‡ ‡ Definition Consumer behavior is defined as the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that the consumers expect will satisfy their needs. Consumer behavior focuses on how individuals make decisions to spend their available resources ( time, money , effort ) on consumption-related items. Scope of Consumer Behavior 1. Personal consumer ± buys goods and services for his or her own use. - Products are bought for final use by individuals as end users. 2. Organizational consumer ± includes profit, or non-profit businesses, government agencies, institutions. All buy products, goods, services in order to run their organizations.


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‡ The term µCustomer¶ is specific in terms of brand, company, or shop. ‡ It refers to person who customarily or regularly purchases particular brand, purchases particular company¶s product, or purchases from particular shop. ‡ Thus a person who shops at Bata Stores or who uses Raymond's clothing is a customer of these firms. ‡ µConsumer¶ is a person who generally engages in the activities search, select, use and dispose of products, services, experience, or ideas.

Individual Buyer
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Purchases goods / services for own use No geographical concentration No bulk purchases, larger in Nos. Elastic Demand from individuals Individual decision making mostly impulsive in nature Buying motive is mostly rational. Lack of professionalism in buying No formalities in buying Decision making process is easy

Organizational Buyer
* Buys goods / services for business use. * Org. buyers are geographically concentrated. * fewer in numbers & bulk purchases. * Fluctuational & In-elastic demand. * many individuals or group involved in decision making. * Buying motive is mostly rational than individual * Org. buyers are knowledgeable & professional * formalities like quotations, proposals are to be followed. * complex decision making with high financial risk, technical aspects, multiple influencing factors etc., * Requires more extensive negotiation over larger period of time.


Requires less time in negotiation

‡ Customer value is defined as the ratio between the customer¶s perceived benefits( economic, functional, psychological ) and the resources ( monetary, time, effort, psychological ) used to obtain those benefits.

‡ Customer Satisfaction
‡ Customer satisfaction is the individual¶s perception of the performance of the product or service in relation to his or her expectations. Concept of customer satisfaction is a function of customer expectations. A customer whose experience falls below expectations will be dissatisfied. A customer whose experience exceeds his or her expectations, will be very satisfied or delighted.

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Customer Retention
Customer Retention is in the best interest of customers stay with the company rather than switch to another firm. In all business situations , it is more expensive to win new customers than to keep existing ones. Customer retentions increases profits in business because, 1. loyal customers buy more products 2. loyal customers are less price sensitive and pay less attention to competitor¶s advertising. 3. servicing existing customers ( familiar with company¶s offerings, processes ) is cheaper. 4. loyal customers spread positive word of mouth and refer other customers. A customer retention driven company closely monitors its customers¶ consumption volume and patterns, establishes tiers of customers according to their profitability levels, develops distinct strategies towards each group of customers.


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‡ ‡ ‡ ‡ Consumer Motives Consumer has a motive for purchasing a particular product. Motive is a strong feeling, urge, instinct, desire or emotion that makes the buyer to make a decision to buy. Buying motives thus are defined as µthose influences or considerations which provide the impulse to buy, induce action or determine choice in the purchase of goods or service. These motives are generally controlled by economic, social, psychological influences etc. Motives which Influence Purchase Decision The buying motives may be classified into two: i. Product Motives ii. Patronage Motives

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CONSUMER MOTIVES ‡ Nature of Motive ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Desire for money Vanity Fear Pride Fashion Possession Health Comfort Love and affection : : : : : : : : : Purchase Decision Purchasing when price falls down Getting costly Items. mixy Purchasing gift items . to be admired by others Purchasing Insurance policy Purchasing premium products Rural people imitate urban purchasing antiques Buying health foods. washing machine. membership in health clubs Purchasing micro-oven.

thinking about products and services . Study of consumer behavior may suggest ways to increase the efficiency of the market system and improve the well-being of people in society.NEED FOR STUDY OF CONSUMER BEHAVIOUR ‡ ‡ ‡ Marketer gains insight in to the attitudes. of the target segment. when we do shopping. interests. Studying consumer behavior plays significant role in our lives. Understanding consumer behavior can provide insight in to aggregate economic and social trends and perhaps even predict such trends. hearing advertisements. To plan out an effective marketing strategies & promotional messages for the target customers. ‡ ‡ ‡ ‡ . lifestyles. Consumers are often studied because certain decisions are significantly affected by their behavior or expected actions. Pertinence to Decision Making ± Micro & Macro perspectives involve understanding the consumers for the purpose of helping a firm to achieve its objectives.

To do Market-Opportunity analysis. To develop and implement a strategy for delivering an effective combination of want satisfying features to consumers within target markets. for the provision of public services. To offer the physical product and service features which have major influences among customers. In the decision making of the Governmental agencies. . To achieve the company objectives. To design the goals and methods of communicating aspects of the firm and its offerings to target customers.APPLICATIONS OF CONSUMER BEHAVIOR STUDIES ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ A sound understanding of consumer behavior is essential to the long-run success of any marketing program. To devise integrated strategy in achieving a firm¶s objective through consumer satisfaction. To consider of where and how to offer products and services for sale. To identify and satisfy the consumer¶s wants and needs. To make decisions regarding the prices to charge for the company¶s products and services and any modification to those prices. for the company To identify and select the target market and to offer the unique market offerings.

co-worker. Time . ‡ Reference Groups ( consists of people whose approval matter to us. ‡ Non-Personal Influences ± Environment. This group could be personal ( family. Place. ‡ Opinion Leader ( any person or organization whose opinions in his field of expertise is respected by us ) ‡ Culture & Sub-Culture. celebrity ) . Society. friends ) or impersonal ( movie star.FACTORS INFLUENCING CONSUMER BEHAVIOR ‡ Influences on Consumer Behaviour ‡ Interpersonal Influences ± Family. whom we may wish to copy .

5.To predict how consumers will react to promotional messages. 3. 6. Identifying consumer needs and product expectation levels. ‡ ‡ ‡ ‡ ‡ ‡ .CONSUMER RESEARCH PROCESS ‡ CB research is a scientific enquiry to collect information about the consumer in all possible details and dimensions. 4. Identifying factors influencing purchase decisions. Ascertaining the level of customer satisfaction. 1. Determining demographics of existing and potential users. To understand why consumers make the purchase decisions. 2.

TYPES OF CONSUMER RESEARCH ‡ ‡ ‡ ‡ ‡ Primary Vs Secondary Research Internal Vs External Research Qualitative Vs Quantitative Research Primary Research Primary data pertains to firsthand information collected for a specific purpose. company accounts. The potential of sale for an innovative new product can only be found through the primary research. online services. statistics. * Govt. Original research performed by individual researchers or organizations to meet the specific objectives called Secondary Research. ‡ * provides wealth of information to the Market researcher. Secondary Research * Secondary data collected originally for a more general purpose. casual research. competitive market intelligence. popular media Technical / specialist publications third party data services. patent application job advertisements. usually by a third party. Ex. ‡ . Primary research is specially commissioned since it is unlikely that related data is available already.

‡ Internal research is relatively rapid and require minimal resources. IMRB etc. * Ex. ‡ Internal Research data can only be primary data. Ex. effort etc. Market survey data ‡ . External Research * Information collected by outside bodies Census survey. and requires maximum resources like money. production distribution records. time. Census. Internal data would include sales. * External research data is descriptive & More precise. * External research data can be primary or secondary.TYPES OF CONSUMER RESEARCH ‡ ‡ Internal Research The information available within the organization is termed as Internal Research... market research comps such as NCAER. customer data base etc.

. projective techniques etc.pretivism¶. . Qualitative Research * Quantitative research deals with less tangible Data such as consumer opinions. ‡ ‡ This research approach is known as¶ Positivism¶. ‡ ‡ Primarily to understand effects of various promotional inputs on the consumer & to predict the consumer behavior. survey techniques and observation etc. * the research approach is termed as µ inter. & more comprehensive studies.TYPES OF CONSUMER RESEARCH ‡ ‡ Quantitative Research Qualitative research mostly deals with numerical information. metaphor analysis. collage research. * methods mainly consists of depth interviews Focus group. large populations. Consists of experiments . The findings are descriptive. empirical and can * the findings cannot be generalized to a be generalized to a larger populations. * to obtain new ideas for promotional campaign and products that can be tested more Thoroughly in larger.

‡ ‡ ‡ ‡ ‡ . This research occurs in situations when there is not enough known about consumers to draw conclusions about what variables are influencing their behavior. Many retailers conduct an informal type of research similar to the familiar µ suggestion box¶. In this method. customers with complaints or new ideas are able to express them in timely fashion. Two significant methods used in exploratory research are * Consumer Suggestions * Focus Groups. Consumer Suggestions Many influences and problems encountered by consumers are discovered through the spontaneous suggestions of consumers themselves.‡ ‡ Exploratory Research TYPES OF CONSUMER RESEARCH Used to identify variables influencing consumers and discover how consumers may tend to react to these factors.

Do a postmortem on a failed product. Understands consumers lifestyles and personalities. Check an advertisement. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ .EXPLORATORY RESEARCH ‡ ‡ Methods used in Exploratory Research . A moderator guides the discussions but allows consumers to interact with each other. misleading. or product concept to determine if anything about it confusing. Understands consumers language and motivations.TYPES OF CONSUMER RESEARCH. Advantages in Focus Group Interview Generate hypotheses about consumers and market situations. Explores new areas as a prelude to a quantitative study. Suggest fresh & revitalized ideas. package.Focus Group Interview Focus groups generally bring together in a casual setting eight to ten people with similar backgrounds to apply the principles of group dynamics and free association to a marketing problem. or negative. The session which lasts about two hours . are usually videotaped.

TYPES OF CONSUMER RESEARCH ± CONCLUSIVE RESEARCH ‡ ‡ ‡ Conclusive Research Conclusive research build upon exploratory research. The prediction of consumer¶s behavior and methods of influencing it can be suggested by conclusive research. The major goals of conclusive research are to describe consumers¶ behavior and to offer explanations for its causes. ‡ .

A depth interview is an unstructured discussion between the interviewer and the respondent. The role of the interviewer is to obtain detailed information on the topic needed within the time available. ‡ ‡ ‡ ‡ . Depth interviews are particularly useful during the early stages of a product / brand development when new ideas are required and little leads been decided. Depth interview is generally lengthy ( anything up to 1 Hr. ) and is best carried out by trained and experienced interviewer. balance the need for open ended discussion with the need to address certain topics.QUALTITATIVE RESEARCH METHODS ‡ ‡ Depth Interviews The aim of depth interview is to secure the maximum amount of useful information from the respondent on a particular topic with the minimum intervention from the interviewer.

thematic apperception test 4. 1. Projective techniques are used to explore associations with the particular brand. word association 2. and feeling. motivation.QUALITATIVE RESEARCH METHODS ‡ ‡ Projective Techniques Projective techniques are used by trained psychologists to understand the respondent¶s hidden attitude . role play ‡ ‡ ‡ ‡ ‡ ‡ . sentence completion 3. There are a number of projective techniques available. in the Marketing context.

The session which lasts about two hours . Do a postmortem on a failed product.QUALITATIVE RESEARCH PROCESS ‡ ‡ Focus Group Interview Focus groups generally bring together in a casual setting eight to ten people with similar backgrounds to apply the principles of group dynamics and free association to a marketing problem. Understands consumers lifestyles and personalities. Explores new areas as a prelude to a quantitative study. or product concept to determine if anything about it confusing. are usually videotaped. Check an advertisement. Understands consumers language and motivations. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . package. A moderator guides the discussions but allows consumers to interact with each other. Suggest fresh & revitalized ideas. or negative. Advantages in Focus Group Interview Generate hypotheses about consumers and market situations. misleading.

of sounds. say. pre-screened respondents were asked to bring in to a depth interview pictures that illustrated their perceptions of the value of advertising. Metaphor analysis relies on visual images to assess consumer¶s deep and sub-conscious thoughts about products. through the use. consumer perceptions on advertising. or pictures in their mind. and marketing strategies. Consumer theorists believe that people use metaphors as the most basic method of thought and communication.QUALITATIVE RESEARCH METHODS ‡ ‡ Metaphor Analysis Metaphor is the expression of consumers¶ thought processes in the form of series of images. In metaphor analysis. music. drawings or pictures to describe or represent feelings about another. a non-verbal form. ‡ ‡ ‡ . services.

Lab observations are naturally in artificial setting and therefore may not reflect true behavior. through a hidden camera . Secretive ± when the subject of observation is unaware that he is being observed . Observation method is quite useful under those circumstances where we are more interested in behavior than in any mental process. Observations can be carried out in the field or laboratory setting. or by an unknown observer ( to the person being observed ) Non-participatory ± where the subject knows that he is being observed but the researcher takes no part in the activity being conducted by the person being observed Participatory ± here the subject and the researcher interact.QUANTITATIVE RESEARCH METHODS ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Quantitative primary data can be basically be collected through Observation method Surveys and questionnaires ( including interviews. dairy. Observations can be of three types. and postal survey ) Observations A researcher can actually observe the behavior of the consumer. telephone. .

administer-ask questions 7. present the findings.enter the data 8. design the questionnaire 5. pretest the questionnaire 6. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Survey Methods Most commonly used method. determine your sample-who will you survey 3. analyze the data 9. The following are the sequential steps in survey methods. 1. decide on your survey goals-what do you want to learn 2. select methodology 4.QUANTITATIVE RESEARCH METHODS ‡ ‡ Mystery Shopping In this method the researcher simply poses as a customer and reports on the nature and quality of the service he receives.

THE CONSUMER BEHAVIOR RESEARCH PROCESS Develop Objectives Collect Secondary data Design Qualitative Research ‡Method ‡Screener Questionnaire ‡Discussion Guide Design Quantitative Research ‡Method ‡Screener Questionnaire ‡Discussion Guide Conduct Research ( using highly trained Interviewers ) Exploratory Study Collect Primary Data ( Usually by field Staff ) Analyze Data ( Subjective ) Analyze Data ( Objective ) Prepare Report Prepare Report .

‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ THE CONSUMER BEHAVIOR RESEARCH PROCESS Developing Research Objectives The first step in the consumer behavior research process is to carefully define the objectives of the study. percentage of households use email. If more detailed information on purchasing patterns or product usage is needed or if psychological or socio-cultural consumer information is sought . The objectives could be to segment the market. Secondary information includes findings based on research done by outside organizations. to study consumer attitudes. Secondary research findings sometimes provide sufficient insight in to the problem at hand to eliminate the need for primary research. . then primary data must be collected. A carefully thought-out statement of objectives helps to define the type and level of information needed. Collecting Secondary Data Secondary information is any data originally generated for some purpose other than the present research objectives. data generated in-house for earlier studies and even customer information collected by the firm¶s sales or credit departments. The marketing manager and the researcher to agree at the outset on the purposes and objectives of the study to ensure that the research design is appropriate.

If descriptive information is needed . Larger the sample size. then a probability sample should be chosen. If the purpose is to get new ideas ( for exp. If the findings have the sufficient representative of the total population. the more likely the response will reflect the total universe under study. will differ for each of the research approach. If the researcher wants the findings project able. how many to survey ( the sample size ). Sampling and Data Collection The sampling plan addresses three questions : whom to survey ( the sampling unit ). type of data collection instrument used. will provide highly reliable findings. depending on the sampling procedure adopted. The method of data collection. then a quantitative study is likely to be undertaken. The size of the sample is dependent both on the size f the budget and on the degree of confidence that the market wants to place in the findings. how to select them ( the sampling procedure ). . Interviewing the correct target market or potential target market is basic to the validity of the study. Repositioning a product ) then a qualitative study is undertaken.THE CONSUMER BEHAVIOR RESEARCH PROCESS ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Designing Primary Research The design of a research study is based on the purposes of the study. Smaller sample size. then a non-probability sample can be selected. sample design. to the total population.

Open ended responses are first coded and quantified ( i. the research report includes a brief executive summary of the findings. The body of the report includes a full description of the methodology used and for quantitative research. also includes tables and graphics to support the findings. e converted in to numerical scores ) then all of the responses are tabulated and analyzed using sophisticated analytical programs that correlate the data by selected variables and cluster the data by selected demographic characteristics. Depending on the assignment from marketing management.THE CONSUMER BEHAVIOR RESEARCH PROCESS ‡ ‡ ‡ ‡ Data Analysis and Reporting Research findings In qualitative research. ‡ ‡ ‡ ‡ ‡ . the researcher supervises the analysis. In quantitative research. the moderator or test administrator usually analyzes the responses received. Reporting Research findings In both qualitative and quantitative research. A sample of the questionnaire is usually included in the appendix to enable management to evaluate the objectivity of the findings. the research report may or may not include recommendations for marketing action..

Demographic segmentation ± division of market based on the demographic variables such as age. Bases for Segmentation Geographic segmentation ± division of market by locations.CONSUMER MARKET SEGMENTATION ‡ Market segmentation can be defined as the process of dividing a market in to distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix. marital status. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . learning. core cultural values. income.e division based on the family life cycle. personality. gender. Psychological Segmentation ± Consumer segmentation based on the specific psychological variables which refers to the inner or intrinsic qualities of the individual consumer. i. Psychological variable or Psychographics are motivations. perceptions. Social Segmentation ± market segmentation based on the sociological ( group ) and anthropological variables. and attitudes. Demography means to the vital and measurable statistics of a population. The above referred psychological variables are influencing the consumer decision making and consumption behavior. social class. sub-cultural memberships and cross-cultural affiliation. occupation and education.

