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348 EN 230
1 – 24
ANNAMALAI UNIVERSITY
DIRECTORATE OF DISTANCE EDUCATION
M.B.A. Marketing Management

SECOND YEAR
CONSUMER BEHAVIOUR
LESSONS: 1 – 24
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SECOND YEAR
CONSUMER BEHAVIOUR
Editorial Board
Members
Dr. E. Selvarajan
Dean, Faculty of Arts
Annamalai University
Annamalainagar
Dr. C. Samudhrarajakumar Dr. C. Madhavi

Professor and Head Professor and Coordinator
Department of Business Administration Management Wing, DDE
Annamalai University Annamalai University
Annamalainagar. Annamalainagar.
Internals
Dr. S. Sivaraj Murugan Dr. P. Balathandayutham
Asst. Professor Asst. Professor
Department of Business Administration Department of Business Administration
Annamalai University Annamalai University
Annamalainagar Annamalainagar
Externals
Dr. R. Thenmozhi Dr. R.V. Pazhani

Professor and Head Professor and Head
Dept. of Management Studies Dept. of Management Studies
University of Madras Manakualar Vinayagar
Chennai. Institute of Technology
Puducherry – 605 107.
Lesson Writers
Units : I – III Units : IV – VI
Dr. S. Arulkumar Dr. J. Arthi
Assistant Professor & Deputy Coordinator Asst. Professor (S.G)
Management Wing, DDE Avinashilingam University
Annamalai University Coimbatore
SECOND YEAR
CONSUMER BEHAVIOUR
SYLLABUS
Objectives
This course introduces participants to the basics of consumer behaviour,
which is seen as a vital component in advertising and marketing. This course will
teach the students about the internal and external factors that influence the
behaviour of consumers. Influences such as perception, learning, personality,
lifestyle, family and social class are examined, with a view to sensitise students to
the interplay of psychological forces.
Unit–I
Consumer behaviour - Meaning, Scope, Importance and Inter-disciplinary
nature - Problems in Buyers behaviour study.
Unit–II
Buyer behaviour Models - Buying Motives - Buying Habits and Buying process.
Consumer research process-quantitative and qualitative research.
Unit–III
Factors influencing consumer behaviour - Cultural, Social, Personal and
Psychological - Product perception- Learning, Attitude, Personality, New Product
Purchase, Repeat Purchase, Consumer Spatial Behaviour.
Unit–IV
Consumption Analysis-Product Usage Rates-Expenditure Pattern and Howard-
Sheth Model of Buyer Behaviour. Organizational behaviour of Buyer. Diffusion of
innovations-Process of diffusion and adoption.
Unit–V
Individual influence on Consumer Behaviour - Perception - Consumer
Motivation and Involvement-Attitudes and Attitude Change.
Unit–VI
The Buying Process-Problems Recognition and Information Search-
Information Processing - Alternative Evaluation-Purchase Process- Post Purchase.
Rural consumer behaviour. e-consumer behaviour.
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Reference Books
1) Rodger D.Black well, James F. Engel and Paul.W Miniard - Consumer
Behaviour: Cengage Learning, 2012
2) Loudon, David - Consumer Behaviour: Concepts and Applications, Tata
McGraw Hill, 2001.
3) Del I Hawkins David L Motherbaugh and Amiit Mookerjee - Consumer
Behaviour: building marketing strategy, Tata McGraw Hill, 2010.
4) Paul Peter and Jerry, Colsen -Consumer Behaviour and Marketing Strategy
Tata McGraw Hill, 2005.
5) Leon Schffman and Leslie lazar Kanuk, - Consumer Behaviour: Pearsn
Education, 2005.
6) D.D Sharma- Marketing Research: Sultan Chand & Sons New Delhi, 2001.
Journals and Magazines
1) Journal of Consumer Research
2) The Journal of Consumer Behaviour
3) Journal of Consumer Behaviour and Psychology
Web Resources
1) www.scribd.com
2) www.researchworld.com
3) www.icmrindia.com
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SECOND YEAR
CONSUMER BEHAVIOUR
CONTENTS
Lesson Page
Titles
No. No.
1 Consumer Behaviour Meaning 1

2 Application of consumer Behaviour 9
3 Buyer Behaviour Model 14
4. Types of Buying Decision Behaviour 25
5. Buying Motives 31
6. Consumer Research Process 39
7. Factors Influencing Consumer Behaviour 58
8. Perception 74
9. Learning 84
10. Attitude 99
11. Personality 110
12. Buyer Decision Process towards New Products or Services 119
13. Consumption Analysis 128
14. Models of Buyer Behaviour 145
15. Organisational Behaviour of Buyer 160
16. Diffusion of Innovation 175
17. Individual Influence on Consumer Behaviour 188
18. Perception 201
19. Consumer Motivation 214
20. Consumer Attitude 230
21. Buying Process 245
22. Post Purchase Consumer Behaviour 263
23. Rural Consumer Behaviour 277
24. E-Consumer Behaviour 291
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1
LESSON – 1
CONSUMER BEHAVIOUR MEANING

1.1 INTRODUCTION
Consumer is the reason why business exists. Without them no company can
survive or thrive. In their absence, an organisation doesn’t have a business or
purpose. The main purpose of a company is to satisfy customer’s needs and wants.
Though similar, consumers are unique in themselves; they have needs and want
which are varied and diverse from one another; and they have different
consumption patterns and consumption behaviour. The marketer helps satisfy
these needs and wants through product and service offerings. For a firm to survive,
compete and grow, it is essential that the marketer identifies these needs and
wants, and provides product offerings more effectively and efficiently than other
competitors. A comprehensive yet meticulous knowledge of consumers and their
consumption behaviour is essential for a firm to succeed. Herein, lays the essence
of Consumer Behaviour, an interdisciplinary subject, which emerged as a separate
field of study in the 1960s. Peter F Trucker, a leading management expert, once
stated that the aim of marketing is to know and understand the consumer so well
that the product or service fits him and sells itself. Ideally, marketing should result
in a consumer who is ready to buy. All that should be needed then is to make the
product or service available. In short consumer or customer satisfaction is the key
to an organisational success.
1.2 OBJECTIVES
After studying this lesson, you will be able to understand:
• Importance of CB
• Need for studying consumer behaviour
• Nature of Consumer Behaviour
• Scope of Consumer Behaviour:
1.3 CONTENTS
Importance of CB
Need for studying consumer Behaviour.
Nature of Consumer Behaviour
Scope of Consumer Behaviour:
Consumer
Any individual who purchases goods and services from the market for his/her
end-use is called a consumer. In simpler words a consumer is one who consumes
goods and services available in the market. In other words, consumer is an ultimate
user of a product or service. According to International Dictionary of Management,
“consumers are purchasers of goods and services for immediate use and
consumption”.
Consumer Behaviour
Human being differs from one to another. It is not easy to predict the human
behaviour. Human being differs in their taste, needs, wants and preferences. But
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one constant thing is that we all are consumers. CB is a vast and complex subject.
Understanding CB and “knowing consumers’ are not that simple. It is almost
impossible to predict with one hundred per cent accuracy, how consumer(s) will
behave in a given situation. Marketers are interested in watching people shopping,
flirting, parading, playing, entertaining, as they are keenly interested in the wide
variety of behaviours they display. The efforts of all marketers are to influence the
behaviour of consumers in a desired manner. The success or failure in this pursuit
determines the difference between success and failure of marketing efforts or even
the business itself.
Consumer behaviour explains the reasons and logic that underlie purchasing
decisions and consumption patterns; it explains the processes through which
buyers make decisions. Consumer Behaviour may be defined as “the interplay of
forces that takes place during a consumption process, within a consumers’ self and
his environment. This interaction takes place between three elements viz.
knowledge, affect and behaviour; it continues through pre-purchase activity to the
post purchase experience; it includes the stages of evaluating, acquiring, using and
disposing of goods and services”. The “consumer” includes both personal
consumers and business/industrial/organizational consumers.
Definitions
1. “The behaviour that consumers display in searching for, purchasing, using,
evaluating and disposing of products and services that they expect will satisfy their
needs.”- Schiffman and Kanuk
2. “…..the decision process and physical activity engaged in when evaluating,
acquiring, using or disposing of goods and services." - Loudon and Bitta
3. “The study of consumers as they exchange something of value for a product
or service that satisfies their needs”- Wells and Prensky
4. “Those actions directly involved in obtaining, consuming and disposing of
products and services including the decision processes that precede and follow
these actions”. -Engel, Blackwell, Miniard
5. “The dynamic interaction of effect and cognition, behaviour and the
environment by which human beings conduct the exchange aspects of their lives” -
American Marketing Association
By analysing the above definition, it reveals that the study includes within its
purview, the interplay between cognition, affect and behaviour that goes on within a
consumer during the consumption process: selecting, using and disposing off goods
and services.
i. Cognition:
This includes within its ambit the “knowledge, information processing and
thinking” part; It includes the mental processes involved in processing of
information, thinking and interpretation of stimuli (people, objects, things, places
and events). In our case, stimuli would be product or service offering; it could be a
brand or even anything to do with the 4Ps.
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ii. Affect:
This is the “feelings” part. It includes the favourable or unfavourable feelings
and corresponding emotions towards stimuli (towards a product or service offering
or a brand). These vary in direction, intensity and persistence.
iii. Behaviour:
This is the “visible” part. In our case, this could be the purchase activity: to
buy or not to buy (again specific to a product or service offering, a brand or even
related to any of the 4 Ps).
Why we study of CB: (Importance of CB)
The term CB is defined as the behaviour that consumers’ display in searching
for, purchasing, using, evaluating and disposing of products and services that they
expect will satisfy their needs. CB focuses on how individuals make decisions to
spend their available resources (time, money, effort) on consumption related items.
The term CB describes two different kinds of consuming goods and services for his
or her own use, for the use of the household or as a gift for a friend. In each of
these contexts, individuals, who are referred to as end users or ultimate
consumers, buy the products for fine use. The second category of consumer- the
organizational consumer- includes profit and not-for-profit businesses, government
agencies (local, state, and national), and institutions (e.g. Schools, hospitals, and
prisons), all of which must buy products, equipments and services in order to run
their organization.
The subject of Consumer Behaviour is viewed as the edifice of the marketing
concept, an important orientation in marketing management. The knowledge of
Consumer Behaviour helps the marketer understand and predict the consumption
patterns and consumption behaviours of people. It helps them gain insights as to
why a consumer behaves differently to another consumer; as well as, why a
consumer behaves differently in different times and buying situations. The study
helps them understand the internal (individual determinants) and external
(environmental factors) forces that impel people to act out different consumption
patterns and behaviours. The study helps the marketer in:
a) Analyzing the environment: identifying opportunities and fighting threats.
b) Segmenting, targeting and positioning.
c) Designing the marketing-mix.
d) Designing the marketing strategy.
e) Governmental and Non-profit Organization and Social Marketing.
Need for studying consumer behaviour
Consumer Behaviour is studied to predict buyers’ reaction in markets. If a firm
understands its customers, it becomes successful in the market place. The success
of any business is based on understanding the consumer and providing the kind of
products that the consumer wants. The consumer decides what to buy, when to
buy and also what not to buy. One cannot thrust a product on a consumer. A
marketer sells what the consumer wants. So, emphasis is placed on knowing what
the consumers’ wants are. Studying consumer Behaviour is very much emphasized
for the following reasons.
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1. To satisfy need of customers

Consumers respond favorably while evaluating the products that best satisfy
their needs. A marketer studies how consumers spend their available resources on
the consumption of related items. It includes the study of what they buy, when they
buy it, where they buy it and how often they use it. So, knowledge of consumer
Behaviour will be of immense help to the marketer which will help to satisfy their
needs. He can understand the consumer’s reaction to a firm’s marketing strategies.
It would help in planning and implementing marketing strategies.
2. Helps to understand consumer psychology
The study of consumer Behaviour enables the marketer to understand the
psychology of consumers. Consumer psychology is based on his knowledge,
attitude, intention and motive. The psychology of customer develops on the basis of
knowledge he has. Sales promotion plays an important role to provide the
knowledge of the product to consumers. Attitude is a state of mind or feeling.
Attitude explains Behaviour. Intention means a desire to do something. A
marketing programme is formulated only after understanding the intention of
consumers. Motive is the integral state which directs the Behaviour of a person.
3. Helps to understand consumer motives
A study of the Behaviour of a consumer is essential to understand his/her
buying motives. A motive is an urge for which an individual seeks satisfaction.
Consumers have several motives. All these motives may not have the same intensity
of purchase. Only a few motives prompt the consumer to buy a product or service.
The study of consumer Behaviour involves both motives and purchases.
4. Helps to understand consumer choices
It is important for the marketer to understand how consumers make their
choices. Human beings are usually very rational. They make systematic use of
information available to them before they buy. A marketer studies the Behaviour of
the customer and accordingly alters his presentation, enticing the customer to go
for the product.
5. Helps to understand consumer preferences
A business firm which is ignorant of consumer preferences cannot succeed in
the market place. Adam Smith has stated that consumption is the sole end and
purpose of all production. So, a firm must plan its production and distribution to
suit the needs of consumers. Thus, the extent of consumer understanding
determines the effectiveness of marketing mechanism.
To conclude
The study of consumer Behaviour helps the marketer to
1) Satisfy need of customers
2) Understand consumer psychology
3) Understand consumer motives
4) Understand consumer choices
5) Understand consumer preferences
Nature of Consumer Behaviour
1. Process: -Consumer behaviour is a systematic process relating to buying
decisions of the customers. The buying process consists of the following steps;
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1) Need identification to buy the product

2) Information search relating to the product.
3) Listing of alternative brands.
4) Evaluating the alternative (cost-benefit analysis)
5) Purchase decision.
6) Post-purchase evaluation by the marketer.
2. Influenced by various factors: -Consumer behaviour is influenced by a
number of factors. The factors that influenced consumer are as follow; marketing,
personal, psychological, situational, social, cultural etc.
Different for different customers: -All consumers do not behave in the same
manner. Different consumers behave differently. The difference in consumer
behaviour is due to individual factors such as nature of the consumer’s life style,
culture, etc.
4. Different for different products: -Consumer behaviour is different for different
products. There are some consumers who may buy more quantity of certain items
and very low/no quantity of some other items.
5. Varies across regions: -The consumer behaviour vary across states, regions
and countries. For instance, the behaviour of urban consumers is different from
that of rural consumers. Normally, rural consumers are conservative (traditional) in
their buying behaviour.
6. Vital for marketers: -Marketers need to have a good knowledge of consumer
behaviour. They need to study the various factors that influence consumer
behaviour of their target customers. The knowledge of consumer behaviour enables
marketers to take appropriate marketing decisions.
7. Reflects Status: -Consumers buying behaviour is not only influenced by
status of a consumer, but it also reflects it. Those consumers who own luxury cars,
watches and other items are considered by others as persons of higher status.
8. Result in spread-effect: -Consumer behaviour has a spread effect. The
buying behaviour of one person may influence the buying behaviour of another
person. For instance, a customer may always prefer to buy premium brands of
clothing, watches and other items etc. this may influence some of his friends,
neighbours, colleagues. This is one of the reasons why marketers use celebrities
like Sharuk khan, Sachin Tendulkar to endorse their brands.
9. Improves Standard of Living: -Consumer buying behaviour may lead to
higher standard of living. The more a person buys the goods and services, the
higher is the standard of living.
10. Undergoes a change: - The consumer’s behaviour undergoes a change over
a period of time depending upon changes in age, education and income level etc.,
for instance,, kids may prefer colourful dresses, but as they grow up as teenagers
and young adults, they may prefer trendy clothes.
Scope of Consumer Behaviour:
The study of consumer behaviour deals with understanding consumption
patterns and behaviour. It includes within its ambit the answers to the following:
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• ‘What’ the consumers buy: goods and services

• ‘Why’ they buy it: need and want
• ‘When’ do they buy it: time: day, week, month, year, occasions etc.
• ‘Where’ they buy it: place
• ‘How often they buy’ it: time interval
• How often they use’ it: frequency of use
The scope of consumer behaviour includes not only the actual buyer but also
the various roles played by him/ different individuals.
Basic Components:
i) Decision making (Cognitive and Affect): -this includes the stages of decision
making: Need recognition, Information search, Evaluation of alternatives, Purchase
activity, Post purchase behaviour.
ii) Actual purchase (Behaviour): -this includes the visible physical activity of
buying of goods and/or service. It is the result of the interplay of many individual
and environmental determinants which are invisible.
iii) Individual determinants and environmental influences: The environmental
factors affect the decision process indirectly, through way of affecting individual
determinants.
iv) Buying roles: Actual Buyer vis a vis other users. There are five buying roles,
viz., Initiator, Influencer, Decider, User, and Buyer. The initiator is the person who
identifies that there exists a need or want; the influencer is the one who influences
the purchase decision, the actual purchase activity and/or the use of the product
or service; the decider is the one who decides whether to buy, what to buy, when to
buy, from where to buy, and how to buy; the buyer is the one who makes the actual
purchase; and, the user is the person (s) who use the product or service. These five
roles may be played by one person or by different persons. A person may assume
one or more of these roles. This would depend on the product or service in
question.
Examples: Let us take an example.
A child goes to a kindergarten school. She comes back home and asks her
parents to buy her a set of colour pencils and crayons. Now the roles played are:
1. Initiator: the child in nursery school
2. Influencer: a fellow classmate
3. Decider: the father or the mother
4. Buyer: the father or the mother
5. User: the child research becomes essential.
1.4 REVISION POINTS
1) Any individual who purchases goods and services from the market for his/her
end-use is called a consumer.
2) Understanding CB and “knowing consumers’ are not that simple. It is almost
impossible to predict with one hundred per cent accuracy, how consumer(s)
will behave in a given situation.
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3) CB focuses on how individuals make decisions to spend their available

resources (time, money, effort) on consumption related items.
4) The success of any business is based on understanding the consumer and
providing the kind of products that the consumer wants.
5) The scope of consumer behaviour includes not only the actual buyer but also
the various roles played by him/ different individuals.
6) An understanding of consumer behaviour is necessary for long term success
and survival of a firm. It is viewed as the edifice of the marketing concept, an
important orientation in marketing management.
1.5 INTEXT QUESTIONS
1) Differentiate the customer and consumer
2) What is the importance of studying consumer Behaviour?
3) What is the need for studying consumer Behaviour?
4) What is the nature of consumer Behaviour?
1.6 SUMMARY
Now that you have finished reading this chapter, you should understand
Consumer Behaviour is the study of the processes involved when individuals or
groups select, purchase, use, or dispose of products, services, ideas, or experiences
to satisfy needs and desires. A consumer may purchase, use, and dispose of a
product, but different people may perform these functions. In addition, we can
think of consumers as role players who need different products to help them play
their various parts.
1.7 TERMINAL EXERCISES
1) Any individual who purchases goods and services from the market for his/her
end-use is called a ----------
2) Human being differs in their -------------
3) ----------- focuses on how individuals make decisions to spend their available
resources (time, money
4) A study of the Behaviour of a consumer is essential to understand his/her ----
------ motives.
5) ---------- this includes the visible physical activity of buying of goods and/or
service effort) on consumption related items.
1.8 SUPPLEMENTARY MATERIALS
1) Maher, A. a., Clark, P. & Maher, A., 2010. International Consumer Admiration
and the Persistence of Animosity. Journal of Consumer Marketing, 27(5),
pp.414–424.
2) Sharma, P. (2014). Consumer Ethnocentrism: Reconceptualization and Cross-
Cultural Validation. Journal of International Business Studies, 46(3), 381–389.
3) Rapaille, C., 2006, The Culture Code: An Ingenious Way to Understand Why
People Around the World Live and Buy as They Do Paperback, Brodway Books,
New York.
4) Misra, Vaibhav and Shukla, R. K., Study of Consumer Behaviour in the
International Market with Respect to Cultural Factors in Delhi, India and
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London, UK (2012). Anvikshiki: The Indian Journal of Research, Volume 6,

Number 1, January-February 2012.
5) Wilkie, W. L. 1994. Consumer Behaviour, New York: John Wiley & Sons Inc.
1.9 ASSIGNMENTS
1) What is consumer Behaviour? Why is it important for a marketing manager to
study consumer Behaviour?
2) Consumer Behaviour is a multi- disciplinary science” Critically analyze the
statement
3) Discuss the application on consumer Behaviour in business decisions?
1.10 SUGGESTED READINGS/ REFERENCE BOOKS
1) Bennet and Kassarjian, Consumer Behaviour, Prentice Hall of India, New Delhi
2) Michael R. Solomon, Consumer Behaviour, PHI Learning Private Limited, New
Delhi, 2011
3) Ramanuj Majumdar, Consumer Behaviour, Prentice Hall of India, New Delhi,
2011
4) Loudon and Della Bitta, Consumer Behaviour: Concepts and Applications, Tata
McGraw Hill. New Delhi,2007
5) Berkman & Gilson, Consumer Behaviour: Concepts and Strategies, Kent
Publishing Company.
1.11 LEARNING ACTIVITIES
1) Consider the following summary of research of 400 consumers of tyres in
Sydney. Results are based on a scale of 0-100 for attribute importance and 0-
10 for evaluative criteria. The research was conducted for a company Fivestar
who manufacturers Treadfast.
Work together and come up with the following:

a) Describe one strategy in which Fivestar might be able to change consumers’
attitudes to Treadfast by changing the importance /desirability of the
attribute(s).
b) Describe one strategy in which Fivestar might be able to change consumers’
attitudes to Treadfast by changing brand belief(s)
c) Describe one strategy in which Fivestar might be able to change consumers’
attitudes to Treadfast by adding a new attribute(s)
d) Report back to class your suggestions.
1.12 KEYWORDS
Consumer, Consumer Behaviour, Cognition, consumer psychology, consumer
motives, consumer choices, consumer preferences, marketing, personal,
psychological, situational, social, cultural, target market
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LESSON – 2
APPLICATION OF CONSUMER BEHAVIOUR

2.1 INTRODUCTION
As a consumer we are all unique and this uniqueness is reflected in the
consumption pattern and process of purchase. The study of consumer behaviour
provides us with reasons why consumers differ from one another in buying using
products and services. We receive stimuli from the environment and the specifics of
the marketing strategies of different products and services, and responds to these
stimuli in terms of either buying or not buying product. In between the stage of
receiving the stimuli and responding to it, the consumer goes through the process
of making his decision.
2.2 OBJECTIVES
• Applications of consumer behaviour
2.3 CONTENTS
Applications of consumer behaviour
Application of Consumer Behaviour:
An understanding of consumer behaviour is necessary for long term success
According to the marketing concept, the marketer should be able to determine
needs and wants of the target segment and provide product and service offerings
more effectively and efficiently than competitors. It is essentially a customer-
centered philosophy, which aims at understanding customer needs and wants,
providing the right product and service, and deriving customer satisfaction; “make
what you can sell” rather than “sell what you make.”
An understanding of the study of consumer behaviour helps formulate
appropriate marketing strategies for a firm keeping in view the consumer and his
environment. It has a number of applications; the main application bases are as
follows:
1. Analyze the environment:
The knowledge of consumer behaviour can be applied to help identify
opportunities and fight threats. The opportunities could be in terms of newer
customers, newer markets, unfulfilled needs and wants (through a study of
consumer individual determinants and other environmental influences). The
threats could be fought by developing and implementing appropriate marketing
strategies to best fit the environment.
The marketing strategies need to be dynamic and constantly evolving
keeping in view the uncertainty in the environment; Environmental uncertainty is a
function of complexity and dynamism. Complexity is defined in terms of the
number, strength and interrelatedness of the various factors in the environment
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that a firm has to deal with. Dynamism relates to how quickly the changes take
place in the environment.
2. Segmentation, targeting and positioning:
The study of consumer behaviour may be applied to segment the market,
select the target market and position the product or service offering. Identifying the
target segment, understanding their needs, providing the right product and service
offering and communicating about the offering – all of these help a marketer succeed
in the long term and ensure his survival and success in a changing environment.
a) Segment the market: The marketer needs to identify distinct customer
groups with needs and wants, classify them on basis of descriptive characteristics
and behavioural dimensions. The descriptive characteristics may take forms of age,
gender, income, occupation, education, family size, family life cycle, gender,
lifestyle, personality, religion, generation, geography, nationality, and social class.
The behavioural dimensions take forms of benefits, uses, use occasion, usage rates,
and loyalty status.
b) Select target market: The marketer then selects one or more markets to
enter. The segment(s) that should be targeted should be viable; there should be a fit
between the market attractiveness and the company’s objectives and resources. The
marketer would be able to assess the viability of a segment on the basis of the
following criteria, viz., measurability, substantial ability, accessibility,
differentiability, and actionability.
c) Position: the product offering in the mind of the customers: The marketers
should be able to communicate the distinct and/or unique product characteristics.
3. Designing the Marketing Strategy:
There exists an interrelation between the Consumer, the Environment
and the Marketing strategy.
a) Consumer: The consumer has his needs and wants as well as product
preferences; Thus, there exists an interplay of Cognition (knowledge about products
and alternatives), Affect (feelings of favorableness and unfavourableness ) and
Behaviour (action: buy or not to buy).
b) Environment: This refers to forces in the environment, which make the
environment complex and dynamic.
c) Marketing strategies: This implies setting up of goals and then achieving
them through the design of an appropriate marketing mix.
The Marketing Strategy should be designed to influence consumers (Cognition,
Affect and Behaviour) and be influenced by them. It should be flexible and ever
evolving with changes in the customer needs and wants; as well as, changes in the
environment in which it operates. The knowledge of consumer behaviour can be
applied to develop a “best fit” between consumer needs and wants, the environment
in which the firm operates; and, the firms’ goals and objectives.
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4. Designing the Marketing Mix:

4-Ps The study of consumer behaviour may be applied to design the 4 Ps.
a) Product: The term product includes both tangible products and intangible
services. The issues to address consist of name (brand), size, shape, features,
labeling, packaging, accessories and supplementary products, terms of sale and
services, after sales etc.
b) Price: This includes the pricing of the product offering. The major
components include, form of payment, terms and conditions of payment, discounts,
price sensitivity, differential prices and customer reaction, imagery (price increase
and customer reaction, price decrease and customer
reaction).
c) Place and Distribution: This includes the marketing channel, and comprises
decisions regarding choice of channel (direct or indirect), location, accessibility and
availability of product offering, wholesaling, retailing, logistics etc.
d) Promotion: This includes marketing communication, and the major issues
comprise decisions on communication/promotion mix, the message and media
strategy (the content, appeal and context).
5. Application in Governmental and Non-profit Organizations and Social
Marketing: The knowledge of consumer behaviour finds relevance even in
Governmental and Non-profit Organizations and Social Marketing. Governmental
and Non-profit Organizations have the society as its customers and need to
understand them so as to be able to serve them better. Social marketing involves
propagation of ideas; attempts at such circulation and spread of ideas for moral
and social upliftment can be more successful if there is a proper understanding of
the these consumers (i.e., the public and society)
Social Sciences and Buyer Behaviour:
As an interdisciplinary area of study, the subject borrows heavily from
psychology, sociology; social psychology; anthropology and, economics.
1. Psychology: This includes the study of the individual as well as the
individual determinants in buying behaviour, viz., consumer perception, learning
and memory, attitude, self-concept and personality, motivation and involvement,
attitudes and attitudinal change and, decision making.
2. Sociology: This includes the study of groups as well as the group dynamics
in buying behaviour, viz., family influences, lifestyles and values, and social group
influences.
3. Social psychology: This includes the study of how an individual operates in
group/groups and its effects on buying behaviour viz, reference groups and social
class influences.
4. Anthropology: This is the influence of society on the individual viz., cultural
and cross-cultural issues in buying behaviour, national and regional cultures etc.
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5. Economics: This is the study of income and purchasing power, and its
impact on consumer behaviour. The underlying premise is that consumers make
rational choices while making purchase decisions. While resources are limited and
needs and want many, consumers collect information, and evaluate the various
alternatives to finally make a rational decision. As discussed before, consumers are
unique in themselves. A comprehensive yet meticulous knowledge of consumers
and their consumption behaviour is essential for a firm to succeed. In order to
understand and predict consumption patterns and behaviours within segment (s),
market.
2.4 REVISION POINTS
1) An understanding of the study of consumer behaviour helps formulate
appropriate marketing strategies for a firm keeping in view the consumer and
his environment.
2) The study of consumer behaviour may be applied to segment the market,
select the target market and position the product or service offering
3) The marketer needs to identify distinct customer groups with needs and
wants, classify them on basis of descriptive characteristics and behavioural
dimensions.
4) There exists an interrelation between the Consumer, the Environment and the
Marketing strategy.
5) The knowledge of consumer behaviour finds relevance even in Governmental
and Non-profit Organizations and Social Marketing.
6) As an interdisciplinary area of study, the subject borrows heavily from
psychology, sociology; social psychology; anthropology and, economics.
1) Explain the applications of consumer Behaviour
2) Consumer Behaviour contents borrows heavily from psychology, sociology;
social psychology; anthropology and, economics. – Discuss
2.6 SUMMARY
An understanding of consumer behaviour is necessary for long term success
1) The knowledge of consumer behaviour can be applied to help identify ---------
and ----------
2) ----------, ----------- and ---------- help a marketer succeed in the long term and
ensure his survival and success in a changing environment.
3) Setting up of goals and then achieving them through the design of an
appropriate marketing mix is known as ----------
4) The study of consumer behaviour may be applied to design the ----------
5) ---------- is the influence of society on the individual viz., cultural and cross-
cultural issues in buying behaviour, national and regional cultures etc.
13

1) East, R., Wright, M., & Vanhuele, M. (2013). Consumer Behaviour: Applications
in Marketing. Sage.
2) Foxall, G. (1990). Consumer Psychology in Behavioural Perspective. Routledge.
New York.
3) Foxall, G., & Greenley, G. (2000). Predicting and Explaining Responses to
Consumer Environments: An Empirical Test and Theoretical Extension of the
Behavioural Perspective Model. Service Industries Journal, 20(2), 39-63.
4) Meyer, Ch., & Schwager, A. (2007) Understanding Customer Experience.
Harvard Business Review, 85(2), 116-126.
2.9 ASSIGNMENTS
1) Justify the statement-―The Evaluation of Marketing Concept from mere Selling
concept to Consumer-oriented marketing has resulted in buyer behaviour
becoming an independent discipline.
1) D. L. Loudon, J. Albert Della Bitta: Consumer Behaviour; Concepts and
Applications, Tata McGraw Hill Publishing Company Limited .
2) L. G. Schiffman, L. L. Kanuk, & S. R. Kumar: Consumer Behaviour, Pearson
Education Inc
3) Kazmi & Batra- Consumer Behaviour (Excel Books)
4) Henry A.: Consumer Behaviour and Marketing Action, Thomson Asia Pvt. Ltd.
5) M. Evans, A. Jamal, & G. Foxall : Consumer Behaviour, John Wiley & Sons
LTD.
6) M. Khan: Consumer Behaviour, New Age International Publishers.
1) Given the geographical characteristics of Indian consumer market, analyse five
important implications that will be faced by an all-India distribution company
dealing in consumer durables such as refrigerators, televisions and music
systems
2.12 KEYWORDS
Psychology, Sociology; Social Psychology, Anthropology, Economics Service
Offering


14
LESSON – 3
BUYER BEHAVIOUR MODEL

3.1 INTRODUCTION
The influences of social science have prompted marketing experts to propound
certain buying behaviour models for explaining buyer behaviour. These models are
divided in two broad categories microeconomic and macroeconomic models. The
classical microeconomic approach focus on type of purchase and quantity of these
purchases made by the consumer. Macroeconomic approach considers the monetary
value of goods and resources and how they will change over the period the period of
time. Several models have been put forward for explaining buyer behaviour. All the
social sciences like Economics, Psychology, Sociology and Anthropology have
influenced the buyer behaviour studies. Some important consumer behaviour models
are discussed below to nurture the ideas of social sciences.
3.2 OBJECTIVES
• Purpose and advantages of models of consumer Behaviour
• The Economic Model:
• Learning or Pavlovian model
• Psychoanalytical model
• Sociological model
• The Nicosia model
• The Howard-Sheth model
• Engle-Blackwell-Miniard Model:
• Sheth Family Decision Making Model:
• Sheth Newman Gross Model of Consumption Values:
• Andreasan Model
3.3 CONTENTS
Purpose and advantages of models of consumer Behaviour
The Economic Model
Learning or pavlovian model
Psychoanalytical model
Sociological model
The Nicosia model
The Howard-Sheth model
Engle-Blackwell-Miniard Model:
Sheth Family Decision Making Model:
Sheth Newman Gross Model of Consumption Values:
Andreasan Model
Purpose and advantages of models of consumer Behaviour
The purpose and advantages offered by models of consumer behaviour are
listed below:
15
a) Explanations are provided for behaviour: Engel et al. (1990: 475) list
probably the most obvious advantage - that it is possible to visually grasp what
happens as variables and circumstances change;
b) Explanatory variables are specified: According to Engel & Blackwell (1982:
677) every person has a model of consumer behaviour in mind, whether implicit or
explicit. This implies that each person has a concept of factors that shape
motivation and behaviour. Without a held concept, explanation and prediction will
be impossible. The distinction is made with respect to the comprehensiveness of
competing models and the accuracy with which predictions can be made;
c. Systematic thinking is encouraged: Runyon & Stewart (1987: 698) suggest
that forcing theorists to define the relevant elements in behavioural theory, will
result in systematic thinking. Lilien & Kotler (1983:204) support this view by
adding that all major variables that models comprise, are identified and measured;
d} Fundamental relationships between variables and the exact sequence of
cause and effect of variables are specified: This view by Lilien & Kotler (1983: 204)
is supported by Runyon & Stewart (1987: 698), adding that by showing explicit
relationships between variables, a tentative view of behavioural phenomena is
offered;
e) Research findings can be integrated into a meaningful whole: Engel &
Blackwell (1982: 677) point out that most analysts of consumer behaviour are
familiar with behavioural sciences. A well-formulated model assists analysts to
differentiate between relevant and irrelevant literature that is often a highly
frustrating experience to examine;
f) Evaluations are provided for performance of the system: Part of the
requirements for a good model, according to Engel & Blackwell (1982: 678) is that
they describe the functional relationships between variables, resulting in the ability
of the model to make behavioural predictions with some degree of accuracy;
g) Avenues for fruitful research are revealed: Engel & Blackwell (1982: 678)
point out that carefully designed models are often the source of researchable
hypotheses, since gaps in existing knowledge are easily exposed. The nature of the
researchable hypotheses identified is usually determined by the variables
themselves and linkages between them.
Engel et al. (1990: 475) add to the above by stating that the gaps identified
could possibly even establish research priorities;
h) A foundation is provided for management information systems: Essential
insights for marketing strategy, according to Engel et al. (1990: 475), are provided
through the proper use of a model that discloses information required to
understand consumer decision processes; and
i) The final advantage, offered by Runyon & Stewart (1987: 698) and supported
by Lilien & Kotler (1983: 204), is that models sometimes permit sensitivity
analyses and simulations of behaviour so that the impact of changes in variables
can be explored and the implications of the model observed under different sets of
assumptions.
16
THE ECONOMIC MODEL:

To economic model buyer is a rational man and his buying decisions are fully
governed by the concept of utility. If the buyer has purchasing power of choosing a
set of services to met his need. He will allocate this amount over the set of services
in a very rational manner with the intention of maximising the utility or benefits.
People are limited by their skills, habits, reflexes, knowledge etc. Buyer’s operate in
an imperfect world in which they do not maximize their decisions in terms of
economic considerations such as price-quantity relationships, marginal utility or
indifference curve. The buyer usually unwilling to engage in extensive decision-
making activities and satisfied with utility or benefits of a product. The economic
factors which affect the buyers behaviour are:
1. Disposable Personal Income
The economists attempted to establish relationship between income and
spending. Disposable personal income represents potential purchasing power that a
buyer has. The change in income has direct relation on buying habits. Personal
consumption spending tends both to rise and fall at a slower rate than what
disposable personal income does.
1. Size of family income
Size of family and size of family income affect the spending and saving
patterns. Usually large families spend more and small families spend less in
comparison.
2. Income Expectation
The income expected to get in future has direct relation with the buying
behaviour. The expectation of higher or lower income has a direct effect on
spending plans.
3. Tendency to Spend and to Save
This goes to the habit of spending or saving with the disposable income of
buyers. If the buyers give importance to the present needs, they dispose of their
income. And buyers spend less if they give importance to future needs.
4. Liquidity of Funds
The present buying plans are greatly influenced by liquidity of assets readily
convertible into cash. For example, readily marketable shares and bonds, bank
balances come into this category. However, this convertable assets influence and
offer freedom to buyer, who actually buys with current income.
5. Consumer Credit
Facility of consumer credit system - hire purchase, installment purchase etc.,
plays an important role in purchase decision. A buyer can command more
purchasing power. Buy now and pay later’ plays its role effectively in the rapid
growth of market for car, scooter, washing machine, furniture, television and so on.
The economic model of consumer behaviour is unidimensional. It is based on
certain predictions of buying behavoiur. They are:
a. Lower the price of the product, higher the sales
b. Lower the size of substitute product, lower the sale of this product
c. Higher the real income, higher the sales of this product
17
d. Higher the promotional expenses, higher are the sales

However, lower the price of a product, higher the sales‘ may not hold good, as
buyer may feel that the product is sub-standard one. The behavioural researchers
believe that this model ignores all the other aspects such as perception, motivation,
learning, attitude and personality, and socio-cultural factors. Further, it is also
observed that consumer also gets influenced by other marketing variables such as
products, effective distribution network and marketing communication. Hence, it is
felt that the economic model is inadequate. It assumes that market is homogeneous
where markets are assumed to be heterogeneous.
LEARNING OR PAVLOVIAN MODEL
Psychology has contributed lot to the marketers to understand the buyers. It
explains how consumers learn about a product and the way they can recall from
the memory, and the development of buying habits. All theories of buyer‘s
behaviour have been primarily based on a learning, viz., Stimulation-Response or
S-R model, this theory of learning is explained as a process of repetition,
motivation, conditioning and relationship. Repetition improves learning. For
example, when advertisements are repeated, people may be able to understand
further about the product. This is aimed at repeated advertisements for drawing the
attention and interest of the people. According to stimulus- response theory
learning involves the following steps.
a. Drive: It is a strong internal stimulus which impels action and when it is
directed towards a drive reducing object, it becomes a motive. A drive thus
motivates a person for action to satisfy the need. Drives may be primary-thrust,
hunger etc., and secondary - desire for money, pride etc.
b. Cues: These are weak stimuli. They determine when the buyer will respond.
c. Response: Response is the feedback reaction of the buyer. It is an answer
given to drive or cue. The individual has to choose some specific response in order
to fulfill the drive or the need which was acting as a stimulus. For example, a
hunger drive can be satisfied by visiting a shop known through an advertisement
and buying the readymade food product. If that experience is satisfactory, this
response of satisfaction is strengthened.
Thus this learning of links which mean stimulus, cue and response results in
habits. Along with this attitudes and beliefs also learnt. As it becomes a habit, the
decision process for the individual becomes routine affair. Thus, learning model has
the following prediction:.
a. Learning refers to change in behaviour brought about by practice or
experience. Everything one does or thinks is learnt.
b. Product features such as price, quality, service, brand , package etc., acts
as cues or hints influencing consumer behaviour
c. Marketing communications such as advertising, sales promotion etc., also
act as guides persuading buyer to purchase the product.
d. Response is decision to purchase.
18
PSYCHOANALYTICAL MODEL
Sigmund Freud developed this theory. According to him human personality
has three parts:
1. The Id, is the source of all mental energy that drives us to action
2. The super ego, the internal representation of what is social is approved
conscience
3. The Ego, the conscious director of id impulses for finding him satisfaction in
socially acceptable manner.
The buyer behaviour depends upon the relative strength of the three
elements in the personal ability. Motivational research has been involved in
investigating motives of consumer behaviour so as to develop suitable marketing
implications accordingly. This approach has been used to generate idea for
developing- design, features, advertising and other promotional techniques.
SOCIOLOGICAL MODEL
According to this theory the individual decision and behaviour are quite often
influenced by the family and the society. He gets influenced by it and in turn also
influences it in its path of development. He plays many roles as a part of formal and
informal associations or organizations i.e., as a family member, employee of a firm,
member of professional forum, and as an active member of an informal cultural
organization. Hence he is largely influenced by the group in which he is a member.
For example, the decision may be made by one, actual buying may be done by
another, and the product is used by yet another member of the family. Here, a
mother takes a decision to buy a tiny cycle for her child, the cycle is purchased by
the father and the user is the child.
THE NICOSIA MODEL
According to Runyon & Stewart (1987: 699), the Nicosia model provides a
sophisticated attempt to show the interrelationship between attributes of the
consumer, the consumer decision-making process, the marketing communication
of an organisation and feedback of the response of the consumer to the
organisation.
Schiffman & Kanuk (1987: 653) provide a simplistic explanation of the model
by stating that it is interactive in design, where the organisation attempts to
influence consumers through marketing actions and the consumers in return
influence the organisation through their purchase actions (or lack of action if
products are not purchased)
Runyon & Stewart (1987: 701) continues by stating that if the reaction or
attitude resulting from field one is favourable, the consumer will search for the
product and evaluate it in terms of other alternatives. Schiffman & Kanuk (1987:
654) add that the output of the second field is motivation to purchase the
organisation's brand. The evaluation could, however, also lead to rejection of the
brand although the model illustrates a positive response. The positive evaluation
leads to purchase of the product, the third field of the model
19
.According to Schiffman & Kanuk (1987: 654), the final field of the Nicosia
model, field four, consists of two types of feedback from the purchase experience.
The first type of feedback relates to the organisation where sales data will be
obtained and the second to the consumer in the form of experience, leaving the
consumer either satisfied or dissatisfied. The experience obtained by the consumer
relating to the product will affect the predisposition and attitudes with regard to
future messages from the organisation.
Limitations of the Nicosia model according to Runyon & Stewart (1987: 701),
are the questionable assumptions that the consumer has no prior knowledge or
experience of the product, as well as inadequate understanding of subfield two, the
influences and interrelationships among the consumer attributes. A final limiting
factor is that, for repetitive decisions (considered a significant part of consumer
purchases), the operation of the model is ambiguous.
Engel, Blackwell & Kollat (1978: 548) criticise the Nicosia model by claiming
that the model never received the necessary elaboration and empirical support nor
has it been revised to reflect changes. In conclusion to the Nicosia model, Runyon &
Stewart (1987: 701) express the opinion that despite the limitations of the model, it
attempts to explicitly incorporate the marketing actions of the organisation within a
model of consumer behaviour.
THE HOWARD-SHETH MODEL
The Howard-Sheth model of buying behaviour, according to Foxall (1990: 10),
presents a sophisticated integration of the psychological and various social and
marketing influences on consumer choice, into a coherent sequence of information
20
processing. Runyon & Stewart (1987: 704) and Foxall (1990: 10) add respectively
that the model attempts to explain rational brand choice behaviour within the
constraints of incomplete information and limited individual capacities, and also
that it provides an empirically testable description of behaviour in terms of
cognitive functioning together with its outcomes.
Schiffman & Kanuk (1987: 654) explain the Howard-Sheth model (depicted in
Figure 2.4) a model that explicitly distinguishes between three different stages or
levels of decision-making, also referred to as levels of learning, namely extensive,
limited and routinised problem-solving.
Extensive problem-solving implies that the consumer has very little or no
knowledge and beliefs about brands. The consumer actively seeks information on a
number of alternatives at this point due to the lack of a brand preference. Foxall
(1990: 12) adds that in order to reduce brand ambiguity, the consumer is involved
in a decision process and undertakes prolonged deliberation contemplating which
brand to purchase or whether to buy at all.
Limited problem-solving occurs when the consumer cannot fully assess the
brand differences to arrive at a preference, since knowledge and beliefs about the
brands are only partially established. According to Foxall (1990: 12). Other factors
to be considered in limited problem-solving are that consumers have formed choice
criteria, know a few brands well and favour them equally because they have already
tried several brands at this stage.
Routinised problem solving
A type of purchasing scenario whereby the purchaser of a product or a service
has past experience with purchasing it and automatically makes the decision to
purchase again. Brand recognition plays a large part in routine response
Behaviour. It can also be referred to as habitual response Behaviour.
The value of the Howard-Sheth model, according to Runyon & Stewart (1987:
706), is that the model attempts to identify and organise major variables that may
influence consumer behaviour. The model is also perceived to be dynamic in
nature, since it reflects the complexity of consumer behaviour in an attempt to
understand it. The consumer is portrayed to form generalisations as a guide to
decision-making through an active information search from the environment by
employing past experiences.
Criticism towards the model, highlighted by Runyon & Stewart (1987: 706), is
that the hypothetical constructs portrayed in the model are not operationally
defined in unambiguous terms and the specific interrelationships are therefore
somewhat speculative.
ENGLE-BLACKWELL-MINIARD MODEL:
This model was originally developed in 1968 by Engle, Kollat and Blackwell
followed by number of researches on this model. Recently Miniard has contributed
this model in conjunction with Engle and Blackwell. It stands as one of the most
popular representation of buyer behaviour. The model is summarized in four
sections (1) Decision-process stages, (2) Information output, (3) Information
processing and (4) variables influencing the decision process.
21
Variables are grouped into four general categories: stimulus input, information
processing, decision process and variables influencing the decision process. The
model depicts buyer behaviour or decision process as the central focus of this
model defined under five basic decision process stages. These stages are motivation
and need recognition, search for information, alternative evaluation, purchase and
outcomes.
Similar to Howard-Sheth model the authors recognize two significantly
different modes of operation by buyers. One is described as extended problem
solving behaviour (EPS) which is categorized by high levels of involvement and high
level of perceived risk. In limited problem solving behaviour (LPS) the buyer is
operating under low level of involvements and low level of perceived risk. The
authors argue that the same basic model can be used to characterize both EPS and
LPS, depending on the degree of various stages used by the buyer.
These models are helpful in gaining new insight into complex and dynamic
buyer Behaviour. These models have their own pros and cons. Several other models
were also proposed but the typical, complicated and unpredicted nature of buyer
Behaviour could not be fully explained by anyone. Neither they establish a straight
input-output equation on buyer behaviour nor they provide a precise answer to the
why‟s or how‟s of buyer of buyer behaviour. It is essential to understand various
dimensions of buyer Behaviour for developing a sound marketing strategy for a
product or a service. The working on buyer mind is still a mystery for marketers.
SHETH FAMILY DECISION M AKING MODEL
Three comprehensive models presented were far all focusing on individual
decision making model. An alternative perspective considered the family as an
appropriate decision making unit. This model shows separate psychological
systems representing the distinct predispositions of the father, mother and other
family members. The separate predisposition leads into family buying decisions
which may be either individually or jointly determined. The model lists seven
factors that influences purchase decision are autonomous or joint: social class,
lifestyle, role orientation, family life cycle stage, perceived risk, service importance
and time pressure. The model suggests that joint decision making tends to prevail
in middle class families, newly married and close relation. It is suggested that joint
decision making is more prevalent in situations of high perceived risk and
uncertainty. The joint purchase decision is also considered important when there is
ample time to make a decision.
SHETH NEWMAN GROSS MODEL OF CONSUMPTION VALUES:
This model explains the reasons of selecting a product by the consumer. The
model concentrates on assessing consumption-relevant values that explain why
consumers buy a product or not. This model describes three central propositions:
(1) Consumer choices is a function of small number of consumption values, (2)
Specific consumption value make differential contribution in any given choice
situation and (3) Different consumption values are independent. The model
describes five consumption values that are core of this model. Functional value of a
22
consumer choice is the perceived functional utilitarian or physical performance

utility received from the choice’s attributes. This is associated with economic utility
theory. Social value of a choice is the perceived utility acquired because of the
association between one or more specific social groups and a consumer’s choice. A
consumer choice gains social value by being linked with positively or negatively
stereotyped demographic, socioeconomic and cultural ethnic groups.
Emotional value of a choice is perceived utility acquired from its capacity to
stimulate the consumer’s emotions or feelings. A choice acquires emotional value
when associated with specific feelings or when it triggers or sustain those feelings.
Products and services are frequently associated with emotional responses.
Epistemic value of a choice is the perceived utility that comes from the choice’s
ability to foster curiously, provide novelty and satisfy a desire for knowledge. New
purchase and consumption experiences, especially offer epistemic value.
Conditional value of a choice is the perceived utility acquired by a choice as an
outcome of some particular situation or circumstance facing the consumer.
The model proposes that consumer choice Behaviour may be influenced by
any or all of these five consumption values. The model is based on conceptual
composition and measurement of five component values in different consumer
choice situations. The model has already been tested in more than 200 consumer-
choice situations.
ANDREASAN MODEL
This model develops a general model of buyer’s choice behaviour based on
several conceptions about attitude formation and change drawn from social
psychology. According to Alan R. Andreasan the attitude changes are exposure of
various kinds of information. These exposures may be voluntary or involuntary. The
entire process comprises of four stages namely input stimuli, perception and
filtration, disposition changes and various feasible outcomes.
There are two principle strategies adopted by marketers to attract favourable
purchase decisions. Market segmentation strategy attempts to fit in existing
attitude and Behaviour in terms of service design, distribution etc., while service
differentiation strategy attempts to change attitude and behaviour to make the
consumer accept a particular service. Attitude formation and change are central
concept of this model. There is a difference between what the actual information is
and ways people perceive it. Information is not stored objectively but subjectively to
perceptual judgment. A marketer should try to build a favourable attitude in
consumer. This model is comprehensive, highly complex and based on the concepts
of consumer learning along with attitude formation as integral part.
Traditional theories concerning consumer behaviour were based on economic
theory whereas later researches discovered that consumers purchase impulsively
and influenced not only by family, friends, role models and advertisers, but also by
mood, situation and emotion. All reflects both the cognitive and emotional aspects
of consumer decision making.
23
3.4 REVISION POINTS

1) According to economic model buyer is a rational man and his buying decisions
are fully governed by the concept of utility. If the buyer has purchasing power
of choosing a set of services to meet his need.
2) Psychology has contributed lot to the marketers to understand the buyers. It
explains how consumers learn about a product and the way they can recall
from the memory, and the development of buying habits.
3) The buyer behaviour depends upon the relative strength of the three elements
in the personal ability.
4) The individual decision and behaviour are quite often influenced by the family
and the society.
5) The Nicosia model provides a sophisticated attempt to show the
interrelationship between attributes of the consumer, the consumer decision-
making process, the marketing communication of an organisation and
feedback of the response of the consumer to the organisation.
6) The Howard-Sheth model of buying behaviour, according to Foxall (1990: 10),
presents a sophisticated integration of the psychological and various social
and marketing influences on consumer choice, into a coherent sequence of
information processing.
1) What is Purpose and advantages of models of consumer Behaviour?
2) Explain the learning pavlovian model of consumer Behaviour
3) Explain about psycho analytical model of consumers
4) Explain the sociological of consumer Behaviour
5) Discuss Howard-Sheth model
3.6 SUMMARY
This lesson considered a number of models of human behaviour. These models
offered only a partial explanation of the way in which human beings and consumers
behave since they focused on only a small number of possible influences that could
possibly affect behaviour. The dynamic changes in these models could clearly be
highlighted, especially when considering current models, that have been revised a
number of times over a period of more than 20 years. All the models of consumer
behaviour attempted to explain all possible variables and influences on consumer
behaviour. Earlier attempts considered the possibility to explain models of
consumer behaviour by means of testable equations, often comparing a model to
that of a different author. The final model on consumer behaviour, the Engel,
Blackwell & Miniard model, provided a comprehensive discussion on the possible
influences on consumer behaviour, and more specifically the impact of influences
on the different stages of the decision-making process. The model provided the
latest thoughts on the subject of consumer behaviour and will, therefore, be used
as the basis for the discussion on the consumer decision process
3.9 ASSIGNMENTS
1) What aspects of consumer Behaviour would be most relevant for you to study
and why?
24
2) Discuss in detail about the models of consumer Behaviour

3) What is meant by consumer Behaviour? Explain interrelationship between
marketing strategy and consumer Behaviour?
4) Explain anyone model of Consumer Decision-making with relevant examples.
5) Explain the Howard Seth Model of Consumer Behaviour.
6) Explain anyone model of Consumer Behaviour in detail, giving suitable
examples.
7) Explain the Nicosia Model of Consumer Behaviour
8) Explain the Engel Blackwell and Miniard Model of Consumer Behaviour
9) Explain the Engel Blackwell and Miniard Model of Consumer Behaviour.
Discuss its applications and limitations in formulation of a marketing program
1) According to ----------- model buyer is a rational man and his buying decisions
are fully governed by the concept of utility
2) --------- represents potential purchasing power that a buyer has.
3) ----------- affect the spending and saving patterns.
4) ---------- play an important role in purchase decision.
1) Majumdar Ramanuj Consumer Behaviour: Insights from Indian Market PHI
Latest Edition R
2) Hoyer, MacInnis and Dasgupta Consumer Behaviour Biztantra Latest Edition
3) Evans Consumer Behaviour Wiley Indian Edition Latest Edition R\
4) Peter and Olson Consumer Behaviour & Marketing Strategy Tata McGraw-Hill
Latest Edition
5) Assael Henery Consumer Behaviour and Marketing Action Cengage Latest
Edition
6) indquist Jay D Consumer Behaviour Cengage Latest Edition.
1) Schiffman and Kanuk Consumer Behaviour Pearson IX Edition.
2) Loudon & Della Bitta Consumer Behaviour Tata McGraw-Hill IV Edition
Blackwell and Engel Consumer Behaviour Cengage Indian Edition
1) A university student has just purchased a new laptop computer. What factors
might cause this individual to experience post-purchase dissonance? How
might the student try to overcome it? How can the retailer who sold the
computer help reduce the student’s dissonance? How can the computer’s
manufacturer help?
3.12 KEYWORDS
Disposable personal income, income expectation, consumer credit, pavlovian
model, learning, the id, super ego, ego, individual decision extensive problem-
solving limited problem-solving, routinised problem solving
25
LESSON – 4
TYPES OF BUYING DECISION BEHAVIOUR

4.1 INTRODUCTION
Buying decision Behaviour varies from place to place and person to
person, either purchase of a detergent soup or hardy bikes. Buying decision
Behaviour become more complex in the result of more buying participants and
deliberation. There are different factors which affects buying decision behaviour.
Buying Decision Behaviour can be classified in to four different categories on the basis
of extent of involvement and extent of differences among the brands.
1) Complex Buying Behaviour
2) Dissonance Reducing Buying Behaviour
3) Habitual Buying Behaviour
4) Variety Seeking Buying Behaviour
4.2 OBJECTIVES
• Complex Buying Behaviour
• Dissonance Reducing Buying Behaviour
• Habitual Buying Behaviour
• Variety Seeking Buying Behaviour
4.3 CONTENTS
Complex Buying Behaviour.
Dissonance Reducing Buying Behaviour
Habitual Buying Behaviour
Variety Seeking Buying Behaviour
26
COMPLEX BUYING BEHAVIOUR:

Consumers go through complex buying behaviour when they are highly
involved in a purchase and aware of significant differences among brands.
Consumers are highly involved when the product is expensive, bought infrequently,
risky and highly self-expressive. Typically the consumer does not know much about
the product category and has much to learn. For example, a person buying a
personal computer may not know what attribute to look for. Many of the product
features like “16K.memory” “disc storage”, “screen resolution” carry no meaning to
him or her.
This buyer will pass through a learning process characterized by first
developing beliefs about the product, then attitudes, and then making a thoughtful
purchase choice. The marketer of a high-involvement product must understand the
information-gathering and evaluation behaviour of high-involvement consumers.
The marketer needs to develop strategies that assist the buyer in learning about the
attributes of the product class, their relative importance, and the high standing of
the company’s brand on the more important attributes. The marketer needs to
differentiate the brand’s features, use mainly print media and long copy to describe
the brand’s benefits, and motivate store sales personnel and the buyer’s
acquaintances to influence the final brand choice.
DISSONANCE-REDUCING BUYING BEHAVIOUR:
Sometimes the consumer is highly, involved in a purchase but sees little
difference in the brands. The high involvement is again based on the fact that the
purchase is expensive, infrequent, and risky. In this case, the buyer will shop
around to learn what is, available but will buy fairly quickly because brand
differences are not pronounced. The buyer may respond primarily to a good price or
to purchase convenience.
After the purchase, the consumer might experience dissonance that stems
from noticing certain disquieting features of the product or hearing favourable
things about other brands. The consumer will be alert to information that might
justify his or her decision. The consumer will first act, then acquire new beliefs and
end up with a set of attitudes. Here marketing communications should aim to
supply beliefs and evaluations that help the consumer feel good about his or her
brand choice.
HABITUAL BUYING BEHAVIOUR:
Many products are bought under conditions of low consumer involvement and
the absence of significant brand differences. Consider the purchase of salt.
Consumers have little involvement in this product category. They go to the store
and reach for the brand. If they keep reaching for the same brand, it is out of habit,
not strong brand loyalty.
There is good evidence that consumers have low involvement with most low-
cost, frequently purchased products. Consumer behaviour in these cases does not
pass through the normal belief/attitude/behaviour sequence. Consumers do not
27
search extensively for information about the brands, evaluate their characteristics,
and make a weighty decision on which brand to buy.
Instead, they are passive recipients of information as they watch television or
see print ads. Ad repetition creates brand familiarity rather than brand conviction.
Consumers do not form a strong attitude towards a brand but select it because it is
familiar. After purchase, they may not even evaluate the choice because they are
not highly involved with the product. So the buying process is brand beliefs formed
by passive learning, followed by purchase behaviour, which may be followed by
evaluation.
Marketers of low-involvement products with few brand differences find it
effective to use price and sales promotions to stimulate product trial, since buyers
are not highly committed to any brand. In advertising a low-involvement product, a
number of things should be observed. The ad copy should stress only a few key
points Visual symbols and Imagery are important because they can easily be
remembered and associated with the brand.
The ad campaigns should go for high repetition with short- duration messages.
Television is more effective than print media because it is a low-involvement
medium that is suitable for passive learning. Advertising planning should be based
on classical conditioning theory where the buyer learns to identify a certain product
by a symbol that is repeatedly attached to it.
Marketers can try to convert the low-involvement product into one of higher
involvement. The ways are:
i. This can be accomplished by linking the product to some involving issue, as
when Crest toothpaste is linked to avoiding cavities.
ii. The product can be linked to some involving personal situation, for
instance, by advertising a coffee brand early in the morning when the consumer
wants to shake oft sleepiness.
iii. The advertising might seek to trigger strong emotions related to personal
values or ego defense.
iv. An important product feature might be added to a low-involvement product,
such as by fortifying a plain drink with vitamins,
These strategies at best raise consumer involvement from a low to a moderate
level, they do not propel the consumer into highly involved buying behaviour.
VARIETY-SEEKING BUYING BEHAVIOUR:
Some buying situations are characterised by low consumer involvement but
significant brand differences. Here consumers are often observed to do a lot of
brand’ switching. An example occurs in purchasing cookies. The consumer has
some beliefs, chooses a brand of cookies without much evaluation, and evaluates it
during consumption. But next time, the consumer may reach for another brand out
of boredom or a wish for a different taste. Brand switching occurs for the sake of
variety rather than dissatisfaction.
28
The marketing strategy is different for the market leader and the minor brands
in this product category. The market leader will try to encourage habitual buying
Behaviour by dominating the shelf space, avoiding out-of-stock conditions, and
sponsoring frequent reminder advertising. Challenger firms will encourage variety
seeking by offering lower prices, deals, coupons, free samples and advertising that
presents reasons for trying something new.
BUYING ROLES
For making strategic decisions the marketers have to identify the buyers who
make the final buying decisions. It is truly a big task before the marketers to
identify the target buyers of the particular service.
1) Influencer: Several people may be involved in a particular purchase decision,
but all of them are not consumers. A person who has influence, whose views
or advice is given wheightage while taking the final decisions
2) Gatekeepers: Family members who control the flow of information about a
product or service into the family.
3) Initiator: The person who is the first to suggest or think of the idea of
purchasing a product or service.
4) Decider: The person who finally takes the decisions of whether to buy, what to
buy, how to buy and from where to buy.
5) Buyer: The person who actually buy the product/service after making
payments.
6) User: The person who actually uses or consumes the product or service.
decision.
4.4 REVISION POINTS
1) Consumers go through complex buying behaviour when they are highly
Consumers are highly involved when the product is expensive, bought
infrequently, risky and highly self-expressive.
2) Sometimes the consumer is highly, involved in a purchase but sees little
difference in the brands.
3) Many products are bought under conditions of low consumer involvement and
the absence of significant brand differences.
4) Some buying situations are characterised by low consumer involvement but
significant brand differences.
1) What are the types of buying decision Behaviour?
2) What is Dissonance-Reducing Buying Behaviour?
3) What is Habitual Buying Behaviour?
4) What is Variety-Seeking Buying Behaviour?
4.6 SUMMARY
High involvement always has a strong affective component, and this does not
necessarily mean a high cost commitment. People also fall in love with cheap
products. So involvement does not always equate to price. A high-involvement good
29
is not necessarily a high-priced one, nor is a low-involvement good necessarily a

cheap one. Smokers can become very involved with their brand of cigarettes costing
very few (Take the example of beedi or gold flake cigarette). Conversely, some people
may not get involved deeply with a highly costly 5-star hotel. Many researchers
distinguished four types of consumer buying behaviour based on the degree of
buyer involvement and the degree of differences among brands. The four types are
named described are Complex Buying Behaviour, Dissonance Reducing Buying
Behaviour, Habitual Buying Behaviour and Variety Seeking Buying Behaviour.For
making strategic decisions the marketers have to identify the buyers who make the
final buying decisions.
1) Consumers go through ---------- buying behaviour when they are highly
2) Many products are bought under conditions of low consumer involvement and
the absence of significant brand differences is called ----------
3) ---------- more effective than print media because it is a low-involvement
medium that is suitable for passive learning.
4) Buying situations are characterised by low consumer involvement but
significant brand difference is called ----------
1) Consumer Behaviour, Blackwell and others, India Edition, Cengage learning.
2) Consumer Behaviour, Indian Edition – Michael R. Solomon, PHI learning PVT
Ltd.,
3) Consumer behaviour, Special Indian Edition, Deli Hawkins Roger J Best and
others Tata McGraw Hill.
4) Consumer Behaviour and Marketing Strategy By J. Paul Peter and Jerry C.
Olson, Special Indian Edition – Tata McGraw Hill.
4.9 ASSIGNMENTS
1) Discuss the emerging trends in Indian market with special reference to
changing consumer Behaviour. Explain the application of understanding
consumer Behaviour in marketing decisions.
1) Consumer Behaviour – Ramanuj Majumdar PHI learning PVT Ltd.,
2) Consumer Behaviour, CL Tyagi and Arun kumar, Atlantic publishers.
3) Consumer behaviour, India Edition, Jay D. Lindqnist and M. Joseph Sirgy,
Cengage learning.
4) Consumer behaviour, concepts, Applications and cases – MS Raju, Dominic
Xardel, Vikas publishing House PVT Ltd.,
5) Consumer Behaviour, By David L. LOUDON Albert J. Della Bitta – India
Edition Tata Mcgraw Hill. Co
The task for each group is to brainstorm a tagline, or slogan for a new product,
the “VibeAwake”. This ingenious new product is a mattress pad designed to serve
likean alarm clock. Instead of waking the consumer up with a loud alarm, the
30
mattress pad can be set to shake the consumer awake. VibeAwake’s parent
company, Linens Only is planning to roll this new product out in the summer
months, as parents and students are purchasing supplies to take to the university.
When the product is initially introduced, they plan that the first big target customer
group will be university students, especially first year students. The executives at
Linens Only plan that as Vide Awake moves through its life cycle, they will target
other major customer segments such as the deaf community. Once you have settled
on a tagline, you must provide a rationale /explanation for the tagline that you
have created.
1) Tagline:
2) Rationale/Explanation of Choice
4.12 KEYWORDS
Complex Buying Behaviour, Dissonance-Reducing Buying Behaviour, Habitual
Buying Behaviour, Variety-Seeking Buying Behaviour, purchasing cookies, Visual
symbols, Imagery

31
LESSON – 5
BUYING MOTIVES
5.1 INTRODUCTION
Buying motive is the urge or motive to satisfy a desire or need that makes
people buy goods or services. Behind every purchase there is a buying motive. It
refers to the thoughts, feelings, emotions and instincts, which arouse in the buyers
a desire to buy an article. A buyer does not buy because s/he has been persuaded
by the salesman, but s/he buys for the aroused desire in him or her. Motives
should be distinguished from instincts.
5.2 OBJECTIVES
• Promotional product buying motives
• Rational product buying motives:
• Emotional patronage buying motives and
• Rational patronage buying motives.
5.3 CONTENTS
Promotional product buying motives
Rational product buying motives:
Emotional patronage buying motives and
Rational patronage buying motives.
A motive is simply a reason for carrying out a particular behaviour and not an
automatic response to a stimulus, whereas instincts are pre-programmed
responses, which are inborn in the individual and involuntary. Thus hunger is an
instinct whereas desire to purchase pizza is a buying motive. According to Prof. D.
J. Duncan, “Buying Motives are those influences or considerations which provide
the impulse to buy, induce action and determine choice in the purchase of goods
and services.” Buying motives are can be divided by the following way:
Product Buying Motives:

Product buying motives refer to those influences and reasons, which prompt
(i.e. induce) a buyer to choose a particular product in preference to other products.
They include the physical attraction of the product (i.e. the design, shape,
dimension, size, colour, package, performance, price etc. of the product) or the
32
psychological attraction of the product (i.e. the enhancement of the social prestige
or status of the purchaser through its possession), desire to remove or reduce the
danger or damage to life or body of the possessor, etc. In short, they refer to all
those characteristics of a product, which induce a buyer to buy it in preference to
other products. Product buying motives may be sub-divided into two groups, viz.,
(1) emotional product buying motives and (2) rational product buying motives.
EMOTIONAL PRODUCT BUYING MOTIVES:
When a buyer decides to purchase a product without thinking over the matter
logically and carefully (i.e., without much reasoning), she is said to have been
influenced by emotional product buying motives. Emotional product buying motives
include the following:
1. Pride or Prestige:
Pride is the most common and strongest emotional buying motive. Many
buyers are proud of possessing some product (i.e., they feel that the possession of
the product increases their social prestige or status). In fact, many products are
sold by the sellers by appealing to the pride prestige of the buyers. For instance,
diamond merchants sell their products by suggesting to the buyers that the
possession of diamonds increases their prestige or social status.
2. Emulation or Imitation:
Emulation, i.e., the desire to imitate others, is one of the important emotional
buying motives. For instance, a housewife may like to have a silk saree for the
simple reason that all the neighbouring housewives have silk sarees.
3. Affection:
Affection or love for others is one of the stronger emotional buying motives
influencing the purchasing decisions of the buyers. Many goods are purchased by
the buyers because of their affection or love for others. For instance, a husband
may buy a costly silk saree for his wife or a father buy a costly watch for his son or
daughter out of his affection and love.
4. Comfort or desire for comfort:
Desire for comfort (i.e., comfortable living) is one of the important emotional
buying motives. In fact, many products are bought comfort. For instance, fans,
refrigerators, washing machines, cushion beds, etc. are bought by people because
of their desire for comfort.
5. Sex appeal or sexual attractions:
Sex appeal is one of the important emotional buying motives of the
buyers. Buyers buy and use certain things, as they want to be attractive to the
members of the opposite sex. Men and women buy cosmetics, costly dresses, etc.,
because of this emotional motive, i.e., sex appeal.
6. Ambition:
Ambition is one of the emotional buying motives. Ambition refers to the desire
to achieve a definite goal. It is because of this buying motive that, sometimes,
customers buy certain things. For instance, it is the ambition that makes many
33
people, who do not have the facilities to pursue their college education through
regular colleges, pursue their education through correspondence courses.
7. Desire for distinctiveness or individuality:
Desire for distinctiveness, i.e., desire to be distinct from others, is one of the
important emotional buying motives. Sometimes, customers buy certain things,
because they want to be in possession of things, which are not possessed by others.
Purchasing and wearing a particular type of dress by some people is because of
their desire for distinctiveness or individuality.
8. Desire for recreation or pleasure:
Desire for recreation or pleasure is also one of the emotional buying motives.
For instance, radios, musical instruments, etc. are bought by people because of
their desire for recreation or pleasure.
9. Hunger and thirst:
Hunger and thirst are also one of the important emotional buying motives.
Foodstuffs, drinks, etc. are bought by the people because of this motive.
10. Habit:
Habit is one of the emotional considerations influencing the purchasing
decision of the customers. Many customers buy a particular thing because of habit,
(i.e. because they are used to the consumption of the product). For instance, many
people purchase cigarettes, liquors, etc. because of sheer habit.
RATIONAL PRODUCT BUYING MOTIVES:
When a buyer decides to buy a certain thing after careful consideration (i.e.
after thinking over the matter consciously and logically), s/he is said to have been
influenced by rational product buying motives. Rational product buying motives
include the following:
Safety or Security:
Desire for safety or security is an important rational buying motive influencing
many purchases. For instance, iron safes or safety lockers are bought by the people
because they want to safeguard their cash, jewelries etc., against theft. Similarly,
vitamin tablets, tonics, medicines, etc., are bought by the people because of this
motive, i.e. they want to safeguard their health and protect themselves against
diseases.
2. Economy:
Economy, i.e. saving in operating costs, is one of the important rational buying
motives. For instance, Hero Honda bikes are preferred by the people because of the
economy or saving in the operating cost, i.e. petrol costs.
3. Relatively low price:
Relatively low price is one of the rational buying motives. Most of the buyers
compare the prices of competing products and buy things, which are relatively
cheaper.
34
4. Suitability:
Suitability of the products for the needs is one of the rational buying motives.
Intelligent buyers consider the suitability of the products before buying them. For
instance, a buyer, who has a small dining room, naturally, goes in for a small
dining table that is suitable, i.e. that fits in well in the small dining room.
5. Utility or versatility:
Versatility or the utility of a product refers to that quality of the product, which
makes it suitable for a variety of uses. Utility of the product is one of the important
rational buying motives. People, often, purchase things that have utility, i.e. that
can be put to varied uses.
6. Durability of the product:
Durability of the product is one of the most important rational buying motives.
Many products are bought by the people only on the basis of their durability. For
instance, buyers of wooden furniture go in for teak or rosewood table, though they
are costlier, as they are more durable than ordinary wooden furniture.
7. Convenience of the product:
The convenience of the product (i.e. the convenience the product offers to the
buyers) is one of the important rational product buying motives. Many products are
bought by the people because they are more convenient to them. For instance,
automatic watches, gas stoves, etc., are bought by the people because of the
convenience provided by them.
PATRONAGE BUYING MOTIVES
Patronage buying motives refer to those considerations or reasons, which
prompt a buyer to buy the product wanted by him from a particular shop in
preference to other shops. In other words, they are those considerations or reasons,
which make a buyer, patronise a particular shop in preference to other shops while
buying a product.
Patronage buying motives also may be sub-divided into two groups viz. a)
Emotional patronage buying motives and b) Rational patronage buying motives.
A. EMOTIONAL PATRONAGE BUYING MOTIVES:
When a buyer patronises a shop (i.e. purchases the things required by him
from a particular shop) without applying his mind or without reasoning, he is said
to have been influenced by emotional patronage buying motives. Emotional
patronage buying motives include the following:
1. Appearance of the shop:
Appearance of the shop is one of the important emotional patronage buying
motives. Some people make their purchases from a particular shop because of good
or attractive appearance of the shop,
2. Display of goods in the shop:
Attractive display of goods in the shop also makes the buyers patronise a
particular shop.
35
3. Recommendation of others:
Recommendation of others also constitutes one of the important emotional
patronage buying motives. Some people purchase their requirements from a
particular shop because that shop has been recommended to them by others, i.e.,
by their friends and relatives.
4. Imitation:
Imitation also is one of the emotional patronage buying motives influencing the
purchases of buyers. Some people make their purchases from a particular shop
just because other people make their purchases from that shop.
5. Prestige:
Prestige is one of the emotional patronage buying motives of the buyers. For
instance, some people consider it a prestige to take coffee from a five-star hotel.
6. HABIT:
Habit is also one of the important emotional patronage buying motives. Some
people make their purchases from a particular shop for the simple reason that they
have been habitually making their purchases from that shop.
B. RATIONAL PATRONAGE BUYING MOTIVES
When a buyer patronises a shop after careful consideration (i.e. after much
logical reasoning and careful thinking) he is said to have been influenced by
rational patronage buying motives. Rational patronage buying motives include the
following:
1. Convenience:
Convenient location proximity of a shop is one of the considerations
influencing the purchases of many buyers from a particular shop. Many buyers,
usually, buy their requirements from a near-by shop, as it is convenient to them to
make their purchases.
Similarly, convenient working hours of the shop also influence the purchases
of good many buyers. For instance, if a shop works for a longer period of time every
day and even on Sundays, it will be very convenient to the buyers. As such, many
buyers may make their purchases from such a shop.
2. Low price charged by the shop:
Price charged by the shop also influences the buyers to patronise a particular
shop. If the price charged by a shop for a particular product is relatively cheaper,
naturally, many people will make their purchases from that shop.
3. Credit facilities offered:
The credit facilities offered by a store also influence the buying of some people
from a particular shop. People who do not have enough money to make cash
purchases every time prefer to make their purchases from a shop which offers
credit facilities.
4. Services offered:
The various sales and after-sale services, such as acceptance of orders
through phone, home delivery of goods, repair service, etc., offered by a shop also
36
induce the buyers to buy their requirements from that shop. Rational buyers are,
often, influenced by the various services or facilities offered by the shop.
5. Efficiency of salesmen:
The efficiency of the salesmen employed by a shop also influences the people
in patronising a particular shop. If the employees are efficient and are capable of
helping the buyers in making their purchases, people naturally would flock to such
a shop.
6. Wide choice:
Wide choice of goods offered by a shop is one of the rational considerations
making the buyers patronise a particular shop. People generally prefer to make
their purchases from a shop, which offers wide choice (i.e. wide varieties of goods).
7. Treatment:
The treatment meted out by a shop to the customers is one of the rational
considerations influencing the buyers to patronise a particular shop. Usually,
people would like to purchase their requirements from a shop where they get
courteous treatment.
8. Reputation of the shop:
Reputation of the shop for honest dealings is also one of the rational patronage
buying motives. Usually, people would like to make their purchases from a store
having reputation for fair dealings.
5.4 REVISION POINTS
1) A motive is simply a reason for carrying out a particular behaviour and not an
automatic response to a stimulus, whereas instincts are pre-programmed
responses, which are inborn in the individual and involuntary.
2) Product buying motives refer to those influences and reasons, which prompt
(i.e. induce) a buyer to choose a particular product in preference to other
products.
3) When a buyer decides to purchase a product without thinking over the matter
logically and carefully (i.e., without much reasoning), she is said to have been
influenced by emotional product buying motives.
4) When a buyer decides to buy a certain thing after careful consideration (i.e.
after thinking over the matter consciously and logically), s/he is said to have
been influenced by rational product buying motives.
5) Patronage buying motives refer to those considerations or reasons, which
preference to other shops. In other words, they are those considerations or
reasons, which make a buyer, patronise a particular shop in preference to
other shops while buying a product.
6) When a buyer patronises a shop (i.e. purchases the things required by him
from a particular shop) without applying his mind or without reasoning, he is
said to have been influenced by emotional patronage buying motives.
7) When a buyer patronises a shop after careful consideration (i.e. after much
logical reasoning and careful thinking) he is said to have been influenced by
rational patronage buying motives.
37

1) What is meant by the term 'Buying Motives?
2) What is emotional buying motives?
3) What is rational buying motives?
5.6 SUMMARY
Marketers try to satisfy consumer needs, but the reasons people purchase any
product can vary widely. The identification of consumer motives is an important
step to ensure that a product will satisfy appropriate needs. Chapter Summary
Traditional approaches to consumer Behaviour focus on the abilities of products to
satisfy rational needs (utilitarian motives), but hedonic motives (e.g., the need for
exploration or for fun) also play a key role in many purchase decisions. As Maslow’s
Hierarchy of Needs demonstrates, the same product can satisfy different needs for
different people and in different situations.
1) Thus hunger is an instinct whereas desire to purchase pizza is a ----------
2) ---------- is the most common and strongest emotional buying motive
3) When a buyer decides to buy a certain thing after careful consideration is
called ---------?
4) ---------- buying motives refer to those considerations or reasons, which
preference to other shops.
5) When a buyer patronizes a shop (i.e. purchases the things required by him
from a particular shop) without applying his mind or without reasoning is
called ----------
1) R. Meyer and E.J. Johnson, Empirical Generalizations in the Modeling of
Consumer Choice, Marketing Science 14, G180 (1995).
2) J.E. Slaughter, E.F. Sinar and S. Highhouse, Decoy Effects and Attribute-Level
Inferences, Journal of Applied Psychology 84, 823-828 (1999).
3) Engel, J. F., Kollat, D. T., Blackwell, R. D. (1968). Consumer Behaviour. New
York: Holt, Rinehart and Winston. p. 652
4) De Pelsmacker,P., Geuens, M., Van den Berg, J. (2007). Marketing
Communications A European Perspective. Harlow: Pearson Education Ltd.
p. 610.
5.8 ASSIGNMENTS
1) Distinguish between emotional and rational buying motives
2) A marketer in the cosmetics industry once remarked: “In the factory, we make
cosmetics; in the drugstore we sell hope” how does this relate to the marketing
concept and the need of the marketers to understand consumer Behaviour?
1) Bennet and Kassarjian, Consumer BehaViour, Prentice Hall of India, New Delhi
2) Michael R. Solomon, Consumer Behaviour, PHI Learning Private Limited, New
Delhi, 2011
38
3) Ramanuj Majumdar, Consumer Behaviour, Prentice Hall of India, New Delhi,

2011
4) Loudon and Della Bitta, Consumer Behaviour: Concepts and Applications, Tata
McGraw Hill. New Delhi,2007
5) Berkman & Gilson, Consumer Behaviour: Concepts and Strategies, Kent
Publishing Company..
The Public Transport Authority in India is planning an advertising campaign to
encourage people to switch from private cars to mass transit. Give examples of how
the department can use the following strategies to change commuters’ attitudes:
1) Changing the basic motivational function.
2) Changing beliefs about public transport.
3) Using self-perception theory.
4) Using cognitive dissonance.
5.12 KEYWORDS
Buying motives, Product Buying Motives, Emotional Product Buying Motives,
Emulation, Sex Appeal, Ambition, Rational Product Buying Motives, Patronage
Buying Motives, Emotional Patronage Buying Motives, Rational Patronage Buying
Motives

39
LESSON – 6
CONSUMER RESEARCH PROCESS

6.1 INTRODUCTION
In order to implement the marketing concept, marketers require information
about the characteristic needs, wants and desires of their target markets. To
undertake marketing effectively, businesses need information. Information about
customer wants, market demand, competitors, distribution channels etc.
6.2 OBJECTIVES
After going through this lesson you should be able:
• To understand the concept of Consumer research
• To learn the steps involved in the marketing research process.
• To understand the functions and important issues of each step in the process.
6.3 CONTENTS
Research process
Qualitative Research vs. Quantitative Research
CONSUMER RESEARCH PROCESS
Before moving into the consumer research process, let us first understand a
very key issue in consumer research, i.e., the difference between market research
and marketing research.
Marketing Research vs. Market Research
You will find that these terms often are used interchangeably, but technically
there is a difference. Market research deals specifically with the gathering of
information about a market's size and trends. Marketing research covers a wider
range of activities. While it may involve market research, marketing research is a
more general systematic process that can be applied to a variety of marketing
problems.
The eight-Step Research Process
We are depicting the consumer research process in eight steps:
1. a. Problem/opportunity identification, b. Problem/ opportunity formulation
2. Create the research design
3. Choosing a basic method of research
4. Selecting the sampling procedure
5. Data collection
6. Data analysis
7. Preparing and writing the report
8. Follow-up
Step one a: problem/opportunity identification
1. The research process begins with the recognition of a business problem or
opportunity.
2. Problem/opportunity emerges when: Environment change.
40
3. Examples: Technological breakthrough, new legal policy, social change, high

unemployment rate.
4. How to know there is an environmental change? Continuous information
collection/search, internal data, managerial experience, or even gut feeling may
help.
5. Two fundamental questions that is asked: (1) should we alter our marketing
mix in order to perform better? (2) If so, what should we do?
6. Another important question could be: Can we predict possible
environmental change? This can be done by using historical data and trying to find
trend and factors that affect the emergence of such trend.
Three key questions to answer at the problem/opportunity definition stage
1. Why is the information being sought? (1) Make sure what conclusions you
want to get and you will know what information you will need (backward approach).
(2) If I omit this piece of information, what will happen?
2. Does the information already exist? Secondary data, internal data are
sufficient? Or we have to acquire primary, external data?
3. Can the question really be answered? It suggests that you have to know
your limitations. You may find difficulties in finishing your research if: (1) the
problem is too broad, too complicated. (2) Involve tremendous resource input. (3)
The environment is too unstable, (4) The issue is too sensitive etc.
Problem Immediate solution Immediate solution
requirement not required
Occurrence of problem expected Routine Planning

Occurrence of problem unexpected Emergency Evolving
Table 1 Types of problems
Step One b: Problem/Opportunity Formulation
1) Information is needed to clarify your research question.
2) You can use exploratory research, literature review, personal interview, focus
group and other techniques to obtain information to formulate your research
question.
3) Exploratory research: small-scale research undertaken to define the exact
nature of the problem and to gain a better understanding of the environment
within which the problem has occurred.
4) Literature review. Obtain secondary from secondary literature, such as
newspapers, magazines, books and professional journals. You have to know
that their usage and credibility will be different.
5) Interview with the related parties.
6) Focus group: Usually a moderator in an in-depth discussion leads a small
group on one particular topic or concept.
The decision problem faced by management must be translated into a market
research problem in the form of questions that define the information that is
41
required to make the decision and how this information can be obtained. For
example, a decision problem may be whether to launch a new product. The
corresponding research problem might be to assess whether the market would
accept the new product.
The objective of the research should be defined clearly. To ensure that the true
decision problem is addressed, it is useful for the researcher to outline possible
scenarios of the research results and then for the decision maker to formulate
plans of action under each scenario. The use of such scenarios can ensure that the
purpose of the research is agreed upon before it commences.
Setting up the Research Objectives
1) A statement of research objectives. For example: "This research investigates
the relationship between demographic background and musical preference.
More specifically, this study studies how age, sex, income level and educational
level determine consumer preference on film and classical music."
2) Declare the precise information needed.
3) It should be specific and unambiguous as possible.
4) The entire research efforts should be directed to accomplish the
research objectives.
5) Sometimes, theories and models are set up.
6) Sometimes, hypotheses are set up.
Step Two: Creating the Research Design
A plan that researchers follow to answer the research objectives and/or test
the hypotheses.
Whether the design will be Descriptive and/or Causal (diagnostic and predictive)?
Descriptive design: Answer the questions who, what, when, and how.
In quantitative research, we may calculate the mean, median, mode or S.D. of
the data collected. For example: 35% of the respondents said they like classical
music.
Causal design: Examine whether one variable causes or determine the value
of another variable (two variables at least).
Independent variable (The cause, example demographic variables) and
dependent variable (the outcome, musical preference).
In quantitative research, you may use regression analysis to analyze the
association between two (or more) variables. For example, the older the respondent,
the more he likes classical music. Now let us now look more in details at each of
the three categories of marketing research, viz.,
• Exploratory research
• Descriptive research
• Causal research
These classifications are made according to the objective of the research.
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• Exploratory Research has the goal of formulating problems more precisely,

clarifying concepts, gathering explanations, gaining insight, eliminating impractical
ideas, and forming hypotheses. Exploratory research can be performed using a
literature search, surveying certain people about their experiences, focus groups,
and case studies. When surveying people, exploratory research studies would not
try to acquire a representative sample, but rather, seek to interview those who are
knowledgeable and who might be able to provide insight concerning the
relationship among variables. Exploratory research may develop hypotheses, but it
does not seek to test them. Exploratory research is characterized by its flexibility.
• Descriptive research is more rigid than exploratory research and seeks to
describe users of a product, determine the proportion of the population that uses a
product, or predict future demand for a product. As opposed to exploratory
research, descriptive research should define questions, people surveyed, and the
method of analysis prior to beginning data collection. In other words, the who,
what, where, when, why, and how aspects of the research should be defined. Such
preparation allows one the opportunity to make any required changes before the
costly process of data collection has begun.
There are two basic types of descriptive research longitudinal studies and
cross-sectional studies.
Longitudinal studies are time series analyses that make repeated
measurements of the same individuals, thus allowing one to monitor Behaviour
such as brand switching. However, longitudinal studies are not necessarily
representative since many people may refuse to participate because of the
commitment required. Cross-sectional studies sample the population to make
measurements at a specific point in time. A special type of cross-sectional analysis
is a cohort analysis, which tracks an aggregate of individuals who experience the
same event within the same time interval over time. Cohort analyses are useful for
long-term forecasting of product demand.
• Causal research seeks to find cause and affect relationships between
variables. It accomplishes this goal through laboratory and field experiments.
Step three: Choosing a Basic Method of Research
1) Analysis of secondary data.
2) Survey. Obtain factual (e.g., age) and attitudinal (e.g., musical preference)
data.
3) Observation. Obtain Behavioural data, researchers and subjects do not have
direct interaction.
4) Experiment. The researchers deliberately change the independent variable(s)
and record the effects of that (those) variable(s) on other dependent variable(s).
Experiments are frequently used in testing causality.
Primary Data
Often, secondary data must be supplemented by primary data originated
specifically for the study at hand. Some common types of primary data are:
43
• Demographic and socioeconomic characteristics

• Psychological and lifestyle characteristics
• Attitudes and opinions
• Awareness and knowledge - for example, brand awareness
• Intentions - for example, purchase intentions. While useful, intentions are not
a reliable indication of actual future Behaviour.
• Motivation - a person's motives are more stable than his/ her Behaviour, so
motive is a better predictor of future Behaviour than is past Behaviour.
• Behaviour
Secondary Data
Data that previously may have been collected for other purposes but that can
be used in the immediate study. Secondary data may be internal to the firm, such
as sales invoices and warranty cards, or may be external to the firm such as
published data or commercially available data. The government census is a
valuable source of secondary data.
Secondary data has the advantage of saving time and reducing data gathering
costs. The disadvantages are that the data may not fit the problem perfectly and
that the accuracy may be more difficult to verify for secondary data than for
primary data.
• Some secondary data is republished by organizations other than the original
source. Because errors can occur and important explanations may be missing
in republished data, one should obtain secondary data directly from its source.
One also should consider who the source is and whether the results may be
biased. There are several criteria that one should use to evaluate secondary
data.
• Whether the data is useful in the research study.
• How current the data is and whether it applies to time period of interest.
• Errors and accuracy - whether the data is dependable and can be verified.
• Presence of bias in the data. Specifications and methodologies used, including
data collection method, response rate, quality and analysis of the data, sample
size and sampling technique, and questionnaire design.
• Objective of the original data collection.
• Nature of the data, including definition of variables, units of measure,
categories used, and relationships examined.
Primary data can be obtained by communication or by observation.
Communication involves questioning respondents either verbally or in writing. This
method is versatile, since one needs only to ask for the information; however, the
response may not be accurate. Communication usually is quicker and cheaper than
observation. Observation involves the recording of actions and is performed by
either a person or some mechanical or electronic device. Observation is less
versatile than communication since some attributes of a person may not be readily
observable, such as attitudes, awareness, knowledge, intentions, and motivation.
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Observation also might take longer since observers may have to wait for appropriate
events to occur, though observation using scanner data might be quicker and more
cost effective. Observation typically is more accurate than communication.
Personal interviews have an interviewer bias that mail-in questionnaires do not
have. For example, in a personal interview the respondent's perception of the
interviewer may affect the responses.
Step four: Selecting the Sampling Procedure
1) Sample is a subset of the whole population.
2) Why sampling? May be.. .Population is too big, population unknown,
insufficient resources to conduct a census.
3) Sample should be "representative" — should help the researchers to make
inference about the population.
Sampling Plan
The sampling frame is the pool from which the interviewees are chosen. The
telephone book often is used as a sampling frame, but have some shortcomings.
Telephone books exclude those households that do not have telephones and those
households with unlisted numbers. Since a certain percentage of the numbers
listed in a phone book are out of service, there are many people who have just
moved who are not sampled. Such sampling biases can be overcome by using
random digit dialing. Mall intercepts represent another sampling frame, though
there are many people who do not shop at malls and those who shop more often
will be over-represented unless their answers are weighted in inverse proportion to
their frequency of mall shopping.
In designing the research study, one should consider the potential errors. Two
sources of errors are random sampling error and non-sampling error. Sampling
errors are those due to the fact that there is a non-zero confidence interval of the
results because of the sample size being less than the population being studied.
Non-sampling errors are those caused by faulty coding, untruthful responses,
respondent fatigue, etc.
There is a tradeoff between sample size and cost. The larger the samples size
the smaller the sampling error, but the higher the cost. After a certain point the
smaller sampling error cannot be justified by the additional cost.
While a larger sample size may reduce sampling error, it actually may increase
the total error. There are two reasons for this effect. First, a larger sample size may
reduce the ability to follow up on non-responses. Second, even if there are a
sufficient number of interviewers for follow-ups, a larger number of interviewers
may result in a less uniform interview process.
Two ways of thinking about sampling:
A. Sampling for policy makers, or "describers". A policymaker is interested in
questions such as "How many people are unemployed?" Policy makers typically use
cumulative statistics and confidence intervals.
45
B. Sampling for academics, or "modelers". An academic is interested in

questions such as "Why are people unemployed?"
A Scientific Sample Survey or Poll will have these characteristics:
1. It samples members of the defined population in a way such that each
member has a known nonzero probability of selection. Unless this criterion is
adhered to, there exists no scientific basis for attempting to generalize results
beyond those individuals who completed the survey.
2. It collects data from a sufficient number of sampled units in the
population to allow conclusions to be drawn about the prevalence of the
characteristic in the entire study population with desired precision (for example, +
or — 5%) at a stated level of confidence (e.g. 95%).
Sampling distribution: the distribution of all possible sample statistics of all
possible samples drawn from a population.
The number of different samples that can be drawn is large, but finite. The
distribution of sample statistics assumed to be distributed normally, but eg, the
mean of the sample distributions is not necessarily the population mean.
Every statistic in a sample might have a different sampling distribution.
Standard error: The distributions of sample statistics are based on probability
theory. In a simple statement — certain proportions of sample statistics will fall
within specified increments of the population parameter.
Sampling distribution and confidence levels
We know from probability theory that 34% will be within one standard error
and 95 percent will be within 2 standard errors.
We can be x% confident that a given sample mean will be within y units of the
sampling distribution mean. The most common value for x is 95% (at least as
reported in newspapers, etc). This is not the same as saying one is x% confident
that a given sample mean is within y units of the population mean, although it is
often presented that way.
Sampling theory is based on simple random sampling but few general
population surveys use simple random sampling.
Definitions
The principal reason for thinking carefully about standard errors, sampling,
errors, etc., and the social world is the big difference between sampling red and
white balls and determining exactly who is being sampled in the real world.
Universe: theoretical and hypothetical aggregation of all elements to which a
survey should apply. E.g., Indians
Population: a more specified theoretical aggregation. E.g., Adult Indians in
spring 2002.
Survey Population: the aggregation of elements from which the survey sample
is actually drawn. E.g., Adult Indians, in households, in 10 states, in March 2002.
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Sampling Frame: Actual list of units from which the sample is drawn which
might not be totally inclusive of the survey population.
Sampling Unit: Elements or set of elements considered for sampling. E.g.,
persons, geographical clusters, churches.
Unit of Analysis: Unit from which the information is collected. E.g., persons,
households, network.
Types of Sampling and Area Probability Sampling
A. Probability Samples
1. Simple Random Samples
We rarely use them except for some listed samples, e.g., the lists of seniors
and freshman provided by the schools for a survey. We were provided the lists,
assigned the students random numbers, and then selected the sample based on the
random numbers. This method can be used where sampling frames are clearly
defined, e.g., a list of all students in a college. It is very difficult for household
populations studies. In SRS, every sample has a greater than 0 probability of
selection which implies every item in the sample can be selected.
2. Systematic Samples
Begins with a random start within a list. Then, based on the sampling fraction,
a certain proportion is chosen. E.g., University has approximately 6000 students in
total. We wanted to sample 500. The sampling fraction is 500/6000 or one of
twelve. We could have used a random number between one and twelve to indicate
the first student chosen and then choose every twelfth student. E.g., if the random
number were 5, we would have chosen the 5th, 17th, 29th, etc through the list.
These samples are generally used with fairly large and well-organized lists. In
many studies, there are some drawbacks to their practical application, e.g. if there
are problems with the lists..
3. Stratified Samples
The target population is divided into strata (groups) based on characteristics
that the researcher thinks are important. Many surveys of college students stratify
by race, ethnicity, gender, on-off campus, etc. Stratification generally reduces
sampling error because they can ensure that all relevant portions of the population
are included in the sample. Strata can also be used to compensate for nonresponse
of various forms.
Proportional Stratified Sampling
The number in each strata are chosen to ensure that each strata is
represented proportionally. E.g., we would stratify the classes in some schools to
ensure that a proportional numbers of students living off-campus are included.
Non-proportional
The number in each strata are chosen to ensure there are enough in each
strata to make reasonable estimates. Eg, in our University student's survey, we
increased the sampling rate of day scholars so that we could be sure there would be
enough to analyze them as a group.
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1. Probability Proportional to Size Sampling and Cluster Sampling

These procedures are often used in surveys that require more difficult
sampling procedures. PPS attempts to ensure that every unit has a non-zero
probability of inclusion into the study but at the same time recognizing that
practical considerations preclude forms of random sampling that would actually
allow everyone to be included. Cluster sampling is another technique that allows
researchers to minimize field costs without sacrificing the non-zero probability of
inclusion.
B. Nonprobability Sampling
There are many types (quota, convenience etc.) of nonprobability sampling
procedures. They are generally used for smaller projects or when there is no
effective method of probability sampling, e.g., surveys of persons with rare
characteristics.
C. Area Probability Sampling
Area probability sampling is the method used by major survey organizations to
select samples for field (in person household) interviews. It is essentially a form of
stratified multi-stage cluster sampling. The development of this technique and the
statistical techniques associated with it allowed good national sampling to be
accomplished in this country. These samples can cost-effectively represent the
entire country.
It's virtually impossible to do any form of simple random, stratified, or
systematic sampling of large numbers of people spread over a wide geographical
area, so area probability samples are much preferred.
Area probability sampling is designed to minimize field costs and provide a
sample that is based on random sampling procedures. The development of
statistical techniques to measure the impact on "statistics" based on all sampling
decisions allows this form of sampling to work.
Some problems that we generally face with area sampling are:
• Area probability sampling models are designed for an optimal sample size and
often a researcher will not have sufficient funds to use all of the sampling
areas. It is more difficult to sample from only part of the areas and maintain
representativeness.
• Sampling decisions are based on census data and the characteristics of the
PSUs, and the strata can change over time. There might be new housing areas
not included.
• Accuracy in listing the housing units is often very difficult to achieve, eg, in
low-income areas, rural areas, and rapidly developing areas.
• Usually the focus of surveys is on households. For most surveys,
institutionalized populations (e.g., persons in the military, jails, nursing
homes, residence halls) are not included.
• Many survey organizations interview only in English.
• There is no complete list of housing units for in-person surveys, even the
Census Bureau hires listers to count every housing unit.
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Step Five: Data Collection

1) Under a natural or controlled environment? Especially important for
experimental designs.
2) Survey: Mall intercept, telephone, mail, Internet. .each method has different
advantages and disadvantages. For example, response time, response rate,
structure of questions, costs, etc.
Comparing Different Survey Methodologies
Face-to-face Telephone Mail Internet
Speed of data collection Moderate fast Fast Slow Fast
Cost Highest Moderate Low Lowest
high
Possible questionnaire Moderate to Moderate Can be long Can be long
length short (depends on (depends on
incentive) incentive)
Flexibility in High Moderate No No
interviewing high
Interviewer influence High Moderate None None
bias
Sample randomness Moderate to Highest Low Difficult to
high control
Low incidence rate Depend on Not fit Fit Not fit
venue
selection
Ability to expose Yes No Possible (photo) Possible
respondent to various (animated
physical stimuli images)
Response rate High Moderate Low Moderate low
high
In addition to the intrinsic sampling error, the actual data collection process
will introduce additional errors. These errors are called non-sampling errors. Some
non-sampling errors may be intentional on the part of the interviewer, who may
introduce a bias by leading the respondent to provide a certain response. The
interviewer also may introduce unintentional errors, for example, due to not having
a clear understanding of the interview process or due to fatigue.
Respondents also may introduce errors. A respondent may introduce
intentional errors by lying or simply by not responding to a question. A respondent
may introduce unintentional errors by not understanding the question, guessing,
not paying close attention, and being fatigued or distracted. Such non-sampling
errors can be reduced through quality control techniques.
Data Collection Forms
1 Questionnaire Design
The questionnaire is an important tool for gathering primary data. Poorly
constructed questions can result in large errors and invalidate the research data,
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so significant effort should be put into the questionnaire design. The questionnaire
should be tested thoroughly prior to conducting the survey.
2 Steps to Developing a Questionnaire
The following are steps to developing a questionnaire - the exact order may
vary somewhat. In addition I would also like to mention that we are doing all this
things in much greater detail in the next lesson.
• Determine which information is being sought.
• Choose a question type (structure and amount of disguise) and method of
administration (for example, written form, email or web form, telephone
interview, verbal interview).
• Determine the general question content needed to obtain the desired
information.
• Determine the form of response.
• Choose the exact question wording.
• Arrange the questions into an effective sequence Specify the physical
characteristics of the questionnaire (paper type, number of questions per page,
etc.)
• Test the questionnaire and revise it as needed.
3 Question Type and Administration Method
Some question types include fixed alternative, open ended, and projective:
• Fixed-alternative questions provide multiple-choice answers. These types of
questions are good when the possible replies are few and clear-cut, such as age, car
ownership, etc.
• Open-ended questions allow the respondent to better express his/her
answer, but are more difficult to administer and analyze. Often, open-ended
questions are administered in a depth interview. This technique is most appropriate
for exploratory research.
• Projective methods use a vague question or stimulus and attempt to project a
person's attitudes from the response. The questionnaire could use techniques such
as word associations and fill-in-the-blank sentences. Projective methods are
difficult to analyze and are better suited for exploratory research than for
descriptive or causal research.
There are three commonly used rating scales: graphic, itemized, and
comparative.
• Graphic - simply a line on which one marks an X anywhere between the
extremes with an infinite number of places where the X can be placed.
• Itemized - similar to graphic except there are a limited number of categories
that can be marked.
• Comparative - the respondent compares one attribute to others. Examples
include the Q-sort technique and the constant sum method, which requires one to
divide a fixed number of points among the alternatives.
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4 Form of Question Response

Questions can be designed for open-ended, dichotomous, or multichotomous
responses.
• Open-ended responses are difficult to evaluate, but are useful early in the
research process for determining the possible range of responses.
• Dichotomous questions have two possible opposing responses, for example,
"Yes" and "No".
• Multi-chotomous questions have a range of responses as in a multiple-choice
test.
The questionnaire designer should consider that respondents might not be
able to answer some questions accurately. Two types of error are telescoping error
and recall loss.
• Telescoping error is an error resulting from the tendency of people to
remember events as occurring more recently than they actually did.
• Recall loss occurs when people forget that an event even occurred. For recent
events, telescoping error dominates; for events that happened in the distant past,
recall loss dominates.
5 Measurement Scales
Attributes can be measured on nominal, ordinal, interval, and ratio scales:
• Nominal numbers are simply identifiers, with the only permissible
mathematical use being for counting. Example: social security numbers.
• Ordinal scales are used for ranking. The interval between the numbers
conveys no meaning. Median and mode calculations can be performed on ordinal
numbers. Example: class ranking
• Interval scales maintain an equal interval between numbers. These scales
can be used for ranking and for measuring the interval between two numbers.
Since the zero point is arbitrary, ratios cannot be taken between numbers on an
interval scale; however, mean, median, and mode are all valid. Example:
temperature scale
• Ratio scales are referenced to an absolute zero value, so ratios between
numbers on the scale are meaningful. In addition to mean, median, and mode,
geometric averages also are valid. Example: weight
6 Validity and Reliability
The validity of a test is the extent to which differences in scores reflect
differences in the measured characteristic. Predictive validity is a measure of the
usefulness of a measuring instrument as a predictor. Proof of predictive validity is
determined by the correlation between results and actual Behaviour. Construct
validity is the extent to which a measuring instrument measures what it intends to
measure.
Reliability is the extent to which a measurement is repeatable with the same
results. A measurement may be reliable and not valid. However, if a measurement
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is valid, then it also is reliable and if it is not reliable, then it cannot be valid. One
way to show reliability is to show stability by repeating the test with the same
results.
7 Attitude Measurements
Many of the questions in a marketing research survey are designed to measure
attitudes. Attitudes are a person's general evaluation of something. Customer
attitude is an important factor for the following reasons:
• Attitude helps to explain how ready one is to do something.
• Attitudes do not change much over time.
• Attitudes produce consistency in Behaviour.
• Attitudes can be related to preferences.
Attitudes can be measured using the following procedures:
• Self-reporting - subjects are asked directly about their attitudes. Self-
reporting is the most common technique used to measure attitude.
• Observation of Behaviour - assuming that one's Behaviour is a result of one's
attitudes, attitudes can be inferred by observing Behaviour. For example, one's
attitude about an issue can be inferred by whether he/she signs a petition related
to it.
• Indirect techniques - use unstructured stimuli such as word association
tests.
• Performance of objective tasks - assumes that one's performance depends on
attitude. For example, the subject can be asked to memorize the arguments of both
sides of an issue. He/she is more likely to do a better job on the arguments that
favor his/her stance.
• Physiological reactions - subject's response to stimuli is measured using
electronic or mechanical means. While the intensity can be measured, it is difficult
to know if the attitude is positive or negative.
• Multiple measures - a mixture of techniques can be used to validate the
findings; especially worthwhile when self-reporting is used. There are several types
of attitude rating scales:
• Equal-appearing interval scaling - a set of statements are assembled. These
statements are selected according to their position on an interval scale of
favorableness. Statements are chosen that has a small degree of dispersion.
Respondents then are asked to indicate with which statements they agree.
• Likert method of summated ratings - a statement is made and the
respondents indicate their degree of agreement or disagreement on a five-point
scale (Strongly Disagree, Disagree, Neither Agree Nor Disagree, Agree, Strongly
Agree).
Semantic differential scale - a scale is constructed using phrases describing
attributes of the product to anchor each end. For example, the left end may state,
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"Hours are inconvenient" and the right end may state, "Hours are convenient". The
respondent then marks one of the seven blanks between the statements to indicate
his/her opinion about the attribute.
Stapel Scale - similar to the semantic differential scale except that 1) points on
the scale are identified by numbers, 2) only one statement is used and if the
respondent disagrees a negative number should marked, and 3) there are 10
positions instead of seven. This scale does not require that bipolar adjectives be
developed and it can be administered by telephone.
Dimension Qualitative Quantitative Remarks
Types of Probing Limited probing Respondents have more
questions freedom to structure
the answers.
Information per Large and in-depth Depends
respondent
Administration Demand skilled Less skillful is Quantitative researches
administrators acceptable usually have clearer
guidelines.
Ability to Low High
replicate
Sample size Usually small (<30) Can be large
Analysis Subjective, inter Statistical Qualitative analysis will
subjective, be more time-
interpretive. consuming
Type of research More suitable for More suitable for
exploratory descriptive or causal
research research
Special Tape and/or video Questionnaires,
hardware recorder, probing computer with
questions, pictures statistical software
Training of the More on Social More on information
researchers science processing
• Q-sort technique - the respondent if forced to construct a normal
distribution by placing a specified number of cards in one of 11 stacks according to
how desirable he/she finds the characteristics written on the cards.
QUALITATIVE RESEARCH VS. QUANTITATIVE RESEARCH
Qualitative Research is about investigating the features of a market through
in-depth research that explores the background and context for decision-making. In
qualitative research there are 3 main methods of collecting primary data:
i. Depth interviews
ii. Focus/discussion groups
iii. Projective techniques
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Depth Interviewing
Depth interviews are the main form of qualitative research in most business
markets. Here an interviewer spends time in a one-on-one interview finding out
about the customer's particular circumstances and their individual opinions.
The majority of business depth interviews take place in person, which has the
added benefit that the researcher visits the respondent's place of work and gains a
sense of the culture of the business. However, for multi-national studies, telephone
depth interviews, or even on-line depth interviews may be more appropriate.
Feedback is through a presentation that draws together findings across a
number of depth interviews. In some circumstances, such as segmentation studies,
identifying differences between respondents may be as important as the views that
customers share.
The main alternative to depth interviews - focus group discussions - is typically
too difficult or expensive to arrange with busy executives. However, on-line
techniques increasing get over this problem.
Group Discussions
Focus groups are the mainstay of consumer research. Here several customers
are brought together to take part in a discussion led by a researcher (or
"moderator"). These groups are a good way of exploring a topic in some depth or to
encourage creative ideas from participants.
Group discussions are rare in business markets, unless the customers are
small businesses. In technology markets where the end user may be a consumer, or
part of a team evaluating technology, group discussions can be an effective way of
understanding what customers are looking for, particularly at more creative stages
of research.
Projective Techniques
Used in Consumer research to understand consumer's knowledge in
association with a particular product or brand. Used by clinical psychologists to
understand a consumer's hidden 'attitudes', 'motivation' and 'feelings'. These
techniques could be:
i. Word association: Respondents are presented with a series of words or
phrases and asked to say the first word, which comes to your mind. This method is
helpful to check whether the proposed product names have undesirable
associations.
ii. Sentence completion: The beginning of a sentence is read out to the
respondent and he/she is asked to complete it with the first word that comes to the
mind. E.g., "people who don't prefer to eat from fast food joints are.....”
iii. Third party techniques: Respondents are asked to describe a third person
about whom they have little information. It is useful in determining 'attitudes' of the
respondents.
54
iv. Thematic appreciation test: Respondents are shown an ambiguous picture

or drawing or fill in a blank 'speech bubble' associated with a particular character
in an ambitious situation and then asked to interpret the same. It helps in
understanding the perception of the respondents towards the various aspects of the
product.
v. Repertory grid: Respondents are presented with a grid and asked to title the
columns with brand names or various types of a particular product (tastes of soft
drinks). Then they are asked to select any three of these products and think of a
phrase, which will describe the way, in which any two are different from the third.
This description is used as the title of a row and each of the other products are
rated accordingly. By repeatedly selecting and describing the items, the researcher
will be able to find the way in which the respondent perceives the market.
Age 24 32 66 38 42 16 57 29 33 49
Pop Music 4 3 1 3 3 5 2 4 4 2
vi. Role-playing: respondents are asked to visualize that they are a product or a
person and asked to enact or perform their role describing their feelings, thoughts
and actions.
Step Six: Data Analysis
Before analysis can be performed, raw data must be transformed into the right
format. First, it must be edited so that errors can be corrected or omitted. The data
must then be coded; this procedure converts the edited raw data into numbers or
symbols. A codebook is created to document how the data was coded. Finally, the
data is tabulated to count the number of samples falling into various categories.
Simple tabulations count the occurrences of each variable independently of the
other variables. Cross tabulations, also known as contingency tables or cross tabs,
treats two or more variables simultaneously. However, since the variables are in a
two-dimensional table, cross tabbing more than two variables is difficult to visualize
since more than two dimensions would be required. Cross tabulation can be
performed for nominal and ordinal variables.
Cross tabulation is the most commonly utilized data analysis method in
marketing research. Many studies take the analysis no further than cross
tabulation. This technique divides the sample into sub-groups to show how the
55
dependent variable varies from one subgroup to another. A third variable can be
introduced to uncover a relationship that initially was not evident.
Step Seven: Preparing and Writing the Report
1. Researcher should communicate their findings to the managers; if possible,
oral presentation and written report should both be made.
2. Practical recommendations should be suggested to the managers. For
example: If our shop will target on younger consumers, we should sell more pop
music, and the interior design should be more fashionable to fit their lifestyles.
3. How you present the results may affect how the managers use your
information.
The format of the marketing research report varies with the needs of the
organization. You should make sure that the report contains the following sections:
• Authorization letter for the research
• Table of Contents
• List of illustrations
• Executive summary
• Research objectives
• Methodology
• Results
• Limitations
• Conclusions and recommendations Appendices containing copies of the
questionnaires, etc.
6.5 REVISION POINTS
1) The research process begins with the recognition of a business problem or
opportunity.
2) In quantitative research, you may use regression analysis to analyze the
association between two (or more) variables.
3) Descriptive research is more rigid than exploratory research and seeks to
describe users of a product, determine the proportion of the population that
uses a product, or predict future demand for a product.
4) Causal research seeks to find cause and affect relationships between variables.
1) What are the steps in the consumer research process?
2) What are the types of research design?
3) What are the popular data collection methods?
4) What is the format of research report?
6.6 SUMMARY
Before moving into the consumer research process, let us first understand a
very key issue in consumer research, i.e., the difference between market research
and marketing research. You will find that these terms often are used
interchangeably, but technically there is a difference. Market research deals
56
specifically with the gathering of information about a market's size and trends.
Marketing research covers a wider range of activities. While it may involve market
research, marketing research is a more general systematic process that can be
applied to a variety of marketing problems. The stages in consumers research
process discussed in this lesson.
1) ---------- deals specifically with the gathering of information about a market's
size and trends.
2) The general systematic process that can be applied to a variety of marketing
problems is known as ----------.
3) ---------- begins with the recognition of a business problem or opportunity.
4) Theoretical and hypothetical aggregation of all elements to which a survey
should apply is known as ----------
5) -------- sampling begins with a random start within a list.
6) The questionnaire should be tested thoroughly prior to conducting ---------
7) ---------- is about investigating the features of a market through in-depth
research that explores the background and context for decision-making.
1) Du Plessis, P.J., and Rousseau, G.G. 2003. Buyer Behaviour. Third Edition.
Cape Town: Oxford University Press.
2) Jacoby, J., Chestnut, R. W., and Fisher, W. A. "A Behavioural process
approach to information acquisition in nondurable purchasing," Journal of
marketing research) 1978, pp 532-544.
3) Howcroft, B., Hewer, P., and Hamilton, R. "Consumer decision-making styles
and the purchase of financial services," Service Industries Journal (23:3) 2003,
pp 63-81
4) Katona, G., and Mueller, E. "A study of purchase decisions," Consumer
Behaviour: The dynamics of consumer reaction (1) 1955, pp 30-87
6.9 ASSIGNMENTS
1) List the information you would require for preparing the presentation of
research process. Discuss various methods/sources for obtaining the required
information. Suggest the best method for data gathering.
1) Philip Kotlar, Kevin Kellar, Abraham Koshy, Mithileswar Shah, Marketing
Management-South Asian Perspective, 14th edition, Pearson Education, New
Delhi
2) Leon G. Schiffman & Leslie Lazar Kanuk: Consumer Behaviour, Pearson PHI.
3) Batra & Kazmi, Consumer Behaviour, Excel Books.
4) Hawkins, Best & Concy, Consumer Behaviour, Tata McGraw Hill.
5) Peter. D. Bennett Harold H. Kassarjian: Consumer Behaviour (PHI).
6) Srivastava, Khandoi, Consumer Behaviour, Galgotia publications.
7) M.S.Raju & Dominique. Xardel, Consumer Behaviour, Vikas Publications.
8) Loudon & Della Bitta, Consumer Behaviour, Tata McGraw Hill,
57
9) Soloman, Consumer Behaviour: Buying, Having and Being, Pearson / PHI.

