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Q-2. Consumer Research is central to the success of a marketing strategy. Critically examine the above statement in light of present business environment in India? Ans. Consumer Research is the systematic collection of &analysis of consumer information for the purpose of important decision making in marketing. It is an important tool to study buyer behavior, change in consumer life styles & consumption patterns, brand loyalty & also forecast market changes. It is also used to study competition & Analyze the competitors product positioning & how to gain competitive advantage. Recently consumer research is being used to help create &enhance brand equity. This is a new role and decidedly different from the conventional one where it was used for just studying buyer behavior or for conducting feasibility studies etc. In fact because of this conventional role, consumer research till mid 1980s was considered a luxury, which only multinationals like lever & Procter & gamble & there like could afford. However it is not so now. This is because competition in all sectors has increased manifold after 1985 especially after 1991. Due to liberalization & globalization the competition has intensified & survival of an organization is at stake. There aim is now to gain & retain competitive advantage & consumer research plays an important role over here. Realizing this contribution more & more companies are turning towards consumer research. However there are still many who are skeptics of consumer research. There criticism is that consumer research conclusions are not dependable. There are various cases where the research has failed to deliver desired results or the product failed even though the research had shown that majority of customers preferred it. The classical example is that of coke, which failed to correctly understand customer’s expectations & went ahead to launch New Coke. Its marketing research showed that 68% customers in US liked the taste of the new formula developed by the company. We all know that New Coke failed & in less than six months of its launch in the summer of 1985, the coke management had to re launch old coke under the brand name coke classic. This example also brings to fore a major limitation of most researchers, & that is they often respond to the “here and now situation” rather than taking a long-term view of the market. In fact many times researchers over look the background of the problem & comes up with recommendations, which are at times not feasible. Besides consumer research has often been de-linked from the business strategy. When that happens, most research reports become “academic” in nature & are “filed”. Therefore to make consumer research more effective it is important that it has a linkage with business strategy & should respond to future or emerging scenarios in the market place.
Q-3. Do you agree that personality greatly affects the buying motives of consumers? Justify your claim on the basis of some personality theories. Give examples. Ans An individual’s personality represents another set of characteristics that contributes to an understanding of consumer behavior. Personality characteristics can be valuable guide to marketers. For example knowing that users of a brand of headache remedies are more likely to be compulsive led one company to advertise the product in an orderly setting that described a fixed routine. Marketers have used four personality theories to describe consumers: 1) 2) 3) 4) Self concept theory Psychoanalytic theory Social/Cultural theory Trait theory
These four theories vary greatly in there approach to personality measurement. Self-concept theory is, arguably, the most relevant for marketers because it focuses on how an individual’s self image affects his or her purchasing behavior. It recognizes that what we buy & own is a reflection of who we are. Extensions of psychoanalytic theory have also been widely used in marketing to develop qualitative insights into why consumers buy. We will first describe self-concept theory, and then the more qualitatively oriented psychoanalytic & social theories. 1. SELF CONCEPT THEORY This theory holds that individuals have a concept of self-based on which they think are (the actual self) & a concept of which they think they would like to be (the ideal self). Self-concept theory is governed by two principles; the desire to attain self-consistency & the desire to enhance one’s self-esteem. Attaining self-consistency means that individuals will act in accordance with their concept of actual self. For example, a consumer may see himself as a practical & self-controlled individual. He buys conservative suits drives a large four door sedan, & spend quiet evenings at home. Deep down, however he would like to be more carefree & reckless. If he were to act more like his ideal self, he might own a small sports car, dress in jeans & sports shirts & go to rock clubs. Such actions would enhance his self-esteem by drawing him closer to his ideal self.
Actual Self: - There is no actual self. Consumers have various role identities-Wife, Mother, Working woman etc. One of these roles dominant in specific situations, the particular role will affect the individual’s style of dress & behavior. The amalgams of the individual’s roles make up the actual self. Applied to marketing, the concept of actual self says that consumer’s purchases are influenced by the image they have of themselves. They attain selfconsistency by buying products they perceive as similar to their self-concept. For Example; Enfield bullet is targeted to persons who consider or cherish to have an authoritative image. This is the reason for its higher sales among policemen & affluent agriculturists. Ideal Self: - The concept of the ideal self relates to one’s self esteem. The greater the difference between the actual self and ideal self, the lower an individual’s self-esteem. In a marketing context, dissatisfaction with oneself could influence purchases, particularly for products that could enhance self-esteem. Thus, a woman who would like to be more efficient, modern & imaginative may buy a different type of perfume or deodorant or tend to shop at different stores than a woman who would like to be more warm & attractive. Consumption and the extended self: - Another dimension of self-concept theory is applicable to consumers. Not only does our self-image influence the products we choose but also the products we choose frequently influence our self-image. Certain products have symbolic value. They say something about us and the way we feel about ourselves. For example, when we buy a certain suit or dress, we may anticipate that it enhance our self-esteem 2. PSYCHOANALYTIC THEORY Freud’s psychoanalytic theory stresses the unconscious nature of personality as a result of childhood conflicts: Id, ego & superego. The id controls the individual’s most basic needs & urges such as hunger, sex & self-preservation. The source of all innate forces that drive behavior, the id operates on one principle: directing behavior to achieve pleasure & to avoid pain. The id is entirely unconscious, with no anchor in objective reality. A newborn baby’s behavior for example is governed totally by the id. The ego is the individual’s self-concept & is manifestation of objective reality as it develops an interaction with the external world. As manager of id, the ego seeks to attain the goals of id in a socially acceptable manner. For example, rather than manifest a basic need to be aggressive in antisocial ways, an individual may partially satisfy this need by buying a powerful sports car. The