Thus. Values act as powerful force ( motivators ) influencing consumer behavior. Values Values are enduring beliefs that a given behavior or outcome is desirable or good. When goals are activated we feel motivated to engage in behavior that are relevant to the goals.CONSUMER BEHAVIOR . Personality. goals are simultaneously determined and are specific to a given behavior or action. Goals Goals reflect the objectives we would like to achieve in a given situation. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . The reason for this is that our values guide what we see as relevant for ourselves. Values. Consumer is more likely to attend to some information if he finds it relevant to his values. and life style constitute psychographics.PSYCHOGRAPHICS ‡ Psychographics : The science of describing a consumer on the basis of his psychological characteristics.

4. 5. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . A motive is a construct representing an observable inner force that stimulates and compels a behavioral response and provides specific directions to that response. Once the need satisfied potential consumer feels a drive to reduce the same. 2. The consumer motivation comprises of five stages. Consumers buy and use products because they are motivated by the need and desire to do so. Based on the prior knowledge and fresh search he satisfies the need and achieves the goal. Consumer motivation is one of the driving forces of consumer behavior. The consumer motivation is the process through which needs are satisfied. Need converts itself in to want and desire to obtain the need satisfying object. 3. Latent need becoming explicit.THEORY OF MOTIVATION ‡ ‡ Motivation is the driving force within individuals that impels them to action. Desire is manifested in a specific goal as the customer searches his memory for the product. 1.

MOTIVATION PROCESS Need Need Regulation Drive Drive Reduction Want Manifestation of desire Goal Goal attainment Tension Reduction Behavior .

water. shelter ) . air. self esteem ) Social Needs ( attraction. stability ) Physiological Needs ( Food. status .MOTIVATION ± HIERARCHY OF NEEDS ‡ Dr. belonging) Safety & Security Needs (Protection. formulated a widely accepted theory of human motivation based on the notion of a universal hierarchy of human needs. a clinical psychologist . order. friendship . Abraham Maslow . Self ± Actualization ( self-fulfillment) Ego Needs ( prestige.

This model is based on four premises.THEORY OF HIERARCHY OF NEEDS ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Maslow¶s theory identifies five basic levels of human needs. Even if no level or need may be completely satisfied . D. B. Some motives are more basic and critical than others. Maslow believed that these motivating forces operate more or less in a sequential fashion. as satisfaction at one level increases. which rank in order of importance from lower level needs ( biogenic ) to higher ± level needs. more advanced motives come in to play. the next level becomes a strong motivator. ‡ . As the basic motives are satisfied . A. The theory postulates that individuals seek to satisfy lower ± level needs before higher-level needs emerge. all humans acquire a similar set of motives through genetic endowments and social interaction. C. those at the next level are felt more intensely. As the needs at one level are particularly or fully satisfied . More basic motive must be satisfied at least to some minimum levels before other motives are activated.

HIERARCHY OF NEEDS ± MARKETING APPLICATIONS ‡ ‡ ‡ Limitations of Theory of Hierarchy of Needs 1. 3. This theory offers useful framework for marketers trying to develop appropriate advertising appeals for their products. the theory can not be tested empirically. there is no way to measure precisely how satisfied one level of need must be before the next higher need becomes operative. 2. ‡ ‡ ‡ ‡ . Marketing Applications of Theory of Hierarchy of Needs 1. The theory facilitates product positioning or repositioning. the need hierarchy also appears to be very closely bound to the contemporary American culture. 2.

‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . 6. opinions. 5. Need for novelty ± seeking variety and difference out of a need for novelty. 4. 8. 7. self image. Need to assign cause to an event ± these motives deal with one¶s need to determine who and what causes things to happen. 1. are listed below. Need to categorize ± information and experiences in a certain meaningful manner. Need for independence ± this arises from the motive to establish a sense of self worth and meaning by achieving self actualization. 2.need to defend our identities and egos is another important motive. Need for self expression ± this motive is externally oriented and deals with the need to express one¶s identity to others. Need for consistency ± to observe consistency among various facets like attitude. behavior. as applicable in marketing context. Need for assertion ± reflects a consumer¶s need or engaging in those type of activities that will bring about an increase in self esteem as well as esteem in the eyes of others.these motives reflect the need for observable cues and symbols that enable us to understand what we feel and know. other¶s view point about ourselves. Need for ego defense. 9. The list of motives.McGUIRE¶S THEORY OF PSYCHOLOGICAL MOTIVATION ‡ ‡ ‡ McGuire has developed a motive classification system which is more specific than Maslow¶s. 3. Need for cues.

discounted price. emergency repairs. ‡ ‡ ‡ ‡ ‡ . Situational needs ±The needs. Purchase of a car for new experience.g. logos .Ex : purchase of a car because of its fuel efficiency. soap .g. e.involves the appearance or attractiveness of the product / service.reflected in the status and esteem value of product / service. size.g. . . shape. e. .‡ ‡ THEORY ON CONSUMER MOTIVES Jagdish Seth identified five consumer motives each oriented to the achievement of specific goals.involves the utility of the product / service or the function it performs. Purchase of the car because it shows that the buyer is µ cut above¶. space. reliability. Purchase for immediate delivery. which are contingent on time/place. Emotional needs ±Those needs which. e.g. Social needs ± Needs that Allow identification with desired group. e.interest arises by a product / service Ex. joy on getting gift.Ex. . e. Functional needs ±Those needs which satisfy a physical/functional purpose.g.Ex : purchase of a car because of its color. newspaper . Ex. Epistemic needs ±The Need for knowledge/information. create appropriate emotions. .inferred by an un-expected benefit of a product/service.

and Need for affiliation nACH: need for achievement: drive to excel: drive to achieve in relation to a set of standards. to strive to succeed. Need for Power.Theory of Needs ‡ McCLELLAND¶S Three Needs Theory ‡ As we know. nPOW: need for power: the need to make others behave in a way that they would not have behaved otherwise. nAFF: need for affiliation: the desire for friendly and close interpersonal relationships. having studied this before McClelland had identified three types of needs: Need for achievement. ‡ ‡ ‡ ‡ ‡ ‡ ‡ .

our body has a need (say hunger). This is also called person motivation. ‡ Positive or negative Motivation Motivation can be either positive or negative. at the basic level. We can say that a motive is an inner state that energizes. a driving force compelling the person to move away from someone or something will be known as negative motivation. For instance. Motivation: Motivating can be described as the driving force within individuals that impels them into action. ‡ Motivating: This implies an activity engaged into by an individual. On the other hand. . by which he or she will channelise the strong motives in a direction that is satisfactory. or moves and directs or channels behavior towards the goal. activates. A positive motivation happens when an individual experiences a driving force towards an object or person or situation.Some important terms in Motivation Theory Motives: Motives give direction to human behavior. which will translate into a drive (here the drive will e to obtain food) and the goal will be to satisfy the need (in this example to fee full in the stomach).

Consumers may make many purchase decisions without first developing clear brand attitudes or even having much knowledge about alternative brands.Impact of Motivational Research on Marketing Strategies ‡ ‡ Conclusions from Motivational Research Studies 1. 1. Moving low involvement customers to higher levels. many consumers are quite un-interested in learning about alternative brands and their characteristics. For numerous products or situations. 3. Differentiate Marketing Communications for each condition. Marketing Strategy Implications. 2. 2.Segmenting consumers in to high and low involvement groups and tailoring marketing programs for each. ‡ ‡ ‡ ‡ ‡ .

Personality is consistent pattern of responses to the world across situations and over time. Personality can change. traits. attributes. Nature of Personality 1.CONCEPT OF PERSONALITY ‡ Personality is defined as those inner psychological characteristics ( those specific qualities. The identification of specific personality characteristics associated with consumer behavior has proven to be highly useful in the development of a firm¶s market segmentation strategies. Personality reflects individual differences. 4. 2. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Personality is consistent and enduring 3. Personality is an internalized system which includes all those aspects of a person that are inherited as well as those hat are learned. factors and mannerisms that distinguish one individual from other individuals ) that both determine and reflect how a person responds to his or her environment.

and as part of gradual maturing process on the other. Marketers use personality traits to first differentiate individuals. 2. ‡ ‡ ‡ . 3. Personality dictates responses that are consistent across situations and endure overtime. as learning which contributes to personality formation is a continuous process.Personality change overtime in response to situations and events in life on one hand. and then only group them according to their behavioral similarity. Personality traits are an important and dominant factors dictate an individual¶s purchase behavior. 1.Characteristics of Personality ‡ ‡ Personality is the sum total of ways in which an individual reacts and interacts. 4. The individual has to appeal to the relevant personality traits inherent in target customer groups. Thus marketers cannot change individual¶s personality.

To target less known brands and technological innovations to consumers with high level of self esteem and self confidence. To Position brands to enhance their appeal to target customers by communicating the brand benefits that match consumer personality types. 2. To identify the extent to which consumers of the product category are prone to discounts / rebates and how value conscious they are. 4. ‡ ‡ ‡ .Marketing Applications of Personality ‡ ‡ Understanding consumer personality and personality traits helps marketers 1. 3. then market accordingly. To avoid targeting innovative products to rigid consumers and consumers with low tolerance for ambiguity.

1. Neo ± Freudian Theory 3. According to Sigmund Freud. every individual¶s personality is the product of a struggle among three interacting forces ± the id .basic psychological needs such as thirst. 2. Freudian Theory Also known as µ Psychoanalytic Theory¶ proposed by Sigmund Freud. Freud constructed his theory based on the patient¶s recollection of early childhood experiences. ‡ ‡ ‡ ‡ ‡ ‡ id is the source of strong inborn drives ± considered as µ warehouse¶ of primitive & impulsive drives. hunger.. etc. Freudian Theory 1. analysis of their dreams. . and the specific nature of their mental and physical adjustment problem.Theories of Personality ‡ The following theories have played a prominent role in the study of the relationship between consumer behavior and personality. Trait Theory. the ego and the super ego.

The id operates at a very subjective and un-conscious level and is not fully capable of dealing with objective reality. his id would urge him to grab something cold to drink. ‡ ‡ ‡ Gratification ID System 1 EGO System 3 Super Ego System 2 . When an individual is hot and thirsty. Also many of the id impulses are not acceptable to the values of organized society. Ex.Theories of Personality ‡ ‡ Freudian Theory The id operates on what is called µ Pleasure Principle¶ ± id acts to avoid tension and seeks immediate pleasure. There would be no concern about how the drink was acquired or whether it belonged to someone else.

Ego state operates on the µ Reality Principle¶. Ex. the ego might reason that asking for the food may take longer but may also result in getting a greater portion.Theories of Personality ± Freud¶s Psychoanalytic Theory ‡ ‡ The ego state is individual¶s conscious control. ‡ ‡ ‡ ‡ Ego is serving as organized focal point for effective action in the environment. ± which is capable of postponing the release of tension until that time when it will be effectively directed at coping with the external environment. Ego is the executive of the personality . The hungry person¶s id will encourage him to take away the food from his friend. Ego state functions as an internal monitor that attempts to balance the impulsive demands of the id and develops capabilities of realistic thinking and ability to deal appropriately with the individual¶s environment.

‡ ‡ Super ego represents the ideal by defining what is right and good and it influences the individual to strive for perfection. ‡ The super ego¶s real is to see that the individual satisfies needs in a socially acceptable fashion. The superego constitutes the moral part of the individual¶s psychic structure through internalizing the values of society. ‡ Super ego is conceptualized as the individual¶s internal expression of society¶s moral and ethical codes of conduct. . ‡ Super ego controls basic strivings of the id which could disrupt the social system and influences the ego to strive for socially approved goals rather than purely realistic ones.Freud¶s Psychoanalytic theory of Personality ‡ The super ego is the third component of personality.

ego and super ego states. Ego is capable of resolving many of the conflicts that arise between the three personality components. When No resolutions achieved for resolving conflicts. This idea has been translated in to advertising themes. This approach in advertising is also known as µ Triple Appeal¶. Defense Mechanisms are unconsciously determined techniques for avoiding or escaping from high levels of tension brought about by unresolved conflicts between components of the personality. Applications of Freud¶s Psychoanalytic Theory 1. The ego directs behavior that is also acceptable to id and super ego. The ego arbitrates the acceptability of the two forms of expressions of id and super ego in an advertising campaign.Freud¶s Psychoanalytic Theory of Personality ‡ ‡ ‡ ‡ ‡ According to Freud. Understanding the operation of defense mechanisms can assist the marketers in developing marketing and promotional strategies. 2. the individual¶s total personality develops and is defined by the relationships among the id. ego and super-ego in some purchase situations. Advertising Appeals . defense Mechanisms work. ‡ ‡ ‡ .Freudian proponents suggest that various appeals can assist in resolving the conflict which can develop between the id.

insecurity and lack of love. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . The childhood experiences in relating to others produce feelings of inferiority . These ten needs were classified in to three major orientations. Horney identified ten major needs which are acquired as a consequence of individuals attempting to find solutions to their problems in developing a personality and dealing with others in a social environment. some reasoned that individual develops a personality through numerous attempts to deal with others in a social setting. approval. 1. and brotherhood. affection. Individuals are striving to over-come feelings of inferiority and searching for ways to obtain love.NEO-FREUDIAN PERSONALITY THEORY ‡ Among those who rejected Freud¶s id based personality theory . These individuals tend to exhibit large amounts of empathy and humility and are selfish. According to Neo ± Freudian theory. compliant orientation ± those move toward people and stress the need for love. modesty. security. Karen Horney proposed the first theoretical scheme based on Neo-Freudian approach. These feelings motivate individuals to perfect themselves and also to develop methods to cope with anxieties produced by such feelings of inferiority.

focusing on the measurement of personality in terms of specific psychological characteristics called traits ‡ ‡ ‡ ‡ . and self-reliance in their dealings with others. Aggressive orientation ± Those who move against people and stress the need for power . and the ability to manipulate others. A CAD ( Compliant. Detached orientation ± Those move away from people. It is primarily quantitative or empirical. TRAIT Theory Trait theory is a significant departure from the earlier qualitative measures that are typical of Freudian and neo-Freudian theory. These individuals stress the need for independence. Aggressive. Many marketers have used some of the Neo-Freudian theories in marketing applications. Detached ) instrument was developed to measure people¶s interpersonal orientations within a consumer context.NEO-FREUDIAN THEORY OF PERSONALITY ‡ 2. strength. freedom. 3.

. Types of traits measured include: Consumer innovativeness ² how receptive a person is to new experiences. relatively enduring way in which one individual differs from another.TRAIT THEORY OF PERSONALITY ‡ ‡ ‡ ‡ ‡ ‡ ‡ A trait is defined as any distinguishing. Researchers have learned to expect personality to be linked to how consumers make their choices. and to the purchase or consumption of a broad product category rather than a specific brand.´ Consumer ethnocentrism ² the consumer¶s likelihood to accept or reject foreign-made products. Selected single-trait personality tests increasingly are being developed specifically for use in consumer behavior studies. Consumer materialism ² the degree of the consumer¶s attachment to ³worldly possessions.

Dogmatism Dogmatism is a personality trait that measures the degree o rigidity an individual displays toward the unfamiliar and toward information that is contrary to their established beliefs. Social character. new services. Consumers high in dogmatism are more accepting of authority. Consumers low in dogmatism are more likely to prefer innovative products to established ones. Dogmatism. Consumer Innovativeness How receptive are consumers to new products. Variety-novelty seeking. or new practices? Recent Consumer research indicates a positive relationship between innovative use of the Internet and buying online.PERSONALITY TRAITS ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Personality traits to be discussed include: Consumer innovativeness. Need for uniqueness.based ads for new products. . Optimum stimulation level.

If bored. If the two are equivalent. they tend to be satisfied. Persons with optimum stimulation levels (OSL s) are willing to take risks. Need for Uniqueness These people avoid conformity are the ones who seek to be unique! Optimum Stimulation Level Some people prefer a simple.INFLUENCE OF PERSONALITY TRAITS IN CONSUMPTION BEHAVIOUR ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Social Character Social character is a personality trait that ranges on a continuum from inner directed to other-directed. . They prefer ads that feature social environment and social acceptance. to try new products. to seek purchase-related information. The correspondence between an individual¶s OSL and their actual circumstances has a direct relationship to the amount of stimulation individual¶s desire. complex. Other-directed consumers tend to look to others for direction and are not innovators. they are under stimulated. They also prefer ads stressing product features and personal benefits. uncluttered. Inner-directed consumers tend to rely on their own ³inner´ values or standards in evaluating new products and are innovators. although others seem to prefer an environment crammed with novel. and vice versa. and unusual experiences. to be innovative. and calm existence. and to accept new retail facilities.

