, sponsored fashion shows within the city, participated in
college fests, direct marketing to connect with loyal customers, publicity in
which Lakme’s female grooming initiatives were covered and likewise,
more initiatives possible under marketing were utilised to grow the idea
rather than speak the same idea. Thus, the impact of it was much higher
than what any other approaches would have created.
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Agencies have realised the importance of this aspect and the critical
dependence of marketing on the agency. They have oriented themselves to
tap the opportunity by launching various divisions supporting their mainline
functions such as direct marketing, event management, activation,
celebrity management and financial advertisement divisions and more.
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DAGMAR Approach
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DAGMAR has utilities like its help in improvements in the advertising and
promotional planning process by providing a better understanding of goals
and objectives. Planners’ efforts are directed towards collective objectives.
It focuses advertisers’ attention on the value of using communication-
based rather than sales-based objectives to measure advertising
effectiveness. It helps in less subjectivity and leads to better
communication and relationship between the client and agency.
Video Link 1
Video Link 2
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Promotional objectives evolve from the company’s marketing plan and are
rooted in the firm’s marketing objectives and have statements of what is to
be accomplished by the overall marketing program. Advertising objectives
are the various communication tasks required to deliver the message.
However, two schools of thoughts operate here - usually to communicate
or usually to increase sales or market share. Clarity regarding which side of
thought you wish to pursue must come.
Many believe that the only objective of advertising is sales, but lack of
sales can be due to any of the other marketing mix elements or due to
factors like competition, price, quality, changing taste, etc. Advertising can
make consumers aware and interested. But all the marketing elements
must be synchronized together to make a brand successful. Additionally,
the effect of advertising happens over some time post multiple exposures.
The sales objective approach can be used either when advertising plays a
dominant role and other factors are relatively stable or when the advertiser
is looking for immediate results such as sales promotions, DM, retail
promotions or festival sale.
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Advertising Strategy
Determine what's going on in the market. What's the history, the major
trends and the current situation? And what are the risks and opportunities?
Also, what does the future look like? With the product, with competitors,
with consumer attitudes.
What action should you take regarding the competition, technological and
media trends? Specifically, how can you address those issues with
advertising and related tools? For example, what, if anything, should you
do with the brand, with direct marketing, and on social media platforms?
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1. Your objectives
Before deciding whether to use advertising, clarify what you are trying to
achieve.
Creating a reputation as the market leader may allow you to increase your
prices and win long-term contracts. Building brand awareness for a product
makes the product easier to sell. It also makes it easier to launch new
products. Making consumers feel good about your company can boost
sales.
1.2 You may need to convey a specific one-off message to your market.
1.3 You may need to prompt a specific action, such as the customer
visiting your premises.
1.4 You may need to address your existing customers, rather than win new
ones.
Based on your profession and whom you wish to target and serve,
advertise in a local newspaper if you are a local plumber or estate agent.
You may use your website to advertise special offers and events in your
restaurant. Advertise for your accountancy firm in a local online directory -
Just Dial.
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For example:
• Direct mail with a mailing list that more closely matches your target
market.
• Personal selling to build relationships with high-value customers.
• PR for building your reputation over the longer term.
• Trade exhibitions and conferences.
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3. The budget
Check that your budget is realistic. How many extra sales do you need to
generate to justify your spending?
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4. Media selection
Identify your segment of the market and decide which media would best
reach your target audience.
Search online to see how easy it is for your customers to find your website.
The Internet is generally the first place customers go to.
Ask a selection of people from your target market what they read, watch,
listen to and which websites they visit.
4.2 Choose the media that match your needs. Ask yourself some key
questions:
How much will your ad cost to produce? How much will the ad cost run?
Look for circulation figures audited by the Audit Bureau of Circulations. Ask
for a readership profile, analyzing characteristics and spending habits of
readers, including the proportions in socio-economic groups A, B, C1, C2, D
and E.
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You might get a discount for taking unsold ad space at the last minute. You
might be able to have a larger ad or a better position for the same price.
Extra discounts may be available for repeat advertising.
5.1 Your advertising campaign is just one part of your marketing strategy.
Make sure it is suitable for your product or service.
For example, ads to generate immediate sales are not effective for
products that require demonstrating, or that need special skills or
knowledge to operate.
It is not enough to say, 'the best or 'free'. You must know what motivates
your target audience to buy.
When are your target customers likely to be most receptive to your ad?
Plan well in advance. Some media gets booked up many months ahead.
When do you want your targets to respond and what is the likely lead time
from advertisement to action?
Will you be able to handle the response? Make sure your response is
professional and carefully planned.
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6.1 Most of your sales advertising can be monitored simply and directly.
Always ask new enquirers how they heard about you. Use coded
advertisements. Ask enquirers to quote the code when they respond to
your ad. You will be able to trace which had generated the response.
Use reply coupons in print adverts. You will be able to trace the source of
the coupon, as well as obtaining information on the potential customer.
6.2 Calculate the total costs of your campaign and weigh them against the
response.
Make sure you have allowed for all the likely costs. For example:
• The cost of buying advertising space.
• Design costs, including print preparation.
• Brochures and other literature.
• The fulfilment cost (goods, postage, delivery, employee costs and so on).
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6.3 Some ads may generate many responses but convert a few into sales.
If your conversion rate is poor, something is wrong.
Re-examine your price structure. The price you are offering may be
unsuitable for your target market.
Message Presentation
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A product that falls under the personal use/care category also needs
proper handling – you can’t conclude anything against their belief
system, religious roots, caste and social outlook. You can conclude on
their ignorance, latent needs – e.g., pregnancy kit.
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Message Format
The word format means the setting, organization, structure and style of the
ad message. The message format takes care of how the message content
and structure strategy are implemented. It is characterised by the type of
media vehicle in which the message is delivered. In a print ad, the
message format elements are headline, body copy, illustration and colour,
whereas in radio advertising it is words, voice modulation and dialogue
(conversation). Your format makes your advertising appeal stand out.
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Message Development
There are so many media that carry the ad campaign for the same
product. In other words, there are so many products that get advertised on
the same media by different companies. Your target population receives
communication from all directions – direct, indirect, horizontal, zigzag and
more. This leads to communication and thus we need to understand the
concept of clutter. Clutter is a form of noise in the communication process
which prevents your message from being delivered to your target
customers. Your message format and message development along with the
advertising appeal chosen for communicating your message are vital for its
success.
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Buying Motives
We have just concluded that unfulfilled needs motivate us. When we get
motivated, our buying motive may differ from other person’s buying
motive, e.g., one may buy a flat to move out from chawl living but
someone has bought a flat next to you as an investment.
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will often strategically consider the key buying motives within a target
consumer group to enhance sales of their product’.
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The emotional buying motive depends on the emotion, feeling and attitude
of the consumers. This type of motive is purely a psychological aspect of a
person. This type of buying motive may be different from person to person.
It includes:
a. Love and affection: It is an important buying motive that induces
buyers to purchase the goods. Due to love and affection towards
children, we buy toys, dresses, biscuits, etc. A husband may buy saris
and cosmetics for his wife due to love and affection.
b. Curiosity: Curiosity is the desire for a new experience that motivates
people to buy specific goods. Thus, to get a new experience, customers
purchase the goods.
c. Fashion: It is an important motive that can change the mind of the
customers. Generally, customers try to copy particularly the movie
stars, sportsmen and athletes etc. So, all the producers advertise their
products with the help of these popular personalities.
d. Pride and Prestige: Due to pride and prestige in society, customers
purchase expensive and luxury goods to maintain their status. They
purchase a Toyota car, Karizma motorcycle, fifty-nine-inch colour
television, etc., to get a high position in society.
e. Sex and Romance: Sex and romance is another important emotional
buying motive that induces customers to purchase the goods. Due to
sex and romance, they purchase a fancy dress, cosmetic items,
perfumes, shaving lotions etc.
f. Fear: People are generally afraid of losing their health, wealth and life.
Thus, it motivates them to purchase goods such as insurance policy,
hiring lockers in bank and membership of health club, etc. These goods
or services help them to avoid their fear.
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All consumers do not buy any goods or services with an emotional motive.
They become thoughtful, and carefully consider their needs, priorities,
financial capacity etc. They study and analyze the necessity, utility, price,
etc., of the goods or services. Then they make the final decision to buy or
not. Consumers become logical, rational, apt and knowledgeable. Such
quality can be seen in their buying decision. The customers buy goods or
services considering cheapness, health and security, utility, comfort, etc.
Economy: Under this motive, customers prefer products that are more
economical or cheap. To get more profit and discount, customers purchase
such goods. These elements attract and encourage the customers to buy
such goods in large quantities.
g. Utility: Customers want to purchase those goods which have more or
higher utility. Utility satisfies the wants of the customers.
h. Comfort and Convenience: Every person has the desire to live in
comfort and in a convenient way. As a result, they get motivated to
purchase such goods which provide comfort and convenience.