10) Kardes, F.R. Consumer Behaviour and managerial Decision making, Pearson
11) Nair – Consumer Behaviour and Marketing Research , Himalaya.
12) H.Assael, Consumer Behaviour, Biztantra.
13) Jain & Bhatt, Consumer Behaviour, S. Chand.
14) Alok,Sinha & Sharma, Customer Relationship Management, Biztantra.
1) Bring to class a product or service that you had bought recently that fits your
needs exactly which of the business orientations discussed in the text may
have guided the development of this product? Explain. Write up an
explanation.
2) Conduct a focus group interview to discover the buying motives influencing the
purchases of following products and brands
a) Vacuum cleaner b) Purchases in Hyper-Markets
c) LG Refrigerator d) Sun Umbrella
6.12 KEYWORDS
Research process, data collection research design, sampling, questionnaire,
sampling error, data analysis

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LESSON – 7
FACTORS INFLUENCING CONSUMER BEHAVIOUR

7.1 INTRODUCTION
Consumer Behaviour refers to the selection, acquisition and consumption of
goods and services to meet their needs. There are different processes involved in
consumer Behaviour. Initially, the consumer tries to find what products you would
like to consume, and then select only those products that promise greater utility.
After selecting the products, the consumer makes an estimate of available funds
that can happen. Finally, the consumer looks at the current prices of commodities
and makes the decision about which products to consume. Meanwhile, there are
several factors that influence consumer purchases, such as social, cultural,
personal and psychological. The explanation of these factors will be discussed in
this lesson.
7.2 OBJECTIVES
• Internal influence
• External influences
• Situational influence
7.3 CONTENTS
Internal influence
External influences
Situational influence
There are various factors influencing buyer behaviour can be grouped in three
categories: (A) Internal Influence: Factor that are part of the buyer as an individual.
Demographic and Personal factors- age, education, economic position, status, self-
concept; religion, language; psychological/ behavioural factors: beliefs, attitudes,
motivation, perception and learning.
(B) External Influence: Buyer's social environment - Since there are two broad
groups of which an individual is a part: influence of intimate group and influence of
the broad social class.
(C) Environmental Influence: Information from a variety of sources- The
rational buyer is exposed to various sources of information/situations these
sources inform him about new products and services, improved versions of existing
services, new uses for existing services and so on. These could be inhibitors in a
buying process such as price, brand, availability, time, place or other determinants.
A) INTERNAL INFLUENCES
Demographical: Demographics describe population in terms of its size,
distribution, structure and vital characteristics or personal characteristics of
individual buyers such as age, education, economic conditions. These are most
often used as the basis for market segmentation because these characteristics
usually influence consumer choice and decision making. Demographics influence
consumption behaviour directly by affecting other attributes of individuals such as
their personal values and decision styles. The major disadvantage of demographic
59
segmentation is that it tends to be one-dimensional and does not differentiate

among brands. Most of secondary data, including census data are expressed in
demographic terms. Media and marketers also use demographic profile for their
editorial focus to attract advertiser with matching consumer profiles. Demographic
variables essentially refer to personal statistics such as income, gender, education,
location (rural vs. urban, East vs. West), ethnicity and family size.
Population Size and Distribution: The population of India is approximately 1.6
billion people and it is expected to grow despite a decline birthrate due to longer life
expectancies. More than two third of the population lives in the rural areas. Urban
India has also a significant migratory population which rooted in villages. The
major rural occupations are seasonal and agriculture. There is a vast diversity of
income and there are distinct income category. A recent study has found that more
than four hundred individuals earning over a crore of rupees per annum reside in
rural Haryana.
Due to the geographical spread of India there are many environmental and
cultural differences between different regions in India. The differences in people's
cooking habits, diets, food consumed and taste preferences are clearly very different
across regions in India. The marketers have successfully changed their service
features, communication, pricing, services etc.
Age and Life Cycle: Services needs and interest often vary with consumer age.
Marketers have found age to be a useful demographic variable to distributed
segment. A specific age group known as "cohort" (aggregate of persons those who
born in between a specified period) is studied by most of the researchers for
understanding buyer behaviour of a generation. People buy different goods and
services over the lifetime. Buyer's taste in clothes, furniture and recreation are also
age related. Youngsters, early middle aged, middle aged, late middle aged, early old
aged, old are some of the demographical determinants. Many marketers have
carved out a niche in the marketplace by concentrating on a specific age group for
segmentation. Proper age positioning is critical for many services. Age carries
culturally defined behavioural and attitudinal norms. It affects our self-concept and
lifestyles. The age shapes the media buyer use, how they use services and how they
think and feel about marketing activities. According to population census of 2001
there were 35 percent. Indians below 15 years of age and over 50 percent were
below 25 years of age. This would become a large, demographically similar market
which earns to spend as per the emerging culture of material success and
aspirational lifestyles in coming years.
Age is related to the stage in life with typical needs at different age levels. It is
observed that cultural mornings, mindsets and consumption habits are also
significantly different across ages or generations. These significant differences that
emerged in to cultural values and attitudes. Each age group presents s significant
volume of buyers. The young are more prone to experiment that those with set
habits are more traditional or norm driven in their mindsets. On one hand, in the
generation that values savings and believes in being thrifty, having gone through
post Independence era of scarce resources and consumption, where simplicity was
60
esteemed as a lifestyle and as a personal value and was culturally apt as well as
was a respected aspect of individuals. They have probably imbibed the importance
given to the age old values of thrifts and savings, which have imbued these
generations with cost consciousness. On the other hand, is the movement that
eschews the values of avoiding ostentatious or luxurious or even comfort driven
lifestyles or of subsuming their individuality to the socially "correct" and tradition
bound ways of life. Indian consumers are value conscious and value for money
buyers and are extremely cost conscious (across all income groups), yet these
marketing people base their communication on the prestigious, the luxurious and
so on and not so much on the price. The usage of credit for purchase itself is an
area or great change.
Sex: Male and female dominating decisions are discussed in the context of
different types of services as well as for marketing segmentation. According to many
authors some decision are male dominated, some are female dominated and other
are joint in nature. Gender is another important variable to distinguish between
male and female consumers. But from past few decades sex roles are neglected by
marketers as it is not an accurate basis for differentiate consumers. Much of the
sex roles have been discussed because of the upsurge in the number of working
women.
Marital Status: The family has focus of marketing efforts for many products
and services as the household continues to be the relevant consuming unit. There
are more autonomy and less influence among unmarried as compared to among
married couples. However these patterns vary from service to service and from
decision stage to decision stage. Marketers are interested in the number and kinds
of households that own and/or buy certain services. They are also interested in
determining the demographic and media profiles of the household decision maker
in order to develop appropriate marketing strategies.
Income: Income is an important variable for distinguishing market segments. A
major problem with segmenting market on the basis of income alone is that income
simply indicates the ability (or inability) to pay for a service. For this reason,
marketers often combine income with other demographic variable(s) to define target
markets accurately. Personal income is the income from wages, salaries, dividends,
rent, interests, business/professions, social security and farming. Disposable
personal income is the amount available after deductions (taxes) for personal
consumption expenditure and saving. Income has long been an important variable
for determining buyer Behaviour. The discretionary income is the income available
for spending after deducting expenditures for necessities or fixed items such as
food, clothing, transportation, shelter and utilities. A household's income level
combined with its accumulated wealth determines its purchasing power. While
many purchases are made on credit, one's ability to buy on credit is ultimately
determined by one's current and past income (wealth). As developing economy,
Indian has seen income rising amongst a growing number of household across both
urban and rural markets. However, the typical middle and lower middle class
dominance in household income and expenditure can be seen from the fact that
number of registered vehicle is increasing from past few decades.
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The NCAER established a five level classification in their 2002 report and
stated that over two 2 percent of the population consisted of very rich households
in terms of consumption levels. Their 2005 study, classifying consumers in four
categories of deprived, aspiring, middle class and the rich, has been quoted as
stating that by the end of the century, over 1.25 lakh households would have an
annual income of more than ten million rupees.
Education: The levels of education achieved by buyer such as Graduate, Post
Graduate also influence buyer Behaviour. India is increasingly seen as a country
with a future in knowledge based economy; this base will contribute significantly to
the GDP, the per capita income and the general disposable income that flows back
to the economy through higher consumption standards. Education levels usually
determine occupational chances and thereby income. Education may also affect
skills and expertise and thereby income, even in agricultural and entrepreneurial
ventures such as with mechanized scientific farming or technocrat ventures.
Experts also argue that with the largely agrarian economy at present and prevailing
low levels of high school, college and vocational educational levels in the
population. It may be difficult to transform our economy into a largely knowledge
based one at present. However, the gross number of knowledge workers is quite
large. Further their contribution to the economy is also seen to be growing at a
much higher rate than that of the workers in any other sector. With decreasing
population growth rates and better life chances, population is getting greater
education. Families in the lower income categories are also sending their children
to school, which to some extent increases the growth in literacy, as well as the
gross numbers of children in school. This number of children making it to the high
school stage has increased significantly in the last decade. The number of
professional college has also grown. Literacy affects consumer markets in many
ways. At one end, it signifies occupational status and consumption baskets to
some extent. It is also indirectly indicates the general awareness of the consumer
and likely sophistication of information search and evaluation. It also determines
the modes of information search and the media and content that may be
communicated by the marketer. The exposure of consumers to various media is
also seen as influenced by education levels, as reported by various readership
surveys.
Occupation: Occupation of the buyer also influences consumption pattern. The
workforce diversity is providing variety of occupations such as service occupation,
blue collared and white collared. The education, occupation and income tend to be
closely related. Occupation is probably the most widely applied single cue people
use to initially evaluate and define individuals. Occupation is strongly associated
with education (which to some extent determines occupation) and income (which to
some extent is determined by occupation).
One's occupation provided status and income. In addition, the type of work
one does and the types of individual’s one works with over time also directly
influence one's values, lifestyle and all aspects of the consumption process.
Differences in consumption between occupation classes have been found for
62
products and services. Media preferences, hobbies and shopping pattern are also
influenced by occupational class.
Given the occupation is so closely linked with qualifications and education on
one side and opportunities in life and lifestyles on the other. It has been observed
that in India, the role of caste, region and developmental status of the residential
area has also played a role in occupations of people. The society had earlier been
defined in castes which were hereditary and occupation ran in the family. In many
cases, especially in artisan, farming and other occupations, family jobs are taken
up by succeeding generations. Further, since it badly affected income and hence
education and awareness, the changes in the occupational profile have been slow to
catch on. However, the last decade has changed the opportunity profile and
the economy in terms of skills and employment opportunities as well as
remuneration pattern. Further, with better health and life chances and smaller
families, education has also spread to a significant extent. This has led to a change
in the occupational profile of the population significantly. The service is now the
largest part of the economy and engages a large part of working population. Change
in rural occupation pattern has been slow, as the household industry is not that
widespread and rural economy is still primarily agri-produce oriented and not agri-
processing oriented or mechanized in nature.
Economic Circumstances: Service choice is influenced by one's economic
circumstances. People economic circumstances consists of spending behaviour,
level of spendable income, stability of income, savings, assets, debts, borrowing
power, attitude toward spending.
Geographical: In geographic segmentation, the market is divided by location.
The theory behind this strategy is that people who live in the same area have
similar needs and wants and that these needs and wants differ from those of people
living in other areas. Some regional differences can be accounted for by climate.
Marketers observed divergent consumer purchasing patterns among urban, rural
and suburban areas.
Geo demographic: People share similar financial means, life styles and
consumption habits. Geo demographics is not a new concept it is age old and
useful when the personalities, goals and interest of an advertiser can be isolated in
terms of where they live.
Location: The place where a buyer resides and stays for a longer time.
Transportation, mode of conveyance, development in the residential area,
educational and industrial advancements are some of the factors influencing buyer
behaviour and buying decisions.
City or Metro: The place where a buyer resides is part of urban, sub-urban,
metropolitan or rural areas, facilities, advancements, mall culture, fashion, trends,
status and living parent of geographical area also influence buying decisions.
Climate: Weather, temperature and other climatic conditions are components
of geographical factors that may influence decision making of individuals for their
purchases.
63
Regional Differences: Urban, sub-urban, rural or the regional disparities due to

environmental factors are also determinants of buyer behaviour.
Psychological/psychographic: Psychological characteristics refer to the intrinsic
qualities of the individual consumer. Such qualities are often used as segmentation
variables. For instance, consumer may be segmented in terms of their needs and
motivations, personality, perceptions, learning, level of involvement and attitudes.
Personality: Personality is an individual's characteristic response tendencies
across similar situations. Personality is a person's distinguishing psychological
characteristics that lead to relatively consistent and lasting responses to stimuli in
the environment. While there are many personality theories, all have two common
assumptions: (a) all individuals have internal characteristics or traits and (2) there
are consistent and measurable differences between individuals on those
characteristics. Single-trait theories emphasises one personality trait as being
particularly relevant to understanding a particular set of behaviours. They do not
suggest that other traits do not exist or are not important; rather, they study a
single trait for its relevance to a set of behaviours. Multi-trait personality theory
specifies several traits that in combination capture a substantial portion of the
personality of the individual.
Psychographics: By personality we mean a person's distinguishing
psychological characteristics that lead to relatively consistent and enduring
responses to his environment but analysis of psychological traits in the context of
service choice in known as psychographics (or life style analysis). Psychographic
study can be either generic or service specific. The difference between
psychographics and life style can be identified as:
Lifestyle is a pattern of living expressed through a person's activities, interests
and opinions. A person's lifestyle is the person's pattern of living in the world.is
environment.
Psychographics is a technique for measuring personality and lifestyles to
developing lifestyle classifications.
Self concept: Self-concept is defined as the totality of the individual's thoughts
and feelings towards an object. It is an individual's perception and feelings toward
oneself. In other words self-concept is composed of the attitudes one hold towards
oneself. Interdependent/Independent Self-Concepts: The self concept is important
in all cultures. However, those aspects of the self that are most valued and most
influence consumption and other Behaviours vary across cultures.
Values: Consumer values differ individually. These values have a substantial
influence on their decisions. Observable shifts in behaviour, including consumption
behaviour often underlying shifts in cultural values, widely held beliefs that affirm
what is desirable. Therefore it is necessary to understand the underlying value
shifts in order to understand current and future consumer behaviour. India has
traditionally been very participative, socially involved and norm driven society.
Tastes: Individual differs and their preferences also differ from time to time.
Taste is one of the major determinants of buyer Behaviour.
64
Preferences: A buyer prefers certain characteristics of service over others also

influence buyer behaviour.
Financial means: Sources of income, expenditure and spending nature of a
buyer is also a determinant of buying behaviour.
Consumption Habits: The frequency of consumption and way of consumption
are also important determinants of buying behaviour.
Perception: Our perception is an approximation of reality. Perception is defined
as a process by which an individual selects, organises and interprets stimuli into a
meaningful and coherent picture of the world. Perception helps in developing
attitude of a consumer that may influence buying decisions.
Learning: Learning involves "a change in the content or organisation of long
term memory or Behaviour." Learning involves changes in an individual's behaviour
arising from experiences. There are three types of learning that may determine
buyer behaviour.
(a) Classical conditioning: (b) Operant conditioning: (c) Cognitive conditioning:
Brand Image: Brand image refers to the schematic memory of a brand. It
contains the target market's interpretation of the service's attributes, benefits,
usage situations, users and manufacturer/ marketer characteristics. It is, in
essence what consumer has learned about the brand. Company image and store
image are similar except they apply to companies and stores rather than brands.
Service positioning is a decision by a marketer to try to achieve a defined brand
image relative to competition within a market segment.
Brand Loyalty: Service positioning plays an important role in projecting image
of the brand in the mind of consumer in a market segment. The trust and faith of
consumer after trying a brand over time develop loyalty. That is, when a loyal
consumer sticks to a brand and recommends it to others.
Motivation: Motivation is a reported urge to buy a specific product/ service. A
need become a motive when it is aroused to a sufficient level of intensity. A motive
is a need that is sufficiently pressing to derive the person to act. Motivation is the
reason for behaviour. A motive is constructing or representing an unobservable
inner force that stimulates to and compel behavioural responses and provides
specific direction to that responses. A motive is why an individual does something.
Motivation is another important determinant of buyer behaviour.
Attitudes: An attitude is a person's enduring favourable or unfavourable
evaluation, emotional feelings and action tendencies toward some object or idea.
Consumer attitudes are a composite of a consumer's beliefs, feelings about and
Behavioural intentions toward some object within the context of marketing. There
are four functions of attitude as discussed below:
Knowledge function: Some attitudes serve primarily as a means of organising
beliefs about objects or activities such as brand and shopping. These attitudes may
be accurate or inaccurate with respect to objective realities, but the attitude will
often determine subsequent behaviours rather than that reality.
65
Value-expressive function:-concept. Thus, consumers who value nature and the

environment are likely to develop attitudes about services and activities that are
consistent with that value.
Utilitarian function: This function is based on operant conditioning, people tend
to form favourable attitudes toward objects and activities that are rewarding and
negative attitudes toward those that are not. Marketers frequently promise rewards
in advertising and conduct extensive service testing to be sure that services are
indeed rewarding.
Ego-defensive function: People form and use attitudes to defend their egos and
self-image against threats and shortcomings. Services promoted as very macho may
be viewed favourable by men who are insecure in their masculinity.
Socio-cultural /Socio-economic: Socio-economic or demographic variables are
the most important basis for distinguishing buyer groups. Consumer wants,
preferences and usage rates are generally associated with these variables. The
marketers should have a deeper understanding of the market in terms of these
socio-economic variables such as brand reputation, brand loyalty, perception of
quality revealing ability of factors like brand reputation, price, features, promotion
etc.
Family Size and Family Life Cycle: The number of individuals in family,
number of male and female in the family, number of earning members and family
life cycle also influence family purchases or decision making. There are four basic
functions provided by the family are particularly relevant to consumer behaviour
researches. These include economic wellbeing, emotional support, suitable family
life style and socialization to family members.
Social Class: Social class (or relative status in the community) is an important
determinant of buyer behaviour. It is traditionally measured by a weighted index of
several demographic variables such as education, occupation and income. The
concept of social class implies a hierarchy in which individuals in the same class
generally have the same degree of status, while member of other classes have either
of higher or lower status. Consumers in different social classes vary in terms of
values, service preferences and buying habits.
Culture: Cultural factors exert the broadest and deepest influence on
consumer behaviour. Culture is part of the external influences that impact the
consumer. Culture represents influences that are imposed on the consumers by
other individuals. Culture is the complex whole that includes knowledge, belief, art,
law, morals, customs and any other capabilities and habits acquired by humans.
Culture is the distinctive way of life of a group of people, their complete design for
living. Culture is the most fundamental determinants of a person's wants and
behaviour. Culture is a comprehensive concept. It includes almost everything that
influences an individual's thought process and behaviours. Culture is acquired and
does not include inherited responses and predispositions. Culture also supplies the
boundaries within which most individuals think and act. The boundaries that
culture sets on behaviour are called norms, which are simply rules that specify or
prohibit certain behaviours in specific situations. Violation of cultural norms
66
results in sanctions, or penalties ranging from mild social disapproval to

banishment from the group. The marketer needs to understand the importance of
culture, subculture, social class, basic values, beliefs, norms and associated
Behaviours that are learned by a member of society. Dividing the factors that
influences consumers into categories is somewhat arbitrary. Culture has several
important characteristics: (1) Culture is comprehensive. (2) Culture is learned
rather than being something we are born with. (3) Culture is manifested within
boundaries of acceptable Behaviour. (4) Conscious awareness of cultural standards
is limited. (5) Cultures fall somewhere on a continuum between static and dynamic
depending on how quickly people adapt change.
Cross culture: When a culture interacts with another culture they share values,
perceptions and preferences. Buyer acquires and learns characteristics of different
cultures.
Sub culture: Each culture contains smaller subcultures or groups of people
with shared value systems based on common life experiences and situation.
Subcultures include: Nationalities, religions, racial groups and geographical
regions. A subculture is a segment of a larger culture whose members share
distinguishes values and patterns of behaviour.
Religious subcultures: Religion is important determinant of behaviour and
directly influences the buying decisions. This includes consuming religiously
themed services.
Ethnic subcultures: Ethnic subculture broadly defined as those whose
member's unique shared behaviours are based on a common racial, language or
nationality background.
Regional subcultures: Distinct regional subculture arises as a result of climatic
conditions, the natural environment and resources. The characteristics of various
immigrant groups also influence consumer decisions of followers of their regional
subgroups.
Values: cultural values are widely held beliefs that affirm what is desirable. It
is necessary to understand the underlying value shifts in order to understand
current and future consumer behaviour. India has traditionally been a very
participative, socially involved and norm driven society. Indian culture is of
assimilation of religions, traditions, practices, norms and values.
Households: There are various types of households. Household is defined as all
the people who occupy a housing unit. It defined as a family of two or more related
by birth, marriage or adoption and residing together.
Family: A family household is defined as a household consisting of a family
and any unrelated people residing in the same housing unit. A nonfamily
household is a household living alone or exclusively with others to whom he or she
does not related. Family is a group of people related by blood, marriage, or other
socially approved relationship. The traditional family refers to a married couple and
their own or adopted children living at home. Family: Family is the most important
buying organisation in society and it has been researched extensively.
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The household life cycle (HLC): The HLC is based on the age, marital
status of adult members in the households along with presence and age of their
children. The buyer use to change their preferences for services over a period of
time. Marketers often define their target markets in terms of life-cycle stage and
develop appropriate services and marketing plans for each stage such as; Single I:
Unmarried single, Young couples (No Children), Full nest I (Married couples), Single
parent I, Middle aged single, Empty nest I (Middle aged married with no children),
Delayed full nest I (Old married with young children), Full nest II (Middle -aged
married with children at home), Single parent II (Middle -aged single with children
at home), Empty nest II (Older married couples) and Older single.
Consumer socialization: The family provides a basic network in which
consumer socialization occurs, Consumer socialization is the process by which
young people acquire skills, knowledge an attitude relevant to their functioning as
consumers in a marketplace. Consumer's behaviour is determined by social factors,
such as small group, family and status.
Group Influences on Consumer Behaviour
A group is defined as two or more individuals who share a set of norms,
values, beliefs. The group member should have certain implicitly or explicitly
defined relationships to one another so that their behaviours are interdependent. A
group is association of two or more people who interact to accomplish individual or
mutual goals. Groups may be classified according to a number of variables.
Marketers have found three classification criteria for groups: (1) membership, (2)
type of contact and (3) attraction. The membership criteria are dichotomous. Either
one is the member of a particular group or one is not a member of that group. Type
of contact refers to how much interpersonal contact the group members have with
each other. Attraction refers to the desirability that membership in a given groups
has for the individual. This can range from negative to positive. Groups with
negative desirability -dissociative reference group can influence behaviour just as
do those with positive desirability. Membership groups also have a direct influence
on consumer decision process. Reference groups serve as direct or indirect points of
comparison. A person's reference group consists of all the groups have a direct
(face-to-face) or indirect
The aspirational reference group refers to those others against whom one
would like to compare oneself. Humans are inherently social animals and
individuals greatly influence each other. Associative reference groups include
people who more realistically represent the individuals' coworkers and neighbors.
Finally, the dissociative reference group includes people that the individual would
not like.
Social Class is a group of individuals with similar social rank, based on such
factors as occupation, education and wealth. Social classes are relatively permanent
and ordered divisions whose members share similar values, interests and
behaviours. Social class is not determined by a single factor but is measured as a
combination of occupation, income, education, wealth and various other factors.
Markets are interested in social class because people within a given social class
tend to exhibit similar buying behaviour. Social classes show distinct services and
68
brand preferences in areas, such as: clothing, home furnishing, leisure activity and
motor vehicles.
Roles and Status: A role consists of the activities people are expected to
perform according to persons around them. Each role carries a status reflecting the
general esteem given by society.
Consumption Subculture: A consumption based group often termed as
consumption subculture is a distinctive subgroup of society. On the basis of shared
commitment to a particular service class, brand or consumption activity. These
groups have (1) an identifiable, hierarchical social structure, (2) a set of shared
beliefs or values and (3) unique jargon, rituals and mode of symbolic expressions.
Thus, they are reference groups for their members as well as those who aspire to
join or avoid them. A number of such subcultures have been studied in some
details, including those focused on style/attitude, organisation, service, television
programme and activities.
Brand Communities: Consumption subculture focus on the interactions of
individuals around an activity, service category or occasionally a brand. A brand
community is a non-geographically bound community, based on a structured set of
social relationships among owners of a brand and the psychological relationship
with a specific brand.
Opinion Leader: Opinion leader is a person within a reference group who exerts
influence on his followers because of special skills, knowledge, personality etc. The
exchange of advice and information between group members and leader can occur
when they seeks information from each other. In choosing products and services
consumer are often influenced by advice received from experts.
Factors Influencing Indian Consumer in a Turbulent Marketing Environment
India being a large country consists of several states, different religions and
different languages. It is difficult to generalize the tastes and preferences of the
Indian masses as there can be various segments of consumers based on economic
and social characteristics such as income levels, regions, caste and culture that
they belongs to. There are various social classes emerging due to turbulent
marketing environment. Even though the per capita income in India is low, it still
remains an enticing market. India is a unique market in the sense there are so
many factors affecting the buying decisions like tradition, family values, value for
money, orientation towards love and affection. There are many issues influencing
Indian consumers such as socio-cultural, cultural, economical and psychological.
India can be divided into various emerging social classes such as:
High Net worth People: These are the people who are at the top of the income
chart. They frequently visit trendy malls, chic restaurants, upscale multiplexes and
very expensive clubs. They go for ultra expensive brands and do not think twice
about spending millions on them.
The Great Indian Middle Class: This is a cliche but the companies can ignore
this group at the cost of their own performance. These people reflect the taste and
preferences of the majority. They seek a lot of information before purchasing any
high value item. They want full value for their money and are quite careful while
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making purchases. Savings are top priority and they are always willing to struggle
financially today, for a better and more satisfying future.
The Alpha Female: This is a new category which has recently joined the Indian
buying brigade. Earlier, there were not many working women but today their
presence is inescapable. These working women have added punch to the
purchasing power to the household they belong to be in their paternal house as
spinsters or their in-laws house after marriage. So, the overall effect has been good
for the companies selling their wares. These women have become more independent
and are in the position to take independent decisions regarding purchases.
Rural India: There is a huge market out there in the hinterland. Companies
have started targeting them but a major part still untapped. The rural people are
not only aware but also are willing to spend money for procuring them. This is
especially true of the rich farmers of Punjab, Western UP and to some extent,
Haryana. The buying pattern varies across different classes as also across regions
and the level of exposure that people have. With the advent in information
technology, e-choupals and choupal-sagar rural people can assess information
related to financial services at their native place.
Indian Urban Market: This niche is strongly supported by the lifestyle and
aspirations of west. The following values can be associated with niche:
Material success: Young professional between 25 to 30 years, extremely
conscious of their material success, have changed in the last decade. Higher
education, intelligence and aspirations of these consumers have resulted in their
acquiring substantial wealth at a relatively young age in the life-cycle stages. This
wealth is spent on essential services which have contributed to the service
economy-health, amusement, time-compression and convenience.
Impulse Gratification: While a number of consumer mat be using credit cards
only for convenience, the neo-urban young adults exhibit a compulsive need to buy
products and services through credit cards. This niche may process multiple credit
cards. The insurers are joining hands with credit card companies to sell their
offerings.
Success through Professional Achievements: These aspects contributes to the
intrinsic and extrinsic motivational levels and are reflected in the consumption of
services and brands, possessing an insurance, property, vehicle or latest mobile.
Involvement at Work: As a logical extension to the previous value,
contemporary consumers break away from traditional work practices and are
involved in high tension, fast passed jobs, distant assignments etc. they experience
time pressure and hence prefer time compression or convenience services. There is
a growing need of financial and insurance services that may offer high level of
satisfaction.
Changing Workplace Requirements and Policies: Some employers are offering
group and individual insurance policies for the secure future of employees.
Whereas other offer these policies as they have some contract with insurance
agencies for health and life insurance of employees.
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Technological Advancements and e-consumer: Many new components of the

business environment also influence consumer decisions such as e-insurance,
bank insurance, employer group insurance and perception of policyholders,
spending habits, credit card/ plastic money usage, mobile payment. These new
dimensions of Indian business are using various fast and speedy modes to
approach a rational consumer.
B) EXTERNAL INFLUENCES / SITUATIONAL INFLUENCES ON CONSUMER BEHAVIOUR
We define situational influence as all those factors particular to a time and
place that do not follow from knowledge of personal stimulus (choice alternatives)
and attributes that have an effect on current behaviour. Consumer do not respond
to stimuli such as advertisements and services presented by marketers in isolation;
instead they respond to marketing influences and the situation simultaneously. To
understand a consumer's behaviour, we must know about the consumer, about the
object such as a service that the consumer is responding to and about the situation
in which the response is occurring.
The consumption process occurs within four broad categories or types of
situations; the communication situation, the purchase situation, the usage
situation and the disposition situation. Situational Variables: Situational variables
are external environmental variables that provide the context in which behaviours
are performed. Personal variables and situational variables often jointly influence
buyer behaviour. Specific circumstances often influence consumer behaviour.
Consumer whose attention is demanded elsewhere are likely to disregard
commercial message. Consumers shopping for a special occasion may buy different
services. Urgency circumstances, time, location, temperature and humidity can also
insist consumer to buy different services.
The Communication Situation: The situation in which consumers receive
information has an impact on their behaviour. Whether one is alone or in a group,
in a good mood or bad, in hurry or not influences the degree to which he sees and
listens to marketing communication. A marketer is able to deliver an effective
message to consumers who are interested in the service and are in a receptive
communication situation. However, finding high interest potential buyers in
receptive communications situations is a difficult challenge.
The Purchase Situation: Situations can also affect service selection in a
purchase situation. A shortage of time, such as trying to make a purchase between
all classes, can affect the store choice decision. Marketers must understand how
purchase situations influence consumers in order to develop marketing strategies
that enhance the purchase of their services.
The Usage Situation: Marketers need to understand the usage situations for
which their services are actually appropriate. Using this knowledge, marketers can
communicate how their services create consumer satisfaction in each relevant
usage situation.
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C) SITUATIONAL INFLUENCE
A number of features or characteristics of situation influence behaviours
across the various types of situations described below. We will describe five key
characteristics of situations that help to determine the situation's impact on
behaviour, physical features, social surroundings, temporal perspectives, task
objectives (definition) and antecedent states.
1. Physical Features: Physical surroundings include decor, sounds, aroma,
lighting, weather and configurations of merchandise or other material surrounding
the stimulus object. Physical surroundings are widely used type of situational
influence, particularly for retail applications.
2. Social Surroundings: Social surroundings are the other individuals present
during the consumption process. People's actions are frequently influenced by
those around them. Most people would change their apparel for at least some of
these situations. Social influence is a significant force for acting on our behaviour,
since individuals tend to comply with group expectations, particularly when the
behaviour is visible.
3. Temporal Perspective: Temporal perspectives are situational characteristics
that deal with the effect of time on consumer behaviour. Time as a situational factor
can manifest itself in a number of ways. The amount of time available for the
purchase has a substantial impact on the consumer decision process and
information search.
4. Task Definition: Task definition is the reason the consumption activity is
occurring. The major task dichotomy used by marketers between purchases for
self-use versus gift giving.
5. Antecedent Status: Feature of the individual person that are not lasting
characteristics such as momentary moods or conditions are called antecedent
states. Moods are transient feeling states that are generally not tied to a specific
event or object. They tend to be less intense than emotions and may operate
without the individual's awareness. Although moods may affect all aspects of a
person's behaviour, they generally do not completely interrupt ongoing behaviour
like emotions.
7.4 REVISION POINTS
1) There are various factors influencing buyer behaviour can be grouped in three
categories Internal Influence, External Influence and Environmental Influence.
2) Demographics describe population in terms of its size, distribution, structure
and vital characteristics or personal characteristics of individual buyers such
as age, education, economic conditions.
3) Income is an important variable for distinguishing market segments. A major
problem with segmenting market on the basis of income alone is that income
simply indicates the ability (or inability) to pay for a service. For this reason,
marketers often combine income with other demographic variable(s) to define
target markets accurately.
72
4) The levels of education achieved by buyer such as Graduate, Post Graduate

also influence buyer Behaviour.
5) Occupation of the buyer also influences consumption pattern. The workforce
diversity is providing variety of occupations such as service occupation, blue
collared and white collared.
6) A group is defined as two or more individuals who share a set of norms,
values, beliefs.
7) Social Class is a group of individuals with similar social rank, based on such
factors as occupation, education and wealth.
8) We define situational influence as all those factors particular to a time and
place that do not follow from knowledge of personal stimulus (choice
alternatives) and attributes that have an effect on current behaviour.
9) A number of features or characteristics of situation influence behaviours
across the various types of situations described below. We will describe five
key characteristics of situations that help to determine the situation's impact
on behaviour, physical features, social surroundings, temporal perspectives,
task objectives (definition) and antecedent states.
1) What are the factors influencing consumer Behaviour?
2) What are internal influence factors?
3) What are situational influence factors?
4) What are external factors influence consumer Behaviours?
7.6 SUMMARY
From the viewpoint of the marketing strategist, the mix of cultural, social,
personal and psychological factors which influence behaviour are largely non-
controllable. Because of the influence they exert upon patterns of buying, it is
essential that as much effort as possible is put into understanding how they
interact and, ultimately, how they influence purchase behaviour.
1) ---------- describe population in terms of its size, distribution, structure and
vital characteristics or personal characteristics of individual buyers such as
age, education, economic conditions.
2) A major problem with segmenting market on the basis of income alone is that
income simply indicates the ability (or inability) ----------
3) ---------- and ---------- demographic factors tend to be closely related
4) People share similar financial means, life styles and consumption habits are
called ---------
5) ---------- is a person's distinguishing psychological characteristics that lead to
relatively consistent and lasting responses to stimuli in the environment.
73

1) Anas, H., Ayu, H., & Ajeng, D. (2013). Factors Influencing Attitudes and
Intention to Purchase Counterfeit Luxury Brands among Indonesian
Consumers. Journal of Marketing strategy, Vol. 5, No. 4.
2) Dorota, R.-H. (2013). Determinants of purchasing Behaviour. Volume 17, No 1
3) F.Livesey and P.Lennon. (2007). Factors affecting consumer choice between
manufacturer brand and retailer labels. European Journal of Marketing 12,2,
pp 158-170.
4) Irini. (2012). Age , gender affact on consumer's awarness and source of
awarness for food-related private label brands. Vol3 , no1.
7.8 ASSIGNMENTS
1) Discuss the interrelationship between Consumer Behaviour and Marketing
Mix Strategies with suitable examples
2) You are the manager of a highly sought brand of apparel that offers a complete
range of highly priced but good quality trendy wears for both boys and girls.
Describe how an understanding of consumer Behaviour would be useful you in
deciding on your i. Segmentation strategy ii. New product introduction
1) Consumer Behaviour – Leon Schiffman, Leslie Lazar Kanuk
2) Consumer Behaviour – Hawkins, Best, Coney
3) Customer Behaviour – A Managerial Perspective – Sheth, Mittal – Thomson,
4) Conceptual Issues In Consumer Behaviour Indian Context – S Ramesh Kumar
– Pearson,
5) Consumer Market demographics in India – Edited by S.L.Rao
6) Understanding Your Customer - R.Woodruff and S.F.Gardial
7) Consumer behaviour - Louden, Delebeta
1) For each of the following products, identify the segmentation base that you
consider to be the best one for targeting consumers: a) coffee b) soups c) home
exercise equipment d) mobile phones e) non-fat frozen yogurt Discuss among
yourself and explain your choices.
7.12 KEYWORDS
Demographical, Population Size, Life Cycle, Geo demographic, Psychological,
psychographic, Personality, Self-concept, Values, Consumption Habits,
Perception, Classical conditioning, Operant conditioning, Cognitive conditioning,
Brand Image, Motivation¸ Cognitive Component
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LESSON – 8
PERCEPTION
8.1 INTRODUCTION
We all know that a motivated person is ready to act. How that person acts
is influenced by his or her perception of the situation. In the same situation, two
people with the same motivation may act quite differently based on how they
perceive conditions. You may perceive the waiters at MacDonald’s as casual and
unsophisticated, while your friend may view them as spontaneous with cheerful
personalities. MacDonald’s is targeting those in the second group. Why do people
have different perceptions of the same situation? All of us experience a stimulus by
the flow of information through our five senses: sight, hearing, smell, touch, and
taste. However, each of us receives, organizes and interprets this sensory
information in an individual way.
8.2 OBJECTIVES
• Define perception and its key elements.
• Identify the various elements in perception
• Explain the perceptual process
• Explain the marketing applications of just noticeable difference
CONTENTS
Process of perception
Elements of perception
Marketing Application of Perception
Perception is the process of selecting, organizing and interpreting information
inputs to produce meaning. The above definition of perception of perception lays
emphasis on certain features:
• Perception is a mental process, whereby an individual selects data or
information from the environment, organizes it and then draws significance or
meaning from it.
• Perception is basically a cognitive or thinking process and individual activities;
emotions, feelings etc. are based on his or her perceptions of their
surroundings or environment.
• Perception being an intellectual and cognitive process will be subjective in
nature.
THE PROCESS OF PERCEPTION HAS THREE SUB STAGES -
1. Sensation- Attending to an object/event with one of five senses
2. Organisation - Categorizing by matching sensed stimulus with similar object
in memory, .eg. colour
3. Interpretation- Attaching meaning to stimulus, making judgments as to value
and liking, e.g. bitter taste
People can emerge with different perceptions of the same object because of
three perceptual processes:
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1. Selective attention
2. Selective distortion and
3. Selective retention.
1. Selective Attention. People are exposed to a tremendous amount of daily
stimuli: the average person may be exposed to over 1500 ads a day. A person
cannot possibly attend to all of these; most stimuli will be screened out. Selective
attention means that marketers have to work hard to attract consumers' notice. A
stimuli is more likely to be attended to if it is linked to an event, satisfies current
needs, intensity of input changes (sharp price drop).
2. Selective Distortion. Stimuli do not always come across in the way the
senders intend. Selective distortion is the tendency to twist information into
personal meanings and interpret information in a way that will fit our
preconceptions. Unfortunately, there is not much that marketers can do about
selective distortion. Advertisers that use comparative advertisements (pitching one
product against another), have to be very careful that consumers do not distort the
facts and perceive that the advertisement was for the competitor.
3. Selective retention. People will forget much that they learn but will tend to
retain information that supports their attitudes and beliefs. Because of selective
retention, we are likely to remember good points mentioned about competing
products. Selective retention explains why marketers use drama and repetition in
sending messages to their target market. We remember inputs that support our
beliefs, forgets those that don't.
ELEMENTS OF PERCEPTION
We will examine some of the basic concepts that underlie the perception
process.
Sensation is the immediate and direct response of the sensory organs to
stimuli (an advertisement, a package, and a brand name). A stimulus is any unit of
input to any of the senses.
Sensory receptors are the human organs (i.e., the eyes, ears, nose, mouth, and
skin) that receive sensory inputs, sight, sound, smell, taste, or touch. Human
sensitivity refers to the experience of sensation.
Sensitivity to stimuli varies with the quality of an individual's sensory
receptors and the amount or intensity of the stimuli to which he/she is exposed.
Sensation itself depends on energy change, the difference of input.
Thus, a constant environment, whether very busy and noisy or relatively quiet,
would provide little sensation because of the lack of change, the consistent level of
stimulation.
As sensory input decreases, the ability to detect changes increases. This ability
of the human organism to accommodate itself to varying levels of sensitivity as
external conditions vary not only protects us from damaging, disruptive, or
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irrelevant bombardment when the input level is high but has important
implications for marketers.
The Absolute Threshold - The lowest level at which an individual can
experience a sensation is called the absolute threshold. The point at which a person
can detect the difference between "something" and "nothing" is that
Sensory adaptation is a problem that causes many advertisers to change their
advertising campaigns regularly. Marketers try to increase sensory input in order to
cut through the daily clutter consumers experience in the consumption of
advertising. Some increase sensory input in an effort to cut through the advertising
"clutter." Other advertisers try to attract attention by decreasing sensory input.
The Nature and Process of Perception
Information processing is a series of activities by which stimuli are perceived,
transformed into information and stored. There are four major stages in the
information-processing model, viz., exposure, attention, interpretation and memory.
It is the first three, which constitute the perception process. Exposure occurs when
a stimulus such as an advertisement comes within range of a vision. Attention
occurs when the receptor nerves pass the sensation on to the brain for processing.
Target customer allocates cognitive processing capacity »i.e. pays attention to ad.
Interpretation is the assignment of meaning to the received sensations. Target
customer interprets the message »i.e.' message sent = message received' Memory is
the short-term use of the meaning for the immediate decision-making and the
longer-term retention of the meaning. -Target customer stores the advertisement
and message in memory so can be accessed when needed.
Process of Perception
There is normally a linear flow from exposure to memory.
Exposure - Attention - Interpretation - Memory Perceptual process
As we can see in the perceptual process in figure there is a linear flow from
exposure to memory. But, these processes occur virtually simultaneously and are
clearly interactive. It implies that our memory influences the information we are
exposed to, attend to, and the interpretation we assign. At the same time, memory
itself is being shaped by the information it is receiving. Much of the interpreted
information will not be available to active memory when the individual needs to
make a purchase decision. The perceptual process consists of many sub processes.
We can understand this by taking a note of the input-throughput - output
approach. This approach is based on the fact that there is an input, which when
processed gives outputs. That is, the perceptual inputs will comprise of stimuli in
the environment.
PERCEPTUAL PROCESSES
Perceptual Inputs: The first process in the perceptual processes the presence of
stimuli like people, objects, events, information etc.
Perceptual mechanism: We will discuss the mechanism of perception in the
next section.
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Perceptual outputs: The perceptual outputs will be the behaviour or actions of

the individuals, i.e., the resultant opinions, feelings attitudes etc.
BIASES IN THE PERCEPTUAL PROCESS
Selective exposure- Customers only allow exposure to a small number of the
3000 daily marketing communications e.g. 'zipping' and 'zapping' TV commercials.
• Selective attention - Customers ignore ads that do not relate to their interests
De.g. Flipping past magazine ads.
• Selective interpretation - Customers use perceptual distortion to make
information more congruent with existing beliefs e.g. Smoker versus non-
smoker interpretations of warnings on cigarette packs.
DYNAMICS OF PERCEPTION
a. Physical stimuli from the outside environment, and internal stimuli based
on expectations, motives, and learning is based on previous experiences. Because
each person is a unique individual, with unique experiences, needs, wants, desires,
and expectations, it follows that each individual's perceptions are also unique.
There are three aspects to perceptions—
1) selection, organization, and interpretation of stimuli.
2) Individuals are very selective as to which stimuli they "recognize."
3) They subconsciously organize the stimuli they do recognize according to widely
held psychological principles.
4) And they interpret such stimuli (i.e., they give meaning to them) subjectively in
accordance with their needs, expectations, and experiences.
Perceptual Selection
We as consumers subconsciously exercise selectivity as to the stimuli they
perceive. Which stimuli get selected depends on two major factors in addition to the
nature of the stimulus itself.
The Nature of the Stimulus
Marketing stimulus contains an enormous number of variables. Examples include:
• Nature of the product.
• Its physical attributes.
• The package design.
• The brand name.
• The advertisements and commercials.
• The position of a print ad or commercial.
• The editorial environment.
Contrast is one of the most attention-compelling attributes of a stimulus.
• Advertisers use extreme attention-getting devices to get maximum contrast
and penetrate the consumer's perceptual screen.
• Advertisers use colour contrasts, size, etc., to create stopping power and gain
attention.
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Expectations
People see what they expect to see. What they expect to see is usually based on
familiarity, previous experience, or preconditioned set expectations. Stimuli that
conflict sharply with expectations often receive more attention than those that
conform to expectations.
Motives
People tend to perceive things they need or want. The stronger the need, the
greater the tendency to ignore unrelated stimuli in the environment.
Selective Perception
The consumer's "selection" of stimuli (selective perception) from the
environment is based on the interaction of expectations and motives with the
stimulus itself. Selective exposure—consumers actively seek out messages they find
pleasant or with which they are sympathetic.
a. Consumers actively avoid painful or threatening messages. Selective
attention—consumers have a heightened awareness of the stimuli that meet their
needs or interests.
b. Consumers have a lower awareness of stimuli irrelevant to their needs.
c. People vary in terms of the kind of information in which they are interested
and the form of message and type of medium they prefer.
Perceptual defense—Threatening or otherwise damaging stimuli are less likely
to be perceived than are neutral stimuli. Individuals unconsciously may distort
information that is not consistent with their needs, values, and beliefs.
Perceptual blocking— consumers screen out enormous amounts of advertising
by simply "tuning out."
Perceptual Organization - People do not experience the numerous stimuli they
select from the environment as separate and discrete sensations. People tend to
organize stimuli into groups and perceive them as unified wholes. Gestalt
psychology (Gestalt, in German, means pattern or configuration) is the name of the
school of psychology that first developed the basic principles of perceptual
organization. Three of the most basic principles of perceptual organization are
figure and ground, grouping, and closure.
Figure and Ground
Stimuli that contrast with their environment are more likely to be noticed. The
simplest example is the contrast between a figure and the ground on which it is
placed. The figure is usually perceived clearly. The ground is usually perceived as
indefinite, hazy, and continuous. The figure is more clearly perceived because it
appears to be dominant—the ground appears to be subordinate and less important.
Advertisers have to plan their advertisements carefully to make sure that the
stimulus they want noted is seen as figure and not as ground. Marketers
sometimes run advertisements that confuse the consumer because there is no clear
indication of which is figure and which is ground.
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Grouping
Individuals tend to group stimuli in "chunks" rather than as discrete bits of
information. Grouping can be used advantageously by marketers to imply certain
desired meanings in connection with their products.
Closure
Individuals have a need for closure.
a. As a result, people organize a perception so they see a complete picture.
b. If the pattern of stimuli to which they are exposed is incomplete, they tend
to perceive it as complete—they fill in the missing pieces. The very act of completion
serves to involve the consumer more deeply in the message.
Perceptual Interpretation
The interpretation of stimuli is uniquely individual because it is based on what
individuals expect to see in light of their previous experience. Stimuli are often
highly ambiguous.
a. When stimuli are highly ambiguous, individuals usually interpret them in
such a way that they serve to fulfill personal needs, wishes, and interests. How
close a person's interpretations are to reality depends on the clarity of the stimulus,
the past experiences of the perceiver, and his or her motives and interests at the
time of perception.
Perceptual Distortion
With respect to perceptual distortion, individuals are subject to a number of
influences that tend to distort their perceptions.
Physical Appearances—people tend to attribute the qualities they associate
with certain people to others who may resemble them.
a. Attractive models are more persuasive and have a more positive influence on
consumer attitudes and Behaviour than do average-looking models. Stereotypes—
individuals tend to carry "pictures" in their minds of the meaning of various kinds
of stimuli.
First Impressions—these tend to be lasting but formed while the perceiver does
not know which stimuli are relevant, important, or predictive. Jumping to
Conclusions—many people tend to jump to conclusions before examining all the
relevant evidence—hearing the beginning of an ad and drawing the incorrect
conclusion. Halo Effect—describes situations where the evaluation of a single object
or person on a multitude of dimensions is based on the evaluation of just one or a
few dimensions.
b. Consumers often evaluate an entire product line on the basis of the one
product within the product line.
c. Licensing also is based on the halo effect—associating products with a well-
known celebrity or designer name. Consumer Imagery
Consumers attempt to preserve or enhance their self-images by buying
products they believe agree with that self-image and avoiding products that do not
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agree. This is called consumer imagery. Consumers tend to shop in stores that have
images that agree with their own self-images.
Perceptual Mapping
Perceptual mapping allows marketers to determine how their products appear
to consumers in relation to competitive brands on one or more relevant
characteristics. Perceptual mapping enables the marketer to see gaps in the
positioning of all brands in the product class and to identify areas in which
consumer needs are not being adequately met.
M ARKETING APPLICATION OF PERCEPTION
Positioning of Services
Compared with manufacturing firms, service marketers face several unique
problems in positioning and promoting their offerings. Services are intangible;
image becomes a key factor in differentiating a service from its competition. The
marketing objective is to enable the consumer to link a specific image with a
specific brand name. Many service marketers have developed strategies to provide
customers with visual images and tangible reminders of their service offerings.
Perceived Price
How a consumer perceives a price (perceived price)—as high, as low, as fair—
has a strong influence on both purchase intentions and purchase satisfaction.
Reference Prices
A reference price is any price that a consumer uses as a basis for comparison
in judging another price. Reference prices can be external or internal. An advertiser
generally uses a higher external reference price ("sold elsewhere at...") in an ad in
which a lower sales price is being offered, to persuade the consumer that the
product advertised is a really good buy.
Perceived Quality
Consumers often judge the quality of a product (perceived quality) on the basis
of a variety of informational cues.
a) Intrinsic cues are physical characteristics of the product itself, such as size,
colour, flavor, or aroma.
b) Extrinsic cues are such things as price, store image, service environment,
brand image, and promotional message.
Perceived Quality of Products
Intrinsic cues are concerned with physical characteristics of the product itself,
size, colour, flavor, etc.
a) Consumers like to think they base quality evaluations on intrinsic cues, but
in reality, they are often unable to identify that product in a taste test.
b) In the absence of actual experience with a product, consumers often
evaluate quality on the basis of extrinsic cues, price, brand image, store image, etc.
Many consumers use country-of-origin stereotypes to evaluate products.
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Perceived Quality of Services

It is more difficult for consumers to evaluate the quality of services than the
quality of products. Service characteristics include—intangibility, variability,
perishability, inseparability, simultaneously produced, and consumed. Consumers
are unable to compare services side-by-side as they do products, so consumers rely
on surrogate or extrinsic cues when purchasing services. Marketers try to
standardize their services in order to provide consistency of quality. Service is
consumed as it is being produced. As a result, defective services are difficult to
correct. Researchers have concluded that the service quality that a customer
perceives is a function of the magnitude and direction of the gap between expected
service and the customer's assessment of the service actually delivered.
Price/Quality Relationship
Perceived product value has been described as a trade-off between the
product's perceived benefits (or quality) and perceived sacrifice required to acquire
it. A number of research studies support the view that consumers rely on price as
an indicator of product quality. Other studies suggest consumers are actually
relying on a well-known brand name as a quality indicator. Because price is so
often considered to be an indicator of quality, some products deliberately emphasize
a high price to underscore their claims of quality. Marketers have used the
price/quality relationship to position their products as the top-quality offering in
their product category.
b) There is a positive price/quality relationship.
c) Consumers use price as a surrogate indicator of quality if they have little
information or little confidence in their ability to make a choice.
Retail Store Image
Retail stores have their own images that influence the perception of the quality
of the products they carry. Studies show consumers perceive stores with small
discounts on a large number of products as having lower-priced items than stores
that offer large discounts on a small number of products. The width of product
assortment also affects retail store image. The type of product the consumer wishes
to buy influences his or her selection of retail outlet, conversely, the consumer's
evaluation of a product often is influenced by the knowledge of where it was bought.
Manufacturer's Image
Consumer imagery extends beyond perceived price and store image to the
producers themselves. Manufacturers who enjoy a favorable image generally find
that their new products are accepted more readily than those of manufacturers who
have a less favorable or even a "neutral" image. Today, companies are using
advertising, exhibits, and sponsorship of community events to enhance their
images.
8.4 REVISION POINTS
1) Theory concerning the perceived differentiation between similar stimuli of
varying intensities (i.e., the stronger the initial stimulus, the greater the
82
additional intensity needed for the second stimulus to be perceived as

different).
2) Perception of very weak or rapid stimuli received below the level of conscious
awareness.
1) Identify and describe the three stages of perception
2) Describe two factors that can lead to stimulus adaptation.
3) How does the sense of touch influence consumers’ reactions to products?
8.6 SUMMARY
Perception is the process of selecting, organizing and interpreting information
inputs to produce meaning. Information processing is a series of activities by which
stimuli are perceived, transformed into information and stored. There are four
major stages in the information-processing model, viz., exposure, attention,
interpretation and memory. It is the first three, which constitute the perception
process. Exposure occurs when a stimulus such as an advertisement comes within
range of a vision. Attention occurs when the receptor nerves pass the sensation on
to the brain for processing. Target customer allocates cognitive processing capacity
»i.e. pays attention to ad.
Interpretation is the assignment of meaning to the received sensations. Target
customer interprets the message »i.e.' message sent = message received'
Memory is the short-term use of the meaning for the immediate decision-
making and the longer-term retention of the meaning. -Target customer stores the
advertisement and message in memory so can be accessed when needed.
1) The technique of _____ helps marketers to determine how their products and
services appear to consumers in relation to competitive brands on one or more
relevant characteristics.
a. umbrella branding
b. repositioning
c. perceptual mapping
d. perceptual organization
2) A _____ is any price that a consumer uses as a basis for comparison in judging
another price.
a. tensile
b. objective
c. reference
d. discount
1) Elzinga, D., S. Mulder, and O.J. Vetvik, The consumer decision journey.
McKinsey Quarterly, 2009. 3: p. 96-107
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2) Mascarenhas, O.A., R. Kesavan, and M. Bernacchi, Lasting customer loyalty: a

total customer experience approach. The Journal of Consumer Marketing,
2006. 23(7): p. 397- 405
3) Aronson, E., Wilson, A., and Akert, B.K. 2001. Dissonance Theory.
Psychological Inquiry. 3: 303 – 311.
4) Du Plessis, P.J., and Rousseau, G.G. 2003. Buyer Behaviour. Third Edition.
Cape Town: Oxford University Press.
8.9 ASSIGNMENTS
1) “The whole is greater than the sum of its parts.” Explain this statement.
2) Assuming that some forms of subliminal persuasion may have the desired
effect of influencing consumers; do you think the use of these techniques is
ethical? Explain your answer.
1) K.K.Srivastava, Consumer Behaviour, Galgotia Publishing Co. New Delhi,
2003.
2) Henry Assael, Consumer Behaviour, 6/e, Thomson, New Delhi, 2001.
3) Michael R.Solomon, Consumer Behaviour, 5/e, PHI, New Delhi, 2003.
4) Soloman, Consumer Behaviour: Buying, Having and Being, Pearson / PHI.
5) Kardes, F.R. Consumer Behaviour and managerial Decision making, Pearson
6) Nair – Consumer Behaviour and Marketing Research , Himalaya.
7) H.Assael, Consumer Behaviour, Biztantra.
8) Jain & Bhatt, Consumer Behaviour, S. Chand.
9) Alok,Sinha & Sharma, Customer Relationship Management, Biztantra.
1) It has been said that consumers do not buy drill bits- they buy ways in which
consumers make holes. Assuming this is true, what are the consumers really
purchasing when they buy the following five items?
1. A pair of sneakers
2. Lipstick
3. A life insurance policy
4. A Toyota car
5. Levis Jeans. 3
2) Discuss with your group then present your conclusion to class.
3) When might a marketer want us to notice a change or difference (want the
change to be above JND)?
8.12 KEYWORDS
Exposure , Attention, Selective Exposure, Focal attention, Non Focal Attention,
Habituation, Perceptual Defense, Subliminal perception, Gestalt Psychology,
Closure, Similarity
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LESSON – 9
LEARNING
9.1 INTRODUCTION
Need to understand individual’s capacity to learn. Learning, changes in a
person’s Behaviour caused by information and experience. Therefore to change
consumers’ Behaviour about your product, need to give them new information
reproduct ... free sample etc.
When making buying decisions, buyers must process information. Knowledge
is the familiarity with the product and expertise. Inexperience buyers often use
prices as an indicator of quality more than those who have knowledge of a product.
Non-alcoholic Beer example: consumers chose the most expensive six-pack,
because they assume that the greater price indicates greater quality.
Learning is the process through which a relatively permanent change in
Behaviour results from the consequences of past Behaviour.
This chapter takes a brief look at the two major categories of learning theories
(Behaviourism and constructivism), the major theorists within those categories, and
the implications of those theories for the use of consumer Behaviour research.
9.2 OBJECTIVES
After studying this lesson, you will be able to:
• Explain consumer learning theory and identify the necessary elements.
• Discuss the elements of Classical Conditioning theory.
• Identify the three strategic applications of Classical Conditioning.
• Review the elements of Instrumental Conditioning.
• Discuss the strategic applications of Instrumental Conditioning.
9.3 CONTENTS
Introduction to consumer learning
Behavioural Learning Theories
Instrumental Conditioning
Modeling or Observational Learning
Cognitive Learning Theory
How Consumers Store, Retain, and Retrieve Information
Involvement Theory
Measures of Involvement
Marketing Applications of Involvement
Marketers are concerned with how individuals learn because they want to
teach them, in their roles as consumers, about products, product attributes, and
potential consumer benefits; about where to buy their products, how to use them,
how to maintain them, even how to dispose of them. Marketing strategies are based
on communicating with the consumer.
a) Marketers want their communications to be noted, believed, remembered,
and recalled.
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b) For these reasons, they are interested in every aspect of the learning
process. There is no single, universal theory of how people learn.
There are two major schools of thought concerning the learning process: one
consists of Behavioural learning theories, the other of cognitive learning theories.
Cognitive theorists view learning as a function of purely mental processes,
although Behavioural theorists focus almost exclusively on observable Behaviours
(responses) that occur as the result of exposure to stimuli.
INTRODUCTION TO CONSUMER LEARNING
Consumer learning can be thought of as the process by which individuals
acquire the purchase and consumption knowledge and experience that they apply
to future related Behaviour. Several points in this definition are worth noting.
a) First, consumer learning is a process; that is, it continually evolves and
changes as a result of newly acquired knowledge eor from actual experience.
b) Both newly acquired knowledge and personal experience serve as feedback
to the individual and provide the basis for future Behaviour in similar situations.
The role of experience in learning does not mean that all learning is deliberately
sought. A great deal of learning is also incidental, acquired by accident or without
much effort. The term learning encompasses the total range of learning, from
simple, almost reflexive responses to the learning of abstract concepts and complex
problem solving. c) Most learning theorists recognize the existence of different types
of learning and explain the differences through the use of distinctive models of
learning. Despite their different viewpoints, learning theorists in general agree that
in order for learning to occur, certain basic elements must be present—motivation,
cues, response, and reinforcement.
Motivation - Motivation is based on needs and goals.
a) The degree of relevance, or involvement, with the goal, is critical to how
motivated the consumer is to search for information about a product. Uncovering
consumer motives is one of the prime tasks of marketers, who try to teach
consumer segments why their product will best fulfill their needs.
Cues - If motives serve to stimulate learning, cues are the stimuli that give
direction to the motives. a) In the marketplace, price, styling, packaging,
advertising, and store displays all serve as cues to help consumers fulfill their
needs. Cues serve to direct consumer drives when they are consistent with their
expectations.
Response - How individuals react to a cue—how they behave—constitutes their
response. A response is not tied to a need in a one-to-one fashion. A need or motive
may evoke a whole variety of responses. The response a consumer makes depends
heavily on previous learning; that, in turn, depends on how related responses were
reinforced previously.
Reinforcement - Reinforcement increases the likelihood that a specific response
will occur in the future as the result of particular cues or stimuli.
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BEHAVIOURAL LEARNING THEORIES

