Consumer Behaviour

Background
• A definition of consumer behaviour –
– …the decision process and physical activity individuals engage in when evaluating, acquiring, using, or disposing of goods and services.

• CB is a subset of Human Behaviour • Behavioral Sciences have studied Human Behaviour

….contd
• BS disciplines which have greatly contributed to our understanding of consumers are : – Psychology : study of the behaviour and mental processes of individuals – Sociology : study of the collective behaviour of people in groups – Social psychology : study of how individuals influence and are influenced by groups – Economics : study of people‟s production, exchange, and consumption of goods and services – Anthropology : study of people in relation to their cultural and racial heritage

collective behaviour of consumers. highway systems/services. eg the need of advertising managers / product designers to understand the consumer • Societal perspective : macro or aggregate level. eating. eg western world and automobile tptn – cars. directly and significantly. in turn ! • Micro perspective : understanding consumers for the purpose of enabling a co to accomplish its objectives. entertainment) . decisions • Decisions in the market place have other effects. where many live and how daily life is run (shop.Why Study Consumer Behaviour • CB affects. petro prods.

in-depth consumer understanding helps to ensure that the right products are marketed to the right consumers in the right way .the need for studying consumer behaviour emanates from the demands of customer oriented marketing • According to Marketing Experts – „Successful marketing requires that companies fully connect with their customers.Foundations of Consumer Behaviour (2 h) Customer oriented marketing . Gaining a thorough.. Adopting a holistic marketing orientation means understanding consumers – gaining a 360-degree view of both their daily lives and the changes that occur during their lifetimes.

co objectives. eg deodorant soap Irish Spring captured 15% mkt share – Col Palm identified unique group thru segmentation • Mktg-mix determination. integrated strategy • Mkt-opportunity analysis. eg fitness centres/ eqpt • Target-mkt selection.Customer Oriented Marketing • Consumers‟ needs and wants. eg expensive watches .

Influences on Buying Behaviour • Cultural factors • Social factors • Personal factors .

.Consumer Buying & Consumption Process • Making a purchase with little or no influence from others • Purchase involving joint decision • Purchasing for someone else • Purchase situation may involve at least one person in each such role. or a single individual can take on several roles • Focus on actual buyer useful – decisions…. .

actual purchase. and/or the use of the product or service • Buyer – individual actually making the purchase transaction • User – person most directly involved in the consumption or use of the purchase . intentional or unintentional.contd) Classification of roles • Initiator – individual who determines that some need or want is not being met and authorizes a purchase to rectify the situation • Influencer – person who by word or action.Consumer Buying & Consumption Process (…. influences the purchase decision.

(…. when.. where…. how. while others follow it • Consumption system – who. • All these factors capable of influencing the adoption of products or services .contd) Consumer behaviour involves • A mental decision process • Physical activity • Actual act of purchase is just one stage in a series of mental and physical activities that occur during this phase • Some of these activities preceded the actual buying.

(….contd) Primary psychological processes involved are • Motivation • Perception • Learning • Memory – We shall study these in details as we go along…. .

attitudes. info processing.Consumer Decision Making Models • External environmental variables influencing behaviour – culture. post-purchase behaviour • Level of Consumer Involvement • Decision Heuristics and Biases • Mental Accounting . subculture. evaluating. family. social class. social group. personal influences • Individual determinants of behaviour – learning / memory. motivation/ involvement • Consumer‟s decision process – problem recognition. personality/ self-concept. information search (internal & external). purchase process.

These decisions are influenced by two main factors. however the structure of presentation and relationship between the variables differs somewhat model is structured around a seven point decision process: need recognition followed by a search of information both internally and externally. and Blackwell and has gone through numerous revisions many of the elements of the model are similar to those presented in the Theory of Buyer Behaviour (Howard AND Sheth 1969). post purchase reflection and finally. divestment.Consumer Decision Model • The Consumer Decision Model (also known as the Engel-Blackwell-Miniard Model) . The environmental influences identified include: Culture. social class. personal influence. motivation and involvement.originally developed in 1968 by Engel. external variables in the form of either environmental influences or individual differences.Miniard et al. – Firstly stimuli is received and processed by the consumer in conjunction with memories of previous experiences. family and situation. and – secondly. knowledge. purchase. values and lifestyle (Blackwell. While the individual influences include: consumer resource. • • • . 2001). personality. Kollat. the evaluation of alternatives. attitudes.

main objectives are to describe consumer behaviour and to offer explanations for its causes. behaviour forecast and methods of influencing it can be determined • Market segmentation . ie forming a conjectural statement about the relationship between tow or more variables • Conclusive research – builds upon exploratory research. focus groups. also. primary objective is hyothesis formulation.Researching the Consumer • Exploratory research – consumer feedback.

Personal Factors (2 h) .

shapes choice process and preferences. can catalyse income . preferences • Occupation – influences consumption patterns.Demographics • Age – stage in life cycle : people buy different goods and svcs over a lifetime • Gender – differing needs. software engineer vs construction engineer • Education – fashions mindset. eg factory worker‟s outfit vs co director‟s apparel.

