CONSUMER BEHAVIOUR

Scheme of Lessons
Page No
UNIT I
Lesson 1 IntroductiontoConsumerBehaviour
Lesson 2 ConsumerBehaviourApplicationsandDecisionMakingProcess

UNIT II
Lesson 3 ConsumerBehaviour Models - I
Lesson 4 ConsumerBehaviourModels-II

UNIT III
Lesson 5 Psychological Influenceson ConsumerBehaviour
Lesson 6 ConsumerExpectationandSatisfaction

UNIT IV
Lesson 7 Socio-Cultural
Lesson 8 GroupandFamilyInfluences

UNIT V
Lesson 9 PurchaseDecisionProcess
Lesson DiffusionofInnovation
10
 UNIT I
LESSON1-INTRODUCTIONTOCONSUMERBEHAVIOUR
LEARNINGOBJECTIVES
 To understandtheconceptsofconsumerbehaviour
 To identifythesignificanceofconsumerbehaviour
 To explainthedimensionsofconsumerbehavior

LEARNINGOUTCOMES
After studying this unit, Students will be able to:
Define consumer behaviour
Distinguish between consumer & customer and buyer
User know the origin and developments in the field of consumer behaviour
Discuss strategic applications of consumer behaviour

OVERVIEW

For policymakers, public health specialists and local government, as for any
commercial business, the key to a successful marketing strategy, both domestically and
globally, is often a thorough understanding of consumer behaviour—that is, an
understanding of how and why consumers purchase (or do not purchase) goods and
services. Knowledge of consumer behaviour is relevant to all types of enterprises,
including commercial businesses (such as Unilever), non-profit organisations (such as
Cancer Council Australia) and government agencies involved in regulating marketing
activities (such as the Australian Competition and Consumer Commission).
Understanding consumer behaviour also allows us to appreciate how various societies
function, as consumption is an important activity in all cultures.
 The purpose of this course is to provide such a key. consumer behaviour includes
observable behaviours such as the amount purchased and when, by whom and with
whom, and how the purchase is consumed. It also includes non-observable variables
such as consumers' values, personal needs and perceptions, what information
consumers have in their memories, how they obtain and process information, how they
evaluate alternatives and how they feel about the ownership and use of various
products.

This lesson focuses on various significant concepts of consumer behaviour.

Itfurther highlights thesignificance of consumer behaviour. At the end of
thelesson,thedimensionsofconsumerbehaviourarediscussedindetail.

1.1 CONCEPT OF CONSUMER BEHAVIOUR

Consumer Behaviour is the study of how individual customers, groups or

organizations select, buy, use, and dispose ideas, goods, and services to satisfy their
needs and wants. It refers to the actions of the consumers in the marketplace and the
underlying motives for those actions

Engel, Blackwell, and Mansard, “consumer Behaviour is the actions and decision
processes of people who purchase goods and services for personal consumption”.

According to Schiffman “Consumer Behaviour is defined as Behaviour that

consumers display in searching for purchasing, using evaluating and disposing of
products and services that expect will satisfy their needs”.

According to Louden and Bitta, “Consumer Behaviour is the decision process and
physical activity, which individuals engage in when evaluating, acquiring, using or
disposing of goods and services”.
1.1.1 Consumer and Customer

A consumer is anyone who typically engages in any one or all of the activities
mentioned in the definition. Traditionally, consumers have been defined very strictly in
terms of economic goods and services wherein a monetary exchange is involved. This
concept, over a period of time, has been broadened. Some scholars also include goods
and services where a monetary transaction is not involved and thus the users of the
services of voluntary organisations are also thought of as consumers. This means that
organisations such as UNICEF, CRY, or political groups can view their publics as
“consumers.

The term consumer is used for both personal consumers and organisational
consumers and Notes represents two different kinds of consuming entities. The personal
consumer buys goods and services for her or his personal use (such as cigarettes), or for
household consumption (such as sugar, furniture), or for just one member of the family
(such as a pair of shoes for the son), or a birthday present for a friend (such as a pen
set). In all these instances, the goods are bought for final use, referred as “end users” or
“ultimate consumers.” The other category of consumer is the organisational consumer,
which includes profit and not-for-profit organisations. Government agencies and
institutions (such as local or state government, schools, hospitals etc.) buy products,
equipment and services required for running these organisations. Manufacturing firms
buy raw materials to produce and sell their own goods. They buy advertising services to
communicate with their customers. Similarly, advertising service companies buy
equipment to provide services they sell. Government agencies buy office products
needed for everyday operations. The focus of this book is on studying behaviours of
individual consumers, groups and organisations who buy products, services, ideas, or
experiences etc. for personal, household, or organisational use to satisfy their needs.
Anyone who regularly makes purchases from a store or a company is termed as
“customer” of that store or the company. Thus a customer is typically defined in terms
of specific store or company.

1.1.2 Buyers and Users

The person who buys a particular product may not necessarily be the user, or the
only user of this product. Likewise, it is also true that the person who purchases the
product may not be the decision-maker. For example, the father buys a bicycle for his
school going son (the son is the user), or he buys a pack of toothpaste (used by the
entire family), or the mother is the decision maker when she buys a dress for her three-
year-old daughter. The husband and wife together may buy a car (both share the
decision). It is clear that in all cases buyers are not necessarily the users of products they
buy. They also may not be the persons who make the product selection decisions

1.3 Origin and Development in the Field of Consumer Behaviour

For a variety of reasons, the study of consumer behaviour has developed as an

important and separate branch in marketing discipline. Scholars of marketing had
observed that consumers did not always behave as suggested by economic theory. The
size of the consumer market in all the developed and rapidly developing economies of
the world was extensive. A huge population of consumers was spending large sums of
money on goods and services. Besides this, consumer preferences were shifting and
becoming highly diversified. Even in case of industrial markets, where the need for
goods and services is generally more homogenous, buyers’ preferences were becoming
diversified and they too were exhibiting less predictable purchase behaviour. Marketing
researchers involved in studying buying behaviour of consumers soon appreciated the
fact that though there were many similarities, consumers were not all alike. There were
those who used products currently in vogue while many consumers did not like using
“me too” types of products and showed a preference for highly differentiated products
that they felt met their special needs and reflected their personalities and lifestyles.
These findings led to the development of market segmentation concept, which required
dividing the total heterogeneous but potential market into relatively smaller
homogenous groups or segments for which they could design a specific marketing mix.
They also used positioning techniques and developed promotional programmes to vary
the image of their products so that they were perceived as a better means to satisfying
the specific needs of certain segments of consumers.

1.3.1 Marketing

Marketing, on the one hand, is a business philosophy and on the other hand,
anaction-orientedprocess. The philosophy – alsotermed as marketing concept –has its
roots in market economy.There are four critical ideas thatformthefoundationofsuchan
economy:
 Individualspursuetheirself-interesttoseekrewardingexperience.
 Their choices determined as to what would constitute such experience,
thechoices themselves being shaped by person (taste) and external
(cultural)influences.
 Consumersenjoythefreedomtochoose;theyaresovereign.
 This freedom ensures free and competitive exchange between “buyers
andsellers”.
Marketing, in turn, is based on these four principles. Thus marketing can
bedefinedas“aprocessthataimsatsatisfyingindividualandorganisationalneeds by
creating, offering andexchanging competitively made products
thatprovidevaluetothebuyers”.

1.3.2 NeedsandWants

Thesatisfactionofbuyers’needsisattheheartofamarketeconomy,andisthe core
theme of marking. To put it more simply, a need is a feeling of
beingdeprivedofsomething desirable.

Example: Youmay be in astatein which youare not feeling satisfy(say you are
feeling hungry). So you visualise-a more desirable (but unattained,yet) state, that of
having afull stomach. Hence there is agap between yourcurrent state (hunger)
anddesirable state (satiated palate). This gap leads toaneedbeingfelt.

Wants are somewhat different. While needs are basic to human being,
(sincenobody ever to tell us that we need to feel hungry, thirsty, etc.) wants are
not.Later in our life when we become part of various informal and formal
groups(family,friendsschool,club,workplace,etc.)wedeveloptheconceptsoffriendship
social approval, beauty, and so on. These are our acquired needs
andproductsconceptthatadequatelysatisfiesourbiogenicoracquiredneed.

1.4 Scope of Consumer Behaviour

Consumer behaviour was a relatively new field of study during the second half of 1960s
without a history or research of its own. It is in fact a subset of human behaviour and it is
often difficult to draw a distinct line between consumer-related behaviour and other
aspects of human behaviour. The discipline of consumer behaviour has borrowed
heavily from concepts developed in other disciplines of study such as psychology,
sociology, social psychology, cultural anthropology and economics.

1. Psychology is the study of the individual which includes motivation, perception,

attitudes, personality and learning theories. All these factors are critical to an
understanding of consumer behaviour and help us to comprehend consumption related
needs of individuals, their actions and responses to different promotional messages and
products and the way their experiences and personality characteristics influence product
choices.

2. Sociology is the study of groups. When individuals form groups, their actions are
sometimes quite different from the actions of those very individuals when they are
operating alone. The influences of group memberships, family and social class on
consumer behaviour are important for the study of consumer behaviour.

3. Social psychology is a combination of sociology and psychology and studies how an

individual operates in a group. It also studies how those whose opinions they respect
such as peers, reference groups, their families and opinion leaders influence individuals
in their consumption behaviour

4. Cultural anthropology is the study of human beings in society. It explores the

development of core beliefs, values and customs that individuals inherit from their
parents and grandparents, which influence their purchase and consumption behaviour.
It also studies subcultures and helps compare consumers of different nationalities and
cultures.

5. Economics: An important aspect of the study of economics is the study of how

consumers spend their funds, how they evaluate alternatives and how they make
decisions to get maximum satisfaction from their purchases. Despite the fact that
consumer behaviour, as a field of study, is relatively of recent origin, it has grown
enormously and has become a full-blown discipline of its own and is used in the study of
most programmes of marketing study.

Marketing concept was accepted and adopted by a large number of companies in

the developed countries, particularly the United States and this provided an impetus to
the study of consumer behaviour. Companies had to engage in extensive marketing
research to identify unsatisfied consumer needs. In this process, marketers learned that
consumers were highly complex as individuals had very different psychological and
social needs, quite apart from their survival needs. They also discovered that needs and
priorities of different consumer segments differed significantly. They realised that to
design products and develop suitable marketing strategies that would satisfy consumer
needs, they had to first study consumers and the consumption related behaviour in
depth. In this manner, market segmentation and marketing concept paved the way for
the application of consumer behaviour principles to marketing strategy.

1.5SIGNIFICANCEOFCONSUMERBEHAVIOUR

For a variety of reasons, the study of consumer behaviour has developed as

animportantandseparate branchin marketing discipline.Scholars of marketinghad
observed that consumers did not always behave as suggested by
economictheory.Thesizeoftheconsumermarketinallthedevelopedandrapidlydeveloping
economiesoftheworldwasextensive.Ahugepopulationofconsumers was spending large
sums of money on goods and services.
Besidesthis,consumerpreferenceswereshiftingandbecominghighlydiversified.Even in
case of industrial markets, where the need for goods and services isgenerally
morehomogenous,buyers’preferenceswerebecomingdiversifiedandtheytoowereexhibi
tinglesspredictablepurchasebehaviour.

Marketingresearchersinvolvedinstudyingbuyingbehaviourofconsumerssoon
appreciated the fact that though there were many similarities, consumerswerenotall
alike.Therewerethosewhousedproductscurrently in
voguewhilemanyconsumersdidnotlikeusing“metoo”typesofproductsandshowed a
preference for highly differentiated products that they felt met
theirspecialneedsandreflectedtheirpersonalitiesandlifestyles.

These findings led to the development of market segmentation concept,

whichrequired dividing thetotal heterogeneous but potential
marketintorelativelysmaller homogenous groups or segments for which they could
design a
specificmarketingmix.Theyalsousedpositioningtechniquesanddevelopedpromotional
programmes to vary the image of their products so that they
wereperceivedasabettermeanstosatisfyingthespecificneedsofcertainsegmentsofconsum
ers.

Otherimportantfactorsthatcontributedtothedevelopmentofconsumerbehaviouras
amarketingdisciplineincludeshorterproductlifecycles,increased environmental concerns,
interest in consumer protection, growth ofservicesmarketing,opening up of
internationalmarketsandthedevelopmentofcomputersandsophisticatedtechniquesofstat
isticalanalysis.

Thestudyofconsumerbehaviouristhestudyofhowindividualsmakedecisionstospend
theiravailableresources(time,money,effort)onconsumption of related items. It includes
the study of what they buy, why theybuy it,whenthey buy it, wherethey buy it,how
oftenthey buy itandhowoften they useit.Consumerbehaviouris a rapidly growing
discipline
ofstudy.Itisacomplexandmultidimensionalprocessandreflectsthetotalityofconsumerdecis
ionswithrespectacquisition,consumptionanddisposalactivities. Organisations are also
realising that their marketing effectiveness
insatisfyingconsumerneedsandwantsandprofitdependsonadeeperunderstandingofconsu
merbehaviour.Ourconsumerrelatedbehaviourinfluencesthedevelopmentoftechnologyan
dintroductionofnewandimprovedproductandservices.

Someoftheimportantissuesthatmarketingexecutivesfaceinclude:
 Whatdoconsumersthinkaboutourproductsandthoseofourcompetitors?
 Whatdotheythinkofpossibleimprovementsinourproducts?
 Howdothey ourproducts?
 Whataretheirattitudestowardsourproductsandourpromotionalefforts?
 Whattheyfeelaretheirrolesinthefamilyandsociety?
 Whataretheirhopesanddreamsforthemselvesandtheirfamilies?

Marketers wanttoknowwhatconsumers think,whatthey want,howtheywork, howthey

entertain themselves,howthey play etc.,they alsoneedtocomprehend personal and
group influences which have a significant impact onconsumerdecision-makingprocess.