superego is the leash on the id and works against its impulses. It does not manage the id but restrains it by punishing unacceptable behavior through the creation of guilt. Like the id, it operates in the unconscious and often represses behavior that would otherwise occur based on the id. The superego represents the ideal rather than the real. It motivates us to act in a moral way. According to Freud, the ego manages the conflicting demands of the id and the superego. The way the child manages these conflicts (particularly sexual conflicts) determines the adult personality. Conflicts that are not resolved in childhood will result in defense mechanisms (strategies that the ego uses to reduce tension) and will frequently influence later behavior in a manner of which the adult is unaware. 3. SOCIAL/CULTURAL THEORIES A number of Freud’s disciples shifted from his view of personality in two respects. First they sought that social and cultural variables, rather than biological drives are more important in personality development. Second, Freud’s understanding of personality focused primarily on observations of emotionally disturbed people. His disciples subsequently believed that insights into personality development should also rely on observations of people who function normally in the social environment. Kevin Thorny, a social theorist believed that personality is developed as an individual learns to cope with basic anxieties stemming from parent child relationships. She hypothesized three approaches to coping with this, anxiety; compliance; a strategy of moving towards people and stressing the needs for love, approval and affection; aggressiveness moving against people and stressing the need for power, strength and manipulate others; and detachment; moving away from people and stressing the need for freedom and self-reliance. In one of the few studies relying on social theories of personality to explain purchase behavior, when developed a compliance-aggressivenessdetachment (cad) scale based on Thorne’s Work. In applying the cad scale, when found that compliant types used more cologne and after shave lotion and bought old spice deodorant and Van-Heusen shirts and detached types drank more tea and less beer. 4. TRAIT THEORIES Trait theory states that personality is composed of a set of traits that describe general response predisposition. Trait theorists construct personality inventories and ask respondents to respond to many items, perhaps agreeing or disagreeing with certain statements or expressing likes or dislikes for certain situations or types of people. These items then are statistically analyzed and reduced to a few personality dimensions. A number of studies have used personality traits to segment markets. A study of smoking
behavior found that heavy smokers scored higher on heterosexuality, aggression and achievement and lower an order and compliance. Heavy smokers are more likely to orient towards power and competitiveness and may be more influenced by sexual themes and symbols. They are not as compulsive or submissive as non-smokers.
However consumer behavior researchers have seen drawbacks in using personality characteristics to explain consumer behavior. Personality theories are meant to describe envying patterns of behavior. Quite often, the focus is an aberrant, rather than typical, behavior. To apply measures developed for these purpose to consumer behavior assumes that consumers are motivated to buy based on deep-seated drivers. The consumer behavior is a day-to-day affair clearly unequivocal results are to emerge, consumer behavior researchers should develop there own definitions and design there own instruments to measure the personality variables that go into the purchase decision.
Q-4. How can the principles of instrumental conditioning be applied in advertising? In what ways do applications of instrumental conditioning differ from those of classical conditioning? Give examples. Ans. The principles of instrumental conditioning can be applied to advertising and sales promotion strategy. The role of advertising is to increase consumer’s expectations for reinforcement. Communicating product benefits to convince consumers that they will be satisfied if they buy the product can do this. The role of sales promotion is to create an initial inducement to try the product by offering free samples, coupons or price deals. If the product is satisfactory, many consumers will continue to buy even if incentives are withdrawn. However, these strategies can be successful only if the product is a source of Satisfaction and reinforcement. Advertising and price inducements cannot support a poor product for long. In case of classical conditioning, a secondary stimulus is paired with a primary stimulus that already elicits a particular response. As a result of this pairing an association is formed. Eventually, the secondary stimulus elicits the same reaction as primary stimulus. An effective advertising campaign links a product to a stimulus that evokes a positive feeling. Advertisers accepted classical conditioning concepts of repetition and contiguity on a widespread basis. Advertisers frequently used jingles and themes in radio commercials. The advent of television lent new dimensions to advertising by providing more variability through the video component. A consumer-oriented approach to advertising resulted in greater variation as advertisements were directed to particular consumer segments. Instrumental conditioning requires the development of a link between a stimulus and response. However the individual determines the response that provides the greatest satisfaction. That is, no previous stimulus response connection is required; response is within the conscious control of the individual. In classical conditioning, the unconditioned stimulus is already linked to a response and response is more reflexive. The foremost pronouncement of instrumental conditioning was B.F. Skinner. In skinner’s experiments, the subject was free to act in a variety of ways. The consequences of the act will influence the future behavior. Behavior results in an evaluation of degree of reward or punishment obtained from past behavior. Reward will increase the probability of repeating the behavior; punishment will decrease the probability. Antismoking commercials rely on principles of instrumental conditioning by linking smoking to a shortened life span. Whereas the advertisements of various cigarettes such as Wills, Red White, are based on the principles of classical conditioning. The advertisement of Red White tries to condition smokers responses based on positive association of bravery awards with the product. Instrumental conditioning leads to the formation of the habit in
consumer purchasing. The consumer has control over his or her purchasing behavior. Repeated satisfaction resulting from product usage increases the probability that the consumer will purchase the same brand.
Similarly principles of instrumental conditioning helps to understand the events that may lead to a consumer to cease buying by habit a consumer is no longer satisfied with the product, a process of extinction that is, elimination of the link between stimulus and expected reward takes place. Extinction leads to a rapid decrease in the probability that the consumer will repurchase the same brand. Successful antismoking commercials will create extinction by eliminating the link between a cigarette & the pleasure of smoking.