Economic Status • Buying behaviour vis-à-vis buy-not-buy or product choice greatly affected by economic circumstances • Income : level. time pattern – personal income. discretionary income • The problem with specification of „necessities‟ and the usefulness of the concept of subjective discretionary income (SDI) . stability. disposable income.

Needs and Motivation • Needs and motivation related to demographics and economic logic • Different stages of life produce varying needs – say. progression from toys to walking stick. similarly motivation – amusement to functionality • Economic circumstances form the logic of one man‟s luxury being seen by another as necessity .

which influence the degree of personal importance ascribed to a product or situation – Can vary across individuals and different situations – Is related to some form of arousal • Involvement is characterised by – intensity or degree of arousal and directional influence .Level of Involvement and Decision Making Type • Involvement defined in terms of the level of engagement and active processing undertaken by the consumer in responding to a marketing stimulus – Is related to consumer‟s values and self-concept.

in relation to the use (situational context) of the product – govern involvement • Properties of involvement – Intensity : degree > high or low. values. sport fishing. etc and closeness of the product (or stimulus) to these. stimulus/object. eg women and perfume. men and cars – Persistence : length of time consumer remains engaged. interests. ie how much a consumer will invest in decision making for purchase – Direction : focus or target < strong influence of antecedents. situations – a persons needs.contd) • Dimensions of involvement – Antecedents : person. auto enthusiasts . eg bird watchers.(….

(….contd)
• High involvement decision making • Low involvement decision making • Flowing from the above : – Central route (to processing) in which cognition and extensive critical evaluation leads to attitude formation followed by behaviour – Peripheral route, in which cognition, at low attention, continues with weak brand knowledge and interest, without developing strong attitude about any of the specific brands; thus mere familiarity or association with non-central cues, like good shop ambience or salesperson, leads to decision • Marketing strategies are tailored to account for these

Psychographics
• Personality – A set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli – Traits such as self-confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability – Major Personality Theories • Psychoanalytic Personality Theory – id, ego, superego; the reality principle, defence mechanisms (repression, projection, identification, reaction formation) • Social Theories • Trait and Factor Theories – Can be a useful variable in analyzing consumer brand choices

(….contd)
Brands also have personalities, and consumers are likely to choose brands whose personalities match their own • Brand personality : the specific mix of human traits that may be attributed to a particular brand; eg one such identification – sincerity (down-to-earth, honest, cheerful) – Excitement (daring, spirited) – Competence (reliable, intelligent) – Sophistication (upper-class and charming) – Ruggedness (outdoor-type and tough)
• Ruggedness – Levis, competence – BBC, LH

opinion) analysis . and opinions • Lifestyle portrays the „whole person‟ interacting with his or her environment • Broadly. two segments : money-constrained (Wal-Mart‟s target thru low prices bringing high sales) or timeconstrained (breakfast on feet – bagels rather than cereals) • Lifestyle segmentation further into brand-user. productuser. • AIO (activity.Lifestyle • A person‟s pattern of living as expressed in activities.. interests. situation segmentation…. interest.

and good humour in relation to others. and even extending to include certain possessions and his creations • How one views oneself – actual self-concept • How one would like to view oneself – ideal self-concept • How one thinks others see one – others‟ self-concept • Affects publicly consumed products as compared to privately consumed goods.Self-concept • Self-image > a person‟s perception of himself which includes his physical being. honesty. other characteristics such as strength. congruence with actual or ideal self-concept .

beliefs. concepts of the universe. eg Big Bazaar. attitudes. and beliefs they share. notions of time. religion. meanings. and our responses to the word “sale” • • . Spencers – Non-material culture: includes the words people use. the ideas. and the habits they pursue. artifacts of material culture would include all the products and services which are produced and consumed. automobiles. such as tools.Interpersonal Factors Culture • Culture refers to the cumulative deposit of knowledge. values. roles. eg the way in which consumers shop in supermarkets. customs. experience. spatial relations. hierarchies. and farms. and material objects and possessions acquired by a group of people in the course of generations through individual and group striving. roads. Culture is a collective programming of the mind that distinguishes the members of one group or category of people from another Culture consists of material and non-material components : – Material culture: consists of all the physical substances that have been changed and used by people. our desire for newer and better products. in the context of markets and CB.

contd) • Significance of culture lies in – – The understanding of the extent to which people are more than just chemistry. their views of the world. and how they act differ according to their cultural backgrounds . physiology. or a set of biological drives and instincts – Thus.Culture (…. although all customers may be biologically similar. what they value.

Culture & Marketing Decisions • Culture influences consumers – historically acknowledged • All activities people engage in are culturally determined • All purchases of goods are made either to provide physical comfort or to implement the activities that make up the life of a culture • …..an understanding of culture enables the marketer to interpret the reaction of consumers to alternative marketing strategies. .

food and drink preferences. Jews.contd) • Culture manifests through – – National character – Differences in subcultures such as blacks. or symbols – Ritualised activities in which people participate at home. phrases. semiotics – how signs function within a culture ie anything that conveys a meaning : advertising uses this to invest products with meaning for a culture whose dominant focus is consumption – Taboos. Such behaviour occurs in a fixed episodic sequence. posture.(…. and Hispanics in America. or play. and other nonverbal clues to behaviour – Symbols in society. and tends to be repeated over time . relating to various things such as the use of particular colours. and regional population groups in India – Silent language of gesture. or prohibitions in a culture. both as individuals and as members of a group. work.

traffic Shower and grooming : items used Dresses for work : as appropriate Drives : car model En route visits temple. newspaper. then bed .Cultural Manifestations • Cultural meaning can be communicated by consumer goods • Commonly observed consumption rituals – – – – – – – – Morning tea/coffee. beverage Home for dinner over TV. weather. TV/radio news. posts a b‟day card Business meetings / lunch En route home takes in a movie.

religious.entertainment / recreation. household. gift-sending. bedtime • Observe how rituals involve aspects of consumer behaviour processes in obtaining goods and services. eating.(…. business. or using and disposing of them . grooming. exchanging them.contd) • These activities are associated with various types of rituals : media.