CASE STUDY

Health Conscious Consumers

Consumers are becoming health conscious and would like to consume foods which are
balanced, and have all the required nutrients in proper quantities. These ingredients are
cholesterol, salt, sugar, fibre, calories and additives. The consumers are not only
concerned about such goods for themselves, but also their families. A survey was made
by a company to find out the food attitudes of consumers. This was done to find out
how products could be designed, advertised and positioned to attract health conscious
consumers. The survey of food attitude was carried out as food-related items. These
attitudes were food conscious, cooking attitudes, brand loyalty, instant foods, price
sensitivity, value, etc. The analysis revealed that basically customers could be classified
into three categories. Category I: Older Consumers These were health conscious older
people, who because of medical consideration, had little choice, and these people were
concerned about sugar, salt, greasy foods, etc. They ate meals regularly, at regular
timings, and took great precautions for their food. They used branded products, and
played very safe in eating outside and not consuming food not prescribed for them.
Category II: Buyers of Convenience Food These are younger consumers keeping busy
mostly outside the house, who skip lunch or breakfast. They rely on convenience food
and fast foods. They have a hectic lifestyle. They are upwardly mobile, use ready to eat
and frozen foods. They work mostly outside the house and are pressed for time. They
have an irregular schedule for meals. They also dislike cooking and want to utilise time
for leisure and other activities rather than for cooking. They are not very concerned
about balanced diet, and would have greasy burgers or any other fast foods to suit their
convenience. They can also be categorised under impulse buyers, rather than careful
shoppers. If the product has appeal, it will be bought, and the price and brand name are
not the main considerations. Category III: Cooking Own Food They like to cook their own
food and get involved in the kitchen. They love to make an assortment of dishes. This is
also done to cut costs. They like to buy their own groceries and cooking stuff, and do
not want to waste money on fancy packings. They do not try new products, i.e., they are
not innovators, but try to be a late majority, and buy a thing, when it has established
itself in the market. They tend to have a big family, and have to economise, as well.
Questions

1. What inferences can be drawn by marketeers from the above study? How does it
help them to formulate strategies for advertisement, positioning, etc?

2. Do you require any other information and why?

SUMMARY
 Thislessonmainlyfocusesontheissuesrelatedtoconsumerdiversityandmanagement.
 Itdiscussesthechangingconceptofconsumerwithrespecttotimeandchangingneedsan
dwants.
 Italsoemphasisesontheimportanceofunderstandingconsumerbehaviourbythemark
eters.
 Itexplainsthenatureofconsumerandtheirneedsandlevelofconsumption.
 In overall,itgives apurviewaboutconsumers,theirchangingneeds
androleplayedbymarketersinanalysingtheseneeds.
 The discipline of consumer behaviour involves the concepts developed
inotherdisciplinesofstudysuchaspsychology,sociology,socialpsychology,culturalant
hropologyandeconomics.

Keywords
Consumer behavior: How consumers make purchasing decisions with available
resources. Consumer: Anyone who is engaged in purchasing process.
Cultural anthropology: Study of humans in a society.
Customer: This is regular purchaser form a specific store or company.
Marketing concept: Consumer oriented marketing approach.
Organizational consumer: Buys goods and services for profit and non-profit
organizations.
Personal consumer: Buys goods and services for personal use
SELF-ASSESSMENTQUESTIONS
ShortAnswerQuestions
1. Whatismarketing?
2. Definetheterm‘consumer’.
3. Whatisthedifferencebetweencustomerandconsumer?
4. Whatdoyoumeanbydiversityofconsumerbehaviour?
5. Howdiversityofconsumerbehaviourisimportantinmarketing?
6. Why thereisaneedforstudyingconsumerbehaviour?
7. Definetheterm‘consumerbehaviour’.
8. Everyconsumerisdifferentfromeachother.Givefewexamples.
9. Definetheterm‘socialpsychology’.
10. Whatissocialanthropology?
11. Explaintheterm‘sociology’.
12. Definetheterm‘psychology’.
13. Listdownthefactorsthatcontributedtothedevelopmentofconsumerbehaviourasam

arketingdiscipline.
14. Namethedimensionsofconsumerbehaviour.
15. Discusstheimportanceofconsumerbehaviour.
16. Whatdoyoumeanby need?
17. Explaintheterm‘want’.

LongAnswerQuestions
1. Explainthemeaningofconsumerbehaviourindetail.
2. Whatisthesignificanceofconsumerbehaviour?
3. Discussthedimensionsofconsumerbehaviour.
4. Whatdoyoumeanbythediversityofconsumerbehaviour?Elaboratetheconceptwithth
ehelp of examples.
5. Whyconsumerbehaviourawarenessisimportantforthecompany’sperspective?
6. Discusstherelevanceofconsumerbehaviourawareness.
7. Elaboratetheconceptofmarketing.
8. Whyneedsandwantsplay an importantroleinstudying consumerbehaviour?
9. Discussthestatement“customeristhekingofthemarket”.
10. Howacompanycanbecomesuccessfulaftersatisfyingtheircustomers'needsandwants
?

Further Reading

KotlerPhilip;KelvinlaneKeller(2007).MarketingManagement,12th ed.Pearson,
PrenticeHall.
MichaelR.Solomon,“ConsumerBehavior:Buying,HavingandBeing”PearsonEducatio
n,Limited,2011
Schiffman,“ConsumerBehavior”PearsonEducationIndia,2010
Assel,“ConsumerBehavior-AStrategicApproach”,Biztranza,2008
ShethMittal,“ConsumerBehaviour–AManagerialPerspective”,Thomson Asia(P) Ltd.,2011

LESSON 2 - CONSUMER BEHAVIOURAPPLICATIONSANDDECISIONMAKINGPROCESS

LEARNINGOBJECTIVES
 To understandthedevelopmentofmarketingconcept
 To know the applicationsofconsumerbehaviourinmarketingdecisions
 To understand theconsumerresearchprocess

LEARNINGOUTCOMES

Uponcompletionofthelesson,studentsareabletodemonstrateagoodunderstandingof:
 Thedevelopmentofmarketingconcept
 Application of consumer behavior
 Understand theconsumerresearchprocess

OVERVIEW

Consumer behaviour is arapidly growing discipline of study.Itmeansmorethan

just how a person buys products. It is a complex and
multidimensionalprocessandreflectsthetotalityofconsumers’decisionswithrespecttoac
quisition,consumption and disposal activities.You, asa consumer,exhibitvery
significantdifferencesinyourbuying behaviourandplay an importantrole inlocal,national
or internationaleconomicconditions.One of
theveryfewaspectscommontoallofusisthatweareallconsumersandthereasonforabusine
ss firmtocome intobeing is the presenceof consumers
whohaveunfulfilled,orpartiallyfulfilledneedsandwants.Ourconsumptionrelatedbehavio
urinfluences thedevelopment of technology andintroduction
ofnewandimprovedproductsandservices.

Inthislessonaftertheapplicationspartyouwilllearnaboutthestepsofconsumer
research process.There are six steps of consumer research process.One by one you
will acquaint with the significance of all the steps of consumerresearchprocess.

2.1 Development of Marketing Concept

Marketing concept evolved in late 1950s and the field of consumer behaviour is deeply
rooted in this concept. After World War II, there was great demand for almost all sorts
of products and the marketing philosophy was to produce cheap goods and make them
available at as many places as possible. This approach suited the marketers because
demand exceeded supply and consumers were more interested in obtaining the product
rather than in any specific features. This approach is called a production orientation and
is based on the assumption that consumers will buy what is available and would not wait
for what they really want. The marketer does not really care to know what consumer
preferences are. The next stage has been product orientation, which assumes that
consumers will buy the product that offers them the highest quality in terms of
performance and features. The company makes all efforts to improve product quality.
The focus is on the product rather than on what the consumers need or want. Professor
Levitt has called this excessive focus on product quality as “marketing myopia.” This we
see happen in highly competitive markets where some companies keep on adding
unnecessary features, passing their cost on to the consumers, in hopes of attracting
them. Selling orientation evolved as a natural consequence of production orientation
and product orientation. The marketer is primarily focused on selling the product that it
unilaterally decided to produce. The assumption of this approach is that consumers
would not buy enough of this product unless they are actively and aggressively
persuaded to do so. This approach is known as “hard-sell” and consumers are induced to
buy what they do not want or need. The problem with this approach is that it does not
take consumer satisfaction into account. This often leads to dissatisfaction and
unhappiness in consumers and is likely to be communicated by word-ofmouth to other
potential consumers, discouraging them to buy the product. Soon marketers realised
that they could easily sell more goods if they produced only those goods that they had
first confirmed consumers would buy. Thus, consumer needs and wants became the
marketer’s primary focus. This consumer-oriented marketing approach came to be
called as the marketing concept. The important assumption underlying marketing
concept is that a company must determine the needs and wants of its target markets
and deliver the desired satisfactions more efficiently and effectively than the
competition. This is the key to successful marketing.

2.2 Applications of Consumer Behaviour

Consumer behaviour principles are applied in many areas of marketing as discussed

below:

1. Analysing market opportunity: Consumer behaviour study helps in identifying the

unfulfilled needs and wants of consumers. This requires examining the trends and
conditions operating in the marketplace, consumers’ lifestyles, income levels and
emerging influences. This may reveal unsatisfied needs and wants. The trend towards
increasing number of dual income households and greater emphasis on convenience and
leisure have led to emerging needs for household gadgets such as washing machine,
mixer grinder, vacuum cleaner and childcare centres etc. Mosquito repellents have been
marketed in response to a genuine and unfulfilled consumer need.

2. Selecting target market: A review of market opportunities often helps in identifying

distinct consumer segments with very distinct and unique wants and needs.
Identifying thesegroups,learning howthey behaveandhowthey make purchase
decisions enables the marketer to design and
marketproductsorservicesparticularlysuitedtotheirwantsandneeds.

Example:Consumerstudiesrevealedthatmanyexistingandpotentialshampoousersdidno
twanttobuyshampoopackspricedat60 or more and would rather prefer a low priced
sachet containing enoughquantity for one or two washes. This finding led companies
to introduce theshampoosachetwhichbecameagoodseller.

Marketermustfocustocatertothatparticularsegmentwhichismeasurable, substantial,
accessible, responsive towards products and mostimportantly profitable. If a
segmentcomprises of all these features it is aptfor marketer totarget this segment and
bring out thebest product or servicetofulfiltheirneedsanddemands.

1. Marketing-mix decisions: Once unsatisfied needs and wants are

identified,themarketerhasto determine therightmix of product, price,
distributionandpromotion.Heretoo,consumerbehaviourstudyisveryhelpfulinfinding
answerstoomanyperplexingquestions.

(a) Product: The marketer designs the product or service that would
satisfyunfulfilledneedsorwants.Furtherdecisionsregardingtheproductconcern
tosize,shapeandfeatures.Themarketerhas alsoto
decideaboutpackaging,importantaspectsofservice,warrantiesandaccessories,etc.

Example: Nestle first introduced Maggi noodles in masala

andcapsicumflavours.Subsequently,keepinginviewtheconsumerpreferencesin
someregions,thecompany introducedgarlic,Sambarandotherflavours.

Everyproducthasadefinitelifecyclewhichcanberevitalisedbymaking tweaking in
it. Hence, marketer must put special emphasis onbringing out variants of
 theproduct orintroducing itin a refreshingmannerforcustomers.

Example:‘Dettol’whichisafamousliquidantisepticanddisinfectant was used in

hospitals only or in medical kits. Later its useswere taught to various target
audience for using it in washing clothes tosterilize them. Mixing it in the water
used for mopping the floor etc. notonly this, the soap andhandsanitizer
alsogainedwider acceptance inthemarketwhentheywereintroduced.

(b) Price:Thesecondimportantcomponentofmarketingmixisprice.Marketers must

decide what price to charge for the product or
service.Thesedecisionswillinfluencetheflowofrevenuetothecompany.Shouldthe
marketerchargethesame,higherorlowerpriceincomparisontocompetition?Isthe
consumerpricesensitiveandwouldalower pricestimulatesales?

Example: Nokia had a good position in market and was runningsuccessfully

when it entered India. But later, it realised that India had ahuge segment of
those who wants to be connected but they can’t affordmobile
handsets.Hence,it came out with low priced handsets
whichhelpedNokiagainedvolumesales.

To answer such questions, the marketer must understand the way

thecompany’s productisperceived by consumers,theimportanceof priceas a
purchase decision variableand how different price levels
wouldaffectsales.Itisonlythroughconsumerbehaviourstudyinactualbuying
situations that the marketer can hope to find answers to theseimportantissues.

(c) Distribution: Thenextdecision relates tothedistribution channel,thatis, where

and how to offer products and services for sale. Should theproducts be sold
through all the retail outlets or only through selectedones? Should the
marketer use only the existing outlets, which also
 sellcompetingbrands,orshouldnewexclusiveoutletssellingonlythemarketer’s
brands are created? Is the location of retail outlets importantfrom
consumers’pointof view? Shouldthecompany think of directmarketing?

The answers tothese questions arefurnishedby consumerbehaviourresearch.

Example: HUL wanted totapevery nook andcorner of

themarkethenceitdesignedaprogramcalledProjectShakti,whichempoweredru
ral women toearn income andbecome self-reliant
andearnastatusinsociety.Italsoservedthepurposeofreachingthehinterlandwit
houtinvolvingcostinacquiringsalesmenforthecompany. These Shakti amma(s),
work on the basis of commission, forselling eachunittothecustomers.

(d) Promotion: Promotion is concerned with marketing communications

toconsumers.Themoreimportantpromotionmethodsareadvertising,personal
selling,sales promotion, publicity anddirect marketing.
Themarketerhastodecidewhichmethodwouldbemostsuitabletoeffectivelyreac
htheconsumers.Shoulditbeadvertisingaloneorshould it be combined with
sales promotion? The company has to knowthe target consumers, their
location, what media do they have access
toandwhataretheirmediapreferences,etc.

Example: After conducting consumer research it was found thatwhen

consumers arehungry they tend to perceive andremember
theadvertisements relatedtofood better.Hence,FMCG (especially
foodmanufacturers)startedschedulingsnackingadvertisementswhenconsume
rs watch television atthetime of dinnerorlunch.Thus,theway a productis
promotedmay increase profitsandvolumes both forthecompany.

Use in social and non-profits marketing: Consumer behaviour studies

 areuseful to design marketing strategies for social, governmental and not-for-
profit organisations tomaketheir programmes.Theiraim is atselling
aparticularbehaviourwhichissociallydesirableandacceptable

This subject aims at covering all those aspects which helps bringing a wave
ofchangeinsociety.UsingAmitabhBachchaninpoliocampaigningadvertisements
topursuethe ruralandurban masses
tomaketheirinfantsandchildrenhavedropsofpolioisonestrategyinthisregard.