Q-5. Short Notes: • PERCEPTUAL SELECTION: There are basically three steps in the process of perception viz., selection, organization and interpretation. The first component of perception, selection, requires consumers to be exposed to marketing and to attend to these stimuli. Consumers will pick and choose marketing stimuli based on there needs and attitudes. The car buyer will be more attentive their needs and attitudes .In each case the consumer is processing stimuli selectively by picking and choosing them based on his her psychological set. The process of perceptual selection is increasingly difficult because of the greater clutter of advertising messages. By estimate, consumers are bombarded by an average of 300 to 600 messages a day, and the number of ads has more than tripled in the last 25 years, creating significant advertising clutter. For such perceptual selection to occur, the consumer must first see or hear the stimulus and then respond to it. Therefore three processes define selection: exposure, attention and selective perception. Exposure: Exposure occurs when consumer’s sense (sight, hearing, touch, and smell) are activated by a stimulus. Exposure to stimulus either occurs or it does not. Consumers interesting and involvement with the stimulus is reflected in the level of attention they devote to it. Consumers will pick and choose the stimuli they are exposed to. For example, a consumer in the market for a new car is more likely to look for car ads. Similarly consumers are likely to avoid exposure to stimuli that are unimportant and uninteresting. Attention: It is the momentary focusing of a consumer’s cognitive capacity on a specific stimulus. When consumers notice a T.V ad, a new product on a shelf or a car in a showroom, attention has taken place. Advertisers can use many of the structural factors to attract consumers attention such as size, through large ads, position by placing an ad in the upper half of a page, and novelty by using eye catching photos or illustration. Selective Perception: Consumers perceive marketing stimuli selectively because each individual is unique in the combination of his or her needs, attitudes, experiences and personal characteristics selective perception means that two consumers may perceive the identical
advertisement. Package or product differently. For example some consumers may believe a claim that Robin gets clothes whither than other bleaches, another may such a claim as untrue and may believe that all bleaches are the same. Selective perception operates for both high and low involvement purchases. In the high involvement case, consumers selectively choose information that (1) helps them evaluate brand that meets their needs and, (2) conforms to their beliefs and predisposition .In the low involvement case, consumers selectively screen out most information in an attempt to avoid cognitive activity and informational clutter. • PRICE –QUALITY RELATIONSHIP: An important question for marketers is whether consumers perceive a price quality association. Generally. When consumers do not have sufficient information about product quality, they use price as an indication of quality. Since these consumers know little about the product, they are less likely to be involved. Consumers with information about product characteristics are less likely to make price-quality inferences. These consumers are more likely to be involved with the product category. Price is more likely to be a reflection of quality if consumers have confidence in the source of the price information. Price is also more likely to be a sirrafate for quality when consumers believe that quality and price difference exist between product alternatives. Such variations allow for price-quality inferences. Consumers are unlikely to attribute higher quality to products that are standardized or that differ by a few rupees. Price range permits quality inferences. In support of these views overrule, found that price-quality association are more likely for product lines than they are for single brands because product lines are more likely to have a wide range in prices. On the basis, if the consumer shopping for 21-inch color TV set believes there are significant price and quality differences among brands and has little knowledge about TV sets, to use high price as an indicator of quality.
RISK PERCEPTIONS: When consumers see potential risk in purchase, they may be about the outcome of the division or they may be commend about the consequences of the division. Thus the two components of perceived risk are uncertainty about the outcome of the decision and concern about the consequences of the division. Several factors are likely to increases the risk consumers see in purchasing. Perceived risk is likely to be greater when: a) There is little information about the product category. b) The product is new.
c) d) e) f) g)
The product is technologically complex. Consumers have little self-confidence in evaluating brands. There are variations in quality among brands. The price is high. The purchase is important to consumers.
For example, perceived risk in purchasing a laptop is high because most of the listed will be met. As the product category is relatively new for many consumers, they have little experience with alternatives. Moreover the product is technology complex, making evaluation more difficult. As a result, consumer’s confidence in selecting brand over another is low. Furthermore, substantial variations among brands and incompatible systems heighten risk. A high price will also contribute to perceived risk. Finally such a purchase is probably important to consumers. Consumers strategies to Reduce Risk: Consumers use various strategies to reduce risk. a) By acquiring additional information that will allow consumers to better asses risk. b) Engaging more extensive evaluate alternatives. information processing to better
c) Buying most popular and well-known brands. Reducing the consequences of failure. This is done by:
Buying the lowest priced item or the smallest size. Obtaining a warranty or guarantee on the product also reduces the consequences of failure. Reducing the level of expectations before making the purchase. For example, a consumer who decides that cars are a necessary evil and produce mechanical failures and repair bills. This purchase is going to be terribly disappointed if his or her car does not perform well, he or she expects it.
Q-6. Define and explain meaning of attitude. Explain in brief factors affecting the relationship between attitude belief and behavior. Explain the two theories of attitude ? Ans. Over 50 yrs ago, Gordon all port formulated the max formulated used definition of attitude. He wrote “attitudes are leaned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way” that is consumer’s evolution of a particular brand on a overall basis from poor to excellent. it is a combination of objects of beliefs of consumers about the product attributes and the evaluation of these attributes as being beneficial or not . for example the attributes of Kwality Walls ice cream are freshers, natural fragrance, hygienic, tasty and refreshing evaluating these attributes towards Kwality walls. Factors affecting the relationship between attitude belief and behavior: 1. Lack of Involvement : consumer attitude are less likely to be related to behaviour for low involvement products. For example, if a consumer wants to buy a product such as bulb, the involvement of the consumer in purchase of a bulb is likely to be low in such a situation he will not be keen to get more information on bulbs and hence will not have any specific nature. Hence a particular brand does not really matter him and he will except any brand say Philips, Surya or GE . Lack of Purchase Feasibility : Consumers may have very positive attitude towards the brand, but it may not be one of the brands consumer can feasibly purchase for example the consumer may evaluate Mercedes positively but the car is not the realistic alternative for most of the consumers because of its price, as result attitude are not related to behavior Lack of direct product experience : When consumers have direct product experience there attitudes are more likely to be related to subsequent behavior lack of product experience may result in weakly held attitudes that are not related to behavior Lack of relation between value and believes : Attitude are unlikely to be related to behavior is brand believes are not tied to consumer values the fact that consumers believe a brand of cereal has few calories is not going to predict behavior if consumers have no interest in losing weight Changing market conditions : An increase in the price of the favoured brand may cause consumer to switch with no change in attitudes special price promotions are better credit terms for competitive brands may cause consumers to buy a less preferred brand the unavailability of the preferred brand may
lead consumers to purchase a less preferred brand with no change in attitudes 6. Poor Attitude Accessibility : Consumer retain brand believes in memory as schema representing there associations with there brand for these beliefs to affect the brand evolutions they must be accessible from memory lack of relationship between attitudes and behavior may be due to the fact that some attitudes are so weakly held that they are not accessible if consumers have strongly held attitudes they often spontaneously retrieve them when they encounter the object if a consumer have strong positive attitude towards McDonalds the consumer could spontaneously retrieve the McDonalds schema by the mare mention of golden mcpuff or by sight of chicken mcgrill.