Characteristics of Culture
Culture(s) is / (are)
• Invented : ideological system (ideas, beliefs, values, and ways of reasoning in defining what is desirable or not), technological system, organisational system • Learned • Socially shared • Similar but different • Gratifying and persistent • Adaptive • Organised and integrated • Prescriptive

Cultural Values
• Can be defined as
– A widely held belief or sentiment that some activities, relationships, feelings, or goals are important to the community‟s identity or well-being Or – Centrally held and enduring beliefs that guide actions and judgments across specific situations and beyond immediate goals to more ultimate end-states of existence

(….contd)
• Values produce inclinations to respond t specific stimuli in standard ways • A specific behaviour is expected to either help or hinder the attainment of some value or group of values • Consumers then, are motivated to engage in behaviours designed to enhance the achievement of certain values and to avoid those behaviours perceived to hinder the attainkent of certain value states • Values vs attitudes

etc • A marketer must understand society‟s basic value structure so that strategy decisions are consistent with ingrained cultural patterns • Much easier to harmonize with the culture than to attempt to change fundamental cultural values . overall there is much similarity in consumer behaviour within a given culture. even though specific situations may dictate slightly different actions. largely from our families and friends in settings such as schools and other places of aggregation • Values strongly influence consumer hehaviour.(…. such as in tastes. methods of shopping.contd) • Values are culturally determined • Values are learned from social interaction.

nationalism.Core Cultural Values • Individualism – interrelated with ideas such as freedom. founded on a belief in the dignity. and patriotism. democracy. and goodness of the individual • Equality • Activity • Progress and achievement • Efficiency and practicality • Mastery over the environment • Religious and moral orientation • Humanitarianism • Youthfulness • Materialism • Social interaction and conformity . worth.

Values and Consumer Behaviour • Culture is a strong force in the consumer‟s milieu affecting his or her choice of behaviour • Marketers have long recognised the importance of appealing to consumers‟ values in marketing • Values guide actions. attitudes. and judgments .

Sacramental. Symbolic Non-verbal Extended Family Tradition No Eye-to-eye Contact Holistic Problem Solving .Illustrative Listing of Indian Contrasts INDIAN VALUES Leaders are the servants Cooperation Group Emphasis Passive Informal Courtesy Patient Sharing Time .Fleeting Respect for Youth Conquest over Nature Religion = Segment of Life . Piece by Piece . . .Constant Respect for Age Harmony with Nature Religion = Way of Life . . . . . Intellectual. Gnostic Verbal Nuclear Family Novelty Eye-to-eye Contact Analytical Problem Solving . Vision of Total NON-INDIAN VALUES Leaders are the masters Competition Individual Emphasis Assertive Formal Politeness Impatient Saving Time . . .

Implications of Cultural Change for the marketer • Values are dynamic. not static or fixed • Cultural change may happen gradually. or rapidly. as an evolution. frozen foods . the latter places more stress on the system • Marketers need – to understand that cultures do change and – to appreciate the implications this may have for consumer behaviour e.g.

which gives the marketer deeper insight – Growing diversity of individual tastes. pricing.Cultural Change & Marketing Strategies • What the consumer wants. expects. associates • Will affect product planning. related to needs. distribution channels. promotion • Increasing importance of market segmentation – Knowledge of consumer value orientations provides a measurable set of variables. abetted by increasing incomes and the concept of pleasure – Finer segmentation of the market on the basis of value profiles .

the extent to which these elements vary determines how Goodyear must customise its marketing programs . While segment sizes vary from country to country.Cross-cultural Understanding of Consumer Behaviour • Global outlook • Cultural differences among international and regional markets. and price – and the sequence of their pairing critical. identified four groups for global marketing purposes : quality buyers.g. and commodity buyers. Goodyear : found consumers make three key decisions when buying tyres – outlet. brand. value buyers. price buyers. the elements in each segment‟s profile remain largely the same. influence consumer behaviour • Time • Thought and communication process • Personal space • Materialism and achievement • Family roles • Religion • Competitiveness and individuality • Social behaviour e.

satisfies what needs – Determine characteristic decision-making process – Determine appropriate promotion methods – Determine appropriate distribution channels – Determine appropriate pricing approaches . what changes.Decision areas for the International Marketer • Elements of CB analysis in a cross-cultural setting – Determine underlying values and their rate of change. positive values. what are more strongly held – Evaluate the product concept as it relates to this culture : does it harmonize with current and evolving values.

five distinct global segments with shared attitudes.Market Segments • As in domestic. successful marketing in international also requires mkt segmentation • Illustrative case of one survey identifying across 14 countries. actual purchasing patterns: – Strivers – Achievers – Pressureds – Adapters – Traditionals But their consumption pattern can be distinct . values.

separate marketing mixes and programs may be needed – Product considerations : home appliances use in Germany vs Spain – 128 : 54 – Promotion considerations – Distribution channel considerations – Pricing considerations .Marketing Strategies • Across boundaries-cultures.