Customers purchase a T.V., DVD, motorcycle, washing machine, heater,
cooler, sofa set, etc., for their pleasure and comfort.
i. Durability: This is another element of a rational buying motive. Due to
the durability of the products, customers are motivated to purchase the
goods; for example, a Toyota car, Pulsar motorcycle, Sony TV, etc., are
purchased due to their durability.
j. Security: It is important to people. People are not feeling secure from
floods, earthquakes, theft, dacoits, etc., in society. So, they purchase
key lockers, open a bank A/c, keep a watchman, etc., to feel secured.
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3. Prestige Motive
4. Patronage Motive
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Video Link 1
Video Link 2
Appeals make us realise our unfulfilled needs and thus it cues our
attention. Appeals provide us with the buying motives; thus, they lead to
action. Lower-priced Wheel detergent has the price appeal, but it
incorporates economic motives.
1. Informational/Rational Appeals
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d. News Appeal: This kind of appeal can be used when your product has
some newsworthy point, or the company has that appeal in its
development. It is not released as news, but advertisement
communicates in the form of a newsworthy appeal. Many product
categories invariably try this appeal - E.g., Nayi Wheel Tikiya, or
Breakthrough Ceramic Technology Bearings now in India.
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2. Emotional Appeals
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g. Musical Appeal: The use of tunes and jingles plays an important role
to capture the attention of listeners – Britannia ting tiding, Airtel’s
signature tune.
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Direct Appeals
Direct appeals are those that communicate with the consumers about a
given need, followed by a message that extols the advertised brand as a
product that satisfies that need. In Industrial advertising, some ads may
have a direct appeal, satisfying the customer's technical need; but in
consumer advertising, the direct appeal plays an extremely limited role.
Examples of direct appeal ads for consumer products are rare – Snickers
Chocolate writes “Hungry Kya?”
Indirect Appeals
Indirect appeals are those that do not emphasize a human need but allude
to a need. Because advertisers understand the influence of needs upon
selective perception, they leave some ambiguity in the message so that the
consumers may be free to interpret it and the need to which the advertiser
is appealing. Since this interpretation of the consumer is not difficult, there
is no risk involved in keeping the ambiguity in the message.
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Selling points are those product attributes that are listed in the
advertisement copy to impress upon the consumer the significance of a
product to him. These could be specifications, quality statements,
composition statements, descriptive or narrative or performance
statements. Some selling points are primary selling points, and the rest are
subsidiary selling points. Selling points to be effective must have the force
to appeal to a particular buying motive. So, selling points successfully
touch upon the buying motives. Thumbs Up soft drink’s selling appeal is
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Aaj Kuch Toofani Karte Hain, which in a way affects your buying motives of
having great fun. Mountain Dew says Darr Ke Aagey Jeet Hai which
appeals to our buying motives of enjoying adventurous moments with the
team.
Activity C
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Answers:
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 9
Influences Shaping Consumer Buyer
Behaviour
Objectives
Structure:
9.1 Introduction
9.2 Understanding Group and Types of Groups
9.3 Marketing Applications of Reference Groups
9.4 Functions of the Family
9.5 Family Life Cycle
9.6 Understanding Social Class
9.7 Social Class Categories
9.8 The Measurement of Social Class
9.9 Understanding Culture
9.10 Characteristics of Culture
9.11 Advertising & Cultural Values
9.12 Measuring Culture
9.13 India’s Core Cultural Values
9.14 What is opinion leadership?
9.15 Dynamics of the opinion leadership process
9.16 Measuring Oinion Leadership
9.17 What Have You Learnt – A Summary
9.18 Self-Assessment Questions
9.19 Multiple Choice Questions (MCQ)
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9.1 INTRODUCTION
The family commonly provides the opportunity for product exposure and
trial and imparts consumption values to its members. As a major
consumption unit, the family is also a prime target for the marketing of
many products and services.
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There are various ways in which groups can be classified – say based on
several criteria like the structure of the group, hierarchy in the group,
membership or size. In consumer behaviour, we deal with small groups
because these very groups affect the buying behaviour of their members.
Video Link 1
Video Link 2
Formal versus Informal Groups: A formal group is one where the group
purpose is defined, the structure of the group is hierarchical, and the roles
and responsibilities of individuals are clear – A housing cooperative society
or employees’ union is a formal group. A loosely defined group is called an
informal group, e.g., a group of past school friends.
Video Link 1
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Activity A
Primary Groups
- ......................................................................................................
Secondary Groups
- ......................................................................................................
Formal Groups
- .....................................................................................................
Informal Groups
- .....................................................................................................
Membership Groups
- ......................................................................................................
Symbolic Groups
- .....................................................................................................
Consumer-relevant Groups
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Reference Groups
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It is thus clear that two variables namely (1) nature of influence and (2)
membership, determine the nature of groups you belong to and their
influence on you. The same is plotted on a two x two matrix table below for
your better understanding.
Table 9.1
Both, the individual and the product determine the influence of the
reference group on buyer behaviour. So does the specific social factors. We
need to understand how and why some of these factors operate to
influence consumer behaviour.
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We wear formal clothes in the office, but informal jeans and T-shirts at
parties. We may wear jeans and a t-shirt when we go to a temple, but we
wear dhoti and kurta when we go for post-death rituals of a close family
member.
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Kapoor - an actress and Lux soap, or by the recognition the person has,
say an architect and cement.
(a)Celebrities
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Video Link 1
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The Expert
Common Man
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Executives
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Activity B
Economic Well-being
Inherent structural provision of financial means to its dependents is the
most primary family function. Structurally, there is/are bread earners and
dependents. Young working male (husband)/female (wife) maybe a bread
earner while children and parents are dependents.
Emotional Support
By its structure, the provision of emotional support to its members is an
important function of the family. Here encouragement, inspiration,
motivation, skill development, education, hobby nurturing, etc., are
supposed to be so interwoven that each individual’s emotional and mental
support needs are taken care of.
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In the process of socialization, children receive their basic values (moral &
behavioural) and code of conduct in keeping with their culture. Our
grooming starts with the teaching of religious practices and interpersonal
skills. We also learn how to dress well, groom ourselves, good etiquette
(dining etiquette and more) and manners. We decide what our career
would be and how to grow up as responsible citizens. Socialisation is both
direct and indirect. Direct instruction comes from the parents. Indirectly,
we learn by observing the behaviour of our parents and other siblings.
Socialisation is the foundation on which the later experiences in life are
placed one by one. Marketers target parents often to influence
socialization.
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Activity C
List the name of all your family members and identify at least two
functions being handled by each one of them as per the above
understanding.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
Family Role
Each member of a family performs some tasks either alone or together
with others. Traditionally each member’s roles and responsibilities were
defined within the societal context. However, in this 21st century, new
roles are being performed, shared by every member of the household. As a
result, marketers must be sensitive to the fact that how this shifting role
pattern may affect their markets. So, let’s first understand key family
roles.
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Which role will be performed by whom, is a matter that varies from family
to family. A single-family member may perform several roles. A single role
may be performed by more than one family member. Some products are
used by several family members, e.g., Amul butter or Dove soap. Some
products are meant for the whole family, e.g., furniture in the living room
or a common TV set in the hall.
While deciding jointly, the husband and wife team generally attempts to
influence each other to arrive at what they perceive to be the best
decision. There are six influence strategies that we come across.
• Expert: One of the spouses assumes an expert’s role to influence the
other spouse.
• Legitimacy: The decision is legitimized based on position in the family.
• Bargaining: Influence exerted by a spouse at present which will be
exchanged with the other spouse in future.
• Reward: A reward is offered to the other spouse to influence the
decision.
• Emotional: Emotionally charged response affects the other spouse.
• Impression: Persuasive approach to influence the behaviour of the
other spouse.
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These strategies are adopted when there are conflicts and disagreements
with the other spouse. We know how different family members have
different preferences for the car to be purchased.
Children’s Influence
Children put forward their demands as soon as they acquire talking skills.
They need all kinds of toys, crayons, chocolates and toffees. As they grow,
they start participating directly in the consumption process. They influence
the purchase decisions of a home PC, a music system, a video game and a
holiday destination. When parents purchase according to the bidding of
their children, they have a sense of fulfilment.
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Young, Married, with Child and Dual Income: Here both the husband
and the wife work, and get dual income for their household. The pace of
life is faster and there is less time for children and also for one another.
The consumption pattern, therefore, shows a preference for convenience
goods like washing machines, grinder-mixers, rice cookers, roti maker, etc.
Women manage on two fronts – domestic chores and work. Husbands
share the responsibilities of running the house to some extent. Instant
foods, crèches, etc., appeal to such families. To compensate for the time
babies, miss with parents, there is a tendency to buy costly garments for
kids, games for kids, prams, etc. as well as take them out during the
weekend.