2.3 Consumer Research

Consumer research has emerged as an extension and an integral part of

marketing research. It is the set of methods used to identify the needs and then develop
products and services to satisfy those needs. The focus of consumer research is
exclusively on exploring consumer behaviour. In the beginning, consumer research was
used to help marketers to predict the consumer reactions to marketer’s promotional
messages and to understand why consumers made purchase decisions which they did.
Marketers were reasonably convinced that if they could know everything about
consumer decision process, they would be in a position to design marketing strategies
and promotional campaigns that would influence the consumers in such a manner that
they would buy the company’s products or services. At this time, marketing was viewed
as simply appliedeconomics and the prevailing theory was that of an ‘economic man’,
assuming that consumers are rational beings who make objective evaluations about
products or services and chose only those that offer them maximum satisfaction at the
lowest cost. Consumer behaviour research is now used to identify both felt and latent
needs, to learn how consumers perceive products, brands and stores, what their
attitudes are before and after promotional campaigns and how and why they make their
purchase decisions. Consumerresearchprocessinvolvessixmajorsteps:

(1)definingresearchobjectives,

(2) collecting and evaluating secondary data,

(3) primary researchdesign,

(4) collecting primary data,

(5) analysing data,

(6) report preparation.

Figure2.1depictsthe stagesinconsumerresearch.

2.3 .1 DefiningResearchObjectives

Atthe outset,itisimportanttoclearly definethepurpose andobjective ofresearch study

on which the marketing manager and the researcher agree.
Thiswillensurethedevelopmentofappropriateresearchdesign.

Example: If the purpose of the research study is to come up with newideas for
advertising campaigns, then a qualitative study might be fruitful. Thesample size
would be small due to cost of each interview and a highly
trainedprofessionalwillspendmoretimeface-to-facewithrespondentsandsubsequently
wouldalsoanalyse andinterpret the data.In case the purpose ofthe study is to learn
what percentage of people use certain products and howfrequently
theyusethem,thenaquantitativestudyismoreappropriate

2.3 .2CollectingandEvaluatingSecondaryData

Secondarydataisanyinformationoriginallygeneratedforsomeotherpurposes rather than

the current problem under consideration and can be
eitherinternalorexternaltotheorganisation.

Itincludesfindingsbasedondatageneratedin-houseforearlierstudies,customer
information collected by company’s sales or credit departments
andresearchconductedby
outsideorganisations.Theactoflocatingsecondarydataiscalledsecondaryresearch.Origin
alresearchdonebyindividualsororganisationstomeetspecificobjectivesiscalledprimaryre
search.
In most cases, secondary research offers clues and direction for the design ofprimary
research.Governmentagencies,industry
sources,tradeassociations,marketingresearchfirmsandadvertisingagenciesareimportan
tsourcesofsecondarydata.

2.3.3 Design Primary Research

Since the approach to research design for qualitative and quantitative
researchdiffersintermsofdatacollectionmethod,sampledesignanduseofdatacollectionin
strument,bothresearchapproachesarediscussedhere

2.3.3 .1 QualitativeResearchDesign

Theresearcherfirsttakesintoconsideration the purpose of theresearch studyand the kind

of data needed. Data collection techniques for qualitative
studiesincludefocusgroup,depthinterviewsandprojectivetechniques.Allthesetechniquesr
elatetopsychoanalyticandclinicalaspectsofpsychology.Theemphasis is on open-
endedandfree-response types of questions sothat therespondents
revealtheirunconsciousthoughtsandbeliefs.Thesetechniquesare frequently used in early
stages of attitude research to learn product-relatedbeliefs or attributes and the
resulting attitudes. Various techniques like
depthInterviews,focusgroupsandprojectivetechniquesareusedforthis.

2.3.3 2 QuantitativeResearchDesign

Quantitativeresearchdesignincludesmethodofdatacollection,thedatacollectioninstrumen
tsandthesampledesign.

2.3.3.3 Datacollectionmethods for Primary Data :

Therearethreebasicapproachestocollectdatainquantitativestudy:

1. Observation

2. Experimentation

3. Survey

Theseapproachesarediscussedindetailasfollows:
 1. Observation: One important approach to gain an in-depth understanding
ofconsumers is to observe their behaviour in the process of buying and
usingproducts.By watchingconsumers,researchersgain
abetterunderstandingofwhataproductsymbolisestoaconsumerbecauseinmostcase
sconsumers do not realise that they are being observed and their
behaviourremainsnatural.

2. Experimentation:Inexperimentalstudies,theresearchercantesttherelative
salesappeals forpackage designs, prices, promotional offers andcopy themes etc.
by designing suitable experiments toidentify cause
andeffect.Insuchstudies,calledcausalresearch,onlyoneindependentvariable is
manipulatedat a time andothers remain constant. This ensuresthat any difference
in dependent variable (results) is because of changes ofindependent variablessuch
as consumers’attitudes or purchase
behaviourandnotduetotheinfluenceofanyextraneousfactors.

3. Survey: In a survey for data collection, consumers are aware of the fact thatthey
are being studiedandparticipate actively. A survey can be conductedby
personalinterview,by mail,or by telephone.Various kinds of
surveysarementionedasfollows:

(a) Personalinterviewsurvey:Thisisadirectface-to-faceinteractionbetween interviewer

and the respondent in home or in a retail
shoppingarea(calledmallintercept).Alargeamountofrelativelyaccurateinformationca
nbeobtainedbythisapproach.Amajoradvantageofthisapproachistheflexibility.Theint
erviewercanmodifythequestions as per the situation andcan alsoprovide any
 clarifications totherespondentifnecessary.Thedrawbackisitshighcost.

(b) Mail surveys: These are conducted by sending questionnaires directly toindividuals
who complete it at their leisure and return it, usually in
apostagepaidenvelope.Mail surveyscanlargely
reducerespondents’reluctancetorevealsensitiveinformationbecausetheyareseldom
asked to identify themselves. The cost per respondent of mail survey islow and
widely dispersed consumers can be covered, generating largeamount of data. On
the negative side, mail surveys can result in
smallnumberofresponsesbecausemanyconsumersdonotreturnthecompletedquesti
onnaires.

(c) Telephonesurveys:Thesealsoprovideinterviewer-respondentinteraction, though not

face-to-face and can be a useful alternative topersonal interview. The method is
quicker and far less expensive thanpersonal interviews. Telephone surveys work
wellwhen the objective isto learn about certain behaviour at the time of the
interview,such asbefore or after viewing a TV programme. Telephone surveys
generallygeneratehigherresponseratethanmailorpersonalinterview.Theinformatio
n collectedduring each interview is limited because of thedifficulty of keeping
respondents interested and on phone for extendedperiod. Also, it is not possible
to determine the intensity of respondents’feelingson telephone.

Table2.1:DifferencesbetweenQualitativeResearchandQuantitativeResearch
 QualitativeResearch QuantitativeResearch
Main techniquesused Focus groups and in- Surveysandscientificsampl
for datacollection depthinterviews. ing.
Kindsofquestionsasked Why? Through what Howmuch?Howmany?
thoughtprocess?Inwhatway
?Whatotherbehaviourortho
ughts?
Interviewer’srole Interviewermustthinkcriticall
Criticalroleimportant,but
yandquickly frame questions interviewersneed only be
and probesin response to able to read scripts.
whatever respondentssay. Theyshould not
Highly trained improvise or deviate.
professionalsrequired. Littletraining needed,
responsible
personnelaremostsuitabl
e.
Questionsasked Position of questions may Novariation. Must
vary insequence and bethesamequestionfor
phrasing from groupto group each interview. Sequence
and in different andphrasing of questions
interviews.New questions must be
are included and carefullycontrolled.
oldonesdropped.
Number Fewerinterviewsbutthedurat Many interviews to
ofinterviews ionofeachinterviewis more. ascertain a
scientificsamplethat
isworth projecting.
Natureoffindings Developahypothesis,gainins Testhypothesis,arrangef
ight,explore language actorsaccordingtopriorit
options, refineconcepts, y,andfurnishdatafor
add numerical data, mathematical modelling
andprovide diagnostics for andprojections.
advertisingcopy.
2.3.3.4Datacollection instruments:

The methodof datacollection dependsonthetypeof research.Theprimary method of data

collection for quantitativestudyis the questionnaire. Researchers can use a questionnaire
to conduct any of thethreetypesofsurveys(personalinterview,mailandtelephone).

A questionnaire consists of a set of questions presented to respondents for

theirresponses.

Constructingagoodquestionnairerequiresconsiderableexpertise.Typicalproblems include
asking the wrong questions, asking too many questions andusing the wrong words.
Effective survey questions have three attributes: focus,brevity andclarity.They focus on
the topic of survey,are as brief as possibleand they are expressed simply and clearly. The
questions must be
interesting,objective,unambiguousandeasytoanswertruthfullyandcompletely.

Questionnairesinclude both questions thatarerelevanttothetopic of

studyandarepertinentdemographicquestions.Thisfacilitatesanalysisandclassification of
responses into suitable categories. Questionnaires are firstpre-
testedandanyerrorsareremovedbeforetheirwidespreaduse.

Thetruepurposeofa questionnaireitselfcanbedisguisedorundisguised.Sometimes the

answerstoa disguisedquestionnaire aremore truthful than
toanundisguisedquestionnairebecausetheformeravoidsresponsesthatrespondents may
think are expected. There are two types of questions, open-endedandclosed-
ended.Open-endedquestionsrequireinformationintherespondent’sownwordsandclosed-
endedquestionsrequiretherespondentonly to check the appropriate answer from the
given list. Open-ended questionsrevealmore because they do notrestrain
respondents’answers but are difficulttotabulateandanalyse.Closed-
endedquestions,whicharecheckedbyrespondents,arerelativelysimpletocodeandinterpret
butreveallimitedinformationbasedonalternativeresponsesprovided.
Sometimes,researchersusealistofproductattributesorproductsandaskrespondents
toindicate their relative evaluationsor feelings. Researchers alsouse attitude scales to
collect this type of evaluative data. Attitude scales
includelikertscales,semanticdifferentialscalesandrank-orderscales.
A
.Likertscale:Likertscaleisthemostpopularformofattitudescale,beingeasytoprepareandin
terpretandsimpleforrespondentstoanswer.Useofthisapproach involves compiling a list
of statements relevant to the attitude understudy.The respondents are askedto check
orwritethenumbercorrespondingtotheirlevelofagreementordisagreementwiththestate
ment.
Example:

Stronglya Agree Undecided Disagree Stronglydis

gree agree
BigShopperisgenerallyap ---------- X ---------- ---------- ----------
rogressivestore.
BigShopperisgenerallyw X --------- ---------- ---------- ----------
ellstocked. -
Big X --------- ---------- ---------- ----------
Shopper’smer -
chandiseisgenerallyreaso
nablypriced.

B.Semanticdifferentialscale:Semanticdifferentialscaleisrelativelyeasy toconstruct and

administer. It consists of a pair of bipolar pair adjectives (such
asgood/bad,like/dislike,expensive/inexpensive,sharp/blunt,aggressive/docile)or
antonym phrases at both ends of the scale with response options spaced inbetween in
five or seven points. Respondents are asked to mark the position
onthecontinuumthatmostcloselyrepresentstheirattitudetowardaproduct,conceptorco
mpanyonthebasisofeachattribute.

Example:

Healthy Unhealthy
Fresh State
Soft Hard
Expensive Inexpensive
Young Old
Oldfashioned Modern

C,Rank –Order Scale

Administering rank-order scales involve asking the respondents to rank

items(products, stores or companies)in order of preferenceagainstsome
criterionsuchasquality,valueformoneyorimage.Rank-orderscalingrevealsimportant
competitive information and helps identify areas of product designimprovement.

Example: The following are six brands of toothpaste.We are

interestedinlearningyourpreferenceforeach of thesebrands.Place 1alongside
thebrandthatyouwouldbemostlikelytobuy,2alongsidethebrandyouwouldnextbemostlikel
ytobuy.Continuedoingthisuntilyouhaverankedallsixbrands.

ColgateTotal

Aquafresh

Close-Up

Pepsodent

Neem
 ViccoVajradanti

2.3.3.5SampleDesign:

Asampledesignaddressesthreequestions:whoistobesurveyed(sampling unit), how many

tosurvey (sample size) andhow shouldtherespondentsbechosen(thesamplingprocedure).

Decidingwhomtosurvey (sampling unit)requires

thattheresearchermustdefinethetargetpopulation(universe)thatwouldbe sampled.

Example: If the Indian Airlines conduct a survey, should the samplingunit be business
travellers, vacation travellers, or both? Should travellers
underage30yearsbeinterviewed?Interviewingthecorrecttargetmarketorthepotentialtarg
etmarketisbasictothevalidityofresearch.

Deciding how many people should be surveyed (sample size) depends on

thebudgetandtherequiredconfidenceinresearchfindings.Asarule,largesamplesgivemorer
eliableresultsthansmallsamples.Ifthesamplingprocedure is credible, sample sizes of less
than 1% of a population can givereliableresults.

How should the respondents be chosen (sampling procedure)? If the researcherwants to

project the findings to the total population, then a probability
sampleshouldbeselected.Iftheresearcherwantsthefindingstobe“representative”ofthepo
pulation,thenanon-probabilitysamplecanbechosen.

2.3.4. CollectingPrimaryData

Datacollection phaseofresearchis probably

themostexpensiveandquitepronetoerror.Thefourmajorproblems encounteredare:
somerespondentswill not be available athome and must be either contacted again or
replaced,otherrespondentswillrefusetheinterview,stillotherswillgivebiasedordishonesta
nswersandsomeinterviewersthemselveswillbebiasedordishonest.

Aquantitativestudygenerallyemploysafieldstaff,recruitedandtraineddirectlybytheresearc
herorcontractedfromafirmthatspecialisesinconductingfieldinterviews.Thecompletedque
stionnairesreceivedarereviewed on a regular basis to ensure that the recorded
responses are clear andcomplete.
2.3.5AnalysingData

Thelast-but-onestepintheresearchprocessistoextractrelevantfindingsfrom the
collected data. In qualitative research, the moderator/analyst
usuallyanalysestherespondents’responses.Theresearchersupervisesthedataanalysis in
quantitative research. The responses are converted into
numericalscoresthentabulatedandanalysedwiththehelpofcomputersusingsophisticated
analyticaltechniques.

2.3.6ReportPreparation

Theresearcherpreparesareport ofher/hisfindingstobepresentedtotherelevant parties.