Behavioural learning theories are sometimes called stimulus response
theories. a) When a person responds in a predictable way to a known stimulus, he
or she is said to have "learned." Behavioural theories are most concerned with the
inputs and outcomes of learning, not the process. Two theories relevant to
marketing are classical conditioning and instrumental (or operant) conditioning.
Classical Conditioning
Early classical conditioning theorists regarded all organisms as passive
recipients.
a) Conditioning involved building automatic responses to stimuli. Ivan Pavlov
was the first to describe conditioning and to propose it as a general model of how
learning occurs.
b) For Pavlov, conditioned learning results when a stimulus that is paired with
another stimulus elicits a known response and serves to produce the same
response when used alone.
c) He used dogs to demonstrate his theories.
d) The dogs were hungry and highly motivated to eat.
e) Pavlov sounded a bell and then immediately applied a meat paste to the
dogs' tongues, which caused them to salivate.
f) After a sufficient number of repetitions of the bell sound, followed almost
immediately by the food, the bell alone caused the dogs to salivate. In a consumer
Behaviour context, an unconditioned stimulus might consist of a well-known brand
symbol (e.g., the Microsoft "windows" icon) that implies technological superiority
and trouble-free operation (the unconditioned response). Conditioned stimuli might
consist of new products bearing well-known symbols.
Cognitive Associative Learning
Recent conditioning theory views classical conditioning as the learning of
associations among events that allows the organism to anticipate and "represent"
its environment. The relationship (i.e., contiguity) between the conditioned stimulus
and the unconditioned stimulus (the bell and the meat paste) influenced in turn
influenced their Behaviour salivation). Classical conditioning is seen as cognitive
associative learning not the acquisition of new reflexes, but the acquisition of new
knowledge about the world.
Optimal conditioning—that is, the creation of a strong association between the
conditioned stimulus (CS) and the unconditioned stimulus (US)—requires forward
conditioning; that is, the CS should precede the US, repeated pairings of the CS
and the US, a CS and US that logically belong together, a CS that is novel and
unfamiliar, and a US that is biologically or symbolically salient. Under neo-
Pavlovian conditioning, the consumer can be viewed as an information seeker who
uses logical and perceptual relations among events, along with his or her own
preconceptions, to form a sophisticated representation of the world.
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Strategic Applications of Classical Conditioning

Three basic concepts derive from classical conditioning: repetition, stimulus
generalization, and stimulus discrimination.
1. Repetition works by increasing the strength of the association and by
slowing the process of forgetting.
i) After a certain number of repetitions retention declines.
ii) This effect is known as advertising wear out and can be decreased by
varying the advertising messages.
iii) Wear out may be avoided by varying the message through cosmetic variation
or substantive variation.
According to classical conditioning theorists, learning depends not only
on repetition, but also on the ability of individuals to generalize.
2. Stimulus generalization explains why imitative "me too" products succeed in
the marketplace: consumers confuse them with the original product they have seen
advertised.
i) It also explains why manufacturers of private label brands try to make their
packaging closely resemble the national brand leaders. The principle of
stimulus generalization is applied by marketers to product line, form, and
category extensions.
ii) In product line extensions, the marketer adds related products to an already
established brand, knowing that the new product is more likely to be
adopted when it is associated with a known and trusted brand name.
i) Conversely, it is much more difficult to develop a totally new brand.
iii) Marketers offer product form extensions that include different sizes, different
colours, and even different flavors.
iv) Product category extensions generally target new market segments.
a) The success of this strategy depends on a number of factors.
b) For example, if the image of the parent brand is one of quality,
consumers are more likely to bring positive associations to the new
category extensions. Family branding—the practice of marketing a
whole line of company products under the same brand name—is
another strategy that capitalizes on the neralize favorable brand
associations from one product to the next. Retail private branding
often achieves the same effect as family branding.
3. Stimulus discrimination is the opposite of stimulus generalization and
results in the selection of specific stimulus from among similar stimuli.
i) The consumer's ability to discriminate among similar stimuli is the basis of
positioning strategy, which seeks to establish a unique image for a brand in
the positive positioning, a major competitive advantage.
ii) The image, or position, that a product or service has in the mind of the
consumer is critical to its success.
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iii) Unlike the imitator who hopes consumers will generalize their perceptions
and attribute special characteristics of the market leader's products to their
own products, market leaders want the consumer to discriminate among
similar stimuli. Most product differentiation strategies are designed to
distinguish a product or brand from that of competitors on the basis of an
attribute that is relevant, meaningful, and valuable to consumers. It often is
quite difficult to unseat a brand leader once stimulus discrimination has
occurred.
iv) In general, the longer the period of learning—of associating a brand name
with a specific product—the more likely the consumer is to discriminate, and
the less likely to generalize the stimulus. The principles of classical
conditioning provide the theoretical underpinnings for many marketing
applications.
v) Repetition, stimulus generalization, and stimulus discrimination are all
major applied concepts that help explain consumer Behaviour.
INSTRUMENTAL CONDITIONING
Like classical conditioning, instrumental conditioning requires a link between
a stimulus and a response.
a) However, in instrumental conditioning, the stimulus that results in the most
satisfactory response is the one that is learned. Instrumental learning theorists
believe that learning occurs through a trial-and-error process, with habits formed
as a result of rewards received for certain responses or Behaviours.
b) Although classical conditioning is useful in explaining how consumers learn
very simple kinds of Behaviours, instrumental conditioning is more helpful in
explaining complex, goal-directed activities. According to American psychologist B.
F. Skinner, most individual learning occurs in a controlled environment in which
individuals are "rewarded" for choosing an appropriate Behaviour.
c) In consumer Behaviour terms, instrumental conditioning suggests that
consumers learn by means of a trial-and error process in which some purchase
Behaviours result in more favorable outcomes (i.e., rewards) than other purchase
Behaviours.
d) A favorable experience is instrumental in teaching the individual to repeat a
specific Behaviour. Like Pavlov, Skinner developed his model of learning by working
with animals. ) In a marketing context, the consumer who tries several brands and
styles of jeans before finding a style that fits her figure (positive reinforcement) has
engaged in instrumental learning.
Reinforcement of Behaviour
Skinner distinguished two types of reinforcement (or reward) influence, which
provided that the likelihood for a response would be repeated.
a) The first type, positive reinforcement, consists of events that strengthen the
likelihood of a specific response.
b) Negative reinforcement is an unpleasant or negative outcome that also
serves to encourage a specific Behaviour.
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i) Fear appeals in ad messages are examples of negative reinforcement.

c) Either positive or negative reinforcement can be used to elicit a desired
response.
d) Negative reinforcement should not be confused with punishment, which is
designed to discourage Behaviour.
Forgetting and extinction—when a learned response is no longer reinforced, it
diminishes to the point of extinction; that is, to the point at which the link between
the stimulus and the expected reward is eliminated. a) Forgetting is often related to
the passage of time; this is known as the process of decay. b) Marketers can
overcome forgetting through repetition and can combat extinction through the
deliberate enhancement of consumer satisfaction.
Reinforcement schedules—marketers have found that product quality must be
consistently high and provide customer satisfaction with each use for desired
consumer Behaviour to continue. Marketers have identified three types of
reinforcement schedules: total (or continuous) reinforcement, systematic (fixed ratio)
reinforcement, and random (variable ratio) reinforcement.
Variable ratios tend to engender high rates of desired Behaviour and are
somewhat resistant to extinction—perhaps because, for many consumers, hope
springs eternal. Shaping—the reinforcement of Behaviours that must be performed
by consumers before the desired Behaviour can be performed is called shaping. a)
Shaping increases the probabilities that certain desired consumer Behaviour will
occur.
MODELING OR OBSERVATIONAL LEARNING
Learning theorists have noted that a considerable amount of learning takes
place in the absence of direct reinforcement, either positive or negative, through a
process psychologists call modeling or observational learning (also called vicarious
learning). They observe how others behave in response to certain situations
(stimuli), the ensuing results (reinforcement) that occur, and they imitate (model)
the positively reinforced Behaviour when faced with similar situations. a) Modeling
is the process through which individuals learn Behaviour by observing the
Behaviour of others and the consequences of such Behaviour. b) Their role models
are usually people they admire because of such traits as appearance,
accomplishment, skill, and even social class. c) Children learn much of their social
Behaviour and consumer Behaviour by observing their older siblings or their
parents. Advertisers recognize the importance of observational learning in their
selection of models, whether celebrities or unknowns. Sometimes ads depict
negative consequences for certain types of Behaviour. d) This is particularly true of
public policy ads, which may show the negative consequences of smoking, of
driving too fast, or taking drugs.
COGNITIVE LEARNING THEORY
Not all learning is the result of repeated trials. a) Learning also takes place as
the result of consumer thinking and problem solving. Cognitive learning is based on
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mental activity. Cognitive learning theory holds that the kind of learning most
characteristic of human beings is problem solving, and it gives some control over
their environment.
Information Processing
The human mind processes the information it receives as input much as a
computer does.
a) Information processing is related to both the consumer's cognitive ability
and the complexity of the information to be processed. Individuals differ in terms of
their ability to form mental images and in their ability to recall information. The
more experience a consumer has with a product category, the greater his or her
ability to make use of product information.
HOW CONSUMERS STORE, RETAIN, AND RETRIEVE INFORMATION
The structure of memory—because information processing occurs in stages, it
is believed that content is stored in the memory in separate storehouses for further
processing; a sensory store, a short-term store, and a long-term store. Sensory
store—all data comes to us through our senses, however, our senses do not
transmit information as whole images. a) The separate pieces of information are
synchronized as a single image. b) This sensory store holds the image of a sensory
input for just a second or two. c) This suggests that it's easy for marketers to get
information into the consumer's sensory store, but hard to make a lasting
impression.
Short-term store—if the data survives the sensory store, it is moved to the
short-term store.
d) This is our working memory.
e) If rehearsal—the silent, mental repetition of material— takes place, then the
data is transferred to the long-term store.
f) If data is not rehearsed and transferred, it is lost in a few seconds. Long-
term store—once data is transferred to the long-term store it can last for days,
weeks, or even years. Rehearsal and encoding—the amount of information available
for delivery from the short-term store to the long-term store depends on the amount
of rehearsal an individual gives to it.
g) Encoding is the process by which we select and assign a word or visual
image to represent a perceived object.
h) Learning visually takes less time than learning verbal information.
i) How much consumers encode depends on their cognitive commitment to the
intake of the information and their gender. Information overload takes place when
the consumer is presented with too much information.
j) It appears to be a function of the amount of information and time frame of
that information.
k) There are contradictory studies on what constitutes overload.
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Information is constantly organized and reorganized as new links between

chunks of information are forged. m) In fact, many information-processing theorists
view the long-term store as a network consisting of nodes (i.e., concepts) with links
among them.
n) As individuals gain more knowledge they expand their network of
relationships, and sometimes their search for additional information. o) This
process is known as activation, which involves relating new data to old to make the
material more meaningful.
p) The total package of associations brought to mind when a cue is activated is
called a schema.
q) Research has found that older adults appear to be more reliant on schema-
based information processing strategies than younger adults. r) Consumers'
information search is often dependent upon how similar or dissimilar (discrepant)
presented products are to product categories already stored in memory.
i) Consumers recode what they have already encoded to include larger
amounts of information (chunking).
s) The degree of prior knowledge is an important consideration. t)
Knowledgeable consumers can take in more complex chunks of information than
those who are less knowledgeable in the product category. u) Information is stored
in long-term memory in two ways: episodically (i.e., by the order in which it is
acquired) and semantically (according to significant concepts).
v) Many learning theorists believe that memories stored semantically are
organized into frameworks by which we integrate new data with previous
experience.
Retrieval is the process by which we recover information from long-term
storage.
w) A great deal of research is focused on how individuals retrieve information
from memory.
x) Studies show that consumers tend to remember the product's benefits,
rather than its attributes.
y) Motivated consumers are likely to spend time interpreting and elaborating
on information they find relevant to their needs; and are likely to activate such
relevant knowledge from long-term memory.
z) Research findings suggest that incongruent (e.g. unexpected) elements
pierce consumers' perceptual screens and improve the memorability of an ad when
these elements are relevant to the advertising message. a) Incongruent elements
that are not relevant to an ad also pierce the consumer's perceptual screen but
provide no memorability for the product. Interference effects are caused by
confusion with competing ads and result in a failure to retrieve.
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b) Advertisements for competing brands or for other products made by the

same manufacturer can lower the consumer's ability to remember advertised brand
information.
c) There are actually two kinds of interference.
i) New learning can interfere with the retrieval of previously stored material.
ii) Old learning can interfere with the recall of recently learned material.
1. Limited and Extensive Information Processing
For a long time, consumer researchers believed that all consumers passed
through a complex series of mental and Behavioural stages in arriving at a
purchase decision (extensive information processing).
a) These stages ranged from awareness (exposure to information), to evaluation
(preference, attitude formation), to Behaviour (purchase), to final evaluation
(adoption or rejection). This same series of stages is often presented as the
consumer adoption process. Some theorists began to realize that there were some
purchase situations that simply did not call for extensive information processing
and evaluation; that sometimes consumers simply went from awareness of a need
to a routine purchase, without a great deal of information search and mental
evaluation (limited information processing).Purchases of minimal personal
importance were called low involvement purchases, and complex, search-oriented
purchases were considered high-involvement purchases.
INVOLVEMENT THEORY
Involvement theory developed from research into hemispherical lateralization
or split-brain theory.
a) The premise is that the right and left hemispheres of the brain specialize in
the kinds of information they process.
b) The left hemisphere is responsible for cognitive activities such as reading,
speaking, and attribution information processing.
c) The right hemisphere of the brain is concerned with nonverbal, timeless,
pictorial, and holistic information.
1. Involvement Theory and Media Strategy
Individuals passively process and store right-brain information.
a) Because it is largely pictorial, TV viewing is considered a right hemisphere
activity.
b) Passive learning was thought to occur through repeated exposures to low-
involvement information.
i) TV commercials were thought to produce change in consumer Behaviour
before it changed consumer attitudes.
c) The left hemisphere is associated with high-involvement information.
i) Print media (newspapers and magazines) are considered left hemisphere or
high-involvement activity.
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Right-brain theory is consistent with classical conditioning and stresses the

importance of the visual component of advertising.
d) Recent research suggests that pictorial cues help recall and familiarity,
although verbal cues trigger cognitive functions, encouraging evaluation.
e) The right-brain processing theory stresses the importance of the visual
component of advertising, including the creative use of symbols.
f) Pictorial cues are more effective at generating recall and familiarity with the
product, although verbal cues (which trigger left-brain processing) generate
cognitive activity that encourages consumers to evaluate the advantages and
disadvantages of the product.
2. There are limitations to split-brain theory
Research suggests the spheres of the brain do not always operate
independently of each other, but work together to process information. There is
evidence that both sides of the brain are capable of low- and high-involvement. It
does seem the right side is more cognitively oriented and the left side more
affectively oriented.
Involvement Theory and Consumer Relevance
A consumer's level of involvement depends on the degree of personal relevance
that the product holds for the consumer.
a) High-involvement purchases are those that are very important to the
consumer in terms of perceived risk.
b) Low-involvement purchases are purchases that are no very important to the
consumer, hold little relevance, and little perceived risk.
Highly involved consumers find fewer brands acceptable (they are called
narrow categorizers); uninvolved consumers are likely to be receptive to a greater
number of advertising messages regarding the purchase and will consider more
brands (they are broad categorizers).
CENTRAL AND PERIPHERAL ROUTES TO PERSUASION
Central and peripheral routes to persuasion—the central premise is that
consumers are more likely to weigh information carefully about a product and to
devote considerable cognitive effort to evaluating it when they are highly involved
with the product category and vice versa.
a) Use of the central route to persuasion is more effective in marketing for
high-involvement purchases.
b) The peripheral route to persuasion is more effective for low-involvement
purchases.
The elaboration likelihood model (ELM) suggests that a person's level of
involvement during message processing is the critical factor in determining the
most effective route of persuasion.
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c) Thus, when involvement is high, consumers follow the central route and
base their attitudes or choices on the message arguments.
d) When involvement is low, they follow the peripheral route and rely more
heavily on other message elements to form attitudes or make product choices. The
marketing implications of the elaboration likelihood model are clear:
e) For high-involvement purchases, marketers should use arguments stressing
the strong, solid, high-quality attributes of their products—thus using the central
(i.e., highly cognitive) route.
f) For low-involvement purchases, marketers should use the peripheral route
to persuasion, focusing on the method of presentation rather than on the content of
the message(e.g., through the use of celebrity spokespersons or highly visual and
symbolic advertisements).
MEASURES OF INVOLVEMENT
Researchers have defined and conceptualized involvement in a variety of ways
including ego involvement, commitment, communication involvement, purchase
importance, extent of information search, persons, products situations, and
purchase decisions.
a) Some studies have tried to differentiate between brand involvement and
product involvement.
b) Others differentiate between situational, enduring, and response
involvement. The lack of a clear definition about the essential components of
involvement poses some measurement problems.
c) Researchers who regard involvement as a cognitive state are concerned with
the measurement of ego involvement, risk perception, and purchase importance.
d) Researchers who focus on the Behavioural aspects of involvement measure
such factors as the search for and evaluation of product information.
e) Others argue that involvement should be measured by the degree of
importance the product has to the buyer. Because of the many different dimensions
and conceptualizations of involvement, it makes sense to develop an involvement
profile, rather than to measure a single involvement level.
Marketing Applications of Involvement
Involvement theory has a number of strategic applications for the marketer. f)
The left-brain (cognitive processing)/right-brain (passive processing) paradigm
seems to have strong implications for the content, length, and presentation of both
print and television advertisements. g) By understanding the nature of low-
involvement information processing, marketers can take steps to increase
consumer involvement with their ads.
Measures of Consumer Learning Market share and the number of brand-loyal
consumers are the dual goals of consumer learning.
a) Brand-loyal customers provide the basis for a stable and growing market
share.
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b) Brands with larger market shares have proportionately larger groups of loyal
buyers.
Recognition and Recall Measures
Recognition and recall tests are conducted to determine whether consumers
remember seeing an ad, the extent to which they have read it or seen it and can
recall its content, their resulting attitudes toward the product and the brand, and
their purchase intentions. a) Recognition tests are based on aided recall, although
recall tests use unaided recall.
b) In recognition tests, the consumer is shown an ad and asked whether he or
she remembers seeing it and can remember any of its salient points.
c) In recall tests, the consumer is asked whether he or she has read a specific
magazine or watched a specific television show, and if so, can recall any ads or
commercials seen, the product advertised, the brand, and any salient points about
the product.
The learning processes among the customer roles
Learning User Payer Buyer
Process
Cognitive User learns about Payer learns about used Buyers learn about
learning the use of products car prices from the used new stores by word of
and services by car price book mouth and about
reading about them brand ratings from
choice etc.
Classical Food preferences Perceived fairness of Buyers are
conditioning are acquired in price levels is conditioned through
early childhood classically conditioned. patronage of the same
vendors.
Instrumental Users adopt new Payers 'buy cheap' at Buyers learn they can
conditioning products and first, then experience get better terms by
services if they find shoddy performance and changing vendors
them beneficial. learn to 'invest' more.
Modeling Users model their Budgeting decisions Buyers may switch
clothing and car mirror those of admired preferences to stores
choice after people companies. Payers learn and vendors that are
they admire. norms for tipping by trendy.
observing others.
Adoption of Users adopt Payers adopt financing Buyers adopt
innovation product and service innovations like credit purchase procedure
feature innovations cards, leasing etc. innovations like
buying through the
internet.
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Comparison of Learning Theories

Behaviourist Cognitivist
Definition of Change in behaviour Process of gaining or changing
learning based on Experience. insights, outlooks, or through patterns
Conditions that Environment Needs, interests, feelings, etc. of
Influence learning learner. S-R
Learning Conditioning in small Something must go on inside the
process steps. Reinforcement learner that can't be measured, but
must be inferred from observed
Behaviour. There is more to learning
than just observed Behaviour
Central We can't know students Something must go on inside the
argument have learned unless we learner that can't be measured, but
can measure changes in must be inferred from observed
observed Behaviour. Behaviour. There is more to learning
than just observed Behaviour
9.4 REVISION POINTS
1) A learning is a process by which individuals acquire the purchase and
Consumption knowledge and experience that they apply to future related
Behaviour.
2) Cognitive Theories: A theory of learning based on mental information
processing, often in response to problem solving
3) Behavioural Theories: Theories based on the premise that learning takes place
as the result of observable responses to external stimuli. Also known as
stimulus response theory.
4) A reinforcement is positive or negative outcome that influences the likelihood
that a specific Behaviour will be repeated in the future in response to a
particular cue or stimulus.
1) Explain how learning is related to brand loyalty
2) What is the difference between an unconditioned stimulus and a conditioned
stimulus?
3) What is the difference between classical conditioning and instrumental
conditioning?
4) What is the major difference between Behavioural and cognitive theories of
learning?
5) Name the three stages of information processing.
9.6 SUMMARY
Learning is a change in Behaviour caused by experience. Learning can occur
through simple associations between a stimulus and a response or via a complex
series of cognitive activities. Behavioural learning theories assume that learning
occurs as a result of responses to external events. Classical conditioning occurs
when a stimulus that naturally elicits a response (an unconditioned stimulus) is
paired with another stimulus that does not initially elicit this response. Over time,
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the second stimulus (the conditioned stimulus) elicits the response even in the
absence of the first. This response can also extend to other, similar stimuli in a
process we call stimulus generalization. This process is the basis for such
marketing strategies as licensing and family branding, where a consumer’s positive
associations with a product transfer to other contexts.
1) ---------- can be thought of as the process by which individuals acquire the
purchase and consumption knowledge and experience that they apply to
future related Behaviour.
2) ---------- is one of the prime tasks of marketers, who try to teach consumer
segments why their product will best fulfill their needs.
3) ---------- increases the likelihood that a specific response will occur in the
future as the result of particular cues or stimuli.
4) Two theories relevant to marketing are ---------- and ---------
5) ----------- theory holds that the kind of learning most characteristic of human
beings is problem solving, and it gives some control over their environment.
1) Sheth, J.N. (1973), “A model of industrial buyer Behaviour”, Journal of
Marketing, Vol 37, October, pp 50-65
2) Webster Jr. F.E. (1965). Modeling the Industrial Buying Process. Journal of
Marketing Research. Vol 2, pp 370-376.
3) Wind, Y.P. and Thomas, J.R. (1980), Conceptual and Methodological Issues in
Organizational Buying Behaviour, European Journal of Marketing, Volume 14,
No. 5, pp-239- 263
4) Johnston, W.J. and Lewin, J.E. (1996), “Organizational buying Behaviour:
toward an integrative framework”, Journal of Business Research, Vol.35, pp.
1-26
5) Dadzie, K, & Johnston, W 1999, 'Influence in the organizational buying center
and logistics automation technology adoption', Journal of Business &
Industrial Marketing, 14, 5/6, p. 433
9.9 ASSIGNMENTS
1) How can the principles of a) classical conditioning theory and b) instrumental
conditioning theory be applied to the development of marketing strategies?
2) Describe in learning terms the conditions under which family branding is a
good policy and those under which it is not.
3) Define the following memory structures: sensory store, short-term store
(working memory), and longterm store. Discuss how each of these concepts
can be used in the development of an advertising strategy.
1) David L Loudon and Albert J Della Bitta, Consumer Behaviour, 4/e TMH, New
Delhi, 2002.
2) Schiffman, L.G. and Kanuk LL Consumer Behaviour, 8/e, Pearson Education,
New Delhi, 2003.
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3) Roger D.Black Well et al, Consumer Behaviour, 9/e Thomson, New Delhi,
2002.
1) Should Head and Shoulders Shampoo be sold worldwide with the same
formulation? In the same package? With the same advertising theme? Explain
your answers.
2) Mercedes-Benz, a German car manufacturer is using cross cultural
psychographic segmentation to develop marketing campaigns for a new two
seater sports car directed at consumers in different countries. How should the
company market the car in the United States? How should it market the car in
Japan?
3) Discuss a recent product purchase you regard as high involvement and
another one you view as low involvement with three classmates. Do they agree
with your selections? Describe how their points of view may be related to
a. Brand loyalty
b. Frequency of use
c. Price paid
d. Perceived risk associated with the purchase
9.12 KEYWORDS
Cognitive Learning, Classical Conditioning, Instrumental conditioning, Modeling,
Behaviourism, Constructivism, Social Learning, Locus of Control, Social
Reinforcement, Self Reinforcement

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LESSON – 10
ATTITUDE
10.1 INTRODUCTION
We as individuals learn attitudes through experience and interaction with
other people.
Our attitudes toward a firm and its products as consumers greatly influence
the success or failure of the firm’s marketing strategy. Attitudes and attitude
change are influenced by consumer’s personality and lifestyle. Consumers screen
information that conflicts with their attitudes. We distort information to make it
consistent and selectively retain information that reinforces our attitudes, in other
words, brand loyalty. But, there is a difference between attitude and intention to
buy (ability to buy).
For instance, Honda, dispelled the unsavory image of a motorbike rider, in the
late 1950s with the slogan “You meet the nicest people on a Honda”. But with the
changing market of the 1990s, and baby boomers aging, Hondas market was
returning to hard core. To change this they have a new slogan “Come ride with us”.
Through acting and learning, people acquire beliefs and attitudes, which in
turn, influence their buying behaviour. A BELIEF is a descriptive thought that a
person holds about something. A customer may believe that Taj group of Hotels
have the best facilities and most professional staff of any hotel in the price range.
These beliefs may be based on real knowledge, opinion, or faith. They may or may
not carry an emotional charge.
Marketers are interested in the beliefs that people have about specific products
and services. Beliefs reinforce product and brand images. People act on beliefs. If
unfounded customer beliefs deter purchases marketers will want to do a campaign
to change them.
Unfounded consumer beliefs can severely affect the revenue and even the life
of hospitality and travel companies. Among these beliefs might be the following:
• A particular hamburger chain served ground kangaroo meat.
• A particular hotel served as Mafia headquarters.
• A particular airline has poor maintenance.
• A particular country has unhealthy food-handling standards.
People have attitudes about almost everything: religion, politics, clothes, music
and food.
10.2 OBJECTIVES
After going through this lesson, you should be able to
• Describe attitude in terms of its four elements.
• Discuss the structural models of attitude: tricomponent, multi-attribute,
trying-to-consume, and attitude-toward the- ad.
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10.3 CONTENTS
Models of Attitude
Attitude Formation and Change
Cognitive Dissonance Theory
Attribution Theory
CONSUMER ATTITUDES
An attitude describes a person's relatively consistent evaluations, feelings, and
tendencies towards an object or an idea. Attitudes put people into a frame of mind
for liking or disliking things and moving toward or away from them. Companies can
benefit by researching attitudes toward their products. Understanding attitudes
and beliefs is the first step toward changing or reinforcing them. Attitudes are very
difficult to change. A person's attitudes fit into a pattern, and changing one attitude
may require making many difficult adjustments. It is easier for a company to create
products that are compatible with existing attitudes than to change the attitudes
toward their products. There are exceptions, of course, where the high cost of trying
to change attitudes may pay off. We can now appreciate the many individual
characteristics and forces influencing consumer behaviour. Consumer choice is the
result of a complex interplay of cultural, social, personal, and psychological factors.
We as marketers cannot influence many of these; however, they help the marketer
to better understand Customer's reactions and behaviour.
Attitudes are defined as a mental predisposition to act that is expressed by
evaluating a particular entity with some degree of favor or disfavor. The value of
attitude in marketing can be explained in terms of its importance in prediction,
diagnostic value and also as relatively inexpensive information that is easily
obtained.
MODELS OF ATTITUDE
We will now look at the various models of attitudes. But before looking at these
models, we have to understand the fact that many a times our attitudes depend on
the situations.
Structural models of attitudes: To understand the relationships between
attitudes and behaviour, psychologists have tried to develop models that capture
the underlying dimensions of attitude. To serve this purpose, the focus has been on
specifying the composition of an attitude to better explain or predict behaviour.
1. TRI-COMPONENT ATTITUDE MODEL
According to the tri-component attitude model, attitude consists of three
major components, viz., a cognitive component, an affective component, and a
conative component.
a. The cognitive component: The cognitive component consists of a Wledge and
perceptions (about an object). This knowledge and resulting perceptions commonly
take the form of beliefs, images, and long-term memories. A utility function
representing the weighted product of attributes and criteria would be used to
develop the final ranking and thus choice. This model represents the process used
by individuals with a strong Thinking Cognitive Style.
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b. The affective component: The affective component of an attitude comprises of

the consumers emotions or feelings (toward an object). These emotions or feelings
are frequently treated by consumer researchers as primarily evaluative in nature;
i.e., they capture an -object, which might be positive, negative, or mixed reaction
consisting of our feelings about an object. Buying of any product or service would
be accomplished on the basis of how each product/service makes the decision
maker feel. The product that evokes the greatest positive (pleasurable) affective
response would thus be ranked first. The affective response may be derived through
association (i.e. category attributes) or directly attributed to the interaction between
the product or service and the decision maker. It is believed that the manner in
which the product/service affirms or disaffirms the self-concept of the decision
maker has a strong impact to the decision maker's affect response to the candidate.
This model represents the process used by individuals with a strong Feeling
Cognitive Style. Ordering of the three job candidates would be accomplished on the
basis of how each candidate makes the decision maker feel. The candidate that
evokes the greatest positive (pleasurable) affective response would thus be ranked
first. The affective response may be derived through association (i.e, category
attributes) or directly attributed to the interaction between the candidate and the
decision maker. It is believed that the manner in which the candidate affirms or
disaffirms the self-concept of the decision maker has a strong impact to the
decision maker's affect response to the candidate.
c. The conative component: The conative component is concerned with the
likelihood or tendency of certain Behaviour with regard to the attitude object. It
would also mean the predisposition or tendency to act in a certain manner toward
an object
2 MULTI-ATTRIBUTE ATTITUDE MODELS
Multi-attribute attitude models portray consumers' attitudes with regard to an
attitude "object" as a function of consumers' perceptions and assessment of the key
attributes or beliefs held with regard to the particular attitude "objects". The three
models, which are very popular, are: the attitude-toward-object model, the attitude-
toward-behaviour model, and the theory of- reasoned-action model.
1) Attitude toward object model. The attitude-toward object model is suitable
for measuring attitudes towards a product or service category or specific brands.
This model says that the consumer's attitude toward a product or specific brands of
a product is a function of the presence or absence and evaluation of certain
product-specific beliefs or attributes. In other words, consumers generally have
favorable attitudes toward those brands that they believe have an adequate level of
attributes that they evaluate as positive, and they have unfavorable attitudes
towards those brands they feel do not have an adequate level of desired attributes
or have too many negative or undesired attributes. For instance, you may like
BMWs
2) Attitude toward Behaviour model: This model is the individual's attitude
toward the object itself. The crux of the attitude-towards-behaviour model is that it
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seems to correspond somewhat more closely to actual behaviour than does the
attitude-toward-object model. So taking on from liking a BMW, we may say you are
not ready to buy/drive one because you believe that you are too young/old to do so
3) Theory of reasoned-action-model: This model represents a comprehensive
integration of attitude components into a structure that is designed to lead to both
better explanations and better predictions of behaviour. Similar to the basic tri-
component attitude model, the theory-of-reasoned-action model incorporates a
cognitive component, an affective component, and a conative component; however
these are arranged in a pattern different from that of the tricomponent model.
To understand intention, in accordance with this model, we also need to
measure the subjective norms that influence an individual's intention to act. A
subjective norm can be measured directly by assessing a consumer's feelings as to
what relevant others would think of the action being contemplated; i.e., would they
look favorably or unfavorably on the anticipated action?
3. THEORY OF TRYING TO CONSUME
The theory of trying to consume has been designed to account for the many
cases where the action or outcome is not certain, but instead reflects the
consumer's attempts to consume or purchase. In such cases there are often
personal impediments and/or environmental impediments that might prevent the
desired action or outcome from occurring. Here again, the key point is that in these
cases of trying, the outcome is not, and cannot be assumed to be certain. The focus
here is the "trying" or seeking part, rather than the outcome (consumption)
Attitude-toward-the-ad models
The gist of this model can be explained by the following: 1) Normally if you like
an ad, you are more likely to purchase the advertised brand. 2) For a new
product/brand, an ad has a stronger impact on brand attitude and purchase
intention.
4. ATTITUDE FORMATION AND CHANGE
1. How are attitudes formed?
We examine attitude formation by dividing into three areas: how attitudes are
learned, the sources of influence on attitude formation, and the impact of
personality on attitude formation. 1. How attitudes are learned:
1) The shift from having no attitude toward a given object to having an attitude
is learned. The learning may come from information exposure, consumers' own
cognition (knowledge or belief), or experience.
2) Consumers may form an attitude before or after a purchase. 2. Sources of
influence on attitude formation: personal experience, friends and family, direct
marketing, or mass media.
3) Personality factors: such as high/low need for cognition (information
seeking), and social status consciousness
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1. Learning of Attitudes
By formation of attitude, we mean a situation, where there is a shift from
having no attitude towards a given object to having some attitude toward it. This
shift from no attitude to an attitude or the formation of attitude is a result of
learning. Attitudes are generally formed through:
• Repeated exposure to novel social objects,
• Classical conditioning,
• Operant conditioning and
• Exposure to live and symbolic models.
Consumers generally purchase new products that are associated with a
favorably viewed brand name. Their favorable attitude toward the brand name is
frequently the result of repeated satisfaction with other products produced by the
same company. In terms of classical conditioning, an established brand name is an
unconditioned stimulus that has resulted in a favorable brand attitude through
past positive reinforcement. A new product, which is yet to be linked to the
established brand, would be the conditioned impulse. For example, by giving a new
anti-wrinkle lotion the benefit of its well-known and respected family name,
Johnson & Johnson may be counting on an extension of the favorable attitude
already associated with the brand name to the new product. They are counting on
stimulus generalization from the brand name to the new product. It has been
shown by research that the "fit" between a parent brand like in the case -wrinkle, is
a function of two factors:
(1) the similarity between the pre-existing product categories already
associated with the parent brand and the new extension, and
(2) the "fit" or match between the images of the parent brand and the new
extension. At times, attitudes follow the purchase and consumption of a product.
For example, a consumer may purchase a brand-name product without having a
prior attitude towards it, because it is the only product available like the last bottle
of shampoo in a hotel store). Consumers sometimes make trial purchases of new
brands from product categories in which they have little personal involvement. If
they find the purchased brand to be satisfactory, then they are likely to develop a
favorable attitude toward it. Life is too complicated to predict what attitudes will
persist and which will change but early socialization experiences do shape
attitudes.
2. Sources of Influence on Attitude Formation
The formation of consumer attitudes is strongly influenced by personal
experience, the influence of family and friends, direct marketing, and mass media.
Attitudes towards goods and services are primarily formed through the consumer's
direct experience
Personality Factors
We know that the personality of each individual is different and it plays a very
crucial role in formation of attitude. Say for example, if you have a high need for
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cognition, i.e., you crave for information and enjoy thinking. Then you are likely to
form a positive attitude in response to ads or direct mail that are rich in product
related information. On the other hand, your friend Ravi, who is relatively low in
need for cognition, is more likely to form positive attitudes in response to ads that
feature an attractive model or well-known celebrity.
2. Attitude Change and Persuasion
3. Strategies of Attitude Change
Bringing about a change in the consumer attitudes is a very important
strategic consideration for us marketing people. When the product or brand is the
market leader, the marketers will work at ensuring that their customers continue to
patronize their product with the existing positive attitude. Such firms also have to
ensure that their existing loyal customers do not succumb to their competitor's
attitude change ploys. But it is the firm whose is not the brand leader, which tries
to adopt marketing strategies so as to change the attitudes of the market leaders,
customers and win them over. Among the attitude change strategies that are
available to them are:
1) Changing the consumer's basic motivational function
2) Associating the product with an admired group or event
3) Resolving two conflicting attitudes
4) Altering components of the Multi-attribute model, and
5) Changing consumer beliefs about competitor's brands. Now let us look at each
of these strategies in greater details.
1. Changing the basic motivational function:
This strategy calls for changing consumer attitudes towards a product or
brand by making a new need prominent. One such method changing motivation is
called the functional approach. As per this approach, attitudes can be classified in
terms of four functions, viz:
1. The utilitarian function
2. The ego defensive function
3. The value - expressive function
4. The Knowledge function.
The utilitarian function: A consumer develops a brand attitude because of its
utility. In other words; we develop a favorable altitude towards a product because of
its utility function. So marketers try to change consumer attitudes in favor of their
products or brand by highlighting its utilitarian purpose, which they (the
competitors consumers;) may not have considered. Ego defensive function: Most
individuals want to protect their self-image. They want re-assurance about their
self-image from inner feelings or doubts. Firms marketing personal care and
cosmetics try to appeal to this need and develop a favorable attitude change
towards their products or brands by communicating a re-assurance to the
consumers self concept
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The value expressive function: A. consumer develops an attitude based on his

general value, life style and outlook. If the target consumers hold a positive attitude
towards being fashionable, then they will have a positive attitude towards high
fashion clothes
The knowledge function: Human nature is such that individuals prefer to know
and understand the people and things they are in contact. While product
positioning, marketers try to do this and improve the consumers attitude towards
their product or brand by highlighting its benefits over competing brands.
2. Associating the product with an admired group or event
At times attitudes come to be attached to certain groups, social events or
causes. So marketers could try strategies whereby their product or service comes to
be associated with certain events, social groups or causes.
3. Resolving two conflicting attitudes
Marketers also try to take advantage of actual or potential conflict between
attitudes. At times firms make consumers see that their attitudes towards a brand
is in conflict with another attitude, and then they maybe inclined to change their
evaluation of the brand.
4. Altering components of the Multi-attribute model
In the earlier lesson we discussed a number of Multi-attribute models, which
have implication for attitude change strategies. To be more precise, these models
provide us with additional insights as to how to bring about attitudinal change:
(1) Changing the relative evaluation of attributes
(2) Changing brand beliefs
(3) Adding an attribute, and
(4) Changing the overall brand rating
(1) Changing the relative evaluation of attributes
Consumer markets can be segmented in the same product category according
to brands that offer different features or beliefs.
(2) Changing brand beliefs
This calls for changing attitudes of consumers by changing beliefs or
perceptions about the brand itself.
(3) Adding an attribute
This means either adding an attitude that p previously has been ignored or
one that represents an improvement or technological innovation.
(4) Changing the overall brand rating
Altering the consumers overall assessment of the brand directly without
attempting to improve or change their evaluation of a single brand attribute.
Usually this strategy is used by using some form of global statement like " this is
the largest selling brand
(5) Changing consumer beliefs about competitor's brands
Usually it is seen that the attitude change agent is a well respected agent
authority or peer group. The amount of attitude change is related to the credibility
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of the source of the message. The major purpose of changing attitudes is to

eventually change consumer Behaviour. Thus an understanding of consumer
attitudes towards their product will enable the marketer to adopt suitable strategies
and create a positive image or attitude for that matter of their products in the
minds of the consumer. Behaviour Can Precede or Follow Attitude Formation
COGNITIVE DISSONANCE THEORY
According to cognitive dissonance theory, discomfort or dissonance occurs
when a consumer holds confusing thoughts about a belief or an attitude object
(either before or after the purchase). Post purchase dissonance occurs after the
purchase.
The consumer is not happy with the purchase—so they adjust their
attitudes to conform to their Behaviour. Post purchase dissonance is quite normal.
Attitude change is frequently an outcome of an action or Behaviour. Dissonance
propels consumers to reduce the unpleasant feelings created by the rival thoughts.
Tactics that consumers can use to reduce dissonance include reduction:
By rationalizing the decision as being wise. By seeking out advertisements that
support the original reason for choosing the product. By trying to "sell" friends on
the positive features of the brand. By looking to known satisfied owners for
reassurance. Marketers can help reduce post purchase uncertainty by aiming
specific messages at reinforcing consumer decisions. Beyond these dissonance-
reducing tactics, marketers increasingly are developing affinity or relationship
programs designed to reward good customers and to build customer loyalty and
satisfaction.
ATTRIBUTION THEORY
What does attribution theory say about attitude? Attribution theory attempts
to explain how people assign causality to events on the basis of either their own
Behaviour or the Behaviour of others.
1. Self-Perception Theory
Self-perception theory addresses individuals' inferences or judgments as to the
cause of their own Behaviour. In terms of consumer Behaviour, self-perception
theory suggests that attitudes develop as consumers look at and make judgments
about their own Behaviour. Internal and external attributions—attitudes develop as
consumers look at and make judgments about their own Behaviour. These
judgments can be divided into internal, external, and defensive attributions.
Internal attribution—giving yourself credit for the outcomes— your ability, your
skill, or your effort.
External attribution—the purchase was good because of factors beyond your
control—luck, etc.
Defensive attribution—consumers are likely to accept credit personally for
success, and to credit failure to others or to outside events. For this reason, it is
crucial that marketers offer uniformly high quality products that allow consumers
to perceive themselves as the reason for the success; that is, "I am competent."
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2 Attributions toward others

Every time you ask "Why?" about a statement or action of another or
"others"— a family member, a friend, a salesperson, a direct marketer, a shipping
company— attribution toward others theory is relevant.
3 Attributions toward Things
It is in the area of judging product performance that consumers are most likely
to form product attributions toward things. Specifically, they want to find out why a
product meets or does not meet their expectations. In this regard, they could
attribute the product's successful performance (or failure) to the product itself, to
themselves, to other people or situations, or to some combination of these factors.
How We Test Our Attributions
We as Individuals acquire conviction about particular observations by acting
like "naive scientists," that is, by collecting additional information in an attempt to
confirm (or disconfirm) prior inferences. In collecting such information, we often
use the following:
Distinctiveness—The consumer attributes an action to a particular product or
person if the action occurs when the product (or person) is present and does not
occur in its absence.
Consistency over time—Whenever the person or product is present, the
consumer's inference or reaction must be the same, or nearly so. Consistency over
modality—The inference or reaction must be the same, even when the situation in
which it occurs varies.
Consensus—The action is perceived in the same way by othe consumers.
14.4 REVISION POINTS
1) Cognitive Dissonance Theory holds that discomfort or dissonance occurs when
a consumer holds conflicting thoughts about a belief or an attitude object.
2) Attitude towards things is in the area of judging product performance that
consumers are most likely to form product attributions toward things.
3) Self-Perception Theory suggests that consumers develop attitudes by
reflecting on their own Behaviour
4) Defensive attribution suggests consumers are likely to accept credit for
successful outcomes (internal attribution) and to blame other persons or
products for failure (external attribution).
1) What are the strategies adopted for costumer attitude change
2) Describe the ABC model of attitudes.
3) List the three hierarchies of attitudes, and describe the major differences
among them.
4) How does the two-factor theory explain the effects of message repetition on
attitude change?
10.6 SUMMARY
An attitude is a predisposition to evaluate an object or product positively or
negatively. We form attitudes toward products and services, and these attitudes
often determine whether we will purchase or not.
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Attitude researchers traditionally assumed that we learn attitudes in a fixed

sequence: First we form beliefs (cognitions) about an attitude object, then we
evaluate that object (affect), and then we take some action (Behaviour). Depending
on the consumer’s level of involvement and the circumstances, though, his
attitudes can result from other hierarchies of effects as well. A key to attitude
formation is the function the attitude holds for the consumer (e.g., is it utilitarian
or ego defensive?).
One organizing principle of attitude formation is the importance of consistency
among attitudinal components— that is, we alter some parts of an attitude to be in
line with others. Such theoretical approaches to attitudes as cognitive dissonance
theory, self-perception theory, and balance theory stress the vital role of our need
for consistency.
Multi-attribute attitude models underscore the complexity of attitudes: They
specify that we identify and combine a set of beliefs and evaluations to predict an
overall attitude. Researchers integrate factors such as subjective norms and the
specificity of attitude scales into attitude measures to improve predictability.
1) Attitudes are formed:
a. before using the product.
b. after using the product.
c. when hearing about the product.
d. all of the above
2) The primary means by which consumers form their attitudes is through _____.
a. consumer reports
b. family influences
c. personal experience
d. direct marketing
3) Which of the following is one of the attitude change strategies that marketers
follow?
a. associating the product with an admired group or event
b. resolving two conflicting attitudes
c. changing consumer beliefs about competitor brands
d. all of the above
1) Consumer International, The State of Consumer Protection Around The World
20 (Apr. 2014) [hereinafter CI REPORT], available at http://www.consumers
international.org/media/1139641/english_full_report_april.p df.
2) Govt launches Consumer Protection Bill, NEWSDAY (Oct. 16, 2014), https:/
/www.newsday.co.zw/ 2014/10/16/govt-launches-consumer-protection-bill/
3) Sakil A. Suleman, New UK Consumer Protection Law Raises Stakes For
Industry, LAW 360 (Oct. 7, 2014, 11:53 AM), http://www.law360.com/articles
/584606/new-uk-consumer-protection-law-raisesstakes-for-industry
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10.9 ASSIGNMENTS
1) “Do as I say, not as I do.” How does this statement relate to attitude models?
2) Construct a multiattribute model for a set of local restaurants. Based on your
findings, suggest how restaurant managers could improve their
establishment’s image via the strategies described in this chapter.
3) What are three obstacles to predicting Behaviour even if we know a person’s
attitudes?
1) Hawkins, Best, Coney, Consumer Behaviour, 8/e, TMH, New Delhi, 2002 2.
2) Kumar: Conceptual Issues in Consumer Behaviour: The Indian Context,
Pearson Education, New Delhi 2003.
3) Jay D Lindquist and M Joseph Sirgy, Shopper, Buyer and Consumer
Behaviour, Second Edition, Bizttantra, New Delhi, 2003.
4) Loudon, D. and Bitta, A.D., Consumer Behaviour: Concepts and Applications,
4th Edition, Tata McGraw-Hill Education, 2001.
5) Majumdar, R., Consumer Behaviour: Insights from Indian Market, PHI
Learning, 2010.
1) Describe a situation in which you acquired an attitude toward a new product
through exposure to an advertisement for that product. Describe a situation
where you formed an attitude toward a product or brand on the basis of
personal influence.
2) Using the Internet, find two advertisements that are trying to persuade you.
Try to find an advertisement that is trying to persuade you to buy something
and one that is trying to persuade you to do something (e.g., vote for someone,
donate money to something).
3) Determine what processing route the ads are trying to use and how effective it
might be. Also try to generate some ideas about how a consumer could resist
the advertisement’s persuasive tactics.
10.12 KEYWORDS
Cognitive, Affective, Cognitive, Structural Model, Tricomponent Attitude model,
Multi-attribute attitude model, Attitude towards Object Model, Theory of reasoned
action model, Fishbein’s multi-attribute model, Theory of trying-to-consume,
Attitude-towards-the-ad model

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LESSON – 11
PERSONALITY
11.1 INTRODUCTION
”Personality is the supreme realization of the innate idiosyncrasy of a living
being. It is an act of high courage flung in the face of life, the absolute affirmation of
all that constitutes the individual, the most successful adaptation to the universal
condition of existence coupled with the greatest possible freedom for self-
determination.” - Carl Gustav Jung, 1934
We cannot define Personality very easily. Basically, ‘personality’ refers to our
attempts to capture or summarize an individual’s ‘essence’. Personality is
personality, the science of describing and understanding persons. Clearly,
personality is a core area of study for psychology, if not the core.
No two people are exactly the same - not even identical twins. Some people are
anxious, some are risk-taking; some are phlegmatic, some highly-strung; some are
confident, some shy; and some are quiet and some are loquacious. This issue of
differences is fundamental to the study of personality. Note also that in studying
these differences we will also examine where the differences come from: as with
intelligence we will find that there is a mixture of nature and nurture involved.
11.2 OBJECTIVES
After studying this lesson, you will be able to:
• Define personality
• Describe the nature and development of personality.
• Outline Freudian personality theory and the corresponding stages of
development.
• Discuss neo-Freudian personality theory and trait theory.
• Discuss the relationship of personality and consumer diversity.
• Enumerate cognitive personality factors, consumption, and possession traits.
11.3 CONTENTS
The Nature of Personality
Personality & Consumer Diversity
Consumer Innovativeness and Related Personality Traits.
Cognitive Personality Factors
Compulsive Consumption Behaviour
Brand Personality
Brand Personification
Personality and Colour
The word 'personality' derives from the Latin word 'persona' which means
'mask'. The study of personality can be understood as the study of 'masks' that
people wear. These are the personas that people not only project and display, but
also include the inner parts of psychological experience, which we collectively call
our 'self.
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11.3.1. THE NATURE OF PERSONALITY

In our study of personality, three distinct properties are of central importance:
a) Personality reflects individual differences.
b) Personality is consistent and enduring.
c) Personality can change.
Personality Reflects Individual Differences
1) An individual's personality is a unique combination of factors; no two
individuals are exactly alike.
2) Personality is a useful concept because it enables us to categorize consumers
into different groups on the basis of a single trait or a few traits.
Personality is Consistent and Enduring
1. Marketers learn which personality characteristics influence specific
consumer responses and attempt to appeal to relevant traits inherent in their target
group of consumers. Behaviour often varies considerably because of psychological,
socio-cultural, and environmental factors that affect Behaviour.
Personality can Change
1. An individual's personality may be altered by major life events, such as the
birth of a child, the death of a loved one, a divorce, or a major career change.
2. An individual's personality also changes as part of a gradual maturing
process.
a) Personality stereotypes may also change over time.
b) There is a prediction, for example, that a personality convergence is
occurring between men and women.
Personality Perspectives
The different approaches or perspectives to personality are:
• Biological
• Psychoanalytic
• Dispositional
• Learning
• Humanistic
• Cognitive
THEORIES OF PERSONALITY
There are three major theories of personality we need to discuss in this lesson.
They are:
a) Freudian theory.
b) Neo-Freudian personality theory.
c) Trait theory.
a. Freudian Theory
Sigmund Freud's psychoanalytic theory of personality is the cornerstone of
modern psychology. This theory was built on the premise that unconscious needs
or drives, especially biological and sexual drives, are at the heart of human
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motivation and personality. Id, Superego, and Egos, such as: thirst, hunger, and
sex, for which the individual seeks immediate satisfaction without concern for the
specific means of that satisfaction. Superego is the individual's internal expression
of society's moral and ethical codes of conduct.
a) The superego's role is to see that the individual satisfies needs in a socially
acceptable fashion.
b) The superego is a kind of "brake" that restrains or inhibits the impulsive
forces of the id. Internal monitor that attempts to balance the impulsive demands of
the id and the socio-cultural constraints of the superego. Freud emphasized that an
individual's personality is formed as he or she passes through a number of distinct
stages of infant and childhood development. These distinct stages of infant and
childhood development are: oral, anal, phallic, latent, and genital stages. An adult's
personality is determined by how well he or she deals with the crises that are
experienced while passing through each of these stages.
Structure of Mind: Freud's Id, Ego, and Superego
As mentioned above Freud came to see personality as having three aspects,
which work together to produce all of our complex Behaviours: the id, the ego and
the superego. As you can see, the Ego and Superego play roles in each of the
conscious, subconscious, and unconscious parts of the mind. All 3 components
need to be well balanced in order to have good amount of psychic energy available
and to have reasonable mental health.
Freudian Theory and Product Personality
Those stressing Freud's theories see that human drives are largely
unconscious, and that consumers are primarily unaware of their true reasons for
buying what they buy. These researchers focus on consumer purchases and/or
consumption situations, treating them as an extension of the consumer's
personality.
b. Neo-Freudian Personality Theory
Several of Freud's colleagues disagreed with his contention that personality is
primarily instinctual and sexual in nature. They argued that social relations are
fundamental to personality development. Alfred Adler viewed human beings as
seeking to attain various rational goals, which he called style of life, placing. Harry
Stack Sullivan stressed that people continuously attempt to establish significant
and rewarding relationships with others, placing emphasis on efforts to reduce
tensions.
Karen Horney focused on the impact of child-parent relationships, especially
the individual's desire to conquer feelings of anxiety. She proposed three
personality groups: compliant, aggressive, and detached. Compliant individuals are
those who move toward others—they desire to be loved, wanted, and appreciated.
Aggressive individuals move against others—they desire to excel and win
admiration. Detached individuals move away from others—they desire
independence, self-sufficiency, and freedom from obligations. A personality test
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based on the above (the CAD) has been developed and tested. It reveals a number of
tentative relationships between scores and product and brand usage patterns. It is
likely that many marketers have used some of these neo- Freudian theories
intuitively.
c. Trait Theory
Trait theory is a significant departure from the earlier qualitative measures
that are typical of Freudian and neo-Freudian theory. It is primarily quantitative or
empirical, focusing on the measurement of personality in terms of specific
psychological characteristics called traits. A trait is defined as any distinguishing,
relatively enduring way in which one individual differs from another. Selected
single-trait personality tests increasingly are being developed specifically for use in
consumer Behaviour studies. Types of traits measured include:
Consumer innovativeness — how receptive a person is to new experiences.
Consumer materialism — the degree of the consumer's attachment to "worldly
possessions."
Consumer ethnocentrism — the consumer's likelihood to accept or reject
foreign-made products.
Researchers have learned to expect personality to be linked to how consumers
make their choices, and to the purchase or consumption of a broad product
category rather than a specific brand.
PERSONALITY & CONSUMER DIVERSITY
Marketers are interested in understanding how personality influences
consumption Behaviour because such knowledge enables them to better
understand consumers and to segment and target those consumers who are likely
to respond positively to their product or service communications.
CONSUMER INNOVATIVENESS AND RELATED PERSONALITY TRAITS
Marketing practitioners must learn all they can about consumer innovators—
those who are likely to try new products. Those innovators are often crucial to the
success of new products. Personality traits have proved useful in differentiating
between consumer innovators and non-innovators.
Personality traits to be discussed include:
• Consumer innovativeness.
• Dogmatism.
• Social character.
• Need for uniqueness.
• Optimum stimulation level.
• Variety-novelty seeking.
1. Consumer Innovativeness
How receptive are consumers to new products, new services, or new practices?
Recent consumer research indicates a positive relationship between innovative use
of the Internet and buying online.
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2. Dogmatism
Dogmatism is a personality trait that measures the degree o rigidity an
individual displays toward the unfamiliar and toward information that is contrary
to their established beliefs. Consumers low in dogmatism are more likely to prefer
innovative products to established ones. Consumers high in dogmatism are more
accepting of authority- based ads for new products.
3. Social Character
Social character is a personality trait that ranges on a continuum from inner-
directed to other-directed. Inner-directed consumers tend to rely on their own
"inner" values or standards in evaluating new products and are innovators. They
also prefer ads stressing product features and personal benefits. Other-directed
consumers tend to look to others for direction and are not innovators. They prefer
ads that feature social environment and social acceptance.
4. Need for Uniqueness
These people avoid conformity are the ones who seek to be unique!
5. Optimum Stimulation Level
Some people prefer a simple, uncluttered, and calm existence, although others
seem to prefer an environment crammed with novel, complex, and unusual
experiences. Persons with optimum stimulation levels (OSL s) are willing to take
risks, to try new products, to be innovative, to seek purchase-related information,
and to accept new retail facilities. The correspondence between an individual's OSL
and their actual circumstances has a direct relationship to the amount of
stimulation individual's desire. If the two are equivalent, they tend to be satisfied. If
bored, they are under stimulated, and vice versa.
6. Variety-Novelty Seeking
This is similar to OSL. Primary types are variety or novelty seeking. There
appear to be many different types of variety seeking: exploratory purchase Behaviour
(e.g., switching brands to experience new and possibly better alternatives), vicarious
exploration (e.g., where the consumer secures information about a new or different
alternative and then contemplates or even daydreams about the option), and use
innovativeness (e.g., where the consumer uses an already adopted product in a new
or novel way). The third form of variety or novelty seeking—use innovativeness—is
particularly relevant to technological changes. Consumers with high variety seeking
scores might also be attracted to brands that claim to have novel or multiple uses or
applications. Marketers, up to a point, benefit from thinking in terms of offering
additional options to consumers seeking more product variety. Ultimately, marketers
must walk the fine line between offering consumers too little and too much choice.
The stream of research examined here indicates that the consumer innovator differs
from the non-innovator in terms of personality orientation.
COGNITIVE PERSONALITY FACTORS
Market researchers want to understand how cognitive personality influences
consumer Behaviour. Two cognitive personality traits have been useful in
understanding selected aspects of consumer Behaviour. They are:
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a) Need for cognition.