THEORY OF ATTITUDES Heiders Balance Theory This theory is so named because it maintains that people seek to achieve balance between there thoughts ( beliefs ) and feelings ( evaluation ) balance theory confirms to the principle of cognitive consistency this principle states that consumers value harmony between there believes and evaluations if one is inconsistency with the other the consumer will change there attitude to create in there cognitive structure. There are 3 elements in attitude formation, the person of other person and the object there are 2 generic types of relationship that exists between the elements they are (1) linking or sentiment relations (2) unit relations both the relations can be positive or negative in a 3 element system balance will exist if all 3 relations are positive or if 2 are negative and 1 is positive conversely imbalance exists if all 3 are negative or if 2 are positive and 1 is negative people have a tendency to perceive others and objects linked to them such that the system is balanced lets analyze this further with an illustration . A salesman of vaccume cleaner has approached you for selling it to you the process will have 3 stages which are as under stage 1 in the first stage the salesman shows you the leaflets and understands your needs he then matches the benefits of the product with your needs and this leads to a positive attitude built by the trust you placed on him this can be illustrated by a figure Vaccume cleaner + +
Stage 2 after the sales talk you may either form a positive or a negative opinion about the sales man if you are favorable towards the salesman to achieve the stability you will form positive opinion about the cleaner if you are unfavorable towards the salesman you will also be unfavorable towards to the cleaner Vaccum Cleaner + You + + Salesman You Vaccum Cleaner + Salesman
Congruity theory This theory was developed by Osgood and Tennenbaun it deals with attitudes (evaluations) and relationships congruity exists whenever evaluation of (attitude towards ) two objects that are associatively bonded are identical in magnitude and direction congruity is the stable state and is also set to exist when a source and a concept are negatively associated and have exactly opposite evaluations attached to them when congruity exists it leads to attitude change congruity theory helps to rate attitude on a seven points scale from +3 (highly favorable ) 2 – 3 ( highly unfavorable ) with a middle zero point let us illustrate this theory with our earlier example of salesman and a vacuum cleaner suppose we are convinced that the cleaner is good and will meet our needs well a rate of +3 may be given however if we have developed the slight unfavorable attitude towards sales man a rating of –1 would be given. According to congruity theory the final attitude towards even is the difference between the 2 ratings which in this case will be +1 the midpoint between –1 and +3.
Final Rating of Vaccum Cleaner
Q-7. Explain with the help of few examples how social class, lifestyle and culture affect the buying pattern of consumers. Ans. Affect of social classes on buying pattern of consumers. Social classes are relatively homogeneous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests and behavior. Social classes reflect not only, income but other indicators such as occupation, education and area of residence. Social classes differ in speech patterns recreational preferences and many characteristics. Social classes have several characteristics. First, those within each class tend to behave more alike than persons from two different social classes. Second, Person is perceived as occupying inferior or superior position according to social class. A cluster of variables indicates third, social classes? For example, occupation, income wealth, education and value orientation. Rather than by any single variable. Fourth, individuals can move up or down the social class ladder during their lifetimes. A consumer behavior is influenced by social factors such as reference group, family and social roles and statues. Reference Group : A reference group consists of all the groups that have a
direct (face to face) or indirect influence on person's attitude or behavior. Groups, which have a direct influence on person, are called membership groups. Some membership groups are primary groups , such as family, friends, neighbors, and co- workers, with whom the person interacts fairly continuously and informally. People also belong to secondary groups, such as religious, professional and trade union groups, which tend to be more formal and require less continuous interaction. People are significantly influenced by their reference groups in at least three ways. Reference groups expose an individual to new behaviors and lifestyles and influence product and brand choices. Marketers try to identify target customers reference groups. However level of reference group influence varies among products and brands. Manufactures of products and brands where group influence is strong must determine how to reach and influence opinion leaders in these reference groups. An opinion leader is the person in informal, product - related communications who offers advice or information about a specific product or product category such as, which of several brands is best, or how a particular product may be used. Marketers try to reach opinion leaders by identifying demographic and psychographics characteristics associated with opinion leadership, identifying the media read by opinion leaders and directing messages at opinion leaders. Clothing companies like Levi Strauss, that hope to appeal to the fickle and fashion conscious youth market have made a converted effort to monitor urban opinion leaders style and behavior. Family : The family is the most important consumerbuying organization in society, and family members constitute the most influential primary reference group. A more direct influence on everyday buying behavior of an individual is of one's spouse and children. Marketers are interested in the roles and relative influence of the husband, wife and children in the purchase of a variety of products and services. These roles vary widely in different countries and social classes. Roles and Status : A person participate in many groups family, clubs, organizations. The person's position in each group can be defined in terms of role and status. A role consists of activities that a person is expected to perform. Each role carries a status. A supreme court justice has more status than a sales manager and a sales manager has more
status than an officer clerk. People choose products that communicate their roles and status in the society. Marketers must be aware of the status symbol potential of products and brands. Affect of life style People from the same subculture, social class and occupation may lead quite different lifestyles. A lifestyle is a person's pattern of living in the world as expresses in activities, interests and opinions. Lifestyle portrays the "whole person" interacting with his or her environment. Marketers search for relationship between their products and lifestyle groups. Lifestyle factors are relevant to marketers on two levels. First, broad lifestyle trends such as changing male / female purchasing roles have altered the habits, tastes and purchasing behaviour of consumers. Second, lifestyle can be applied on a product specific basis. Effect of changing lifestyle on consumer behaviour Changing lifestyle are a result of changes in demographic characteristics and changing values of consumers. These have become more opponent and visible in 1990's. Some highlights and their effects on consumer behaviour are as under: a) Changes in Male Purchasing RolesThe increase in number of working women particularly in urban areas has created a shift in role of males and housewife. Today, the role of male has extended to shopping, childcare and more involvement in cooking and other household chores, which traditionally were considered to be female roles. The changing male role is not only a function of demographics. It is also important of change in male values. Males have started to shop for jewellery, skin care products, moisturizers and cosmetics that were considered to be feminine. The net result of the greater involvement of men in shopping and housekeeping activities and their willingness to shed a traditional male image has led to a merger of male and female purchasing roles.