Itmay ormay notinclude any recommendations
foractiondependingontherequirementsofthemanagement.Thereportincludesadescripti
on of the methodology used, as well as tables andgraphicsto supportthe research
findings.The
researchershouldpresentmajorfindingsthatarerelevanttodecisionsfacingmanagementa
ndavoiddetailingnumbersandfancyjargonsuchas“multivariateanalysisofvariance.”

CASE STUDY

Wish –n –shop

Wish-n-Shop is a very large retail store in Delhi's major commercial area. It was
established in 1990 to cater to the segment of customers who have had exposure to
international shopping and were looking for a wide range of quality products under
one roof. In 1980, Wish-n-Shop was originally started as a mail order company and
subsequently moved to retailing after 10 successful years in mail order business. Wish-
n-Shop management views the whole plan as a grand exercise and emphasis on its
commitment to being world class in retail standards in India. The management is
always keen on innovating and finding new products and trends, and develops
elaborate plans to take the concept further. According to the company's marketing
vice president, the role of consumer research is of vital importance for their business.
"Continuous consumer research is a way of life for us, considering the fact that our
clients are high profile individuals who have tested the best and thus, it is of great
importance that they perceive us as the ultimate in retailing. We use research for a
variety of reasons - what customer segments we should focus on; to get the feedback
on our merchandise and concepts; to learn what our customers expect from us
instead of making any assumptions about these important issues. For this purpose, we
ask them a number of questions such as; are they aware of a particular brand, what is
their perception of its value, and do they expect us to keep the brand with us. We
then map out their responses and look for brands enjoying high awareness, which
customers perceive as valuable and expect to find in our stores." The two basic areas
of interest in conducting research are consumer preferences and, attitudes, and
customer service. The experts feel that this is the best way they can anticipate
customer preferences and expectations. The research at the company is integrated
into an information system linked with strategic planning. "The research must be
closely linked to strategic aspects of our business and none of our business planning is
completed without doing a comprehensive research," observes the company vice
president, Hemant Anand. Question

Prepare a small questionnaire for Wish-n-Shop to identify new products for its
women's section.
SUMMARY
 Consumerbehaviourreferstotheobservablebehaviourofconsumersduringsearching,
purchasingandpostconsumptionofproductsorservices.
 Therearetwoimportantgroupsofconsumers:personalconsumerandorganisationalco
nsumer.
 The study of consumer behaviour involves interplay of number of
variablesthatarenotvisibletoanobserver.
 The study of consumer behaviour involves what they buy, how they buy
it,whentheybuyit,wheretheybuyit,andwhatarethepostpurchaseactivities.
 The research process includes a series of steps, which the researcher has
toundertake.
 The research design is selected depending on the purpose of study. For
alldescriptive information, quantitative research designs are helpful and if
thepurposeis togeneratenew ideas,then qualitativeresearch techniques
canbeused.
KEYWORDS

Customer:Acustomerisregularpurchaserformaspecificstore orcompany.

Qualitativestudy:Usedmostlytogeneratenewideas.

Quantitativestudy:Usedwhendescriptiveinformationisrequired.

Sellingorientation:Acompany-centredapproachdesignedtomotivatepotential
customers to buy products and services through various
promotionaloffers,suchasquantitydiscounts,freetrial,money-
backguaranteesandrebates.
Product orientation: Product orientationis abusinessmethod or philosophywhereby
whatever a company makes is the main focus of the management'sattention.

Target market: A target market is a group of customers that the business

hasdecidedtoaimitsmarketingeffortsandultimatelyitsmerchandisetowards.

SELF-ASSESSMENTQUESTIONS

ShortAnswerQuestions

1. Definetheterm‘targetmarket’.

2. Whatdoyoumeanbyproductorientation?

3. Explaintheconceptofsellingorientation.

4. Whendidmarketingconceptevolved?
5. Whatisanimportantassumptionunderlyingmarketing?

6. Namethestepsofconsumerresearchprocess.

7. Prepareadiagramofconsumerresearchprocess.

8. Nametheapplicationsofconsumerbehaviourinmarketingdecisions.

9. Whysemanticdifferentialscaleisused?

10. Whatistheuseoflikertscale?

11. Definetheterm‘samplingunit’.

12. Whatissamplingprocedure?

13. Explaintheterm‘samplingsize’.

14. Whatarethemarketingdecisions?

15. Giveexamplesofeachmarketingdecision.

16. Makeadifferentiationbetweenproductandsellingorientation.
17. Whatdoyoumeanbymarketingmyopia?

18. Howthemarketopportunityisidentified?

19. Definereportpreparation.

20. Definetheterm‘primarydata’.

LongAnswerQuestions

1. Whatis thethinlinethatdifferentiates
betweenacustomerandaconsumer?Explainwithexamples.

2. Therearedifferentrolesthataconsumerplayswhilemakingapurchasedecision.Explain
them.

3. Explaintheprocessandthevariousrolesthataconsumer orhouseholdassumes.

4. Isitimportanttoconsiderthebehaviourofconsumerswhiledecidingonthemarketingmi
xofthecompany?Why?Explainwithsuitableexamples.

5. Compareandcontrastthequalitativeandquantitativetechniquesofresearchdesign
.Whichonedoyouthinkisbetter?

6. Discusseachstepoftheconsumerresearchprocessinbrief.

7. Writeshortnotesonthefollowing:

(a) PrimaryData

(b) SecondaryData

(c) AnalysingData

8. Discussthedevelopmentofmarketingconcept.

9. Elaboratetheapplicationsofconsumerbehaviourinmarketingde
cisions.

10. Prepareanelaborativediagramofconsumerresearchprocess.
FURTHERREADINGS

Laermer, Richard; Simmons, Mark, Punk Marketing, New

York:HarperCollins,2007.ISBN978-0-06-115110-1(Reviewofthebook by Marilyn
Scrizzi, in Journal of ConsumerMarketing24(7),2007)

WayneD.Hoyer,DeborahJ.MacInnis“ConsumerBehavior”CengageLearning,23-Dec-2008

MariekedeMooij“ConsumerBehaviorandCultureConsequences for Global Marketing

and Advertising” SAGE, 29-Sep-2010

Abbael,“ConsumerBehavior:AStrategicApproach”(IndianEdition2005)Wiley2012.

Hed,Hoyer,“ConsumerBehavior”,2008EditionWiley2012.
 UNITII

Lesson 3

ConsumerBehaviour Models - I

LEARNINGOBJECTIVES

Afterstudyingthislesson,one shouldbeableto:

 To Understandtheindustrialandindividualconsumerbehaviormodels

 To explainthePsychoanalyticModel,SociologicalModel and Howard-ShethModel

LEARNINGOUTCOMES

Uponcompletionofthelesson,students are able to demonstrate a goodunderstanding of:

 basicofindustrialandindividualconsumerbehaviourmodels
 conceptof various modelanddrawinput,processandoutputmodel
OVERVIEW
Consumers are influenced by various internal, external and marketing factors
which is reflected in the choice they make to choose a product.

An attempt has been made here to understand why consumer behaves the
waythey does.A variety of traditional models exists, which explains theanswer tothe
same question based on differential views about consumer theory. In
thislesson,youwill haveaview about models of consumer behaviour,such
aseconomicmodel,sociologicalmodel,thepsychologicalmodel,etc.andresultantexplanati
onofconsumer behaviour.

In this Unit , the industrial and individual models

likeEconomicmanmodelandLearningModel,thePsychoanalyticModel,SociologicalMode
landHoward-ShethModel are discussed.

3.1 GENERAL MODEL OF CONSUMER BEHAVIOUR

The general model of consumer behaviour consists of five stages .The consumers
when making buying decisions is influenced by external Factors namely marketing
stimuli ,external environmental factors and buyers characteristics
Figure 3.1 Stages of Purchasing Process

A consumer undergoes the following stages before making a purchase decision –a

Stage 1 − Needs / Requirements

It is the first stage of the buying process where the consumer recognizes a problem or a
requirement that needs to be fulfilled. The requirements can be generated either by
internal stimuli or external stimuli. In this stage, the marketer should study and
understand the consumers to find out what kinds of needs arise, what brought them
about, and how they led the consumer towards a particular product.

Stage 2 − Informa on Search

In this stage, the consumer seeks more information. The consumer may have keen
attention or may go into active information search. The consumer can obtain
information from any of the several sources. This include personal sources (family,
friends, neighbors, and acquaintances), industrial sources (advertising, sales people,
dealers, packaging), public sources (mass media, consumer-rating and organization),
and experiential sources (handling, examining, using the product). The relative
influence of these information sources varies with the product and the buyer.

Stage 3 − Evalua on of Alterna ves

In this stage, the consumer uses information to evaluate alternative brands from
different alternatives. How consumers go about evaluating purchase alternatives
depends on the individual consumer and the specific buying situation. In some cases,
consumers use logical thinking, whereas in other cases, consumers do little or no
evaluating; instead they buy on aspiration and rely on intuition. Sometimes consumers
make buying decisions on their own; sometimes they depend on friends, relatives,
consumer guides, or sales persons.

Stage 4 − Purchase Decision

In this stage, the consumer actually buys the product. Generally, a consumer will buy
the most favorite brand, but there can be two factors, i.e., purchase intentions and
purchase decision. The first factor is the attitude of others and the second is unforeseen
situational factors. The consumer may form a purchase intention based on factors such
as usual income, usual price, and usual product benefits.

Stage 5 − Post-Purchase Behavior

In this stage, the consumers take further steps after purchase based on their
satisfaction and dissatisfaction. The satisfaction and dissatisfaction depend on the
relationship between consumer’s expectations and the product’s performance. If a
product is short of expectations, the consumer is disappointed. On the other hand, if it
meets their expectations, the consumer is satisfied. And if it exceeds their expectations,
the consumer is delighted.
The larger the gap between the consumers’ expectations and the product’s
performance, the greater will be the consumer’s dissatisfaction. This suggests that the
seller should make product claims that faithfully represent the product’s performance
so that the buyers are satisfied.

Consumer satisfaction is important because the company’s sales come from two basic
groups, i.e., new customers and retained customers. It usually costs more to attract
new customers than to retain existing customers and the best way to retain them is to
get them satisfied with the product.

3.2INDUSTRIAL ANDINDIVIDUAL CONSUMERBEHAVIOURMODELS

Understandingbuyerbehavioursplaysanimportantpartinmarketing.
Thereare twokindsofbuyers:
1. Industrial(organisational)buyerand
2. Individualconsumer.

OrganisationalbuyingbehaviourhasmanydistinctasFirst,itoccursinaformalorganisat
ionalcontextinfluencedby
budgetandcost.Second,undercertainconditions,jointdecision-
makingprocessmayhappen,andthisisimpossible in individual buying behaviour.
Finally,conflict is hardto avoidintheprocessofjointdecisionmaking.

In order tounderstandthe organisational buying behaviour,we first considerwhowill

beinvolvedin the buying processandwhattheir
expectationsarelike.Usually,atleastpurchasingagents,engineers,andfinaluserswillpartici
pate in the buying process. The expectations of different decision
makersaredifferent.Inthismodel,therearefivedifferentsetsofvariablesdeterminingtheex
pectations:theindividuals'background,informationsources, active search, the selective
distortion of the information based on theirprior knowledge and expectation,
satisfaction with past purchase. Except theperceptual
distortion,theotherfourvariablesareeasytogatherinformation.

Thesecondpartofthemodelisregardingtheindustrialbuyingprocesses:autonomousd
ecisionwhichmeansthatthedecisionisdelegatedtoonedepartment,jointdecisionprocesses
.Theproduct-
specificfactors(theperceivedrisk,thetypeofpurchase,andtimepressure)andthecompany-
specificfactors(companyorientation,companysizeandthedegreeofcentralisation) will
determine the type. The greater the perceived risk, the morepreferredtojoint decisions.
If it is alife-time capital purchase,the more likelythejoint decision will happen. If
thedecisionhas to be madeat an emergency,it is likely to delegate to one party. A small,
privately-owned company
withproductortechnologyorientationwilltendtowardsautonomousdecisions.While a
large public corporation with decentralisation will tend to have jointdecision process.

3.3 Models of Consumer Behaviour

3.3.1 Traditional Models:

The early or traditional models were developed by economists with a view to

understand economic systems. Economics helps to understand how scarce resources
are allocated among unlimited wants and needs. The first four Models give a general
view in terms of the Economic model, Learning model, Psychoanalytic model and the
Sociological model.
3.3.1.1 EconomicManModel

Economic Model: Under economics, it is assumed that man is a rational human

being, who will evaluate all the alternatives in terms of cost and value received and
select that product/service which gives him/her maximum satisfaction (utility).
Consumers are assumed to follow the principle of maximum utility based on the law of
diminishing marginal utility. It is assumed that with limited purchasing power, and a set
of needs and tastes, a consumer will allocate his/her expenditure over different
products at given prices so as to maximise utility. The law of equi marginal utility enables
him to secure maximum utility from limited purchasing power

Economic model of consumer behaviour is unidimensional. This means that

buying decisions of a person are governed by the concept of utility. Being a rational man
he will make his purchase decisions with the intention of maximising the utility/benefits.

Economic model is based on certain predictions of buying behaviour.

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

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

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

The assumption about the rational behaviour of human beings has been challenged
by the behavioural scientists. They are of the opinion that while the predictions are
useful, the model only explains how a consumer ought to behave, it does not throw light
on how does the consumer actually behave.
 The economic theory of consumer decision-making was based on the
followingassumptions:

(a) Beingunlimited,consumerneedsandwantscanneverbefullysatisfied.

(b) Asconsumerresourcesarelimited,hewouldallocatetheavailablemoneyinthatmaximi
sesthesatisfactionofhisneedsandwants.

(c) Consumers have complete knowledge about the utility of each product
andservicei.e. they are capable of completing the exact satisfaction that
eachitemislikelytoproduce.

(d) Asmoreunitsofthesameitemareboughtthemarginalutilityorsatisfaction provided

by the next unit of the item will keep on
decreasing,accordingtothelawofdiminishingmarginalutility.

(e) Priceisusedasameasureofsacrificeinobtainingthegoodsand/orservices.