Single Parent Families: The single-parent family needs security and buys
all the products that offer physical, psychological and financial securities–
e.g., door video, toys, insurance, government schemes, etc. When the
child grows, he may be put in a boarding school/public school so a single
parent can look after generating economic resource.
Divorced: They buy from places where money can be saved, stay in the
lease or rental housing, childcare, time-saving appliances, instant foods.
They are short of cash.
Older people Married or Single: They are age-wise older, still single or
married, thus dependent on others, not with sufficient cash, and health-
conscious. They essentially need security. They also need recreation to
spend their time.
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Table 9.2
Product Segment
(i) Cosmetics Young single and young married women who are cash-rich are
a potential segment for beauty products like face creams,
moisturizers, compacts, foundation make up, etc.
(ii) Vacations Middle-aged families need facials, sauna baths and such
related products. Newly married couples are sold vacations at
the time of marriage in the form of honeymoon packages.
Middle-aged couples with no responsibility for children are the
most attractive segment to sell vacations in the form of
packaged tours. They are cash-rich and free from
encumbrances.
(iii) Housing Young, married with children need starter housing.
Middle-aged couples need housing – two-bedroom flats, etc.
Bachelors need liberal and professional education. They are
career-minded. They can be sold courses like private
secretary, computers, etc.
(iv) Education Middle-aged children buy education for their children - home
tuitions, coaching classes, public schools, etc.
They buy education for themselves also to improve their
career – e.g., distance education programmes of IGNOU
Activity D
Highlight segmentation for the electronic diary using the FLC concept.
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Video Link 1
Video Link 2
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Social classes are open-ended, and people from one social class can aspire
to move to a higher social class. As opposed to this, the caste system
prevalent in India is closed-ended. Marketers can make use of social
classes in segmenting the market. Each social class has certain shared
values and attitudes and shows certain characteristic preferences. This
helps marketers to understand consumer behaviour.
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Social classes are often measured in terms of social status – i.e., the
amount of status the members of a specific class have in comparison with
members of other social classes. Status has evolved considering three
factors like wealth, power, and prestige.
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often to other members of the same class for clues related to appropriate
behaviour.
Warner has classified society into six classes. This classification has been
most preferred. The following table summarises his categorization.
However, there is little agreement among sociologists on how many
distinct class divisions are necessary. We will later cover variations brought
in by classifying social classes differently.
Table 9.3
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Yet another way to classify could be top class, middle class and a lower
class based on their income level.
Systematic approaches for measuring social classes fall into the following
broad categories – subjective measures, reputational measures and
objective measures. We can briefly understand them, as covered in the
following paragraphs.
Subjective Measures
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Reputational Measures
The reputational approach for measuring a social class takes the help of
informants to make judgements concerning the social class membership of
others within the community, rather than themselves.
Objective Measures
Objective measures of social classes get further divided into two basic
categories – Single variable indexes and Composite variable indexes.
Single Variable Indexes: A single variable index uses just one socio-
economic variable to evaluate social-class membership. Some of the most
popular variables are Education, Income, Employment, Ownership, and Net
worth. Interestingly, when two individual variables are matched and
plotted differently, one composite matrix can emerge such as Occupation
and Income. When these two variables are combined, it can give an
interesting and powerful index.
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Thus, for Indian marketers, one composite index was developed, known as
SOCIO-ECONOMIC CATEGORISATION (SEC), in which occupation of
the individual and income are considered. This was developed by the
Market Research Society of India (MRSI). This is considered a traditional
classification and in the recent past, new SEC classification has also been
evolved in which their education is considered along with their ownership
of durables. There is also a classification available for rural India based on
the nature of house owned by them, and education. As per the traditional
classification, SEC A represents white-collar people, and SEC B represents
affluent but not white-collared people. Same being self-explanatory, it is
reproduced below:
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Table 9.4
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Table 9.5
Note: Four Socioeconomic Classes have been labelled as R1, R2, R3, and
R4.
R1: Uppermost Class.
R4: Lowest Class
Data may be reproduced for research, analysis, survey, review, studies and
such other academic purposes with due acknowledgement.
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As per one estimate, when India’s total population was 1.30 billion, India’s
middle-class number was at 300 to 350 million (estimated) (urban and
rural included) by 2017. There is significant income inequality within India,
as it is simultaneously home to some of the world's richest people. For
many years, companies considered this as a homogeneous class and
designed their marketing programs accordingly. Later, with more use of
consumer buyer behaviour, it was discovered that within this class,
consumer behaviour depended on their income level. Not only that, besides
income level, it is the purchasing propensity that is important – those
having the same income may show a different propensity to buy and thus
the difference in their purchasing potential. Purchasing propensity also gets
driven by other factors like social, cultural and regional.
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The belief and value components covered in our definition refer to past
knowledge and experience led feelings and thus priorities that individuals
have about ‘things’. Belief refers to knowledge-based conclusive
realization either hidden in mind or expressed verbally (as I believe....
statements) about something (person, a store, a product, a brand).
Values are also beliefs. What differentiates values vis-a-vis beliefs are
criteria such as 1. they are limited in numbers, 2. they are enduring, 3.
widely accepted, 4. free from any bonding 5. and guide culturally
appropriate behaviour.
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Many times, culture has so naturally impacted us that we are not even
aware. We just follow as we see others doing it that way. Often when such
behaviours are questioned, the answer would be ‘because it’s the right
thing to do and most others do it that way. In certain cultures, it is
essential to take a bath every day but in other cultures, it is not likewise.
Only when you know more about the other culture, you will come to know
what impacted your seemingly routine behaviour.
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Culture is Learned
Our physical characteristics are the result of our biological DNA (skin
colour, eye colour, hair colour, intelligence, etc.). However, culture is not,
and it is acquired through learning. Right from birth, we begin to acquire
our set of beliefs, values and customs that give us our culture.
Video Link 1
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Video Link 1
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Because the human mind can process symbols, it is possible for a person
to ‘experience’ an advertisement for a product and conclude the desired
meaning. Marketers have used this opportunity both positively as well as
negatively, such as for surrogate advertisement of liquor.
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Culture is Shared
Culture is Dynamic
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Indian advertising has understood such aspects very well – the HDFC Life
‘Sar Utha Ke Jiyo’ advertisement in which it is shown that when you retire,
you will not have to be dependent on anyone, diamonds are gifted by
parents to their children, emotional marriage cantered ads, Dabur
Chyavanprash ad ‘Saanth Saal ke Budhey Ya Saanth Saal ke Javaan’ are all
a reflection of strong cultural values we have regarding certain aspects of
our life.
On the other side, Indians have been lured by adventurous ads (Mountain
Dew), Healthy hair (Parachute Advance), Youthful bank (Deepika Padukone
in Axis bank ads).
Also, we feel like changing ourselves when we see ads like Levi’s denim;
Marks & Spencer’s clothing line, etc.
Activity E
List how advertisements are linked to culture. List one advertisement which
has a strong cultural connotation and explains why you think it does.
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Content Analysis
Using this approach, efforts are made to analyse the content presented in
verbal, written and pictorial messages either in print, audio or video
format, covering a long past period to derive conclusions about society or
specific aspects of society. Lux soaps advertisements of yesteryears using
heroin were not as glamorous as today, thus symbolizing the changing
importance of glamour in Indian culture. It can cover specific aspects like
changing the role of women or changing the family structure or it can
cover various aspects collectively.
Consumer Fieldwork
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However, such a survey just indicates trends but its relationship between
people’s values and their actions as consumers is still in its infancy. There
are various instruments within this approach available.
India has its core cultural values which affect and reflect its character.
India encompasses several subcultures, each having its cultural values.
Indian society is evolving to the world environment and embracing cultural
transformation. Its transformational alignment creates contradictions such
as, in India nuclear family is now considered as normal but at the heart of
its family value is still strong. Indians want to adopt foreign products and
services but still want to retain their original choice as it is.
Core values of any society can be selected based on three criteria like
value being pervasive, enduring and must be consumer-related.
Some of the core cultural values identified for Indians are – family virtues,
respect for family hierarchy, bonding, religion, faith, caste-based
marriages, belief in karma (hard work), freedom-seeking, being liberal,
belief in monogamy, joint gathering, open to transition, spirituality, caste-
based culture, adoption of a wide array of products and services, tolerance
and patience, equal opportunities for all, philanthropic nature, freedom of
individuality, appreciation for skills, music and art.
Certain cultural aspects are taboo – like in nature, like punctuality, lack of
process centricity, casualness, lower tolerance to the stress level, low on
gratification, inequality, poor discipline, social values and more.
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Subculture
India is such a country where there is unity in diversity. Within the same
society, we have different subsets of cultures that themselves have their
distinct cultural values, and beliefs and thus constitute what is known as a
subculture. These subcultures have been here for centuries and thus
shared values are transmitted from generations to generations. These
subculture sets conform to many norms of the dominant culture. When
these norms become incompatible, they deviate and form their subsets of
values and beliefs.