Vicarious exploration (e. switching brands to experience new and possibly better alternatives).g. Primary types are variety or novelty seeking. up to a point. The stream of research examined here indicates that the consumer innovator differs from the non-innovator in terms of personality orientation.INFLUENCE OF PERSONALITY TRAITS IN CONSUMPTION BEHAVIOUR ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Variety-Novelty Seeking. Consumers with high variety seeking scores might also be attracted to brands that claim to have novel or multiple uses or applications. where the consumer uses an already adopted product in a new or novel way).g. where the consumer secures information about a new or different alternative and then contemplates or even daydreams about the option). Marketers.. Ultimately. and Use innovativeness (e... This is similar to OSL. marketers must walk the fine line between offering consumers too little and too much choice. benefit from thinking in terms of offering additional options to consumers seeking more product variety. The third form of variety or novelty seeking²use innovativeness²is particularly relevant to technological changes. There appear to be many different types of variety seeking: Exploratory purchase behavior (e. ‡ .g.

Perception is basically a cognitive or thinking process and individual activities. e. Organization ± Categorization by matching sensed stimulus with similar object in memory. Color 3.THEORY OF PERCEPTION ‡ CONSUMER PERCEPTIONS. organizing and interpreting information inputs in to a meaningful and coherent picture of the world. whereby an individual selects data or information from the environment. Interpretation± Attaching meaning to stimulus. bitter taste ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . organizes it and then draws significance or meaning from it. Ex. feelings etc. are based on his or her perceptions of their surroundings or environment.Perception is the process of selecting. The process of perception has three sub stages 1. Sensation± Attending to an object/event with one of five senses. emotions. Perception being an intellectual and cognitive process will be subjective in nature. 2. making judgments as to value and liking.g. Characteristics of Perception Perception is a mental process.

Selective distortion 3. satisfies current needs. Advertisers that use comparative advertisements (pitching one product against another).Theory of Perception ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Perceptual Processes: 1. Selective attention means that marketers have to work hard to attract consumers¶ notice. Unfortunately. if it is linked to an event. 2. Selective attention Selective Attention. Selective distortion is the tendency to twist information into personal meanings and interpret information in a way that will fit our pre-conceptions. . Selective retention. there is not much that marketers can do about selective distortion. have to be very careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. Selective Distortion. intensity of input changes (sharp price drop). A stimuli is more likely to be attended to .

sending messages to their target market. Human sensitivity refers to the experience of sensation. ‡ . Selective retention explains why marketers use drama and repetition in . nose. Because of selective retention. sight. Sensation itself depends on energy change. People will forget much that they learn but will tend to retain information that supports their attitudes and beliefs. the difference of input. taste. Sensory receptors are the human organs (i. A stimulus is any unit of input to any of the senses. and a brand name). a package.Theories of Perception ‡ ‡ ‡ ‡ ‡ ‡ * ‡ ‡ Selective retention. (an advertisement. smell. and skin) that receive sensory inputs. We remember inputs that support our beliefs. Sensitivity to stimuli varies with the quality of an individual¶s sensory receptors and the amount or intensity of the stimuli to which he/she is exposed.e. the eyes. or touch. sound. ears.. we are likely to remember good points mentioned about competing products. mouth. forgets those that don¶t. Basic Concepts in Perception Process Sensation is the immediate and direct response of the sensory organs to stimuli.

bitter and floral etc. sensory preferences and consumer expectations. Perception The five senses ± sight . ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . packaging. tempo and pitch. Factors influencing Sensory Perception 1. Marketers recognize the importance of colours and use it intelligently and extensively in product design.‡ ‡ Sensory and taste govern sensory perception. hear Sensory perception focuses on specific attributes of a product or service and how these attributes are understood and evaluated by consumers. and size. they are sensory acuity. Colour is a powerful cue in visual perception. promotion. Sensory acuity ± different people used to have different capacities to recognize and differentiate among certain sensory cues. shape. sweet. smell. Stimulus Factors 2. touch.. Individual Factors Stimulus Factors Sensory cues are such attributes as colour. and store décor. Individual Response factors The following are the individual factors affecting the sensory perceptions.

Reference Prices A reference price is any price that a consumer uses as a basis for comparison in judging another price... as low. service marketers face several unique problems in positioning and promoting their offerings. Reference prices can be external or internal. ‡ ‡ ‡ ‡ ‡ ‡ .Marketing Applications of Perception ‡ ‡ Positioning of Services Compared with manufacturing firms. The marketing objective is to enable the consumer to link a specific image with a specific brand name.´) in an ad in which a lower sales price is being offered. as fair² has a strong influence on both purchase intentions and purchase satisfaction. An advertiser generally uses a higher external reference price (³sold elsewhere at. Many service marketers have developed strategies to provide customers with visual images and tangible reminders of their service offerings. Services are intangible image becomes a key factor in differentiating a service from its competition. Perceived Price How a consumer perceives a price (perceived price)²as high. to persuade the consumer that the product advertised is a really good buy.

etc. store image. brand image. b) Extrinsic cues are such things as price. such as size. and promotional message. a) Intrinsic cues are physical characteristics of the product itself. Many consumers use country-of-origin stereotypes to evaluate products. b) In the absence of actual experience with a product. they are often unable to identify that product in a taste test. size. . Service is consumed as it is being produced. service environment. etc. store image.‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Perceived Quality Marketing Applications of Perception Consumers often judge the quality of a product (perceived quality) on the basis of a variety of informational cues. so consumers rely on surrogate or extrinsic cues when purchasing services. color. Consumers are unable to compare services side-by-side as they do products. flavor. Perceived Quality of Products Intrinsic cues are concerned with physical characteristics of the product itself. Marketers try to standardize their services in order to provide consistency of quality. or aroma. Perceived Quality of Services It is more difficult for consumers to evaluate the quality of services than the quality of products. but in reality. consumers often evaluate quality on the basis of extrinsic cues. color. defective services are difficult to correct. brand image. a) Consumers like to think they base quality evaluations on intrinsic cues. price. Researchers have concluded that the service quality that a customer perceives is a function of the magnitude and direction of the gap between expected service and the customer¶s assessment of the service actually delivered. As a result. flavor.

Because price is so often considered to be an indicator of quality. Other studies suggest consumers are actually relying on a well-known brand name as a quality indicator. b) There is a positive price/quality relationship.Marketing Applications of Perception ‡ ‡ Price/Quality Relationship Perceived product value has been described as a trade-off between the product¶s perceived benefits (or quality) and perceived sacrifice required to acquire it. ‡ * ‡ ‡ ‡ . A number of research studies support the view that consumers rely on price as an indicator of product quality. c) Consumers use price as a surrogate indicator of quality if they have little information or little confidence in their ability to make a choice. some products deliberately emphasize a high price to underscore their claims of quality. Marketers have used the price/quality relationship to position their products as the topquality offering in their product category.

Needs 4. intensity. Gestalt principle implies that the process of perception is influenced by stimulus factors & individual response factors. Individual Response factors 1. not its individual features. size. contrast.Gestalt Theory of Perception ‡ ‡ Consumers perceive the overall form of a product . and situation perceived. Colour & Contrast ± color perception involves subjective judgments. movement. chemical. electro-magnetic and other observable characteristics of person . Intensity ± More attention is usually gained as intensity increases. Position Isolation ± centering a small object in a virtually blank page draws the eyes to it immedaitely. and isolation. The stimulus factors which affect sensory perception include colour. Size ± Large sizes tend to attract greater attention than small. Interest 2. The Stimulus factors are physical. Involvement 3. object . position. Values ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ .

and reinforcement. learning theorists in general agree that in order for learning to occur. almost reflexive responses to the learning of abstract concepts and complex problem solving. a) First. it continually evolves and changes as a result of newly acquired knowledge from actual experience. cues. consumer learning is a process.CONSUMER LEARNING ‡ Consumer learning is a process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior. response. ‡ ‡ ‡ c) Most learning theorists recognize the existence of different types of learning and explain the differences through the use of distinctive models of learning. that is. . b) Both newly acquired knowledge and personal experience serve as feedback to the individual and provide the basis for future behavior in similar situations. certain basic elements must be present²motivation. Despite their different viewpoints. from simple. ‡ ‡ Several points in this definition are worth noting. The term learning encompasses the total range of learning.

Cues are the stimuli that give direction to the motive of learning. Conversely. advertising. They may seek information concerning the prices. ‡ The degree of involvement determines the consumer¶s level of motivation to search for knowledge or information about a product or service. and store displays all serve as cues to help consumers fulfill their needs. packaging. quality and characteristics of tennis racquets. individuals who are not interested in tennis are likely to ignore all information related to the game. a) In the marketplace. Cues serve to direct consumer drives when they are consistent with their expectations. ‡ ‡ ‡ ‡ . price. Uncovering consumer motives is one of the prime tasks of marketers who then try to teach motivated consumer segments why and how their products will fulfill the consumer¶s needs. For Ex. Men and women who want to become good tennis players are motivated to learn all they can about tennis and to practice whenever they can. styling.PRINCIPAL ELEMENTS OF LEARNING ‡ ‡ Motivation is based on needs and goals and Motivation acts as a spur to learning.

‡ ‡ . Reinforced behavior tends to be repeated. that. consumers can learn to develop successful means of responding to their needs or changing conditions. The response a consumer makes depends heavily on previous learning.How individuals react to a cue²how they behave²constitutes their response.Reinforcement increases the likelihood that a specific response will occur in the future as the result of particular cues or stimuli. in turn. depends on how related responses were reinforced previously. A response is not tied to a need in a one-to-one fashion.PRINCIPAL ELEMENTS OF LEARNING ‡ ‡ ‡ ‡ Response . A need or motive may evoke a whole variety of responses. Reinforcement .

The rate at which extinction occurs is inversely related to the strength of the original learning. the more likely we are to learn it.CHARACTERISTICS OF LEARNING ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ There are several characteristics of learning which are relevant and of interest to marketers. Learning lasts longer. and imagery. Reinforcement is anything which increases the likelihood that a given response will be repeated in the future. The more imagery contained in the material. when the more important the material to be leaned. 1. The greater the number of stimulus repetitions that occurs. 2. Imagery refers to the images created by words. . Importance ± refers to the value that the consumer places on the information to be learned.Extinction Extinction or forgetting occurs when the reinforcement for the learned response is withdrawn. repetition. more reinforcement received during the learning process. Strength of Learning ± heavily influenced by importance. reinforcement. Repetition is the more times we are exposed to the information or practice a certain kind of behavior .

5. The more the retrieval situation offers cues similar to the cues present during learning. This characteristic of consumer learning is used by marketers to develop brand extensions. the more likely effective retrieval is to occur. real or symbolic advertising. Marketers use Advertising as one of the ways to differentiate their products from others by brand differences. Many a time.Stimulus Discrimination Stimulus Discrimination refers to the process of learning to respond differently to somewhat similar stimuli. 4.CHARACTERISTICS OF LEARNING ‡ ‡ ‡ ‡ ‡ ‡ 3. the more likely relevant information will be retrieved when required. ‡ ‡ ‡ ‡ .Response Environment The stronger the original learning. the shopping environment is replicated to bring the learning environment much closer to the retrieval environment.Stimulus Generalization Stimulus generalization occurs when a response to one stimulus is elicited by a similar but distinct stimulus.

Behavioural Learning Theories Learning Theories Connectionist Learning ( Development of connections between stimulus ± Response ) Cognitive Learning Classical Conditioning Instrumental Conditioning Conditioning Conditioning refers to learning based on association of stimulus ( information ) and response ( behaviour or feeling ) .

PAVLOVIAN MODEL OF CLASSICAL CONDITIONING Unconditioned Stimulus Meat Paste Unconditioned Response Salivation Conditioned Stimulus Bell AFTER REPEATED PAIRINGS Conditioned Stimulus Bell Conditioned Response Salivation .

‡ Early classical conditioning theorists regarded all organisms ( both animal & human ) as relatively passive entities that could be taught certain behaviors through repetition ( or conditioning ). a) Conditioning involved building automatic responses to stimuli. Ivan Pavlov was the first to describe conditioning and to propose it as a general model of how learning occurs. b) For Pavlov, conditioned learning results when a stimulus that is paired with another stimulus elicits a known response and serves to produce the same response when used alone. c) He used dogs to demonstrate his theories. d) The dogs were hungry and highly motivated to eat. e) Pavlov sounded a bell and then immediately applied a meat paste to the dogs¶ tongues, which caused them to salivate. f) After a sufficient number of repetitions of the bell sound, followed almost immediately by the food, the bell alone caused the dogs to salivate. In a consumer behavior context, an unconditioned stimulus might consist of a well-known brand symbol (e.g., the Microsoft ³windows´ icon) that implies technological superiority and trouble-free operation (the unconditioned response). Conditioned stimuli might consist of new products bearing well-known symbols. ‡ ‡ ‡

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‡ ‡ Classical conditioning is seen as cognitive associative learning not the acquisition of new reflexes, but the acquisition of new knowledge about the world. Optimal conditioning²that is, the creation of a strong association between the conditioned stimulus (CS) and the unconditioned stimulus (US)²requires forward conditioning; that is, the CS should precede the US, repeated pairings of the CS and the US, a CS and US that logically belong together, a CS that is novel and unfamiliar, and a US that is biologically or symbolically salient. This model is Neo- pavlovian Conditioning. Under neo- Pavlovian conditioning, the consumer can be viewed as an information seeker who uses logical and perceptual relations among events, along with his or her own preconceptions, to form a sophisticated representation of the world. Strategic Applications of Classical Conditioning Three basic concepts derive from classical conditioning: repetition, stimulus generalization, and stimulus discrimination. 1. Repetition works by increasing the strength of the association and by slowing the process of forgetting. a) After a certain number of repetitions retention declines. b) This effect is known as advertising wear out and can be decreased by varying the advertising messages. c) Wear out may be avoided by varying the message through cosmetic variation or substantive variation.


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‡ ‡ ‡ ‡ ‡ ‡ ‡ 2. Stimulus generalization explains why imitative ³me too´ products succeed in the marketplace: consumers confuse them with the original product they have seen advertised. a) It also explains why manufacturers of private label brands try to make their packaging closely resemble the national brand leaders. The principle of stimulus generalization is applied by marketers to product line, form, and category extensions. b) In product line extensions, the marketer adds related products to an already established brand, knowing that the new product is more likely to be adopted when it is associated with a known and trusted brand name. c) Marketers offer product form extensions that include different sizes, different colors, and even different flavors. d) Product category extensions generally target new market segments. i) The success of this strategy depends on a number of factors. ii) For example, if the image of the parent brand is one of quality, consumers are more likely to bring positive associations to the new category extensions. Family branding²the practice of marketing a whole line of company products under the same brand name² is another strategy that capitalizes on the consumer¶s ability to generalize favorable brand associations from one product to the next. Retail private branding often achieves the same effect as family branding.

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e) Repetition. The principles of classical conditioning provide the theoretical underpinnings for many marketing applications. The key to stimulus discrimination is effective positioning. that a product or service has in the mind of the consumer is critical to its success. the longer the period of learning²of associating a brand name with a specific product²the more likely the consumer is to discriminate. and the less likely to generalize the stimulus. meaningful. and valuable to consumers. c) Unlike the imitator who hopes consumers will generalize their perceptions and attribute special characteristics of the market leader¶s products to their own products. or position. b) The image. a major competitive advantage. market leaders want the consumer to discriminate among similar stimuli. d) In general.STRATEGIC APPLICATIONS OF CLASSICAL CONDITIONING ‡ ‡ 3. It often is quite difficult to unseat a brand leader once stimulus discrimination has occurred. which seeks to establish a unique image for a brand in the consumer¶s mind. stimulus generalization. and stimulus discrimination are all major applied concepts that help explain consumer behavior. Stimulus discrimination is the opposite of stimulus generalization and results in the selection of specific stimulus from among similar stimuli. a) The consumer¶s ability to discriminate among similar stimuli is the basis of positioning strategy. ‡ ‡ ‡ ‡ ‡ ‡ . Most product differentiation strategies are designed to distinguish a product or brand from that of competitors on the basis of an attribute that is relevant.

b) Although classical conditioning is useful in explaining how consumers learn very simple kinds of behaviors. In a marketing context.INSTRUMENTAL CONDITIONING ‡ ‡ ‡ ‡ ‡ ‡ ‡ Instrumental Conditioning also called as µ Operant Conditioning¶. ‡ ‡ . rewards) than other purchase behaviors. a) In instrumental conditioning. instrumental conditioning requires a link between a stimulus and a response. Skinner. Instrumental learning theorists believe that learning occurs through a trial-and error process.e. d) A favorable experience is instrumental in teaching the individual to repeat a specific behavior. instrumental conditioning is more helpful in explaining complex. c) In consumer behavior terms. instrumental conditioning suggests that consumers learn by means of a trialand error process in which some purchase behaviors result in more favorable outcomes (i. the consumer who tries several brands and styles of jeans before finding a style that fits her figure (positive reinforcement) has engaged in instrumental learning. According to American psychologist B. most individual learning occurs in a controlled environment in which individuals are ³rewarded´ for choosing an appropriate behavior. Like classical conditioning.. F. the stimulus that results in the most satisfactory response is the one that is learned. goal-directed activities. with habits formed as a result of rewards received for certain responses or behaviors.