(f) The overall objective oftheconsumer,isto,ina very rational

manner,maximisehissatisfactionoutoftheactofpurchase.
Behavioural scientists feel the economic model is incomplete. They feel that
Economics is assuming the market to be homogeneous where all the buyers will think
and act alike and also focuses only on one aspect of the product i.e., income. It has been
argued upon that man is a complex entity and hence the need to adopt a
multidisciplinary approach to understand consumer behaviour. Whereas, the model has
ignored all vital aspects such as perception, motivation, learning, attitude, personality
and socio-cultural factors. Added to this, man is today living in a technologically
advanced age with constant exposure to the various marketing variables such as
superior technologically advanced quality products (and services), efficient network
distribution centers, highly interactive media exposure etc. Under such circumstances
man cannot be assumed to be a rational person who only treats ‘price’ as the deciding
factor in his consumption related decisions. Behaviour scientists have opined that
broader perspectives need to be adopted while analysing the buyer behaviour. So apart
from economics, even the role played by needs, motives, personality, self-concept and
the socio-cultural factors have to be considered for understanding the buyer responses
to various stimuli, which in turn could influence their buying behavior

3.3.1.2 Learning Model

Learning Model: Unlike the economists, classical psychologists have been

interested in the formation and satisfaction of needs and tastes. They argued that living
beings were influenced by both innate needs such as the primary needs of hunger,
thirst, sex, shelter and learned needs like fear and guilt.

This model suggests that human behaviour is based on some central concepts –
thedrives,stimuli,cues,responsesandreinforcementswhich
determinethehumanneedsandneedssatisfyingbehaviour.

Drive:Astronginternalstimuluswhichcompelsaction.

Stimuli:Theseareinputswhicharecapableofarousingdrivesormotives.

Cues:Itisasignorsignalwhichactsasastimulustoa particulardrive.

Response:Thewayanindividualreactstothestimuli.

Iftheresponsetoagivenstimulusis“rewarding”,itreinforcesthepossibilityof
similarresponse when facedwith thesame stimulusorcues.Appliedtomarketing if on an
informational cue like advertising, the buyer purchases aproduct (response); the
favourable experiencewith the product increases theprobability that the response
would be repeated the next time the need stimulusarises(reinforcement).
 For instance, a hungry person will be driven towards food, which after
consumption will reduce the drive and also provide satisfaction. According to learning
theorists, this response of satisfaction (feeling) reinforces the relationship between drive
and the drive reducing stimulus object as well as the related cues

Further, when consumers learn to associate connection between stimulus and

response, it becomes a habit. There are certain cognitive theorists, who have advocated
that human beings not only learn to link stimulus with response (S-R) but also about the
formation of other cognitive processes such as, attitudes, values, beliefs, motivation etc.
In marketing context, ‘learning’ will help marketers to understand how consumers loam
to respond in new marketing situations, or how they have learned and responded in the
past in similar situations. Very often it is observed that consumer’s experience with one
product from an organisation is likely to be generalised to the other products of the firm.
Conversely, consumers also learn to discriminate and this information will be useful in
working out different marketing strategies. Simply stated this learning model will help
marketers to promote associations of products with strong drives and cues and positive
reinforcements from the consumers

Figure 3.2 Input,ProcessandOutputModel.

3.3.1.3 Psychoanalytical Model

This model is based on the work of psychologists who were concerned with
personality. They were of the view that human needs and motives operated at the
conscious as well as at the subconscious levels. This theory was developed by Sigmund
Freud. According to him human behaviour (personality) is the outcome of

(a) ‘id’ – the source of all psychic energy which drives to act,
(b) ‘super ego’ – the internal representation of what is approved by the society,
(c) ‘ego’ – the conscious directing ‘id’ impulses to find gratification in a socially
accepted manner.
Thus, we can say that human behaviour is directed by a complex set of deep-
seated motives.

Freudstartedwiththeassumptionthatthechildenterstheworldwithinstinctive
needs, the gratification of which depends upon others. He tries togratify these needs
through direct means like screaming, crying, grabbing, etc.The painful realisation
which is instant gratification of his needs is not
possibleandtheresultantfrustrationleadshimtodevelopmoresubtlemeansofgratifyinghis
needs.Theseinstinctive, leadhim to develop more subtle meansof gratifying his needs.
These instinctive drives are fully overcome as he
growsolder,hispsychebecomesmorecomplex.Theinstinctiveneedsandurgesresideinther
id;whichbecomestheirreservoir.Theintellectualplanningcentrewhichmediatestheunrest
rainedneedsandsocials,calledtheego,governs the manifestation of these needs and
urges. A third party of the psyche,the super ego, which embodies values, channelised
gratification of instinctivedrivesintosocially
values,channelisesthegratificationofinstinctivedrivesintosocially approved
outlets,sothat theguilt thatisfelt towards some oftheseurgesisavoided.

Mantendstofeelguilty aboutsomeofhisinstinctiveurgesespecially thesexual urge.

This leads him to suppress them from his consciousness, to eitherdeny them or
tochannelisethemin socially acceptablenorms of
behaviour.Theyareneverfullyovercomeoreliminated.Theysurfacenowandthenaccordin
g to the state of delicate balance which the ego maintains between theimpulsive
powerful urges of the idandthe intuiting, oppressive powersuperego,
Freudmaintainedthatsex or libido, is one of the most powerful
instinctsandthusmotivatesformanyactscanbeattributedtothesexualurgemanifestingitse
lfinobviousfashionsunconsciously.
Accordingtothepsychoanalytictheory,therefore,byimplicationthebehaviour of the
individual is never simple. The motivations that underlie it arenotapparent toa casual
observerofovertbehaviouroreven tothepersonhimself.
For example “When a person buys a car, his stated reason may be comfort,
Subconsciouslyhowever, he may have hada desire tofeel young or impress others.
From the marketing point of view this means that buyers will be influenced by
symbolic factors in buying a product. Motivational research has been involved in
investigating motives of consumer behaviour so as to develop suitable marketing
implications accordingly. Marketers have been using this approach to generate ideas for
developing products – design, features, advertising and other promotional techniques

3.3.1.4 The Sociological Model:

According to this model the individual buyer is a part of the institution called
society. Since he is living in a society, he gets influenced by it and in turn also influences
it in its path of development. He is playing many roles as a part of various formal and
informal associations or organisations such as a family member, as an employee of a
firm, as a member of a professional forum and as an active member of an informal
cultural organisation. Such interactions leave some impressions on him and may play a
role in influencing his buying behaviour. Intimate groups comprising of family, friends
and close colleagues can exercise a strong influence on the lifestyle and the buying
behaviour of an individual member.
The peer group plays a very important role in acting as an influencing factor
especially in adopting particular lifestyles and buying behaviour patterns. The group
generally has an informal opinion leader, whose views are respected by the group. This
leader is able to influence the individual member’s lifestyle and buying decisions.
Similarly, depending on the income, occupation and place of residence etc., each
individual member is recognised as belonging to a certain social class. As a member of a
particular class, he may enjoy certain status and prestige.
Further, each class has its own standards of lifestyle and buying behaviour
pattern. So an individual member will adopt the role suitable to conform to the style and
behavioural pattern of the social class to which he/she belongs. The marketers, through
a process of market segmentation can work out on the common behaviour patterns of a
specific class and group of buyers and try to influence their buying pattern.

CASE STUDY

Buyers Behaviour

In the U.S. cereals are taken at breakfast time. Cereal manufacturing is an industry of
great magnitude. Cereals are manufactured in various shapes, flavours and colours and
the advertisement is directed at children. The leading manufacturers are Kellogg’s,
General Mills, General Foods, Quaker Oats, and Champion. Kellogg’s share was
constantly being eaten away by other manufacturers who were introducing new cereals.
Kellogg’s therefore thought of introducing a new cereal, which they had not done for a
long time. The cereals were not only consumed by children, but a substantial portion
formed the adult market as well. Kellogg’s developed a new plan to come out with a
cereal which would be tasty, nutritious, free of sugar and made of grain. The cereal
consisting of the above attributes “Nutrigrain”. These were available in four types.
Nutrigrain Corn, Wheat, Barley and Rye. These were introduced together, and no test
marketing was done to avoid competition. These Products were advertised heavily and
targeted at adults. To promote the product further, discount coupons were freely
distributed, which gave a cut of about 30 per cent in the retail price of the product.
Coupons were also inserted in the Nutrigrain boxes’ so that customer would return to
take advantage of these coupons, and make repeat purchases. A lot of information and
advantages of consuming Nutrigrain was boldly printed on the packages for the
information of the consumers. Proper display in the shelves of stores was also taken care
of. Their efforts brought results, and the stores were loaded with orders and most adults
started eating these cereals, because of promotion, curiosity, etc. After one year, the
sales declined because there were very few repeat purchases. This started the extensive
thinking as to where they had gone wrong. Consequently, they withdraw two of their
brands—Barley and Rye. These were replaced by raisin and wheat varieties. They also
found out later, that there was a shortage of time for the adults, which prevented them
from having cereals. If they could get out of bed 10 minutes early and devote these ten
minutes to breakfast , they would probably enjoy the cereals. They also found out that
though people were clamouring for sugarless cereals, yet they loved to satisfy their
palates with sugar coated cereals.

Questions

1. Should Kellogg’s have done test marketing and gradual product introduction?
2. How can you comment on the habits of the consumers and their preferences?

3. Suggest methods of increasing the market share of the adult market?

SUMMARY

 This lesson gives detailed information about various models of

consumerbehaviour.
 It also discusses the variables and assumptions on which these models
arebased.A briefexplanationaboutsuitabilityandusageisalsomentioned.
 Each model analyses someimportantaspectsabout the behaviour of
theconsumerduetowhichtakingmarketers’closertosolvethemysterybehindth
e enigmatic decisions consumers takewhile buying products orservices.
 The economic model believedthat all human beingshave avestedinterestin
behaving economically.
 The learning model is entirely based on the capability of an individual
tolearn,unsolvedanddifferentiate.
 According tothepsychoanalytical model,every consumerhas
acomplexsetofdeepseatedmarrowswhichdrivehimtowardsspecificbuyingbeh
aviour.
 Thesociologicalmodelbroughtintofocustheneedtolookattheenvironmental
and sociological influences that can shape human decision-making.

KEYWORDS
Drive:Driveisastronginternalstimuluswhichcompelsaction.
Stimuli: These are inputs which are capable of arousing drives or motives.
Cues: This is a sign or signal which acts as a stimulus to a particular drive.
Response:Thewayanindividualreactstothestimuli
PriceEffect: Lesserthepriceof the productmore will bethe quantitypurchase.
SubstitutionEffect:Lesserthepriceofthesubstituteproduct,lesserwillbetheutilityof
theoriginalproductbought.
IncomeEffect:Whenmoreincomeisearned,ormoremoneyisavailable,morewillbethequ
antitypurchased.
SELF-ASSESSMENTQUESTIONS

ShortAnswerQuestions
1. Definetheterm“priceeffect”.
2. Whatissubstitutioneffect?
3. Explaintheincomeeffect.
4. Whatisdrive?
5. Whatdoyoumeanbystimuli?
6. Explaintheterm‘cues’.
7. Definetheterm‘response’.
8. DefinethePsychoanalyticModel.
9. ExplaintheSociologicalModel.
10. Therearetwokindsofbuyers.Whatarethey?
11. Whointroducedthelearningmodelfirst?
12. Whatarethebasesofeconomicmanmodel?
13. Preparea diagramofinput,processandoutputmodel.
14. Whoisthefounderofpsychoanalyticmodel?
15. Whatiseconomicmodel?
16. Explaintheconceptofindividualconsumerbehaviourmodels.
17. Definethelearningmodel.
LongAnswerQuestions
1. Discussconsumerbehaviouraspertheeconomicmodel.
2. Doyouagreewiththecontentionthataconsumerisaneconomicman?Substantiatewithex
amples.
3. Explainthedifferentrolesplayedbydifferentfamilymembersinthedecisionmakingp
rocess.
4. ExplainthePsychoanalyticModel,SociologicalModelandHoward-ShethModel.
5. Elaboratetheindustrialandindividualconsumerbehaviourmodels.
6. Describetheeconomicmanmodelandlearningmodel.
7. Explain,inbrief,thefourvariablesofHoward-Shethmodel.
8. Theeconomictheoryofconsumerdecision-
makingwasbasedonthefewassumptions.Whataretheseassumptions?
9. Someinputsarenecessaryforthecustomerformakingdecisions.Theseinputsareprovid
edbythreestimuli.Explainthesestimuliindetail.
10. Makeadifferentiationbetweenorganisationalandindustrialbuyingbehaviour.

FURTHERREADINGS

Leon G. Schiffman, Håvard Hansen, Leslie Lazar Kanuk,Consumer Behavior: A

European Outlook, Prentice Hall/FinancialTimes, 2008
KumarRamesh,“ConceptualIssuesinConsumerBehaviourtheIndianContext”PearsonEducat
ionIndia,2008
JimBlythe,“ConsumerBehavior”SAGE,2013
DasGupta,“ConsumerBehavior”,2008Edition,Wiley2012
Shri Prakash, “Theory of Consumer Behavior”, 1st Edition, Vikas2012
 Lesson 4
ConsumerBehaviour Models - II
LEARNING OBJECTIVES

Afterstudyingthislesson,youshouldbeableto:

 Understandthedevelopmentofmarketingconcept

 Elaboratetheapplicationsofknowledgeofconsumerbehav
iourinmarketingdecisions

 Discusstheconsumerresearchprocess

LEARNING OUTCOMES

Uponcompletionofthelesson,studentsareabletodemonstrateagoodunderstandingof:

 conceptofdevelopmentofmarketing

 applicationsofknowledgeofconsumerbehaviourinmarketingdecisions

 howtouseconsumerresearchprocess

OVERVIEW

Consumer behaviour is arapidly growing discipline of study.Itmeansmorethan just how

a person buys products. It is a complex and
multidimensionalprocessandreflectsthetotalityofconsumers’decisionswithrespecttoac
quisition,consumption and disposal activities.You, asa consumer,exhibitvery
significantdifferencesinyourbuying behaviourandplay an importantrole inlocal,national
or internationaleconomicconditions.One of
theveryfewaspectscommontoallofusisthatweareallconsumersandthereasonforabusine
ss firmtocome intobeing is the presenceof consumers
whohaveunfulfilled,orpartiallyfulfilledneedsandwants.Ourconsumptionrelatedbehavio
urinfluences thedevelopment of technology andintroduction
ofnewandimprovedproductsandservices.