Convenience: as more and more women are joining the work force there is an increasing demand for products that help lighten and relieve the daily household chores. This is reflected in the soaring sale of Washing machines.Education: People in our society today wish to acquire relevant education and skills that would help improve their career prospects. Some changes in our culture: 1. time scarcity is a growing problem. food processors. 2. microwaves. and make life more convenient. career oriented educational centers are coming up. • • . Pressure cookers. This is evident from the fact that so many professional. respect for age and seniority. As a specific instance count the number of institutions offering courses and training in computers that has opened in your city. education. which implies a change in meals. But in our culture today. frozen food etc. and still they cannot seem to meet the demand. Mixer grinders.Indian Culture & Changes • Cultural values in India are good health.

Cosmetics for both women and men are being sold in increasing numbers. cars CD players etc. • . physical fitness.Materialism: There is a very definite shift in the people’s cultural value from spiritualism towards materialism.contd) • 3.(…. Physical appearance: Today. Even exclusive shops are retailing designer clothes. good health and smart appearance are on premium today. We are spending more money than ever before on acquiring products such as air-conditioners. Slimming centers and beauty parlours are mushrooming in all major cities of the country. which adds to our physical comfort as well as status. 4.

professional sportspersons. and other ways of behaving that are peculiar to a particular group within a culture. musicians.consists of basic behavioural patterns which exist in a society • However.Subcultures • Culture .. all segments of a society may not have the same cultural patterns • Within the heterogeneous national society more homogeneous subgroups can be distinguished • These groups are subcultures – having values. thus marketers must identify the most relevant sub…. eg students. . customs. academics. etc • Individuals may be members of more than one subculture. traditions.

Sub-cultural Segmentation • Marketers also segment overall societies into smaller subgroups (subcultures). geographic locality. religion. race. • A subculture consists of people who have the same ethnic origin or customs or behaviors. • Sub-cultural divisions are based on various sociocultural and demographic variables such as nationality. and gender • CB in the sub-cultural context explores marketing opportunities created by specific sub-groups within society . age.

distinct from other groups. identification based on what a person is when born. over generations. three ethnic types – race. religion . descend from common forbears.Two Broad Subcultures • Ethnic – normally minority group of a society. tend to reside in the same area. nationality. marry within. share a common sense of peoplehood (kindredness) • Commonly.

Two Broad Subcultures (….contd) • Age – youth subculture – olders subculture .

price (…. travel. colour. music. humour .Youth Subculture • Money to spend – discretionary almost entirely • Primary purchaser product patterns – clothes. cosmetics. use of celebrities. sports themes. entertainment. fashion accessories. may be long lasting • Shopping behaviour – rely more on personal sources for information on high value products and on media for others • At the product evaluation stage. gimmicky ads.discounts) and brand perceived as important • Promoting to youth – all media. make. electronic items (including games) • Style. model • Emergence of brand loyalties.

less experimenting unless recommended • Shopping behaviour – near homes.Olders Subculture • Product p – brand. independence . quality. comfort. demand guarantees and warrantees. store loyalty particularly with high income and high value. value for money • Promoting – all media.

nepali. North Eastern.MajorIndian Sub-cultural Categories Categories Nationality Examples original nationality : indian. SouthIndian. Western. art. Eastern. etc many languages. purchase of ethnic cultural artefacts. travel to the homeland. pakistani ancestral pride is manifestedin CB termsby their consumption of ethnic foods. clothing. Dravidian (conservative/ subtle/ non-experimental). music Religion hinduism. jainism. lit. etc Race Aryan (high consumption/ experimental/ flamboyant). christianity (140 different organised religious subcultures symbolic and ritualistic products Geographical regions NorthIndian. bangladeshi. movie. clothing between generations . islam. food habits. buddhism. Mongoloid (fashion conscious/ trendy/ techno-inclined) Age appreciate different music.

professional. providers ‡ Females: gentleness. lower . competitiveness. hair spraysfemales internet use: Males seek out investments. business.(…. hair dryers. online books. free software.contd) Gender Traditionally society assigns certain traits to males and females Males: aggressiveness. pants. nurturers ‡ Within every society certain products are either male or female ‡ eg. exec Social class upper.Cigars. neatness.females-reference materials. ties-males and colognes. middle. medical information Men are likely to purchase more on the internet than women because of the latter’s concern with privacy and security Occupation govt. discovery. talkativeness.