b) Visualizers versus verbalizers.
1. Need for Cognition
This is the measurement of a person's craving for or enjoyment of thinking.
Consumers who are high in NC (need for cognition) are more likely to be responsive
to the part of an advertisement that is rich in product-related information of
description. They are also more responsive to cool colours. Consumers who are
relatively low in NC are more likely to be attracted to the background or peripheral
aspects of an ad. They spend more time on print content and have much stronger
brand recall. Need for cognition seems to play a role in an individual's use of the
Internet.
2. Visualizers versus Verbalizers
Visualizers are consumers who prefer visual information and products that
stress the visual. Verbalizers are consumers who prefer written or verbal
information and products that stress the verbal. This distinction helps marketers
know whether to stress visual or written elements in their ads. From Consumer
Materialism to Compulsive Consumption
CONSUMER M ATERIALISM
Materialism is a trait of people who feel their possessions are essential to their
identity. They value acquiring and showing off possessions, they are self-centered
and selfish, they seek lifestyles full of possessions, and their possessions do not
give them greater happiness.
FIXATED CONSUMPTION BEHAVIOUR
Somewhere between being materialistic and being compulsive is being fixated
with regard to consuming or possessing. Like materialism, fixated consumption
Behaviour is in the realm of normal and socially acceptable Behaviour. Fixated
consumers' characteristics: include - 1. A deep (possibly: "passionate") interest in a
particular object or product category. 2. A willingness to go to considerable lengths
to secure additional examples of the object or product category of interest. 3. The
dedication of a considerable amount of discretionary time and money to searching
out the object or product. This profile of the fixated consumer describes many
collectors or hobbyists (e.g., coin, stamp, antique collectors, vintage wristwatch, or
fountain pen collectors).
COMPULSIVE CONSUMPTION BEHAVIOUR
Compulsive consumption is in the realm of abnormal Behaviour. Consumers
who are compulsive have an addiction; in some respects, they are out of control,
and their actions may have damaging consequences to them and those around
them.
BRAND PERSONALITY
It appears that consumers tend to ascribe various descriptive "personality-like"
traits or characteristics—the ingredients of brand personalities—to different brands
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in a wide variety of product categories. A brand's personality can either be

functional ("provides safety") or symbolic ("the athlete in all of us").
BRAND PERSONIFICATION
A brand personification recasts consumers' perception of the attributes of a
product or service into the form of a "humanlike character." It seems that
consumers can express their inner feelings about products or brands in terms of
personality link or creating one for new products are important marketing tasks.
There are five defining dimensions of a brand's personality ("sincerity,"
"excitement," "competence," "sophistication," and "ruggedness"), and fifteen facets of
personality that flow out of the five dimensions (e.g., "down-to-earth," "daring,"
"reliable," "upper class," and "outdoors").
PERSONALITY AND COLOUR
Consumers also tend to associate personality factors with specific colours. In
some cases, various products, even brands, associate a specific colour with
personality-like connotations. It appears that blue appeals particularly to male
consumers. Yellow is associated with "novelty," and black frequently connotes -food
restaurants use combinations of bright colours, like red, yellow, and blue, for their
roadside signs and interior designs. These colours have come to be associated with
fast service and food being inexpensive. In contrast, fine dining restaurants tend to
use sophisticated colours like gray, white, shades of tan, or other soft, pale, or
muted colours to reflect fine leisurely service. Consumers' like or dislike for various
colours can differ between countries.
SELF AND SELF-IMAGE
Self-images, or "perceptions of self," are very closely associated with
personality in that individuals tend to buy products and services and patronize
images. Such concepts as one or multiple selves, self-image, and the notion of the
extended self are explored by consumer Behaviour researchers.
1. The Makeup of the Self-Image
A person has a self-image of him/herself as a certain kind of person. The
individual's self-image is unique, the outgrowth of that person's background and
experience. Products and brands have symbolic value for individuals, who evaluate
them on the basis of their consistency with their personal pictures or images of
themselves. Products seem to match one or more of individual's self images; other
products seem totally alien. Four aspects of self-image are:
1) Actual self-image—how consumers see themselves.
2) Ideal self-image—how consumers would like to see themselves.
3) Social self-image—how consumers feel others see them.
4) Ideal social self-image—how consumers would like others to see them. Some
marketers have identified a fifth and sixth self-image.
5) Expected self-image—how consumers expect to see themselves at some
specified future time. "Ought-to" self—traits or characteristics that an
individual believes it is his or her duty or obligation to possess. In different
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contexts consumers might select different self images to guide Behaviour. The
concept of self-image has strategic implications for marketers.
6) Marketers can segment their markets on the basis of relevant consumer self-
images and then position their products or stores as symbols for such self-
images.
1) A personality is the inner psychological characteristics that both determine
and reflect how a person responds to his or her environment.
2) Consumer researchers using Freud’s personality theory see consumer
purchases as a reflection and extension of the consumer’s own personality
3) A compliant personality is One who desires to be loved, wanted, and
appreciated by others.
4) Personality is linked to how consumers make their choices or to consumption
of a broad product category - not a specific brand
5) A personality trait that reflects the degree of rigidity a person displays toward
the unfamiliar and toward information that is contrary to his or her own
established beliefs is known as dogmatism
1) What is personality? Explain its nature
2) Explain Freudian theory.
3) Explain Neo-Freudian personality theory.
4) Explain Trait theory
5) Explain the need for cognition
6) Explain brand personality
11.6 SUMMARY
The word 'personality' derives from the Latin word 'persona' which means
'mask'. The study of personality can be understood as the study of 'masks' that
people wear. These are the personas that people not only project and display, but
also include the inner parts of psychological experience, which we collectively call
our 'self. Sigmund Freud's psychoanalytic theory of personality is the cornerstone
of modern psychology. This theory was built on the premise that unconscious
needs or drives, especially biological and sexual drives, are at the heart of human
motivation and personality. Those stressing Freud's theories see that human drives
are largely unconscious, and that consumers are primarily unaware of their true
reasons for buying what they buy. These researchers focus on consumer purchases
and/or consumption situations, treating them as an extension of the consumer's
personality.
1) ---------- recasts consumers' perception of the attributes of a product or service
into the form of a "humanlike character
2) --------- is either be functional ("provides safety") or symbolic ("the athlete in all
of us").
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3) ---------- is a trait of people who feel their possessions are essential to their
identity.
4) --------- theory is a significant departure from the earlier qualitative measures
that are typical of Freudian and neo-Freudian theory
1) Consumer International, The State of Consumer Protection Around the World
20 (Apr. 2014) [Hereinafter Ci Report], Available at Http://Www. Consumers
international. Org/Media/1139641/English_Full_Report_April.P Df.
2) Govt. launches Consumer Protection Bill, NEWSDAY (Oct. 16, 2014),
3) Sakil A. Suleman, New UK Consumer Protection Law Raises Stakes For
Industry, LAW 360 (Oct. 7, 2014, 11:53 AM), http://www.law360.com/
articles/584606/new-uk-consumer-protection-law-raisesstakes-for-industry
11.9 ASSIGNMENTS,
1) How would you explain the fact that although no two individuals have
identical personalities, personality is sometimes used in consumer research to
identify distinct & sizeable market segments
2) What is Personality ? State different stages in the development of Personality.
Explain influence of Personality on Consumer Behaviour.
3) Compare the major characteristics in the Freudian Theory, Non Freudian
Theory and Trait Theory.
1) Hawkins, Best, Coney, Consumer Behaviour, 8/e, TMH, New Delhi, 2002 2.
2) Kumar: Conceptual Issues in Consumer Behaviour: The Indian Context,
Pearson Education, New Delhi 2003.
3) Jay D Lindquist and M Joseph Sirgy, Shopper, Buyer and Consumer
Behaviour, Second Edition, Bizttantra, New Delhi, 2003.
4) Loudon, D. and Bitta, A.D., Consumer Behaviour: Concepts and Applications,
4th Edition, Tata McGraw-Hill Education, 2001.
5) Majumdar, R., Consumer Behaviour: Insights from Indian Market, PHI
Learning, 2010.
1) Form two groups among yourself in classroom and discuss the following topics
and present the results
2) the Consumer really the King in India?
3) Our world economy is based on personality of consumers. Will personality
always be predominant?
4) Does mass media and society affect personality of teenage?
5) A marketer of health foods is attempting to segment his or hermarket on the
basis of consumer self-image. Describe the four types of consumer self-image
and discuss which one(s) would be most effective for the stated purpose.
11.12 KEYWORDS
Consumer Innovativeness, Dogmatism, Social Character, Variety-Novelty
Seeking, Cognitive Personality Factors, Compulsive Consumption Behaviour,
Brand Personality, Brand Personification, Personality and Colour
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LESSON – 12
BUYER DECISION PROCESS TOWARDS

NEW PRODUCTS OR SERVICES
12.1 INTRODUCTION
Philip Kotler considers five steps in consumer adoption process, such as
awareness, interest, evaluation, trial, and adoption. On the other hand, William
Stanton considers six steps, such as awareness stage, interest and information
stage, evaluation stage, trial stage, adoption stage, and post-adoption stage. These
stages will be discussed in this lesson.
12.2 OBJECTIVES
• Stages in buying decision process of new product services
12.3 CONTENTS
Stages in buying decision process of new product services
Buying process or consumer decision making
Repeat purchases
Impulse Buying
STAGES IN BUYER DECISION PROCESS TOWARDS NEW PRODUCTS OR SERVICES
(1) Awareness stage: In this stage an individual comes to know about a new
innovation or new idea or new product/service. He becomes aware of the innovation
from any source of information like friends or neighbors, co-workers, commercial
sources etc. The individual only learns about knowledge, innovations from either of
the sources of information. This means his knowledge about the new innovation is
only limited to extent the information generated by the source of information from
where he first learns about the new innovations.
(2) Interest stage: After being aware of innovation in this stage the buyer feel
stimulated and is interested in the innovation to seek more information in terms of
its utility aspects, its performance, durability and so on. The in depth information
sought by him will try to be obtained from all the sources he finds reliable.
(3) Evaluation stage: Based on all the information gathered by the individual
buyer will evaluate and make decision whether it is worthwhile or whether it will
make sense and do him good to try out the innovation. In other words from all the
collected information related to innovation buyer will mentally try to evaluate the
service attributes and work out to what extent the new service will be useful and
then decide whether or not to try the new service.
(4) Trial stage: After evaluating the worthiness of the new service the buyer
may decide to try out the innovation on a small scales basis initially to make an
actual assessment of the value of the new service. This stage also indicates that
now the buyer is mentally prepared to try out the innovation, through initially on a
small scale. The buyer wants to experiment with the innovation and depending on
how comfortable he feels with to service, he will decide whether to go for large scale
use or not. Since the buyer is not sure about the outcome of the use or
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consumption of the new service or innovation, he feels it more logical and practical
to go for a trial before extending it to full fledge use.
(5) Adoption stage: After deriving the satisfaction from the purchase of new
service on a trial basis, the buyer decide upon whether to extend full fledge use or
not. This is the last stage in the adoption process. The buyer takes the final
decision for the further use of service. The adoption process model is suggested by
Everett M. Rogers describes five stages of adoption; knowledge (awareness stage),
persuasion (forming attitude), decision, implementation and confirmation.
BUYING PROCESS OR CONSUMER DECISION MAKING
A decision is the selection of an action from two or more alternatives. In other
words, in order to make a decision, there must be a choice of alternatives available.
If a person has a choice between making a purchase and not making a purchase, or
a choice between brands, we can say that this person is in a position to make a
decision. A “no-choice” decision is commonly referred to as a “Hobson’s choice.”
Buyer decision making is an attempt to solve consumer problems. A problem refers
to a discrepancy between a desired state and an ideal state which is sufficient to
arouse and activate a decision process. Thus problem can be major or minor and
the broader and more ambiguous a problem is, the more potential solutions are
generally available.
The study of buyer behaviour is the most dynamic marketing activities as the
buyer rapidly change their preferences and are affected by multiple factors at a
given point of time, are difficult to analyze. Therefore, it is necessary that
continuous study of buying behaviour must be conducted and extended. This
monitoring will make an understanding of marketing management to take effective
decisions regarding service price, distribution and promotion. A marketer
understands how buyer will respond to different service features, prices, advertising
appeals and so on will have an enormous advantage over his adversaries. When a
buyer takes a decision to buy there is no rigid rule to bind them. Sometimes the
decisions are taken on spot or after evaluating various alternatives available and
reassuring himself with the opinion of those who have already purchased the
service.
Four views of buyer Decision Making
Before presenting a simple model how consumers make decisions. For
depicting consumer decision making it‟s important to consider several models of
man. The term model of man refers to a general perspective held by a significant
number of people concerning how (and why) individuals behave as they do.
Following are the consumer-related models of man:-
(1) Economic man (Traditional view): Economics reflects a world of perfect
competition and the consumer is often characterised as an economic man. The
economic theory of consumer behaviour was synthesized by Alfred Marshall from
the ideas of Classical Economists and the proponents of theory of „Marginal Utility.‟
Economic view explains the consumer as an economic man who buys rationally to
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maximize the utility (benefits) derived from a service. To behave rationally in the
economic sense a consumer would have to be aware of all available service
alternatives. The consumer would have to be capable of correctly ranking each
alternative in terms of its benefits and disadvantages. According to leading social
scientists this view is unrealistic because of three reasons (a) people are limited by
their existing skills, habits and reflexes (b) people are limited by their existing
values and goals (c) people are limited by the extent of their knowledge. However,
consumers rarely have enough information, sufficient or sufficiently information, or
even an adequate degree of involvement or motivation to make perfect decision.
Consumers are living in an imperfect world where they do not maximise their
decisions in terms of economic considerations such as price- quantity relationships,
marginal utility or indifference curves. Indeed the consumers are often unwilling to
engage in extensive decision making activities and will instead settle for a
“satisfactory” decision, one that is “good enough.” For this reason, the economic
model is often rejected as too idealistic and simplistic. economists described man as
a rational buyer and viewed the market as a collection of homogenous buyers.
(2) Passive man: This model is quite opposite to the economic model of man.
The passive view depicts the consumer basically submissive to the self-serving
interest and promotional efforts of marketers. Consumers are perceived as
impulsive and irrational purchasers, ready to yield to the arms and aims of
marketers. At least to some degree the passive model of the consumer was
subscribed by the hard deriving salesman who is trained to manipulate customer.
The passive man view fails to recognize that the consumer plays an equal (if not
dominant) role in many buying situations by seeking information about service
alternatives and selecting the service that appears to offer greatest satisfaction.
(3) Cognitive man: According to this view consumer is defined as a thinking
problem solver. Within this framework consumers are frequently depicted as either
receptive to or actively seeking services that fulfill their needs and enrich their lives.
The cognitive man focuses on the process by which consumers seek and evaluate
information about the services. There are six types of consumer perceived risks
(functional risk, economic risk, physical risk, social risk, psychological risk and
time risk) which a consumer use to handle such as collecting information about
alternatives, patronizing specific agents, brand loyalty etc. These risks are key
components of cognitive view and consumers are viewed as information-processing
systems. Consumer may use a preference formation strategy that is “other-based”
in which they allow another person probably a trusted person or an expert to
establish preferences to them. (4) Emotional man: Marketers prefer to think of
customer in terms of either economic or passive models. Emotional man is also a
reality of each of us because of deeply rooted feeling and emotions: joy, fear, love,
hope, fantasy, sadness etc. These emotions have an impact on purchases and
possessions. 9 Such feelings or emotions are likely to be highly involved for making
a purchase decisions. When a consumer makes any emotional purchase decision,
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less emphasis tends to be placed on current mood, feelings, prepurchase

information and information search.
REPEAT PURCHASES
The buying of a product by a consumer of the same brand name previously
bought on another occasion. A repeat purchase is often a measure of loyalty to a
brand by consumers and is often taken into account by marketing research
professionals to evaluate a business. Most purchases are repeated over time. When
repeat purchases occur, there are two possibilities:
a) repeated problem solving, and
(b) habitual decision-making.
(a) Repeated Problem solving: Repeat purchases often require continued
problem solving. Several factors including dissatisfaction with a previous purchase
resulting in a brand switch or retail stock outs when the retailer doesn’t have
product available can lead to this outcome.
(b) Habitual decision making: Habitual takes different forms, depending on the
decision process followed in the initial purchases:
• Brand loyalty/Company loyalty: Consumers have certain expectations about
the products they buy and the retailers from whom they buy. The satisfaction that
consumers experience when their expectations are met or exceeded often results in
loyalty to that product or retailer. For the most part, consumers want to reward
these companies with continued use over time—that is, brand or company loyalty,
which can be highly resistant to change.
• Inertia: There are certain categories of products in which there is limited
brand loyalty, for instance toothpaste. Where any degree of loyalty does not exist, it
mostly consists of several brands, all of which are about equal. Buying habits of
this type are based on inertia and are unstable. Although there is no incentive to
switch, this 298 11.623.3 may occur quite when prices are lowered with a coupon
or another brand is promoted as offering something new.
IMPULSE BUYING
An impulse purchase or impulse buying is an unplanned decision to buy a
product or service, made just before a purchase. One who tends to make such
purchases is referred to as an impulse purchaser or impulse buyer. Research
findings suggest that emotions and feelings play a decisive role in purchasing,
triggered by seeing the product or upon exposure to a well crafted promotional
message.
Impulse purchases are the least complex form of LPS but differs in some forms
important ways. This kind of buying may be explained as an unplanned, spur-of-
the-moment action triggered by product display or point-of-sale promotion. The
main characteristics of Impulse buying are:
• A sudden and spontaneous desire to act accompanied by urgency.
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• A state of psychological disequilibrium in which a person can feel temporarily

out of control.
• The onset of conflict and struggle that is resolved by an immediate action.
• Minimal objective evaluation exists-emotional considerations dominate.
• A lack of regard for consequences.
Although there is an absence of the careful reasoning of EPS, there is not the
indifference that accompanies LPS. A high sense of emotional involvement and
urgency, in effect, short-circuits the reasoning process and motivates immediate
action.
1) In awareness stage an individual comes to know about a new innovation or
new idea or new product/service.
2) After being aware of innovation in this stage the buyer feel stimulated and is
interested in the innovation to seek more information in terms of its utility
aspects, its performance, durability and so on.
3) Based on all the information gathered by the individual buyer will evaluate
and make decision whether it is worthwhile or whether it will make sense and
do him good to try out the innovation.
4) After evaluating the worthiness of the new service the buyer may decide to try
out the innovation on a small scales basis initially to make an actual
assessment of the value of the new service.
5) After deriving the satisfaction from the purchase of new service on a trial
basis, the buyer decide upon whether to extend full fledge use or not.
1) What are the stages in new product adoption?
2) What is awareness stage?
3) What is interest stage?
4) What is evaluation, trial, and adoption stage?
12.6 SUMMARY
Philip Kotler considers five steps in consumer adoption process, such as
awareness, interest, evaluation, trial, and adoption. On the other hand, William
Stanton considers six steps, such as awareness stage, interest and information
stage, evaluation stage, trial stage, adoption stage, and post-adoption stage.
Innovators and early adopters are quick to adopt new products, and laggards are
very slow. A consumer’s decision to adopt a new product depends on his or her
personal characteristics as well as on characteristics of the innovation itself. We are
more likely to adopt a new product if it demands relatively little Behavioural
change, is easy to understand, and provides a relative advantage compared to
existing products.
1) In ----------- stage an individual comes to know about a new innovation or new
idea or new product/service.
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2) --------- stage is based on all the information gathered by the individual buyer
will evaluate and make decision whether it is worthwhile or whether it will
make sense and do him good to try out the innovation.
3) After evaluating the worthiness of the new service the buyer may decide to try
out the innovation on a small scales basis initially to make an actual
assessment of the value of the new service is called --------- stage
4) After deriving the satisfaction from the purchase of new service on a trial
basis, the buyer decide upon whether to extend full fledge use or not is called -
--------
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determinants of Behavioural contagion: density and number. Basic and
Applied Social Psychology, 1(2), 155-161.
12.9 ASSIGNMENTS
1) You are the marketing manager of a newly established company. Design the
segmenting and positioning strategy for a innovative product of your choice
12.10 SUGGESTED READINGS/ REFERENCE BOOKS / REFERENCES
1) Loudan, David L and Bitta, A.J. Della Consumer Behaviour
2) Schiffman LG and Kanuk LL Consumer Behaviour
3) Nair, Suja R, Consumer Behaviour in Indian Perspective
4) Bennet and Kasarjian Consumer Behaviour
5) Mowen, John Consumer Behaviour
6) Ajzen, I.,(1980), Understanding attitudes and predicting social Behaviour.
7) Approach, New York: Gardner Press, 246-249.
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9) Arnold, J., Robertson., (1991), Work Psychology: Understanding human
Behaviour in the workplace. 2nd ed. ed. London: Pitman, 45-111
10) Bagozi, R., (2002), The Social Psychology of Consumer Behaviour,
Buckingham:
11) Blackwell Roger D., Miniard W. Paul & Engel F. James – Consumer Behaviour
(Vikas Publishing House 2003)
12) Blackwell, R., Miniard., (2001), Consumer Behaviour, 9th ed. Orlando:
Harcourt,
125
13) Blackwell, R.,( 2001), Consumer Behaviour. 9th ed. Orlando: Harcourt, 98-
117.
14) Bozinoff, L., (1982), A script theoretic approach to information processing: an
15) Burger, J.M. (1993). Personality (3rd ed.) Pacific Grove, CA: Brooks/Cole.
16) Carver, C. S., & Scheier, M. F. (2000). Perspectives on Personality (4th ed.)
Needham Heights, MA: Simon & Schuster.
17) Carver, C.S., & Scheier, M.F. (2000). Perspectives on personality (4th ed.)
Boston: Allyn and Bacon.
18) Consumer Behaviour- Concepts , applications and Cases, M.S.Raju,
Dominique Xardel ( UK) Limited, New York, 65-69.
19) Consumer Behaviour ( Fourth edition )- David L.Loudon and Albert J.Della
Bitta.
20) Du Plessis,, (1991), Consumer Behaviour. A South African Perspective.
Pretoria: Sigma, 216-222.
21) Evans J.R., and Berman B - Marketing (Biztantra, 2003)
22) Eyesenck, M., Keane, (2000), Cognitive psychology: a student's handbook, 4th
Ed. ed. London: Lawrence Erlbaum, 156-177.
23) Fishbein, M., (1965), A Consideration of Beliefs, Attitudes, and their
Relationships, New York: Hold, Rinehart and Winston, 107-120.
24) Fishbein, M., (1975), Belief, attitude, intention and Behaviour: An introduction
to
25) Fishbein, M., (1975), Belief, attitude, intention and behaviour: An introduction
to
26) Foxall, G., (1993), ‘Situated Consumer Behaviour: a Behavioural interpretation
of purchase and consumption’, Research in Consumer Behaviour’, 6, 113-152.
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of purchase and consumption’, Research in Consumer Behaviour, 6, 113-152.
28) Groome, D., et.al., (1999), An Introduction to Cognitive Psychology, Hove:
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Conceptual
30) Hines, C., et al., (2000), Ethical consumerism - a research study conducted for
the Co-operative Bank, London: Mori, 45-59.
31) Howard, J. A., (1969), The Theory of Buyer Behaviour. London: John Wiley
and
32) Howard, J. A.,(1969), The Theory of Buyer Behaviour, London: John Wiley and
33) Integrated Approach, London: Pitman, 24-86.
34) Jacoby.Y, J., (2002), ‘Stimulus-Organism-Response Reconsidered: An
Evolutionary Step in Modeling (Consumer) Behaviour’, Journal of Consumer
Psychology, 12, (1) 51-57.
35) Jobber, D. (2001), Principles & Practice of Marketing, McGraw-Hill
International
126
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under Risk’, Econometrica, 47, (2) 263-291.
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Publication, 2000)
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Pvt Ltd, 2000)
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ed.: McGraw Hill, 44-49.
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4th ed.: McGraw Hill, 56-64.
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ecommerce in the purchasing of leisure travel by the residents of Cascais,
Portugal. In: Bournemouth University, 46-96.
45) Nair Suja R. – Consumer behaviour in Indian Perspective (Himalaya Publishing
House)
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Pvt. Ltd., 2002)
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51-96.
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New York: Appleton-Century, 346-396.
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Singapore: McGraw Hill, 213-222.
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127
59) Saxena R - Marketing Management (Tata-McGraw Hill, 2002)

60) Schiffman Leon G. & Kanuk Leslie Lazar – Consumer Behaviour (Prentice Hall
of India Pvt Ltd, Eighth Edition)
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1) Define ‘extensive problem solving’, ‘limited problem solving’, and ‘routinised
response behaviour’. What are the differences between the three decision-
making approaches? What type of decision process would you expect most
consumers to follow in their first purchase of a new product or brand in each
of the following areas?
a) Chewing gum
b) Sugar
c) Men’s aftershave lotion
d) Carpeting
e) Paper towels
f) Mobile telephone
g) New bank account
h) Luxury car.
2) Discuss as a group and explain your answers.
12.12 KEYWORDS
New Products, Awareness stage, Interest stage, Evaluation stage, Trial stage,
Adoption stage
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LESSON - 13
CONSUMPTION ANALYSIS
13.1 INTRODUCTION
Consumer Behaviour has been conventionally thought of as the study of “Why
people buy?” Based on the acts of individuals the marketers can develop strategies
to influence consumers. The learners need to be acquainted with the buyer
Behaviour and analysis of consumption pattern. The knowledge on consumers
needs and wants help organizations to explore how the consumers think, feel,
comprehend in deciding among competing products, how they are influenced by the
environment, motivational parameters. These understandings form basis to make
changes in the process of diffusion and adoption.
This unit comprises of four lessons namely consumption Analysis, models of
buyer Behaviour, organizational Buying Behaviour and Diffusion of Innovations.
This unit focuses on the consumer decision making which deliberate on
different types of purchase situations and roles of the consumers, in a competition
environment, consumers have several options and alternatives which necessitates
the marketers to understand the consumer decision making process.
13.2 OBJECTIVES
• To provide insights on various aspects of consumer buying decision with
special reference to India.
• To vividly illustrate the different models of buyer Behaviour.
• To showcase the constructs of organizational buying Behaviour.
• To understand the diffusion and adoption process and the attributes of
innovation.
13.3 CONTENTS
The changing profile and preferences of consumers has led to innovative
trends in promoting products to satisfy the consumers’ desires. The Indian
consumer hardly ever has adequate information about a product towards making
purchase decisions. The marketers need to be aware of the purchase Behaviour of
consumers in order to elevate the customer satisfaction. Consumers make three
types of purchases namely trial purchases, repeat purchases and the L.T
commitment purchase. Trial purchase refers to purchase of a product for the first
time as a trial to experience the product in similar quantity. Repeat purchase is
that when consumer prefer to purchase the product repeatedly for a period of time.
The long term commitment purchase happens when the consumers become very
loyal to the product. It is very significant that the customer are aided in their
decision making process and consumers should be made to think that their
decision is wise.
Companies need to undergo a consumption analysis to keep them updated
about the customer profile, product usage rates, expenditure pattern of consumers.
Consumers are complex individuals. The decisions of consumers are influenced by
psychological and social needs of consumers belonging is different segments, it is
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essential for the marketers in the process of designing and marketing strategies, to
consider consumption pattern and analyze the consumer Behaviour.
The knowledge of consumers needs, wants, attitude and beliefs help firms to
renew their consumer satisfaction strategies by analysing issues related to
purchase Behaviour of the consumers. This requires the consumer pattern of
Behaviour. The determinants to analyse the consumption pattern:
a) Product usage Rate
The usage rate reflects the differences among heavy, medium and light users
and non-users of a specific product, service or brand. Companies of fast moving
Consumer products like soap, shampoo, food products have found that a relatively
small group of heavy users accounts for a disproportionately large percentage of the
total product usage. Targeting heavy users is a common marketing strategy and is
often more profitable than targeting other user categories. However, marketing to
this segment needs a lot of expensive promotion as all the competitors target the
same heavy users. Usage rate segmentation helps to identity the product usage
rate. This segmentation focuses on the factors that directly affect the usage
Behaviour. For example, a study of super market customers found differences
between two segments of buyers in terms of usage frequency which is defined as
the number of times per week buyers visited the super market. The researchers
also examined usage frequency in relation to buyers reasons for purchasing that
shop, levels of expenditure at the store, travel times to the store and modes of
transportation and whether consumers take efforts to reach the stores or were
simply passing by.
Rate of usage is strongly related to product awareness status, which is the
degree of a consumers awareness of the product and its features, and whether or
not he or she intends to buy it reasonably soon. The consumers degree of
awareness of the product, along with whether the consumer is unaware and needs
to be informed about the product, represent distinct targeting opportunities. A
related factor is product involvement, which specifies the degree of personal
relevance that the product holds for the consumer.
Another aspect of product usage is usage occasion, Vicco turmeric portrays
the occasion of marriage. Marie biscuits have been projected with tea time snack or
family time recreation. Nowadays consumers purchase products online, the
ecommerce sites markets showing month end bonanza, holidays, festival eve,
special days etc when the usage rates increases based on the schemes introduced
that time as a part of some occasion.
B) Expenditure
In the marketing era today, a marketer has to consider the value of the offering
and not just, the price of the brand. But with the onset of Net oriented Retailing, it
looks price plays a dominant role which drives consumers to spend in a particular
product or service as well as in a particular site or stores. There are certain factors
that influence consumers spending which are detailed below-
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(a) Change in purchasing pattern

The rural consumer are evolving at a very fast rate not only in quantitative but
also in qualitative terms. The rural consumption-basket these days is fully of the
so-called urban categories of products. Especially, the upper segments are buying
some most contemporary range of products that were beyond the imagination of
yesterday villagers. Following a study by Rajesh Shukla, Director, National Council
for Applied Economic Research (NCAER), it may be argued that the ‘middle-income
and above’ household in the rural areas are supposed to experience a massive
growth from 77 million in 2001 to 151 million in 2015. On the contrary, in urban
India the projection for such rise from 46 million to 87 million, Shukla’s study is
quite in line with the projection of a senior HUL official in the opening vignette. He
had claimed that they disposable income spend on fast moving consumer goods
(FMCG) by urban India is just Rs. 49500 crore as compared to Rs.63500 crore in
rural India.
A study on ownership of goods in rural India points to a similar trend. It
categories all the consumer durable products generally opted by the rural
customers into three distinct groups: (1) necessary products – cooking gas,
bicycle/moped, etc.; (2) emerging products – cheaper mobile handsets and (3) life
style products – CTV and refrigerators. Nonetheless, consumer durables continue to
attribute jus over 3% of the overall consumption basket in rural India. But with the
rural-urban cultural mix due to frequent urban migration by the rural family
members, the demand for durables is lightly to be far more augmented in another 5
years down the line
However, while talking about FMCG brands, it was quite clear that the
extremely price- sensitive rural consumers prefer small consumption packages.
Some companies have addressed this issues of price –sensitive and affordability by
introducing unitary packs or sachets. Hindustan Unilever was among the
pioneering MNC’s to capitalize the latent potential of Indians rural market. They
launched a variant of its largest selling soap brand, lifebuoy, at Rs. 2 for 50gm
primarily target at the rural market and the bottom of the pyramid market as
whole. Coca cola has respond to the price-sensitive issue by launching’ chhota
coke’ (200ml) for Rs.5 this effort of coca cola paid so well that today. It is noted that
80% of the new drinkers of ‘chhota coke’ are from the rural network. Keeping the
success in the consideration, coca cola has also introduced sunfill, a power soft
drink concentrated. This instant and ready-to-mix sunfill is available in a single-
serve sachet of 25gms priced at Rs.2 and a multi-serve sachet of 200 grams priced
at Rs. 15
(b) Price
Price is what consumers must give up to purchase a product. Marketing issues
in this area are as follows.
• How much are the consumers in a target market ready to pay for a particular
product?
• What price would consumers in this market judge this product is of worth?
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• What do specific prices correspond to consumers about the quality of the

particular product?
• If the price of the product were lowered in the short run, would consumers
carry on to buy the product when it reverts to full price?
• Would consumers stop purchasing the product if the price were increased end
enduringly?
• How significant is price to consumers in a extremely price- sensitive target
market?
Whether a company is introducing a new product are planning a short term or
long term price change, it meets to examine how the consumers will react to the
price variable.
(c) Personal Income:
The personal income of a person is determinant of his buying behaviour. The
gross personal income of a person consists of disposable income and discretionary
income. The disposable personal income refers to the actual income (i.e. money
balance) remaining at the disposal of a person after deducting taxes and
compulsorily deductible items from the gross income. An increase in the disposable
income leads to an increase in the expenditure on various items. A fall in the
disposable income, on the other hand, leads to a fall in the expenditure on various
items.
The discretionary personal income refers to the balance remaining after
meeting basic necessaries of life. This income is available for the purchase of
shopping goods, durable goods and luxuries. An increase in the discretionary
income leads to an increase in the expenditure on shopping goods, luxuries etc.
which improves the standard of living of a person.
(d) Family income:
Family income refers to the aggregate income of all the members of a family.
Family income influences the buying behaviour of the family. The surplus family
income, remaining after the expenditure on the basic needs of the family, is made
available for buying shopping goods, durables and luxuries.
(e) Income Expectations:
Income expectations are one of the important determinants of the buying
behaviour of an individual. If he expects any increase in his income, he is tempted
to spend more on shopping goods, durable goods and luxuries. On the other hand,
if he expects any fall in his future income, he will curtail his expenditure on
comforts and luxuries and restrict his expenditure to bare necessities.
(f) Savings:
Savings also influence the buying behaviour of an individual. A change in the
amount of savings leads to a change in the expenditure of an individual. If a person
decides to save more out of his present income, he will spend less on comforts and
luxuries.
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(g) Liquid assets:

Liquid assets refer to those assets, which can be converted into cash quickly
without any loss. Liquid assets include cash in hand, bank balance, marketable
securities etc. If an individual has more liquid assets, he goes in for buying
comforts and luxuries. On the other hand, if he has less liquid assets, he cannot
spend more on buying comforts and luxuries.
(h) Consumer credit:
Consumer credit refers to the credit facility available to the consumers
desirous of purchasing durable comforts and luxuries. It is made available by the
sellers, either directly or indirect у through banks and other financial institutions.
Hire purchase, installment purchase, direct bank loans etc. are the ways by which
credit is made available to the consumers.
Consumer credit influences consumer behaviour. If more consumer credit is
available on liberal terms, expenditure on comforts and luxuries increases, as it
induces consumers to purchase these goods, and raise their living standard.
(I) OTHER ECONOMIC FACTOR:
Other economic factors like business cycles, inflation, etc. also influence the
consumer behaviour.
Personal factor:
Personal factors also influence buyer behaviour. The important personal
factors, which influence buyer behaviour, are a) Age, b) Occupation, c) Income and
d) Life Style
(a) Age:
Age of a person is one of the important personal factors influencing buyer
behaviour. People buy different products at their different stages of cycle. Their
taste, preference, etc. also change with change in life cycle.
(b) Occupation:
Occupation or profession of a person influences his buying behaviour. The life
styles and buying considerations and decisions differ widely according to the nature
of the occupation. For instance, the buying of a doctor can be easily differentiated
from that of a lawyer, teacher, clerk businessman, landlord, etc. So, the marketing
managers have to design different marketing strategies suit the buying motives of
different occupational groups. Income level of people is another factor which can
exert influence in shaping the consumption pattern. Income is an important source
of purchasing power. So, buying pattern of people differs with different levels of
income.
(c) Life Style:
Life style to a person’s pattern or way of living as expressed in his activity,
interests and opinions that portrays the “whole person” interacting with the
environment. Marketing managers have to design different marketing strategies to
suit the life styles of the consumers.
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CHARACTERISTICS OF INDIAN CONSUMERS

India is a huge country with 29 states, over one billion population, and more
than 120 dialect/ languages.
Form the market point of the view the country consists of diverse Segments of
the consumers, depending on various social classes, place of inhabitancy, caste,
race, and various other spectra. Among the total 164.8 million domestic units in
India, 80.7 million constitutes the bottom of the pyramid (< US $ 581), followed by
the 50.4 million lower middle-income households ( US $ 581- 1162), 19.7 million
middle- income group( US $ 1162-1190), 802 million upper middle-income
group(US $ 1790-2465), and 5.8 million high- income group (>US $ 2465).
Different segments of Indian consumers
The Indian market can be divided into four major segments to better
understand the Indian consumers, according to a Study on Consumer Behaviour in
the country, done by MATRADE, National Trade Promotion Agency of Malaysia in
2005. The four segments are the socialites, conservatives, working ladies, and the
Indian rich
The socialites
The Indian upper class has been analyzed in the said study under the
nomenclature of the socialites. These groups, due to their affluence, are frequent
visitors of shopping malls, departmental stores, multiplexers and are usually more
focused on purchasing luxury items. The highly brand conscious socialites always
look for executive items like boutiques.
The conservatives
The Indian middle class, the beholders of the true face of the Indian culture
and heritage are named as they conservatives. These traditionalists are relatively
much more price sensitive than the socialites. They are more family-oriented and
are cautious shoppers. Being risk averse, they focused more on saving than
spending. They weigh the durability and functional attributes of the product more
than the style and design. This turns them to slow diffusers to any kind of
innovation in the market place. They are very sensitive about the social needs and
hence, are quite conscious about their self-image.
The working ladies
This group constitutes a large number of working women. This category has
undergone a tremendous escalation in the late 1990’s. The pressure of both office
and household work puts them in tremendous time crunch. This has reduced their
time for household activities and has raised the demand for the crèches, washing
machines, microwave ovens, cell phones, home delivers, budget car, etc.
Indian rich
India’s rich can be further divided into five major categories as follows;
The rich – According to the Study, the Indian rich with an income more than
US $ 11000 per annum is very much upwardly mobile. The number of households
in this category is nearly 1 crore. They squander more on leisure and entertainment
134
time and items rather than on future looking nest eggs. Luxurious resorts, mainly
target these sort of customers.
Super rich – the super rich have income greater than US $ 22000 per annum.
Total number of super rich families in India exceeds 3 lakhs. They are mostly
modern professionals with high inclination towards consumerism. They often by a
number of durables and are quite sensitive about their status
The ultra rich – Indians with earnings of more than US $ 44000 per annum can
be demarcated as ultra rich. The number of ultra rich families in India is quite
meager (approx. a lakh some 6 years ago). Some middle-level managers or the first
generation industrialists are the visible entities in this cluster. Some rich farmers of
Punjab and Haryana also belong to this category.
The sheer rich – household crossing the income slab of US $ 110000 per
annum are known as sheer rich. However, in India hardly 20,000 families fall into
this category. They do portray similar silhouettes as they ultra rich, although the
extend varies. They look for possessing different brands of cars. They like to own
house and apartments in various posh locations of the country and abroad. They
desire social status and power
The obscenely rich – in India, around 6000 house holders having an income of
more than US $ 222000 per annum constitute this cluster. They are mainly the
first generation entrepreneurs or technocrats. These peoples are equivalent to the
moneyed class in the first world country. They yearn for elitism in every purchase.
Designer dresses, special diamond-studded watches, exclusive platinum jewelries
are some of the products especially targeted towards them. The event management
of marriage of the daughter of steel tycoon Lakshmi Mittal is one such service.
Segments of the consumers, depending on various social classes, place of
inhabitancy, caste, race, and various other spectra. Among the total 164.8 million
domestic units in India, 80.7 million constitutes the bottom of the pyramid (< US $
581), followed by the 50.4 million lower middle-income households ( US $ 581-
1162), 19.7 million middle- income group( US $ 1162-1190), 802 million upper
middle-income group(US $ 1790-2465), and 5.8 million high- income group (>US $
2465).
UNDERSTANDING CONSUMPTION
Consumption is a major concept in Economics. Economists are particularly
interested in the relationship between consumption and income, as modeled with
the consumption function, Different schools of economists define production and
consumption differently. According to mainstream economists, only the final
purchase of goods and services by individuals constitutes consumption, while other
types of expenditure in particular, fixed investment, intermediate consumption, and
government spending are placed in separate categories. Other economists define
consumption much more broadly, as the aggregate of all economic activity that
does not entail the design, production and marketing of goods and services (e.g. the
selection, adoption, use, disposal and recycling of goods and services).
135
Consumption Function
The consumption is a mathematical function that expresses consumer
spending in terms of its determination, such as income and accumulated wealth.
Behavioural Economics and Consumption
The Keynesian consumption function is also known as the absolute income
hypothesis, as it only bases consumption on current income and ignores potential
future income (or lack of). Criticism of this assumption led to the development of
Milton Friedman’s permanent income e hypothesis and Franco Modigliani’s life
cycle hypothesis. More recent theoretical approaches are based on Behavioural
economies and suggest that a number of Behavioural principles can be taken as
microeconomic foundations for a Behaviourally based aggregate consumption
function.
CONSUMPTION AND HOUSEHOLD PRODUCTION
Consumption is defined in part by comparison to production. In the tradition
of the Columbia school of household economics, is also known as the New Home
economics, commercial consumption has to be analyzed in the context of household
production. The opportunity cost of time affects the cost of home-produced
substitutes and therefore, demands for commercial goods and services. The
elasticity of demand for consumption goods is also a function of who performs
chores in households and how their spouses compensate them for opportunity
costs of home production.
Different schools of economists define production and consumption differently.
According to mainstream economists only the final purchase of goods and services
by individuals constitutes consumption, while other types of expenditure--- in
particular, fixed investment, intermediate consumption, and government
spending—are placed in separate categories. Other economists define consumption
much more broadly, as the aggregate of all economic activity that does not entail
the design, production and marketing of goods and services (e.g. the selection,
adoption, use, disposal and recycling of goods and services).
Consumption can also be measured by a variety of different ways such as
energy in energy economics metrics.
Effects of Consumption
Aggregate consumption is a component of aggregate demand. According to the
UN, “Today’s consumption is undermining the environmental resource base. It is
exacerbating inequalities. And the dynamics of the consumption- poverty-
inequality-environment nexus are accelerating. If the trends continue without
changes---not redistributing from high-income to low-income consumers, not
shifting from polluting to cleaner good and production technologies, not shifting
priority from consumption for conspicuous display to meeting basic needs---today’s
problems of consumption and human development will worsen”. Developing
countries like India as they move down the path of copying the consumption
patterns of developed economies, will basically create demands that earth will not
136
be able to fulfill. Some economists talk about putting a price on using earth’s
resources which is in addition to the cost of just extracting them.
CONSUMER ECONOMICS
Consumer economics is a branch of Economics. It is a broad field, principally
concerned with microeconomic analysis behaviour in units of consumers, families,
or individuals. It sometimes also encompasses family financial planning and policy
analysis. The term largely describes what was more commonly called “home
economics” in the past. Consumer economics has its roots in pre-world war
academia.
The traditional economists had little interest in analyzing family units. When
economic theory was insufficient to explain the phenomenon of women starting to
enter the labor force en masse, consumer economics both gained attention and
received important contributions from economic theorists. Major theoretical
cornerstones include Gary Becker’s Household Production model, time allocation
models and Stigler’s information search theory.
Consumer economics conclude the family-unit economists were strongly
influenced by the most recent “consumer era”; which was the “Modern Consumer
Movement” of the 1970’s.The connection between consumer economics and
consumer-related politics has been overt, although the strength of the connection
varies between universities and individuals.
Many facets of consumer economics are measured through a number of
indicators, such as personal income, total household debt, and the consumer
leverage ratio.
Consumer Spending
Consumer spending, consumer demand, consumption or consumption
expenditure is the purchasing of goods and services by individuals or families.
It is the largest part of aggregate demand at the macroeconomic level. There
are two components in the basic model: Induced consumption (which is offered by
the level of income) and Autonomous consumption (which is not).
Macroeconomic Factors Affecting Spending
(a) Taxes
Taxes are a tool in the adjustment of the economy. Tax policies designed by
governments affect consumer groups, net consumer spending and consumer
confidence. Economists expect tax manipulation to increase or decrease consumer
spending, though the precise impact of specific manipulation are often the subject
of controversy.
Underlying tax manipulation as a stimulant or suppression of consumer
spending is an equation for Gross Domestic Product(GDP). The equation is
GDP=C+I+G+NX, where (GDP) is the value of all final goods and services provided in
the economy(C) is private consumption, (I) is private investment, (G) is government
and (NX) is the net of exports minus imports. Increases in government spending
create demand and economic expansion. Government spending increases may
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translate to tax increases or deficit spending. Thus the expansions cannot be done
without a potential negative impact on private consumption(C) or one of the other
two elements, investment(I) or the net of exports and imports(NX).
(b) Consumer Sentiment
Consumers sentiments are the attitudes of households and other entities
toward economy and the health of the fiscal markets, and they are a strong
constitute of consumer spending. Sentiments have a powerful ability to cause
fluctuations in the company, because if the attitude of the consumer regarding the
state of the economy is bad, then will be reluctant to spend. Therefore, sentiments
prove to be a powerful predictor of the economy, because when people have faith in
the economy or in what they believe will soon occur; they will send and invest in
confidence. However sentiments do not always affect the spending habits of some
people as much as they do for others. For example, some households set their
spending strictly off of their income, so that their income closely equals, or nearly
equals their consumption (including savings). Others rely on their sentiments to
dictate how they spend their income and such.
(c) Government Economic Stimulus packages
In times of economic trouble or uncertainty, the government often tries to
rectify the issue by distributing economic stimuli, often in the form of rebates or
checks. However such techniques have failed in the past for several reasons. As
well discussed earlier, temporary financial reprieve rarely a success because people
do not often like rapidly shifting their spending habits. Also, people are many
timers intelligent enough to realize that economic stimulus packages are due to
economic downturns, and therefore they are even more reluctant to spend them.
Instead they put them into savings, which can potentially also help spur the
economy. By putting money into savings, banks profit and are to decrease the
interest rates, which then encourages others to save less and promote future
spending.
(d) Oil
Oil is an extremely valuable and vital resource to economies and societies
everywhere. There is a strong relationship between the increase in oil prices, and
real growth in the economy. When a society suffers a disturbance in energy
supplies, there is potential for a shock to expensive consumption or investment
goods that are heavily dependent on energy, like motor vehicles and machinery.
This is because disruption in energy supplies creates uncertainty regarding
availability and upcoming prices of these supplies. Often consumers attempt to
delay the purchase of such items until they have a better idea of what energy prices
are going to look like after the subsiding of the disruption. Increases in the price of
oil means a greater portion of the consumer’s income is required to purchase oil,
and therefore less than can be used in the purchase of other goods. Oil price
changes, both increases and decreases, have an extremely potent effect on
allocation channels. This affects the currency conversion, purchase of gold and
jewellery and related products where oil prices has much say.
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(e)Consumerism
While consumerism may not be an invisible stage in industrial
development it has been a frequent choice made within complex cultural, political
and social contexts. It explains the reasons how industrialism helped consumerism
along by providing the goods but at the same time it hurt consumerism along by
providing the goods but at the same time it hurt consumerism for the people who
kept the industrial world running. This happened because the workers were busy
trying to make their living making these goods that when it came down to trying to
buy any luxury goods they either didn’t have enough money or they didn’t have the
time to buy or use the luxury goods.
Look at the Data
United States
In 1929, consumer spending was 75% of the nation’s economy. This grew to
83% in 1932, when business spending dropped. Consumer spending dropped to
about 50% during world war II due to large expenditures by the government and
lack of consumer products. Consumer spending in the US rose from about 62% of
GDP in 1960, where it stayed until about 1981, and has since risen to 71% in
2013.
In the united states, the consumer spending figure published by the Bureau of
Economic analysis includes three broad categories of personal spending.
Durable goods: motor vehicles and parts, furnishings and durable household
equipment, recreational goods and vehicles and other durable goods.
Nondurable goods: food and beverages purchased for off-premises
consumption, clothing and footwear gasoline and other energy goods, and other
nondurable goods.
Services: housing and utilities, health care, transportation services recreation
services, food services and accommodations, financial services and insurance and
other services……
India
India Consumer Survey 2013
(28 January 2013 Asia Pacific/India Equity Research Consumer Discretionary
/ Consumer Staples Source: Credit Suisse India Consumer Survey 2013)
■ Consumer optimism still falling. The decline in Indian consumer optimism
observed in 2011 intensified on the back of continued adverse macro conditions.
Compared to 2011, more people expect lower salary increases and expect personal
finances to worsen, making it a bad time for large-ticket purchases. Only 5% of
consumers we surveyed expect inflation to fall. Confidence in the government is
also waning.
■ Signs of down-trading in discretionary items. Not surprisingly there was a
temporary reversal in 2012 of the up-trading trend observed in 2011. The
preference for purchasing unbranded products again rose. Fewer people bought
smartphones and more now want to buy an entry-level car. This trend is reflected
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in the commentary of many companies who operate in discretionary consumption

categories and are indicating a growth slowdown.
■ Rural doing better than urban. Spending patterns show a significant
divergence across rural and urban India. While the mean household income of
urban India declined 3%, it increased 6% in rural India. Car penetration has
stagnated in urban India, but doubled in the past two years in rural. Monthly ARPU
in urban India fell 15%, but showed a small increase in rural.
■ Low penetration bodes well for long-term growth. Another silver lining for the
long-term growth potential of India is low penetration across categories. Of the eight
countries surveyed, ownership of cars, smartphones and electronic items is the
lowest in India. They are among the lowest consumers of items, such as beer,
spirits, meat and cigarettes. While spending on education has come off this year, at
~10% of household income it is still pretty high compared to other countries. This,
combined with the greater participation of rural India and lower income categories,
bodes well for India’s consumption story. Our top picks in the Indian consumption
universe are: ITC, Bajaj Auto, Titan, HDFC Bank and Emami.
Understanding Consumer Choice
The theory of consumer choice is the branch of microeconomics that relates
preferences to consumption expenditures and to consumer demand curves.it
analyzes how consumers maximize the desirability of their consumption as
measured by their preferences subject to limitations on their expenditures, by
maximizing utility subject to a consumer budget constraint.
Consumption is separated from production, logically, because two
different economic agents are involved. In the first case consumption is by the
primary individual; in the second case, a producer might have something that he
would not consume himself. Therefore, different motivations and abilities are
involved. The models that make up consumer theory are used to represent
prospectively observable demand patterns for an individual buyer on the hypothesis
of constrained optimization. Prominent variables are used to explain the rate at
which the good is purchased are the price per unit of that good, prices of related
goods, and wealth of the consumer.
The law of demand states that the rate of consumption falls as the price of the
goods rises, even when the consumer is monetarily compensated for the effect of
the higher price; this is called the substitution effect. As the price of the goods
raises, consumers will substitute away from that good, choosing more of other
alternatives. if no compensation for the price rise occurs, as is usual, then the
decline in overall purchasing power due to the price rise leads, for most goods, to a
further decline in the quantity demanded; this is called the income effect.
In addition, as the wealth of the individuals rises, demand for most product
increases, shifting the
ASSUMPTIONS
The behavioural assumption of the consumer theory proposed herein is that
all consumers seek to maximize butility. In the mainstream economics tradition,
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this activity of maximizing utility has been demanded as the “rational” behaviour of
decision makers. More specifically, in the eyes of economists, all consumers seek to
maximize a utility function subject to a budgetary constraint. In other words,
economists assume that consumers will always choose the ‘best’ bundle of goods
they can afford. Consumer theory is therefore based around the problem of
generate refutable hypotheses about the nature of consumer demand from this
Behavioural postulate.
In order to reason from the central postulate towards a useful model of
consumer choice, it is necessary to make additional assumptions about the certain
preferences that consumers employ when selecting their preferred ‘bundle’ of goods.
These are relatively strict, allowing for the model to generate more useful
hypotheses with regard to consumer Behaviour than weaker assumptions, which
would allow any empirical data to be explained in terms of stupidity, ignorance, or
some other factor, and hence would not be able to generate any predictions about
future demand at all. For the most part, however, they represent statements which
would only be contradicted if a consumer was acting in (what was widely regarded
as) a stranger manner. In this vein, the modern form of consumer choice theory
assumes:
Preferences are complete
Consumer choice theory is based on the assumption that the consumer fully
understands his or her preference, allowing for a simple but accurate comparison
between any two bundles of good presented. That is to say, it is assumed that if a
consumer is presented with two consumption bundles A and B each containing
different combinations of n goods, the consumer can unambiguously decide if (s)he
prefers A to B, B to A, or is indifferent to both. The few scenarios where it is possible
to imagine that decision-making would be very difficult are thus placed “outside the
domain of economic analysis”. However, discoveries in Behavioural Economics has
found that actual decision making is affected by various factors, such as whether
choices are presented together or separately through the distinction bias.
Preferences are Reflexive
Means that if A and B are in all respect identical the consumer will consider A
to be at least as good as B. Alternatively, the axiom can be modified to read that
that the consumer is indifferent with regard to A and B.
Preference are Transitive
If A preferred to B and B is preferred to C then A must be preferred to C. This
also means that if the consumer is indifferent between A and B and is indifferent
between B and C she will be indifferent between A and C. This is the consistency
assumption. This assumption eliminates the possibility of intersecting indifference
curves.
PREFERENCES EXHIBIT NON-SATIATION
This is the “more is always better” assumption; that in general if a consumer is
offered two almost identical bundles A and B, but where B includes more of one
particular good, the consumer will choose B.
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Among other things this assumption precludes circular indifference curves.