Inthislessonaftertheapplicationspartyouwilllearnaboutthestepsofconsumer research
process.There are six steps of consumer research process.One by one you will
acquaint with the significance of all the steps of consumerresearchprocess.
5.1 Contemporary Models
With the evolution of the consumer behaviour study, newer approaches were
used to understand what influences consumer behaviour. These were said to be
contemporary models. These contemporary models or views differed from the earlier
models mainly because they focused on the decision process adopted by consumers and
borrowed concepts from behavioural sciences field. Some of these models have been
discussed here under.
In this unit you will learn more about the other models like Engel-Kollat-
BlackwellModel.Themodelrepresentsconsumerbehaviourasadecisionprocessoffiveactiviti
eswhichoccurovertimei.e.motivationandneedrecognition,searchforinformation,alternati
veevaluation,purchaseandOutcomes. Further you will study the Webster and Wind
Consumer BehaviourModels,attheendoftheUnit.
5.2 NicosiaModel Of Consumer Decision-Making(ConflictModel)

This model isviewedasrepresenting asituation whereafirmis

designingcommunications (products, ads etc.) to be delivered to consumers and in
turnconsumers'responsesinfluencesubsequentactionsofthefirm.Themodelcontainsfour
majorfieldsorcomponents:(Field-I)thefirm'sattributesandoutputs or communications
and the consumer's psychological attributes, (Field-II) the consumer's search for and
evaluation and of the firm's outputs and otheravailable alternatives, (Field-III) the
consumer's motivated act of purchase, and(Field-IV)theconsumer's storageoruse of
theproduct.Nicosiaassumes thatthe consumer is seeking tofulfil specific goals andthat
initially there is
nohistorybetweentheconsumerandthefirm,sonopositiveornegativepredispositionstow
ardsthefirmexistintheconsumer'smind.

The firm produces some type of communication (product,service,adetc.)

thattheconsumerisexposed.Attributesofthemessageandtheconsumerdeterminethenat
ureofconsumer'sexposuretoitanditsinfluenceontheindividual. One consequence is that
the message will influence the
consumer'sattitudetowardsthebrand.ThisattitudeistheinputtotheField-II.

Theconsumerwillprobablybecomemotivatedtogaininformationatthispoint, and
search activity is likely to occur. Some search activity will involvesearching internal
memory for relevantinformation about the communication(product, service, company
etc.).External searchmay alsooccur,where
theconsumervisitsstoresorreadsreportsetc.Thisislikelytoleadtoevaluation.If the
consumer processes relevant information and begins to favour the firm'sbrand,
she/he will be motivated, leading to Field-III, and if nothing
intervenes,thisinformationislikelytoprecipitateshoppingactivityandpurchaseofthebran
d. At this point, a number of outcomes can occur. One outcome is that thefirm
receives feedback (Field-IV) and anotheris that the consumer's
attitudetowardsthebrandmaychangebecauseshe/hegainsexperiencewiththeproduct
during storage and use. This experience is feedback to the consumer'spredispositions.

Figure 5.1NicosiaModel Of Consumer Decision-Making

5.3 ENGEL-KOLLAT-BLACKWELLMODEL

Thismodelconsistsoffourcomponentswhicharementionedasfollows:
 1. InformationProcessing

2. Centralcontrolpoint

3. Decisionprocess

4. Environmentinfluences

Theabovementionedfourcomponentsarediscussedbelow:
1.Information Processing: In this model, theinformation processing consistsof exposure,
attention, comprehension and retention of the marketing andnon-
marketingandrepeatedlyexposedtothemessage.

2.Central Control Unit: The stimuli processes and interprets the informationreceived
by an individual. This is done by the help of four psychologicalfactors.
(a) Stores information andpast experienceabout theproduct, which
servesasastandardforcomparingotherproductsandbrands.
(b) Evaluativecriteriawhichcouldbedifferentfordifferentindividuals.
(c) The personality of the consumer which guides him to make a
choicesuitinghispersonality.
(d) Attitudes orthe state of mindwhich changes from time totime,
andhelpsinchoosingtheproduct.
3.Decision Process: This process is dealt with later in the text, and consistsbasically of
problemrecognition,internal andexternal
search,evaluationandthepurchase.Thedecisionoutcomeorthesatisfactionanddissatisfac
tionarealsoimportantfactorswhichinfluencefurtherdecisions.
 Figure 5.2 Engel-Kollat-Blackwell—ModelofBuyerBehaviour

4.EnvironmentalInfluences:Theenvironmentinfluencesareshowninaseparatebox
(inFigure4.2)andconsistofincome,social class,familyinfluences, social class and physical
influences and other consideration. Allthesefactorsmayfavourordisfavourthe purchase.

5.4 Howard - Sheth Model

 John Howard and Jagdish Sheth presented their buyer model in 1969. It’s an
integrated model. It assumes a problem-solving approach in buying and adopts an input-
output or system approach in buying. Howard introduced learning process in buying.
Satisfaction leads to brand loyalty. Discontentment creates brand switching by the
buyers.

In other words, the logic of this model is that there are inputs in the form of
stimuli. There are outputs beginning with attention to a given stimulus and ending the
purchase. In between these inputs and outputs, there are variables affecting perception
and learning.

These variables are “hypothetical” as they can not be directly measured at the
time of occurrence. It explains the complex decision-making process a consumer goes
through. A diagram of this is shown in Fig. below

Figure 5.3Howard - Sheth Model

1. Inputs Stimulus Display

2. Perceptual Constructs
3. Response Outputs (Output Variables)

1.Inputs Stimulus Display

These input variables consist of three distinct types of information sources in the
consumer’s environment.

 Significant: Information furnishes physical brand characteristics such as quality, price,

distinctive, service, availability.
 Symbolic: Verbal or visual product characteristics such as quality, price, distinctive,
service, availability.
 Consumer’s social environment: This is the information about the product or service
offering that comes from the social environment, viz. family, groups, society and
culture at large.
2.Perceptual Constructs

The perceptual constructs deal with how a consumer obtains and processes
information received from the input variables. Once the buyer is exposed to any
information, there is attention; this attention towards the stimuli depends on the
buyers’ sensitivity to information in terms of his urge and receptivity towards such
information.

Not all information would be processed and the intake of information is subject to
perceived uncertainty and lack of meaningfulness of information; this is referred to as
stimulus ambiguity.

 Learning constructs: The learning constructs relate to buyer learning, formation of

attitudes and opinions, and the final decision.
The learning constructs are seven in number, and range from a buyer’s motive for a
purchase to the final satisfaction from a purchase; the interplay of these constructs
 ultimately leads to a response output or a purchase. The motives refer to the goals
that urge towards action or the purchase activity.
3.Response Outputs (Output Variables)
The output variables refer to the buyer’s action or response to stimulus inputs.
According to Howard and Sheth, the response outputs comprise five constituents, viz.,
attention, comprehension, attitude, intention and purchase.

These could be arranged in a hierarchy, starting from attention and ending up with
purchase.

 Attention refers to the degree or level of information that a buyer accepts when
exposed to a stimulus. It reflects the magnitude of the buyer’s information intake.
 Comprehension is the amount of information that he actually processes and stores;
here, it refers to brand comprehension which is buyers’ knowledge about the
product/service category and brand.
 The attitude is the composite of cognition, affect and behaviour towards the offering;
the attitude reflects his evaluation of the brand and the like/dislike based on the
brand potential.
 Intention refers to the buyer’s intention to buy or not to buy a particular offering.
 Purchase behaviour refers to the actual act of buying. The purchase behaviour is a
cumulative result of the other four constituents.

5.5 WebsterAndWindModelOfConsumerBehaviour

Thismodelreferstotheenvironmental,organisational,interpersonalandindividual
buyingdeterminantswhichinfluencesthe organisationalbuyer(s).These
determinantsinfluence both the individual andgroup decision
makingprocessesandconsequentlythefinalbuyingdecisions.Theorganisationaldeterminan
t is based on Harold Leavitt’s four elements of organisation
buyingviz.,people,technology,structureandtask.
 An individual engaged in buying for organisations may be involved in one
ormoreofthefollowingbuyingroles:

 Influencers: They may or may not be directly connected with the

decision.Buttheirviewsorjudgementsof a product or a supplier carry a
lotofweightage.

 Buyers:Thosepeoplewhonegotiatethepurchase.

 GateKeeper:Thepersonwhoregulatestheflowofinformation.

 Deciders: The people who take the actual decision (they may be formal
orinformaldecisionmakers).

 Users: The ultimate users who often initiate the buying process and help
indefiningspecifications.

5.6 ImplicationsOfTheModelsOnMarketing Decisions

Consumersareinfluencedbyothers,andsavvymarketersknowthis.Theuseoftestimo
nialsandspokespeopletostrengthenabrandiscommonamongmany marketers – consider
the use of sports figures such as Tiger Woods toPeyton Manning to endorse products
from golf clubs to cars to apparel. Word-of-
mouthcanbeapowerfulinfluenceonbuyingbehaviour,andmarketingstrategiesareoftendes
ignedtoleverageword-of-mouth.Theincreasingpopularity anduse of social
mediahelpmarketerstotake even moreadvantageof referencegroupsinhelping
tospreadmessagesabouttheirproducts andservices In general, consumers seek to
increase pleasure and avoid pain. They wish
tominimisetheriskofdecisionstheymakeandwillinvestmoretimeinresearchingpurchasede
cisionsthatrepresentahigherlevel ofrisk.

Example:Low-cost,low-involvementproductslikeshampoowillrequire less effort and

consideration on the part of consumers than high-cost,high-
involvementproductslikecars,computersorhomes.Knowingthis,marketerswillspendmoree
fforttocommunicateinmoredetailwithconsumerswhosechoicesrepresentahigherlevelof
risk.
Consumerinvolvementaffectshowconsumersgather,comprehendandtransmitinfor
mation,makepurchasedecisionsandmakepost-purchaseevaluation. As the level of
consumer involvement increases, the consumer
hasgreatermotivationtogether,comprehend,elaborateandassimilateoninformation. Thus
a marketer needs to understand the process and design hismarketing mix in a manner
thatcan activate the involvement process to hisfavour.
CASE STUDY

Fancy Dreams

TheboardroomwasfilledwiththevoiceofMarketingManager,
AshutoshKant.HewasaddressingthemeetingofSeniorManagers He was addressing
meeting of senior Managers of Fancy dreams The last three months were spent by our
market research teamin finding out the reasons andpatterns ofsalesat stores. Letme
emphasise that retail sales is showing growth all over the country and inthe process,
competition is intensifying. We can no longer afford to sit
andrelax;insteadweneedtoputourselvesfullytoretainourmarketleadership."Threefactsrev
ealedbythesurveywereparticularlydisturbing.

1. People foundFancy Dreamsservice staff bordering on aggressivenessandnot

reallyhelpful,ascustomerswereneverlefttobrowse.Children got bored and hence
parents often left the store within minutesafter finishing essential shopping.
They never browsed or spent
leisuretimeatFancyDreamsstore,whichcouldotherwisehelppromotesales.

2. With many choices available in the market, consumers stopped

treatingFancyDreamsstoreasuniqueandexclusiveanymore.
Rehman, an entrepreneur, had set up a garment shop in one of Delhi's
busyupmarket area about 10 years ago. He realised that to attract customers,
hemust do something new. With this in mind, he chalked out a detailed plan
toopen a chainof storescalledFancy Dreams.Somemajorfeatures of thisstorewere:

1. Completedressrangeforkids,parentsandteenagers.

2. Fullaccessoriesforwomen andmen in footwear, purses,jewellery andcosmetics.

3. Aplaycentrewherekidscouldspendtimewhentheparentsshopped.

The stores were openedin twolocationsin Delhi on an area of

10,000sq.feeteach.Within six months,thestoresbecamepopular
andthebusinessgrewrapidlyandinthreeyearstheturnovercrossed`6crore.Thepromoti
onplansincludedadvertisinginprintmediaandthroughcableoperators. The store also
conducted festivals such as children's carnival,
andValentinespecialetc.,toattractcrowdsofcustomers.

StressonstoreambiencewashighasRehmanwantedtocreateanimageofa complete
shopping experience fortheentirefamily. Thesales personnelwere carefully selected
and trained to promote, not push, any product and
toencouragecustomerstobrowsethrough.

The women's section was given a feminine touch and the men's section
hadpolishedwood andleather all over. Thegarments, the accessories, andthegifts
were displayedin large racks and full-length mirrors were placed inmultiple places.
Sales personnel present on all the three floors often
advisedthecustomersbutnevershowedaroundeverything.Thekids'sectionincluded
garments, toys, books, and was manned by more staff. The playcentre for thekids
wasa major attraction. The parents couldsafely leavetheir children in the place,
situated on the ground floor itself. The place
hadseparatesectionoftoysandbooksforchildrenandwassupervisedbytrainedstaff.The
 yfeltcomfortablethattheirchildrenwouldbetakencareof properly and the parents,
therefore, could leave the children and shop in
arelaxedmanner.Thisconceptwasuniqueandhighlyappreciatedbycustomersandbeca
methemajorattractionforthem.
The stores were one of a kind in the early 1990s and grew rapidly. The
newsections on books, gifts, and handicrafts were launched gradually and at
anytimethestorehadmorethan200categoriesofproducts.Duringthistime the
competition startedintensifying as threesimilar ventures were launchedin the city.
This didn't bother Rehman much, because he felt he had built animageofFancy
Dreamsbeingtheultimatestore.By 1996,multi-storey,one-
stopstoresbecamethetrendinDelhiandmanysuchstorescameup.

Rehmanhadexpandedhisstoresinthreeothercitiesaswellandtheturnover had crossed

` 40 crore. The total manpower rose to 500 and severalnewmanagementandnon-
managementcadreswereintroducedinthecompany.

Lastyearduring Diwali festival season,thestoreattractednearly 40,000customers in

the entire month. This worried Rehman as it was almost 20
percentlessthantheirestimates.Hismarketingmanager,afterlongdiscussions, hired a
market research firm to study the buying pattern andpreferencesof
peoplewalkinginthestore.