Changes in goal-directed behavior. Useful in explaining how consumers learn brand names and acquire / change their opinions. * Learning to adapt and control one¶s environment is better explained by this theory. * The outcome of instrumental conditioning Dependent on learner¶s actions. ‡ The outcome of classical conditioning is not dependent on learner¶s actions. tastes . tastes and goals. ‡ . Learners discover appropriate response.CLASSICAL CONDITIONING Vs INSTRUMENTAL CONDITIONING Classical Conditioning ‡ Involves an already established response to another stimulus Instrumental Conditioning * No previous stimulus ± response connection necessary. goals. ‡ Classical conditioning influences development * The instrumental conditioning influences and changes in opinions.

that is. Forgetting and extinction²when a learned response is no longer reinforced. a) The first type. consists of events that strengthen the likelihood of a specific response. it diminishes to the point of extinction. Fear appeals in ad messages are examples of negative reinforcement. d) Negative reinforcement should not be confused with punishment. b) Negative reinforcement is an unpleasant or negative outcome that also serves to encourage a specific behavior. ‡ ‡ ‡ ‡ . which provided that the likelihood for a response would be repeated. to the point at which the link between the stimulus and the expected reward is eliminated. c) Either positive or negative reinforcement can be used to elicit a desired response.REINFORCEMENT BEHAVIOUR ‡ ‡ ‡ ‡ Reinforcement of Behavior Skinner distinguished two types of reinforcement (or reward) influence. positive reinforcement. this is known as the process of decay. which is designed to discourage behavior. a) Forgetting is often related to the passage of time.

for many consumers. Reinforcement schedules²marketers have found that product quality must be consistently high and provide customer satisfaction with each use for desired consumer behavior to continue. a) Shaping increases the probabilities that certain desired consumer behavior will occur. and random (variable ratio) reinforcement. systematic (fixed ratio) reinforcement. hope springs eternal. Variable ratios tend to engender high rates of desired behavior and are somewhat resistant to extinction²perhaps because. Marketers have identified three types of reinforcement schedules: total (or continuous) reinforcement.REINFORCEMENT BEHAVIOUR ‡ ‡ b) Marketers can overcome forgetting through repetition and can combat extinction through the deliberate enhancement of consumer satisfaction. Shaping²the reinforcement of behaviors that must be performed by consumers before the desired behavior can be performed is called shaping. ‡ ‡ ‡ ‡ .

of driving too fast. accomplishment. the ensuing results (reinforcement) that occur. and even social class. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . a) Modeling is the process through which individuals learn behavior by observing the behavior of others and the consequences of such behavior. which may show the negative consequences of smoking. c) Children learn much of their social behavior and consumer behavior by observing their older siblings or their parents. Sometimes ads depict negative consequences for certain types of behavior. whether celebrities or unknowns. or taking drugs. b) Their role models are usually people they admire because of such traits as appearance. They observe how others behave in response to certain situations (stimuli). and they imitate (model) the positively reinforced behavior when faced with similar situations. skill. d) This is particularly true of public policy ads. Advertisers recognize the importance of observational learning in their selection of models.Modeling or Observational Learning ‡ Learning theorists have noted that a considerable amount of learning takes place in the absence of direct reinforcement. through a process psychologists call modeling or observational learning (also called vicarious learning). either positive or negative.

it is believed that content is stored in the memory in separate storehouses for further processing. and Retrieve Information The structure of memory²because information processing occurs in stages. How Consumers Store. Sensory store²all data comes to us through our senses. the greater his or her ability to make use of product information. and it gives some control over their environment. a) Information processing is related to both the consumer¶s cognitive ability and the complexity of the information to be processed. ‡ ‡ ‡ ‡ . Cognitive learning theory holds that the kind of learning most characteristic of human beings is problem solving. and a long-term store.Cognitive Learning Theory ‡ ‡ ‡ ‡ Cognitive learning is based on mental activity. a short-term store. a sensory store. however. Information Processing The human mind processes the information it receives as input much as a computer does. Individuals differ in terms of their ability to form mental images and in their ability to recall information. our senses do not transmit information as whole images. Retain. The more experience a consumer has with a product category.

Cognitive Learning Theory ‡ Information Processing & Memory Stores Sensory Input Rehearsal Encoding Retrieval Sensory Store Working Memory ( Short term store ) Long Term Store Forgotten Lost Forgotten lost Forgotten unavailable .

weeks. b) This sensory store holds the image of a sensory input for just a second or two. or even years. . mental repetition of material² takes place. f) If data is not rehearsed and transferred. but hard to make a lasting impression. Rehearsal and encoding²the amount of information available for delivery from the short-term store to the long-term store depends on the amount of rehearsal an individual gives to it. then the data is transferred to the long-term store.Cognitive Learning Theory ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ a) The separate pieces of information are synchronized as a single image. it is lost in a few seconds. e) If rehearsal²the silent. c) This suggests that it¶s easy for marketers to get information into the consumer¶s sensory store. it is moved to the short term store. d) This is our working memory. Long-term store²once data is transferred to the long-term store it can last for days. Short-term store²if the data survives the sensory store.

e. k) There are contradictory studies on what constitutes overload.. l) The difficulty is determining the point of ³overload. i) How much consumers encode depends on their cognitive commitment to the intake of the information and their gender. Information overload takes place when the consumer is presented with too much information. many information-processing theorists view the long-term store as a network consisting of nodes (i. . Retention²information is constantly organized and reorganized as new links between chunks m) In fact.Cognitive Learning Theory ‡ ‡ ‡ ‡ ‡ ‡ ‡ g) Encoding is the process by which we select and assign a word or visual image to represent a perceived object. ‡ ‡ of information are forged. h) Learning visually takes less time than learning verbal information. j) It appears to be a function of the amount of information and time frame of that information. concepts) with links among them.

. q) Research has found that older adults appear to be more reliant on scheme based information processing strategies than younger adults. i) Consumers recode what they have already encoded to include larger amounts of information (chunking). p) The total package of associations brought to mind when a cue is activated is called a schema. r) Consumers¶ information search is often dependent upon how similar or dissimilar (discrepant) presented products are to product categories already stored in memory. which involves relating new data to old to make the material more meaningful. s) The degree of prior knowledge is an important consideration. o) This process is known as activation. and sometimes their search for additional information.Cognitive Learning Theory ‡ ‡ ‡ ‡ ‡ ‡ ‡ n) As individuals gain more knowledge they expand their network of relationships.

rather than its attributes.. ‡ ‡ ‡ ‡ Retrieval is the process by which we recover information from long-term storage. u) Information is stored in long-term memory in two ways: episodically (i.e.Cognitive Learning Theory ‡ ‡ ‡ t) Knowledgeable consumers can take in more complex chunks of information than those who are less knowledgeable in the product category. by the order in which it is acquired) and semantically (according to significant concepts). y) Motivated consumers are likely to spend time interpreting and elaborating on information they find relevant to their needs. w) A great deal of research is focused on how individuals retrieve information from memory. and are likely to activate such relevant knowledge from long-term memory. v) Many learning theorists believe that memories stored semantically are organized into frameworks by which we integrate new data with previous experience. . x) Studies show that consumers tend to remember the product¶s benefits.

g. b) Advertisements for competing brands or for other products made by the same manufacturer can lower the consumer¶s ability to remember advertised brand information. ii) Old learning can interfere with the recall of recently learned material. Interference effects are caused by confusion with competing ads and result in a failure to retrieve. ‡ ‡ ‡ ‡ ‡ . unexpected) elements pierce consumers¶ perceptual screens and improve the memorability of an ad when these elements are relevant to the advertising message. c) There are actually two kinds of interference.Cognitive Learning Theory ‡ z) Research findings suggest that incongruent (e. i) New learning can interfere with the retrieval of previously stored material. a) Incongruent elements that are not relevant to an ad also pierce the consumer¶s perceptual screen but provide no memorability for the product.


speaking. Limitations of Split ± Brain Theory Research suggests the spheres of the brain do not always operate independently of each other. It does seem the right side is more cognitively oriented and the left side more affectively oriented. and intuitive. pictorial. and realistic. active. The right hemisphere of the brain is concerned with non-verbal .SPLIT ± BRAIN THEORY ‡ ‡ Split Brain theory developed from a stream of research called hemispheral lateralization. metaphoric. The right side of the brain is emotional. Split Brain Theory states that the right and left hemispheres of the brain specialize in the kinds of information they process. The left hemisphere is primarily responsible for cognitive activities such as reading. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . The left side of the brain is rational. timeless. impulsive. but work together to process information.and high-involvement. The Individuals who are exposed to verbal information cognitively analyze the information through the left brain processing and form mental images. and attributional information processing. and holistic information. There is evidence that both sides of the brain are capable of low.

Right-brain theory is consistent with classical conditioning and stresses the importance of the visual component of advertising. although verbal cues trigger cognitive functions. Print media (newspapers and magazines) are considered left hemisphere or high-involvement activity. encouraging evaluation. . TV viewing is considered a right hemisphere activity. f) Pictorial cues are more effective at generating recall and familiarity with the product. a) Because it is largely pictorial. although verbal cues (which trigger left-brain processing) generate cognitive activity that encourages consumers to evaluate the advantages and disadvantages of the product.INVOLVEMENT THEORY & MEDIA STRATEGY ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Individuals passively process and store right-brain information. including the creative use of symbols. e) The right-brain processing theory stresses the importance of the visual component of advertising. b) Passive learning was thought to occur through repeated exposures to low involvement information. c) The left hemisphere is associated with high-involvement information. d) Recent research suggests that pictorial cues help recall and familiarity.

risk perception. purchase importance. d) Researchers who focus on the behavioral aspects of involvement measure such factors as the search for and evaluation of product information. enduring. communication involvement. persons. it makes sense to develop an involvement profile. commitment. and purchase decisions. b) Others differentiate between situational. extent of information search. a) Some studies have tried to differentiate between brand involvement and product involvement. and purchase importance. rather than to measure a single involvement level. Because of the many different dimensions and conceptualizations of involvement.MEASURES OF INVOLVEMENT ‡ Researchers have defined and conceptualized involvement in a variety of ways including ego involvement. The lack of a clear definition about the essential components of involvement poses some measurement problems. and response involvement. ‡ ‡ ‡ ‡ ‡ ‡ . e) Others argue that involvement should be measured by the degree of importance the product has to the buyer. c) Researchers who regard involvement as a cognitive state are concerned with the measurement of ego involvement. products situations.

Measures of Consumer Learning Market share and the number of brand-loyal consumers are the dual goals of consumer learning. b) Brands with larger market shares have proportionately larger groups of loyal buyers. and presentation of both print and television advertisements. length. f) The left-brain (cognitive processing)/right-brain (passive processing) paradigm seems to have strong implications for the content.Marketing Applications of Involvement ‡ ‡ Involvement theory has a number of strategic applications for the marketer. a) Brand-loyal customers provide the basis for a stable and growing market share. ‡ ‡ ‡ ‡ . g) By understanding the nature of low involvement information processing. marketers can take steps to increase consumer involvement with their ads.

values and customs that serve to direct the consumer behaviour of members of a particular society.‡ ‡ Definition of µ Culture¶ CULTURE Culture is defined as the complex whole that includes knowledge. Beliefs & Values Beliefs & Values are mental images that affect a wide range of specific attitudes that . in turn. Culture is a system of collectively held values. art. Culture is defined as the sum total of learned beliefs. Culture is the collective programming of human mind that distinguishes the members of one human group from those of another. custom and any other capabilities and habits acquired by man as a member of society. law. Customs consist of everyday or routine behaviour ‡ ‡ ‡ ‡ ‡ ‡ ‡ . belief. influence the way a person is likely to respond in a specific situation. morals. Customs Customs are overt modes of behaviour that constitute culturally approved or acceptable ways of behaving in specific situations.

friends. Elements of Culture Culture is exhibited by the customs. symbols and rituals within the society. ‡ ‡ ‡ ‡ ‡ .WAYS OF LEARNING CULTURE ‡ ‡ Culture is learned through the following three ways. you have been taught that you need to study to be successful and happy in life. or by watching TV and film actors in action 3. 1. 2. dancing. Informal learning: we learn by imitating the behaviour of our parents. For instance. These elements are the observable in nature. Technical learning: instructions are given about the specific method by which certain things to done such as painting. Formal learning: parents and elders teach children the proper way to behave. language. This learning may influence your response both as a student and individual towards education. singing etc.

rewards and punishments. Multiple cultures are nested hierarchically . We are not born with any cultural knowledge. Culture is socially acquired. Culture is adaptive ± it changes in response to the needs of the society. Culture makes life more efficient All members of a certain cultural group follow same norms. . Culture is cumulative and transferred from one generation to another.CHRACTERISTICS OF CULTURE ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Culture is learned ± by interacting with other members of the cultural group Culture regulates society ±Norms. Culture is environmental and exists to serve the needs of the society. standards of behaviour.

frozen food etc. 2. We are spending more money than ever before on acquiring products such as air-conditioners. 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. Education: People in our society today wish to acquire relevant education and skills that would help improve their career prospects. physical fitness. 3. As a specific instance count the number of institutions offering courses and training in computers that has opened in your city. Slimming centers and beauty parlors are mushrooming in all major cities of the country. This is evident from the fact that so many professional.SOME CHANGES IN OUR CULTURE ‡ 1. Even exclusive shops are retailing designer clothes. Materialism: There is a very definite shift in the people¶s cultural value from spiritualism towards materialism. career oriented educational centers are coming up. Physical appearance: Today. and make life more convenient. food processors. Mixer grinders. microwaves. cars CD players etc. Cosmetics for both women and men are being sold in increasing numbers. This is reflected in the soaring sale of Washing machines. 4. good health and smart appearance are on premium today. which adds to our physical comfort as well as status. and still they cannot seem to meet the demand. ‡ ‡ ‡ . Pressure cookers.

TYPES OF CULTURE ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ National culture The culture prevalent in a nation. myths and heroes . customs. religion. rituals. etc. gender. race. Popular culture The culture of the masses with norms of mass appeal. region. common to everyone. Subculture The culture of a group within the larger society. age. Corporate culture The company¶s values. Group identification based on nationality of origin.

Islam. American. Christians Race: Asian.Sub . Sikhs. middle. Female Occupation: Farmer. cultural group. Japanese Religion: Hinduism. Pakistani. while following the dominant cultural values of the overall society also has its own belief. values and customs that set them apart from other members of the same society. youth. white Age: young. North-eastern India ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Chinese. matured Sex: Male. middle aged.Culture ‡ A subculture is an identifiable distinct. lower Geographic regions: South India. black. which. elderly. teacher. business Social class: upper. teens. Sub-culture categories are: Nationality: Indian. Srilankan.

Sex roles are changing. Gender shows different consumption patterns and perceptions of consumption situations ±E.Influences of Sub. Regional. information processing. consumption patterns may differ in various regions of India and the world. and religious differences. and Religious Influences on Consumer Behavior The three major aspects of culture that have important effects on consumer behavior are regional. our country has a number of different ethnic groups. Firstly. The very diverse Asian American subculture is described as young and having higher socioeconomic status. religious beliefs and values can influence consumer. who need to establish an identity. Age. are the consumers of tomorrow and have an increasing influence on family decisions.. and Household Influences on Consumer Behavior Among the four major age groups. Finally. Secondly. the wedding ceremony. and population trends will dramatically alter the demographic profile of the country in the next 50 years. placing strong value on the family and the group. and being strongly brand loyal. marketing strategies can be developed for this group. Ethnic. men and women can differ in terms of traits. 2. ‡ ‡ ‡ ‡ . Women are becoming more professional and independent. ethnic. Teens. Also. and consumption patterns. Gender.g. Gender is consistent throughout lifetime.Cultures on Consumer Behaviour ‡ ‡ ‡ ‡ 1. and men are becoming more sensitive and caring. Many marketers now becoming multicultural in their marketing activities by trying to appeal to a variety of cultures at the same time. decision styles. influencing customer values and preferences. In spite of its diversity. and marketing strategy can sometimes be tailored specifically to these regions.

Western cultures tend to place a relatively high value on material goods. and technology.dominant. youth. husbands and wives vary in their influence in the decision process. household members can play different roles in the decision process (gatekeeper.Cultures on Consumer Behaviour ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Households play a key role in consumer behavior. hedonism. (2) Cohabitation. . autonomic. work and play. health. and user). Households also exert an important influence on acquisition and consumption patterns. with some values being viewed as more important than others. First. Psychographics: Values. Marketers use tools like value segmentation to identify consumer groups with common values. depending on the situation husband. influencer. Domain-specific values are those that are relevant within a given sphere of activity. family and children. Our values exist in an organized value system. 3. decider. (4) Increased divorce. Personality. Some are regarded as terminal values and reflect desired end states that guide behavior across many different situations. the home. or syncratic. and Lifestyles The roles of psychographics in affecting consumer behaviour are detailed below. buyer. and (5) Fewer children. Values are enduring beliefs about things that are important. wife-dominant.Influences of Sub. They are learned through the processes of socialization and acculturation. (3) Dual-career families. The proportion of nontraditional households has increased due to factors such as (1) later marriages. Instrumental values are those needed to achieve these desired end states. Second.