Changes in Female Purchasing Roles Working women's greater affluence, independence and selfconfidence have created a substantial change in women's purchasing roles. As their purchasing power has increased they flexed more muscle in just about every product category, making almost no enclave a male reserve anymore. As a result of this many working women no longer like to identify with the ads that tell them how to clean the floors or to please their husbands.
Emphasis on Health and Fitness Today consumers have become more aware of health and fitness issues and have started going in for low calorie foods, refined oil and low fat food. But on the other hand due to fast life especially in urban areas people have started to go in for fast food which is considered to be unhealthy by the nutrionist. The large-scale increase in fitness related business in India has slowly started receding due to fast life of individuals. The recessionary trend in India has forced employed people to put in more number of hours and this has added to declining fitness rate. People have started to prefer workouts at home which had given a boost to the manufactures making exercise equipments.
A More Isolated Lifestyle
Consumers are spending more time at home, resulting in more isolated lifestyle. There are two dimensions to this trend : staying at home for leisure and working at home. Today consumers are more likely to stay at home for leisure and entertainment. The early 90's saw a lot of TV channels coming into India. The wide choice of soap opera on
these channels have forced people of wide cross sections to to their homes. A second and broader dimension of a more isolated consumer is
the greater opportunities for working at home spawned by the information revolution, making it easy for home based entrepreneurs to operate as if they worked in a corporate office. e) Greater Time pressures In the present scenario, the working class is under tremendous pressure when it comes to time management. The working class is forced to put long working hours as the expectations of consumers are ever increasing. Moreover, they are under tremendous pressure to give equivalent time to their families as well. This prefer to buy goods from stores that offer a wide variety of products. such a shift has increased the number of super stores in large cities. Today for many consumers shopping no more a pleasant job. They do not have time to evaluate products before purchasing them. They go more towards known brands and expert the retail stores to advice them on product selection. Convenience in purchasing is becoming vital. f) Better Means of Information
With the advent of electronics, computers and internet, the awareness level of consumers have increased dramatically. Product knowledge has also gone up. This is in a way advantageous to the manufactures as the communication process becomes simplified. On the other hand more product knowledge means a better understanding of product features. More product knowledge edge leads to dramatic reduction in brand loyalty. Consumers become reluctant to pay a premium for a brand. This leads to a large-scale increase in price
wars and has an adverse impact on the profitability of manufactures. This creates a need for product differentiation and for this manufactures have to continuously upgrade their existing products and work towards new product development. CULTURAL INFLUENCES Culture refers to a set of values, traditions or beliefs, which guide the individual behaviour. in a way culture is normative as it prescribes norms of acceptable human behaviour. In other words culture refers to values, ideas, attitudes and other meaningful symbol created by people to shape human behaviour and the art facts of that behaviour transmitted from one generation to another. For examples, beef is not very readily accepted in the Hindu society and likewise pork in the Muslim society. Values in any culture are developed through socialization and acculturation. Refusing beef or mions or garlic by a is a value developed through socialization. the use of a fork or knife to eat food by Indian family is a value acquired through acculturation. In any culture there are subcultures that exist. these are different nationalities religious and geographic groups. For example in India we have Hindus Muslims Jews Christians and Sikhs as exciting religious subcultures. A marketer needs to be aware of these cultural and sub cultural influences on consumer preferences. This will affect his brand, packaging advertising sales promotion and even distribution decision. A culture's values are likely to influence its member’s purchases and consumption pattern. For example, one consumer may place a high value on achievement and may demonstrate success with symbols of luxury and prestige. Culture not only influences consumer behaviour, it reflects it. The preponderance of exercise machines, fitness club, skin care lotions, diet foods, and low fat products reflects the emphasis. Indian youth places on fitness. Culture is therefore a mirror of both values and possessions of its members. Q-10. Explain the characteristics of Organizational Buyers. State the factors affecting organizational buying behavior and clearly differentiate between organizational buying and individual consumer buying behaviors.
Webster and Wind define organizational buying as the decision making process by which formal organizations establish the need for purchased products and services and identify, evaluate and choose among alternative brands and suppliers. The term organizational buyer refers to not only the business firms but also includes the government, retail institutions, other service institutions like universities, colleges, financial firms like banks and social organizations like Red cross, family planning foundation etc. Characteristics of Organizational Buyer. GROUP INVOLVEMENT. The organizational purchase decisions are joint decisions. All individuals who participate in decision making are referred to as the decision-making unit. They have a common goal and share the risks arising out of the decision. These individuals may or may not be a part of the buying organization, but plays a key role in the decision making process. Also these individuals may directly or indirectly be involved in the decision process. The group of organizational buyers has five basic levels that include:
Actual user: Actual user is the person who actually uses the product. These people are typically “shopfloor” individuals. They could be foremen or workmen in a factory, lab technicians and chemists in a chemical firm, and programmers in a software firm. These people often lay down the product specifications. Influencer: Influencer is a person or persons who may or may not be a part of customer organization, but whose opinion is valued significantly by the customer. Within the organization, the actual user plays the Influencer role. For example in a construction project, the architect plays an influencing role in determining the grade of cement to be sought. Decider: Decider is the person who actually takes the decision to buy. The decider will invariably consider both the technical and economic factors in decision-making. Thus he will consider commercial terms like price, payment options, delivery schedules etc.
Buyer: Buyer is the person who actually buys on the behalf of the organization. He is a part of the purchase or materials department. For buyers, the most critical factor is on-time delivery as he does not want to spend sleepless nights on uncertain deliveries. Gatekeeper: This is often a critical role played by an individual. The purpose of a gatekeeper is to facilitate the flow of information in the organization.