Questions

1. Identifytherelevantmajorproblemsandissuesinthiscase.

2. Suggestastrategytorectifytheproblems.
SUMMARY
 The study of consumer behaviour models is necessary to get an insight
intodifferentaspectsconnectedwiththeunderstandingofconsumerbehaviour.
 The Nicosia model contains four major fields or components: (Field-I)
thefirm'sattributesandoutputsorcommunicationsandtheconsumer'spsychological
attributes, (Field-II) the consumer's search for and
evaluationandofthefirm'soutputsandotheravailablealternatives,(Field-
III)theconsumer'smotivatedactofpurchaseand(Field-
IV)theconsumer'sstorageoruseoftheproduct.
 IncontemporarymodelslikeNicosiamodelandEngel,Blackwell,andMiniardmodel,consu
merbehaviouranddecision-makinghasbeenanalysedmorescientifically.
 In Blackwell model, there are four basic elements i.e. information,
centralcontrolpoint,decisionpointandenvironmentinfluences.
 TheWebsterandWindmodeloforganisationalbuyingbehaviourhighlights
environmental variables, individual variables and
organisationalvariablesthatcanaffectthedecisionstakenatthebuyingcentre.
 There are few implications for the marketers in concern with these models.The
increasing popularity anduse of social media helpmarketers totakeeven
moreadvantageof referencegroups in helping
tospreadmessagesabouttheirproductsandservices.

KEYWORDS
Gatekeepers: These are members whocontrol the flow of information for aproduct or
brandthatthey favourand influence thefamily tobuy the productoftheirchoice
Buyers:Thosepeoplewhonegotiatethepurchase.
Deciders:Thepeoplewhotaketheactual decision (they may beformal
orinformaldecisionmakers).
Users: The ultimate users who often initiate the buying process andhelp indefining
specifications.
Influencers: These are individual who can influence the buying decision at anystage. Top
management, external experts, consultants, financial institutions
andgovernmentpolicymakersareusuallygroupedintothiscategory.
WebsterandWindModel:Thismodelreferstotheenvironmental,organisational,interperso
nalandindividualbuyingdeterminantswhichinfluencestheorganisationalbuyer(s).
SELF-ASSESSMENTQUESTIONS

ShortAnswerQuestions
1. DefineNicosiamodel.
2. PrepareadiagramofNicosiamodel.
3. WhodiddeveloptheNicosiamodel?
4. Listdownfewimplicationsofmodelsonmarketingdecisions.
5. ExplaintheNicosiamodelofconsumerbehaviourwiththehelpofanexample.
6. WhatisEngelandBlackwellmodelofconsumerbehaviour?
7. WhatisWebsterandWindmodeloforganisationalbuyingbehaviour?
8. Definetheterm‘gatekeepers’.
9. Whoarecalledasusers?
10. Definetheterm‘deciders’.
11. Whoareinfluencers?
12. ListdownthefourcomponentsofEngelandBlackwellmodel.
13. HowmanycomponentsorfieldsarethereinNicosiamodel?
14. Explainthedecisionprocess.
15. PrepareadiagramofEngelandBlackwellmodelofconsumerbehaviour.
16. Whatdoyoumeanbycentralcontrolunit?
17. Theorganisational determinantis based on
HaroldLeavitt’sfourelementsoforganisationbuying.Namethem.
18. Namethebuyingroles.
19. Whatistheimportanceofinformationinmodels?
20. Whyisthestudy ofconsumerbehaviournecessary?
21. WhatistheuseofHoward-ShethModel?
22. Prepareadiagram ofsimplifiedversionoftheHoward-Shethmodelofbuyerbehaviour.
23. Howard-Shethmodelhasfoursetsofvariables.Namethem.
LongAnswerQuestions
1. WriteadetailednoteonNicosiamodelofindustrialbuying.
2. DiscusstheEngelandBlackwellmodelofconsumerbehaviour.
3. Discuss,indetail,thesalientfeaturesoftheWebsterandWindmodeloforganisational
buyingbehaviour.
4. ElaborateupontheNicosiamodel.
5. Whatimplicationofbehaviourdoandindividualfeelsaccordingtopsychoanalysismo
del?
6. Explain,indetail,allthecomponentsofEngelandBlackwellmodel.
7. Thestimuliprocessesandinterpretstheinformationreceivedbyanindividual. This is
done by the help of four psychological factors. Explainthem.
8. Anindividualengagedinbuyingfororganisationsmaybeinvolvedinoneor moreof
thefewbuyingroles.Whatare they?
9. Explain Howard Shelth model of consumer behaviiour.
10. “If the consumer processes relevant information and begins to favour thefirm's
brand, she/he will be motivated, leading to Field-III, and if
nothingintervenes,thisinformationislikely toprecipitate shopping activity
andpurchaseof the brand.”Explainthisstatement.
Lesson 5 PSYCHOLOGICALINFLUENCESON CONSUMERBEHAVIOUR

LEARNINGOBJECTIVES

 To understandtheconceptofmotivation,perceptionandpersonality
 To describetheconceptoflearningandattitude
 To explaintheself-imageandlifestylespatterns

LEARNINGOUTCOMES

Uponcompletionofthelesson,studentsareableto

 conceptofmotivation and perception

 explainstagesofpersonalitydevelopment
 determinepersonalityinfluencesandconsumerbehaviour
 conceptoflearningandcomponentsoflearning
 analysinglearningattitudes
 recallrelationshipbetweenattitudeandbehaviour
 defineself-imageandlifestyles

OVERVIEW
In the previous lesson, you have gone through the various models of
consumerbehaviour,suchasNicosiaModelofConsumerDecision-making,Engel-Kollat-
BlackwellModel,WebsterandWindConsumerBehaviourModel.After studying the
models, you must have learnt the implications of models
forthemarketingperspective.Inthislesson,youwillstudy
thepsychologicalinfluencesofconsumerbehaviour.Itincludesmotivation,perception,pers
onality,learningandattitude.
5.1 Motivation

In consumer behaviour, motivation plays an important part in making a

decision. What is themotive of buying? A motive is why an individual does a
thing. Motivation is an inner feelingthat stimulates the action that is to be
taken by an individual. It provides a specific directionor, results in a response.
A person can be motivated to buy a product for convenience, for style,for
prestige, for self-pride, or for being at par with others

Motivation is the driving force that impels individuals to action and result
ofunfulfilledneeds.Ifanindividualhasstrong motivation tolearnsomethingthere is
increased likelihood that learning will take place. Student who are
notinterestedareunlikelytopayanyattentionorignoreallinformationcomputer
courses. The degree of involvementin the goal object will
influencesanindividual’sdegreeofmotivationtoacquireinformationorknowledgea
bouttheproductorservice.Marketersusemotivationresearchtounearthconsumer
motivesanduseit indevelopingmarketingprogrammes.

5.1.1 Cues

Cuesarerelativelyunrealstimuli,notstrongenoughtoarouseconsumersbuthave
thepotentialofprovidingdirectiontomotivatedactivity

5.1.2 Response

The way an individual reacts to a cue or stimulus is the response and could
bephysicalor mentalinnature,leadingtolearning.

5.1.3 Reinforcement

Mostscholarsagreethatreinforcementofaspecificresponseincreasesthelikelihoo
d for the response to reoccur. Reinforcement can be anything that
bothincreasethestrengthtoresponseandtendstoinducerepetitionsofthebehavio
ur thatprecededthereinforcement

Example :A computer marketer keeps on providing cue to a studentthrough

promotional activities and may not be successful in eliciting the finalpurchase
behaviour for a variety of reasons, though the student is motivated
tobuy.Itisalsopossiblethatthestudentformafavourableimageaboutaparticular
model. Itis also possiblethat thestudentform a
favourableimageaboutaparticularmodelhasenoughresourcesandbuythecompu
ters

Motivation can be described at the driving force within individuals that

impelsthemtoaction.This driving force is produced by the stateof
tension,whichexists as a result of unfulfilled needs. Individuals strike – both
consciously andsub consciously – to reduce this tension through behaviour
that they anticipatewill fulfil their needs and thus relieve them of the stress
they feel. The specificgoal they selectandthe patterns of action. It portrays
motivation as a state
ofneedinducedtensionthatexertsa“push”ontheindividualtoengageinbehaviour
that he or she expects will gratify a need and thus reduce the tensionwhether
gratification is actually achieved depends on the course of action
beingpursued.

LEARNING

TENSION DRIVE BEHAVIOUR

UNFULFILLEDNEE GOALS
DS, ORNEEDFULFIL
WANTSDESIRES MENT

COGINITIVEPROCESS

TENSIONREDUCTION
 Figure5.1ModelofMotivationDriveofanIndividual

5.1.4 Model of Motivation Drive of an Individual

 Everyindividualhasneeds:someareinnate,otherareacquired.Innateneedsa
rephysiological.Theyincludetheneedsforfoods,forwater,forair,forclothing, for
shelter and for sex. Because they are needed to sustain
biologicallife,thebiogenicneedsareconsideredprimaryneeds

Acquiredneedsareneedsthatwelearninresponsetoourcultureorenvironme
nt.Thesemayincludeneedsforself-
esteem,forprestige,foraffection,forpowerandforlearning.Because
acquiredneedsaregenerallypsychological,theyareconsideredsecondaryneeds.Th
eyresultfromtheindividual’ssubjectivepsychologicalstateandrelationshipwithoth
ers.
For Example All individual have need for food ,shelter and clothing
.Hunger is primary need . However the kind of food the consumer takes or
prefers is secondary need

A certain situation confronting a consumermay also trigger arousal.

Thiscanoccurwhenthesituationattractsattentiontoanexistingbodilycondition

For instance looking at advertisement of ice cream , a person develops

need for ice cream The need would have been present but was not
strongenough totriggerarousal. Goals are the sought after results of motivated
behaviour. Generic goals are
thegeneralclassesforcategoriesofgoalsthatconsumersselecttofulfiltheirneeds.
Product – specific goals – that is, the specifically branded or
labelledproducttheyselecttofulfiltheirneeds.

It is a macro theory designed to account for most human behaviour in

general. It is based onMaslow’s hierarchy of needs, which states that a human
being has a variety of needs and,these can be classified as primary and
secondary needs or, lower-order and higher-order needs.

Once a need is fulfilled, human beings, try to fulfill other needs. This is
usually done in ahierarchy, which can be classified as under:

a.Physiological

Food, water, sleep, clothing, shelter and sex.

Products in this category include, foods, health foods, medicines, drinks, house
garments,etc.

b.Safety needs

Seeking physical safety and security, Safety of person, safety of belongings,

security of job, etc.

Products are locks, guns, insurance policies, burglar alarms, retirement

investments,etc.

c.Social needs

The need to be approved in a society—to love and be loved, friendship, love

appreciation andgroup acceptance.

Products are general grooming, entertainment, clothing, cosmetics, jewellery,

fashiongarments.

d.Esteem needs

Desire for status, for superiority, self-respect and prestige.

Products are furniture, clothing, liquor, hobbies, fancy cars.

e. Self-actualization needs

The desire for self-fulfillment, the desire to become all that one is capable of
becoming.

Products are educational, art, sports, vacations, garments, foods.

Maslow’s hierarchy is a good guide to general behavior. The same
consumption behaviorcanfulfill more than one need.

According to him, fulfilment of one will lead to the fulfilment of higher

motives. The implications are that as we move up in the ladder, the input of
marketing becomes more and more deep and subtle.

5.1.5 NeedsandGoalsareConstantlyChanging

Needsandgoalsareconstantlygrowingandchanginginresponsetoanindividual’sp
hysicalcondition,environment,interactionswithothersandexperiences.Asindivid
ualsattain theirgoals,they developnewones.If theydo not attain their goals,
they continue to strive for old goals, or they developsubstitutegoals.

Thesearethefollowingactivities:
1. Existingneedsarenevercompletelysatisfied;theycontinuallyimpelactiv
itydesignedtoattainormaintainsatisfaction.
2. Asaneedbecomesatisfied,newandhigherorderneedsemergethatcauseten
sion.
3. Peoplewhoachievetheirgoalssetnewandhighergoalsforthemselves.

Non-fulfilmentofNeedsanditsReaction

Mosthumanneedsareneverfullyorpermanentlysatisfied.Mostpeopleregularl
y seek companionship and approval from other to satisfy their socialneeds
Example: At fairly regularly intervals people experience hunger
needsthatmustbesatisfies

5.1.5 SuccessandFailureInfluenceGoals

Anumber of researcherhaveexploredthe natureof thegoals

thatindividualsetforthemselves.Ingeneral,theyhaveconcludedthatindividualwh
osuccessfullyachievetheirgoalsusuallysetnewandhighergoalsforthemselves,
that is,they raise theirlevel of aspiration.This is probably due tothe fact that
success makes them more confident of their ability to reach
highergoals.Conversely,those whodo not reach theirgoals
sometimeslowertheirlevelofaspiration.

5.1.6 SubstituteGoals

When an individual cannot attain specific goals or types of goal that he

or sheanticipates will satisfy certain needs, behaviour may be directed to a
substitutegoal.Although the substitutegoal may notbeas satisfactory
astheprimarygoal,itmaybesufficienttodispel uncomfortabletension.

CASE STUDY

VENDING MACHINE

Thomson was a limited company manufacturing vending machines. These

machines could be used for automatic vending of cigarette packs, match
boxes, tea, coffee, cold drinks, chocolates and many other products. The
vending machines had to be programmed for vending various items. One
machine could handle a variety of products as well. These were to be installed
at shopping centres, cinema halls, public places, hotels, etc. The manufacturer
started with installing these machines in various parts of the city for selling
coffee and tea. The machines became popular, as they served the customers
with both tea/coffee at a standard price, and the customer had the choice of
having strong or light, with or without sugar, more or less milk depending on
his choice. As they became popular, more and more machines were set up at
strategic places like bus stations, railway platforms, etc. so that the customer
had an access to the beverage, whenever he needed it. In the beginning, an
attendant was also required to stand with the machines, as they were not fully
automatic. Later, fully-automatic machines were developed, which could work
without the help of an attendant. The attendant had to come only once, to
replenish the stocks, and take out the cash from the machines. A difficulty that
was faced, was that these machines did not accept torn notes, or some coins
which got stuck in them. To overcome this difficulty, the company was
contemplating to introduce a card system, which could be purchased with Rs.
100, or its multiples, and on using these cards, the amount would get debited
automatically and the balance would be known by the consumer. The survey
showed the results, but a lot of effort would be required to motivate the
consumers to buy these cards. The company also contemplated providing the
consumers with other products as well. These could be cigarettes, soaps, oils,
cold drinks, chocolates, biscuits, etc.

Questions

1. Do you think that the company will succeed in selling other products along
with the tea/ coffee they are already selling?