Influences of Sub- Cultures on Consumer Behaviour
‡ Personality consists of the distinctive patterns of behaviors, tendencies, qualities, and personal dispositions that make people different from one another. Approaches to the study of personality include 1. The psychoanalytic approach, which sees personality arising from unconscious internal struggles within the mind at key stages of development; 2. Trait theories, which attempt to identify a set of personality characteristics that describe and differentiate individuals, such as introversion, extroversion, and stability; 3. Phenomenological approaches, which propose that personality is shaped by an individual¶s interpretation of life events 4. Social-psychological theories, which focus on how individuals act in social situations (e.g., compliant, detached, or aggressive); and 5. Behavioral approaches, which view an individual¶s personality in terms of past rewards and punishments.

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Influences of Sub- Cultures on Consumer Behaviour
‡ Influences of cultural values on the purchase decisions.
Product Class Choice criteria ( critical product Attributes ) Beliefs and Attitudes about Product class Product class Selection Brand selection

Terminal Values

Instrumental Values

Brand Choice Criteria ( critical brand Attributes )

Beliefs and Attitudes about brands

‡ ‡ ‡ CROSS CULTURAL CONSUMER BEHAVIOUR Cross cultural marketing: Objectives and Policies Cross-cultural marketing is defined as ³the effort to determine to what extent the consumers of two or more nations are similar or different. This will facilitate marketers to understand the psychological, social and cultural aspects of foreign consumers they wish to target, so as to design effective marketing strategies for each of the specific national markets involved.´ A company can enter a foreign market as a Domestic exporter Foreign importer Foreign government-solicit the firm to sell abroad The firm¶s objectives could be: To determine how consumers in two or more societies are similar/different and devise suitable, appropriate strategies· Devise individualized marketing strategy if cultural beliefs, values and customs of a specific country are different.

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g.CHRACTERISTICS OF CROSS-CULTURAL MARKETING ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ 1. 2. Problems related to selection of distribution channels: in Japan. Advantageous economies of scale 3. Availability of resources and capability to absorb huge losses 5. P & G used this to sell soap. but by using the real motivating factors that prompt them to accept or reject products. Problems related to promotion/marketing communication: e. Problems related to product selection: The marketer going for cross cultural marketing has to select the customers/ market not on the basis of the superficial similarities of age or income. ‡ ‡ ‡ . Problems related to pricing: the marketer has to adjust his pricing policies according to the local economic conditions and customs. Ariel in the middle east and also Pepsi 3. Cost and differentiation advantages Problems in Cross Cultural marketing 1. 4. Product/technology clout 6. Access to marketing/manufacturing bases across global borders 4. High market share in the domestic market 2.

American society is youth oriented and Korean is age oriented. a lot of emphasis is placed on this aspect and perfumes and deodorants are widely used. In western countries. Youth/ age: Are prestige roles assigned to younger or older members of the society. If the society values collective activity. Performance/ status: A status oriented society cares for higher standards of living. Decisions are taken by mature people in Korea. There is scope for the sale of beauty creams. The marketers adopt strategies accordingly. Thailand and most Arabic countries. Other Oriented This shows the relationship between individuals and the society. Competitive/ Cooperation: Whether competition leads to success.‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ CROSS Values ± CULTURES ± CULTURAL VALUES I. less importance is given to brand names. etc. Individual/ collective: Whether individual initiation has more value than collective activity? Romantic orientation: This depicts whether the communication is more effective which emphasizes courtship or otherwise. Germans do not give the same amount of emphasis to brand names. This is true for the United States. Indonesia. The relationship influences marketing practices. Environment Oriented Values Cleanliness: If a culture lays too much stress on cleanliness. washing powder. Japan. In performance oriented societies. It gives rise to following questions which affect consumer behaviour. where rewards and prestige is based on an individual's performance. Malaysia. and chooses quality goods and established brand names and high prices items. ‡ ‡ . This is achieved by forming alliances with others. vacuum cleaner. deodorants. decisions will be taken in a group. insecticides. Adult/ child theme: Is family life concentrated round children or adults? What role do children play in decision-making? Masculine/ Feminine: Whether the society is male dominant or women dominant or balanced. In many countries a romantic theme is more successful. Singapore. II. Products which function equally well and may not be big brand names are used. soaps.

important · Ambiguous · General · Hold back emotions in public · Process-oriented · Make a long story short · Nonverbal communication important · Interested in who is speaking American Culture traits * Diverse · Fight for one¶s beliefs/positions · Individualistic · Clear-cut · Specific · Display emotions in public · Result oriented · Make a short story long · Verbal communication important · Interested in what is spoken . social. Similarities & Differences among people ‡ Japanese Culture Traits * Homogenous · Harmony to be valid and preserved · Group.CROSS ± CULTURAL CONSUMER ANALYSIS ‡ Cross-cultural consumer analysis can be defined as the effort to determine to what extent the consumers of two or more nations are similar or different. so that they can design effective marketing strategies for the specific national markets involved. and cultural characteristics of the foreign consumers they wish to target. Such analysis can provide marketers with an understanding of the psychological. not individual.

Alternative Global Marketing Strategies Product Strategy Standardized Communications Global strategy: Uniform product/ Uniform Message Mixed Strategy: Customized Product/ Uniform Message Localized Communications Mixed strategy: Uniform Product/ Customized message Local strategy: Customized Product/ Customized Message Standardized Product Localized Product . and goals. Using national borders as a segmentation strategy would mean to use relatively different local or specific marketing strategies for members of distinctive cultures or countries. values.CROSS. Whether to use shared needs and values as a segmentation strategy or to use national borders as a segmentation strategy? Shared needs and values would mean to appeal to consumers in different countries in terms of their common needs.CULTURES & MULTINATIONAL MARKETING STRATEGIES ‡ ‡ ‡ ‡ ‡ ‡ Alternative Multinational Strategies The differences between consumers of various nations are far too great to permit a standardized marketing strategy.

A new and unknown player will have to spend two to four times more than the market leader to achieve the same share of mind. As long as there is a distinct value attached to your offering. Global brand building increases cash flow efficiency: Global brand building also increases value of the business due to the international presence. the consumer will always be willing to pay more for it. That is the same reason why a brand such as BPL at a higher cost beat the stuffing out of companies such as Akai. Sony sells its Walkman in this fashion. That is the only reason why an unknown brand called Titan could command a substantial premium over HMT.CROSS-CULTURES & MULTINATIONAL MARKETING STRATEGIES ‡ 1. some other organizations imbibe a strategy that adapts their advertising messages to the specific values of particular cultures. Given the huge difference in business volumes. and positioned in exactly the same way regardless of the country in which they are sold. Strong global brands always account for more stable businesses. Human beings as a species love status quo. packaged. Favoring a World Brand: A lot of companies have created world brand products that are manufactured. Global brand building commands a premium. Tangible Benefits of Global Brand Building Global brand building drastically reduces marketing investments. which tries to localize its advertising to consumers in each of the cross-cultural markets in which it operates. Phillip Morris bought Kraft from General Foods in 1991 for $13 billion. 2. Coca-Cola paid $60 million to acquire Thumbs-Up from Parle. Sony and Philips in the CTV wars. more than three times its book value. A very good example here would be that of McDonald¶s. For instance. Therefore. Adaptive Global Marketing: In contrast to the above. the pressure of the bottom-line is much higher for an unestablished player. Global brand building builds entry barriers. Neither buyer had any lacunae in manufacturing. ‡ ‡ ‡ ‡ ‡ ‡ . a brand which is entrenched in the consumer¶s mind is very difficult to dislodge. finance or human resources. A strong brand needs lower and lower levels of incremental investment to sustain itself over time. They merely bought business with very powerful brand equities and therefore paid more than the net worth of the businesses.

Strategic Implications of Multinational Marketing Strategies ‡ There is an assumption that the world is becoming homogenized. Many marketers operate in global markets with a strategy still rooted in the domestic market. yet national and sub-regional cultures do exist. The strategy needs to embrace the opportunities and the costs of working in multiple countries. whilst others find it more profitable to adapt and adjust according to specific conditions in various markets. This makes global branding a tough challenge and one that is handled differently from organization to organization. There are five basic propositions that a global brand manager has to take note of while developing strategy at the global level. ‡ ‡ ‡ ‡ ‡ . What will allow one to compete and win in a strange country? Are the product and the brand in particular needed in another culture? Only careful consideration of these questions will create the right platform for a global branding strategy. Some companies pursue strategies based upon the identification of common elements among countries. The marketer has to look for his competitive advantage outside the country of origin.

then these individuals can be considered as a primary group for that person.Four different types of group classification: 1.GROUPS ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ A group may be defined as two or more people who interact to accomplish some goals. Types of Groups . with neighbors. On the other hand. 2.Formal versus Informal groups. it can be seen that the critical distinctions between primary and secondary groups are the frequency with which the individual interacts with them and the importance of the groups to the individual.Primary versus Secondary groups. From this definition. Primary versus Secondary Groups If a person interacts on a regular basis with other individuals (with members of his or her family. ‡ ‡ . 1. or with co-workers whose opinions are valued). if a person interacts only occasionally with such others.Membership versus Symbolic groups. then these others constitute a secondary group for that person. 3. 4. or does not consider their opinions to be important.Large versus Small groups.

and specific goals (to support a political candidate. see each other frequently then it is considered an informal group. of four women who were in the same college sorority and who meet for dinner once a month. Formal versus Informal Groups Another useful way to classify groups is by the extent of their formality. would be classified as a formal group. if a group is more loosely defined. say.. the extent to which the group structure. If a group has a highly defined structure (e.‡ ‡ 2. or three co-workers who. TYPES OF GROUPS ‡ ‡ ‡ . The local chapter of the American Red Cross. increase the knowledge or skills of members).g. treasurer. improve their children's education. and the group's purpose are clearly defined. On the other hand. if it consists. specific roles and authority levels (a president. a formal membership list). and secretary). with elected officers and members who meet regularly to discuss topics of civic interest. with their spouses. the members' roles. then it would be classified as a formal group. that is.

county. Membership versus Symbolic Groups Another useful way to classify groups is by membership versus symbolic groups. A large group might be thought of as one in which a single member is not likely to know more than a few of the group's members personally. In summary. In contrast. attitudes. with its many state. a group in which an individual is not likely to receive membership. a membership group. and city chapters. In the realm of consumer behavior. actual membership groups offer a more direct. we are principally concerned with the study of small groups. For example.‡ ‡ 3. and the American Bar Association. influence on consumer behavior. and behavior. the group of women with whom a young homemaker plays golf weekly or with whom she hopes to play golf when an opening occurs would be considered. for her. For example. and thus a more compelling. with its numerous subordinate divisions. primary membership groups are of the great interest to marketers because they exert the greatest potential influence on consumer purchase decisions. or be fully aware of the specific roles or activities of more than a limited number of other group members. we can say that small. is considered a symbolic group. members of a small group are likely to know every member personally and to be aware of every member's specific role or activities in the group. A membership group is a group to which a person either belongs or would qualify for membership. despite acting like a member by adopting the group's values. informal. Clearly. Large versus Small Groups It is often desirable to distinguish between groups in terms of their size or complexity. In contrast. since such groups are more likely to influence the consumption behavior of group members. each staff member of a college newspaper is likely to know all the other members and be aware of their duties and interests within the group. TYPES OF GROUPS ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Examples of large groups include such complex organizations as General Motors. 4.

g. ‡ ‡ ‡ . consumption behavior of other members whom they admire.Friendship groups are informal groups because they are. Membership in a formal social group may influence a consumer's behavior in several ways. Because members of a formal social group often consume certain products together. usually unstructured and lack specific authority levels. 3. attitudes. such groups are of interest to marketers. or stores. services. members of such groups have frequent opportunity to informally discuss products. 2. In terms of relative influence. The Friendship Groups . Formal Social Groups... for career advancement).SIX BASIC CONSUMER RELEVANT GROUPS ‡ ‡ The Six basic consumer-relevant groups are 1. it is friends who are most likely to influence the individual's purchase decisions. A person joins a formal social group to fulfill such specific goals as making new friends. after an individual's family. formal social groups are more remote and serve a different function for the individual. and behavior. Some members may copy the. or promoting a specific cause. meeting "important" people (e. The Family ± the family has a greater extent of influence on the establishment of a wide range of values. For example.

to attend a "party" devoted to the marketing of a specific line of products. which typically consists of a group of women who gather together in the home of a friend. more pervasive.Two or more people pass the time. The in-home party approach provides marketers with an opportunity to demonstrate the features of their products simultaneously to a group of potential customers. Consumer action groups can be divided into two broad categories: those that organize to correct a specific consumer abuse and then disband. 5. People like to shop with others who they feel have more experience with or knowledge about a desired product or service. ‡ ‡ ‡ ‡ ‡ .‡ TYPESwho shop together-whether for food. Such groups are often offshoots of family or friendship groups. This type of consumer group has become increasingly visible since the 1960s and has been able to influence product design and marketing practices of both manufacturers and retailers. Consumer Action Groups .A particular kind of consumer group-a consumer action group.has emerged in response to the consumerist movement. Shopping with others also provides an element of social fun to an often boring but necessary task. or simply to OF GROUPS 4. for clothing. problem areas and operate over an extended or indefinite period of time. can be called a shopping group. A special type of shopping group is the in-home shopping group. and those that organize to address broader. Shopping Groups .

The sheer amount of time that people spend at their jobs. The formal work group consists of those individuals who work together as a team.TYPES OF GROUPS ‡ A group of tenants who band together to dramatize their dissatisfaction with the quality of service provided by their landlord. provides ample opportunity for work groups to serve as a major influence on the consumption behavior of members. are examples of temporary. Work groups. Both the formal work group and the informal friendship/work group have the potential for influencing consumer behavior. Members of informal work groups may influence the consumption behavior of other members during coffee or lunch breaks or after-hours meetings. cause-specific consumer action groups. or a group of irate community members who unite to block the entrance of a fast-food outlet into their middle-class neighborhood. frequently more than thirty-five hours per week. ‡ ‡ ‡ ‡ ‡ . 6. Their direct and sustained work relationship offers substantial opportunity for one or more members to influence the consumer-related attitudes and activities of other team members.

. on which each member of society can be placed. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . But. Social class is hierarchical 3. with individuals able to move into a higher social class or drop into a lower class. 4. Social class is continuous rather than concrete. income. Social class is not measured by a single variable but is measured as a weighted function of one¶s occupation. so that members of each class have relatively the same status and the members of all other classes have either more or less status.SOCIAL CLASS ‡ Social class can be defined as µThe division of members of a society into a hierarchy of distinct status classes. Persons within a given social class tend to behave more alike 2. we go by this framework. Thus. wealth. social class is used to assign individuals or families to a social-class category Characteristics of Social Classes: The main characteristics of Social class 1. i.¶ Social class is more of a continuum. social researchers have divided this continuum into a small number of specific classes. a range of social positions. etc. status. education. prestige.e.

drawing handsome salary. Status. executives¶ managers of companies with authority. Value & Prestige enjoyed Low Social Class Factors affecting Social Class 1 Lower Class Lower level occupation with no authority. the earned status is based on a person¶s actions and performance. working in a very senior position or a person born into a rich family. executives or middle level managers of companies. or postgraduates.SOCIAL CLASS ‡ ‡ ‡ Social Stratification . Graduates. The status. No. Authoritative person. For example. very often professionally qualified. drawing handsome salary of which certain amount can be saved and invested. Labour class or clerks etc. The inherited status is an outcome of a person¶s birth in a particular family . S. less income. could be inherited or earned. at the end result of stratification.Hierarchical organization of social classes is called social stratification. with a good background of education 2 Medium Middle Class 3 High Higher Class . For example. and no education or minimum education.

possessions. rather than by income alone.Impact of social class ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Provides a sense of identity Imposes a set of µnormative¶ behaviors Classes share values. customs and activities Marketing response to customers of different economic means Marketing to the low-income consumer Some marketers ambivalent as not perceived as long-term customers constitutes a substantial group Target with value-oriented strategies Social Class & Buying Behavior People¶s buying behavior is strongly influenced by the social class to which they belong. Etc. and power. aspire to belong. With an appropriately large slice of income this class offers attractive opportunities to the marketers of designer clothing. it has also been observed that people from similar social classes are living in common geographical clusters. Upper upper class has access to prosperity . local and foreign vacations. Besides .. prestige. leisure related items. .