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Table 9.6
Subcultural Categories
Subculture Category Examples
Nationality Indian, Bangladeshi, Pakistani
Religion Hindu, Sikh, Christians, Muslims,
Jewish
Geographic Region North, East, South, West
Race Jains, Kutchi, Patel’s
Age Elderly, Teenager, Adolescence, Child
Gender Female, Male
Occupation Doctor, Service, School teacher,
Lawyer
Social class Lower, Middle, Higher
Video Link 1
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an opinion leader for a specific product category while for some other
product category he may be an opinion seeker.
Consumer research dwells into knowing how opinion leaders influence the
consumption pattern of others. The understanding of personal influence
embraces the four areas of activity: 1. Fashion, 2. Movie-going, 3. Public
affairs (politics) and 4. Marketing, (which is basically related to brand
choice).
Video Link 1
Video Link 2
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two-way process - One and the same person can be an opinion leader or
an opinion seeker, depending upon the situation.
Opinion leaders belong to the same primary groups of families, friends and
co-workers. Opinion leaders are characterized by many interpersonal
contacts (gregariousness) and by an above normal exposure to media.
We have to consider what motivates both, the opinion leaders and opinion
receivers.
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Self-designating Method
Here, we ask others what role they have played in influencing the
consumption of others in recent past, (say six months). A straight question
could be:
In the past six months, have you been asked to advise or give your opinion
about ............... products? (Specify products in the blank).
The answer could be a ‘yes’ or ‘no’. It classifies them into leaders or non-
leaders. But such straightjacket compartmentalization does not reflect a
range of opinion leadership activity. The questions, therefore, can be
qualified by using time-denoting adverbs like ‘infrequently influencing
others’ or sometimes influencing or ‘frequently influencing’.
Sociometric Research
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Providing Information
1. In the society, did you tell anyone about the movie Lagaan in the past
one week?
Yes …………………. No …………………..
If yes, then proceed.
2. Whom did you tell about it first? ……………………… (Name the person)
3. Who else from the society did you tell about it? ………………………. (Name
them)
4. Did you recommend them to see or not see the movie?
See ………… Not see …………… Other …………………
Receiving Information
1. Which first comment do you remember about Lagaan?
2. Do you remember who made this comment?
Yes ……………… No ……………………..
If yes, proceed.
3. Who made this comment? …………………….. (Name the person).
4. Is he a society resident?
Yes ……………… No ……………………..
5. Did he recommend you to see or not see the movie?
See …………… Not see …………… Other ……………………….
6. Did you talk with this person prior to seeing this movie or after seeing
it?
Prior ………… After ……………… Do not remember …………………….
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Objective Method
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There are various ways in which groups can be classified such as Primary
versus Secondary Groups, Formal versus Informal Groups and Membership
versus Symbolic Groups. Every consumer-relevant groups have specific
characteristics. A reference group generally is a group that serves as a
point of comparison or reference for an individual to form his attitudes and
behaviour. Group situations, or an individual with whom a segment of the
audience can identify, are used to promote goods and services by subtly
inducing the prospective consumers to identify with the pictured users of
the product. There are four major types of reference group appeals in
common marketing usage – use of celebrities, use of an expert, use of a
common man and use of an executive.
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Advertising has utilized cultural vibes which Indians have absorbed from
different cultures.
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5. Overall spending habits are not driven by the income of households but
by the class to which they belong. Thus, it became essential to develop
a composite variable index for India namely_______________. Fill in
the blank.
(a) Societal Ergonomic Classification
(b) Sophistication Evolution Classification
(c) Socio-economic Classification
(d) Socio-earnings Classification
6. In a specific method of the survey in which people are asked how they
feel about such basic personal and social concepts such as religion,
caste system, national security, politicians, unity, diversity, freedom of
expression, harmony, peace, it is known as _______________ survey
method. Fill in the blank.
(a) content analysis
(b) value measurement
(c) customer filed work
(d) perception
Answers:
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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DIFFUSION AND ADOPTION OF NEW PRODUCTS
Chapter 10
Diffusion and Adoption of New Products
Objectives
Structure:
10.1 Introduction
10.2 The Diffusion Process
10.3 The Adoption Process
10.4 The Diffusion and Adoption in the Digital Era
10.5 What have You learnt – A Summary
10.6 Self-Assessment Questions
10.7 Multiple Choice Questions (MCQ)
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10.1 INTRODUCTION
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The Innovation
The word innovation as such has no specific definition. However, there are
various approaches to classify a new product as firm-oriented, product-
oriented, market-oriented, and consumer-oriented.
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Activity A
List your two examples each for the different innovation orientations listed
above.
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Compatibility: Here the product can make potential consumers feel that a
new product is consistent with their present needs, values, and practices.
Instead of a permanent razor, men felt easy to adopt new disposable
razors.
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Resistance to Innovation
3. Low trialability
4. Low communicability
5. High complexity
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Marketers’ task doesn’t end at knowing the factors for resistance. They
need to develop strategies to overcome known factors from known sources
of resistance.
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Table 10.1
A Classification of Marketing Strategies to Overcome Consumer
Resistance to Innovation
Source of
Marketing Strategy
Resistance
Functional Barriers
Psychological Barriers
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The success of diffusion lies in its ability to spread through the entire
market, which in turn depends on the communication between the
marketers and consumers and also communication among consumers,
especially in this digital age. Thus, in consumer buyer behaviour it is
essential to attend transmission of product-related information through
various communication channels, and to the impact of both, messages and
channels on the adoption or rejection of new products. Communication
sources are categorized as impersonal sources (e.g., advertisement,
publicity) and interpersonal sources (personal selling, opinion leaders).
It is a fact that certain types of information sources have early versus later
adoption of new products. The following findings from various diffusion
research indicate those early adopters:
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The social system has its orientation and special values which affect the
acceptance and rejection of new products. The traditional system does not
easily and immediately absorb innovation vis-a-vis the modern system.
Time
Time is the foundation of the diffusion process and covers three distinct but
interrelated ways: (1) purchase time (2) the identification of adopter
categories and (3) the rate of adoption.
1. Purchase time: It’s the amount of time that elapses between the
consumer’s initial awareness of a new product and the point at which he
or she purchases or rejects it. Purchase time is the result of being
aware, the depth of his involvement needed, and how complex it is for
him to get information, evaluate it and decide to adopt it or reject it.
Also, as the time lag increases, the innovator category products evolve
into a need for other consumers.
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As we can see, the graph indicates that the adopter categories are
generally depicted as taking on the characteristics of a normal distribution
(a bell-shaped curve) that describes the total population that ultimately
adopts a product. Let us briefly understand the classification.
Innovators: They are the ones who take on the risk and venture into
adopting a new product. Profile wise they are generally younger, with a
broad and open outlook, high on social status, love to take on any new
idea with the risk involved, and for them, it’s like a venture worth the
effort when they buy a new product.
Early Adopters: They adopt new ideas early but post careful
consideration. People respect their viewpoints and follow them. Thus, they
are also ‘change agents’. Their opinion matters and thus this category has
the most opinion leaders.
Early majority: It’s not a group that takes unwarranted risk nor does it
have a followers’ base to be considered as opinion leaders. However, they
are conscious about adopting an innovative product much before the
average mass consumers do. It’s a group that’s a notch above the average
masses but they are not leaders.
Late majority: They adopt a new product out of necessity and their
adoption goes un-noticed. It is thus also considered as a skeptical group
that adopts a new product out of social pressure or necessity. Before they
adopt, so many others have owned this new product already.
Laggards: They are the last streams of the population to adopt a new
product. They are believed to be always careful and not risk their
investment in trying a new product. They continue to use old products that
either serve their current needs or they do not have a strong urge to
satisfy the current needs differently. Thus, this group is also considered a
tradition-bound group. In many cases, their acceptance cycle begins when
the innovator category has discarded the idea and they have moved on to
another new product. Profile wise they are relatively older, coming from
the lower end of social strata, or do not have an independent means of
earning.
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The above understanding not only helps marketers to use their marketing
mix appropriately but allows them to understand their media habits and
tap the same appropriately.
3. Rate of adoption: This refers to the time it takes for a new product to
be adopted by members of a social system – that is, how quickly a new
product is accepted by those who will ultimately adopt it.
In India, when black and white TV was introduced, the rate of diffusion
was slower and remained more or less steady, but the moment it was
announced that ASIAD Games will be telecast in colour, its diffusion was
much faster. Thus, it suggests that instead of the time it takes to adopt
a new product, it is essential to track the extent of evaluation.
Thus, based on time and the extent of adoption, four different categories
of adopters are identified.