2. How can the company motivate the consumers to buy other products, as
well as, to use the cards instead of cash?

5.2 PERCEPTION

Marketing management is concerned with the understanding of the

process of perception because, perception leads to thought and thought leads
to action. Perception is the process whereby stimuli are received and
interpreted by the individual and translated into a response. In other words,
perception is the process by which the mind receives, organises and interprets
physical stimuli. To perceive is to see, hear, touch, taste, smell and sense
internally something or some event or some relation

According to Schiffman and Karuk, perception is definedas “the

process bywhich an individual selects, organises andinterprets stimuli intoa
meaningfulandcoherentpictureoftheworld.” Perception is“how we see the
worldaround us”. Differentindividuals may be
expressedtothesamestimuliunderthesameconditions,buthowmucheach
individualrecognisesthestimuli,selectsthem,organisesthemandinterpretsthe
misunique based on his needs, wants, values, beliefs, personal experiences,
moodsandexpectations,etc
5.2.1 Perceptual Process

Marketing management is concerned with the understanding of the

process of perception because, perception leads to thought and thought leads
to action. Perception is the process whereby stimuli are received and
interpreted by the individual and translated into a response. In other words,
perception is the process by which the mind receives, organises and interprets
physical stimuli. To perceive is to see, hear, touch, taste, smell and sense
internally something or some event or some relation

According to Schiffman and Karuk, perception is definedas “the

process bywhich an individual selects, organises andinterprets stimuli intoa
meaningfulandcoherentpictureoftheworld.”
Our perception of the stimuli and the situation plays an important role on
ourbehaviour.Perception isthe critical activity thatlinkstheindividual
consumertoagroup,situationandmarketinfluences
 If a person is exposedto a stimuli,he may show interest in
theexposure.Hisattentionistransmittedtothebrainthroughnervoussensation.Int
erpretation is the assignment of meaning to the received sensations. This
isretainedby the memory leading toconsumption behaviour,which may
havepositiveornegativefeedbackfortheindividual.
Therearemanyexposuresbythemarketers.Theindividual or the consumer is
exposed to only a part of the exposures, some ofwhich is interpreted and little
is retained in the memory on the basis of whichindividualtakesdecisions.

(i)Exposure

When a stimulus comes under the range of sensory perception, nerve

exposureoccurs.Mostofthestimulitowhichanindividualisexposedto,isself-
selected.

We deliberately seek andavoid information of our interest. It is challenge for

the marketers to hold
theinterestoftheconsumeronhiscommercialsandexposures. For instance
Switching channels on TV, skipping pages of magazines
(ii).Attention

This occurs when thesensory receptor nerves are activated by

thestimuliandthebrainregisterssensationforprocessing.Themarketoffersavariet
y
ofgoods.Itisindividualwhoselectivelychooseandattendtoproductsandmessages.
The same individual may devote different levels of attention to
thestimulusindifferentsituation.Attentionisdeterminedbythreefactors–
stimulus,the individual andthesituation.These togetherorindividually
playanimportantroleinattractingtheindividual.

a.Stimulus Factors: There are certain features in a product can attract

greaterattention.Thiswouldbethesize,theintensity,thecolourandmovement,pos
ture,formatofthemessage,informationqualityandinformationoverloadedstimul
atetheindividual,favourablyoradverselyinsituations.

When we look at the advertisement in newspaper , we see attempts made

to differentiate by words , colours and size

b.Individual Factors: Individual factors affect the decision-making process.

Theindividual is governed by the interest or the need. Individual also differ in
theirability togatherandassimilateinformation.Theinformation
soughtreflectstheirneed. For instance a musician will be interested in
advertisement related to music

c.Situational Factors

Decision-making is also influenced by situational

factorsliketimepressureorcleanliness,noise,atmosphereambiencecan

(iii)Interpretation

Interpretation involvesa competitive or factual component and an effective or

emotional response
andcognitivecomponent.Thestimulusisplacedindifferentcategoriesofmeaning

When a new expensive brand is launched , it is interpreted as high quality ,

exclusive etc . Thesame message can be interpretedin differentways

Effective interpretation is an emotional response to an advertisement. The

sameadvertisement or a picture may attract or repel different individuals.

5.3 Personality
Most often the word ‘personality’ is used to refer to the capacity of a person
for popularity, friendliness or charisma. However, in strict sense, it refers to
the essential differences between one individual and another. Therefore,
personality consists of the mannerisms, habits and actions that make a person
an individual and thereby serve to make him distinct from everyone else. It is
the function of innate drives, learned motives and experience

According to GordonWAllport. “Personality is the dynamic organisation

within theindividual of those psychologicalsystems that determine his unique
adjustmenttoenvironment.”

5.3.1 StagesofPersonalityDevelopment

Freud emphasised that individual’s personality is formed as he or she

passesthroughanumberofdistinctstagesofinfantandchildhooddevelopment.Th
ese are the oral, anal, phallic, latent and genital stages. Freud labelled four
ofthese stages of development to conform to the area of the body on which
hebelievedthe child'ssexualinstinctsarefocusedatthetime.
a.Oral Stage: The infant first experiences social contact with the outside
worldthroughthemouth(e.g.eating,drinking,suckingetc.).Acrisisdevelopsfrom
themother’sbreastorfromthebottle
b.Anal Stage: Burning this stage, the child’s primary source of pleasure is
theprocess of elimination. A second crisis develops at the end of this stage
whenparentstrytotoilettrainthechild.

c.Phallic Stage: The child experiences self-oriented sexual pleasure during

thisphase with the discovery of the sex organs. A third crisis occurs when the
childexperiencessexual desire fortheparent of the
oppositesex.Howthechildresolvesthiscrisisaffectslaterrelationshipswithperso
nsoftheoppositesexandwithauthorityfigures.

d.LatencyStage:Freudbelievedthatthesexualinstinctsofthechildstartedfroma
boutage5years.Untilthebeginningofadolescenceandthatnoimportantpersonal
itychangesoccurduringthistime.

e.GenitalStage:Atadolescence,theindividualdevelopsasexualinterestinperson
softheoppositesex,beyondself-orientedloveandloveforparents.
A child need at each of the development stage has to be met . If oral stage is
not satisfied,
displayapersonalitythatincludessuchtrailsasdependenceandexcessive oral
activity (e.g., gum chewing and smoking).

5.3.1.2 PersonalityInfluencesandConsumerBehaviour

Thesefactorsencompassthefollowing:

a.OptimalStimulationLevel

Someactivitieshavemorepotentialtoindividualswithsomesortofphysiolo
gicalarousal.Thereareotherswhopreferacalm,simpleandunclutteredlife,while
someothersprefernovel,complexandexistence.Researchinthisareaindicatesth
athighoptimumstimulationlevelsareassociatedwithmorewillingnesstotakerisk
s;tobeinnovative,trynewproductsareactivelyseekpurchaserelatedinformation
.
 If an individual’s life style is such that it offers the desired level of
stimulation,she/heisquitesatisfied.If thelevelof stimulation fallsshortof the
desiredlevel, such a person is bored, consumers with high stimulation needs
tend to
bethefirsttobuynewproducts,activelyseekinformationaboutthemandengagei
n variety-seeking buying behaviour, they tend to be curious about the ads
theysee but are also likely to get bored by them. Interestingly, they are also
likely tobuyproductswithgreaterrisk.
NeedforCognition

Need for cognition refers to the degree of an individual’s desire tothink

andenjoy getting engaged in information processing. Such individuals tend to
seekinformation that requires thinking. A consumer high in need for cognition
(NC)andlookingatanadforApplecomputerismorelikelytostudyandconcentrateo
ntheinformationcontainedinthead.Ontheotherhand,aconsumerlowinneedfor
cognition would be more inclinedtolook atthebeautiful picture of iMac,
ignoring the detailed information about the computermodel.

b.Dogmatism

Consumersare alsolikely tovary in termsofhow open-mindedorclosed-

mindedthey are.Dogmatism is apersonality traitthat
indicatedthedegreeofanindividual’srigiditytowardanythingthatiscontrarytoher/
hisownestablishedbeliefs.Apparently,theypersonisresistanttochangeandnewid
eas.

One would expect highly dogmatic consumers to a relatively resistant to

newproducts,promotionsoradvertising,ontheotherhand,consumerslowindogm
atismaremorelikelytoacceptnewandinnovativeproductstoestablishedalternativ
es andbe more receptive toadmessages thatfocus onproductattributesand
benefits.

c.SusceptibilitytoInfluence

Consumers differ in term of their proneness to persuasion attempts by

others,especiallywhentheseattemptshappentobeinterpersonalorface-to-
face.Consumerswithlowersocialandinformationprocessingconfidenceshowmor
e proneness to be influenced by ads compared to those who have higherself-
confidence.

d.Self-monitoringBehaviour

Individualconsumersdifferinthedegreetowhichtheylooktoothersforindicationso
nhowtobehave.Thosepersonswhoarehigh-selfmonitorstendto look to others
for direction and accordingly guide their own behaviour. Theyare more
sensitive and responsive to image-oriented ads and willing to try
suchproducts.On the otherhand, individuals whoarelow self-monitors are
guidedby their own preferences or standards and are lesslikely tobe influenced
byotherexpectations.

e.Emotion

Allofusexperienceawidevarietyofemotionswhicharegenerallyevokedbye
ventsintheexternal environment. However, it is possible to generate emotions
by internalprocesses,suchasimagery.
RPBagozzi,MGopinathandRUNyewrotethatemotionsarestrong,relativelyuncont
rolledfeelingthataffectsourbehavior.
 5.4 Attitude:
The concept of attitude occupies a central position in the consumer
behaviour studies in particular and social psychology in general because;
attitude measurements help in understanding and prediction of consumer
behaviour.
‘Attitude’ refers to a predisposition to behave in a particular way when
presented with a given stimulus and the attitudes towards people, places,
products and things can be positive or negative or favourable or unfavourable.
Attitudes develop gradually as a result of experience; they emerge from
interaction of a person with family, friends, and reference groups.

Gordan W. Alport presented a frequency used in definition of attitudes.

He
said“Attitudesarelearnedpredispositionstorespondtoanobjectorclassofobjectsi
naconsistentlyfavourableorunfavourableway.”

Richard E Petty, D T Wegener and I.R. Fabriger have noted that an

attitude
isthewaywethink,feelandacttowardssomeaspectofourenvironment.Suchas–
retailstore,televisionprogrammeor product.

5.4.1 LearningAttitudes

Consumers sometime purchase new products without any prior

experience withthecategory
basedontheirfavourableattitudetowardsabrandname.Forexample,aconsumer
whohashadasatisfyingexperiencewithSamsungrefrigerator,washingmachinean
dtelevision,andhasnopriorexperiencewithamicrowaveoven,butjustbecauseofr
epeatedsatisfyingexperiencewithcompany’sproducts,buysaSamsungmicrowav
eoven.Inthissituation,accordingtotheclassicalconditioningtheory,theestablishe
dbrandname(Samsung) serves as unconditioned stimulus through past
satisfying experienceandthenewproduct
(oven)becomestheconditionedstimulus.

Personalexperiencewithaproduct orserviceis animportantfactorin

theformation of attitudes. Attitudes thus developed tend to be more enduring
andresistanttochange,comparedtoindirectexperiencethatconsumersdevelopa
saresultof exposuretoads.

For example

If a person approaches the nearestshoplooking fortoothpaste A

andtheonly available product is toothpaste
B,whichshe/hehasneverusedbeforeandhencehasnoattitudetowardsit.Afterusi
ng toothpaste B,she/heis satisfied .Thissatisfying experience results in a
favourable attitude towards.toothpaste B, The
samethinghappensincaseoftrialsoffreesamplesortrialpurchasesofmanylow-
costproducts.

Next to direct personal experience are family, friends and those

individuals
weadmireorrespectinfluenceinformingoutattitudes.Thefamilyisaparticularly
important influence because this is where here we acquire many
ofourbasicvaluesandbeliefsthroughreinforcementofbehaviours.
 Incaseofhigh-
involvementrationalpurchases,consumersformpositiveornegative attitudes as
a result of detailed information processing. However, thisdetailed information
processing leads to just two or three important beliefs thatdetermine the
resulting attitude. This means that advertisers need to focus on
averylimitednumberofrelevantdifferentiatingpointsaboutaproductorservice

5.4.2 ChangingAttitudes

An important strategy consideration for most marketers is to affect

alteration ofconsumerattitudes andreinforcing theexistingpositive
attitudesabouttheirbrandstowardoffany
competitiveattacks.Infact,reinforcingattitudesiscomparatively easier than
changing attitudes. Most advertising for well-knownbrands attempts to
maintain and reinforce positive attitudes. “Taste of India”,“Hamara Bajaj”,
“Believe in the best”, and “Just Do It;” are some of the long-
runningcampaignsattemptingtoreinforceconsumerattitudes.

1. It is easier to change beliefs than desired benefits. Marketers could

attempteither to change brand beliefs or change the benefits
consumers’ desire
bychangingthevalueofattributes.Consumers’desiredbenefitsaremoreend
uring than beliefs.

2. Itiseasiertochangebrandbeliefsthanbrandattitudes.Thehigh-
involvementhierarchy
modelssuggestthatchangeinbeliefsprecedesachange in attitudes
(feelings). Thus, under conditions of high-
involvement,changingconsumers’beliefsshouldbeeasierthanchangingthe
irbrandattitudes.
 3. Changingattitudesisamorerelevantvehiclethanbeliefsforhedonicproducts
. Products purchases based on emotion or fantasy rely on
feelings(attitude) rather than beliefs (cognitions).Products purchasedfor
pleasureare high-involvement and due to this reason, attitudes are the
more relevantstrategicvehicleforchangingattitudes.

4. Itiseasiertochangeattitudesforlow-
involvementproducts.Underconditionsoflow-
involvement,consumersarenotcommittedtothebrand.
5. It is easier to change weak attitudes than strong ones. If consumers do
notholdstrongfeelings(attitudes)aboutbrands,anycommitmentisnon-
existent and brand switching is quite common. Marketers can
establishnewlinkswith thebrand.
6. It is easier to change weak attitudes than strong ones. If consumers do
notholdstrongfeelings(attitudes)aboutbrands,anycommitmentisnon-
existent and brand switching is quite common. Marketers can
establishnewlinkswith thebrand.

Example: There has been a campaign to convince consumers

thatcoconut water has nutritional value for everyone. Because coconut
water is basically a low-involvementproduct,itisnotasourceofself-
identityandisnot ego-intensive.

5.4.3 RelationshipbetweenAttitudeandBehaviour

Psychologists have devoted considerable efforts to understand the

relationshipbetween attitudes and behaviour andanumber of models have
been
developedtounderstandunderlyingdimensionsofanattitude(RichardJLutz).