Social Class • A group consisting of a number of people who have approximately equal positions in a society • Positions may be achieved or ascribed/ inherited • Opportunity may exist for upward or downward movement to other classes .

mix of occupation. shopping locations. people can move up or down thru achievements . if latter. functionality. the attributes of such products • Blurring of symbolism – technology. as perceived by other members of society – Symbols of status – the need for prestige and how products satisfy this. which marketers can take advantage of thru suitable mktg mixes • S c are dynamic – closed and open systems. interests. heredity • S c are hierarchical – vertical order • S c restrict behaviour – stay within a class due common traits • S c are homogeneous – similar attitudes. income. and other behaviour patterns – thus similar media. purchases. upward shift of products • S c are multidimensional – not determined solely by one criterion. activities.Basic Characteristics of Social Class • Social class exhibit status – linked to status ie one‟s rank in the social system. mass marketing.

lower-lower • Problems in measurement : based on an average of the person‟s position ignoring inconsistencies like high income-low education. middle. lower-upper.Social Class categorisation • Upper. ignores reference group effects from other classes. assumed to be stable ignoring mobility. lower • Upper-upper. examines usually only the adult male wage earner in the family . upper-lower. upper-middle. lowermiddle.

more appropriate • For undifferentiated products benefits may be less • S c segmtn is usually more effective when used in conjunction with addl variables eg life-cycle stage. ethnic group . and media usage • S c may not often be a relevant basis ie segmentation by other criteria. eg age / gender.Role of social class in segmenting markets • S c and income related to lifestyle patterns • S c and income related to consumer behaviour patterns – product purchase patterns : shopping habits. store preferences.

Social Class and Consumer Behaviour • • • • Products and services consumed Shopping behaviour Promotional response patterns Price-related behaviour .

norms. socialisation. or beliefs and have certain implicitly or explicitly defined relationships to one another such that their behaviours are interdependent • Classification of groups by – Content or function – Degree of personal involvement : primary and secondary – Degree of organisation : formal and informal • Group properties – status. role. values. power .Reference Groups & Opinion Leaders • Group – consists of people who have a sense of relatedness as a result of interaction with each other • Or – Two or more individuals who share a set of norms.

beliefs. and behaviour OR one whose presumed perspectives or values are being used by an individual as the basis of her/his current behaviours – use as guide for behaviour in a specific situation .Reference Groups • Reference groups are those an individual uses (ie refers to) in determining his judgments.

59) .Types of Reference Groups • Membership • Nonmembership – Anticipatory aspirational group – Symbolic aspirational group • Positive versus negative • Influence on consumers group properties (ref. Sl.

Reasons for reference-group influence • Informational benefits • Utilitarian benefits • Value-expressive benefits.+ive / -ive may come into play • Comparative influence .

Variability of reference-group influence on consumers • Variability among products – conspicuousness. outlook. home maintenance services. etc . demographic • Variability by type of influence – type of product and relevance of the influence in terms of informational. utilitarian. publicly / privately consumed luxury / necessity : impact on prod / brand • Variability among group – urge to conform : group cohesiveness. value-expressive • Variability by situation – nature of the consumer situation and the reference influence connect : patronage of retail stores. values • Variability among individuals – personality. proximity to grp members. social character. indiv‟s relationship. influence on prod purchase or choice of brand. similarity to grp characteristics. seen or identified by others.

as others seek advice and info • Can influence +ively or –ively • Consumers tend to be influenced by those with whom they identify • O L present in every group and each status level. but may be more functional at higher income / status level . in a given situation • Ability to influence others through verbal communication.Opinion Leaders • People who are able to exert personal influence on others.

Korea – value maturity . particularly in eastern world. eg India. but viewed as of higher status • Tend to be more gregarious and willingness to act differently • Greater exposure to mass media.Characteristics of Opinion Leaders • Long-term involvement with the product category – enduring involvement • Enhanced knowledge about the product. leading to opinion leadership • Tends to be product specific • Functionss through communications and observations • Usually within the same social-class. relevant to their interest • Expertise and sociability • Tend to be older in age. Indonesia.

esp those viewed as leaders • Stimulating opinion leadership – marketers can advertise with endorsement of health related products by doctors • Generate communications concerning a product by sending samples to potential and influential customers – cosmetics to beauty clinics. but may observe others group members. salesmen and retailers can encourage current customers to pass on to others by word-of-mouth • Market mavens – neighbourhood expert .Situations • High involvement product purchase – seek info and advice • Low involvement purchase – less likely to seek direct opinion.

norms. earning and spending money • Thus individual and collective consumption priorities. and standards in their behaviour) • Strongly bonded group.Family • A type of small group • Often predominant in its influence over consumer behaviour • Primary group (characterised by intimate. how to use to further family members‟ goals • Moulded often by the family they grew up in . where to buy. functioning as an economic unit. face-to-face interaction) • Reference group (with members referring to certain family values. decide on products and brands.

buying behaviour will differ accordingly .FLC • Bachelor stage • Newly married couples • Full Nest I • Full Nest II • Full Nest III • Empty Nest I • Empty Nest II • Solitary Survivor I • Solitary Survivor II Income and needs vary with change in the FLC stages .

md / unmd. married/ unmarried. youngest child 6 or + .Non-traditional FLC Some of the stages identified : • Bachelor I • Young couple : female head. no kids • Full Nest I : female head. kid<6 • Single Parent I / II • Delayed full nest : female head 35-64.

info gatherer. influencer / opinion leader. equalit).Family Decision-making • When two or more members are involved as opposed to individual decisions • How money is to be spent • Role structure (instrumental and expressive. decision maker. power structure (patriarch. initiator. purchaser). resolve conflict . matriarch.

men‟s casual clothing. child clothing. etc • W tends to dominate – women‟s clothing. furniture. financial svcs. greater tendency for this now. with influence of working wives . TV.(…. etc • Autonomous decisions – women‟s jewellery. family car. toiletries. groceries. sports eqpt. cameras. kitchenware. toys and games • Joint decisions – fridge.contd) • Husband / wife influences : • H tends to dominate in products like hardware.