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Video Link 1
Video Link 2
Video Link 3
Video Link 4
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When the TAB was launched in India, it was touted as ‘Phone Bhi, aur
Laptop Bhi’. People were made aware of it through advertisements and
other communication channels. It generated interest and compelled many
to search for information on the net. On finding information that gave them
the perspective about its utility for them, many wanted to see the product,
thus they went to showrooms and enquired about it. Showrooms willingly
gave them live demonstrations and allowed them to touch and feel the
product and try for themselves, which led to final adoption by many
(although it was more from the perspective of a handy computer and not
necessarily a phone).
Regular research on the adoption process indicated the need for adding
two additional stages between trial and adoption. The trial provides direct
experience and the consequences of that experience serve to confirm the
product evaluation, leading to subsequent rejection or adoption. Thus, the
adoption process now will have seven steps – (1) Awareness (2) Interest
(3) Evaluation (4) Trial, and (5) Direct Product Experience (6) Product
Evaluation and (7) Adoption (or rejection).
Video Link 1
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Video Link 1
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The Digital era is changing various things around us. Our dealing with
individuals, the way we collect information, how we decide about the
product or a brand, what do we check to determine product or brand’s
utility and more. The Digital era has also impacted consumer buyer
behaviour in many ways.
You will study in detail about consumer buyer behaviour process in the
next chapter on ‘Consumer Decision Making’. In brief, consumer decision
making has stages like 1) Problem recognition 2) Information search 3)
Evolution of alternatives 4) Making a purchase decision and 5) Post-
purchase evaluation. On the other end, you have marketing
communications simplest model namely AIDA (Attention, Interest, Desire
and Action). Basic principles of innovation diffusion remain the same.
However, the digital medium offers you innovative ways to trigger
innovation acceptance, and speed in reaching innovation adopters. With its
versatility and features, digital mediums enable grabbing the attention,
generate interest (visuals, animation, video and more), develop the desire
(know more, webinar, download, free trial) and facilitate action. With
various digital media and channels website, email, social media, it is
possible to help consumer recognize the problem he has, provide
information to enable evaluation, generate buzz around your brand/
product, help in making a purchase decision by offering convenience,
money back, free trial period and handle post-purchase stage in an
appropriate manner that gives your brand positive traction. The single
most advantage of digital era mediums and channels is that you can
facilitate diffusion of information and adoption process almost concurrently.
The utility of the digital era is that your concurrent initiatives will not clash
and aid widespread customer reach and yet remain mutually exclusive
because the customer will look for what he needs, based on his state and
stage in buying cycle – innovator will look for what is new coming in,
followers will study reviews and ratings, opinion and then decide.
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Innovations have different orientations and thus they can be either firm-
oriented (product new to the firm), product-oriented (a continuous
innovation, a dynamically continuous innovation, or a discontinuous
innovation), market-oriented (by how long the product has been in the
market or by the % age of the potential target market that has purchased
it), and consumer-oriented (new to the consumer).
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DIFFUSION AND ADOPTION OF NEW PRODUCTS
Answers:
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
402
CONSUMER DECISION MAKING
Chapter 11
Consumer Decision Making
Objectives
By the end of this chapter, you should be able:
• To understand the consumer decision-making process
• To understand what are the different types of purchase decision
behaviours of consumers
• To understand what is the model of buyer behaviour
• To understand the post-purchase behaviour of consumers
• To understand the concept and meaning of relationship marketing
Structure:
11.1 Introduction
11.2 Four Views of Consumer Decision Making
11.3 The Consumer Decision Making Process
11.4 Types of Purchase Decision Behaviours
11.5 Model of Buyer Behaviour
11.6 Post Purchase Behaviour
11.7 Relationship Marketing
11.8 What have You learnt – A Summary
11.9 Self-Assessment Questions
11.10 Multiple Choice Questions (MCQ)
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11.1 INTRODUCTION
What is a Decision?
Table 11.1
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Economic Man
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Passive Man
In contrast with the economic man who is rational about his choices, a
passive man is the one who is subject to high-pressure selling, marketing
and promotional efforts of the organizations and yields to these passively.
He tends to be an irrational and impulsive purchaser. The conventional
attention-interest-desire-action (AIDA) model of selling presumes a passive
customer. It fails to recognize an important role any man plays in the
buying process.
Cognitive Man
A cognitive man as a consumer is considered as the one who seeks to
solve his problems by seeking products and services which satisfy his
needs and improve the quality of his life. His choices are governed by
certain processes such as seeking information, evaluating, and forming
preferences. As against the economic man, the cognitive man obtains only
sufficient information so that he can settle for a reasonably good product.
He may develop certain practical methods to arrive at a decision. He may
use certain decision rules. He thus falls in between a purely rational
economic man and a purely irrational passive man. Though he is not in a
position to make perfect decisions, he attempts to make satisfactory
decisions. His consumption decisions are based on the information thus
thought through in nature. He is thus well-informed. Consumer behaviour
literature equates a consumer with a cognitive problem-solving man.
Emotional Man
Man is naturally born with emotions within him. Emotions such as love,
happiness, hope, fear, fantasy, sexuality and even some out-of-the-world
experiences like magic. These influence our product choices a great deal.
We get emotionally involved with the products satisfying our needs. We do
not gift handkerchiefs, we may feel certain colours are lucky for us; we like
certain brands deeply without really knowing why do we get attracted to
these brands – Old Spice, Raymond’s. more.
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The mood is a state of mind, and it also affects our consumption. It is one
of the emotions and it prevails over us as a response to a particular
environment. It pre-exists when a consumer enters a retail outlet or is
face-to-face with a brand or a product. It influences shopping and
therefore a retailer tries to create a mood for shopping. A positive store
image does affect a shopper’s mood. Shopping ambience is also a big and
effective turn-on for consumers’ mood. A positive mood is a great help in a
product recall. However, it does not mean that such a mood created on the
spot by music and PoP (point of purchase) will influence brand choice
unless some previous evaluation has already occurred.
Activity A
List one product each that has been purchased by you while acting as an
economic man, passive man, cognitive man, an emotional man.
…………………………………………………………………………………………………………………………
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Video Link 1
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It should be noted that the process starts much before the actual purchase
and continues beyond it.
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The amount and type of information that is collected are related to the
product in question, and the consumer’s personality. To buy consumer
durables like fridges and ACs, we need a great deal of information from
different sources. To buy daily consumables, we need limited information.
To buy petty items, there is hardly any need for information seeking,
except to know what size is available, and at what price. The essence of
brand marketing is that it makes the consumer loyal to the brands. These
consumers then continue to buy the same brands and do not seek any
information at all.
The major external sources are family members, peers, friends, colleagues,
and relatives on whom we rely on or consider as our opinion leaders.
Besides, we get information from different marketing communications,
media, distribution channels and consumers’ own experience handling a
similar product category, company, brand, etc.
Each brand in the evoked set is evaluated against some chosen criteria. A
consumer buying an electric rice cooker, for example, considers the criteria
such as Brand name, Price, Functions performed, Appearance, Attachments
like a juicer, a chutney jar, Reputation of the company marketing it,
Warranty, Technical specifications and may be After-sales service available.
Each of the above criteria is assigned some weightage, which may differ
from consumer to consumer. After this, it is all a matter of perception. To
illustrate, the flavour of a soft drink may have equal importance for two
different consumers. But one feels Fanta orange has a particularly good
flavour whereas the other feels it is awful.
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Buying Decision: After the choices are evaluated, the brands are ranked
mentally. The top-ranking brand may or may not be purchased as it
depends on how customers look at the value within each one of them. The
ultimate buying decision may change if the preferred brand is not
available. In such a situation, the second-ranked brand may be bought.
The ultimate buying occurs only when the consumer finds a suitable outlet
where the brand is available, and price negotiations are complete.
Activity B
List the stages you went through while purchasing the LED TV in your
house.
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Reutilised Response
(RR) Behaviour
LPS occurs when the consumer knows the brands available, but still needs
additional information to make a correct choice, especially when a new or
unfamiliar brand or variant confronts him. Thus, new Dell or new HP
laptops must convince the customers that they are superior to conventional
laptops due to the presence of an upgraded Intel chip inside and so the
customer feels the necessity of searching for additional information. The
marketer here has introduced a new brand in a well-known product
category. The promotion here should explain the complete features of the
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EPS occurs when a new product category comes on the scene. Here,
extensive information is needed on both, the product category and the
brand being made available, e.g., super hybrid car from Maruti needs to
first explain the concept of a hybrid car vis-a-vis conventional cars, and
then sell Maruti’s hybrid car brand. Colour TVs as a product category, a
particular brand of TV (say Onida or Videocon) and a particular model (say
PIP: Picture-in-Picture or Surround Sound System) do need information at
three levels. Promotion should satisfy the needs of information at these
three levels, and especially, how the advertised brand has a unique set of
positive attributes. This concept is most applicable to new products, ones
that may be new to consumers. For typical rural India customers, even the
purchase of soaps may involve EPS, whereas for us it is just RR.