On-Satiation in this sense is not a necessary but a convenient assumption. It
avoids unnecessary complications in the mathematical models.
Usage
Investors, manufacturers, retailers, banks and government agencies use
various assessments of consumer confidence in planning their actions. The ability
to predict major changes in consumer confidence allows businesses to gauge the
willingness of consumers to make new purchases. As a result, businesses can
adjust their operations and the government can prepare for changing tax revenue.
If confidence is dropping and consumers are expected to reduce their spending,
most producers will tend to reduce their production volumes accordingly. For
example if manufacturers anticipate consumers will reduce retail purchases,
especially for expensive and durable goods, they will cut down their investors in
advance and may pay delay investing in new projects and facilities. Similarly, if
banks expect consumers to decrease their spending, they will prepare for the
reduction in lending activities, such as mortgage applications and credit card use.
builders will plan for the decline in home construction volumes the government will
get ready for the reduction in future tax revenues on the other hand, if consumers
confidence is improving, people are expected to increase their purchases if goods
and services.in anticipation of that change, manufacturers can boost production
and inventories. large employers can increase hiring rates. builders can prepare for
higher housing construction rates. builders can prepare for higher housing
construction rates. banks can plan for a rise in demand for credit products.
government can expect improved tax revenues based on the increase in consumer
spending.
RELEVANCE OF CONSUMPTION FUNCTION
An economy can reach equilibrium without government intervention, with
government intervention, and with trade. Consumption is important to determine
the aggregate demand in an economy. According to the Engel's Law, the amount
spent on food and other necessities falls as the income rises. A country's
consumption expenditures rise as incomes rise. The Keynesian theory explains how
consumption and investment can help the economy reach equilibrium. Savings and
investment can also help the economy reach equilibrium. An increase in savings
leads to a decrease in national product whereas an increase in investment demand
leads to an increase in national product. When savings equal investments, the
economy reaches its equilibrium point. Keynes believed that government
intervention can reduce the level of unemployment. When the economy has high
unemployment levels, the government can take fiscal measures to reduce
unemployment. Government can increase aggregate demand during recessions by
increasing its spending or decreasing the tax rate. An increase in aggregate demand
will have a multiplier effect on the economy.
Consumer spending can be categorized into regular spends and lifestyle
spends. Regular spending includes the basic necessities of life, while lifestyle
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spending includes spending on a computer, internet, car, cell phone, etc. Analysis
of consumer spending in the past 10 years reveals that the average consumer has
been spending on an increasing number of different goods. There are a number of
factors affecting the consumer spending pattern in India; these include growing
income levels resulting in more disposable income with individuals, changing
attitudes towards consumption, changes in prices, introduction of new products,
availability of credit such as loans, mortgages and credit cards, rising aspiration
levels, increased literacy, growing brand consciousness and rapid urbanization.
Spending habits are different for people belonging to different sections of
society. For instance, people belonging to the middle class consider basic
necessities and education and spending toward the future of their children as their
top priorities, followed by lifestyle goods. The rich class spends more on luxury
goods and international brands. The super rich class spends on ultra luxury goods.
It is observed that as disposable income increases, people prefer more of branded
goods, shift to processed foods, and the expenditure on food, beverages, tobacco,
and transport and communication also increases. A comparison of consumer
spending habits in 2002 with those in 2007 revealed that expenditure on food,
clothing and personal care has remained more or less constant, but expenditure on
entertainment has increased.
Shopping habits of Indians are changing due to their growing disposable
income, relative increase in the younger population, and the change in attitudes
towards shopping. The emphasis has changed from price consideration to design,
quality and trendiness. The desire to look and feel good is also guiding factor for
customers while making their purchase decisions. Growing disposable income is
also propelling demand for consumer durables and eating in restaurants among
Indians. Age is also a major factor that affects the spending decisions of an
individual. For instance, people in 20-24 years age group spend more on electronic
/ home appliances and movies, while people in the 45-48 years age group spend
more on vacations.
Consumer spending is an important factor that affects the economic growth
and development in a country.
All marketing strategies are based on explicit or implicit beliefs about
Consumer Behaviour . The integral part of analyzing this Behaviour is consumption
analysis which is done based on product usage rate and expenditure. The desirable
features for any customer are the price of the product and willingness to purchase.
Marketers must have a thorough understanding of their potential customers needs
and of their information acquisition process to succeed at their task. The customers
can be retained only when the brands meet their needs and offers superior value
after their consumption.
1. Customer value and its importance to marketers.
2. Criteria of consumption analysis
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3. Types of consumers
4. Understanding consumers choice
5. Consumption function and its relevance
6. Consumer spending
1. Give a detailed note on contemporary dimensions of Consumer Behaviour.
2. What are the factors that dominate consumer decision to purchase a
product or avail a service?
3. State the importance of understanding consumer behaviour .
4. Prepare a profile of Indian consumers
5. How do you understand product usage rate of consumers?
6. Give an elaborate note on consumer spending
13.6 SUMMARY
Marketing in India is going through a unique phase. Consumer Behaviour is
much complex to study but is very much imperative for the marketers to decide
several strategies. Consumer Behaviour is the psychological process of decision
making by consumers in a social context. There is a need to analyse the segments
of consumers, different purchase patterns, consumer choices, consumption
function and it is to be noted that consumption analysis based on product usage
rates and consumers expenditure. In the course of understanding consumption
analysis, it is vital to get insights in consumer economics which elaborates on
consumers preferences. Companies can aim for effective CRM (Customer
Relationship Management) only through effective Consumer Analysis. The
consumption analysis setting upon consumer purchase pattern, product usage
rate, expenditure, spending pattern would help in evolving right path towards
achieving the objectives of the organisation.
1. A complete analysis of consumer behaviour should identify three types of
actors: marketers, public policy actors, and most
importantly___________________________
a. Government c. Consumers
b. Employers d. Suppliers
2. Which of the following family purchases are often influenced by children?
a. Housing c. Clothing
b. Consumer electronics d. Vehicle
1. Website- http://www.icmrindia.org/casestudies/catalogue
13.9 ASSIGNMENTS
1. Prepare a checklist and conduct a hidden survey of five of your friends
towards the choice of readymade apparels to understand purchase
Behaviour.
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2. Go through Newspapers, magazines and Internet and prepare an assignment

on consumer’s decision making process comparing rural and urban
consumers.
1. Leon G. Schiffman, Joseph Wisenblit, Ramesh Kumar.S (2016), Ivey
Publishing, Pearson India, India.
2. Srabanti Mukherjee (2013),Consumer Behaviour, Cengage Learning, New
Delhi, India.
1. Visit a nearby shop to know the purchasing pattern of consumers in
different period of times.
2. Evaluate few e-commerce sites and decide how the assumptions on
consumer Behaviour are reflected in their website.
3. Assume that this year end you are planning for a world tour and looking for
a tour agent who can help you in deciding the tour plans.(i) Develop a list of
criteria that will help you to decide the right tour agent.(ii) Prepare a
comparative statement with all details collected from tour agents and find
out what made you to select a particular tour agent.
13.12 KEY WORDS
Consumption Analysis
Consumer Behaviour
Consumer Economics
Consumer Spending
Consumer Choice
Customer Satisfaction
Customer value
Product Usage
Purchase pattern
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LESSON - 14
MODELS OF BUYER BEHAVIOUR

14.1 INTRODUCTION
Markets, products and brands undergo a number of changes in a dynamic
environment. Consumer Behaviour is the study of individuals, groups, or
organizations and the processes involved to select, secure, use, and dispose of
products, services, experiences, or ideas to suit their needs and wants. It is also
concerned with the social and economic impacts that purchasing and consumption
behaviour has on both the consumer and the society at large. Understanding
purchasing and consumption behaviour is a key challenge for marketers.
Consumer behaviour, in its broadest sense, is concerned with understanding both
how purchase decisions are made and how products or services are consumed or
experienced.
The utility theory views the consumer as a ‘rational economic man’ (Zinkhan
1992), contemporary research on Consumer Behaviour considers a wide range of
factors influencing the consumer, and acknowledges a broad range of consumption
activities beyond purchasing.
A number of different approaches to modelling consumer decision making can
be adopted. The area is subject to ongoing dynamic research and it is expected that
new insights and approaches still remain unexplored providing a potentially rich
area for study.
Figure 1: Factors influencing Buyer Behaviour

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14.2 OBJECTIVES
• To understand the areas of application of the models based on different
dimensions
• To present a models of Buyer Behaviour and understand how consumers get
cues from environment to decide the final purchase of a product.
• To critically evaluate the models in present scenario and enumerate the scope
of the models in the purchase decision.
14.3 CONTENTS
The contents would focus on
Factors to be considered in analyzing the buyer Behaviour
Application of models to understand the characteristics of consumers
Different classification of Buyer Behaviour Models.
Models of Buyer Behaviour
Early Stimulus-Organism-Response models as shown in Figure 1, suggest a
linear relationship between the three stages with environmental and social stimuli
acting as external antecedents to the organism. This approach assumes that
stimuli act upon an inactive and unprepared organism (Eysenck and Keane 2000)
Stimulus – Response Model of Buyer Behaviour
Figure . 2 Stimulus - Response Model

In order to appreciate the underlying constructs of the consumers’ choice and
the extent to which they contour the choice process, marketers often resort to some
established models of consumer Behaviour. Models are sometimes designed by
verbal illustration, by portraying with the help of diagrams or mathematical
symbols, or by describing with some physical process. In consumer Behaviour, the
existing models may be segregated into two different schools- the traditional models
and the contemporary models. These models are elaborated in the next section. All
the models follow the same pattern as shown in the figure below
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Exogenous Variables
Inputs Hypothetical Constructs/ Outputs

Intervening Variables
Figure 3: Basic Model

TRADITIONAL MODELS
While attempting to have a clear comprehension about the economic system, it
was the economists who emerged as the pioneer to develop the basic consumer
decision models. Ideally, the priori assumptions of the economic models pivot
around allocation of limited resources across unlimited needs and wants. Two of its
key factors, namely, microeconomics and macroeconomics have contributed in
different ways to analyze the process of consumers’ decision making. Even though
these models have been criticized for being over-simplistic, nonetheless, after
several modifications over the decades, these pioneering models still contribute a
lot towards the developed of contemporary theories.
MICROECONOMICS MODELS
The classical microeconomics approach, propound in the first quarter of the
19th century by Alfred Marshall, principal focused on the type of goods (normal,
necessary, or giffen) and prevailing price structure in the country. The underlying
assumptions of the Marshallian model are as follows.
• It is not possible to satisfy the consumer as they have unlimited needs and
wants.
• Consumers are restrained by a budget line and thereby they try to allocate
available purchase budget in a way that maximizes their utility.
• Consumers autonomously build up their own preference in the absence of any
external influence and their preference pattern is consistent over time.
• Consumers have prefect knowledge about the utility of the product, i.e., they
are fully aware of the level of satisfaction they can derive from the use of the
product.
• The law of diminishing marginal utility prevails which means the proportion of
increase in utility gradually diminishes with the consumption of additional
units of the product.
• Price is the only determinant of purchase preference.
• Consumers are perfectly rational in a sense that given the individual’s choice
criteria, they will always act in a conscious and calculated way to maximize
their utility.
Based on these assumptions, economics conclude that perfectly rational
consumers choose the product bundle for which the perceived cost-benefits ratio is
maximum. For any particular item, the benefit/cost ratio can be measured as a
ratio(MU/P) of its marginal utility(MU) to price(P). Hence, the consumer would try to
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realize a position where the following equation is valid for any number (n) of goods.
This means
MU1
The economists noted that if a product’s perceived marginal utility to price
ratio is higher than the others, the consumer will be able to obtain higher level of
satisfaction per unit of money from it and will opt for purchasing additional units of
it. Given the adequacy of budget, the consumer will keep on purchasing additional
units of the product until its marginal utility declines to the level where the
product’s MU/P ratio settles in an equal position to all other products MU/P ratios.
Critical evaluation
Although the microeconomic models are the pioneering attempts to
understand the choice processes, due to their several unrealistic assumptions, their
applications are highly restricted. The concept of utility maximization does not
always hold true in case of the ‘bottom-of-the-pyramid’ consumers who usually
strive for acceptable levels of satisfaction. Besides, in many cases the consumers
lack perfect knowledge regarding products, and they frequently manipulate each
other’s preferences. Also, today’s customers are subjected to many variables in
addition to the price to assess a product’s cost. Finally, customers simply do not
appear to be perfectly rational in all their purchase decisions. In reality, lots of
psychological and social variables influence each other before a customer reaches
his/her final buying decision. These impracticable of an entire economic system,
but they are certainly not useful in understanding how actually the individual
consumers behave in specific purchase situations.
Nonetheless, in spite of several shortcomings, the microeconomic models have
been useful in providing a pioneering perspective which has built the base to
comprehend the contemporary models of the consumer Behaviour. Finally, because
economists have restructured some critical aspects of the microeconomic models, it
contains to exert significant influence on the contemporary thinking of the
consumer Behaviour.
Macroeconomics Viewpoints
Macroeconomics school of thought, on the other hand, stresses on the
summative flows in the economy in terms of the monetary value of goods and
resources, the directions, and the extent of their change over time. Given the
knowledge of these aggregate flows, the macroeconomics school attempts to analyze
the behavioural responses of the consumer who stimulate and direct the extent of
financial flows. Even though the school did not produce a full-proof model of
consumer buying behaviour, it has successfully provided some food for thought to
analyze the contemporary models formulated in the latter half of the 20th century.
One particular aspect which has been stressed in macro-models pivots around
how consumers allocate their income between consumption and saving. The
underlying assumption of the macro-models is –higher the income of the families,
smaller is their marginal propensity to consumer and, thereby, they spend relatively
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lower proportion of their disposal income than the lower-income families on

consumption.
In his relatives-income hypothesis, James Duesenberry (1949) opined that
people’s consumption levels are primarily governed by their peers and social groups
rather than their own absolute income levels. Therefore, an individual’s marginal
propensity to consumer is likely to change only when he moves in an
upward/download direction in terms of social class. Nonetheless, with an equal rise
in income of all the groups of society, the marginal propensity to consume is not
expected to change for any of the change.
On the flip side, the permanent-income hypothesis proposed by Milton
Friedman (1957) centres around the nation that the consumption of a
family/individual/social class depends on what they consider as their ‘normal’
income. In doing this, they try to retain a reasonable stable standard of living even
though their incomes may vary considerably over time. As a consequence, the
change in income that people perceive as impermanent has modest effect on their
consumption spending.
Contrary to the microeconomic models, the macro-models consider a pool of
other variables like consumer’s income, previous income experience, accumulated
liquid assets (Friedman, 1957), variations in taxes or credits, and also increase in
relative income (Duesenberry, 1949) as influencing parameters of consumer
purchase decision. Nonetheless, most of the significant and symbolic cues used by
the marketers as stimuli along with the psychological and social variables are
overlooked in all the macroeconomics models. However, on a pragmatic note, the
customers are often exposed to these variables while forming their attitude or
arriving at the final buying decision.
Furthermore, both the micro- and macroeconomics models crop as result of
their focus on the particular act of purchase. However, substantial search for
information precedes it, and purchase evaluation as well as repeat purchase can
tag on it. Since the economic models do not deal with these activities, they may not
be accepted as all-inclusive illustration of the consumer behaviour.
Thus, the study of consumer behaviour gradually evolved as a distinctive
discipline while several new approaches emerged to illustrate the process of
consumer decision-making. These contemporary views are quite diverse from the
earlier models because of their focus on the decision process that consumers
undertake while choosing products and services. Therefore, contrary to the
economic models, in these models, important is placed on the mental process that
transpires before, during, and after the purchase are made. Secondly, the
contemporary models largely draw analogies from various domains of behaviour
science. In fact, a large number of the variables used in these models are borrowed
from the fields of psychology and sociology.
Quite a few contemporary consumer models have been evolved varying in
terms of their sophistication, precision, domain, and scope. However, due to the
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scope of the syllabi only a few of the widely quoted models will be reviewed in the
following sections.
CONTEMPORARY MODELS
Since consumer behaviour has emerged as a separate discipline, several
attempts have been made to conceptualize the buying behaviour through
comprehensive models. Nonetheless, five major comprehensive contemporary
models are most coveted in the arena of consumer behaviour. The models range
from the oldest Andreason model(1965) to the latest Engel-Kollat-Miniard and
Sheth-Newman-Gross models (1991). The five models are discussed below
Andreason Model (1965)
One of the earliest models of consumer decision-making was propose by
Andreason (1965) whose model focuses on the acceptance and interpretation of the
information in the consumer decision-making process. It is assumed that message
reach the consumer’s memory through five basic senses. The message can either be
personal or non-personal (i.e., either word of mouth or advertisements designed by
the marketers). Therefore, a filter is created by individual’s perception, with attitude
as determining factor, through which the information flows. Nonetheless, the model
seems to have laid too much emphasis on the aspects of attitude while ignoring its
relevance in terms of repeat purchase situations. However, attitudes can be altered
in several ways. For example, when a person interacts within a group, he/she is
often subject to different groups norms. Further, the new information obtained
would certainly experience, and wants will also shape the information processing of
an individual and thereby arriving at the final choice.
Critical evaluation
For most of the complex buying models, the decision-making process starts
much before the information search stage. Even Kotler’s black-box model begins
with the ‘need-recognition’ of the customers due to marketer-provided,
environment, and other stimuli. In reality, if these stimuli reach towards the
perceptual threshold of the customers, then and only then the customer will be
attentive towards the marketing communication and search for information
regarding the intrinsic or extrinsic benefits of the products or brands, secondly, the
model is devoid of detailed analog of repeat purchase situation or impulse buying
situation. Thirdly, it is difficult to generalize the model in the absence of any
validation methods used.
Nicosia Model (1966)
Nicosia’ model (1966) focuses on the buying decision, especially for a new
product. It is a four-field-model, in which the first three fields elucidate various
decision-making steps that the consumers espouse before buying goods or services.
Nicosia had resorted to a detailed computer flowchart for this purpose. For ease of
comprehension, all the mental situation of the consumer has been classified into
various fields and subfields.
Thereafter, all the elements of the model are connected through direct as well
as feedback loops. Hence, the model stresses on the association between the firm
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and its prospective consumer. The firm communicates with consumer through its
stimuli (in terms of all the four Ps), and the consumers respond to these messages
by forming their attitudes towards the product/brands and finally purchase/reject
it. A careful watch on the model may project that the two basic entities of the
market place namely, the firm and the consumer, are neatly connected with each
other, and mutually influence each other’s strategies and actions. The major fields
and subfields of the model are as follows.
Field 1: the consumer’s attitude based on the firm’s massages
The first field that deals with the consumer’s initial attitude after being
exposed to the firm’s message is sub-divided into two subfields.
The first subfield explains how the firm’s marketing environment effort are
shaped by its attribute and trains, given the existing competitive and
communication effort are shaped by its attributes and traits, given the existing
competitive environment and features of the target market. The second subfield
portrays the consumer’s individual characteristics, e.g., experience, personality,
and how he perceives the market’s communications regarding the product. In this
phase, the consumer develops his attitude towards the firm’s product depending on
the way he interprets the firm’s messages.
Field 2: Search and evaluation
In the second phase, the consumer beings to search for attributes of other
firm’s offerings and compares them with the concerned firm’s brand. At this phase,
it is the task of the marketer to provide adequate information about the product,
highlight their USPs, shape the consumer’s evaluative criteria (as Nicosia talks
about new purchase only), and motivate them in favour of its brand through its
promotional messages.
Sub field 1: The firms Consumer’s Subfield 2

attribute in terms of exposure to Consumer’s
individual Additional parameters
symbolic and marketer’s
significative cues communication attributes and
traits Information
search and
evaluation of
Post - consumption experience alternatives
with the brand /product
Motivational parameters
Consumption or
usage of the brand/
product Decision
Purchase Stage
Figure.4 Nicosia’s Model of Consumer Decision process

Field 3: The act of the purchase
At this stage, the motivated customers are convinced to purchase the firms
product from a specific distributing point.
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Field 4: Feedback
Finally, the model interprets the post-purchase feedback of the consumers.
The firms may use the sales data as a feedback and modify the brands traits or
promotion/distribution strategies if required, and the consumer is supposed to use
his experience to develop notions about the product/firm.
Critical evaluation
The worth of Nicosia’s model, however, rests on the integration of insights
about the ‘non-action’ kind of variables present in the environment and the ways
they prompt actions from the consumers. But it does not unveil the impact of the
internal factors on the consumer and the ways they shape the consumer’s attitude
towards the product.
Moreover, the Nicosia model overlooks the aspects of predisposition and
perceptual bias-the two most crucial aspects of understanding the customer’s
expectation from a product or brand. Besides, this model has been severely
criticized by the behavioural scientists as it was not empirically tested, and many of
the variables were not clearly defined and hence could not be measure.
Though the flowchart approach of the model organized and structured the
presentation considerably but on the flip side these posed boundaries on the set of
possible interfaces among the variables.
Howard – Sheth Model (1969)
The most widely used consumer behaviour model is the Howard-Sheth model
of buyer behaviour, which was formulated by the eminent professor John Sheth
in1969. The model is highly significant and distinct from the other models as it
puts forward the relevance of inputs to the consumer buying process and
comments on the ways in which the consumer organizes and interprets these
inputs before arriving at final decisions.
This process of learning serves to influence the extent to which the consumer
considers future purchases, and seeks new information. Howard and Sheth
suggested that consumer decision making differs according to the strength of the
attitude toward the available brands; this being largely governed by the consumer’s
knowledge and familiarity with the product class.
In situations where the consumer does not have strong attitudes they are said
to engage in Extended Problem Solving (EPS), and actively seek information in order
to reduce brand ambiguity. In such situations the consumer will also undertake
prolonged deliberation before deciding which product to purchase or indeed,
whether to make any purchase. As the product group becomes more familiar, the
processes will be undertaken less conscientiously as the consumer undertakes
Limited Problem Solving (LPS) and eventually Routine Problem Solving (RPS) (Foxall
1990).
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Exogenous Importance of Personality Social Culture Organisation Time Financial

Variables Purchase Variables Class Pressure Status
Outputs
Inputs
Search for Inhibitors Purchase
Brands (A,B,C…) Information Behaviour
Significative
1 Quality
2 Price
3 Distinctive Intention
4 Availability
5 Service
Symbolic Predisposition Attitudes
1 Quality
2 Price
3 Distinctive Comprehension
4 Availability
5 Service
Social Environment Non-specific Specific Decision Evoked Attention
Motives Motives Mediators Set
Sensitivity to Perceptual Satisfaction

Information Bias
Perceptual Learning
Input-output flow of
Constructs Constructs information
and affects
Feedback effects
Source: (Howard & Sheth 1969, Loudon Influence of exogenous
&Della Bitta 1993) variables
Figure 5: The Theory of Buyer Behaviour

The model draws heavily on learning theory concepts (Loudon & Della Bitta
1993), and as such six learning constructs are represented:
• Motive – described as either general or specific goals impelling action.
• Evoked Set – the consumers’ assessment of the ability of the consumption
choices that are under active consideration to satisfy his or her goals.
• Decision mediators – the buyer’s mental rules or heuristics for assessing
purchase alternatives.
• Predispositions – a preference toward brands in the evoked set expressed as an
attitude toward them.
• Inhibitors – environmental forces such as limited resources (e.g. time or
financial) which restrain the consumption choice.
This model is constructed in three levels of decision making in almost an
input-process-output format. Howard- Sheth has explained this in the following
manner.
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a) Inputs
These input constructs are comprised of three different types of stimuli
(information sources) in the consumers environment. The marketers at this phase
usher the consumers with product or brand-related information in terms of
physical brand characteristics (significant stimuli) and verbal or visual traits of the
product(symbolic stimuli).on the other hand, the social environment of the
consumer(e.g. family, reference group, and social class)significantly influences the
consumer’s black box and is referred as ‘social stimulus’ in the consumer decision
making process. Together, these three types of stimuli endow the customers with
inputs relating to the traits of product class as well as brands.
b) Processing of inputs
Similar to the consumer black box concept, the most fundamental part of this
model too consists of several psychological variables involved when the consumer is
envisioning a decision. The perceptual variables determine how the consumer
interprets the information from the input stimuli, memory and other sources.
Improper comprehension of the environmental stimuli results in ‘stimulus
ambiguity’. A further consequence of stimulus ambiguity is ‘perceptual bias’ which
is formed when the consumer distorts the information received in a way it fits with
his established needs or experience. While mentally processing the information or
stimuli received from the environment, the consumer may resort to some other
decision – making parameters which sheth at al.refered as learning constructs. the
learning constructs include confidence on the product/brand, intention to
purchase, motives behind the choice, choice criteria, brand comprehension, and
level of perceived satisfaction from the product/brand. The possible interface
amongst the perceptual and learning constructs endows the model with
considerable improvement over the traditional models
However, some exogenous variables, which are not direct part of the decision-
making process, pose some influence on the importance of the purchase,
consumers personality traits, religion, time pressure, etc.
c) Outputs
The outputs are the resultant Behaviours of the consumers exposed in the
market place based on their interpretation of the received environmental stimuli
through the interface of perceptual and learning constructs. These response
Behaviours can be measured in terms of attention, brand comprehension,
attitudes, and intention.
Critical evaluation
Howard-Sheth model focuses on three input stages- significative, symbolic,
and social stimuli. While explaining both the significative and symbolic stimuli, the
model has over-emphasized on the material aspects, such as price and quality.
Conversely, at the point of interpretation of the social stimuli, the model fails to
explain how the dynamics of social variables differ across the societies and event
geographic regions and in particular how those changes in social dynamics
influence the decision-making process. for example, the family values and
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influences of the Indian rural bottom –of-the –pyramid customers are significantly
different from that of the double income urban literate customers. Moreover, the
model has mentioned about various input –processing variables, but has not
mentioned how they inter mingle and correlate amongst themselves to develop the
perceptual bias or predispositions of the customers. Finally, no direct relation has
been drawn on the role of religion in influencing the customer’s decision-making
process. Religion is evaluated just as an external factor without any real sway on
the consumer and, therefore, might be considered as the pilpavle weakness while
interpreting this model. In a country like India, where many of the social stimuli,
like family structure, festivals, etc., vary with religion, the model may significantly
fail to explain the pragmatic situation, especially in the rural contest. in particular,
while targeting the rural bottom- of-the-pyramid customers, having clear-cut idea
about the level of literacy, prevailing myths, and superstitions about the
adoptability of a particular product or the calls for the day. Another weakness
stems from the fact that there being ample of measurement errors, the theory
cannot be practically tested. The distinction between exogenous and endogenous
variables is also not and ambiguous. Some of these constructs are really difficult to
practically measure (for example, perceptual bias and attitude). While howard and
sheth attempted to generalize their conclusions, loudon et al.(1993)pondered over
its unsuitability in explaining joint or group decision-making. jagdish sheth,later on
propounded his open ‘family decision-making model’(1974),but there too, he had
mentioned about several individual and group constructs that influence a family-
purchase Behaviour. but once again, the measurement methods of these variables
where not clear and hence, this model too, could hardly be generalized.
ENGEL- KOLLAT-BLACKWELL MODEL (1972)
Engel- Kollat-Blackwell (EKB) model, as other basic models of consumer
Behaviour, has undergone several modifications and improvisations to enhance its
evocative power of the basic relationships between constructs and sub-constructs.
The latest version coined up was the Engel-Kollat-Miniard (EKM) model, which
principally portrays the four stages explained below.
First stages: Decision- process stage
The pivotal point of the model is the five stages basic decision-process-
problems recognition, search for alternatives, alternative evaluation (at some point
in which consumer’s beliefs may lead to formation of attitude and subsequently
purchase intention), purchase, and outcomes (in terms of satisfaction or
dissatisfaction). Nonetheless, as discussed in the earlier chapter, in all purchase
situations the consumers are not passed through all five stages; only in case of
extended problem situation Behaviour, all the five stages are visible. In case of the
choice of hi-tech and hi-end mobiles, as discussed in the earlier case study (high-
involvement purchase), the consumer will behave as an extended problem-solving
situations and undergo all five relevant stages of decision-making.
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Second stages: Information input

This stage is quite similar to the stimulus-input stage mentioned in the
Howard-Sheth Model. At this stage, the consumer first tries to recollect the product
or band related information from his own memory, which is referred to as ‘internal
search’. For example, in case of choosing a hi-tech mobile, the prospect first tries to
remember the advertisement to which he is exposed to it in recent past, which sets
his peer group has used recently and what the features of the product/brand are. If
this internal search is not sufficient, then the consumer deliberately searches
information from outside. He obtains information from several marketing
(promotions or retailers) and non-marketing sources (peer, family reference groups,
and opinion leaders). At times the situation is the other way round. Sometimes the
external stimulus generates the problem recognition stage of the decision- making
process.
Many a times, to reduce the post- purchase dissonance, the consumer strives
for searching the external information to confirm his choice.
Third stage: Information processing
This phase of consumer decision making encompasses the following stages-
consumer’s exposure to the marketer’s stimuli (advertisements or any other
marketer’s communication), attention (if the product has any relevance to the
consumer), perception (once the marketer’s communication fall within the
consumer’s perceptual threshold), acceptance to the information, and retention of
the perceived and accepted information in the memory (initially short term, then
gradually long term). For example the prospective buyer of the hi-tech mobile may
have to undergo through the following stages of information processing.
• Initially today’s young prospective buyer of a hi-tech mobile is ushered with
information through television commercials, hoardings, banners and also from
his peer group.
• Thereafter, he allocated space for this information.
• Once the information sounds relevant to him and falls within his perceptual
threshold (in terms of price preference, trend, style, design, features,
availability, celebrity endorsement, catchy music, or colours in the
advertisement), he interprets the stimuli.
• After interpretation, the prospective buyer can shape his evoked set and retain
messages related to his choice set by transferring the input to the long-term
memory.
Fourth stage: Variables influencing the decision process
In the fourth stage, Miniard et al. spoke of the individual and environment
influences on all five stages of the decision process. Similar to the Howard-Sheth
model, here too, individual characteristics include motives, values, lifestyle, and
personality. The social influences, like culture, reference groups, and decision
process. About the hi-tech users, once again, it is well understood from the
explanation of the Howard-Sheth model, mentioned in the earlier section, that the
younger high-income prospective consumers are more influenced by both the social
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and the individual variables like esteem needs, social needs, trendy lifestyle, happy-
go-lucky, or chic-urbanite personality, etc.
This model, therefore, incorporates, any important individual and social
parameters such as values, lifestyle, personality, and culture, which significantly
influence the consumer decision-making.
Figure 6: EKM Model

Source: (Blackwell,Miniard et al. 2001)
Critical Evaluation
Majority of the contemporary models shaped in the 1960s and 1970s lacked
strong theoretical background as the discipline of the consumer Behaviour was in
its nascent stage at that time (Du Plesis, Rousseau et al., 1991). These concerns
might have been partially eliminated by the modernizing of some of the
contemporary models like EKB model. The so-called ‘grand model’ has been revised
and renamed as EKM model which has categorically and explicitly encompassed
several individuals and environmental constructs of consumer decision- making,
such as values, lifestyle, personality, and culture. Nonetheless, the environment
and individual variables mentioned in the model have been ushered with severe
criticism due to the vagueness of their definition and their roles within the decision-
making process (Loudon and Della Bitta, 1993). To be more specific, the influence
of the environmental variables are well identified, but their roles in the influencing
the buyer Behaviour are not very comprehensively elucidated. Future, the model
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fails to showcase which factors will shape these individual and social variables, and
why different types of personality traits result in difference in consumer’s choice
processes. In countries like India, Pakistan, or Bangladesh, religion can also play a
major role to elucidate some Behavioural characteristics of the consumer, and,
therby, lead to better understandings of the model. However, this link is completely
missing in the model.
Further, the roles of individual purchase motives are only consider to be
constructive for need recognition, and, thereby, this crucial theoretical aspects
seems to be undervalued in analyzing the decision-making process (Bagozzi,
Gurhan-Canti et al.,2002; London et al., 1993). The model has been criticized for its
mechanistic treatment with highly flexible psychological and social constructs
(Loudon et al., 1993).
1) Classification of Models based on Traditional and Contemporary
2) Compare the different models and apply to an Indian buyer
3) Examine each model based on its relevant applicability to the Indian Context.
1) State the basis of formulating the buyer Behaviour models?
2) How do you think the models can contribute to the buyer’s decision making?
3) Consider any one model that may suit Indian marketing condition and Justify?
4) Give your opinion about the shortcomings of the contemporary model?
5) What are the two major cognitive models of Consumer Behaviour?
6) Explain the Analytical Models of Consumer Behaviour.
14.6 SUMMARY
This chapter explains the importance of Buyer Behaviour Models and how the
determinants influence them to purchase a product. The factors can be of a great
study to the marketers to well understand the cognitive process to design
strategies. The categories of models really provide inputs as to how the pragmatic
process of buyer decision making happens. The review of the decision making
models undertaken here highlights the complexity of consumer choices and
identifies the key processes that lead to behaviour. A wide range of variables have
been posited across the models, and each has evidence to justify its inclusion in
attempts to explain Behaviour.
1) If a consumer places great importance on a purchase, that product would be
considered as ______________________ product..
a. salient c. high-impact
b. high involvement d. expensive
2) __________________ are the things that people are, while behavioural processes
are the tools people apply in deciding.
a. Consumer background characteristics c. Personality traits
d. Consumer features d. Reference characteristics
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3) The Nicosia Model focuses on ____________

a. New Product b. New market c. Old Product d. Existing Market
4) List the components in Howard- Sheth Model
Inputs – Process- Outputs
5) How many stages are there in Engel- Kollat- Blackwell Model? Four
1) https://www.scribd.com/doc/46143297/Consumer-Behaviour-Theory-
Approaches-Models
14.9 ASSIGNMENTS
1) Apply each model by selecting samples of your choice for different product
category.
2) Interview a manager of a super market based on your understanding of
different models and its applicability to the local consumers.
3) Students can develop their own diagrams for each low and high involvement
product they select.
1) Erasmus, A. C., et al., 2001. Consumer decision-making models within the
discipline of consumer science: a critical approach. Journal of Family Ecology
and Consumer Sciences
2) Solomon, M., et al., 2006. Consumer Behaviour: A European Perspective. 3rd
ed. Harlow: Prentice Hall.
3) Srabanti Mukherjee, Consumer Behaviour, Cengage Learning, India, 2013
1) Survey the lower segment of buyers and explain how they behave when they
decide on purchasing Food items, Health care and Banking.
14.12 KEY WORDS
Brand Comprehension
Buyer Behaviour
Exogenous variables
Modelling Behaviour
Motives
Overt Search
Values
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LESSON - 15
ORGANISATIONAL BEHAVIOUR OF BUYER

15.1 INTRODUCTION
Purchase decisions by business are often described as “rational” or
“economic”. However business and other organizations are made up of individual.
These individuals not “the organization” make the purchase decisions. Illustration
reflects the fact that communicating with organizational buyers involves many of
the same principles of perception used to reach household buyers, such as colour,
contrast, and humor.
However, organisations are not just a collection of individuals. Organisations
do develop unique rules and cultures that influence the Behaviour of their member.
Thus it is important that we understand the unique characteristics of organisations
that relate to their purchasing Behaviour.
Understanding organisational purchasing requires many of the same concepts
used to understand individual consumer or household needs. Although larger and
often more complex than individual consumer or household needs, organisations
too develop preferences, memories and behaviours through perceptions,
information processing and experience. Organisation develop cultures that create
relatively stable patterns of Behaviour over time and across situations.
Like households, organisations make many buying decisions. In some
instances, these buying decisions are routine replacement for a frequently
purchased, commodity product or services such as paper or pens. At the other end
of the continuum, organisations face new, complex purchase decisions that require
careful problem identification, extensive information search, along and often
technical evaluation process.
Because there are many similarities between analyzing consumer Behaviour
and analysing organisational buyer Behaviour our basic conceptual model of buyer
Behaviour still holds good .of course some aspects of the model, such as social
status, do not apply ;but most others do, with some modification. The purpose of
this chapter is to discuss how this model of consumer Behaviour should be
modified for application to organisational buying Behaviour and how the concepts
of this model operate when marketing to organisations rather than to individual
consumers or households.
15.2 OBJECTIVES
• Identify organisation as a buyer and how an organisational decisions are
influenced
• Understand the different motivations of organisational buyers
• Formulate strategies for approaching organisational buyers
15.3 CONTENT
Organization as a buyer
Basic buyer decision process
Organisational Behaviuor influence on decision process
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Organisational Purchase process

Consumers are individuals who buy products and services for personal
consumption. Sometimes it is difficult to classify a product as either a consumer or
an organisational good.
Cars, for example, sell to consumers for personal consumption and to
organisations for use in carrying out their activities (e.g. to provide transport for a
sales executive). For both types of buyer, an understanding of customers can only
be obtained by answering the following five questions:
1. Who is important in the buying decision?
2. How do they buy?
3. What are their choice criteria?
4. Where do they buy?
5. When do they buy?
Some of the characteristics of organizational buyers are:
1) Consumer market is a huge market in millions of consumers where
organizational buyers are limited in number for most of the products.
2) The purchases are in large quantities.
3) Close relationships and service are required.
4) Demand is derived from the production and sales of buyers.
5) Demand fluctuations are high as purchases from business buyers magnify
fluctuation in demand for their products.
6) The organizational buyers are trained professionals in purchasing.
7) Several persons in organization influence purchase.
8) Lot of buying occurs in direct dealing with manufacturers
Organisation buying is the decision-making process by which formal
organisations establish the need for purchased products and services and identify,
evaluate, and choose among alternative brands and suppliers.
Organisational Purchase Process
Organisational buying decision are often compared to family purchases.
Organisations generally have relatively objective and clearly articulated criteria
such as profit-maximizing that guide purchases.
Most industrial purchases are made by individual unknown to the other
members of the organisation often including those who will use the product. not the
case with family or household.
The following flowchart clearly depicts how the buying decision starts and a
decision taken finally.
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Most organisational purchases map little effect almost other members of the
organisation, best family quotes directly affect the other member of the family.
Consumer buyer behaviour is considered to be an inseparable part of marketing
and Kotler and Keller (2011) state that consumer buying behaviour is the study of
the ways of buying and disposing of goods, services, ideas or experiences by the
individuals, groups and organizations in order to satisfy their needs and wants.
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Business often engaged in reciprocal purchases and forms strategic alliances

with their suppliers . They may be proactive in helping suppliers develop products
that meet their unique need. These are not common options for household.
Figure.1 Overall Model of Organisational Buyer Behaviour
Decision process
External influence Situations
• Firmographics
• Culture Problem recognition
• Government
Information Search
• Reference groups
• Marketing Activities Organisational
Alternative Evaluation
culture
and selection
Internal influence
• Organisational Outlet selection and
values purchases
• Perception
• Learning
• Memory Post-purchase
• Motives processes
• Emotions
The process family is used to make Purchase Decision and the outcome of
those purchases have important impacts on the well being of the individual family
members and the family itself. These practices are operative in organisational
buying decisions. Thus while organisational decision making has something in
common with family decision making it is not the same.
Decision Making Unit
Decision Making Unit (DMI) is the individuals within an Organisation who
participate in a given Purchase Decision. These often functions as buyer Centre
when they comfort of individual from various area of the firm such as accounting,
engineering, manufacturing and marketing who meet specifically to make a
purchase Decision. They are often relatively permanent for recurring decision and
ad hoc for non routine ones. Large signing structured organisation ordinarily
involves more individuals in up purchase Decision than do smaller, less formal
organisations. Important decisions are likely to involve individual form a wide
variety of functional area and organisational level than are less important Purchase
Decision.
Purchase situation
The buying process is influenced by the importance of the purchase and the
complexity and difficulty of the choice. Simple, low risk, routine decisions are
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generally made by an individual or even an automated process without extensive

effort. The other extreme are decision that are complex and have major organisation
implication.
Organisational culture
At the hub of Consumer Model of Buyer Behaviour is self concept and lifestyle.
Organisation also have a type of self concept in the beliefs and attitude the
organisation members about the organisation and how it operate. Likewise
organizations have a type of lifestyle in that they have distinct ways of operating.
We characterise these two aspects of an organisation and its organisational culture.
organisational culture is much like lifestyle in that organisations vary dramatically
in how they make decisions and how they approach problem involving risk
Innovation and change. The corporate culture is often used to refer to the
organisational culture of a business firm.
Organisational culture reflect and shape organisation’s needs and desire,
which in turn influence organisations to make decisions. For example The Red
Cross and IBM are large organisations. Each has a different organisational culture
that influences how it gathers information, process information and makes
decisions.
EXTERNAL FACTORS INFLUENCING ORGANISATIONAL CULTURE
I. Firmographics
Firmographics involved both organisational characteristics- for example, size,
activities and objective, location and industry category- and characteristics of the
composition of the organisation- for example, gender, age, education and income
distribution of employees.
Size
Large organisations are more likely to have a variety of specialist who attend to
purchasing finance marketing and general management; in Smallest organisation,
one or more individual may have the same responsibility. largerorganisation are
generally more Complex because more individual participate in managing the
organisation operations. that that are often multiple individual involved in the
Purchase Decision in an organisation advertising and sales force Effort must be
targeted at various functions in the firm. message might need to emphasize issue of
concern only to that function. the same Purchase Decision in a smaller firm might
involve only the owner of manager. different media would being required to reach
this person and one message would need to address on the key purchase issue .
Activities and objectives
The activities and objectives of organisations influence their stye and
behaviour. for example the living in procuring an avionics system for a new fighter
plane, Naukri differently than Boeing does In purchasing system for commercial
aircraft. the Navy is a government organisation carrying out a public objective,
whereas Boeing Seeks a commercial objective at a profit.
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Commercial form can be usefully divided into public firm and private firm. in
public firm management is generally expected to operate the firm in a manner that
will maximize economic gain of the shareholders. This organisation face consistent
pressure to make economically sound if not Optimal decision.
II CULTURE/GOVERNMENT
Variations in values find a way of cross culture affect organisational as well as
individual. for example, in most Americans firm shareholder or owner wealth is a
dominant decision criterion. Corporate downsizing has resulted in hundreds of
thousands of worker and manager losing their job in order to enhance profitability.
This action has been acceptable in American society. similar corporate behaviour
could not be accepted much of Europe or Japan. Society worker welfare is on which
all about control about corporate profit. Plant closure laws, layoff Regulation and
worker benefits tend to be much higher than in America.
III REFERENCE GROUP
Reference group influence organizational behaviour and purchasing decisions.
Perhaps the most powerful type of reference group in industrial market is that of
lead users. Innovative organisation derived a great deal of their success from
leading change. As a result the adoption of a new product services Technology
manufacturing process is often emulated by the majority.
a) Internal factors:
Organisational values:
IBM and apple computer both manufacture and market computers. However,
each organization has a distinct organizational culture. IBM is corporate, formal,
and takes itself seriously. Apple is less formal, creative, and promotes a more open
organizational culture. Marketing managers must understand these differences in
order to best serve the respective organizational needs.
As you examine the eight common business values shown below, think of how
IBM might differ from Apple, Macy’s from target, amazon.com from buy.com, or
Fedex from the U.S. postal service. Each is a large organization, but each has a
unique set of values that underlies its organizational culture. To the degree that
organizations differ on these values, a firm marketing to them will have to adapt its
marketing approach.
1) Risk taking is admired and rewarded.
2) Competition is more important than cooperation.
3) Hard work comes first, leisure second.
4) Individual efforts take precedence over collective efforts.
5) Any problem can be solved.
6) Active decision making is essential.
7) Change is positive and is actively sought.
8) Performance is more important than rank or status.
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Perception:
Depending on the various messages received and experiences lived through,
the buyer has a different perception of the various services and brands available to
him. Following on from the first stage, if the individual is motivated, he will be more
likely to increase his level of information to optimize his decision. Motivated by the
purchase of a particular product, he will pay greater attention to the zadvertising by
different brands. It should be noted that the brand concept can modify perception
of a product category, even if this does not necessarily seem logical. A consumer
often has preconceived ideas about the different competitor brands. When the
consumer’s brand preference is adversely affected by a disappointing experience,
“cognitive dissonance” allows him to adapt the company’s message to what he really
wants to hear
To process information, a firm must go through the same sequential stages of
exposure, attention, and interpretation as consumers. Of course, given the more
complex nature of organizations, the processes involved are also more complex. A
business customer develops certain images of seller organizations from their
products, and organizational activities. Like people, organizations have memories
and base their decisions on images or memories they have developed. Once an
image is formed by an organization, it is very difficult to change. Therefore, it is
important for an organization to develop a sound communications strategy to build
and reinforce a desired image or brand position.
Learning:
Like individuals, organizations learn through their experiences and
perceptions. Positive experiences with vendors are rewarding and tend to be
repeated. Purchasing processes and procedures that prove effective tend to be
institutionalized in rules and policies. Likewise, negative experiences with vendors
produce learning and avoidance behaviour, and purchasing procedures that don’t
work are generally discarded. Developing the capacity to learn efficiently is
increasingly a key to organizational success.
Motives and emotions:
Organizational decisions tend to be less emotional than many consumer
purchase decisions. However, because humans with psychological needs and
emotions influence these decisions, this aspect of marketing to an organizational
customer cannot be overlooked or underestimated.
MODEL OF ORGANISATIONAL BUYER BEHAVIOUR
Webster’s buying process model Webster (1965) introduced a model of four
stages for the industrial buying process in order to better analyse and identify the
important variables and causal relationships that exist in this complex
environment. However, this model was just an introduction and was aimed at and
has been further developed for greater specificity. The first stage of Webster’s (1965)
model is problem recognition, where a buying situation is created by an identified
need which may be solved through a purchase. A problem or need arises when
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there is a gap between the actual performance of the organisation and the
organisation’s goals.
Further, there are both external and internal factors that may influence the
goal-setting and problem recognition, thus research is needed to recognise the
major influences. The second stage is buying responsibility, which includes
selecting the buyer in the organisation, which is influenced by the organisation,
industry, product, as well as individual factors. The third stage is the search
process, which entails the gathering of information in order to find alternative
solutions and establishing criteria for evaluating buying alternatives. The search
process may also change the goals. The fourth and last stage is the choice process,
which involves the selection of one or more suppliers. Further, this stage may be
influenced by the order in which the alternatives are evaluated, the relationship
between price-quality-service, as well as the priorities assigned to price-quality-
service.
Webster’s (1965) general model is good to use for understanding the basic
process of organisational buying, however Webster and Wind (1972) as well as
Sargeant and West (2001) have further developed it to achieve a deeper
understanding.
The Nelson box model
This model, according to Agbonifoh, et al. (2007) combines elements of
organizational buyer behaviour with those of consumer behaviour. The model is
built around two important assumptions: a. That decisions at different levels of the
organization neither always involve the same individuals nor identical work. b. That
decision taken at one level forms the basis for all subsequent decision. The Nelson
model describes four levels of decision making in an organization. They are: 1. The
general buying decision which includes the decision to initiate a project (and may
not, therefore, result from a former decision). It may contain the establishment of a
new building, new product, etc. 2. The concrete buying decision which comprise
selection of a definite project, including the objectives, and project specifications. 3.
The decision which is concerned with the most appropriate suppliers/vendors and
products. 4. The technical buying decision which involves decisions related to the
actual mechanics of transportation, drawing up of contracts, final price and
payment negotiations and the stipulation of other details. It is worthy of note that
the Nelson model also captures the individuals, social, organizational and
environmental factors as well as the task and non-task factors that influence
organizational buying Behaviour.
Buying Center Concept
Webster and Wind in the model they proposed to describe organizational
buying process, identified the organizational buying process as a team process and
called the team or the buying decision-making unit of the organization as buying
center. The buying center consists of all persons of the organizations who are
involved in the buying process playing one or the other seven roles: Initiators,
Users, Influencers, Deciders, Approvers, Buyers, and Gatekeepers.
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Users
The persons who use the item. Say for safety equipments for the operators.
Initiators
The persons who request the purchase. The safety officer may initiate the
request for the purchase.
Influencers
Persons who held define specifications. In this case of safety gloves, the safety
officer may himself define specifications. If an industrial engineer is in the
organization, he may also be consulted. There can a different gloves for different
working situations and industrial engineer may be more aware of specific
requirements due to his special nature of work - human effort engineering.
Buyers
They are the person who actually do the buying transaction.
Gatekeepers
They control access to personnel in a company. The receptionist, the
secretaries etc.
Deciders
People who decide on product requirements and suppliers. It is the final
approval for product specifications and suppliers' list.
Approvers
Persons who approve the purchase. In the case of safety gloves, the personal
manager may have the power to approve.
Organizational buying behaviour is a complex process involving many persons,
multiple goals and potentially conflicting decision criteria. And for the business
marketing manager, understanding the consumer and how organizations buy is
fundamental to success. Modeling simplifies the purchase decision process and
gives the marketing manager a fair picture of who the consumer is and how he is
likely to behave towards his marketing strategies. It is therefore recommended that
business goods suppliers should strive to understand the process their consumers
go through from the point of need recognition to when actual purchase takes place.
This should be done for each product/service.
The Organizational Purchase
A purchase will be considered to be Business to Business or organizational
from the moment that it is made in the name of a company or organization,
regardless of size, from a medium sized company up to a multinational or state
company. Professional purchases essentially cover6 : – The purchase of entering
goods, necessary for making the final product: this can be raw materials
(aluminum, titanium, etc.), transformed materials or components, spare parts, sub-
assemblies (cables, braking systems, aircraft windscreens, etc.)
The purchase of foundation goods, necessary for the company to function, e.g.
office supplies, IT equipment, digitally controlled machine tools and production
robots; – The purchase of facilitating goods, from the supply of energy (electricity,
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water), insurance or banking services to consultations (chartered accountants,

auditors, design offices, etc.) via staff restaurants, catering, security services and
the transport of goods. The buying center concept encompasses all of the
operational and functional managers who take part in the final acquisition decision,
and not just the buying department
Forces Influencing Organizational Buying

Behavior
•Economic Outlook:
A projected change in
Domestic & Global
business conditions
Environmental •Pace of Technological
can drastically alter
Change
buying plan. Forces
•Global Trade Relations
•Goals, Objectives, and

Organizational Strategies
Forces •Organizational Position
Organizational of Purchasing
Buying
Behavior •Roles, relative
Group influence, and patterns
Forces of interaction of buying
decision participants
•Job function, past

Individual experience, and buying
Forces motives of individual
decision participants
Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
The organisational buying process is influenced by environmental factors,

organisational forces, group forces and individual factors.
The environmental factors comprise financial, social, political, technological,
legal, infrastructural, demographic and cultural factors. These factors are more
country specific rather than industry specific. The decision maker need to consider
the forces operating and fine tune the marketing strategy.
Organisational buying Behaviour differs from organisation to organisation as
the companies differ at variance in terms of objectives, procedures, organizational
structure, systems and technology. Certain factors under consideration are:
1) Innovativeness
2) Surfacing of Buyer as a vital partner
3) Centralisation/ Decentralisation of input procurement process.
4) Automation of buying process
5) Involvement of purchase experts
6) Top level involvement
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Organisational buying involves multiple individuals in the purchase process.