(…. the better person does so • Increasing influence of children – Perceived knowledge of prod. and income of hus/ wife shapes who tends to decide. importance to them. neglecting.contd) • Implications for marketers depending on who decides : – Media selection – Advt msge target – Requirement of separate ad campaigns • Education. democratic. more purchasing power – The effects of authoritarian parents. permissive . occupation.

or self-esteem is a socially contingent activity • The corresponding expenditures are motivated mainly by the symbolic value they have for transmitting the signal • This presupposes some form of social coordination on what are valid.Interpersonal Factors and Symbolic Consumption • As recognized since long. consumption serving to signal social status. approved symbols • Unlike consumption not serving signaling purposes. the technological characteristics of the goods and services consumed may be secondary that counts is their socially agreed capacity to function as a symbol . group membership.

but also to locate in society • The latter may also enslave us in the illusive world of consumption . but also symbolic meanings • Not only to create and sustain self.• Consumption central to meaningful practice of daily life • Consumption choices not only from product‟s utilities.

and features should the prod have – How should it be packaged – What aspects of service are most important to consumers – What types of warranties and service programs should be provided – What types of accessories and associated products should be offered . shape.Environmental Factors Product offerings and innovations • Product exists in an environment • The nature of the physical product and service features are influenced by consumer behaviour – What size.

„hygienically sealed‟). eg best grade of waterproofing. how cues are encoded (wrapper saying „freshly packed‟. paint.contd) • Consumers‟ attempts to directly evaluate physical prod attributes – intrinsic cues • Difficulty in distinguishing between different prod offerings on the basis of direct attributes. not encoded meaningfully (chemical names). but not be able to determine whether these differences are important in predicting which brand will provide greater satisfaction. adhesives. carpeting. eg taste of colas • May be able to discriminate between brands. etc • Use of extrinsic cues : consumer‟s experience. additional inferential beliefs or interpretations (by association) .(….

but usually not altering estbld patterns. prod alteration only. service. pc to laptop. eg fluoride toothpaste. auto model variants Dynamically continuous innovns – more disrupting. mobile phone with qwert key pad Discontinuous innovns – new prod with new behaviour patterns. new prod or alteration. when.Product offerings-new • • • • • • New-product innovation is an essential element of market dynamics Among various definitions – „an innovation is a product. why. where. salt in toothpaste. eg genset to inverters. eg wall TV. or whether we acquire products . or idea that consumers within a mkt segment perceive as new and that has an effect on existing consumption patterns Continuous innovns – least disrupting to established consumption patterns. swipe card tech Some offerings and innovations influence how. attribute.

user (Johnson baby oil). eg Campbell‟s soup. Gatorade). benefits. competition .• Mkt segmentation and segment consumer behaviour lead to importance of how consumers perceive the marketer‟s prod • Cause for product positioning • Positioning on : prod features. usage (or situation.

Delivering product • The place variable involves consideration of where and how to offer products and services for sale • Also concerned with the mechanisms for transferring goods and their ownership to consumers • What type of retails outlet • Retail outlets – location and number • Logistics of supplying retailers • How much control necessary over channels • What image and clientele should the retailer seek to cultivate .

– in-shop browsing and decision-making time .The When • The time dimension : – when do consumers buy – seasonality. free time. occasions. – also working hours. demographics. – purchase time – existing and new prods. 24 hours necessity.

Value ….or, price
• Marketers must make decisions regarding the prices to charge for the company‟s products or services and any modification to those prices • These will determine the revenues the firm will generate • How price-aware are consumers in the prod category • Price sensitivity among brands • What reduction needed to encourage buying during new intros and promotions • What discount size for cash, seasonality, etc

Letting the consumer know
• Promotion to communicate aspects of firm and its offerings – goals and methods • Methods of promos and specific sits • Most effective means for gaining attention • Methods which best convey intended msge • Advt repeat - periodicity

Public Policy Issues
• Comparative advertising – compare the co‟s brand directly with competitor‟s; present prod info on which consumers can base purchase decisions; encourages competition & can lead to lowering of prices (Pepsi-Coke) – Consumers dislike comp ads : due lacking in reliability and usefulness – Confuse consumers and foster –ve attitudes CB and govtl decision making – Govt services : govt provision of public svcs can benefit significantly from an understanding of the consumers; eg public tptn – metro vs car (address long lines, last mile issues, crowding and behaviour) – Govt & other agencies for consumer protection : regulating business practices to protect consumers‟ interest and welfare; also designed to influence certain consumer actions directly; protection against claims not substantiated by research (food supplements, toothpastes); anti-smoking campaigns

and independent orgns that are designed to protect the rights of consumers • Why : – – – – – – Disillusionment with the system Performance gap Consumer info gap Advertising content Impersonal and unresponsive mktg institutions Intrusions of privacy .• Consumerism – activities of govt. business.