Howard-Sheth Model
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4. External Variables: These are not part of the decision process in the
model but are improvements to the extent that they influence a buyer.
These differ from buyer to buyer and include status, the relevance of
the product, social class, personality traits, etc.
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Formation of Satisfaction/Dissatisfaction
Post-purchase and after the experience with its use, a purchase may lead
either to satisfaction or dissatisfaction. Satisfaction is a result of the
expected outcome – when the product meets our expectations.
Dissatisfaction means it does not perform as per our expectations.
Dissatisfied customers may discontinue their association with the company,
may spread negative word-of-mouth, may send a formal complaint, or in
extreme cases, may sue the company. The communication strategy
depends upon the expectation performance disparity.
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The technical term for a very wide gap between expectations and actual
performance is post-purchase dissonance.
The marketing mix and the perception it creates largely affect the buyers.
Apart from this, social class and culture affect a consumer’s evaluation,
and word-of-mouth publicity affects the ultimate adoption of the products.
The input is processed by the consumer while he takes the decisions. The
decision-making process is affected by psychological factors. Here, we
have to understand two key concepts – perceived risk and evoked set.
While buying products, consumers cannot anticipate the consequences of
their decision, and this is precisely the perceived risk.
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The product may not function as expected (functional risk); the product
may harm us (physical risk); the product may embarrass us socially (social
risk); the product may affect ego adversely (psychological risk); the time
taken to buy may be wasted over a non-performing product (time risk).
Risk is perceived with respect to product categories, e.g., there is a higher
risk while buying a LED TV than buying a book. Shopping situation also
contributes to the perception of risk, e.g., some may not like to buy by
mail order. This perception may change by positive feedback. Perception of
risk differs from people to people, and so consumer research regarding the
risk behaviour of one country cannot be generalized.
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The results depend on how we sort out the products or possibilities into
categories. The way this information is recorded in memory can influence
consumers’ preferences for brands and whether the brand will be
considered for purchase. According to Dannon and Yoplait, if yoghurt is
arranged by brands first and then by flavour within the brand, consumers
tend to select their flavours from the same brand. On the other hand, if the
yoghurts are classified flavour wise first, say all strawberry yoghurts, and
then consumers would most likely choose which flavours they wanted first,
and then choose which brand name they would most like for that particular
flavour.
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Video Link 1
Video Link 2
The emphasis these days is to retain the existing customers against the
onslaught of competition. Such customers who are loyal to a company and
its brands are in effect more profitable to marketers than new customers.
Relationship marketing is thus building long-term relationship and trust
between an organization and its customers for mutual benefit. It enhances
the consumer retention index. Considering that it costs several times more
to acquire a new customer than retaining an existing one, companies are
making all efforts to please the existing customers. This relationship
extends to the members of the distribution channel and suppliers. These
relationships are based on high-quality products, fair pricing, and effective
servicing.
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Building brands that establish a relationship between the customer and the
marketer is one of the key elements in relationship marketing, along with
other elements. Cadbury has an online group which interacts among them
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Video Link 1
Video Link 2
On launch, Mattel Toys has built a 21,000 – strong database. The Club has
12,000 active members between the ages of 6 – 12. Every year, around
5,000 new members join, though there is a subscription fee of Rs 95/-.
They have been successful at developing a cult for Barbie. The Club
members are hardcore Barbie fans, and they correspond regularly with the
company. The relationship marketing exercise has helped the company sell
1.5 million Barbie dolls so far.
Parle Agro has also formed Frooti Funtoon Club targeted at youngsters to
carry over the brand appeal to the second generation. These members will
be parents twenty years hence and will still have a fondness for the brand.
The club organizes plant visits; animation film shows and quiz contests.
Birthday cards are sent. The scheme aims at building up a solid database
plus a consumer segment.
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Companies may offer schemes to their regular customers during sales and
special offers.
Service industries like banks and hotels can also make effective use of
relationship marketing. Communication here is more focused and effective.
Relationship marketing opens a two-way communication channel with
consumers. It has the potential to win their loyalty.
Activity C
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Answers:
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 12
Consumer Protection in India
Objectives
By the end of this chapter, you should be able:
• To understand why consumers, need protection
• To understand the role of the consumer guidance society of India
• To understand the advantages and limitations of the consumer
movement as well as the rights of consumers
• To understand the nature of business malpractices and legislative
regulations in force to protect consumers
Structure:
12.1 Introduction
12.2 Consumers Need Protection – Why?
12.3 Consumer Guidance Society of India (CGSI)
12.4 Rights of Consumers
12.5 Consumer Movement
12.6 Consumerism and Consumers’ Rights and Responsibilities
12.7 Business Malpractices
12.8 Legislative Regulations
12.9 Consumer Protection Councils and Consumer Education
12.10 What have you Learnt – A Summary
12.11 Self-Assessment Questions
12.12 Multiple Choice Questions (MCQ)
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12.1 INTRODUCTION
As almost all the commercial organizations are well managed and well
versed with the market conditions, so certainly they are in a better
dominating position and use it to exploit the consumer. There are
numerous ways in which organizations exploit consumers – poor quality of
content, use of harmful chemicals, incorrect weights and measures
practices, price cartel, poor packaging, mixing, lack of information and in
more ways which are unimaginable.
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3. The laws can guarantee the safety and quality of the products and
services the consumers use. A country can only experience growth in
economic activities when consumers have trust in the producers, so the
producers must work to provide the assurance required to win the trust
of consumers.
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Activity A
List the occasions/ incidences/purchases post which you felt you should
have taken the manufacturers to task for indulging in malpractices with
you. List at least 5 such incidences.
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The Consumer Guidance Society of India (CGSI) is the first and foremost
consumer body of the country. CGSI, which was founded in 1966, is
entering its Golden Jubilee Year in 2015.
CGSI has been actively championing the rights of consumers for more than
40 years. The Society was founded by women activists in the year 1966.
They aimed to protect the rights of consumers.
The efforts of CGSI and other Consumer Organisations of our country bore
fruit when the Consumer Protection Act was enacted in the year 1986 and
the Consumer Courts were set up.
CGSI has reached out to lakhs of consumers and conducted workshops and
seminars on consumer awareness topics like food adulteration and
consumer protection.
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Objective of CGSI
• Develop a resource center at the State level which will be networked with
the National Resource Centre
• Develop alternate consumer disputes redressal mechanisms at the State
level
• Resolve maximum number of disputes out of court
• Promote the active participation of companies and service providers in
resolving consumer disputes
• Early resolution of complaints
• Reach out to rural consumers
• Capacity building of State level voluntary consumer organizations
• Provide service in regional language in addition to the English language
Role of CGSI
• Provide democratic and peaceful means to fight unfair practices
• Provide and facilitate accurate and relevant information
• Regularly test the quality of products offered to consumers in their
laboratories
• Facilitate co-operation with state-level agencies
• Ensure compliance with consumer protection laws
• Educate consumers about their rights and responsibilities under the law
• Use mass media to educate consumers
• Bring out publications and online content to guide individual consumers
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Consumer Awareness
Consumer Protection
Laws are designed to ensure fair trade competition and a free flow
of truthful information in the marketplace. The laws are designed to
prevent businesses that engage in frauds or specified unfair practices from
gaining an advantage over competitors and may provide additional
protection for the weak and those unable to take care of themselves.
Consumer Protection laws are a form of government regulation that aim to
protect consumers.
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1. Right to Safety
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2. Right to Information
The right to information is defined as ‘the right to be informed about the
quality, quantity, potency, purity, standard and price of goods or services,
as the case may be to protect the consumer against unfair trade practices
in the Consumer Protection Act of 1986. In the marketplace of India,
consumers get information in two ways namely, advertising and word of
mouth, however, these sources are considered to be unreliable but still,
word of mouth is quite common here. Because of this, Indian consumers
hardly have complete information for assessing the true value, safety,
suitability, and reliability of any product. Usually, hidden costs, lack of
suitability, quality problems and safety hazards can be found only after the
purchase of the product.
There are other aspects about information that covers labelling, safe
practices, pricing, unit of measurement, harmful/side effects, where
consumers can contact for grievance redressal if any.
3. Right to Choose
The definition of Right to Choose as per the Consumer Protection Act 1986
is ‘the right to be assured, wherever possible, to have access to a variety
of goods and services at competitive prices. For regulating the
marketplace, there is just one factor required and that is competition. The
existence of cartels, oligopolies and monopolies prove to be
counterproductive to consumerism. Since the Indian consumers come from
a socialistic background, the tolerating of the monopolistic market is found
in their blood. It is seldom seen that people want to switch the power
company, in the times when they have a blackout at home. It is interesting
to know that even micro markets like fish vendors in some cities are known
to collude and discourage consumers’ bargaining power. No matter what
size or form, or span, but a collusion of various companies which sell a
similar kind of product is unethical or say less legal. It can be estimated
that India has to stride for about 20 more years for empowering its citizens
fully in this regard.