A reference group is any person or group that serves as a point of companion (or reference) for an individual in the formation of either general or specific values.. rock stars. It also provides some insight into methods that Groups can be used to effect desired changes in consumer behavior. This basic concept provides a valuable perspective for understanding the impact of other people on an individual's consumption beliefs.REFERENCE GROUPS ‡ Reference groups are groups that serve as a frame of reference for individuals in their purchase decisions. ‡ ‡ ‡ ‡ . and behavior. the group can be symbolic: prosperous business people.e. attitudes. nor does it require that consumers identify with a tangible group (i. attitudes. or behavior. The usefulness of this concept is enhanced by the fact that it places no restrictions on group size or membership. and sports heroes).

g. which is likely to play an important role in molding the child's general consumer values and behavior (e. how and where to shop. the number and types of vacations they take). ‡ ‡ ‡ ‡ ‡ . Both normative and comparative reference groups are important. their choice of home furnishings and cars. which foods to select for good nutrition. comparative reference groups influence the expression of specific consumer attitudes and behavior..Classification of Reference Groups ‡ ‡ Reference groups that influence general values or behavior are called normative reference groups. An example of a child's normative reference group is the immediate family. appropriate ways to dress for specific occasions. what constitutes "good" value). Normative reference groups influence the development of a basic code of behavior. A comparative reference group might be a neighboring family whose lifestyle appears to be admirable and worthy of imitation (the way they maintain their home. It is likely that the specific influences of comparative reference groups are to some measure dependent upon the basic values and behavior patterns established early in a person's development by normative reference groups. Reference groups that serve as benchmarks for specific or narrowly defined attitudes or behavior are called comparative reference groups.

2. Thus a contactual group has a positive influence on an individual's attitudes or behavior. and 4. 1. Aspirational groups. and behavior. attitudes. Avoidance groups. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Contactual groups. Disclaimant groups. Four types of reference groups that emerge from a cross-classification of these factors: 1. 3. attitudes.TYPES OF REFERENCE GROUPS ‡ Reference groups can be classified in terms of a person's membership or degree of Involvement with the group and in terms of the positive or negative influences they have on his or her values. A contactual group is a group in which a person holds membership or has regular faceto-face contact and of whose values. and standards he or she approves.

attitudes. Information and Experience An individual who has firsthand experience with a product or service.. Thus the person tends to adopt attitudes and behavior that are in opposition to the norms of the group. is more likely to seek out the advice or example of others. a person who believes that relevant. is less likely to be influenced by the advice or example of others. An aspirational group is a group in which a person does not hold membership and does not have face-toface contact. 4.g. Factors that Affect Reference Group Influence The degree of influence that a reference group exerts on an individual's behavior usually depends on the nature of the individual and the product and on specific social factors. A disclaimant group is a group in which a person holds membership or has face-to-face contact but disapproves of the group's values. Thus 'the person tends to adopt attitudes and behavior that are in opposition to those of the group. advertising may be misleading or deceptive). and behavior. attitudes. 3.TYPES OF REFERENCE GROUPS ‡ 2. a person who has little or no firsthand experience with a product or service. Thus it serves as a positive influence on that person's attitudes or behavior. On the other hand. and does not expect to have access to objective information about it (e. or can easily obtain full information about it. but wants to be a member. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . and behavior. An avoidance group is a group in which a person does not hold membership and does not have face-toface contact and disapproves of the group's values.

‡ ‡ ‡ ‡ ‡ . and that will stand out and be noticed (e.Factors affecting Reference Group¶s Influence ‡ ‡ ‡ Credibility. Attractiveness. and Power of the Reference Group A reference group that is perceived as credible. a luxury item or novelty product).. Even if a product is not visually conspicuous. Products that are less conspicuous (canned fruits. home furniture) are most likely to be purchased with an eye to the reactions of relevant others. fashion clothing. when consumers are concerned with obtaining accurate information about the performance or quality of a product or service. or powerful can induce consumer attitude and behavior change. attractive. Conspicuousness of the Product The potential influence of a reference group varies according to how visually or verbally conspicuous a product is to others. Products that are especially conspicuous and status-revealing (a new automobile.g. they are likely to be persuaded by those they consider to be trustworthy and knowledgeable. it may be verbally conspicuous it may be highly interesting or it may be easily described to others. A visually conspicuous product is one that can be seen and identified by others. For example. laundry soaps) are less likely to be purchased with a reference group in mind.

The idea of classifying products and brands into four groups in terms of the suitability of a reference group appeal was first suggested in the mid-1950s. brand-Plus items. reference groups may influence both a person's product category and brand (or type) choices. brand minus items. brand-minus items. Such products are called product-plus. reference groups influence the brand (or type) decision.Reference Group Impact on Product and Brand Choice ‡ In some cases. these products are called product-minus. and for some products.duct-plus. Such products are called pro. brand-plus items. in some cases. reference groups influence only the product category decision. reference groups influence neither the product category nor the brand decision. along with an initial classification of a small number of product categories ‡ ‡ ‡ ‡ . These products are called product-minus. Finally. In still other cases. In other cases.

2. 3. Influence the individual to adopt attitudes and behavior that are consistent with the norms of the group. Provide the individual with the opportunity to compare his or her own thinking with the attitudes and behavior of the group. To be capable of such influence. The ability of reference groups to influence consumer conformity is demonstrated by the results of a classic experiment designed to compare the effects. ‡ ‡ ‡ ‡ ‡ .Reference Group & Consumer Conformity ‡ ‡ Reference Groups and Consumer Conformity Marketers are particularly interested in the ability of reference groups to change consumer attitudes and behavior (i. to encourage conformity). Inform or make the individual aware of a specific product or brand. Legitimize an individual's decision to use the same products as the group. 4.e.. a reference group must 1.

Celebrity ± The reference group appeal. Celebrities tend to draw attention to the product through their own popularity. This gives the advertiser a competitive advantage in gaining audience attention.Benefits of the Reference Group Appeal ‡ ‡ Increased Brand Awareness Reference group appeals provide the advertiser with the opportunity to gain and retain the attention of prospective consumers with greater ease and effectiveness than is possible with many other types of promotional campaigns. ‡ ‡ ‡ ‡ ‡ . The example set by the endorser or testimonial-giver may demonstrate to the consumer that uncertainty about the product purchase is unwarranted: Following are examples of how reference group appeals serve to lower the consumer's perceived risk. Reduced Perceived Risk The use of one or more reference group appeals may also serve to lower the consumer's perceived risk in purchasing a specific product. particularly on television where there are so many brief and similar commercial announcements. where the personality employed is generally well known to the relevant target segment.

When consumers are worried about how a product will affect them personally. they are likely to be influenced by a common man endorsement or testimonial. "People just like me are using that product." . For eg." Common Man. they welcome the comments of an acknowledged or apparent expert. When consumers are concerned about the technical aspects of a product." Expert. For eg. For eg. then it really must work. "If he says it works. Consumers who admire a particular celebrity often have the following reactions to the celebrity's endorsement or testimonial. "She wouldn't do a commercial for that product if she didn't believe it was really good.Examples of how reference group appeals serve to lower the consumer's perceived risk ‡ ‡ ‡ ‡ ‡ ‡ Celebrity.

‡ An opinion leader acts as an information broker between the mass media and the opinions and behaviour of an individual group. Opinion leaders are people whose position, experience, and knowledge renders them particularly suitable for providing relevant and credible information. Opinion leaders could be personally known people like friends, etc., or those could be people like reviewers, critics, etc., Opinion leaders develop first hand experience with products and communicate their reactions to consumers subsequently. Opinion leadership is product specific ± thus opinion leader for one product category may become an opinion follower for another. Opinion leaders are a part of general category of gate keepers. Gate keepers have special influence or power in offering information about any offering to a market. ‡





Characteristics of opinion leaders
‡ 1. Opinion leaders have the same social class position as non-leaders, although they may have higher social status within the class. 2. opinion leaders have great exposure to mass media that are relevant to their area of interest. 3.Opinion leaders have greater interest and knowledge of the area of interest than nonleaders. 4. opinion leaders are more gregarious than non-leaders. This is because opinion leaders have to interact with those they have to influence. Thus opinion leaders are generally more sociable. 5.Opinion leaders have more innovativeness than do non-leaders. 6. Opinion leaders are more familiar with and loyal to group standards and values than are non-leaders. 7. Opinion leaders exhibit the trait of public and individuation which is a state in which they feel differentiated to some degree from other people and choose to act differently from them. ‡



‡ ‡


‡ 1. Product ± involvement ± use of a product or service may create a tension that may need to be reduced by way of talk , recommendation , and enthusiasm. 2. Self ± involvement ± more emphasis on ways in which an influencer can gratify certain emotional needs. 3. other involvement ± product talk fills the need to give something to the listener. To share one¶s happiness with the influence , or to express love, care, or friendship therefore can be the reason. 4. Message ± involvement ± talking may also be stimulated by great messages that are used to present the product.




and employment status. Other structural changes affect the types of products that are manufactured. For example. consumer analysts have enormous interest in whether families have children and how many they have. food. while they decrease demand for many discretionary items. marriage. including travel. presence of children. in Japan. marital status. Children increase family demand for clothing. furniture. medical care. For example. such as grandparents. mother. plus other relatives. The family into which one is born is called the family of orientation. and education. and adult clothing. and children) living together.FAMILY ‡ A family is a group of two or more persons related by blood. The nuclear family is the immediate group of father. or adoption who reside together. homes. cousins. whereas the one established by marriage is the family of procreation. The extended family is the nuclear family. and parents-in-law. Structural Variables Affecting Families and Households Structural variables include the age of the head of household or family. high-tech companies have formed a consortium to standardize technology that has been developed to monitor and manage households. uncles and aunts. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . higher-priced restaurants.

and communication. Positive communication skills (such as empathy. critical to movement on the other two dimensions. Cohesion reflects a sense of connectedness to or separateness from other family members. role relationships. Understanding whether family members are satisfied with family purchase requires communication within the family. Communication is a facilitating dimension. Cohesion is the emotional bonding between family members. supportive comments) enable family members to share their changing needs as they relate to cohesion and adaptability. ‡ ‡ . and relationship rules in response to situational and developmental stress.SOCIOLOGICAL VARIABLES AFFECTING FAMILY ‡ ‡ ‡ ‡ ‡ ‡ Marketers can understand family and household decisions better by examining the sociological dimensions of how families make consumer decisions. It measures how close to each other family members feel on an emotional level. Negative communication skills (such as double messages. double binds. Three sociological variables that help explain how family¶s function includes cohesion. thereby restricting movement in the dimensions of cohesion and adaptability. reflective listening. criticism) minimize the ability to share feelings. The degree of adaptability shows how well a family can meet the challenges presented by changing situations. Adaptability measures the ability of a family to change its power structure. adaptability.

FUNCTIONS OF THE FAMILY ‡ Four basic functions provided by the family are particularly relevant to a discussion of consumer behaviour. the family provides support and encouragement and assists its members in coping with personal or social problems. values. is a central family function.The socialization of family members. appropriate manners and speech. and the selection of suitable educational and occupational or career goals. this process consists of imparting to children the basic value and modes of behaviour consistent with the culture. interpersonal skills. In fulfilling this function. including the allocation of time. and intimacy) to its members is an important basic function of the contemporary family. (2) Emotional support . especially young children. These include (1) Economic well-being . Socialization skills (manners.Providing financial means to its dependents is unquestionably a basic family function. (3) Suitable family lifestyles . affection. ‡ ‡ ‡ ‡ ‡ ‡ . In large part. These generally include moral and religious principles. goals. and other qualities) are imparted to a child directly through instruction and indirectly through observation of the behaviour of parents and older siblings. greatly influence consumption patterns.Family lifestyle commitments. dress and grooming standard. (4) Family-member socialization .The provision of emotional nourishment (including love.

Stage : II : Parenthood : Married couple with at least one child at home. Consumer researchers have always been attracted of a series of family life cycle ( FLC ) to understand the behaviour of consumers at various stages of their lives so as to effectively design the right marketing strategy. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Stage : IV : Dissolution : one surviving spouse. The traditional FLC describes family patterns as consumers marry. This process historically has been called the family life cycle (FLC). leave home. The four basic stages in Family Life Cycle ( FLC ) may be summarized as Stage : I : Bachelorhood : Young single adult living apart from parents. But consumers don¶t necessarily have to pass through all these stages-thy can skip multiple stages.FAMILY LIFE CYCLE ‡ Families pass through a series of stages that change them over time. lose a spouse. Stage : III : Post parenthood : An older married couple with no children living at home. have children. The concept may need to be changed to household life cycle (HLC) or consumer life cycle (CLC) in the future to reflect changes in society. and retire.

vacation with friends Buys baby food. Seeks more of attention. affection and security conscious Income though good.basic kitchen equipment basic furniture. probability of home ownership on the higher side). Interested in vacation packages Buy more medicinal products other products like the retired people. home appliances. single staying alone ) Parenthood (young married just attained Parenthood ) Post parenthood (growing children or grown up Children) Dissolution (retired & lone survivingspouse) ) Economic circumstances Likely Buying Behaviour Earning reasonable good salary. less liquid assets. Buy more tasteful furniture. no financial burdens Better off financially. chest & cough medicines Financial position improved with wife working. two wheeler.Family Life Cycle ( FLC Stages in Family Life Cycle Bachelorhood (Young. diapers. Concentrates on home improvements. Buy. . and magazines. not interested in spending. not able to save more. At times drastic cut in income is likely. though home purchases at car.

with their nuclear families. furnishings for first residences away from home. These requirements reduce families¶ ability to save. and decide if one parent will stay to care for the child or if they will both work and buy daycare services.habitate with partners in this stage. purchases furniture and furnishings for the child. and the husband and wife are often dissatisfied with their financial position.Family Life Cycle ( FLC ) ‡ ‡ Young Singles Young singles may live alone. vacations. fashions. and purchase new items such as baby food. or with friends. Many of them find themselves spending as much as they make on cars. toys. and other leisure activities. parents begin to change their roles in the family. Newly Married Couples Newly married couples without children are usually better off financially than they were when they were single. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Full Nest I With the arrival of the first child. food away from home. or they may co. and other products. and skates. Although earnings tend to be relatively low. They also have the highest purchase rate and highest average purchases of durable good (particularly furniture and appliances) and appear to be more susceptible to advertising. These families tend to spend a substantial amount of their incomes on cars. In this stage. sleds. alcoholic beverages. families are likely to move into their first home. since they often have two incomes available to spend on one household. these consumers usually don¶t have many financial obligations and don¶t feel the need to save for their futures or retirement. clothing. vacations. recreation.

No Kids Couples who marry and do not have children are likely to have more disposable income to spend on charities. travel. the youngest child has reached school age. Consequently. but the family finds itself consuming more and in larger quantities. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . and the children earn from occasional and part-time employment. these couples are more likely to be dual-wage earners. the family¶s financial position usually improves. clothing. and spends money on education. the employed spouse¶s income has improved. since the family tends to buy largesized packages of food and cleaning suppliers. buying additional PCs for their older children. and entertainment than others in their age range. buys some luxury appliances. the second wage earner is receiving a higher salary. Not only do they have fewer expenses. bicycles. Full Nest III As the family grows older and parents enter their min-40s. Married. and a computer. making it easier for them to retire earlier if they save appropriately. The family typically replaces some worn pieces of furniture. their financial position usually continues to improve because the primary wage earner¶s income rises. sports equipment. the financial position of the family may be tighter than other instances. Families also spend more on computers in this stage. music lessons.Family Life Cycle ( FLC ) ‡ ‡ Full Nest II In this stage. Depending on where children go to college and how many are seeking higher education. Consumption patterns continue to be heavily influenced by the children.

food away from home. allowing them to spend time traveling. sports utility vehicles. The children have left home and are financially independent allowing the family to save more. and volunteering. luxury items. either group of which may or may not have children living in the household. exercising. This group now has more available income to spend on travel and leisure but feels the pressure to save for the future. vacations. In this stage discretionary income is spent on what the couple wants rather than on what the children need. Therefore. ‡ ‡ ‡ ‡ ‡ . they spend on home improvements. travel. since there is no second income on which to rely as they get older. centering on such items as medical appliances and health. Empty Nest II But this time. or never married (because they prefer to live independently or because they co-habitate with partners). and product for their grand children. Empty Nest I At this stage. Many continue working part time to supplement their retirement and keep them socially involved. But many of these families continue to be active and in good health. the family is most satisfied with its financial position. may be single again (ending married status because of divorce or death of a spouse). usually resulting in a reduction in income and disposable income. Expenditures become health oriented. the income earners have retired. age 40 or older. and medicines.Family Life Cycle ( FLC ) ‡ ‡ Older Singles Single.

sickness care. and develop consumer-specific marketing strategies. and some may choose to remarry. he or she usually continues employment or goes back to work to live on earned income (rather than saving) and remain socially active. affection. ‡ ‡ ‡ ‡ ‡ . travel entertainment. with income spent on health care. identify niches.‡ ‡ Solitary Survivor Family Life Cycle ( FLC ) Solitary survivors be either employed or not employed. Depending on how much they have been able to save throughout their lifetimes. These individuals have special needs for attention. Expenditures for clothing and food usually decline in this stage. Retired Solitary Survivor Retired solitary survivors follow the same general consumption patterns as solitary survivors. they can afford to buy a wide range of products. and services. and security based on their lifestyle choices. however. but they often add additional information about consumer markets to analyze their needs. their income may not be as high. If the surviving spouse has worked outside the home in the past. Marketers use the descriptions of these FLC stages when analyzing marketing and communication strategies for products and services. Those who are not employed are often on fixed incomes and may move in with friends to share housing expenses and companionship.

and many other products but may not be the buyers. Role Behavior Families and other groups exhibit what sociologist Talcott Parsons called instrumental and expressive role behaviors. One or both of the parents may be the decider and the buyer. including upholding family norms. which may be assumed by spouses. also known as functional or economic roles. clothing. how and when products are used. Individual Roles in Family Purchases Family consumption decisions involve at least five definable roles. FAMILY DECISION MAKING ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . although the children may be important as influencers and users. or other members of a household. Instrumental roles. remembering that different family members will assume different roles depending on the situation and product. Children. Both multiple roles and multiple actors are normal. toys. Marketers need to communicate with consumers assuming each of these roles.‡ Families use products even though individuals usually buy them. involve financial. Expressive roles involve supporting other family members in the decision making process and expressing the family¶s aesthetic or emotional needs. Determining what products should be bought. and other functions performed by group members. and who should buy them is a complicated process involving a variety or roles and actors. are users of cereals. for example. performance. which retail outlet to use. children.