Consumer‟s Fundamental Rights • • • • Right to safety Right to be informed Right to choose Right to be heard .

Municipality (elevators) • ISI. DGCA. etc . AGMARK.Safety • Unsafe product and physical injury • Drug controller : medicines and allied prods • Certification authorities : RTOs.

nutritional labeling. claimfact interaction • Corrective advtg • Affirmative disclosure • Availability of sufficient info – unit pricing.Information • Deception : capacity to deceive – puffery to deception. information overload . claim-fact discrepancy. dating.

Choice • Consumers must have choice to benefit from market forces interplay • A different take – consumers should be given not what they want. but what is „best‟ for them • Too much choice may confuse and lead to unsuitable choice .

Hearing and redressal • Consumer inputs as a means of setting govt policies and complaints directed to businesses – the facility and response • Restitution • Punishment .

a challenge .Environmental Concerns • Right to a clean environment • Concern about potential environmental damage caused by consumer products and packaging • Companies trying to protect the environment – majority consumers for it • Change in shopping and lifestyle to help protect the environment • Consumer mindset changing – willingness to pay extra for the environment – yet not enough in ratio.

and exchanged through computer and communication technologies has become a tool of power • Concern over threats to privacy • Public still willing to give personal info when convinced about the need and fairplay • Consumer privacy protection policies . merged.Privacy • Consumer information collected.

intuitionism – Absolute standards • Consumer responsibilities : obligation – choose wisely.Social and ethical issues • Good businesses have responded to this responsibility : – Thru varied constitution of their Board of Directors. and promoting them in an accurate manner • What should be considered ethical : the relevance of an ethical base – Relative standards : utilitarianism. help protect the environment . put safety first. and use of social performance disclosures (social audits) • Marketing as the most visible activity of an orgn thus has the onus of developing useful products. emphasis on ethics. keep informed. fair pricing of prods and svcs.

listening to consumers and responding effectively.Marketer response to consumer issues • Understanding the issues – heed the consumer voice and complaints • Designing a consumer response system – understanding what consumers experience. estblng a corp consumer affairs/ svcs unit. educating consumers . establishing a consumer advisory board.

and Outcomes . Processing.Information Receipt.

smell.Stimulus. and hearing • A stimulus is not in isolation. and stimuli which impinge upon the five senses of taste. and Attention • Stimulus serves as the raw material to be processed • Internally produced stimulus like hunger pangs. vision. but of a larger stimulus situation consisting of many stimuli . touch. Exposure.

influenced by this factor under conscious control. exposure to advts (TV. eg nutritional content per serving of a baby food.(…. news reports. a part of the acquisition process.contd) • Acquisition process enables consumers to confront certain stimuli in their environment and begin to process them • Exposure. internal. magazines). has two major categories : – Active search : to seek out specific types of stimuli. external – Passive reception : consumers confront stimuli in the process of living their daily lives. advtsr tries to counter zapping by chameleon advt . info as by-product of shopping activities.

can be allocated to stimuli on a rapid basis .• Sensation – Awareness threshold – Differential threshold. many stimuli require attention to be processed while some do not. the latter helps keep in touch with environment – Characteristics – can attend to a limited number of items at any time. Weber‟s Law • Attention : allocation of processing capacity to stimuli – Voluntary and involuntary – former enables filtering.

novelty and contrast. adaptation. – Selective attention : individual factors – attention span. size and position.• How consumers allocate their attention – mainly affect involuntary attention : – Selective attention : stimulus factor – colour. humour. perceptual vigilance and defence .

knowledge and experience – Feature analysis – synthesis stage – catergorisation .Encoding & Decoding of Message Processing • Encoding – a highly individualised process that is used to derive personal meaning from stimulus experiences • Subsequent actions and thoughts based on interpretations derived from stimuli rather than on the actual stimuli themselves • Processing the sensations (from the stimulus) – individual ability.

• Opportunity – situation. incentive to engage • Depth of processing – degree of effort consumer expends in developing meaning from the stimulus . time. aids • Motivation or willingness – inclination.

• Perception is the process of making sense out of an experience – the imputing of meaning to experience . processes.Perception • Perception is the way in which an individual gathers. and interprets information from the environment.

Mood) .Factors ImpactingPerception • Internal: Sensory Abilities Comprehension Skills Memory Capacity Needs Experience/Knowledge Involvement Confidence Pre-dispositions (Attitudes. Beliefs.

Color. Size Competing Stimuli Setting Characteristics . Format. Intensity. Location. Contrast.• External: Stimulus(I) Characteristics: Motion. Shape.

Selective perception • The various elements of selective perception are: selective exposure selective attention selective comprehension selective retention .

Selective comprehension • Selective comprehension: This stage involves interpreting discrepant information so that it is consistent with beliefs and attitudes .

.• • • • • • Perception The process by which an individual uses information to create a meaningful picture of the world by selecting. organizing interpreting Perception is important because people selectively perceive what they want and it affects how people see risks in a purchase.