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4. Right to be Heard
As stated in the Consumer Protection Act, 1986, ‘the right to be heard and
to be assured that the consumer's interests will receive due consideration
at appropriate forums is the definition of the right to be heard. This right
helps to empower the consumers of India for putting forward their
complaints and concerns fearlessly and raising their voice against products
or even companies and ensure that their issues are taken into
consideration as well as handled expeditiously. However, to date, the
Indian government has not formed even one outlet for hearing the
consumers or their issues to be sorted out.
Various attempts are made by the government for empowering the citizens
with this right, and it is believed that about 10-15 years more are required
for the accomplishment of this goal.
5. Right to Redress
The right to seek redressal against unfair trade practices or restrictive
trade practices or unscrupulous exploitation of consumers is referred to as
the right to redressal according to the Consumer Protection Act, 1986. The
government of India has been a bit more successful concerning this right.
Consumer courts like District Consumer Disputes Redressal Forums at the
district level, State Consumer Disputes Redressal Commissions and
National Consumer Disputes Redressal Commissions have been
incorporated with the help of the Consumer Protection Act. These
consumer grievance redressal agencies have fiduciary as well as
geographical jurisdictions which address consumer cases between
businesses and consumers.
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years away from giving this right that gives power to the common
consumer.
Activity B
Mahatma Gandhi promoted the idea that businesses have the role of a
trustee in being responsible towards customers, workers, shareholders,
and their community. In particular, Gandhi said that "A customer is the
most important visitor on our premises. He is not dependent upon us. We
are dependent upon him. He is not an interruption in our work - he is the
purpose of it. We are not doing him a favour by serving him. He is doing us
a favour by allowing us to serve him". United States consumer
advocate Ralph Nader called Gandhi "the greatest consumer advocate the
world has seen" for advancing the concept that commercial enterprise
should serve the consumer and that the consumer should expect to be
served by businesses. Vinoba Bhave and Jayaprakash Narayan, two great
proponents of Gandhi's philosophy, and V. V. Giri and Lal Bahadur Shastri,
contemporary Indian president and prime minister, similarly expected the
business community to regulate itself as an expression of responsibility to
contribute to society. These ideas were developed by some business
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The basic reasons for the development of consumer movement in India are
different from those in the West. In western countries, the consumer
movement was the result of post-industrialization affluence - for more
information about the merits of competing products and to influence
producers, especially for new and more sophisticated products. In India,
the basic reasons for the consumer movement have been:
• Shortage of consumer products
• Inflation
• Adulteration
• Black Market
• Lack of product choices due to lack of development in technology
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7. It’s a force to reckon with by business houses that make them think
twice before indulging in any malpractices.
8. It facilitates consumer education, so they become their protector
against any malpractices.
9. It creates public opinion against unfair practices.
10.It allows for the formation of consumer grievance handling cells,
consumer co-operatives, fair price shops, fair business councils,
distribution of consumer goods for self-services and self-helpers.
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What is consumerism?
The term "consumerism" had been first used in the year 1915 and was
referred to as "advocacy of the rights and interests of consumers" defined
in the Oxford English Dictionary, but here in this article the term
"consumerism" means the sense which was first used in 1960, i.e.,
"emphasis on or preoccupation with the acquisition of consumer goods.
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Consumer Rights
a. It is referred to as the Right to Safety and Protection from hazardous
goods or services.
b. The Right to be Informed and Protected against deceitful, fraudulent or
information that misleads, and have access to correct information as
well as facts required to go for informed choices along with decisions.
c. The Right to Choose and have easy access to different types of products
and services offered at competitive and fair prices.
d. The Right to be Heard helps to express and represent the interests of
the consumer in the making of political and economic decisions.
e. The Right to Redress and getting compensation for misrepresentation,
unsatisfactory services or shoddy goods is important for consumers.
f. The Right to Consumer Education helps the consumer to become
informed and capable of functioning properly in the market.
g. The Right to a Healthy Environment enhances the quality of life and
gives protection from environmental issues for the present as well as
future generations.
Consumer Responsibilities
a. Consumer responsibilities refer to the responsibility of having awareness
of the quality and safety of goods and services while purchasing.
b. The responsibility to collect information available about a product or
service and to update oneself with changes or innovations taking place
in the market.
c. The responsibility to think as well as make choices independently and
consider the immediate needs and wants.
d. The responsibility to speak out, and to inform manufacturers and
governments of needs and wants.
e. The responsibility to complain or inform businesses along with other
people about discontentment with a product or service in an honest
way.
f. The responsibility of being an Ethical Consumer and be fair and not
engage in malpractices that make all consumers pay.
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taxes, tax evasion, violation of fiscal laws like Income Tax, FERA, hoarding,
adulteration, exploitation, unfair accounting standards and many more.
Usual Malpractices
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Regulations of Malpractices
He does the business using resources available for the masses, support of
labour and infrastructure made for the common man. Thus, a businessman
is not supposed to be anti-social but a generous social worker. He can be a
social worker by providing customers with genuine products, pay all taxes,
labour welfare, social welfare, return to stakeholders, payment to
suppliers, vendors, channel partners and more. Add to this, complexities
with issues like environmental protection, promotion of products with
harmful effects, etc.
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For such thoughtful reasons and the overall gain of the country and
economy, every businessman must stop doing business malpractices.
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attracts both civil and criminal liabilities. Salient aspects are covered
below:
Objectives:
• To protect the public from poisonous and harmful foods
• To prevent the sale of substandard foods
• To protect the interests of consumers by eliminating fraudulent practices
Concept of Adulteration
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Video Link 2
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Video Link 1
7. ISI and AGMARK: ISI Certification Mark Act, 1952 is for ensuring
standards of products and AGMARK is standards for agricultural
products to help, guide and protect consumers. ISI is now known as the
Bureau of Indian Standards (BIS).
8. The Indian Sale of Goods Act, 1930: The Sale of Goods Act is a kind
of Indian Contract Act. It is a contract whereby the seller transfers or
agrees to transfer the property in the goods to the buyer for a price.
This legislation governs the transactions of sales and purchases. It
stimulates the formation of contract terms, effects of the contract,
performance of the contract, what is a breach of contract, rights of
unpaid sellers against the goods. A very important aspect of this is that
it divides the terms of sales into conditions and warranty. Conditions
mean essential aspects needed to be complied with. Warranty stipulates
what is entitled as damages. The act proclaims the principle of ‘Caveat
Emptor’ (Buyer Beware), which puts the onus of judicious selection on
the buyer. Overall, this act lays down the rules for the performance of
the contract of sale.
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9. The Trade and Merchandise Marks Act, 1958: This act influences
the development of uniquely identifiable trademarks (logos, designs,
symbols) and defines what a deceptively similar trademark is. It thus
guides the product and advertising decisions of the company,
particularly about the trade and merchandise marks. Individuals/
organizations need to register their trademark under this Act. It allows
its holder an exclusive right to use the trademark for a maximum period
of seven years. An infringement of the rights of the trademark holder
attracts injunctions, damages and more such penalties. The holder can
thus claim huge damages for the wrong use of his trademark.
Over and above these, there are several other legislations formed to help
consumers by preventing malpractices.
1. FALSE REPRESENTATION
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An analysis of the above definition reveals that where the sale or purchase
of a product or service is made conditional on the sale or purchase of one
or more other products and services, it amounts to restrictive trade
practice.
The buyer has to forego his free choice between competing products. This
results in neutralizing healthy competition in the ‘tied’ market.
However, where there is no such precondition and the buyer is free to take
either product, no tying arrangement could be alleged even though the
seller may offer both the products as a single unit at a composite price.
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When there is less competition, the players in the market will be able to
dominate it and fix high prices for their goods and services. It works to the
company's advantage that there is no or very little competition. Where
there is competition the companies may act to get rid of rivals. They may
work among themselves to fix prices or divide the market among
themselves to keep out competitors.
(a) CARTELS
This is where two or more companies producing the same product get
together to regulate prices for their benefit. With a cartel it will be possible
for the companies (as members of the cartel) to carry out the following:
Fix prices
The cartel will fix a price at which all members will sell their products. The
move is to prevent price-cutting, which is likely to happen when there is a
lack of demand and companies slash prices to get a slice of the market.
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Collusive tendering
With collusive tendering, those who are bidding for a tender have already
agreed among themselves who amongst them will get the tender.
Market allocation
These agreements are designed specially to strengthen the position of a
certain member by others agreeing not to compete in his designated
market. Since each is the only company in the allocated market the result
is that each can act as a monopolist in the designated market.
Boycotts
Boycotting is the refusal to purchase or supply certain goods and is one of
the most common means employed to coerce those who are not members
of the cartel to follow a prescribed course of action.