The process is influenced by different goals, status, authority, control and
persuasiveness of the each party in buying process. Sheth(1973) has provided
solutions for resolving conflicts through problem solving approach, persuasion,
bargaining and politicking.
There are four major factors that shape the individuals purchase risk. They
are purchase problem, characteristics of buyers, organizational environment and
perceived risk connected with the purchase.
Buying Phases
Industrial buying is the result of an iterative process in six main phases:
1) Recognition, or better, anticipation of a need
2) Definition of the characteristics and quantities necessary
3) Search and qualification of potential sources
4) Collection and analysis of propositions
5) Choice of suppliers and ordering process
6) Information feedback and performance evaluation
Organizational Buying Situations
Three main types of buy can be distinguished:
• Straight rebuy
• The modified rebuy
• The new task
• Systems Buy
Straight Re-buy
The straight re-buy pattern is the most often encountered and corresponds to
an almost unchanging need. In this context, the company’s evaluation criteria are
well known as are the appointed suppliers. Commercial relations are stabilized thus
favoring the already established partners.
To reinforce his position, the accredited supplier can go as far as to offer
automatic restocking in order to make it even more difficult for a potential
competitor. In the same way, the trend towards just-in-time production
management tends to reinforce loyalty. In most cases, for this buying pattern the
decision maker remains the buyer or the head of the buying department, when it
concerns “everyday goods”.
In this buying situation, only purchasing department is involved. They get an
information from inventory control department or section to reorder the material or
item and they seek quotations from vendors in an approved list.
The "in-suppliers" make efforts to maintain product and service quality. The
"out-suppliers" have to make efforts to get their name list in the approved vendors'
list and for this purpose they have to offer something new or find out any issues of
dissatisfaction with current suppliers and promise to provide better service.
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Modified Re-buy
This situation involves the desire to modify the response to an existing need.
This is true for example of a product in the mature phase, for which the company
would like an improvement in quality and/or reduced costs. This situation can also
hide an underlying dissatisfaction with the present suppliers who, if they had only
recognized the company’s expectations soon enough could have proposed a
modification or at the very least a direction in which to conduct improvement
research. In this buying situation, there is a modification to the specifications of the
product or specifications related to delivery. Executives apart from the purchasing
department are involved in the buying decisions. The company is looking for
additional suppliers or is ready to modify the approved vendors list based on the
technical capabilities and delivery capabilities.
New Task
This involves the most number of people within the buying center. There are
numerous interactions between the marketing department, the technical
department management (Method, Engineering, Quality), and the Production and
Buying Department. Here, the risk is at a maximum, which is why the opinions of
the influencers and advisors predominate. The buying department’s opinion no
longer takes priority over that of the technical management. This is the most open
type of buying situation for the non-appointed suppliers. In order to obtain new
solutions, information is crucial and members of the buying center should spend a
lot of time collecting and selecting it.
In this situation, the buyer is buying the product for the first time. As the cost
of the product or consumption value becomes higher, more number of executives is
involved in the process. The stages of awareness, interest, evaluation, trial, and
adoption will be there for the products of each potential supplier. Only the products
which pass all the stages will be on the approved list and price competition will
follow subsequently.
Systems buy
A system buying is a process in which the organization gives a single order to a
single organization for supplying a full system. The buying organization knows that
no single party is producing all the units in the system. But it wants the system
seller to engineer the system, procure the units from various vendors and assemble,
fabricate or construct the system.
1) Organisational buying process
2) Models in Buying decision process
3) Buying Centre
4) Factors influencing organsiational buying process
5) Purchase situations
1) Is there any difference between the organizational buying and household
buying practices?
172
2) Discuss the influencing factors of organisational buying process

3) Enumerate on a model of buying decision making process
4) Give a note on different purchase situations
5) Identify the characteristics of an industrial buyer
6) Brief on buying centre concept.
7) Sketch the purchase process of an organisational buyer.
15.6 SUMMARY
Like househols, organizations make many buying decisions. In some
instances, these buying decisions are routine replacement decisions; at other times,
they involve new, complex purchase decisions. purchase situations are common to
organizational buying: Straight rebuy, Modified rebuy, New task and Systems buy.
Each of these purchase situations will elicit different organizational behaviours.
The organizational decision process involves problem recognition, information
search, evaluation and selection, purchase implementation, and post-purchase
evaluation. Quite often a seller organization can influence the information search
such that it establishes the choice criteria to be used in evaluation and selection. A
conjunctive process is typical in establishing an evoked set, and other decision
rules are used for selecting a specific vendor.
Purchase implementation is more complex and the terms and conditions more
important than in household decisions. How payment is made is of major
importance. Finally, use and postpurchase evaluation are often quite formal. Many
organizations will conduct detailed in-use tests to determine the life-cycle costs of
competing products or spend considerable time evaluating a new product before
placing large orders. Satisfaction depends on a variety of criteria and on the
opinions of many different people. To achieve customer satisfaction, each of these
individuals has to be satisfied with the criteria important to him or her.
Organisations have a style or manner of operating that we characterize as
organisational culture. Firmographics have a major influence on organizational
culture. The process of grouping buyer organizations into market segments on the
basis of similar firmographics is called macrosegmentation.
Reference groups play a key role in business-to-business markets. Reference
group infrastructures exist in most organizational markets. These reference groups
often include third-party suppliers, distributors, industry experts, trade
publications, financial analysis, and key customers. Lead users have been shown to
be a key reference group that influences both the reference group infrastructure
and other potential users.
Other external influences on organizational culture include the local culture in
which the organization operates and the type of government it confronts. Internal
factors affecting organizational culture include organizational values, perception,
learning, motives and emotions.
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Organizations hold values that influence the organization’s style. Individuals in

the organization also hold these values in varying degrees. When there is a high
degree of shared values between the individuals and the organization, decision
making occurs smoothly.
Organizations also develop images, have motives, and learn. Seller
organizations can affect how they are perceived through a variety of communication
alternatives. Print advertising, direct mail, and sales calls are the most common.
Whereas organizations have rational motives, their decisions are influenced and
made by people with emotions. A seller organization has to understand and satisfy
both to be successful. Organizations learn through their experiences and
information-processing activities.
15.7 TERMINAL EXERCISE
1) During the next-to-the-last stage of the organizational purchase process, the
organization buyer:
a) looks for potential suppliers b) formally evaluates the performance of a supplier
c) awards a contract d) evaluates a supplier's financial status.
Ans: c
2) Cognitive dissonance occurs in which stage of the buyer decision process
model?
a. Need recognition b. Information search
c. Evaluation of alternatives d. Post purchase behaviour
Ans: d
3) A unique purchase situation in the business market that requires considerable
effort on the decision maker's part is called:
a. a straight rebuy. b. a modified rebuy.
c new-task buy. d. a selective rebuy
Ans: c
4) Which is not a part of oranisation’s decision making unit?
a. Users b. Contractors c. Influencers d. Gate keepers.
Ans: b
1) www.acrwebsite.org/volumes/9608/volumes/v06/NA-06
2) http://www.studymode.com/essays/The-Stages-In-The-Organizational-
Buying-1887693.html
15.9 ASSIGNMENTS
1) Visit a nearby shop and interview few customers with a schedule to
understand the purchase Behaviour of the customers.
2) Interview managers or owners to find out the antecedent process involved
before purchase decision is taken and compile.
1) Michael R. Solomon(2017), Consumer Behaviour, Pearson Education Ltd, 12th
edition, UK
174
2) S. Ramesh Kumar (2006), Conceptual Issues in Consumer Behaviour- The

Indian Context, Pearson Education, 1st Edition, New Delhi.
1) Prepare a questionnaire with all factors influencing Buyers decision and collect
data from individuals and also shops nearby to understand major influencing
factors.
15.12 KEY WORDS
Brand personality
Buy class
Buying centre
Centralised purchasing
Choice criteria
Consumer decision-making process
Decision-Making Unit (DMU)
Financial lease
Firmographics
Just-in-time (JIT) delivery/purchasing
Modified Re-buy
New Task
Organisational Buying Behaviour
Reference group
Relationship management
Straight Re-buy
Systems Buy
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LESSON - 16
DIFFUSION OF INNOVATION
16.1 INTRODUCTION
In today’s competitive context marketers are not only concerned with
launching brands but also with how consumers are accepting them. Diffusion of
innovation is associated with
i) How consumers accept new products and brands?
ii) How they accept a set of marketing mix elements formulated for a brand
over a period of time?
Though traditionally diffusion of innovation has been concerned only with new
products, it can be applied to existing products and brands given the intense
competition in almost any product category.
16.2 OBJECTIVES
• To understand the diffusion of Innovation
• To know the characteristics of diffusion of innovation
• To identify the process of adoption
16.3 CONTENT
The following contents are covered:
Defining new products
Types of Innovations
Diffusion Process
Adoption Process and Extended Decision Making
Framework for diffusion of innovation
Attributes of Innovation and Rate of Adoption
DEFINING ‘NEW’ PRODUCTS
New products can be divided into
i) Continuous Innovation
ii) Dynamically Continuous Innovation
iii) Discontinuous innovations based on the degree of innovation.
The division of ‘new’ among products launched in the market is based on two
aspects:
i) The changes required in consumer Behaviour to use the innovations;
ii) Degree of innovation
In the case of an electric car, the degree of change in Behaviour as well as
innovation is high, this can be categorized as discontinuous innovation. Similarly
foe products like electric shavers, when buying a digital camera or considering
internet shopping, the change in Behaviour on the part of the consumer is
moderate as in the degree of innovation. Hence, these will fall under dynamically
continuous innovations. When the remote switch of a TV is considered, consumers
have to use the remote along with their TV. Hence it is part of continuous
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innovations. The dimensions used for the classification of the ‘newness’ of a

product should take a specific target segment into account.
DIFFUSION OF INNOVATIONS
An innovation is an idea, practice, or product perceived to be new by the
relevant individual or group whether or not a given product is an innovation is
determined by the perceptions of the potential market, not by an objective measure
of technological change. The manner by which a new product is accepted or
spreads through a market is basically a group phenomenon. In this section, we will
examine this process in some detail. The definition of what is a new product varies
among product developers and marketing strategist. From a consumer perspective,
and innovation the present any item that the consumer perceives as new. Many
marketers maintain that new products should be classified in to three categories
reflecting the extent to which they require consumer to change existing
consumption behaviour or buying pattern.
Categories of innovations
Try to recall new products that you have encountered in the past two or three
years. As you reflect on these, it may occur to you there are degrees of innovation.
For example, the Internet is more of an innovation than a new fat-free snack. The
changes required in one’s behaviour, including attitudes and beliefs, or lifestyle if a
person adopts the new product or service determine the degree of innovation, not
the technical or functional changes in the product.
Continuous Innovation
Adoption of this type of innovation requires relatively minor changes in
Behaviours that are unimportant to the consumer. Note that several of these
products are complex technological breakthroughs. However, their use requires
little change in the owner’s behaviour or attitude.
A continuous innovation has the least disruptive influence on established
behaviour. It involves the introduction of a modified product rather than a totally
new product. Examples include the newly redesigned Apple Mac book, the latest
version of Microsoft Office, reduced fat Oreo cookies and Band Aid tough strip.
Dynamically continuous innovation
Adoption of this type of innovation requires a moderate change in an
important behaviour or a major change in a behaviour of a low or moderate
importance to the individual. A dynamically continuous innovation is somewhat
more disruptive then a continuous innovation but still does not alter established
behaviour. It may involved the creation of a new product for the modification of
existing product. Examples include digital camera, digital video recorder, USB flash
drive, and disposable diapers.
Discontinuous Innovation
Adoption of this type of innovation requires major changes in behaviour of
significant importance to the individual or group. A discontinuous innovation
requires consumer to adopt new behaviour. Examples include Airplanes,
Automobile, Fax machine, Medical Self Test kits, and the Internet. Much of the
177
theoretical and empirical research, however, has been based on discontinuous

innovations.
DIFFUSION PROCESS
The diffusion process is the manner in which innovations spread throughout a
market. The term spread refers to purchase Behaviour in which the product is
purchased with same degree of regularity.
Figure.1 Stages in the Adoption and steps in Extended Decision Making Process
Awareness Problem recognition
Interest Information search
Evaluation Alternative evaluation
Trial Purchase
Post - purchase
Adoption
evaluation
The market can range the entire society (for a new soft drink, perhaps) to the
students at a particular high school (for an automated fast-food and snack outlet).
For most innovations, the diffusion process appears to follow a similar pattern
over time: a period of relatively slow growth, followed by a final period of slower
growth. However, there are exceptions to this pattern. In particular, it appears that
for continuous innovations such as new ready-to-eat cereals, the initial slow-growth
stage may be skipped.
An overview of innovation studies reveals that the time involved from
introduction until a given market segment is saturated (i.e. Sales growth has
slowed or stopped) varies from a few days or weeks to years. This leads to two
interesting questions (1) what determines how rapidly a particular innovation will
spread through a given market segment (2) In what ways do those who purchase
innovation relatively early differ those who purchase them later?
Factors affecting the spread of innovations
The rate at which an innovation is diffused is a function of the following ten factors.
1) Type of group: some groups are more accepting of change than others. In
general young, affluent, and highly educated groups accept change, including
new products, readily. Thus, the target market for the innovation is an
important determinant of the rate of diffusion.
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2) Type of decision: the type of decision refers to an individual versus a group

decision. The fewer individuals involved in the purchase decision, the more
rapidly an innovation will spread.
3) Marketing effort: the rate of diffusion is heavily influenced by the event of
marketing effort involved. Thus, the rate of diffusion is not completely beyond
the control of the firm.
4) Fulfillment of felt need: the more manifest or obvious the need that the
innovation satisfies, the factor the diffusion. Rogaine, a cure for some types of
hair loss, gained rapid trill among those uncomfortable with thin hair or
baldness.
5) Compatibility: the more the purchase and use of the innovation is consistent
with the individual’s and group’s values or beliefs the more rapid the diffusion.
6) Relative advantage: the better the innovation is perceived to met the relevant
need compared to existing methods, the more rapid the diffusion. Both the
performance and the cost of the product are included in relative advantage. To
succeed an innovation must have either a performance advantage or a cost
advantage. It is the combining of these two that we call relative advantage.
7) Complexity: the more difficult the innovation is to understood and uses, the
slower the diffusion. The key to this dimension is ease of use, not complexity of
product. For example, Panasonic’s portable videodisc player, while a very
complex product, is very simple for most consumers to use.
8) Observability: the more easily consumers can observe the positive effects of
adopting an innovation the more rapid its difficult will be. Cellular telephones
are relatively visible. Laser eye surgery, while fewer variables may be frequent
topic of conservation.
9) Trialability: the easier it is to have a low-risk trial of the innovation, the more
rapid its diffusion. The diffusion of products like laser eye surgery has been
hampered by the difficulty of trying out the product in a realistic manner.
10) Perceived risk: the more risk associated is trying an innovation, the slower
the diffusion. Risk can be financial. Physical or Social. Perceived risk is a
function of three dimensions- (1)the probability that the innovation will not
perform as desired (2)the consequences of its not performing as desired and (3)
the ability to reverse and the cost of reversing any negative consequences.
However, they perceive the consequences of failure as being extreme and
irreversible and therefore do not adopt this innovation.
DIFFUSION AND ADOPTION OF INNOVATION
Diffusion of innovation is the macro process by which the acceptance of and
innovation takes place among members of a social system, over time. This process
includes four elements:
1) The innovation: new product, model, or service.
2) The channels of communication informal or formal, impersonal or personal
groups
3) The social system market segment
4) Time
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In contrast, the innovation adoption process in micro process that focuses the
states through which an individual consumer fastest when deciding to accept or
reject a new product.
Adopter categories
Researchers have found it useful to divide the adopters of any given innovation
into five groups based on the relative time at which they adopt. These groups,
called Adopter categories.
• Innovators
• Early adopters
• Early majority
• Late majority
• Laggards
Innovators venture some risk takers. They are capable of absorbing the
financial and social costs of adopting an unsuccessful product. They are
cosmopolitan in outlook and the user other innovators rather than local peers as a
reference group. They tend to be younger, better educated, and more socially mobile
than their peers. Innovators make extensive use of commercial media sales
personnel and professional sources in learning of new products.
Early adopters tend to be opinion leaders in local reference groups. They are
successful, well educated, and somewhat younger than their peers. They are willing
to take a calculated risk on an innovation but are concerned with failure. Early
adopters also use commercial, professional and interpersonal information sources
and they provide information to others.
Early majority consumers tend to be cautious about innovations. They adopt
sinner than most of their social group but also after the innovation has proven
successful with others. They are socially active but seldom leaders. They tend to be
somewhat older, less socially mobile than the early adopters. The early majority
relies heavily on interpersonal sources of information.
Late majority members are skeptical about innovations. They often adopt
more in response to social pressures or a decreased availability of the previous
product than because of a positive evaluation of the innovation. They tend to be
older and have less social status and mobility than those who adopt earlier.
Laggards are locally oriented and engage in limited social interaction. They
tend to be relatively dogmatic and oriented toward the past. Laggards adopt
innovations only with reluctance
Diffusion and existing products
Diffusion can be applied to existing products. For example, marketers can consider
i) Categories, if not brands, with which consumers are familiar;
ii) Brands with which consumers are familiar even if the categories are new to
them because of high advertising. New brands in familiar categories have to
address diffusion problems differently from old brands in new or unfamiliar
categories.
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Relatively new brands in consumer durables like Kenstar, LG, Samsung and
Whirlpool have to follow a different kind of strategy in order to compete with
strongly entrenched brands. LG, for instance, has been able to achieve by its focus
on new features/benefits is familiar product categories. LG’s proposition in
refrigerators was ;preservation of nutrition’; in microwave Owen ‘health’; in washing
machines ‘fabric care”, in air-conditioners “healthy air”, LG was able to capture a
significant market share at the premium end of respective product categories,
especially when markets were experiencing a downturn.
Even in consumables, brands new to the market have to adopt strategies with
a strong differentiation. A brand called Pass Pass offered dry fruits as a chewing
option in direct competition with other chewing products. Red Label, through a
well-known brand, introduced a nutritive tea variant when faced with competition.
This was a case of an old brand in a familiar category reacting to competition.
Britannia introduced a number of variants to diffuse itself in the market. It created
a new brand-Tiger for the lower end of the market.
Marketers should remember that diffusion of a product does not just depend
only on competition between brands. It may also depend on competition between
product categories. But PCs, which probably took off during the mid-nineties, have
sold about 1.6 million. Ice-creams can compete with chocolates, snacks and
aerated soft drinks.
This comes at a time when colouring hair is becoming a range the world over.
Sunsilk also has launched a few versions of hair colours with its entry into the
category. Companies in the contact lens market are using a variety of strategies to
diffuse the product. Positioning contact lenses as a fashion accessory is one of
them. In country like India, lowering costs and thereby, enhancing the total value of
the offering should enable brands to diffuse faster in the market.
Product features that affect adoption
Not all new products are equally likely to be adopted by consumer. Some
products catch on very quickly whereas other take a very long time to gain
acceptance Or never seen to achieve widespread consumer acceptance. Rogers
(2003) has identified five product characteristics that influence consumer
acceptance of new products which are detailed next.
1) Relative advantage is the degree to which potential customers perceive the
new product as superior to existing substitute. The cost of purchase, social status
of the customer and his motivation aspects of adopting comprise relative advantage.
2) Compatibility is the degree to which potential consumers free need a new
product is consistent with their present needs, values and practices. for instance an
advantage of 3M Scotch pop up tape strips Is that they are easier to use than roll
tape for certain task, yet they represent no new learning for the user. Similarly in
the realm of shaving products, it is not too difficult to imagine that a few years ago,
when Gillett introduced the fusion razor, some men made the transition from
inexpensive disposable razors, and some other men shifted from competitive non-
disposable razors to using the new product. This newer product is fully compatible
with the established wet shaving rituals of many men. However, it is difficult to
181
imagine male shavers shifting to a new depilatory cream designed to remove facial
hair. Although potentially simpler to use, such a cream is incompatible with most
men’s current values regarding daily shaving practices. Compatibility varies across
cultures. For example, although shelf-stable milk has been successfully sold for
years in Europe, Americans thus far have generally resisted the aseptic milk
package.
3) Complexity- The degree to which a new product is difficult to understand
or use-affects product acceptance. Clearly the easier it is to understand and use a
product, the more likely that product it is to be accepted. For example,the
acceptance of such convenience foods as frozen French fries,instant puddings,
microwave dinner is generally due to their ease of preparation and use.
Interestingly although DVD players can be found in most American homes, many
adults require the help of their children to use the device to record particular
television program. The introduction of cable boxes with built-in DVRs has helped
to reduce the ongoing challenge involved in easily recording a TV program.A study
of the adoption of mobile commerce transactions conducted via a mobile device or
wireless telecommunication found that “perceived ease of use” had a positive effect
on the intention to adopt/
The issue of complexity is especially important when attempting to gain
market acceptance for high-tech consumer products. Four predominant types of
“technological fear” act as barriers to new-product acceptance:1)fear of technical
complexity2)fear of rapid obsolescence,3)fear of social rejection, and 4)fear of
physical harm. Of the four, technological complexity was the most widespread
concern of consumer innovators.
4) Trialability refers to the degree of which a new product can be tried on a
limited basis. The greater the opportunity to try a new product,the easier it is for
consumers to evaluate the product and ultimately adopt it. In general, frequently
purchased household products tend to have qualities that make trial relatively
easy, such as the ability to purchase a small or “trial” size. Because a computer
program cannot be packaged in a smaller size, many computer software companies
offer free working models of their latest software to encourage computer user to try
the program and subsequently buy the program.
After firmly established fairness as its benefits, air and lovely’s extension into
face wash is likely to trigger trialability among consumers especially when the
category is growing at a fast pace.
Aware of the importance of the trial, marketers of new supermarket products
commonly use substantial cents-off coupons or free samples to provide consumers
with direct product experience. In contrast, durable items, such as a major
commitment .This may explain why publications such as consumer reports are so
widely consulted for their ratings of infrequently purchased durable goods.
5) Observability is the ease with which a product’s benefit or attributes can
be observed, imagined, or described to potential consumers. Products that have a
high degree of social visibility, such as fashion items, are more easily diffused than
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products that are used in private, such as a new type of deodorant. Similarly, a
tangible product is promoted more easily than an intangible product.
FRAMEWORK FOR DIFFUSION OF INNOVATION
There are two processes which must be used together if a product/brand is to
diffuse in through the appropriate target segment. One is the adoption process
consisting of Awareness, Interest, Evaluation and Trial; Two, the innovation
decision process comprising Knowledge, Persuasion, Decision, Implementation and
Confirmation.
The combination of the two processes, usage of the characteristics of diffusion
of innovation and adopter categories and the variation of marketing mix elements
will depend on the nature of the product category; b)the social context in which the
product is positioned and c) the level of awareness/perceived risk associated with
the product category.
The following sequence gives an indication about the approach for a brand of
electric shavers launched in the Indian context:
Phase 1 Awareness Knowledge strategy
A well-known brand can reduce perceived risk. But apprehensions associated
with electric shavers will still have to be addressed not only in communication but
also be effectively demonstrated at the retail outlet. Researching a ‘niche’ innovator
profiling is a prerequisite. Appropriate media vehicle is critical.
Phase 2: Interest Persuasion strategy
A database on interested prospective consumers should be collected. This can
be done through a contest among the target segment using appropriate media
vehicles. One to one marketing should be done after the database is obtained.
Phase 1 and phase 2 should lead to positive evaluation
Consumers who are interested in observing the trial may not visit retail outlet
only to express their interest in electric shavers.
Hence, demonstrations should be done at ‘high service ‘outlets where
prospective consumers visit for their regular shopping.
Phase 3 Decision implementation strategy
As consumers for this product category are not likely to be price-sensitive, a
discount may not be required to generate trials. Decision to buy could be reinforced
by allowing life-time free service.
Phase 4 confirmation Strategy
This is probably the most critical aspect of the diffusion process. The
satisfaction levels associated with trials, positive word of mouth and subsequent
usage depend on this stage. All costs incurred by the brand at this stage should be
treated as an investment in brand-building. The following strategies can be used in
this stage:
1. In order to arrest dissonance full refund should be provided to a consumer
who expresses dissatisfaction for a speck period.
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2. An online interactive division to help a consumer with product usage should

be made available. The consumer may lose interest in the product if he is not able
to get online suggestions when he requires them.
3. Apart from online assistance, the company should take the initiative to have
face-to-face interaction with the consumer. Based on feedback, it should improve
strive to improve the product and ensure that consumers who have bought the
original version can exchange it for the new free of cost.
4. Finally, given the probable profit of innovators, there is scope for
community-oriented brand building .For instance, the brand’s club can pursue a
lifestyle interest which is common to the consumers belonging to the club.
Adventure sports may appeal to a majority of these consumers.
THE ADOPTION PROCESS
The innovation process consists of five stages through which potential
consumers passing attempting to arrive at a decision to try or not to try a new or
innovative product. The five stages are-
1) Awareness: the consumer becomes aware that an innovation exists.
2) Interest: the consumer becomes interest in innovative product or service.
3) Evaluation: the consumer undertakes a “metal trial” of the innovation.
4) Trial: the consumer tries the innovation.
5) Adoption: if satisfied, the consumer decides to sue the innovation repeatedly.
Although the traditional adaption model is insightful in the simplicity, it does
not adequately reflect the full complex city of the consumer adaption process. For
one thing,it does not adequately acknowledge that quite often, consumer face and
need are problem-recognition stage before acquiring aware of potentials option of
solution( a need recognitions and preceding the awareness stage).moreover, the
adaption process model does not adequately provide for the possibility of the
evaluation and rejection of an new product are services after each stage, especially
after trial(that is a consumer may reject the product after trial or never use the
product on the continuous basis). Finally it does not include post adaption or post
purchase evaluation which can lead to a strength and commitment or to be
discontinue use.
Diffusion of the innovation in the Indian context
The characteristics of the diffusion are important both for new and existing
product in the emerging market. Emerging market have low penetration of product
categories on the brand that needs to diffuse should also take in consideration that
markets are unorganized, and that there are non price factors and category
development factors that are important.
At the bottom of the oral care category, Colgate toothpowder attempts to
upgrade consumers who may be using substitute like coal powder or neem stick,
Reynolds did not price its pen low in fact, it followed the skimming strategy to price
it above the unbranded offering and become a pen of preference for many
consumers because of it relative advantage.
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On the other hand chick shampoo introduced a 50p sachet to create a relative
advantage. It is essentially the value perception that matters along with the product
attributes or benefits. But a brand also needs to be careful about the manner in
which a category is received, Ariel detergent powder was launched with proposition
that consumers need not use washing bar in context where rubbing clothes with a
washing bar is a ritual. But it introduced a washing bar soon afterwards. In this
example, it is the comparability of consumer habits with the product that mattered.
Gillette vector introduced low-priced razor that helps to get rid of even hard
stubble. This was compatible with the shaving practice in India, where electric
shavers have not become diffused. Besides reasons for pricing, consumers had to
alter their regular shaving practice and this may have created barriers in diffusion.
The perception of consumers about dishwashers may be influenced by
comparability aspects, preserved risk, and complexity aspects associated with
diffusion. Baby powder, over-counter medicine, and electrical appliance are
categories that may be associated with high preserved risk. As one of earliest brand
in the Indian market, Johnson&Johnson have established trust among its
consumers (mothers)of baby product. Himalaya, the brand that has product based
on the alternative system of medicines (ayurveda), has built its trust through a
scientific system of testing, as reported in its website. It is interesting to note that
“triability”, complexity preserved, and “observability”, are together useful in the cell
phone category in India with millions of users,
Parachute after shower used several diffusion characteristics to develop the
hair care market. L’Oreal and Garnier timed their promotional aspects to increase
visibility among target segments in urban markets where there is increase in focus
on personal grooming. Moov pain balam, by positioning itself as a backache
specialist, created relative advantage associated with the proposition. Dove used the
moisturizer route to diffuse itself in the soap category (existing category).
Sometimes an attitude needs to be created through cognitive believes to convey the
relative advantage.
Diffusion of innovation in the Indian context has an interesting trial of history,
category development, timing of the brand’s introduction and cultural aspects and
some of the important aspects that affect the diffusion of brands.
The following are some examples with comments associated with the
respective brand/category:
Brand /category Comments on diffusion of the category/brand
Ezee, Genteel liquid Available in the market for several decades.hoe
detergents should the brands in this category get into the
virtual of the consumers of washing of clothes.
Cadbury Drinking Available in the market for several decades. Does
Chocolate culture aspects of taste acts as a barrier for greater
diffusion of the category?
Detergent(surf-excel, Rin) Continues to be a popular choice by Indian

consumers, perhaps due to the habits.
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After –shower hair cream Vrylcreem wash pioneering brand in the category.
Did after shower brand diffuse fast as it become a
part of the dressing rich will among the youngster?
Tea bag (Tajmahal) The brands created awareness about teabag during
mid80’s have tea bags diffused adequately among
consumers. Are taste on ritual of making
tea(cultural aspects providing to be barriers?
Cafe culture Socializing over coffee was pioneered by Indian
coffee house ICH(Indian coffee board) in few cities
and towns during 60’s.consumers of the bygone era
would have nostalgic memories of ICH.
contemporary version of ICH or the cafe faces we
find today(café coffee day and barista for example).
Innovation and Diffusion Enhancement Strategies
The framework given helps to create strategies to enhance market acceptance
of an innovation. The critical aspect of this process is to analyse the innovation
from the target market’s perspective. The decision maker’s task is to overcome
these inhibitors with diffusion enhancement strategies.
Diffusion determent Diffusion inhibitor Diffusion enhancement strategies
Nature of group Conservative Search for other markets
Target innovators within group
Type of decision Group Choose media to reach all decider
Provide conflict reduction themes.
Marketing effort Limited Target innovators within group
Use regional rollout
Felt need Weak Use extensive advertising to show
importance of benefits
Compatibility Conflict Emphasize attributes consistent with
normative values
Relative advantage Low Lower price
Redesign product
Complexity High Distribute through high-service outlet
Use skilled sales force
Use product demonstrations
Undertake extensive marketing efforts
Observability Low Use extensive advertising
Trialiobity Difficult Use free samples to early adopter types
Offer special pieces to rental agencies
Use high-service outlets
Perceived risk High Document success
Highlight endorsement by credible
sources
Provide guarantees
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1) Defining new products
2) Types of Innovations
3) Diffusion Process
4) Adoption Process and Extended Decision Making
5) Factors affecting diffusion process
6) Framework for diffusion of innovation
7) Attributes of Innovation and Rate of Adoption
8) Innovation Analysis and Diffusion Enhancement Strategies.
1) What do you understand by diffusion of innovation?
2) State the various types of innovation
3) Enumerate on the stages in Adoption and Extended Decision Making Process
4) Explain the factors affecting spread of innovation
5) Briefly explain the adopter classes.
6) What are the product features that affect Adoption?
7) Give a note on Diffusion Enhancement Strategies
16.6 SUMMARY
Markets attempt to, identify opinion leaders primarily through their media
habits and social activities. Identified opinion leaders then can be used in
marketing research, product sampling, retailing/personal selling, advertising and
creating buzz.Groups greatly affect the diffusion of innovations. Innovations vary in
degree of Behavioural change required and the rate which they are diffused. The
first purchasers of an innovative product or service are termed innovators; those
who follow over time are known as early adopters, early majority, late majority, and
laggards. Each of these groups differs in personality, age, education, and reference
group membership. This character sits help marketers identify and appeal to
different classes of adopters at different stages of an innovations diffusion.
1) Which of the following is not a stage in Rogers Model of adoption?
a) Knowledge b) Persuasion c) Liking d) Confirmation
Ans: C
2) Roger’s has proposed a classification of adopters. The five adopter categories
as per sequence are:
a) innovators, early adopters, early majority, late majority, and laggards.
b) innovators, early majority, early adopters, late majority, and laggards
c) innovators, early majority, late majority, early adopters, and laggards
d) none of the above.
Ans:A
3) The degree to which customers perceive a new product/service as superior to
similar existing products determines the _____________________.
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a) Relative Advantage b. complexity c. Trialability d. Compatibility

Ans: A
1) http://www.smartinsights.com/marketing-planning/marketing-
models/diffusion-innovation-model/
2) https://www.hausmanmarketingletter.com/innovation-adoption-diffusion-
age-social-media/
16.9 ASSIGNMENTS
1) Follow some ongoing teaser campaigns of your place and observe whether they
can bring about innovators
2) Read Newspapers select advertisements that you feel had impressed you and
how does that influence a buyer.
3) Identify five friends who have recently purchased smart phone. Interview them
to find out why they selected that brand and additional reasons to prefer the
product.
1) Del Hawkins, Roger J Best, Kenneth A Coney, Amit Mookherjee(2007),
Consumer Behaviour, Tata McGraw Hill, New Delhi
3) Srabanti Mukherjee (2013),Consumer Behaviour, Cengage Learning, New
Delhi, India.
1) Consider the purchase of a Vehicle. From your experience, write a note on its
adoption process
2) List down few innovations in various products that had influenced consumers
towards repeat purchase.
3) Describe how Sony can use the five product features that affect adoption in
order to speed up the diffusion of its new model.
16.12 KEY WORDS
Adoption
Compatibility
Complexity
Diffusion
Early Adopters
Innovation
Innovators
Laggards
Late Adopters
Late majority
Observability
Relative Advantage
Trialabiltiy
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LESSON - 17
INDIVIDUAL INFLUENCE ON CONSUMER BEHAVIOUR

17.1 INTRODUCTION
Consumers as rational beings are affected by many external inputs that can
modulate their cognitive, emotional, volitional and even automatic actions. The role
of psychological influences on people's Behaviour has been widely analyzed and
described in the scientific literature, especially in relation to the selection and
purchase of different products, services or experiences (Axelson & Brinberg, 1989).
Factors such as motivation, perception, attitudes and expectation drive our
ordinary life and make our individual conduct predictable from a social, economic,
cultural or psychological perspective.
17.2 OBJECTIVES
• To identify the dynamics of human behaviour and the basic factors that
influence the consumers decision process
• To discuss the principal factors that influence consumers as individuals and
decision makers with an application to the buying decision process.
• To know the purchase situations and influence of various factors
• To identify the consumer decision process and stimuli surrounding in
influencing the decisions.
• To find out the consumer involvement and types of decisions
• To introduce to the learners the individual behavioural factors as antecedents
to the purchase decisions.
17.3 CONTENTS
Consumer as an individual
Types of buying behaviour
Consumer Decision Process
Various situations in decision process
Situational characteristics and consumption behaviour
Types of consumer Decisions
Involvement and types of decision making process
Consumer Characteristics and outlet choice
CONSUMER AS AN INDIVIDUAL
It has been established that the consumer buying behaviour is the outcome of
the needs and wants of the consumer and they purchase to satisfy these needs and
wants. Although it sounds simple and clear, these needs can be various depending
on the personal factors such as age, psychology and personality. Also there are
some other external factors which are broad and beyond the control of the
consumer.
There is a wide range of factors that can affect consumer behaviour in different
ways. These factors are divided by Hoyer et al. (2012) into four broad categories:
situational, personal, social and cultural factors.
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Situational factors impacting consumer behaviour may include location,

environment, timing and even weather conditions (Hoyer et al., 2012). In order to
benefit from situational factors major retailers attempt to construct environment
and situations in stores that motivate perspective customers to make purchase
decision. Range of available tools to achieve such an outcome include playing
relaxing music in stores, producing refreshing smells in stores and placing bread
and milk products in supermarkets towards the opposite end of stores to facilitate
movement of customers throughout the store to make additional purchases etc.
Social Factors influencing consumer buying decision can be classified as
Reference Groups, Immediate Family Members, Relatives, Role in the Society,
Status in the society.
Personal factors like age, education, occupation, gender, life style, economic
conditions and personality influence why and why not an individual purchases
particular products and services.
Culture is one factor that influences Behaviour. As an individual growing up, a
child is influenced by their parents, brothers, sister and other family member who
may teach them what is wrong or right. They learn about their religion and culture,
which helps them develop these opinions, attitudes and beliefs. These factors will
influence their purchase behaviour.
TYPES OF BUYING BEHAVIOUR
There are four types of buying behaviour.
1) Complex Buying Behaviour is where the individual purchases a high value
brand and seeks a lot of information before the purchase is made.
2) Habitual Buying Behaviour is where the individual buys a product out of habit
e.g. a daily newspaper, sugar or salt.
3) Variety seeking Buying Behaviour is where the individual likes to shop around
and experiment with different products. So an individual may shop around for
different boutiques because she wants variety in the dressings.
4) Dissonance reducing Buying Behaviour is when buyers are highly involved with
the purchase of the product, because the purchase is expensive or infrequent.
There is little difference between existing brands an example would be buying
a musical instrument, as people believe there is little difference between
musical instrument brand manufacturers.
Situational Influences
If we consider wedding as an example, the situation plays a major role in
deciding about the conduct of a wedding. The internet is quickly becoming a major
part of the marriage market. The WeddingChannel.com currently makes it easy for
couples to create personal wedding Web pages on which they post directions and
pictures, notify guests of last-minute changes, recount how they met, and so forth.
The goal is to have a constantly updated gift registry available. This would allow
guests to learn what gifts the couple desires that they have not yet received and to
order those gifts online from participating retailers.
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Walt Disney World capitalizes on this consumption ritual by serving as a

wedding site through its Fairytale Weddings department. In the Cinderella wedding,
the bride arrives in a glass coach drawn by six white horses complete with a
costumed driver and footman. A fairy godmother and stepsisters mix with the
guests at the reception, where dessert is served in a white chocolate slipper. Almost
2,000 couples are married at Walt Disney World each year.
A wedding is a type of situation known as a ritual situation. before examining
the decision process, we must first develop an understanding of situations. In this
chapter, the situations in which consumption occurs is examined, the way
situations influence consumption Behaviours, key characteristics of situations, the
nature of ritual situations, and situations-based marketing strategies.
The Nature of Situational Influence
We define situation influence as all those factors particular to a time and place
that do not follow from knowledge of personal and stimulus (choice alternative)
attributes and that have an effect of current Behaviour. That is, a situation is a set
of factors outside of and removed from the individual consumer as well as removed
from the characteristics of the primary stimulus object (e.g., a product, a television
advertisement) to which the consumer is reacting (e.g., purchasing a product,
viewing a commercial). Consumers do not respond to stimuli such as
advertisements and products presented by marketers in isolation; instead, they
respond to marketing influences and the situation simultaneously. To understand a
consumer’s Behaviour, we must know about the consumer, about the object such
as a product that the consumer is responding to, and about the situation in which
the response is occurring. The consumption process occurs within four broad
categories or types of situations: the communications situation, the purchase
situation, the usage situation, and the disposition situation.
Situation
Situation Situation Marketing
Characteristics Activity
Communications Physical features Product
Purchase Social Surroundings Package
Use Temporal Perspectives Advertisement
Disposition Task Definition Sales Presentation
Antecedent States Retail Outlet
Individual Consumption
Characteristics Responses
Culture and Subculture Problem Recognition
Demographics Information Processing
Social Class Alternative Evaluation
Motivation Purchase
Personality Use
Attitudes Disposition
Lifestule Evaluation
Figure 1: The Situation Interacts with the Marketing Activity

and the Individual to Determine Behaviour
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(a)The Communications Situation

The situation in which consumers receive information has an impact on their
Behaviour. Whether one is alone or in a group, in a good mood or bad, in a hurry or
not influences the degree to which he or she sees and listens to marketing
communications. Is it better to advertise on a happy or sad television program? A
calm or exciting program? These are some of the questions managers must answer
with respect to the communications situation.
A marketer is able to deliver an effective message to consumers who are
interested in the product and are in a receptive communications situation.
However, finding high-interest potential buyers in receptive communications
situations is a difficult challenge. For example, consider the difficulty a marketer
would have in communicating in the following communications situations:
• Final exams begin tomorrow.
• You are driving home on a cold night, and your car heater doesn’t work.
(b)The Purchase Situation
Situations can also affect product selection in a purchase situation. Mothers
shopping with children are more apt to be influenced by the product preferences of
their children than when shopping without them. A shortage of time, such as trying
to make a purchase between classes, can affect the store-choice decision, the
number of brands considered, and the price the shopper is willing to pay.
Marketers must understand how purchase situations influence consumers in
order to develop marketing strategies that enhance the purchase of their products.
For example, how would you alter your decision to purchase a beverage in the
following purchase situations?
• You are in a very bad mood.
• A good friend says “That stuff is bad for you!”
• You have an upset stomach.
(c)The Usage Situation
What beverage would you prefer to consume in each of the following usage
situations?
• With your parents for lunch.
• At a dinner with a friend you have not seen in several years.
Marketers need to understand the usage situations for which their products
are, or may become, appropriate. Using this knowledge, marketers can
communicate how their products create consumer satisfaction in based cereal a
day could lower cholesterol. Research indicates that such expanded usage situation
strategies can produce major sales gains for established products.
(d)The Disposition Situation
Consumers must frequently dispose of products or product packages after or
before product use. As we will examine in detail in Chapter 18, decisions made by
consumers regarding the disposition situation can create significant social
problems as well as opportunities for marketers.
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Some consumers consider ease of disposition an important product attributes.

These people may purchase only items that can be easily recycled. Often disposition
of an existing product must occur before or simultaneously with the acquisition of
the new product. For example, most consumers must remove their existing bed
before using a new one. Marketers need to understand how situational influences
affect disposition decisions in order to develop more effective and ethical products
and marketing programs. Government and environmental organizations need the
same knowledge in order to encourage socially responsible disposition decisions.
How would your disposition decision differ in these situations?
• You have finished reading the newspaper after class, and you note that you
are running late for a basketball game.
• You and two friends have finished soft drinks. Both your friends toss the
recyclable cans into a nearby garbage container.
• A local charity will accept old refrigerators if they are delivered to the charity.
SITUATIONAL CHARACTERISTICS AND CONSUMPTION BEHAVIOUR
A number of features of characteristics of situations influence Behaviours
across the various types of situations described above. There are five key
characteristics of situations that help determine the situation’s impact on
Behaviour-physical features, social surroundings, temporal perspectives, task
objectives, and antecedent states.
(a) Physical Features
Information professionals, Inc., offers a service called “advertiming.” The
service relies on an extensive computer database that compares consumption
patterns with the current weather. Based on observed relationships between
weather and product category sales, the firm uses weather forecasts to advise its
clients on spot advertising buys, sales, point-of-purchase displays, and related
issues.
Many products become defined for particular usage situations. Firms that are
able to expand the range of usage situations deemed appropriate for their brands
can capture significant sales gains.
Retail store interiors should provide a physical environment consistent with
the nature of the target market, the product line, and the desired image of the
outlet.
Physical surroundings include décor, sounds, aromas, lighting, weather, and
configurations of merchandise or other material surrounding the stimulus object.
Physical surroundings are a widely used type of situational influence, particularly
for retail applications.
For example, store interiors are often designed to create specific feelings in
shoppers that can have an important cuing or reinforcing effect on purchase. All
physical aspects of the store, including lighting, layout, presentation of
merchandise, fixtures, floor coverings, colours, sounds, odors, and dress and
Behaviour of sales personnel, combine to produce these feelings, which in turn.
There are certain physical components which is explained below-.
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Colours - The colour red is effective at attracting consumers’ attention and

interest. However, while physically arousing, red is also perceived as tense and
negative. Softer colours such as blue are less attention-attracting and arousing.
They are perceived as calm, cool, and positive. Which colour would be best for store
interiors? Research indicates that blue is superior to red in terms of generating
positive outcomes for both the retailer (sales) and the consumer (satisfaction).
Aromas - Research is just beginning, but there is increasing evidence that
odors can affect consumer shopping Behaviours. One study found that a scented
environment produced a greater intent to revisit the store, higher purchase
intention for some times, and a reduced sense of time spent shopping.
Music- Music influences consumers’ moods, which influence a variety of
consumption Behaviours. Slow music appears to have relaxed and slowed down the
customers, resulting in more time in the restaurant and substantially more
purchase from the bar. Restaurants that rely on rapid customer turnover may be
better off with fast-tempo music.
A study of the impact of music in a supermarket environment found that the
match between the music being played and the customer’s music preference
affected purchasing Behaviour. Another study found that music, particularly music
that the audience liked, increased their perception of how long a wait for a service
was.
Crowding- Crowding generally produces negative outcomes for both the retail
outlet and the consumer. As more people enter a store or as more of the space of
the store is filled with merchandise, an increasing percentage of the shoppers will
experience a feeling of being crowded, confined, or claustrophobic. Most consumers
find these feelings to be unpleasant and will take steps to change them. The
primary means of doing so is to spend less time in the store by buying less, making
faster decisions, and using less of the available information. This in turn tends to
produce less satisfactory purchases, an unpleasant shopping trip, and a reduce
likelihood of returning to the store.
Marketing strategy and physical surroundings Individuals visit retail outlets
for reasons other than or in addition to making a purchase. Physical activity, social
contacts, and sensory stimulation are three such motives.
(b) Social Surroundings
Social surroundings are the other individuals present during the consumption
process. People’s actions are frequently influenced by those around them. What
would you wear in each of the following situations?
• Studying alone for a final.
• Meeting a prospective employer for lunch.
Social influence is a significant force acting on our Behaviour, since
individuals tend to comply with group expectations, particularly when the
Behaviour is visible.
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(c) Temporal Perspectives

Temporal perspectives are situational characteristics that deal with the effect
of time on consumer Behaviour. Time as a situational factor can manifest itself in a
number of ways. The amount of time available for the purchase has a substantial
impact on the consumer decision process. In general, the less time there is
available (i.e., increased time pressure), the shorter will be the information search,
the less available information will be used, and the more suboptimal purchases will
be made.
Limited purchase time can also result in a smaller number of product
alternatives being considered. The increased time pressure experienced by many
dual-career couples and single parents tends to increase the incidence of brand
loyalty, particularly for nationally branded products. The obvious implication is that
these consumers feel safer with nationally branded or “known” products,
particularly when they do not have the time to engage in extensive comparison
shopping.
Internet shopping is growing rapidly in part as a result of the time pressures
felt by many dual-career and single-parent households. Shopping on the Internet
has two important time-related dimensions. First, it has the potential to reduce the
amount of time required to make a specific purchase. Second, it provides the
consumer with almost total control over when the purchase is made .
(d) Task Definition
Task definition is the reason the consumption activity is occurring. The major
task dichotomy used by marketers is between purchases for self-use versus gift
giving.
Gift giving Consumers use different shopping strategies and purchase criteria
when shopping for gifts for many reasons. Social expectations and ritualized
consumption situations such as birthdays often require gift giving independent of
the giver’s actual desires. Gifts are also given to elicit return favors in the form of
either gifts or actions. And, of course, gifts are given as an expression of love and
caring.
The type of gift given and desired varies by occasion and gender. One study
found that wedding gifts tend to be utilitarian (the top four attributes are durability,
usefulness, receiver’s need, and high performance); while birthdays gifts tend to be
fun (the top four attributes are enjoyability, uniqueness, durability, and high
performance). Thus, both the general task definition (gift giving) and the specific
task definition (gift-giving occasion) influence purchase Behaviour as does the
relationship between the giver and the recipient.
(e) Antecedent States
Features of the individual person that are not lasting characteristics, such as
moods or conditions, are called antecedent states. For example, most people
experience states of depression or excitement from time to time that are not
normally part of their individual makeup.
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Moods - Moods are transient feeling states that are generally not tied to a
specific event or object. They tend to be less intense than emotions and may
operate without the individual’s awareness. Although moods may affect all aspects
of a person’s Behaviour, they generally do not completely interrupt ongoing
Behaviour as an emotion might. Individuals use such terms as happy, cheerful,
peaceful, sad, blue, and depressed to describe their moods.
Moods both affect and are affected by the consumption process. For example,
television, radio, and magazine program content can influence consumers’ moods
and arousal levels, which, in turn, influence their information-processing activities.
Moods also influence perceptions of service and waiting time.
TYPES OF CONSUMER DECISIONS
The consumer decision-making process consists of five steps, which are need
recognition, information search, evaluations of alternatives, purchase and post-
purchase Behaviour. These steps can be a guide for marketers to understand and
communicate effectively to consumers. One note is that consumers do not always
move in the exact order through the process; it can depend on the type of product,
the buying stage of the consumer and even financial status.
The term decision produces an image of an individual carefully evaluating the
attributes of a set of products, brands, or services and rationally selecting the one
that solves a clearly recognized need for the least cost. It has a rational, functional
connotation. Consumers do make many decisions in this manner; however, many
other decisions involve little conscious effort. Further, many consumer decisions
focus not on brand attributes but rather on feelings or emotions associated with
acquiring or using the brand or with the environment in which the product is
purchased or used. Thus, a brand may be selected not because of an attribute
(price, style, functional characteristics) but because “It makes me feel good” or My
friends will like it.”
There are various types of consumer decision processes. As the consumer
moves from a very low level of involvement with the purchase to a high level of
involvement, decision processes. As the consumer moves from a very low level of
involvement with the purchase to a high level of involvement, decision making
becomes increasingly complex. While purchase involvement is a continuum, it is
useful to consider nominal, limited, and extended decision making as general
descriptions of the types of processes that occur along various points on the
continuum. Keep in mind that the types of decision processes are not distinct but
rather blend into each other.
Before describing each type of decision process, the concept of purchase
involvement must be clarified. We define purchase involvement as the level of
concern for, or interest in, the purchase process triggered by the need to consider a
particular purchase. Thus, purchase involvement is a temporary state of an
individual or household. It is influenced by the interaction of individual, product,
and situational characteristics.
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The following sections provide a brief description of how the purchasing

process changes as purchase involvement increases.
Nominal Decision Making
Nominal decision making, sometimes referred to as habitual decision making,
in effect involves no decision as such. Nominal decisions occur when there is very
low involvement with the purchase. A completely nominal decision does not even
include consideration of the “do not purchase” alternative. For example, you might
notice that you are nearly out of Aim toothpaste and resolve to purchase some the
next time you are at the store. You don’t even consider not replacing the toothpaste
or purchasing another brand. At the store, you scan the shelf for Aim and pick it up
without considering alternative brands, its price, or other potentially relevant
factors.
Nominal decisions can be broken into two distinct categories: brand loyal
decisions and repeat purchase decisions. In this example, you have a fairly high
degree of product involvement but a low degree of purchase involvement because of
your brand loyalty. Brand Loyal Purchases portrays that a consumer ha been
highly involved in selecting a particular brand and used an extensive decision-
making process. Having selected a brand as a result of this process, consumers
purchase it without further consideration, even though using the best available
brand is still important.
Limited Decision Making
Limited decision making involves internal and limited external search, few
alternatives, simple decision rules on a few attributes, and little post-purchase
evaluation. It covers the middle ground between nominal decision making and
extended decision making. In its simplest form (lowest level of purchase
involvement), limited decision making is similar to nominal decision making.
Consumers may have considered no other alternative except possibly a very limited
examinations of a “do not buy” option. Or consumers may have a decision rule to
buy the cheapest brand of instant coffee available. When you run low on coffee
(problem recognition), you simply examine coffee prices the next time you are in the
store and select the cheapest brand.
INVOLVEMENT AND TYPES OF DECISION M AKING
Limited decision making also occurs in response to some emotional or
environmental needs. For example, Consumers may decide to purchase a new
brand or product because they are bored with the current, otherwise satisfactory,
brand. This decision might involve evaluating only the actual or anticipated
Behaviour of others. In general, limited decision making involves recognizing a
problem for which there are several possible solutions. There is internal and a
limited amount of external search. A few alternatives are evaluated on a few
dimensions using simple selection rules. The purchase and use of the product is
given very little evaluation afterward, unless there is a service problem or product
failure.
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Low Involvement High Involvement

Purchase Purchase
Nominal decision making Limited decision making Extended decision making
Problem recognition Problem recognition Problem recognition

Selective Generic Generic
Information search Information search Information search

Limited internal Internal Limited external Internal External
Alternative evaluation Alternative evaluation

Few attribute Many attributes
Simple decision rules Complex decision rules
Few alternatives Many alternatives
Purchase Purchase Purchase
Post- purchase Post- purchase Post-purchase

No dissonance No dissonance Dissonance
Very limited evaluation Very limited evaluation Complex evaluation
Figure 2 : Involvement and Types of Decision Making

Extended Decision Making
Extended decision making involves an extensive internal and external
information search followed by a complex evaluation of multiple alternatives and
significant post-purchase evaluation. It is the response to a high level of purchase
involvement. After the purchase, doubt about its correctness is likely and a
thorough evaluation of the purchase takes place. Relatively few consumer decisions
reach this level of complexity. However, products such as homes, personal
computers, and complex recreational items such as backpacks and stereo systems
are frequently purchased via extended decision making. Even decisions that are
heavily emotional may involve substantial cognitive efforts
CONSUMER CHARACTERISTICS AND OUTLET CHOICE
This section of the chapter examine to consumer characteristics that are
particularly relevant to store choice perceived risk and shopper orientation.
Perceived risk
• The purchase of products involved the risk that they may not perform as
expected.
• Social cost ( hairstyle that is not appreciated by peers)
• Financial cost (expensive pair of shoes that become too uncomfortable to wear)
• Time cost (service that required this set to be taken to the shop and then pick
up later)
• Effort cost ( a computer disc that is loaded with several hours of work before
its fail)
• Physical cost( new medicine that produces a harmful side effect)
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Figure 4: Perceived Risk

Shopping orientation
Shopping style that put particular emphasis on certain activities of shopping
motivation is called shopping orientation. Shopping orientation is closely related to
general Lifestyle and is subject to particular influences. There are six shopping
orientations identified-
1) Chameleons indicated that they are shopping sites or situation- specific are
constantly changing. Shopping approaches based on product type shopping
impetus and purchase task.
2) Collector gatherers are characterised by the propensity to stock pile items
and to purchase large quantities to edit save money or elevate the need for
shopping.
3) Foragers a particular and motivated to purchase only that desired items.
Willing to search extensively and have little store royalty. They likely to shop
alone.
4) Hibernants are in different words shopping. The shopping pattern
opportunistic rather than need driven and they will often postpone even
required purchases.
5) Predators are purposive and speed oriented in the shopping. Such customers
plan before shopping and like to shop alone.
6) Scavengers enjoy shopping both to make purchases and as an activity. They
like to go to sale and non sider shopping to be entertainment. They make
numerous unplanned purchases.
1) Types of buying behaviour
2) Consumer Decision Process
3) Various situations in decision process
4) Situational characteristics and consumption behaviour
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5) Types of Consumer Decisions

6) Involvement and types of decision making process
7) Consumer Characteristics and outlet choice
8) Shopping orientations
1) Explain how consumer as an individual is influenced by different factors
during purchase process.
2) Give a note on shopping orientation
3) Detail on the situational influences
4) Explain consumer involvement and decision making
5) What are the different types of consumer decisions?
17.6 SUMMARY
Hanson (2005) stated that the decision making of the customer not only
involves the material activities but also psychological and emotional activities. It is
almost like a role play where the actors change their costumes and the backdrops
to add effect to the play each time depending on the situation. Same way the
consumers also change their decisions depending on the situation and their taste.
So consumer behaviour is the study of what, when ans why they need the products
or services. Consumer behaviour is physiological it is human behaviour it can
change with the slightest change in the market, the atmosphere and the trend. In
this process the consumer starts with recognizing the need of the product, and
then finds a way or a medium of solving these needs, makes purchase decisions
like planning whether he should buy or not buy a certain product, and then he
confirms the information, jots down a plan and then implements the plan of
making the purchase. The four major influential factors are situational, personal,
social and cultural. The consumer is also influenced by their own characteris tic
of high or low involvement during purchase.
1) Which of the following is a recommended strategy for manufacturers when
consumers select the outlet first and the brand second?
a) retailer image advertising b)more exclusive distribution
c)point-of-purchase displays d) price special on brands
Ans: c
2) Which of the following is the major reason consumers give for shopping
online?
a) want product delivered b) convenience c) price d) impulse
Ans: b
3) Purchase of which product typically represents low social risk and low
economic risk for consumers?
a) deodorant b) automobile c) socks d) auto repairs
Ans: c
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4) Which of the following is a segment of consumers based on shopping