• Selective comprehension .Selective Perception • • • • Filtering exposure. • Selective exposure – Consumers can pay attention to messages that are consistent with their own attitudes and beliefs – Consumers can ignore messages that are inconsistent. and retention – in the human brain’s attempt to organize and interpret information. comprehension.

or hear. read. • Subliminal perception – Consumers see or hear messages without being aware of them.– Involves interpreting (distorting?) information so that it is consistent with a person's attitudes and beliefs. – This is a hotly debated issue with more popular appeal than scientific support. – Research suggests that such messages have limited effects on behavior . • Selective retention – Consumers do not remember all the information they see.

. Marketers try to reduce a consumer's perceived risk and encourage purchases by strategies such as providing – Free trial of a product – Securing endorsements from influential people – Providing warranties and guarantees.Perceived Risk • • • • Anxieties felt Consumes cannot anticipate the outcomes of a purchase Believe that there may be negative consequences.

Behavioral Learning • The process of developing automatic responses to a situation built up through repeated exposure to it. .Learning • Those behaviors that result from repeated experience and thinking.

the action taken by a consumer to satisfy the drive • Reinforcement .the reward – Employed in conjunction with the methods of learning connections : • Classical conditioning • Instrumental conditioning .a stimulus or symbol perceived by consumers • Response .Four variables central to how consumers learn from repeated experience are: • Drive .a need that moves an individual to action • Cue .

refers to a person's ability to perceive differences in stimuli – the advertising for Hayward X000 beers is an example of this concept .Marketers use two concepts from behavioral learning theory: • Stimulus generalization .occurs when a response elicited by one stimulus (cue) is generalized to another – using the same brand name for different products is an application of this concept • Brand extension aspects play on this and marketers frequently use this to advantage (reference should be made vis-à-vis brand management) • Stimulus discrimination .

etc .Cognitive learning • Involves making connections between two or more ideas • Or. simply observing the outcomes of others’ behaviors and adjusting one's accordingly Brand loyalty • Is a favorable attitude and consistent purchase of a single brand over time • Brand loyalty differs across cultures. countries.

• Values – personally or socially preferable modes of conduct or states of existence that are enduring. recovery. • Shaped by our values and beliefs.Beliefs and Attitudes Attitude Formation • Attitude • A learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. extinction. wearout. • Beliefs – consumer's subjective perception of how well a product or brand performs on different attributes. maintain. recall . Degree of learning – Rate. which are learned.

but other details not so • Structure of memory and its operation is relevant to divine consumer behaviour . shelf location. etc may be recalled easily.Memory and Retrieval • Experience has shown that all that consumers have „learned‟ is not always readily retrievable – eg brand names.

direct representation of reality. forget due interference (new phone models and features) • Levels of processing – treatment of stimuli how rigorous • Activation model – stimuli activating only an appropriate section of memory. decay (tele nos. all perceived by sensors. forgetting by decay (size. long-term – Sensory : fraction of a second. colour – used heavily by advtsrs) – Short-term : < 1 min. short-term.characteristics Structure of memory and its operation : • Multiple store approach – sensory. limit 7 items approx. spreading activation (eg sports-car attributes extending to info on other sports-cars) .) – Long-term : many years. indirect (thru chunking).Memory Systems . unlimited store. indirect (clustering via meaningfulness). shape.

Retrieval of information • Accessing information in long-term memory and activating it into consciousness • Correlated with other material from s-t memory and processed into meaningful package for use • Influences : – Extent of original learning – Goal of original learning – Contextual relevance .

Advertising applications • Advtg msge with unique aspects – long term impact on memory • Order in which material is presented – beginning and end most remembered • Msges that encourage immdte rehearsal – remembered (eg tele no. address) • Chunked – more processing and better retention (7 items) • Amount of info transferred to long term memory is a function of time avble for processing • Cue-dependent – eg babbling mountain brook for healthy water • Meaningfulness of individual – better retained ..

numbers. melodic patterns) .Methods • • • • • Visual material Interactive imagery Showing mistakes Incomplete msges Mnemonic techniques (jingles.

• “Habit strength" . and reward is an essential condition . the process is gradual.said to develop as a function of practice • Habits were depicted as stimulus-response connections based on reward • Responses (rather than perceptions or expectancies) participate in habit formation.

later stages : personal sources of info. discontinuous • Adoption – acceptance and continued use of a product or brand by an individual • Adoption process – awareness. comprehension.Adoption & Diffusion of Innovation • Any idea. mass media appear most effective in creating awareness. or material artifact perceived to be new by the relevant adopting unit – Continuous. trial. so effective personal selling and word-ofmouth communications at these points . legitimation. attitude. adoption • Some consumers pass thru the adoption process early in the product‟s life or it could be later • Relevant for marketers : early stages of the adoption process. practice. dynamically continuous.

Diffusion Process • The nature of the process by which innovations spread • Diffusion process refers to a group phenomenon (as against the indiv phenomenon for adoption). indicating how an innovation spreads among consumers • Trickle-down. trickle-across. leadership . subcultural group‟s propagation.

to promotion . trailability. cost • Marketing implications – from product design to packaging. compatibility. late majority.contd) • Innovators. observability. early majority.(…. complexity. laggards • Factors influencing rate of diffusion – relative advantage. early adopters. distribution and selling.

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