Group boycotts may be horizontal, that is, where cartel members agree to
among themselves not to sell to or buy from certain customers. Boycotts
may be vertical, that is, involving agreements at different levels of the
production and distribution stages, refusing to deal with a third party.
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Where there are already laws on competition, they are likely to specify the
percentage of market share which the company must hold to be considered
to be in a dominant or monopolistic position. For example, a company with
more than a 30% share of the market may be considered to be in a
dominant market position.
A company dominating the market can be said to be carrying out acts that
are considered an abuse of its position when it does the following:
Predatory pricing
The aim is to drive the competitor out of business. The company sells
goods at below cost to attract customers away from its rival. Once the rival
is eliminated, it can raise its price.
Video Link 1
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Discriminatory pricing
This is closely related to predatory pricing. Discriminatory pricing is
unjustifiably differentiating prices (or even in terms of conditions) in the
supply or purchase of goods compared with the prices of similar goods sold
to favourable buyers.
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Transfer pricing
Tied selling
The manufacturer can impose the concept of "tied selling" by his dominant
position in the market.
Exclusive Dealing
With such a practice, the retailer is prevented from fixing its profit margin.
Should he sell the goods at a discount, the manufacturer will refuse to
continue to supply him.
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Market concentration
Interlocking directorships
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Activity C
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The objectives of the Central Council are to promote and protect the rights
of consumers as we have learned earlier.
The State Council is required to meet as and when necessary but not less
than two meetings every year.
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The legislation will be more useful if the common man knows about its
existence, norms, applicability, rights, and obligations and more such
aspects. Thus, the government needs to impart the requisite knowledge to
the common masses. Educated consumers will certainly fight malpractices
being carried out with them. Our existing system does not have any aspect
of consumer protection being covered as part of any syllabus; thus, this
education is needed and the same needs to be facilitated by the
Government of India.
Activity D
As a consumer activist, suggest how will you spread awareness about the
rights of consumers in India and how will you make them aware of their
responsibilities?
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All the commercial organizations are well managed and well versed with
the market conditions so certain that they are in a better dominating
position and use it to exploit the consumer. There are numerous ways in
which organizations exploit consumers – poor quality of content, use of
harmful chemicals, incorrect weights and measures practices, price cartel,
poor packaging, mixing, lack of information and in more ways which are
unimaginable.
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3. As a consumer, when you consider buying any products and you wish to
know who manufactured it, the date of manufacturing, the contents
inside the pack, the price, the weight, and specifications, you are
exercising your right to______________. Fill in the blank.
(a) information
(b) choose
(c) be heard
(d) none of the above
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Answers:
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
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Chapter 13
Consumer Buyer Behaviour in Different
Marketing Domains
Objectives
By the end of this chapter, you should be able:
• To understand consumer buyer behaviour in service marketing
• To understand consumer buyer behaviour in business-to-business
association
Structure:
13.1 Introduction
13.2 Consumer Buyer Behaviour in Service Marketing
13.3 Consumer Buyer Behaviour in Business-to-Business Association
13.4 What have you Learnt – A Summary
13.5 Self-Assessment Questions
13.6 Multiple Choice Questions (MCQ)
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13.1 INTRODUCTION
In this chapter, we will briefly touch base on the use of consumer buyer
behaviour knowledge in the above-mentioned marketing domains.
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The first aspect of a service product lies in one’s ability to tangibalise the
intangible product level and coves it with an augmented product level.
Tangibalisation is a result of the unification of a basic product + expected
product as can be seen below in an example related to a mobile service
provider.
Solid products do not need to tangibalise anything due to the physical form
in which they are present. However, in-service it is more essential to
tangibalise your offering more clearly for enabling the consumer to feel the
same. This is known as the ‘Tangibility’ spectrum of service marketing.
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As you can see in the above chart, tangible products have high tangibility
but intangible products have low tangibility. Thus, they need to do things
that will tangibalise their service package, e.g., a laundry can offer cloth
care lessons, an automobile company can install a concept of an angry
horn (to be pressed by the customer who is not happy about the services
given)/a happy horn (to be pressed to express happiness).
When a consumer first hears about your service package, his natural
reaction will be to evaluate it. As there are no tangible elements present,
on what parameters will he evaluate? For the consumer, there will be
something that will be easy to evaluate and something difficult to evaluate,
especially if it is not tangible. He will resort to information search. The
more information he gets, the more clarity comes forth, and he may
become confident to use the product (but it is rare for any service), e.g.,
cloth merchant, jeweller’s selection. However, there are services about
which you only know through self-experience – e.g., meals, haircut.
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As against this, online retailers need a buyer who looks for convenience,
quality, reliability besides free home delivery, buying at regular interval
etc. As most of these aspects meet the customers’ need, such service
will find good immediate acceptance e.g., Flipkart. You will be surprised
to know that even before Flipkart, there were online stores namely
crossword.com, rediff.com but perhaps they failed to understand the
evolving consumers and their changing needs.
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Also, this is the stage wherein he will come in contact with your
employee for the first time. Your employee can either make or break it.
It depends on how trained and seasoned your employees are, how much
do they understand a customer’s state of mind, can they determine
what will work and what will not work, whether he/she can help a
customer arrive at the right selection from the available alternatives,
and last but not the least, his/her relationship-building skills will
determine whether the customer decides to procure goods from you or
not.
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his marketing tactics and offers; Some of them could be (i) new product
launches (ii) best price offer (iii) deal of the day (iv) bonanza promotion
(v) combo and accessories offer (vi) offer zone and more.
This is also one of the crucial stages where his service encounter with
your employee will take place, maybe telephonically or through a
webchat. How well your employee deals with him, determines whether
the customer decides to utilize your service. How well your employee
can build trust and empathy will build customer confidence and that may
tilt the deal in your favour.
It has been proved beyond doubt that in-service marketing is all the
more important to be focussed on post-purchase evaluation. Service
delivery being intangible is a continuous process. On one hand, you
want your customers to keep coming back to you and also refer your
service to others and on the other hand, consumers expect not only the
same level of service but also expect you to make up for the service
delivery deficiencies pointed by them if any. This psychological
perspective also integrates post-purchase support.
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blog. Last but not least is to have regular feedback and a service
satisfaction survey being conducted to understand how your customer
does evaluate his post-purchase experience. Remember that it’s the
post-purchase evaluation that either encourages or discourages a
consumer to refer your services. However, in a dynamic scenario, where
service production – delivery is happening simultaneously, there may be
a possibility that the service delivery could not be getting handled
properly. As a result, there is a concept of ‘Service Recovery’ in service
marketing. Service recovery recognizes that there was an improper
delivery of service or misunderstanding and thus it tries to have a
dialogue with the customer to understand how he can be attended to so
that he feels he got something reconciled.
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This is more so in the case of service providers since they are selling
intangibles by creating customer expectations. Services are often
differentiated in the minds of the customer by promises of what is to come.
Managing these expectations constitutes a critical component of creating
favourable moments of truth which in turn are critical for business success.
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One example that often gets mentioned is about one 5-star hotel's chain
that used to maintain customer databases detailing room order choices of
their guests. So, if a guest has asked for say orange juice to be kept in the
mini bar in his room, the next time that he makes a reservation at the
hotel, the staffs ensure that the juice is already kept in the room. Such
small gestures go a long way in making the customers feel important,
thereby creating customer delight.
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Summarization
Customer service and delight is the sure key for organizations in service
marketing. Customer service design needs a service provider to
understand the expressed, latent, and unfulfilled needs of his customers
for which knowledge of customer psychographics is vital, understanding
the stimulus that triggers the desired action is essential. Knowledge of
learning theories also helps largely. For any marketers including service
marketers what starts with need and motivations understanding, leads
them to understand different consumer personalities and their different
buying behaviours, how attitude determines him being favourably poised
for the nature of service being offered. Later it deals with the customer’s
perception management, which gets reflected in their satisfaction. All these
things happen in a social set up and their upbringing within a family,
influenced by groups he deals with, besides the impact of an opinion leader
by their selecting your services. Thus, the knowledge of consumer buyer
behaviour can equally play a crucial role for any service marketer.
The idea here is not to completely expose the entire B2B association and
the specifics of consumer behaviour but to give you glimpses about the
relevance of consumer buyer behaviour in the B2B association.
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Consumer behaviour study looks into the way individuals decide, how
individuals make decisions to spend their available scarce resources like
money, time, and energy on their chosen items for consumption.
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Last but not the least, the entire perspective on diffusion and adoption of a
new product will enable you to introduce new products among your B2B
associates successfully. You will be able to leverage new product launch
initiatives by your principle to capitalize gain for you, smartly and
effectively.
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3. For any marketers including service marketers, what starts with need
and motivations understanding, leads them to understand different
consumer _____________ and their different buying behaviours. Fill in
the blank.
(a) profiles
(b) wants
(c) personalities
(d) influences
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Answers:
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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