Influencers: Those family members who provide information and advice and thus influence the purchase. 3. ‡ ‡ ‡ . The husband and wife may jointly decide about the purchase of a new refrigerator.Key Family Consumption Roles ‡ ‡ There are eight distinct roles in the family decision-making process. may withhold from his father much of the relevant information on all brands except the one that he fancies. 1. A housewife may be the person who actually buys all the foodstuffs. which are consumed by all the family members. Gatekeepers: Those family members who control the flow of information about a product/service thus influencing the decisions of other family members. thereby influencing his father¶s decision in favour of his preferred brand. The teenaged son who wants a racing bicycle. 4. rations and toiletries. Deciders: Family members who have the power to unilaterally or jointly decide whether or not to buy a product or service. Buyers: Those family members who actually buy a particular product or service. 2. The housewife tells her family about the new eatery that has opened in the neighborhood and her favorable description about it influences her husband and teenaged children.

watch the television. Preparers: Those family members who transform or prepare the product into the form in which it is actually consumed. The housewife may prepare the family meal using raw vegetables. All family members may use the car.Key Family Consumption Roles ‡ 5. 8. Disposers: Family member(s) who initiate or carry out the disposal or discontinuation of a particular product or service. 6. lentils. Maintainers: Family member(s) who service or repair the product so that it will provide continued satisfaction. Users: Those family members who use or consume a particular product or service. oil and other ingredients. and listen to the stereo music system 7. spices. ‡ ‡ ‡ .

CONSUMER DECISION PROCESS ‡ ‡ LOW PURCHASE INVOLVEMENT HIGH PURCHASE INVOLVEMENT Habitual Decision Making Limited Decision Making Extended Decision Making Problem Recognition Selective Problem Recognition Generic Problem Recognition Generic Information Search Limited internal Information Research ‡ Internal ‡ Limited external Information Search ‡ Internal ‡ External Alternative Evaluation ‡ Few Attributes ‡ Simple Decision Rules ‡ Few Alternatives Alternative Evaluation ‡Many attributes ‡ Complex decision rules ‡ many alternatives Purchase Purchase Purchase Post Purchase ‡No dissonance ‡ Very limited evaluation Post Purchase ‡No dissonance ‡ Limited evaluation Post Purchase ‡Dissonance ‡ Complex Evaluation .

The motives are grouped in to five types. social environment and various other internal & external factors.‡ ‡ Problem Recognition Problem recognition or need recognition is the first step of the five steps consumer takes as he moves through the decision process. conflict resolution Consumer Decision Process ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Problem recognition occurs when a person recognizes a gap of significant magnitude between a perceived desired state and the actual state. Satisfaction optimization 2. 1. prevention of possible failure problems 4. problem avoidance 5. the personality traits of an individual. This arouses and activates the consumption related decision process. Reasons for buying are motives. Satisfaction maintenance 3.

The problem situation could be routine. etc. Evolving Problem ± problem arrives unannounced. 2.Discontent with existing stock of goods 3.. yet needs no immediate solution. Depleted or inadequate stock of goods 2. 1. 4. Routine Problems ± these are due to difference between actual and desired states which requires immediate solution by way of purchasing goods such as convenience goods. emergency.. and evolving immediacy. Planning Problem ± problem which do not require immediate solution. Changing financial circumstances 4. 3. etc. planning.Types of Problem Recognition ‡ Problems can fall in various categories. Situations leading to problem recognition effort ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Emergency Problem ± these problems occur suddenly and solution to be found immediately.

window shopping. Customer has clear and conscious objective to collect information for solving a specific problem Browsing. he will engage in pre-purchase search. Pre-purchase Search Once the consumer has recognized a problem and feels motivated to solve it. ‡ ‡ ‡ ‡ . Different types of Information Search 1. thumbing through catalogues and magazines. Post-Purchase search A consumer continues to evaluate other options available in the market place.Information may be sought on ( 1 ) appropriate evaluation criteria for the solution of the problem ( 2 ) the existence of various alternative solutions ( 3 ) the performance of each alternative solution on each evaluation criterion. reading brochures all fall in this category. It may be due to increased interest in product category and the desire to stay-up-to date.Information Search & Decision Making ‡ ‡ ‡ ‡ ‡ ‡ ‡ Need for search of Information . 2.

knowledge. window displays etc. Dimensions of Internal search 1.. experts. media reports.kind of information retrieved ± four major kinds of information namely brand name. ) ‡ ‡ ‡ ‡ . attributes. External search involves that information can be gathered from an almost unlimited variety of sources outside of the individual. External Search ± if the information in the memory is misleading. evaluation done earlier and experience. 2. and experience. extent of search ± internal search can vary from a simple recall of only a brand name to a more complete search through memory for relevant information .Types of Search ± Internal & External Search ‡ ‡ Internal search involves consumer¶s own recall from memory. feelings and experiences. External search sources could be from personal sources ( friends. sales people ) or from impersonal sources ( advertising. then an external search is required. inadequate. or is suspect.

‡ ‡ ‡ ‡ ‡ ‡ Factors responsible for External search Activity Information Search .Situational factors 4. Customer¶s own characteristics 3. Actual or perceived risk in decision making 5.type of product sought Strategies for information search Maintenance strategy ± Disrupt Strategy Capture Strategy Intercept strategy Preference Strategy Acceptance Strategy ‡ ‡ ‡ ‡ ‡ ‡ . Perceived value of search Vs perceived costs attached 2.External Search 1.

such as price. and importance. Evaluative criteria can differ in number. or performance characteristics or intangible such as brand image or feelings associated with ownership or use. Evaluation criteria are typically product features or attributes associated either with benefits desired by the customer or the costs he has to incur. Evaluate criteria Evaluation of Alternatives On Each criterion Application of Decision Rules Selection of alternatives Importance of criteria Alternatives considered . shape. Evaluation criteria are the various features that a customer looks for in response to a particular type of problem. from product to product. This evaluation in turn leads to formation of attitude. and situation to situation. Evaluating criteria vary from consumer to consumer. size.Evaluation of Alternatives ‡ ‡ ‡ ‡ ‡ Information gathered from sponsored and non-sponsored sources by a customer forms the basis of evaluation. Evaluative criteria can be tangible. color. type.

Consumers may use either compensatory or non-compensatory processes as decision rules in evaluating attributes of the alternative products under consideration. the consumer will not buy the product. If the product does not prove satisfactory on all the evaluative criteria . A consumer is more or less price elastic depending on the degree of substitutability of one brand by the others. Conjunctive elimination by aspects lexicographic rules .Evaluation of alternatives ± Evaluative criteria ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Price as Evaluative criteria ± Price acts as most significant influences in alternatives evaluation. Non-Compensatory Decision Rules A non-compensatory rule is one in which the weaknesses of a possible alternative are not offset by its strengths. This apparent brand quality relationship is most likely tied to the perceived risk associated with a poor purchase decision. Decision Rules Consumer decision rules govern the way in which different consumers evaluate different products in different buying situations. Disjunctive Non-Compensatory Decision Rules are of 4 types. Brand Reputation ± brand name is perceived frequently to be an indicator of product or service quality by the customers.

Then some other rule has to be used to decide about the brand to be purchased. If more than one brand meets this minimum . a consumer considers all evaluative criteria as determinant and a minimum acceptable value or score is established for each one. The remaining alternatives are then compared using the process of elimination. Lexicography Rule Using this rule. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . This rule seeks maximum performance at each stage. ranks each of the evaluative criteria in order of importance. Elimination by aspects rule The consumer ranks the evaluative criteria and also sets minimum scores that must be met on each of them. the consumer first decides which criteria are determinants of his choice while which ones are not. Conjunctive Rule Using the rule. as with the lexicographic rule. Brands which do reach the minimum acceptable score don¶t have to be evaluated any further. Then he establishes a minimum score on each one. Any product alternative considered must meet this score on each determinant attribute in order that it is accepted. then there is no clear winner. The alternatives that don¶t meet each minimum are eliminated.Consumer Decision Rules ‡ ‡ ‡ Disjunctive Rule Using this rule.

Simple Addictive Rule Using this rule. If one attribute is very strong. it may compensate for the weakness in another. This approach uses more than one evaluation criterion for assessment by consumers. with the overall evaluation being the sum of the weighted ratings along each attribute. the consumer totals the score on all evaluative criteria for each alternative and the highest score wins. Then the score on each evaluative criterion is multiplied by the relative weight to produce a weighted score. Weighted additive rule Using this rule. the consumer assigns a relative weight to each evaluative criterion based on its perceived importance. These weighted scores are summed up and the brand with highest weighted score is chosen.‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Compensatory Decision Rule ± compensatory rule are more practical as the consumer is able to make trade-off while comparing alternatives. Consumer Decision Rules . This decision rule evaluates brand individually along all dimensions or attributes . This rule assumes that all criteria are of equal importance.

Self. Peer group attraction ± certain stores provide a meeting place for peer groups may gather. encounters with friends. Outlet Selection ‡ ‡ ‡ ‡ ‡ ‡ . companion shopping. Communication with others having a similar interest.‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Reasons for shopping by consumers Personal Motives Role Playing ± shopping activities are learned behavior & accepted as part of one¶s provides sensory benefits such as looking at and handling merchandise. Social Motives Shopping provides opportunities for seeking new acquaintances. Physical Activity ± shopping provides considerable amount of physical exercise. Pleasure of bargaining ± shopping provides enjoyment of gaining a lower price through bargaining. listening to sounds. Sensory stimulation. visiting special sales. Diversion ± shopping can offer a diversion from the routine of daily life. Status & Authority ± shopping may provide an opportunity to attain a feeling of status & power. Learning about new trends ± shopping provides information about trends and movements.Gratification ± shopping is motivated by the utility of the buying process itself.

‡ ‡ ‡ ‡ ‡ ‡ . Personnel ± employees of a retailer are also instrumental in influencing the store¶s image. Clientele ± consumers tend to patronize those stores where people belonging to similar social class are perceived to be shopping. 2. to remind the customers of the store . Customer Services ± retail stores offer numerous services to attract customers. Advertising and Sales Promotion ± to inform. 7. 5. Store Design and Physical Facilities ± the design characteristics of a store visibly reflect its image and can dramatically influence patronage. guarantees and pricing are considered important. selection or assortment.Factors determining retail outlet selection ‡ 1. 6. Store location ± the closer consumers are to store. the greater is heir likelihood to purchase from that store.Merchandise ± quality. 3. fashion . 4. to persuade.

The perception of these risks differs among consumer. based partly on their past experiences and partly on their lifestyles. because of their expense or technical complexity . Certain products . sensory stimulation.. learning about new trends etc. social interaction.Consumer characteristics to store choice ‡ ‡ ‡ Perceived Risk The risk of purchase of products involves economic and social consequences. Shopping orientation Individuals go shopping to seek diversion from routine activities. represent high levels of economic complexity. ‡ ‡ ‡ ‡ ‡ ‡ . A shopping style that puts particular emphasis on certain activities is called shopping orientation. Products closely related to a consumer¶s public image present high levels of social risk. The relative importance of these motives varies both across individuals and within individuals over time as the situation changes.

In store Purchasing Behavior Displays Price Reductions Store Layout Alternative Evaluation Modify Intended Purchase Behavior Stockouts Sales Personnel .

skill. floor coverings. Point-of ±Purchase Displays ± visual representation and location of the POP material lends to the effectiveness of the stores. 2. Sales Personnel ± the sales person¶s knowledge . store layout ± the location of items within a store has an important influence in the purchase of both product categories and brands. layout . 7. music. ‡ ‡ ‡ ‡ ‡ ‡ . 6. Price reductions and promotional deals ± In-store price reductions do affect brand decisions. and authority.Store Atmosphere ± stores atmosphere or environment affects the shopper¶s mood and willingness to visit and linger.Store atmosphere is influenced by such attributes as lighting.In store purchasing behaviour ‡ 1. air conditioning.. 5.Stockouts ± store being temporarily out of a particular brand. affect a consumer purchase decision. dress and behaviour of sales personnel etc. the nature of the customer¶s buying task and the customer ± sales person relationship will have major impact on consumer purchases. 4. 3. presentation of merchandise.

the consumer must complete the transaction. This involves what is normally called µ purchasing¶ the product. Traditionally the purchase involves paying cash to acquire the right of the product. PURCHASE ‡ ‡ ‡ ‡ ‡ ‡ . However credit plays a major role in consumer purchases in today¶s society. The marketer can make an appropriate offer and position the offer. Marketing implications of purchase behavior The marketer can segment the market on the basis of purchaser influences. The marketer can identify the relevance of each situational factor on the buying process of his customers.‡ Once the brand and the store have been identified .

Because. rituals involve the use of goods / services . 2. Ritual consumption ± rituals are patterns of behaviour tied to events that we consider important in our lives. 2. respond to changing consumer needs with new products and promotions. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . position products to match the physical and social contexts of the consumption situation. occur in fixed or predictable sequence. Sacred and Profane consumption Consumption arising out of special events are considered sacred consumptions.Consumption and Post-Consumption responses ‡ ‡ ‡ ‡ Types of consumption 1. develop and market products around needs triggered by consumer rituals. Consumptions which are part of everyday life are considered to be profane consumption. Rituals usually have some special symbolic meaning to us. and are repeated with some regularity. 3. Marketing applications of consumption behaviour ± Marketers to 1. it is important for marketers to understand them and the ritualistic behaviours they give rise to.

On the other hand. as also other products by the same marketer. if the customer is not happy with the purchase. he will not buy anything from that marketer and he will his friends to do the same. Satisfaction refers to the buyer¶s state of being adequately rewarded in a buying situation for the sacrifice he has made. ± Post ± Consumption outcomes Evaluation of alternatives Purchase Product Expectation Confirmation or disconfirmation Product Performance satisfaction Dissatisfaction . he is likely to buy it again. too.Customer satisfaction Vs Dissatisfaction ‡ ‡ ‡ If the customer is happy with the product he bought. he will not only write off that product. The customer even tell his friends about the product and they buy it .

consumer¶s tendency toward anxiety. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ( a ) change his evaluation of alternatives ( b ) seeking new information ( c ) changing attitudes . the consumer may adopt the following. The level of satisfaction or dissatisfaction depends upon how well the product¶s performance meets our expectations. The experience and intensity of post-purchase dissonance varies from customer to customer .clarity of the final purchase choice.finality of the purchase decision 4. Post ± Purchase Dissonance . 2. there is a feeling of uncertainty about whether the right choice is being made. 3. from situation to situation and from purchase to purchase. Post-purchase dissonance is a function of 1. To reduce Dissonance.Post-purchase dissonance occurs before the consumer make a determination concerning whether a product or service is satisfactory.Post consumption outcomes ‡ Consumers form certain expectations prior to the purchase. importance of the purchase decision.

marketer. frequency of purchase 3. Encourage brand and outlet loyalty 2. 2. Loyalty is a feeling of commitment on the part of the consumer to a product. Number of brands available. Marketing Applications of Post-Purchase behaviour ± Marketers will be able to 1. 4. or outlet which results in repeated purchase.Post-Purchase Behaviour ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ The most positive outcome from achieving customer satisfaction is to gain customer loyalty. perceived difference among brands 4. . use feedback from both positive and negative post-purchase behaviours to improve products and promotions. brand benefits. Factors influencing Brand Loyalty 1. brand. level of involvement 5. level of perceived risk 6. offer swift redress to consumers who complain and thereby regain a positive brand or outlet image. respond promptly to dispel rumors and other negative communications 3.

satisfaction responses of a customer Dissatisfaction of customer Take actions Take no action ( by consumer ) Less favourable attitude Complain to Legal authority Store or manufacturer Complain to Stop buying That brand Or store Warn friends Private or Government agencies Initiate action .Dis.

No disposition is involved for products that are fully consumed ( ice cream in cones ). Product Get rid of It Permanently Keep it Get rid of it temporarily Use it to Serve Original purpose Convert it to Serve new purpose Store it Rent it Loan it Recycle it Throw it away Give it away Trade it Sell it To be sold To be used Direct to consumer Thru¶ middlemen To middleman . during . and after product use.Disposition of the Product ‡ ‡ Disposition of the product and or its container may occur before.