TECHNICAL KNOWLEDGE Organizational buying is characterized by a very high technical and product knowledge. This means that sellers need to know their products in depth and in addition should know the competition products thoroughly. Larger the organization, greater is the product knowledge. The organizations that do not have requisite technical knowledge tend to hire technical consultants to evaluate product and services rather than depending upon the sales people. RATIONAL MOTIVATION Organizational Buying is always based on rational buying. There are no emotional sentiments involved. Such buying decisions are based on the concept of value for money in terms of utilitarian needs. The organizational buyers, today are extremely competitive, offer optimum price-value prepositions, give the best possible service and remain continuously focused towards the customers. These buyers look for suppliers who enhance their customer competitiveness. Therefore, the organizational buying should essentially focus at these requirements and not at the hedonic appeals. Factors affecting Organizational Buying There are four major factors, which influence buyer decisions: • Environmental • Organizational • Interpersonal • Individual. Environmental Variables A very important determinant of organizational purchases is the environmental factor. This includes, besides economy and government policy, factors like competitive developments in the industry rate of technology change and the value of money. For example if the buyer perceives that the government is likely to increase taxation, which will
increase the price of a crucial input, the buyer may not resort to buying more material and holding its stock.
Organizational Variables. The internal variables like culture and environment of an enterprise affects buying decision. For example, most Indian family owned firms have a centralized structure where purchases decisions often require the family’s consent. This can delay purchases and sometimes even affect the firm’s capability to compete in the market. As opposed to this a decentralized structure allows for quicker decision. Also policies like inventory holding, payment procedure or bidding procedure also influence buyer’s decisions. Interpersonal Variables. The buyer center usually involves several individuals with different formal authority, status and persuasiveness. The marketer needs to know who exerts the maximum authority and is able to persuade others to agree with his viewpoint. A knowledge of group dynamics helps the marketer evolve his strategy on selling to the buying center. Individual. Even though there are several individuals, organizational factors and environmental variables affecting buyer’s decisions at the end, it is a human decision involving the individual that matters. It is important that the marketer has the complete personal details of all individuals who are involved in the decision process. For personal factors like age, income, education, job position etc. are likely to affect individual perception, motivation and preference. For example, a sales person could not get an order from a buyer who was old simply because the latter perceived him to be the usual youngster who did not understand responsibility. The old buyer found it difficult to accept that a young boy could explain him the technical detail of computers and networks. Since the buying organization was a very important one, he reported this problem to the marketing manager, who then called on that buyer along with the young salesperson. The manager asked the young sales person to do the presentation and thereafter negotiate the deal with the buyer. They got the order because the buyer could emotionally relate himself better to the “old and reasoned gentleman” than the young, smart. It is therefore important that the marketer be aware of all these buying influences. Organizational Buying vs. Consumer Buying. Concentration of Buyers Organizational Buyers are generally concentrated in the same geographical area, as opposed to household buyers spread all over the country. For example, all leading automobile firms have setup there manufacturing plants in Pitampur near Indore. This area is proposed to
be developed as India’s Detroit. For an automotive tyre manufacturer, like MRF, all customers are located in one geographical area. But for the same automotive tyre firm MRF, customers for replacement tyres are spread all over India. Hence MRF uses a direct personal selling approach for automakers and a mass communication and dealer network to reach the consumer market. Thus in business to business marketing, a more focused marketing strategy with an emphasis on personal selling is used as opposed to consumer marketing, where trade channels and mass communication become important pillars of marketing strategy. Size of the Buyers. The organizational buyers are few but are much larger and they purchase in bulk. The household buyers are relatively much smaller and their purchases are small. Retail buying is common in the household segment. Generally even in the case of small organizational buyer, the annual purchase budget will run into several lakhs of rupees, but in case of large household purchases it will never exceed a few thousand of rupees. Risk in Purchases. The risks in organizational purchases are much higher than in household purchases. The organizational buyer always looks for alternatives that will help him to reduce these risks. Previous experiences with the supplier, vendor image, supplier’s standing within the industry etc. are some of the factors that help the organizational buyer reduce the risks in buying decision. Derived demand. The demand for business goods is ultimately derived from the demand for consumer goods. For this reason the business marketer must closely monitor buying patters of ultimate consumers. For instance, in India the entire industry depends on the rainfall and the crop situation. If the agriculture industry is down, the entire industry is hit. Since consumers postpone or reduce buying household items, this directly or indirectly affects the organizational buying. Inelastic Demand The total demand for many business goods and services is inelastic that is not much affected by price changes. Shoe manufacturers are not going to buy much more leather if the price of leather falls, nor will they buy much less leather if the price rises, unless they can find satisfactory substitutes. Demand is specially inelastic in the short run because producers cannot make quick changes in production methods. Fluctuating Demand
The demand for business goods and services tends to be more volatile than the demand for consumer goods and services. A given percentage increase in consumer demand can lead to a much larger percentage increase in the demand for plant and equipment necessary to produce the additional output. Professional Purchasing Business goods once purchased by trained purchasing agents, who must follow their organization’s purchasing policies, constrains and requirements. Many of the buying instruments-for example, requests for quotations, proposals and purchase contracts are not typically found in consumer buying. Organization Purchase decisions are joint Since the costs and risks involved in organizational purchases are high, thesis decisions are taken jointly and involve several individuals. The reason is to use the expertise of various individuals in their respective fields.
