ASSIGNMENT

MK0011 CONSUMER BEHAVIOUR

Name 1205006802 Learning Centre : AIM Computer Education Learning 02030 ------------------------------------------------------------------------------------------------------------------------------------Q1. Explain the tri-component attitude model. Answer: The Tri-component Attitude Model: In the under discussion model of attitude, three components of attitudes are identified by researchers and these are; Cognitive Component (Knowledge, beliefs), Affective Component (emotions, feelings), Co-native Component (behavioral aspect). Three components are interrelated and integrate to form an attitude of a person toward any product or service in consumer scenario. Cognitive Component (Knowledge, beliefs): Consumers beliefs about an object are the attributes they ascribe to it. These beliefs are based on a combination of the knowledge, experience and perceptions about the attitude object. For most attitude objects consumers have a number of beliefs and that a specific behavior will result in specific outcomes. Affective Component (emotions, feelings): Consumers feelings and emotional reactions to an object represent the affective component of an attitude. This relates to consumers overall evaluation of the attitude object. Consumer beliefs about a brands attributes are multidimensional, but the feeling component is only one-dimensional. Conative Component (behavioral aspect): Behavioral (conative) component is the likelihood or tendency of an individual to respond in a certain manner towards an attitude object. For example, a series of decisions to purchase or not to purchase a canon Inkjet Printer or recommended it to friends, would reflect the behavioral component of an attitude. Q2. Briefly discuss the consumer Research process. Answer: When patients buy your services, they all engage in a decision-making process. Research shows that one of the major problems with businesses is that they fail in supporting the customers in this process. By understanding your patients needs and concerns as they progress through the decision-making cycle, you can build better and more successful medical practice. The consumer decision-making process Imagine that you need a new cell phone. The first step is recognizing your need. (You can insert 'want' or 'desire' instead of need.) Though you may have an idea of which phone you would like to purchase, you research your options to narrow the possibilities. If you're a male, you go online and investigate manufacturers, resellers, and independent consumer organizations. You ask friends and colleagues for advice, and you visit a few stores to
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MBA: Semester III

: Ajit Kumar

Registration No. : Centre Code :

"kick the tires." You compare you options and finally decide to purchase what seems to be the best alternative, based on criteria like design, features, price. For men, this is a linear process. If you're female you go through a much different, non-linear, decision making process that takes into account different variables than males typically choose. Men perceive this process as introducing a lot of extraneous noise into what should be a straight forward decision about cost vs.. benefits. Women are actually much harder to please because theyre also buying a cell phone based on: What color it is. How it fits in their purse. Cute factor, etc. They're deciding how much 'faith or trust' to put in the business. One process is not 'better' than the other, they're just different. Warning: This is where many men don't get it. Women are using criteria that men don't understand so men tend to disregard this process. While women are harder to please, they are much more loyal consumers if you can satisfy them initially. Men look for features, women look for faith. After your purchase, you assess whether it lives up to your expectations. You might find that the phone is able to do what the manufacture promised, but that the navigation is unmanageable. You decide that you will never buy this brand again. Your decision-making process can be described as five different stages:

The customer decision-making process and its five stages The complexity of this process can range from careful analysis to pure impulse. While an impulse buy, such as adding additional services or products to an existing appointment, can take place instantaneously, complex purchase decisions stretch over a long period of time. This buying process is an iterative process, where patients may collect information from different sources and repeatedly return to re-evaluate and compare the information they have found. Women are particularly adept at this and consider any number of points that you may not be aware of in this decision making process. One of the most important of these could be described as 'feel'. (Men typically descry this type of methodology, often causing them to dismiss what women see as the most important part of their decision making.) The customer funnel The Web is a great tool for information research. Studies show that the Internet is now the primary means by which people get key information. This counts for commerce in particular. People expect to be able to find information about products they are considering buying, even if a company doesn't sell its products online. Considering peoples' high expectations about the information and services available online, it's disturbing to see just how bad commerce web sites are at selling. Lets look at a study on consumer buying patterns online as an illustration: From their tests of consumer commerce, researchers from the usability consultancy UIE have discovered that the buying process acts as a sieve, where customers are inadvertently filtered out at each stage of their decision-making process. UIE's studies show that out of 100% of purchase-ready customers completely intent on buying; only 34% will actually make the purchase.
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Q3. Explain the VALS (Value and Lifestyle) framework. Answer: VALS Theory & Concept: VALS: A science of using the demographics and psychology profiles to understand the consumers in a better and in a proper way. VALS was developed by Arnold Mitchell and his colleagues at Stanford Research Institute which is a worlds largest research institute in California City. It was developed in the year 1978 and there have been the use of Abraham Maslows philosophy as well the David Riesman one of the Harvard sociologists. They have divided the buyer in different groups on the basis of the traits of personality which are values and the lifestyles. They have done the research on the basis of questionnaires in 4 demographic and 35 attitudinal questions. The VALS have been updated with more than new and innovative datas and surveys of more than 85000 surveys per year. Thus VALS is known as: V: VALUES A: ATTITUDES L: LIFE S: STYLES Mitchell have used the strategy of statistics, marketing research, attitudinal and demographic questions, that has become very much helpful for the consumers of America into nine types of lifestyle and that are as below with the sustained %age of the consumers. 1. 2. 3. 4. 5. 6. 8. 9. Survivors (4%) Sustainers (7%) Bloggers (35%) Emulators (9%) Achievers (22%) I-am-me (5%)7. Experiences (7%) Societal Conscious (9%) Integrated (2%)