‡ Dispositionsituational variables such as availability of storage space. The method of disposition may vary considerably across products. psychological characts. situational factors extrinsic to the product. 1. of the Product Disposition behaviour is primarily determined by current needs of friend. 2. availability of recycling and so on. The method of disposition depends on the following factors. or give away used products may result in a large second hand market which can reduce the market for new products. 3. to aid the consumers in the disposition of the product. trade. How the disposition decisions affect the Marketing Strategies of the firm ? Dispositions decision affect the purchase decisions of both the individual making the disposition and other individuals in the market for that product category. marketers have initiated exchange schemes where the consumer is given the option of buying anew product in exchange for his older one. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Of the decision maker. Factors intrinsic to the product. The frequent decisions by consumers to sell.

such as consumer¶s repetitive purchase of the same brand over a period of time. to assist in constructing a theory that guides research on consumer behaviour. Model simplifies by incorporating only those aspects of reality that interest the model builder. ‡ ‡ ‡ ‡ ‡ ‡ .MODELS OF CONSUMER BEHAVIOUR ‡ ‡ ‡ A model can be defined as simplified representation of reality. Uses of Consumer Models 1. Some models are designed to represent a very specific aspect of behaviour. as they attempt to include a great variety of consumer behaviours. Other models are comprehensive models. These comprehensive models are less detailed in nature so that they can represent many diverse situations. 3. Consumer behaviour models can be classified in terms of scope. 2. to facilitate learning what is presently known about consumer behaviour. 4. Models aid in understanding the complex relationship between variables influencing a consumer. consumer models serves to structure systematic and logical thinking about consumers.

. The variables which have a poorly defined effect on behaviour and are not included in the consumer models are called Exogenous consumer models. Exogenous and Endogenous variables ± variables that have a clearly defined effect on consumer behaviour are included in a model and are thus called Endogenous variables. 2. 1. These intervening variables are exogenous . The intervening variables modify the relationship between the stimulus received and the response made but cannot be observed. Intervening Variables ± these variables exists between stimulus and response. though in turn they could be internal or external.Building Blocks of consumer decision making models ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ The variables employed in consumer decision making models can be categorized as follows. Stimulus and Response ± A stimulus is an input to consumer behaviour and a response is the observable manifestation of consumer ± behaviour. A response may be a result of either a certain stimulus acting forcefully on the consumer or it may arise as a result of processes internal to a customer. External variables arise as a result of external influences like economic . cultural and other factors. Internal and External Variables ± internal variables are a result of internal physiological processes or psychological processes. 4. social . 3.

Consumer Centre Model ( considers many variables together which influence purchase behaviour ) Marketer controlled variables positive response ( ad. social. availability. This model ignores the internal processing of stimulus in the consumer mind. Stimulus Response Model Response Stimulus Consumer Mind Black Box ‡ ‡ ‡ ‡ Simplest form of black box model of consumer decision-making. & input-output model ) Black Box refers to the human mind. Black Box model rely solely on observable stimulus variables and responses. reference group) Negative response ( rejection of offer ) .MODELS OF CONSUMER BEHAVIOUR ‡ ‡ ‡ ‡ ‡ Black Box Model ( stimulus response model. brand) ( purchase ) Consumer mind ‡ Marketer Non-Controlled variables ( economic. consumer centre model.

This model ignores the internal processes. This model talks about buying influences ( stimuli ) and the purchase related responses ( response variables). ‡ Non-personal ‡ Advertisements ‡ Sales force Choices about + Product Black Box ‡ Brand ‡ Quantity ‡ Frequency ‡ Dealer . ‡ Style ‡ Options ‡ Image ‡ Service ‡Price ‡ Personal ‡ Acquaintances ‡ Observations.Black Box Models of consumer decision making ‡ ‡ Input ± Output Model . ‡ INPUTS STIMULUS CHANNELS Communication PROCESSOR Consumer Outputs Response ‡ Product ‡ Availability ‡ Quality.This model was developed by Kotler.

. Disposable personal income represents potential purchasing power that a buyer has. An individual buyer seeks to spend his money on such goods which give maximum satisfaction (utility) according to his interests and at relative cost. The change in income has direct relation on buying habits.MODELS OF CONSUMER BEHAVIOUR ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Traditional Models of Consumer Behaviours . They gave formal explanation of buyer behaviour.ECONOMIC MODEL This theory was first advanced by the economists. The buying behaviour is determined by the income ± its distribution and level . They follow the law of marginal utility. According to this theory the consumers are assumed to be rational and conscious about economic calculations. The economic factors which affect the buyers behaviour are: 1. Personal consumption spending tends both to rise and fall at a slower rate than what disposable personal income does.affects the purchasing power. Disposable Personal Income The economists attempted to establish relationship between income and spending.

Liquidity of Funds The present buying plans are greatly influenced by liquidity of assets readily convertible into cash. play an important role in purchase decision. A buyer can command more purchasing power. Size of family income Size of family and size of family income affect the spending and saving patterns. washing machine. Usually large families spend more and small families spend less in comparison. For example.Economic Model of Consumer Behaviour ‡ ‡ ‡ ‡ ‡ ‡ ‡ 1. readily marketable shares and bonds. 3. The expectation of higher or lower income has a direct effect on spending plans. television and so on. this convertable assets influence and offer freedom to buyer. The economic model of consumer behaviour is uni -dimensional. And buyers spend less if they give importance to future needs. Consumer Credit Facility of consumer credit system . µBuy now and pay later¶ plays its role effectively in the rapid growth of market for car. It is based on certain predictions of buying behavoiur. Tendency to Spend and to Save This goes to the habit of spending or saving with the disposable income of buyers. furniture. 4. However. Income Expectation The income expected to get in future has direct relation with the buying behaviour. they dispose of their income. 5. scooter. installment purchase etc. If the buyers give importance to the present needs. 2. They are: ‡ ‡ ‡ ‡ ‡ . who actually buys with current income..hire purchase. bank balances come into this category.

motivation. Hence. Lower the price of the product. it is also observed that consumer also gets influenced by other marketing variables such as products. it is felt that the economic model is inadequate. Further. attitude and personality. higher are the sales Limitations of Economic Model The behavioral researchers believe that this model ignores all the other aspects such as perception. higher the sales of this product d. effective distribution network and marketing communication.Economic Model of Consumer Behaviour ‡ ‡ ‡ ‡ ‡ ‡ ‡ a. lower the sale of this product c. higher the sales b. ‡ . Higher the real income. learning. It assumes that market is homogeneous where markets are assumed to be heterogeneous. Higher the promotional expenses. and socio-cultural factors. Lower the size of substitute product.

Here. For example. a mother takes a decision to buy a tiny cycle for her child. and the product is used by yet another member of the family. member of professional forum. The individual plays many roles as a part of formal and informal associations or organizations i. actual buying may be done by another. The individual gets influenced by it and in turn also influences it in its path of development. and as an active member of an informal cultural organization.Models of Consumer Behaviour ± Sociological Model ‡ ‡ ‡ According to this theory the individual decision and behaviour are quite often influenced by the family and the society. ‡ ‡ ‡ . the decision may be made by one. as a family member. the cycle is purchased by the father and the user is the child. employee of a firm. Hence the individual is largely influenced by the group in which he is a member..e.

BASIC STRUCTURE OF BUYING BEHAVIOUR HOWARD .‡ ‡ ‡ ‡ ‡ ‡ The Howard .SHETH MODEL Social class. learning and attitude formation. It emphasizes three key variables.Sheth model shows the processes and variables influencing the buyer behaviour before and during the purchase.perception. financial status Exogenous variable Drive Stimuli Perception Learning outputs . Commercial sources The gathered information is used for comparison of alternative brands according to various choice criteria. Consumers learn by finding out the relevant information about products through two sources of information: ( a ) Social sources ( b ). It explains the way consumers compare available products in order to choose the best which fits their needs and desires.

a number of products or brands are perceived and considered by the consumers mind. financial status etc. Product themselves in the market ii.. Input or stimuli: i. are used to predict perception and learning. say quality. This model describes the buying behaviour in various stages. iii.input variables are marketing programme and social environment. Stage 1: Motives are based on needs demanding satisfaction. Stimulus. Commercial information on them. Exogenous or outside variables such as social class. They lead to goal directed behaviour satisfaction. In this manner the resulting perception is selected. Thus. price. availability and distinctiveness ii.SHETH MODEL ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ The following predictions can be made about the model i.HOWARD .non observable variables. Product information obtained from friends acquaintances and reference groups. Motives ignite a drive to search and secure information from alternatives. . Output occurs on the basis of the perception and learning. Stimuli or perceived learning occurs and results in output Ii.

SHETH MODEL ‡ Stage 2: While evaluating. the preference results in a response output such as attention. comprehension. buying intention and preferably actual purchase. many brands are eliminated or left out for further consideration. The marketer is interested in this outcome. perception. and repeat orders indicate brand loyalty. inadequate supply of brand. These considerations develop as criteria / rule to decide on the goods that have the prospects of yielding maximum satisfaction. Now. The market must offer a good marketing-mix that is used by the buyer to influence the choice criteria. Sudden hindrances may sometimes stop the process. Buying behaviour is influenced by motives (rational / emotional curiosity) attitudes. If they do not occur. external variables such as financial status. This may be in form of price.HOWARD . Stage 4: Feedback of purchase experience is sent to the buyer which shows if the actual satisfaction was equal to the expected satisfaction. Satisfaction leads to repurchase. social factors and personal factors. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Stage3: The choice criteria gives rise to predisposition. attitude. Each will have plus / minus points. time pressure etc. only few will receive further consideration.the relative preference in favour of particular brand. These choice considerations act as connecting links between motives and selected brands choice consideration which provide a structure to motives and the process of learning and experience.

HOWARD .SHETH MODEL Black Box of the Buyer Behaviour Marketing Policy stimulus input variable Brand in the shop Response output variable Purchase motives inhibitors alternatives predisposition Intention Attitude Choice criteria Social information Commercial information Selection perception Evolved set comprehension of the brand Attention satisfaction Marketing ± Mix of the product .

The modern concepts of the buying behaviour state that the behaviour is the result of interaction between people centered factors and situation centered factors. personality.HOWARD . cultural and inter-personal influences and effects advertising and communications. perceptions. The marketer is expected to be aware of the person centered factors such as buyer motivation.. learning. values and beliefs. The external factors may be in the form of group. learning. Similarly. attitudes and perceptions.g. The action of individuals is the result of both internal / external factors and interactions to the consumer decision making processes. marketers must be aware of social environment and internal personal interactions influencing the buyer behaviour Outside Variables Personality Social Class Financial Status and Trial Culture Importance of Purchase Time Pressure ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ .SHETH MODEL ‡ ‡ ‡ Thus models of buyer behaviour are generally based on certain factors internal to the consumer e. attitudes.

It is also called systems model as the human is analysed as a system.NICOSIA MODEL OF CONSUMER BEHAVIOUR ‡ ‡ The buyer behaviour model is taken from the marketing mans point of view. the consumer will have a certain attitude towards the product. Francesco Nicosia. This may result in a search for the product or an evaluation of the product attributes by the consumer. it may result in a positive response. Here the messages from the company initially influence the predisposition of the consumer towards the product and service. with a decision to buy the product or else the reverse may occur. If this step satisfies the consumer. Based on the situation. The Nicosia model divides the above activity explanation into four basic areas: ‡ ‡ ‡ ‡ ‡ . with stimuli as the input to the system and the human behaviour as an output of the system. He tried to explain buyer behaviour by establishing a link between the organization and its prospective consumer. an expert in consumer motivation and behaviour has developed this in 1966.

The newly developed attribute becomes the input for area 2. If the above step motivates to buy the product / service.NICOSIA MODEL OF CONSUMER BEHAVIOUR ‡ ‡ ‡ Area 1: Field one has two sub areas-the consumer attributes and the firms attributes. it becomes the input for the third area. The advertising message from the company will reach the consumers attributes. Area 3: This area explains as how the consumer actually buys the product . Area 2: This area is related to the search and evaluation undertaken by the consumer of the advertised product and also to verify if other alternatives are variable. This can also be used as an out put to receive feedback on sales results to the firm. ‡ ‡ . Area 4: This is related to the uses of the purchase items. Certain attributes may develop sometimes depending upon the way the message is received by the consumer.

Nicosia Model of consumer behaviour Field 1 from source of a message to consumer attitude Attitude Sub Field 1 Firm¶s attributes Message Exposure experience Sub field 2 Consumers attributes field 2 search for field 2 search for & evaluation of means Search field 4 feedback Evaluation motivation Consumption Storage Decision Action field 3 purchasing action .

and Transmission of information. the customer identifies an unsatisfied need. The various models of consumer involvement help marketers to study purchase behaviour across product segments . consumer experiences post-purchase satisfaction or dissatisfaction. the consumer evaluates all the alternatives with the help of available information. The degree of involvement has a lot of impact on search of information.NICOSIA MODEL ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Consumers usually go through five stages in arriving at a purchase decision. In the second stage consumer collect information about the product and brands. In a third stage. the customer makes a purchase decision. In the first stage. Later in stage four. And finally in the fifth stage. Information processing.

alternative evaluation 4.purchase for information 3.Miniard model was originally developed in 1968 by Engel. motivation and need recognition 2. ( a ) stimulus inputs ( b ) information processing ( c ) decision-process ( d ) variables influencing the decision process ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ .ENGEL ± BLACKWELL-MINIARD MODEL ‡ The Engel ± Blackwell. This model has a decision process of five activities which occur over time. Blackwell and has gone through numerous revisions.Kollat.outcomes. The variables are grouped in to four general categories. 1. This model stands as one of the most popular representations of consumer behaviour.

ENGEL ± BLACKWELL-MINIARD MODEL Need recognition Exposure Stimuli Marketer Dominated other Internal search Search beliefs Attention comprehension Memory acceptance Alternative evaluation attitudes intention Environmnt Influences ‡Culture ‡Social class ‡Personal Influence ‡Family ‡situation retention purchase External search outcomes Individual Differences ‡Consumer Resources ‡Motivation ‡Involvement ‡Knowledge ‡Attitudes ‡Personality ‡Lifestyle ‡demographics dissatisfaction satisfaction .

ENGEL ± BLACKWELL-MINIARD MODEL ‡ ‡ ‡ ‡ According to this model. Extended problem-solving behaviour ( EPS ) ± EPS characterized by high levels of involvement and high levels of perceived risk. not real loyalty with the product. Under EPS. 2. there are two significantly different modes of operation by consumers. the product evaluation process will be very rigorous and if necessary the consumer will shop at many outlets. Satisfaction with brand is crucial for continued commitment to use the brand. ‡ ‡ ‡ ‡ ‡ . Consumer is not motivated to shop at many outlets and satisfaction with the purchase will encourage repurchase because of inertia . Limited problem solving behaviour ( LPS ) Consumer is operating under low levels of involvement and low levels of perceived risk. 1. Consumer has low motivation to search for brand information and is only willing to engage in a non-rigorous evaluation of alternatives.

ENGEL ± BLACKWELL-MINIARD MODEL ‡ Under EPS . 1. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ . After the exposure the stimuli must capture the consumer¶s conscious attention to significantly influence extensive problem solving. Any informational inputs are subjected to information processing . activities which the consumer uses to derive meaning from stimuli. consumers . The next stage is information search. The first step in processing involves exposure to such stimuli. The consumer searches internal memory to determine what is known about the alternatives and how to choose among them. information stored in memory 2. External search for information will be activated if the consumer does not feel comfortable with his existing knowledge. environmental influences 3. individual characteristics such as involvement level of consumer. the model is activated with the consumer recognizing the need from three possible influences.

and holding this meaning in short ± term memory. At this point the consumer begins to use the product and evaluation continues by comparing performance to expectations. for further processing. The intention will then lead to purchase behaviour. ‡ ‡ ‡ ‡ ‡ . The alternative evaluation process leads to an intention to make a purchase of the most favourably evaluated brand. The alternative evaluation stage involves comparing information about the alternative brands gained through the search process to evaluate criteria which are product ±judging standards that have been stored in permanent memory. These results may lead to further search for information about the brand and or changes in beliefs. The comprehension stage then involves deriving meaning from information that has been attended to . but if the alternative does not meet the expectations. the process is a continuous one and does not stop with the purchase. dis satisfaction is the result.ENGEL ± BLACKWELL-MINIARD MODEL ‡ The attention stage is highly selective since it tends to ignore most stimuli and admit only those that the individual believes are important. One outcome is satisfaction. Hence.

If the brand meets expectation.ENGEL ± BLACKWELL-MINIARD MODEL ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ problem solving situations the consumer is not highly involved and a number of stages are shortened or pursued by the consumer with less vigor. flow of the model is quite flexible and incorporates many theories such as motivation. 4. Role of motives in influencing behaviour is also quite vague. repurchase is likely but brand loyalty is not likely due to the lack of involvement. Advantages of Engel-Blackwell-Miniard Model 1. focus on levels of consumer¶s involvement 3. . attitude change. its emphasis on the decision-making process regarding purchases. Limitations Vagueness regarding the role of some variables. Alternatives are often evaluated by determining whether they meet some minimal level of acceptability . External search also likely to b minimal and often information is acquired by just seeing ads and µ running into¶ the sources of the product information. considers many variables in influencing consumers 2. and purchase is made with minimal deliberation. information processing.