Q-12. Define Consumer Learning. Explain the various components of learning process. Ans. Consumers learn from past experience, and their future behavior is conditioned by such learning. In fact, learning can be defined as a change in behavior occurring as a result of past experience. As consumers gain experience in purchasing and consuming products, they learn not only what brands they like, but also features they like most in particular brands. They then adjust their future behavior based on past experience. For example after wearing the brand repeatedly, a consumer might determine that a pair of Reebok running shoes is the most comfortable and provides the best support. Continued satisfaction with the brand leads the consumer to buy Reeboks every time he needs new athletic shoes. Thus continued satisfaction reinforces past experience and increases the probability that the consumer will buy the same brand next time. There are two schools of thought in understanding the process of consumer learning: the behaviorist and the cognitive. The behaviorist school is concerned with observing changes in an individual’s responses as a result of exposure to stimuli. Whereas the cognitive school views learning as problem solving and focuses on changes in customers psychological set (the consumer’s attitudes and desired benefits) as a result of learning. In this respect, the cognitive school more closely describes learning within a framework of decision-making. Components of learning: Everyday an individual receives a variety of stimulus. When a particular stimulus becomes associated with a particular response, we conclude that learning has occurred. To understand the concept of learning, we need to consider its various components. These components are as under: Drive: Drive is said to be strong stimuli that forces action. The drive arouses in an individual an urge to respond to the stimuli and thus forms the basis of motivation. For example, seeing a product like a microwave oven at a friend’s place and watching advertisements may create a drive to know more about the oven. This in turn motivates the individual to visit a retailer and have more information about the oven and thus leads to learning. Cues: A cue is any object existing in the environment, as perceived by the individual. Cues give direction to motives. Cues increase the possibility of getting specific response. For example, seeing an advertisement of a packaged tour of Europe may act as a cue for an executive to enjoy a vacation with his family and reduce the tension. Cues should be consistent with the expectations of the consumers.
Response: A stimulus leads to response. It is the reaction of an individual to a stimulus. Such response may be in the physical form or may be in terms of phenomena such as attitudes, perceptions etc. Response does not merely depend on drive, motive or cue. It also depends on past experience of consumers and their association of the cue with something different than the target. Reinforcement: It is a very basic condition of learning. Without it, we cannot observe any measurable modification of behavior. Reinforcement refers to those environmental events, which increase the likelihood of specific response occurring in the future as a result of particular cue or stimuli. Retention: The stability of learned behavior maintained by the individual over a period of time is called Retention. Under repeated condition of positive reinforcement, there is a tendency for the conditioned response to continue for a long period of time. For example, a consumer who is absolutely delighted by the use of a product will continue to have a positive feeling about the product for a long time. The learning theory offers tremendous challenge to a marketer- that of guiding and sometimes even directing human behavior. This is done by developing stimuli and cues, which will bring to force the latent need in the customer. Attractive advertising, shelf displays, packaging, how to use instructions, store layout, availability and sales persons are all examples of cues that marketer develops to drive customers to the product or service. An excellent customer care program of the marketer can help a customer have positive feelings about his or her experience. The marketer may also develop cues to differentiate his or her product from that of the competitor.
Q-14. Explain various Attitude measurement techniques. ‘It is possible to change the attitude of consumers towards products and brands’. Do you agree to this statement? Justify your claim with a few examples. Ans. ATTITUDE MEASUREMENT TECHNIQUES Thurstone scale. This scale also known as Thurstone and Clave scale is one of the best techniques of measuring attitude with the help of equal appearing intervals. It is a technique in which a large number of statements are collected regarding a subject. The statements should range from one extreme of favorable responses to the other extreme of highly unfavorable response. There is no definite number of statements to be collected but they should be sufficiently large. Care should be taken that statements are brief, they truly indicate the attitude of respondent leading to acceptance or rejection of the statement, and should not be double meaning statements. All techniques used today for attitude measurement are based on Thurstone attitudinal scales. Summated Rating Scale: According to this technique, researcher collects a large number of statements and eliminates those, which are ambiguous, irrelevant or deficient. The remaining statements are administered to one or more respondents for their reaction using a five point rating system i.e. strongly approve, approve, undecided, disapprove and strongly disapprove. These categories are assigned value 5,4,3,2 and 1 respectively. In case of negatively worded statements, this scoring is reversed. The correlation between statement scores and total scores is ascertained. Statements with a high correlation with total score are selected for final scale. Scalogram Analysis: Guttman proposed this attitudinal scale. This method is based on the assumption that if an individual replies positively to a difficult question then he will also respond positively to all questions, which are simpler than the earlier question. Semantic Differential: This technique involves three dominant factors i.e. evaluation, potency and activity factor. It is a bipolar scale conforming to the basic concept of motivation, attraction or repulsion from an object. Here respondents are asked to give their opinion on a seven-point scale. The average of all the responses helps to determine the attitude of respondents towards a particular object. Conditions for change in attitude: Several studies show that when communications conform to rather than contradict, existing brand attitudes, consumers are more
easily influenced. Studies indicate that for example, communicating toothpaste attributes known to be important to consumers was more effective than attempting to change the importance of these attributes. Given that it is more difficult to change consumer attitudes than it is to reinforce them, marketers must know change is feasible. The conditions for attitude change are particularly important, as there are times when marketers must attempt to change consumer attitudes towards their companies or brands. However, a certain irony exists in attempting such changes: attitudes are easiest to change when they are less likely to influence behavior (for example, when product involvement is low and when attitudes are weakly held). As a result strategies of attitude change may take much longer than expected or they may not produce the payoff that marketers expect. Despite the difficulty in changing brand attitudes, a significant portion of advertising expenditures is devoted to such change by providing additional information and persuasive appeals. The question the marketer must ask is “under what conditions should changes in attitudes be attempted?” A number of conditions reflecting the product category, market environment and nature of consumers make it easier to produce changes in attitudes through marketing strategies. These principles may change consumer’s belief about a brand, brand attitudes or intention to buy. Beliefs are easier to change than desired benefits. Marketers could seek to change beliefs about a brand. They could also attempt to change the benefits consumers’ desire by changing the value consumer’s place on brand attributes. Desired benefits are more enduring, ingrained and internalized than beliefs because they are more closely linked to consumer values. For instance, a manufacturer of pain relievers produces a brand that consumers regard as significantly stronger and as providing more immediate relief. However, most consumers put more value on the beliefs of a mild, safe brand that doctors recommend. The manufacturer could try to convince customers that pain relievers are non-prescription items that do not need a doctor’s recommendation, that safety should be of no concern, and a stronger product is perfectly acceptable. Alternatively the manufacturer could tone down the emphasis on strength in the advertising, continue to emphasize quick relief, and point out the safety of the product based on Indian Medical Association. The latter strategy is going to be more effective than the former because the marketer is trying to change beliefs about the brand within the consumer’s existing value structure. Brand beliefs are easier to change than brand attributes. Cognitions(beliefs) are easier to change than affect(attitudes). The traditional high involvement hierarchy of effects state that a change in beliefs precedes a change in brand attitudes. The information that a car has fast acceleration will change the beliefs about the brand, but the evaluation of the car will not necessarily change unless consumers see a benefit in fast acceleration. Most advertising implicitly follows the
principle that beliefs are easier to change because advertising generally communicates the attributes of a brand.