The major tendencies of the groups with higher resources are as follows: 1. Innovators: These are the successful people who are always active in their activities in all their works. They are the people who have high self belief, high self confidence and high self esteem. Their purchases always use to reflect the tastes of cultivation. They are basically related with up-scale and niche oriented products and services. They have the great volume and highest amount of income, they have very good image of creativity and they have finer tastes in their life. They never depend on others and they follow the strategy of high character. 2. Thinkers: They are very much mature and satisfied people who have financially strong resources and they are motivated from their ideals. They are very much responsible in their
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duties honestly and whole heartedly and they are very much professionalized in terms of education. They value their responsibilities, order, they spent their free times in home with their gamily and give them time as well they have all the information and ideas about the world and they are practical in terms of buying and they take decisions optimally. 3. Achievers: They are the people who are very much goal-oriented and want to become successful in their fields of work. They are that type of consumers who have a high resource group and they also get motivated by their achievements. They focus on both their family as well their career that gets satisfaction from their jobs and families. They are bit conserved and reserved from their nature and they respect each individuals as well the authorities in their workplace. They believe in completion of their work and in satisfying with their needs as well as achievements and satisfaction. 4. Experiencers: These people are basically very young, highly energetic from their nature and also from their activities. These people are very well organized and enthusiastic as well make the environment also energetic. They have high income and higher amount of resources where they get motivation from their self-expression, from their self-abilities and selfactivities. They are coming in the age group of 2535. They have lot of energy and they seek fun and excitement with high income on fashion, entertainment and socialization. They spend most of their money in friends, hang-outs, foods, music, movies and many more. The major tendencies of the groups with lower resources are as follows: 5. Believers: When we talk about believers, they are the people who have low resources who are very much conservative sort of nature. They have lot of superstitions and they believe in Gods and traditions as well as cultures to live their life. Their incomes are also modest. They have high belief on family, church, community or nation and they always think about all these. 6. Makers: These people are always down to earth and never feel superior in terms of achievement, education, profession, qualification, relationship or any other because these types of people are very practical and they like to do their own work themselves. They favour mostly the American made goods or products which have practical as well as functional benefits and uses. 7. Strivers: These people have low resources and they are very friendly and fun-loving entertaining people who always use to make the people laugh by some sort of jokes or funny talks. They also like to have style in their style and personality so they always appreciate stylish products and greater material wealth. 8. Survivors: These people have very low incomes and they are very much old image. They are most eldest of all the segments but the positive thing about them is they are brand royal and they look for change. Thus VALS have been defined which has been divided on the basis of lifestyles and attitudes of the consumer. Three types of consumer Three different types of consumers exist in the market today. Each type of consumer has specific characteristics, tendencies and preferences. When it comes to identity theft, credit card numbers and bank account information stolen through electronic means is becoming more popular than the traditional check fraud schemes. It seems that there is a new press release every day indicating a corporation has had customers' financial information stolen. Check forgeries and alterations, however, are still a problem in the banking world and an issue that consumers should be aware of. Especially in difficult economic times, the loss or theft and cashing of a single check can cause enormous financial difficulties for a family. Even if the money is eventually reaccredited back to the banking customers, the time period in which it takes to file a dispute can ensure that the consumers fall behind on other bills or monthly obligations. This is why homeowners facing foreclosure should be aware of the different types of check fraud, in case they become a victim.
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The first type is when a thief forgers a consumer's signature on a check and then cashes is. In these cases, it is the bank that will be forced to take the loss. The general theory is that, because the bank making the payment has the customer's signature on file on a signature card, pointing out a forgery should not be difficult. Of course, in practice banks never scrutinize signatures. A forged signature is considered ineffective and cannot bind the banking customer. Banks are allowed to withdraw funds from a consumer's account only if the check is properly payable, and a check with a forged signature does not count as properly payable. And the bank is in the position of being able to examine the consumers signature card to be able to spot potential forgeries. Thieves that forge endorsements of checks are also a problem in the banking industry. This may happen in cases where the check is lost or stolen after the customer has signed it. As with a forged signature, however, a check with a forged endorsement is not properly payable. If the bank debits the checking account, it should later be reaccredited for the amount of the check. A final type of check fraud is when a check is altered after it has been written. The most frequent alternation, not surprisingly, is when the amount is changed. For example, $5.00 becomes $500, and "five dollars" is changed to "five hundred dollars" written on the check. In cases where the alternation is made fraudulently, the consumers may have no obligation at all. However, in other cases, the banking customer may be debited for the original intended amount of the check. Of course, this makes it worthwhile for wrongdoers to alter checks, in the hopes of getting away with the larger amount. Q4. Discuss Pavlovs Classical conditioning theory. Answer: Classical Conditioning: Classical conditioning pairs one stimulus with another that already elicits a given response and over a period of repeated trials, the new stimulus will also start causing the same or quite similar response. The Russian Psychologist, Ivan Pavlov, wash the first who pioneered study of classical conditioning. He noticed that since his hungry dogs salivated (unconditioned response) at the sight of food (unconditioned stimulus), the connection between food and salivation is not taught and is just a reflex reaction. Pavlov reasoned that a neutral stimulus such as the sound of a ringing bell could also cause the dogs to salivate if it was closely associated with the unconditioned stimulus (food). To test this reasoning, Pavlov rang a bell while giving food to the dogs. After a sufficient number of repetitions, the dogs learned the connection between bell and food (Figure). When they heard the bell (conditioned stimulus) even in the absence of food, they salivated (conditioned response).

Unconditioned Stimulus (Food) (outdoor activities)

Unconditioned Response (Salivation) (fun and refreshment)

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Unconditioned Response (Salivation) (fun and refreshment)

Unconditioned Stimulus (Bell) (Coca Cola)