For hedonic products, attitudes are a more relevant vehicle for a change than beliefs: When consumers buy a product based on emotion or fantasy, they are relying on affect(attitudes) rather than cognitions(beliefs). Therefore, for hedonic products, attitudes are the more relevant strategic vehicles for a change. Paradoxically attitudes are harder to change for involving products, and hedonic products are more involving. Attitudes are easier to change when there is low level of involvement with the product. Attitudes towards uninvolving products are easier to change because consumers are not committed to the brand. This principle is true for the three key components of involvement that is, consumer attitudes are easier to change if there is little selfidentification with the product, little emotional attachment to it, and no badge value associated with it. When consumers have high level of involvement with a product, they will accept messages only if messages agree with their beliefs. When involvement is low, consumers are more likely to accept a message even if it does not agree with prior beliefs. Weak attitudes are easier to change than strong ones: If consumer brand attitudes are not strong, marketers can more easily establish new associations with the brand. Weakly held attitudes make it easier for the competitors to continue consumers to switch brands. Attitudes are easier to change when they are based on ambiguous information: Consumers faced with ambiguous claims about competitive products or with highly technical information they cannot assess seek clarifying information that may produce attitude change. When information is highly ambiguous, any clarifying information may cause change in attitudes.
Q-8. Explain the meaning of Consumerism. What were the efforts taken by the Government of India towards protection of Consumer rights? Explain the limitations for the growth of Consumerism in India. Ans. Consumerism is defined as the organized movement of the citizens and the Government to enhance the rights and power of consumers in relation to the sellers. All products and services are created to enhance the quality of life for the members of society. All marketing transactions should be beneficial to the society. The basis of consumerism is to protect the consumers from the immoral practices conducted by the marketers. Such practices may be high prices, high-pressure selling, unsafe products, planning obsolescence and poor services. Marketers have been suing deceptive advertisements to influence people. Such advertisements are often against the morals and decency standards of the society. For example, the recent ads of ‘Fair & Lovely’ where a father says “Kash mujhe ladka hota”, which makes sex discrimination or the ‘Kundali’ ad, which creates a negative feelings among women. Efforts by Government Consumer Rights: of India towards protection of
The Government of India has been instrumental in creating an environment through legislation to give a protection to the consumers. There have been various measures taken by the Government in this regard, which are: • • Statutory Regulation Development and expansion of the public sector
The statutory regulations enforced by the Government to protect the consumer interest are as follows: • • • • • • • Sales of Goods Act, 1935 Drugs Control Act, 1950 Prevention of Food Adulteration Act, 1954 Essential Commodities Act, 1955 Trade Marks and Merchandise Marks Act, 1958 The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 Packaged Commodities (Regulation) Order, 1975
The above statutory regulations were incapable to handle the problems of consumers in the post liberalization era. Consumers had to use the same channels in the judiciary to get justice, and this was considered to be a major drawback in providing speedy justice to consumers. In view of this, and the post liberalization problems, the Government of India passed an important statutory regulation in the form of Consumer Protection Act, 1986. Further, various amendments were made to this act, to further improve the effectiveness of this act. The objectives of this act were: • • To provide for the better protection of the interests of the consumers. To fulfill the above objective by establishment of consumer councils and authorities for the settlement of consumers’ disputes.
In India, as a developing economy, the plight of the consumerism is not different from that of their counterparts in the rest of the world. Indian consumers are not at all well educated and hence are unable to comprehend and understand the complex methods of marketing. They are exploited and very often become victims of false claims of products, misled by deceptive advertisements, mislead by packaging, and poor after sales services. Because of the above felt abuses, it is observed and seen a growing consumer awareness leading to the growth of consumerism and an increasing demand for consumer protection in India. Consumerism can be said to be still in its infancy stage. A recent research indicates that the Indian consumers are cheated to a tune of Rs. 2,000 crores annually, through various devices invented by the clever marketers. In the pre-liberalization era, consumers in India had hardly any voice as regards to their rights in relation to the sellers. The inadequate competition and the absolute monopolies created by the protection provided by the Government only increased consumer’s problems. Since the mid ‘80s, there have been rapid changes taking place in the socio-economical environments. The market has been flooded with goods and services and it has become difficult for the consumers to ascertain the quality or utility of these goods and services. Limitations for the growth of Consumerism in India: Due to the following limitations, Consumerism in India has not progressed : Ä Vastness of the country, imbalance in distribution of wealth, backwardness. Ä The high rate of illiteracy and ignorance.
Ä Traditional outlook of the people to suffer in silence, lack of information and education.
Ä Inability to understand the technical complexity of the goods and accepting manufacturers at face value. Ä Consumer’s tendency to get carried away by the clever advertising and promotion tactics. Ä Consumerism is still in its infancy stage and hence is not developed and organized. The existing laws are incapable of effectively implementing and enforcing the objectives. Consumerism as a social force Consumerism as a social force can help to: • • Make the business community more honest, efficient, responsive and responsible. Consumerism can also be viewed as an opportunity for business community to serve the consumers in a better and more efficient manner. In case of imperfections in the demand and supply situation in the market, concerned marketers can help the consumers to get rid of the traders who resort to practices such as hoarding, black marketing etc. Consumerism will also ensure that the Government takes the necessary measures to protect consumer interest by guarantying their legitimate rights.
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