Classical Conditioning Two factors are important for learning to occur through the associative process. The firstis contiguity (conditioned stimulus and unconditioned stimulus must be close in time and space). The second factor is the repetition (the frequency of association). The more the frequency of unconditioned and conditioned stimuli occurring together, the stronger the association between them will develop. From classical conditioning emerge three basic concepts important for understanding consumer behavior: repetition, stimulus generalization and stimulus discrimination. Repetition Repetition is believed to work by strengthening the bond of association and thus slowing the process of forgetting. Learning follows a pattern, which is known as learning curve. In the Figure 6.2, x axis shows the number of repetitions and y axis represents the amount of learning. In a typical case, the rate of learning is quite rapid in the early stages. In later stages, as the amount learned accumulates, the rate of learning per repetition decreases. This shows that there is a limit to the amount of repetition that will aid learning and beyond a limit, the attention and the rate of learning will decline. Stimulus discrimination Stimulus discrimination is just opposite to stimulus generalization. Unlike reaction to similarity of stimuli, discrimination is a reaction to Differences among similar stimuli. For example, frequent users of a brand are better able to notice relatively small differences among brands in the same product category. Q5. Describe three types of motivational conflict. Answer: A product or service that a person might by to satisfy some need(s) often comes at the expense of depriving another need as the person may be short on resources. These compromises in our ability to satisfy various needs cause motivational conflict. Motivational Conflicts can take of the three principal forms: Approach-Approach Conflict: This type of conflict occurs when a consumer is forced with two desirable alternatives, such as either to by a good music system or a computer. The person must decide between the attractive alternatives and may face a situation of periodic indecision temporarily and swing between the alternatives. Since both alternatives are attractive, the consumer may experience some dissonance. Approach-approach Conflict is believed to be unstable and due to this reason a slight tendency to accept one alternative can solve the conflict quickly.
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Approach-Avoidance Conflict: This type of conflict occurs when a consumer is facing a purchase choice that has both positive and negative consequences. Such a situation may arise when the consumer is making a purchase or consumption decision on a single product in which both positive and negative aspects are involved. This type of conflict tends to be stable. The theory of cognitive dissonance is based on the premise that people have a need for order and consistency in their lives and they experience a state of tension when their beliefs or behaviors conflict with one another. Avoidance-avoidance Conflict: This involves deciding between two or more alternatives that are perceived as undesirable. Such situations are somewhat stable and consumers tend to vacillate between the undesirable choices. For example, if the car is badly damaged in an accident, the alternative may be hefty repair bill or a substantial expense of buying a new one. Comprehensive insurance cover and also the availability of low interest auto finance schemes are ways of reducing this motivational conflict. Q6. A. What are needs? What are the various types of needs? Discuss their features. Answer: Needs can be defined as a felt state of deprivation of some basic satisfaction. The point is that his deprivation has to be felt to drive the individual to seek satisfaction. Every person has needs. Some of these needs are basic to sustaining life and are born with individuals. Needs may also be classified even more basically Utilitarian or hedonic. A consumers utilitarian needs focus on some practical benefits and are identified with product attributes that define product performance such as economy or durability etc. Hedonic needs relate to achieving pleasure from the consumption of a product or service and are often associated with emotions or fantasies. Hedonic needs are more experiential as they are closely identified with the consumption process. For example, hedonic need might be the desire to be attractive to the opposite sex. The evaluative criteria for brands are usually emotional rather than rational (utilitarian). Features of Needs & goals: 1. 2. 3. 4. Needs are never satisfied completely or permanently. New needs emerge. Success and failure influence goals. Substitute goals are formed.

Q6. B. What are different consumer needs, as described by Maslow? Give proper examples to explain each of them. Answer: Maslows Hierarchy of Needs: 1. Physiological Needs: According to Maslow, the first and most basic level of needs is physiological. These needs are essential to sustain biological life and include air water, food shelter, clothing and sex all the primary or biogenic needs. Physiological needs are very potent when they are chronically unfulfilled. 2. Safety Needs: After physiological needs, safety and security needs acquire the driving force and influence an individuals behavior. These needs are concerned with much more than only the physical safety and health but also include routine, familiarity, security,
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certainty and stability etc. For example, the labour unions in India provide members security of employment. 3. Social Needs: The third level, social needs include love, affection, acceptance, belonging and friendship etc. By and large, humans are social creatures and need worm and satisfy human relationships with others . For example, flowers, greeting cards, chocolates, jewellery and diamonds are given as tokens of affection for someone. 4. Ego Needs: The fourth level is concerned with ego needs. These needs include reputation, prestige, status, self-esteem, success and independence etc. Many ads of ego intensive products emphasize ego appeals such as expensive watches, jewelry and designer dresses etc. The term conspicuous consumption is related to ego needs. It describes consumer purchases motivated to some extent by the desire to show other just how successful one is. 5. Self-actualization Need: Maslow believed that most people are unable to satisfy their ego needs sufficiently and as a result of this are unable to move to the fifth and last level. Self actualization refers to a persons desire to achieve or become what one is capable of. People express this need in different ways. The only common this is that they all seem to be striving for excellence in whatever they are doing the work single mindedly for years to achieve what they want.
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