orientation?
a) Chameleons b) Shopping Lovers
c) Adventurous Explorers d) Shopping Avoiders
Ans: a
1) http://www.marketingteacher.com/consumer-Behaviour-shopping-habits
2) http://managementstudyguide.com/consumer-decision-making-process.htm
17.9 ASSIGNMENTS
1) Prepare a report on the comparing the online shoppers and other shoppers to
understand the factors that influence their purchase.
2) Visit a nearby shop and survey them to find their shopping orientations
1) M.R. Solomon (2006), Consumer Behaviour, Prentice Hall International
Edition, 7th edition, USA
2) Philip Kotler, (2010), Principles of Marketing: A South Asian perspective,
Prentice Hall Edition, 13th edition,
1) Describe a situation in which mood caused you to make an unusual purchase.
2) Interview sale persons in Life Insurance or Jewellery to understand the
situational influences in his or her sales.
3) Compile your monthly purchase to know your shopping orientation and
prepare a chart to show the factors behind all your purchases
17.12 KEY WORDS
Antecedent states
Task Definition
Temporal perspectives
Social surroundings
Situational influences
Limited Decision making
Extended Decision making
Perceived risk
Shopping orientation
Chameleons
Collectors
Foragers
Hibernants
Predators
Scavengers
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LESSON - 18
PERCEPTION
18.1 INTRODUCTION
Consumer perception theory attempts to explain consumer Behaviour by
analysing motivations for buying or not buying particular items. The study of
consumers helps firms and organisations improve their marketing strategies by
understanding issues such as how
• The psychology of how consumers think, feel, reason, and select between
different alternatives (e.g., brands, products, and retailers);
• The psychology of how the consumer is influenced by his or her environment
(e.g., culture, family, signs, media);
• The Behaviour of consumers while shopping or making other marketing
decisions;
• Limitations in consumer knowledge or information processing abilities
influence decisions and marketing outcome;
• How consumer motivation and decision strategies differ between products that
differ in their level of importance or interest that they entail for the consumer;
and
• How marketers can adapt and improve their marketing campaigns and
marketing strategies to more effectively reach the consumer.
18.2 OBJECTIVES
• To understand the concept of perception and its application in consumer
buying process
• To find out to what extent consumers organise consumption related
information and interpret
• To note the different perceptual thresholds
• To know the process of perception
18.3 CONTENTS
Consumer perception
Elements of Perception
Levels of Perceptual Thresholds
Perception Process
Perceptual Distortion
Areas of Consumer Perception Theory
CONSUMER PERCEPTION
Perception is the process by which individuals select, organize, and interpret
stimuli into a meaningful and coherent picture of the world. It can be described as
“how we see the world around us”. Two individuals may be exposed to the same
stimuli, but how each person recognizes, selects, organizes, and interprets these
stimuli is a highly individual process based on each person’s own needs, values,
and expectations.
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Consumers act and react on the basis of their perceptions, not on the basis of
reality. For each individual, “reality” is a totally personal phenomenon, based on
that person’s needs, wants, values, and personal experiences. Thus, to the
marketer, consumers’ perceptions are much more important than their knowledge
of objective reality. For if one thinks about it, it’s not what actually is so, but what
consumers think is so, that affects their actions and their buying habits. And,
because individuals make decisions and take actions based on what they perceive
to be reality, it is important that marketers understand the notion of perception
and its related concepts to determine more readily what factors influence
consumers to buy. Lifebuoy has always been at the forefront of saving lives through
its promise of germ kill over the decades. In this particular campaign, Lifebuoy
spreads the message on how washing hand with soap can help prevent flu and 10
such other infections during monsoons.
The concept of the just noticeable difference (JND), maintains that any changes
in logos and packages must be within certain “limits” in order to ensure that
consumers still recognize the items instantly after the changes. Companies focus on
JNDs for two reasons. First, they want to prevent changes (like Increase in product
price). Second, they want to ensure that product improvements are shown vividly to
consumers( New package).
THE ELEMENTS OF PERCEPTION
Perception is all about consumers’ subjective understandings and not objective
realities. Altering subjective “wisdom” is difficult, or even impossible. For instance,
for decades, Pedigree—sold mostly in specialty stores and priced quite high—has
been the premier dog and cat food because it was based on the claims that,
following scientific laboratory research, the food included vitamins, grains, and
other special ingredients. However, in recent years, consumers’ preferences
changed and pet owners became fond of pet foods that follows their own diets, such
as natural and organic foods.
Perception: Basic Concepts
Perception is the sensory understanding of the world around us. It basically
means how we receive environmental stimuli and react to them. In other words,
perception consists of a set of actions by which an individual receives a stimulus
and comprehends it. therefore, the first step of the perceptual process is the
exposure to a message. Exposure happens when our sensory receptors are exposed
to certain colour, texture, or sound associated with certain products or brands (e.g.
the red waves of Coca-Cola or the puppy and jingle of Vodafone). Thereafter, the
consumers selectively attend to those stimuli that catch their attention and rest are
simply received by the sensory receptors, but are not processed. For example,
consider a person aspires to buy a Mercedes Benz car but does not have the
financial capability to buy the same. Naturally, he might attend to the pictorial
projections of the said car in commercials, however, there is a low chance that he
would resort to a mental processing of the information received from the
commercials given his low financial status. Usually, once attended, the consumer
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processes the information based on his own judgemental norms and forms his
perception about the product/brand. In short, this is the gamut of perception.
In short, perception can be defined as the active process of selecting,
organising and interpreting the information brought to the brain by the
senses(Solomon, 2006).
Although the consumer perception process is significant in all facets of
marketing, the strategic implications of the same to the brand builders and
advertisers are worth mentioning.
Factors in Perception
Several sequential factors influence our perception.
Exposure
It involves the extent to which we encounter a stimulus. An initial stage of
perception where some sensations come within range of sensory receptors. For
example, we are exposed to numerous commercial messages while driving on the
freeway: bill boards, radio advertisements, bumper-stickers on cars, and signs and
banners placed at shopping malls that we pass. Most of this exposure is random—
as it is not planned. However, if we are shopping for a car, we may deliberately seek
out advertisements and “tune in” when dealer advertisements come on the radio.
Exposure is not enough to significantly impact the individual—at least not
based on a single trial (certain advertisements, or commercial exposures such as
the “Swoosh” logo, are based on extensive repetition rather than much conscious
attention). Weber’s Law suggests that consumers’ ability to detect changes in
stimulus intensity appear to be strongly related to the intensity of that stimulus to
begin with. The principle advocates that the stronger the initial stimulus, the
greater its change must be for it to be noticed.
Before you can communicate anything, you have to get the potential
customer's attention. This perceptual process has two parts. The marketing process
has to create an initiative that draws the attention away from other, competing
activities, and it has to ensure that the target recognizes the product or brand. For
example, a poster has to attract attention, possibly though colour, attractive
imagery or position, but it also has to highlight the brand or product. The ideal
reaction, in terms of the perceptual process, is that the potential customer notices
the poster with the brand and goes over to read it.
Attention and Adaptation
In order for stimuli to be consciously processed, attention is needed. Attention
is actually a matter of degree—our attention may be quite high when we read
directions for getting an income tax refund, but low when commercials come on
during a television program. Note, however, that even when attention is low, it may
be instantly escalated—for example, if an advertisement for a product in which we
are interested comes on. In consumer information processing, attention occurs
when a person lingers and gives mental processing capacity to the external
stimulus from a product or brand. Selective perception is when a consumer pays
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attention to messages that are consistent with her attitudes, beliefs and needs.
When a product is inconsistent with these factors, the consumer will withdraw
attention.
Adaptation happens when a sensation becomes so familiar that it is no longer
the focus of attention Habituation is a decrease in response to a stimulus after
repeated presentations
A. Personal Selection Factors
i. Experience determines what we attend to:
• Perceptual Filters based on past experience influence us;
• Perceptual Vigilance (that which relates to our current needs; example: UPS
breaks down, you suddenly notice ads for UPS);
• Perceptual Defense (we see what we want to see, and ignore what we don't
want to see; example Smokers blocks out the warning signs and pictures on
cigarette package)
ii. Adaptation also determines attention.
• Adaptation occurs when something is so familiar, we no longer pay attention.
Like a drug we need a larger dose to notice;
• Intensity: Less intense habituates because of lowers sensory impact;
• Duration: stimuli that needs lengthy exposure habituates because of need for
long attention span;
• Discrimination: simple stimuli habituate because they don't require attention
to detail;
• Exposure: frequently encountered habituates as exposure increases;
• Relevance: irrelevant or unimportant habituate because they don't attract
B. Stimulus Selection Factors
• Characteristics of the stimulus itself are important
• Stimuli that differs or contrasts is more likely to be noticed
• Size: Larger ad in magazine is noticed. Is larger always better?
• Colour: What colours attract?
• Position: What position on shelf, what position in magazine?
• Bold: Headline- does it stand out; italics; font
• Novelty: Is it in an unexpected place? Totally new.
• Depth perception can make us believe an object is real
Interpretation
Interpretation involves making sense out of the stimulus. For example, when
we see a red can, we may categorize it as a Coke. Interpretation occurs when a
person assigns a meaning to the sensory stimulus from a product or brand
marketing. Comprehension is aided by expectations and familiarity. A consumer
scans his memory to retrieve previous experiences with the brand or a similar
brand. Store-brand marketing frequently capitalizes on the interpretation stage
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when product packaging design contains logos, colours and other elements that are
similar to national brands that consumers are generally more familiar with.
Several factors influence the extent to which stimuli will be noticed. One
obvious issue is relevance. Consumers, when they have a choice, are also more
likely to attend to pleasant stimuli (but when the consumer can’t escape, very
unpleasant stimuli are also likely to get attention—thus, many very irritating
advertisements are remarkably effective). One of the most important factors,
however, is repetition. Consumers often do not give much attention to a stimuli—
particularly a low priority one such as an advertisement—at any one time, but if it
is seen over and over again, the cumulative impact will be greater.
Surprising stimuli are likely to get more attention—survival instinct requires us
to give more attention to something unknown that may require action. A
greater contrast (difference between the stimulus and its surroundings) as well as
greater prominence (e.g., greater size, center placement) also tend to increase
likelihood of processing.
Subliminal stimuli. Back in the 1960s, it was reported that on selected
evenings, movie goers in a theater had been exposed to isolated frames with the
words “Drink Coca Cola” and “Eat Popcorn” imbedded into the movie at New Jersey.
These frames went by so fast that people did not consciously notice them, but it
was reported that on nights with frames present, Coke and popcorn sales were
significantly higher than on days they were left off.
Perception establishes the meaning about a product or brand when a
consumer makes initial contact. In marketing, this is described as consumer
information processing. At this stage all of the senses are engaged in receiving
brand marketing communicate messages. In marketing literature, four distinct
stages of perception occur during consumer information processing: sensation,
attention, interpretation and retention.
Certain principles form base for perception, Schema, priming, Gestalt
psychology, Closure, Figure Ground, Similarity, Perceptual positioning and
positioning strategy.
Sensation
Sensation describes what occurs when a person's senses are initially exposed
to the external stimulus of a product or brand marketing. The sensory receptors of
a consumer are engaged by product or brand cues through sight, sound, smell,
taste and texture. For example, Starbucks engages all the senses in its sensory
brand marketing. A customer who enters a Starbucks coffee shop may hear the
sounds and smell the aroma of the grinding of fresh coffee in the store. Background
music and a unique store design round out the experience of the taste of hot or cold
coffee and food products that can be enjoyed in-store at quaint cafe tables.
Retention
The conclusion of the consumer perception process is the retention stage. This
is marked by the storage of product or brand information in short-term and long-
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term memory. The marketer's goal is to provide positive stimuli in the proceeding
stages that translate into consumers storing the information about the product or
brand into long-term memory.
One of the key factors of successful marketing is effective communication of
the characteristics of a product. Such communication has to result in a favorable
perception of the product by the target audience. Companies can fine-tune the
marketing effort by breaking down the communication into separate perceptual
processes to enhance the chances of success. They can use different marketing
initiatives and complementary ways of presenting their selling proposition to
support these perceptual processes.
Message
Once you have the attention of the potential customer and he or she is aware
of the brand or product involved, you can communicate the message. The
perceptual process involved is the receiving of the information that the company is
presenting. The information has to match the medium. A message on a poster must
be brief and to the point. A television commercial can contain a more elaborate
message. A catalog might have even more details. The message must be clear and
easy to understand, and it must present the selling proposition. For a successful
perceptual process at this stage, the message delivers the reasons for purchasing
the product.
Comprehension
Delivery of the message is a separate perceptual process from understanding
it. A potential customer may read the message in an ad but come away from it
without understanding what the company was trying to communicate or with an
incorrect impression. The actions that a company wants the potential customer to
take, or the reasons for taking the action, are sometimes not clear. Breaking the
message into three parts, with an introduction of the product, the advantages and
the call to purchase, often makes it more comprehensible.
Context
An important part of all three perceptual processes is the context of the
presentation. The aim is to situate the initiative in an attractive context. In this
way, product exposure can take place in friendly surroundings, such as showing a
food item in the context of a party with attractive, fun people. Other strategies
include showing the product or brand at sports events or concerts. When potential
customers associate a product or brand with a positive experience, they are more
likely to receive and understand the message and act upon it.
LEVELS OF PERCEPTUAL THRESHOLDS
The exposure methods of active search and passive reception generate a lot
more stimuli than the normal consumer’s processing capability. The gate keeping
devices that trim down this blooming confusion about the attention of stimuli
involve consumers physiological precincts viz. awareness thresholds. It means that
any given stimulus can be either too small or weak to notice, or too huge that it
gets above from the awareness levels. The second question related to this concept is
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how the level of awareness can be changed. There are four such thresholds –
absolute, terminal, differential, and subliminal – to classify the consumers zones of
stimulus awareness (stimulus refers to something that causes a change in an
organism).
Absolute Threshold
Absolute threshold is the minimum value of a stimulus, which can be
consciously noticed. In other words, absolute threshold is the lowest level at which
an individual can experience a sensation. It is that end at which a person can
distinguish between ‘something’ and ‘nothing’.
Marketers must try to boost the sensory input in order to be noticed through
the daily clutter of advertising messages individuals are exposed to. Packaging
should be attractive enough to catch the attention of the consumers. For example,
without a colourful glossy package, kids attention cannot be grabbed. Point of
purchase displays often play the role of stimulus for the children to notice the
chocolates.
Terminal Threshold
Terminal threshold is the maximum value of the stimulus that can be noticed.
For example, an average person passes by a billboard within 20 seconds. The part
of the billboard that cannot be read in 20 seconds is left unnoticed. So the readable
and viewable information in 20 seconds is the terminal threshold for that customer.
Differential Threshold
The minimal noticeable difference between two comparable stimuli is called
the differential threshold or the just noticeable difference (JND). The JND between
two stimuli is not merely an absolute value of the stimulus but the difference
between the awareness generated by the two levels of stimuli.
The famous German psychologist of 19th century, Ernst Weber, revealed that
the just noticeable difference between two stimuli was not an absolute amount, but
an amount relative to the magnitude of the initial stimulus. It was the first thought
on JND.
Weber’s law states that stronger the first stimulus, bigger is the added
intensity required for the next stimulus to be perceived as different, and there is a
fixed proportion by which with the change of the stimuli the level of response is
changed.
Subliminal Perception
Subliminal perception refers to the level where the stimulus provided to the
consumers goes completely unnoticed. When the stimulus level is much below the
absolute threshold, it develops subliminal perception. For example, display of a very
light coloured saree will never catch the attention of a lady who likes to wear dark
shades. Psychological concept applied to consumers buying patterns holds that the
consumers are more prone to buy products based on the perceived divergence
between the traits of the products.
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PERCEPTION PROCESS
Perception process is a chain of events that starts with our exposure to stimuli
and leads successively, by our own comprehension mechanism, to interpret them.
perception is formed in three stages: selection, organization, and interpretation.
Selection
Selection is the first stage in the perception process. Selection rests on the
verity that the consumers opt for a small portion of the stimulus to which they are
exposed for conscious processing; it is alternatively termed as focal attention. To
obtain the consumer’s focal interest, an intensification of the sensory impulses is
necessary.
Selection Organization Interpretation

Perceived
image of a
Gesalt Psychology brand
Figure .1 Process of Perception

Organisation
The second stage in the perception process is perceptual organization.
Consumers categorize the stimuli into groups to make sense out of them. basically,
categorization process refers to the contrast between a perceived target and the
categorical knowledge. It is a basic awareness activity that includes all forms of
stimulus situations. One fundamental theory attached to this process is Gestalt
Psychology.
Gestalt Psychology
Gestalt is a German word that means pattern or configuration. Gestalt
psychology is a school of psychology that was initially developed on the
fundamental principles of perceptual organisation. It relates to our understanding
of how and why we perceive things. One of the most distinguished Gestalt
principles is the phi phenomenon. It is the optical illusion that allows us to perceive
constant movement instead of a sequence of images. For example, when one is
exposed to running Christmas lights, he sees this non-existent movement just
because of this principle. Some principles of Gestalt psychology of perceptual
organisation are as follows:
1) Figure-ground: This is the elementary way by which we organize visual
perceptions. When an object is seen, both the object (figure) and the
background (ground) are noticed. For example, when one sees the
advertisement of Raymonds, the model Rajat Kapoor with his dress and
peripherals displays the image of a complete man.
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2) Simplicity/Pragnanz (good form): normally, in this process, the stimuli are

grouped to shape a ‘good form’. Nevertheless, the idea of ‘good form’ is a little
confusing and biased one. a ‘good form’ is whatever is easiest or most simple.
3) Proximity: The objects that are in close vicinity are often perceived as belonging
together. Shops in a super mall often portray this image to the customers.
Interpretation
The last stage in the perceptual process is interpretation. In this stage we
attach meaning to the stimuli. The interpretation of perceptual stimuli involves the
application of learned correlation between perceptual cues or signs, and meanings
to narrative stimuli. These associations are based on individual’s expectations,
motivations, and knowledge about any product. Hence, interpretations are largely
influenced by the customers prior knowledge and experiences.
There are two different types of knowledge: schemas and scripts. Schemas
consist of structured collections of beliefs and sensations that a person possesses
about objects, ideas, people, or situations. The second type of knowledge structures
are named as Scripts, which include sequences of actions associated with objects,
ideas, people, or situations. Priming is the process by which certain properties of
stimulus are more likely to evoke a schema.
Closure - The gestalt principle that person tends to perceive an
incomplete picture as complete.
Figure Ground- The gestalt principle where one part of

configuration dominates while rest is in background.
Similarity- Gestalt principle where person groups objects together;

an integrated whole; birds of a feather.Here what do we notice.
Rows or Columns
Perceptual Positioning- Stimulus is interpreted from what we know about

product category; also from characteristics of brand. These can be brand features,
qualities or price; but also related to the product or brand's image or market
position. It's what we think the products means or says.
Positioning Strategy- The place a brand occupies in the consumer's mind with
regard to important attributes and competitive offerings Dimensions: Price leader,
attributes, product class
PERCEPTUAL DISTORTION
Human brain stores information in schemas. These are constructed from
experience, and help in comprehending and recalling various situations. For
example, just from the physical gigantic structure of the Hilton Group of Hotels, it
can be easily predicted that they fall under deluxe category. This is because people
know that deluxe hotels have certain kind of state-of-art infrastructures.
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Nevertheless, the schemas also form errors, in particular erroneous recalls of usual
events and omission of unusual ones, or improper association of the attributes. For
example, Sundar bought a branded refrigerator and has been using it for the last
two years with certain complaints about its performance. Shyam, his friend, knows
about this matter. Therefore, Shyam perceives that the brand always supplies
erroneous products, which in reality is not true. This distorted perception is
alternatively known as halo effect, which means one trait of a product/brand
shapes the perception about the product/brand as a whole. Understanding an
advertising message often results in perceptual distortion, where the message from
the marketer and the understanding by the customer do not match.
However, perceptual distortion can be rectified through effective marketing
strategies. For example, in India, more than 600,000 children aged below 5 years
are subjected to annual morbidity due to Diarrhea. Diarrheal death causes at least
one-third of the death cases across the globe in infectious disease category.
Researchers revealed that the diarrheal morbidity rate can be cut down to at least
50% by simply resorting to safe hygiene practices, like drinking safe water and
washing hands with soap before eating.
Keeping this notion into consideration, the FMCG giant Hindustan Unilever, in
partnership with the local government bodies, designed a campaign named
‘Lifebuoy Swasthya Chetna Programme’ to spread awareness about the significance
of washing hands with soap. Swasthya Chetna, which literally means ‘Health
Awakening’, is however, a multi-stage campaign the targets to change the
consumer’s perception to ‘visibly clean is not really clean’. Together, the famous
advertising agency Ogilvy & Mather and FMCG major HUL coined the word ‘Active-
B’ to highlight the soap’s anti-bacterial characteristics as its unique selling
proposition. The result of this campaign was phenomenal.
Customers that are satisfied with a product or business have an overall good
perception of that product or business. When consumers’ perceptions are good,
they will continue purchasing goods from this company. These customers also will
avoid spreading disappointing experiences to others. Consumer perceptions are
based on feelings. A customer perception measurement is an important tool used
by companies that expresses how well the companies are satisfying customers.
Three areas of consumer perception theory relate to consumer perception theory:
self perception, price perception and perception of a benefit to quality of life.
Self Perception
Self perception theory attempts to explain how individuals develop an
understanding of the motivations behind their own Behaviour. Self perception by
customers relates to values and motivations that drive buying Behaviour -- which is
also an important aspect of consumer perception theory. The researchers
concluded that consumers' self perception was a driving factor in whether or not
they placed a priority on socially conscious purchase and consumption practices.
Consumers who viewed themselves as socially conscious tended to place more
weight on issues such as environmental impact when making buying decisions
than consumers who did not hold similar views of themselves.
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Price Perception
While mass merchandisers such as Wal-Mart emphasize low prices as an
inherent virtue, upscale merchants attempt to emphasize quality and value for
money to appeal to potential customers. The researchers concluded that price
perception strongly influenced whether customers were satisfied with their
purchases and whether they would make future purchases. Two factors that
shaped price perception were the perceived quality of the merchandise or service in
question and price comparisons with merchants offering similar merchandise or
services.
Benefit Perception
"It's good, and it's good for you." Many consumers are familiar with this phrase
frequently associated with purchase of a product. The researchers also theorized
that consumers would demonstrate a trend toward applying more scrutiny to
claims mentioned and would demand more specific information about the products
they purchase.
Perceived Value
Perceived value may be seen as an “an overall assessment of the utility of a
product based on perceptions of what they receive (quality) versus what they give
(price)”. If consumers perceive a product as highly valued, they get satisfaction from
actively engaging themselves in the decision making process. This perceived value
tends the consumers to decide about their final choice.
If the perception fails, consumers feel remorse. Buyer’s remorse is a strong
feeling of regret which occurs after a purchase has been made. It is a specific case
of cognitive dissonance, or the psychological state of worry or unease which comes
about when attempting to come to terms with conflicting ideas, perceptions or
motives. Buyer’s remorse usually occurs after a consumer has made a purchase he
or she has come to regret. Generally, it involves the realisation that the opportunity
of purchasing one product or service over another in some way outweighs the value
of the purchase. In this regard, it occurs when a consumer’s perception of a
purchase changes after he or she has already invested in it.
Buying decision involves consumers to undergo several cognitive and affective
mental stages before they make a choice. When consumers recognise a need by
themselves or upon provoking, they start to actively collect information available
across various channels. Based on what is presented to them during these stages,
they form an attitude towards particular choices they begin to trust. After a choice
is made, and consumer decides to make a purchase they continue to evaluate their
decision while enjoying the product experience. To ease the burden of making a
buying decision, consumers seek inputs from their reference groups — family,
friends, colleagues, reviews on online forums, and several other means. Each of
these inputs acts as a signal that affects their attitudes and perception towards the
product. But filtering information to find the right signals is difficult and it is even
harder to retain this information. There are evidences showing that consumers
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retain only the information that either appeals to them emotionally or one that
strengthen their beliefs.
1) Elements of Perception
2) Levels of Perceptual Thresholds
3) Perception Process
4) Perceptual Distortion
5) Areas of Consumer Perception Theory
1) What is meant consumer perception?
2) Explain the perception of consumers during purchase decisions.
3) Enumerate on the process of perception.
4) Discuss the various levels of perceptual thresholds.
5) Differentiate between the absolute threshold and the differential threshold.
18.6 SUMMARY
Consumer perception theory is any attempt to understand how a consumer’s
perception of a product or service influences their Behaviour. Those who study
consumer perception try to understand why consumers make the decisions they
do, and how to influence these decisions. Perception is the understanding of the
environment by organising and interpreting the available information. Companies
need to focus on how the consumers perceive and act in response to the products
in relation to quality, artistic sense, price and image. Perception starts with
exposure when a stimulus comes within the range of one of an individual’s primary
sensory receptors.
1) The "absolute threshold" refers to-
a) the minimum difference that can be detected between two stimuli
b) the difference between the minimum and maximum levels of stimulation
that can be detected on a given sensory channel
c) the maximum amount of stimulation that can be detected on a given
sensory channel
d) the minimum amount of stimulation that can be detected on a given
sensory channel
Ans: d
2) Which of the following most accurately reflects the current thinking about the
use of subliminal perception in marketing promotion and advertising?
a) There is some evidence that subliminal perception can have limited effects,
but they are not specific enough to make subliminal messages effective in
advertising
b) It comes down to a matter of attention. If a viewer will pay enough attention
to a subliminal message, then it can have some specific effects
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c) messages are below the threshold of perception, so cannot be utilized in

marketing.
d) Subliminal ads can be effective, but customers do not like them and so
marketers avoid them.
Ans: a
1) http://smallbusiness.chron.com/role-perception-consumer-Behaviour-
67136.html
2) http://www.ijoart.org/docs/Consumer_Perception_and_Buying_Decisions.pdf
18.9 ASSIGNMENTS
1) Apply the perceptual process and write an essay on how the stages in
perceptual process make the consumer organise and interpret information
2) Select a company of your choice and prepare a list of items marketed by them.
Find out whether the information given in their website helps to buy different
categories of product.
18.10 SUGGESTED READINGS / REFERENCE BOOKS
1) Srabanti Mukherjee, Consumer Behaviour, Cengage Learning, India, 2013
2) Leon Schiffman, Joseph Wisenbelt, S. Ramesh Kumar, Consumer Behaviour,
Pearson Education, New Delhi, 11th edition,2016.
1) Interview a shop manager to find out the role of consumer perception in retail
strategies
2) Select five advertisements in the same product category. Analyse the attention
seeking components and the meaning they convey.
3) Develop a logo for an online retail shopping and for a Newspaper. Justify your
design
18.12 KEY WORDS
Absolute threshold
Benefit perception
Differential threshold
Gestalt Psychology
Interpretation
Just Noticeable Difference
Organsiation
Perceived Risk
Perceived value
Perception
Perceptual distortion
Price Perception
Selection
Self Perception
Subliminal perception
Terminal threshold
Weber’s law
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LESSON - 19
CONSUMER MOTIVATION
19.1 INTRODUCTION
Consumer motivations are the forces that activate Behaviour and provide
purpose and direction to that Behaviour. Consumers are often aware of the motives
causing a certain Behaviour. It represents the reasons one has for acting or
behaving in a particular manner. Needs are the base behind motivation. Motivation
encourages consumers to purchase in order to fulfill their needs. Individuals strive
consciously and sub consciously to reduce this tension through selective goals and
fulfillment of needs subsequently reduces their tension.
19.2 OBJECTIVES
• To understand the dynamics of motives, needs and goals and how they
influence consumer behaviour
• To know various motivation theories and their implications on consumer
Behaviour.
• To analyse the consumer involvement and marketing tactics to improve high
involvement
19.3 CONTENTS
Importance of understanding Consumer Motives
Process of Motivation
Theories of Motivation
Motivation and Personality
Consumer Involvement
IMPORTANCE OF UNDERSTANDING CUSTOMER MOTIVES
Marketers are fascinated by the motivation of customer normally when it is
related to purchase behaviour. This behaviour recounts to the intension for the
aspiration to possess the particular goods or service, and it can also be expressed
as ‘goal-related behaviour’. Behind every motive there lies an analogous need. Some
motives are physiological in nature. These are basic human needs like hunger,
thirst, warmth, shelter, etc. some motives. Such as desire for approval, success,
and prestige are psychological. Most often, buying decisions are a blend of motives.
In the alternative evaluation stage, in choice heuristics, some motives might seem
to be stronger than others, and the final choice might be a negotiable solution. For
example, price might be the deciding parameter, where more evidently financial
restrictions dominate the motive. It can, therefore, be seen that a number of
motives might play significant roles while taking a purchasing decision.
As a result of increasing globalization, economic in W1 countries have
developed a large scale of differentiated and value-added customer-friendly
products. Besides, consumers now have not only the option to differentiate
amongst various alternatives of goods and service to fulfil their needs but also
multiplicities of companies that offer different brands of similar products. In fact, to
become the market leader within its industry, a marketer needs to understand the
market properly and comprehend the latent needs of its customers very well.
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Undoubtedly, well-developed commercial tactics add a part of this success too.

Nevertheless, in saturated markets in which products demonstrated tiny variation
in their values, it is of the essence for companies to engender bizarre motivational
stimuli in their offered marketing mix, in order to grab an elevated level of attention
and attraction from the consumers. But, what stimulates people to prefer a certain
brand? It is, at all, possible for marketers to manipulate the consumer decision-
making process to develop their positive attitude for their brand? The consumer
decision process is not superficial; it rather portrays the internal psychological
process, for example, what happens in the mind of a customer at the time of the
evaluation of alternatives.
Let us consider the example of buying a car in several stages of family life
cycle. The question is what motivate a person to purchase a car? It is because a 30-
year-old bachelor wants to perk up his standard of living or is it for the reason that
a man of the same age wants to have a well-guarded and strongly fortified car for
his family given the accident prone city traffic? Therefore, purchase of a product
may be a resultant of various motives. Every individual has needs; some needs are
innate, others are acquired. Innate needs are physiological; they include the needs
for food, water, air, clothing, shelter, and sex. Because they are needed to sustain
biological life, the biogenic needs may be thought as the primary needs or motives.
Acquired needs are those needs that we develop in response to our culture or
environment. These may include needs for self-esteem, prestige, affection, power,
and learning. Because acquired needs are generally psychological or psychogenic,
these are known as secondary needs or motives.
Motivation-Defined
Motivation is the defined state of drive or arousal that propels behaviour
towards goal object. Motivation is comprised of two components: drive or arousal
and goal object. In other words, motivation may be referred as the state of mind
that energized and directs goal-oriented behaviour. Eminent psychologists state
that motivation might be entrenched from the basic need to quench thirst or satisfy
hunger to less-apparent reasons like satisfying hedonism, altruism, morality, or
avoiding morality.
Fonvielle (1997) advocated that if a company’s marketing section needs to
figure out how to stimulate a target group to persuade in favour of their brands,
they first have to identify what their target group actually needs. Here the central
question of consumer behaviour is rooted: how the purchase motives are spawned.
PROCESS OF MOTIVATION
Motivation refers to the process that causes people to act the way they do. It
follows sequential steps.
Motivation plays a driving role in the building of desire. These are the deep
seated reasons pushing the individual to make his choice. Following on from the
work of Sigmund Freud, motivation was studied by Abraham Maslow who proposed
classifying needs into five categories .Starting from the theory that needs do not all
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have the same importance for an individual and that they can be put into a
hierarchy, Maslow developed the idea that it is necessary to have satisfied a first
type of need before taking on the next one. Physiological needs correspond to the
vital necessity to eat and drink to remain healthy. Safety needs correspond to being
able to protect oneself from the elements and from possible danger (animals,
criminals, etc.). Once both of these basic needs are satisfied, the individual begins
to be interested in the need for belonging and affection (social needs). In this case it
is a question of belonging to a community which can be sports oriented, cultural,
religious or a certain style of life. Needs related to esteem correspond to a wish to be
appreciated by one’s close friends and family or within the work environment.
These can translate into external signs of way of life or wealth. The fifth category
involves the need to accomplish something in terms of personality, by traveling far
away or achieving some complex sporting or cultural goal. Whatever the need
whether psychological or material, the greater the lack, the stronger the motivation
to satisfy it.
The process of motivation has sequential steps which begins with Drive-----
Goal Directedness------- Motivational Conflicts----- Outcome and there is a feedback
loop which takes to Drive segment. If the need is not satisfied the cycle starts with
the drive based on the feedback of the purchases made.
THEORIES OF MOTIVATION
(a) Drive or Arousal
When a person feels a difference between the present state and the ideal state,
an inner force directs him towards attainment of the ideal state. This inner force is
called the drive. It can be explained in terms of the degree to which an individual is
eager to spend energy to achieve one goal ahead of their many other goals. Drive
theory is centred at biological needs that create disturbed states or arousal, foe
example, hunger, thirst, etc. Vroom’s expectancy theory states that actions are
mostly drawn by expectations of derived outcomes, for example, some positive
incentives, rather than pushed from within. Drive may also result from hedonic
needs, i.e., to utilise products emotional arousal, sensory pleasure, aesthetic
pleasure, emotional experience, fun, and enjoyment.
(b ) Goal Directedness
Motivation is directed towards the attainment of one’s goal. Marketers try to
produce goods and services that will endow the customers with desired benefits and
allow them to trim down the state of tension.
(c) Motivational Conflicts
Kurt Lewin, a distinguished German-Born psychologist and the founder of
social psychology, shaped the conflict theories about individual’s experience as:
approach – avoidance, approach – approach, and avoidance – avoidance.
Approach - approach conflict: An individual must opt between two enviable
alternatives. In fact, the theory of cognitive dissonance is based on the hypothesis
that people normally want regulation and stability in their lives and a state of
tension is created only when beliefs, values, or actions conflict with one another.
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Approach – avoidance conflict: An approach – avoidance conflict occurs

when one goal contains both positive and negative characteristics. This means, an
individual is also apprehensive about the negative consequences from his desired
product. When the goal is far away, both positive and negative feelings about the
goal are less strong. However, as the person approaches the goal, the feelings about
the negative characteristics arise, and the person or service we desire has negative
getting too close to achieving the goal. Many products or services we desire have
negative consequences attached to them. For example, when a father chooses a
good school for his child, the long distance of the school from his residence might
be the negative consequence of his selection.
Avoidance - avoidance conflict: when an individual needs to make a choice
between two undesirable alternatives, avoidance – avoidance conflict occurs. For
example, whether to repair a damage car or travel to office by cab everyday both
have financial consequences to the customer and, therefore, are undesirable. This
situation may result in avoidance – avoidance conflict. In this case, the closer the
customer towards his goal, stronger is his desire to avoid it.
(d) Outcome
Outcome relates to motivation generated out of his process. It can be of two
types – intrinsic and extrinsic. Intrinsic motivation comes from rewards inherent in
a task or action itself, like the pleasure of solving a puzzle or the passion for playing
chess. Extrinsic motivation comes from external factors. Money is the most
palpable motivator, but coercion and the threat of chastisement are also common
extrinsic motivations. Demonstration effect is often extrinsic because it encourages
the performer to satisfy esteem needs over others, rather than having only the
benefit of the intrinsic incentive of the action.
(e) Feedback
The experience in the motivational process results in increased drive or
internal force to attain the goal.
CONSUMER MOTIVATION AND PERSONALITY
Motivation is the driving force that impels people to act. It represents the
reasons one has for acting or behaving in a particular way. Needs are
circumstances or things that that are wanted or required, and they direct the
motivational forces.
Human beings’ most basic needs are biological and fulfilling them sustains
physical existence and safety. For example, when parents send their kids to school
they expect a physically safe environment. The slogan “It shouldn’t be this
dangerous” urges drivers to stop when they see flashing lights and ensure that kids
get home safely.
Personality consists of the inner psychological characteristics that both
determine and reflect how we think and act, which together form an individual’s
distinctive character. Consumers often purchase products and brands because
advertisers have given them “personalities” that differentiate them from competing
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offerings. Brand personification occurs when consumers attribute human traits or

characteristics to a brand. A “brand personality” provides an emotional identity for
a brand, which produces sentiments and feelings toward it among consumers. For
example, consumers often view certain brands as “exciting”, “sophisticated”, or
“warm”.
Application 1: The power of Virtual/Digital Brand Personality
Brands like Volvo, MTV, and clothing retailer Hennes & Mauritz have entered
the market with virtual goods. With Facebook and other social marketing websites
making their presence felt overwhelmingly, the brands are working on various ways
to connect with consumers. Creating awareness, excitement, and even
strengthening associations by contemporary images are some of the objectives of
these brands.
For instance, a brand like TVS Scooty has used celebrities to convey the self-
concept of independence and self-reliance. It may find that youngsters who are in
the target segment may like to experience a different kind of “self” on the virtual
domain and hence, the challenge for the brand is to balance actual and virtual
brand personality. Mercedes in India is perceived as a sporty, innovative, aesthetic,
and dynamic brand. The brand sponsors golf tournaments, wine tasting sessions,
and events with fashion designers to reinforce such associations.
Application 2: Values, Traits, and Brands
Self-concept, together with values, will be useful to marketers in the
Indian market. Given the diversity of segments, self-concept and values can provide
several insights into brands. A conservative lady belonging to a traditional family
may buy gold jewelry both as an investment and to impress others about her status
when she attends functions like weddings (Indian weddings are typically associated
with jewelry). A middle-class working woman may buy jewelry to identify with her
group of colleagues at the office who had also bought branded jewelry and may
prefer a brand like Gold Plus. A working woman holding an executive rank may
prefer a brand like Tanishq to express her sense of uniqueness.
It is also interesting to note that a consumers’ value of accomplishment is
driven by a specific personality trait. In the case of the first consumer, it is the trait
of affiliation and self-esteem; in the case of the second consumer, it may be
affiliation and self-esteem through identification within the group; in the case of the
third consumer, it is the trait of individuality (autonomy) and in the fourth case,
and it is the trait of exhibitionism along with self-esteem. Values and traits combine
to form an important part of one’s self-concept.
Systems of Needs
Over the years, several psychologists have developed lists of human needs, but
there is no signal, comprehensive, and commonly accepted list. Although there is
little disagreement about physiological needs, there are distinct differences of
opinion about defining and categorizing needs with nonphysical origins, that
is,psychological (or psychogenic) needs.
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Murray‘s List of Psychogenic Needs

In 1938, the pioneering psychologist Henry Murray prepared an extensive list
of psychogenic needs, which represented the first systematic approach to the
understanding of non-biological human needs. Murray believed that although each
needs is important in and of itself, needs can be interrelated, can support other
needs, and conflict with other needs. For example, the need for dominance may
conflict with the need for affiliation when overly controlling Behaviour drives away
friends, family, and spouses. Murray also believed that environment circumstances
strongly influence how psychogenic needs are displayed in Behaviour. Murray
organised his needs into five groups: Ambition, Materialistic, Power, Affection and
Information needs. Later on, the psychologist Allen Edwards developed a self-
administered personality inventory that became one of the most widely used tools
in the study of personality traits. The table below lists the definition and illustrative
characteristics of several needs researched by Murray and Edwards that are most
relevant to consumer Behaviour.
Table 1: Psychogenic Needs Applicable to Consumer Behaviour
Need Illustrative Characteristics Promotional Applications
Achievement: Do the best and work hard Messages that encourage
Accomplish tasks, in any undertaking. Be able and illustrate success (e.g.,
succeed and to do things better than advertising education)
overcome obstacles others.
Exhibition: Tell amusing jokes at Messages showing
Shock or thrill others parties. Say things that attention from others when
and be the center of others regard as witty and they notice one’s
attention. clever. possessions (e.g.,
expensive cars)
Affiliation: Be loyal to and share things Messages showing people
spend time, form with friends. Help friends in enjoying themselves in
strong friendships trouble. Be confided in by large groups (e.g.,
and attachments others and told about their vacations, shopping
with others. troubles. situations)
Power/Dominance: Seek leadership in groups. Messages showing actual
control, influence, Supervise and direct the or symbolic dominance
and lead others. actions of others. (e.g., being a chief
executive; owing a
powerful car)
Change: Doing new and differ like Messages stressing
seek new eating in new restaurants, novelty, uniqueness, and
experiences and going on trips, and avoiding breaking with routines
avoid routine. conventional situations. (e.g., adventure travel and
active vacations)
Order: Planning and organizing the Promoting devices that
Keeping things neat details in any undertaking. save space and keep things
and organized Setting definite times for firmly in place (e.g.,
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activities dividers and organizers for

closets, drawers, and
garages)
The ambition needs are divided into three sub components-need for
achievement, need for exhibition, and the need for social recognition. The
subcomponents of materialistic needs are the needs for acquisition (obtaining
things), retention (keeping things), order (making things neat and organised),
construction (creating things). These needs are quite common in people who run
after materialistic needs, e.g., branded suits, in order to look organised. In other
ways, when a person wants to own a house in a posh area of the city, or wants to
maintain his ancestral luxurious bungalows, he is basically trying to satisfy his
materialistic needs in terms of the acquisition of a house or retaining their
property.
The power needs are divided into subcomponents such as abasement
(confessing and apologizing), autonomy (independence and resistance), aggression
(attacking or ridiculing others), blame avoidance (following the rules and avoiding
blame), deference (obeying and cooperating with others), and dominance
(controlling others). Several advertisements in India, especially those of the fairness
creams, soaps, and detergents ridicule the people for not using some particular
brand.
The tide detergent advertisement claims that it provides such superior quality
of cleanliness in a boy’s shirt that the other boys in the school get punished
because their detergents do not provide such cleanliness. Many of the corporate
houses resort to comparative advertisements to catch hold of the competitor’s
revenue curve and get lead in the market.
The advertisement of Bharti Axa General Insurance focuses on the exclusion of
several major diseases by other insurance companies. It, therefore, draws attention
of the customers towards their USP, i.e., the almost exhaustive list of diseases
under the umbrella of coverage.
On the contrary, the affection need encompasses need for affiliation (spending
time with other people), nurturance (taking care of another person), play (having
fun with others), rejection (rejecting other people), and succorance (being helped or
protected by others).
Next broad need identified by Murray is information need (specially the need
for cognizance and exposition). Customers, worldwide, are now dependent on
knowledge process outsourcing centres and business process outsourcing centres
for getting information about several products and even for maintaining them.
Murray and his other group members have recognized 24 such psychological
needs. These 24 needs can be distributed under 5 heads- ambition needs,
materialistic needs, power needs, affection needs, and information needs. These
needs, therefore, may be referred as psychogenic needs.
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Table:2 List of Murray’s Psychogenic Needs

Broader Needs Specifications of needs Examples
Ambition needs Achievement: Success, Reliance Group of
accomplishment, and overcoming Companies in
obstacles Telecom ..Reliance Jio
Exhibition: Shocking or thrilling other
people
Recognition : Displaying achievements
and gaining social status
Materialistic Acquisition: Obtaining things Looking for
needs Construction: Creating things materialistic needs
Order: Making things neat and Eg Interior products
organised
Retention: Keeping Things
Power needs Abasement: confessing and Dominance and move
apologizing towards globalization
Autonomy: Independence and From Local cinema to
resistance Hollywood
Aggression: Attacking or ridiculing
others
Blame Avoidance: following the rules
and avoiding blame
Deference : obeying and cooperating
with others
Dominance: controlling others
Affection needs Affiliation: spending time with other Looking for protection
people and affection
Nurturance: taking care of another Eg., Fun City, Baby
person products
Play: having fun with others
Rejection: rejecting other people
Succorance: being helped or protected
by others
Affiliation: spending time with other
people
Information Cognizance: seeking knowledge and Digital products
needs asking questions
Exposition: educating others
Psychogenic Needs and its Implications
Research on the need for affiliation has established that people who stress
more on affiliation needs tends to have bigger social groups, fritter more time in
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social interfaces, and are prone to endure with solitude when the social contacts
are somehow reduced. Murray’s list, however, is too explicit in spotting the latent
motives lying beneath customers particular marketplace actions. It gives a
comprehensive look that can be considered by the marketers.
Maslow’s Hierarchy of Needs
Psychologist Abraham Maslow formulated a theory of human motivation based
on the notion that there is a hierarchy of human needs. Maslow’s hierarchy of
needs consists of five levels of human needs, which rank in order of importance
from lower-level(biogenic)needs to higher-level(psychogenic) needs. The theory
states that individuals seek to satisfy lower-level needs before higher-level needs.
The lower-level of unsatisfied needs motivates a person’s Behaviour. When that
need is fairly well satisfied, the individual is motivated to fulfill a need in the next
level of hierarchy. When that need is satisfied, the need in the next level is one’s
primary motivator, and so on. How-ever, if a person experiences renewed
deprivation regarding formerly met lower-level need, that becomes the dominant
factor in the person’s motivation, even if only temporarily. For example, if a person
who is well off and trying to satisfy his ego needs loses his job, he reverts or “goes
back” to trying to satisfy his security needs; if he gets a new job that pays well, thus
satisfying security needs, he will once again “move” to a higher level in the
hierarchy.
Figure 1: Maslow’s Hierarchy of Needs

Physiological Needs
Maslow maintained that Physiological needs are the first and most basic level
of human needs. These primary needs, which are required to sustain biological life,
include food, water, air, shelter, clothing, and sex-all biogenic needs. According to
Maslow, physiological needs are dominant when they are chronically unsatisfied:
“For the man who is extremely hungry, no other interest exists but food”.
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Safety needs
After physiological needs have been satisfied, safety and security needs
become the driving force behind an individual’s Behaviour. These needs are
concerned not only with psychical safety, but also with order, stability, routine,
familiarity and control over one’s life and environment. For example, health and the
availability of health care are important safety concerns. Savings accounts,
insurance policies, education, and vocational training are all means by which
individuals satisfy the need for security
Social needs
The third level of Maslow’s hierarchy consists of social needs, such as love,
affection, belonging and acceptance. Maslow’s concept of social needs, affiliations or
belongingness has been used by Levi’s to connect with hipsters at an individual
level.
Egoistic Needs/ Esteem Needs
When social needs are more or less satisfied, the fourth level of Maslow’s
hierarchy becomes operative. This level includes egoistic needs, which can take
either an inward or an outward orientation:
1) Inwardly directed ego needs reflect an individual’s need for self-acceptance,
self-esteem, success, independence, and personal satisfaction.
2) Outwardly directed ego needs include the needs for prestige, reputation,
status, and recognition from others.
Need for Self-Actualization
According to Maslow, once people sufficiently satisfy their ego needs, they
move to the fifth level. The Self-Actualization need refers to an individual’s desire
to fulfill his or her potential - to become everything that he or she is capable of
becoming. For example, an artist may need to express herself on canvas; a research
scientist may strive to find a new drug that eradicates cancer.
Evaluation of Maslow’s Theory
Maslow’s theory states that higher-order needs become the driving force
behind human Behaviour as lower-level needs are satisfied. The theory says, in
effect, that dissatisfaction, not satisfaction, motivates behaviour. The need
hierarchy has received wide acceptance in many social disciplines because it
appears to reflect the assumed or inferred motivations of many people in American
society. The five levels of needs are sufficiently generic to encompass most
individual needs. The major problem with the theory is that it cannot be tested
empirically; there is no way to measure precisely how satisfied one level of need
must be before the next higher need becomes operative.
Marketing Applications of Maslow’s Theory
Despite its limitations, Maslow’s hierarchy has been a highly useful framework
for marketers. Maslow’s needs hierarchy is readily adaptable to market
segmentation and the development of advertising and other marketing
communications appeals, because there are consumer goods designed to satisfy
each of the need levels, and because most needs are shared by large segments of
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consumers. For example, individuals buy health foods, medicines, and low-fat
products to satisfy physiological needs. They buy insurance, preventive medical
services, and home security systems to satisfy safety and security needs.
Consumers buy personal care and grooming products (e.g., cosmetics, mouthwash,
shaving cream), as well as most clothes, in order to satisfy social needs. They
purchase high-tech and luxury products, such as elaborate sound systems, high-
end wristwatches, sports cars, and expensive furniture, to fulfill ego and esteem
needs. Postgraduate college education, hobby-related products, and exotic and
physically challenging adventure trips are often sold as ways of achieving self-
actualization.
Advertisers and other forms of marketing messages can also use the need
hierarchy to position products; that is, to develop a strategy that will make
consumers perceive a product or brand as its marketer intends. The need hierarchy
is a versatile tool for developing positioning strategies because different appeals for
the same product can be based on different needs.
Ernest Ditcher’s Consumption Motives
In the early to mid 1900s, Ernest Dichter, the famous Viennese psychoanalyst,
emerged as a profounder in the arena of qualitative marketing research. He
recommended that consumer motives were time and again elicited by concealed
comatose needs. The marketing promotions that are based on Ditchter’s theories on
buyer motives in case of selling cars, furs, cell phones, and even paper towels have
demonstrated accomplishment by augmented sales.
The needs identified by Dichter can be classified into six categories-
Autonomy, Dominance, Nurturance, Exhibition, Cognizance, Exposition.
Independent and impulsive decisions come under the autonomy needs. In
many cases, these may be irrational, irresponsible and unconventional. Wearing a
dress or buying some edibles without any prior planning can be an example of this
kind of motive. A child suddenly asking for an ice-cream just by seeing the point of
purchase stimulus also demonstrates autonomous motive. Purchase of a dress
without prior planning by a working lady can be an independent and impulsive
decision satisfying her autonomy need.
Influencing other’s purchase behaviour leads to satisfying the dominance
need. The floor manager of a tourism company may motivate his customers towards
a specific package because of her better knowledge in the field. On the other hand,
in a family decision to purchase a music system, Mr. Ramani, being the father of
Sonu and Head of the family, may dominate Sonu’s choice of a music system. One
may recollect the vision of Dr. Govindappa Venkataswamy while he pioneered
‘Aravind Eye Care System’ to ensure ‘Eye Care for all’ and eradicate the curse of
blindness from the country.
Exposition needs mean information sharing, elucidating or interpreting
something to the customers, shareholders, or anybody linked to the business.
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Business give press briefs about their company policies/performance and their
products regularly.
Table 3: List of Dichter’s needs
Needs Definition Examples
Autonomy Independent and impulsive decisions. In Impulsive purchase
many cases irrational, irresponsible, and
unconventional. For example, buying a dress
Dominance Influencing other’s purchase behaviour Influencing others
choice
Nurturance Fellow feelings and protectiveness for poor or Corporate Social
distressed responsibility
Exhibition To impress others and be recognized and Fashion wear
appreciated by others, i.e., to excite, amaze,
fascinate, entertain, shock, intrigue, amuse
or entice others. For example, wearing high
fashion dresses, buying a luxurious car, etc.
Cognizance To explore, be inquisitive, and knowledge Information kiosk
seeking
Exposition Information sharing, elucidating or Interviews with
interpreting something CEOs
CONSUMER INVOLVEMENT
Involvement refers to a heightened state of awareness that motivates
consumers to seek out, attend to, and think about product information prior to
purchase .With high involvement, attention is increased and more importance is
attached to the stimulus object. Memory is enhanced. Highly involved consumers
tend to place greater importance on information sources. They are heavy users of
newspapers and advertising.
Effects of Consumer Involvement
• Information search- High involvement ? greater information search (more
shopping around) and Information processing
• Depth of comprehension - High involvement ? deeper comprehension
• Extent of cognitive elaboration -High involvement ? more thinking
• Extent of external arousal- High involvement ? greater emotional arousal
• Information transmission -High involvement ? more frequent information
transmission (talking about products) to others
Consumer Involvement Theory categories (CIT):
• The idea behind consumer involvement theory is simply this: that there are
two main forces that drive most purchase decisions.
• One is the time and energy an individual devotes to making the decision.
• A second factor is the degree to which emotion or reason - feelings or logic -
influence a purchase decision.
There are four general CIT categories:
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• High involvement / Emotional Purchase

• High involvement / Rational Purcahse
• Low involvement / Emotional Purchase
• Low involvement / Rational Purchase
High Involvement in Emotional Purchase
High involvement in emotional purchase of any individual normally includes
expensive diamond jewelry, wedding dresses and vacation tours. It can also be the
purchase of a home, a car, or even choosing a mobile service provider.
High Involvement in Rational Purchase
This class involves pricey industrial procurement of something related to the
hi-tech infrastructure, the office setting, or the employee’s benefit insurance plans.
At the consumer’s end, high involvement in rational purchases also refers to pricey
decisions.
Nonetheless, the purchase items in industry and household are not identical.
On consumer’s side, this category is related to the purchase financial services such
as mutual funds, bonds, shares, home, major household electronic appliances etc.
high involvement consumer purchases might focus on the basis on rational or
emotional aspects of individuals which differ from person to person.
Low Involvement in Emotional Purchase
These kinds of purchases are not functional, rather the purchase drive is
emotional or sensual. But these drives are ephemeral. So the customers do not
spend a lot of time in deciding about the purchase. Normally, movies, candies,
magazines, greeting cards, treating a friend at a particular restaurant are some
examples of this kind of purchase.
Low involvement in Rational Purchase
This type of purchase relates to our routine response Behaviour. These
purchases are functionally made out of habit, without much thought and
involvement. In this low involvement purchase, the information search stage is
hardly found.
Normally, after recognising the need, customers decide to purchase. So the
time taken in this decision-making is quite less as compared to the extensive
problem solving Behaviour resulting in high involvement and visibility of all five
stages of buying decision-making. This category includes most of the fast moving
consumer goods in the daily consumption basket of consumers.
Involvement and marketing implications
In certain product classes consumers may not be interested in learning about
alternative brands and their characteristics Purchase decisions may be made
without clear evaluations, brand attitudes or reasons for purchase Can marketing
communications and programmes be differentiated according to level of
involvement? Understand levels of involvement before designing marketing
strategies and try to move low involvement consumers to higher levels.
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Factors affecting Involvement (Jansson and Boyd, 2010)

Personal Factors
Needs
Importance
Interest
Object Factors
Differentiation of alternatives Level of Involvement
Source of Communication
Content of Communication
Situation Factors Determines amount of

Use effort consumer
Occasion commits to achieve
Social influences desired outcome
Figure 2: Factors Affecting Involvement
It is to be clearly noted that the level of involvement is determined by a group
of factors categorised as personal factors, Object factors and Situation factors.
Based on the importance, urgency and utmost interest the level of involvement is
decided. When a consumer experiences effective communication and able to
differentiate the different alternatives available and explored the authentic of
communication, there are chances that there is high involvement of consumers.
Based on the situational factors, it is shown that, Use of the product, the occasion
the product is needed and social persuasion totally influence the buyer decision.
This involvement finally converted into efforts taken based on the three factors to
satisfy the desired needs and wants.
1) Process of Motivation
2) Theories of Motivation
3) Motivation and Personality
4) Consumer Involvement Theory
5) Consumer involvement and marketing implications
1) Can Companies efforts change consumers needs?
2) What are the implications of Motivation theories on Consumer behaviour?
3) Why the needs and drives of consumers change constantly?
4) Critically evaluate the relevance of Ditcher’s consumption motives.
5) Give a note on Murray’s Psychogenic needs theory
6) Write a note on Motivational Conflicts.
7) Explain the Need-Want-Goal-Satisfaction Process in the context of Consumer
Behaviour
19.6 SUMMARY
Motivation is an inner drive that reflects goal-directed arousal. In a consumer
Behaviour context, the results are a desire for a product, service, or experience.
It is the drive to satisfy needs and wants, both physiological and psychological,
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through the purchase and use of products and services. Motivation is an inner
feeling that stimulates the action that is to be taken by an individual. It provides a
specific direction or, results in a response. Motivation, personality and emotion are
all influential factors that affect consumer decision making and also marketing
strategies. In order to better understand the buying habits of consumers these
three elements are important to recognize. Marketing strategies were emphasized in
this text as marketer’s have the greatest interest in exploring consumer motivation
and behaviour. Their strategies are based on explicit and implicit beliefs about
consumer behaviour. Marketing research aims to increase the knowledge of
consumers to gain perceptive and competitive advantage in order to better predict
consumers’ needs and desires.
1) The psychological factors influencing consumer Behaviour are
(a) motivation, perception, learning, beliefs and attitudes
(b) reference groups, family, roles and status
(c) culture, subculture, social class
(d) cultural, organisational, Personal, Social
Ans:a
2) People get attracted towards fast cars, robust engines and speed. This exhibits
the need for __________.
a) Achievement b) Power c) Affiliation d) Esteem
Ans: b
3) The entire process of need – action-- goal -- want -- the satisfaction chain
comprises which of following components:
a) cognition b) affect c) Behaviour d) all of the above.
Ans: d
4) The antecedents, moderators and the properties of involvement finally
converge to a response in terms of:
a) information search b) information transmission
c) Only “a” d) Both “a” and “b”
Ans: b
5) Promotional messages for Information Seekers must lay emphasis on
_______________ rather than emotions.
a) Information b) Behaviour c) Trial d) Preference
Ans: a
6) “A majority of human drives being unconscious, consumers themselves are
often unaware of the true reasons for buying a particular product or brand”.
This statement finds its roots in the works of _______________.
a) Carl Jung b) Sigmund Freud c) Honey d) Murray
Ans: b.
1) https://www.scribd.com/document/159481272/Unit-5-Consumer-
Motivation-and-Involvement
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19.9 ASSIGNMENTS
1) Consider the products of School bags and Holiday Homes. Having Maslow’s
Need Hierarchy as the base, describe how would you use the need to promote
the products?
2) List the acquired needs which can be used to design promotional strategies for
the products- Smart phones, Digital Classrooms and Dish washers.
1) Del Hawkins, Roger J Best, Kenneth A Coney, Amit Mookherjee (2007),
Consumer Behaviour, Tata McGraw Hill, New Delhi.
2) M. Joseph Sirgy, Don R. Rahtz, and Laura Portolese (2014), Consumer
Behaviour Today, Vol.1,Irvington, NJ
3) Srabanti Mukherjee(2013), Consumer Behaviour, Cengage Learning, India
1) Visit several company websites and analyse the effective use of appeal based
on any one theory of Motivation.
2) Identify all the purchases made by you in a particular time frame and compare
the buying motives based on Dichter and Murray’s Need Hierarchies.
19.12 KEY WORDS
Motivation
Motives
Drives
Involvement
Physiological needs
Safety need
Social need
Esteem Need
Self-actualisation need
Ambition needs
Materialistic needs
Motivational Conflicts
Power needs
Affection needs
Information needs
Autonomy
Dominance
Nurturance
Exhibition
Cognizance
Exposition.
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LESSON - 20
CONSUMER ATTITUDE
20.1 INTRODUCTION
The nature of attitude are multi-faceted and perhaps constitute the most
important dimensions explicate, comprehend, and foresee possible changes in
human behaviour. The spirit of the psychological aspect of attitude is articulated by
Baron, Branscombe, and Byrne (2008). In their opinion, attitude refers to ‘people’s
evaluation of virtually any aspect of their social worlds’. In their process of constant
evaluation of people, objects, and situations, Dennis and Wartella (1996),
concluded that we have a natural propensity to evaluate stimuli (provided by the
marketer environment) as favourable and unfavourable. These evaluations, or
beliefs, form our attitude for any product and, thereafter, are reflected in our
purchase actions.
20.2 OBJECTIVES
• To understand the concepts of Attitude
• To know how attitude is formed
• To make out the different models of attitude formation
• To find out how attitude can be altered
20.3 CONTENTS
Concept of Attitude
Functions of Attitude
Consumer attitude formation and change
Alteration of Attitude
Attitude change strategies
Individual and situational features that affect Attitude
Attitude models
CONCEPT OF ATTITUDE
Attitude Defined
Of late, a new definition of attitude is gradually emerging. This definition
illustrated that a person’s overall attitude towards an object is explained as a
function of (a) strength of each belief that a person holds about various
products/brands and (b) what is an individual’s evaluation towards each belief
associated with the particular tangible or intangible object. In short, attitude may
be defined as a ‘learnt predisposition to behave in a consistently favourable or
unfavorable manner towards a given object’. The term ‘object,’ in marketing
purview, refers to products, brands, service, usage, promotional measures, price,
point of purchases, etc.
The latter definition, however, seems to be more appealing as it is quite
conclusive about the consumer’s evaluative criteria and how they form attitude
towards a brand depending on these criteria. For example, when a middle-class
consumer wants to buy a small car, the evaluation criteria are generally price, fuel
efficiency, purchase schemes, available bank loans, comfort, etc. Tata Nano car
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scores high in the minds of the middle-class consumers in terms of all criteria, and
hence could be chosen easily. Therefore, it may be stated that
• An attitude is a resultant factor of learned predisposition.
• Attitudes are targeted at specific objects, individuals, groups, or situations.
• The motivational-affective feature of attitude distinguished it from simply being
the predisposition or habit.
Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2)
feelings about, (3) and Behavioural intentions toward some object--within the
context of marketing, usually a brand or retail store. These components are viewed
together since they are highly interdependent and together represent forces that
influence how the consumer will react to the object.
Beliefs. The first component is beliefs. A consumer may hold both positive
beliefs toward an object (e.g., coffee tastes good) as well as negative beliefs (e.g.,
coffee is easily spilled and stains papers). In addition, some beliefs may be neutral
(coffee is black), and some may be differ in valance depending on the person or the
situation (e.g., coffee is hot and stimulates--good on a cold morning, but not good
on a hot summer evening when one wants to sleep).
Affect. Consumers also hold certain feelings toward brands or other objects.
Sometimes these feelings are based on the beliefs (e.g., a person feels nauseated
when thinking about a hamburger because of the tremendous amount of fat it
contains), but there may also be feelings which are relatively independent of beliefs.
For example, an extreme environmentalist may believe that cutting down trees is
morally wrong, but may have positive affect toward Christmas trees because he or
she unconsciously associates these trees with the experience that he or she had at
Christmas as a child.
Behavioural Intention: The Behavioural intention is what the consumer plans
to do with respect to the object (e.g., buy or not buy the brand). As with affect, this
is sometimes a logical consequence of beliefs (or affect), but may sometimes reflect
other circumstances--e.g., although a consumer does not really like a restaurant,
he or she will go there because it is a hangout for his or her friends.
Attitude-Behaviour Consistency: Consumers often do not behave
consistently with their attitudes for several reasons:
• Ability. He or she may be unable to do so. Although junior high school student
likes pick-up trucks and would like to buy one, she may lack a driver’s license.
• Competing demands for resources. Although the above student would like to
buy a pickup truck on her sixteenth birthday, she would rather have a
computer, and has money for only one of the two.
• Social influence. A student thinks that smoking is really cool, but since his
friends think it’s disgusting, he does not smoke.
• Measurement problems. Measuring attitudes is difficult. In many situations,
consumers do not consciously set out to enumerate how positively or
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negatively they feel about Vehicles and when a market researcher asks them
about their beliefs about mopeds, how important these.
Attitudes, hence, can be strongly positive, undecided, to strongly negative,
and can either be unambiguous/explicit or implicit/hidden. An attitude can also be
intense, as in the case of prejudice, which can lead to perceptual bias and vice
versa.
FUNCTIONS OF ATTITUDE
Attitudes serve the following four major functions.
Utilitarian function Consumers form a particular attitude about as an object
primarily based on its utility. If the consumer has a favourable prior experience
with any brand or product, or has been exposed to some positive word of mouth by
formal or informal sources, the consumer’s attitude towards it may tend to be
favourable. Normally, to highlight the brand’s positive aspects, the marketing
communication is directed at evaluative attributes, like reliability, safety, cost-
effectiveness, and definite need fulfilment. Women’s Horlicks depicts in its
advertisements the importance of consuming iron and calcium especially for Indian
women. Similarly low calorie Horlicks Lite focuses on middle-aged customers (for
maintain calorie level) and Mothers Horlicks (supporting the nutritional
requirement) on the lactating mothers.
Ego-defensive function Consumers develop attitudes to attain personal goals
and defend their self-images. For example, most of the commercials on cosmetics
and personal care products stress on the sense of personal confidence and at
sometimes on the fear of embarrassment. Indian skin care market is dominated by
enormous traditional beauty care products like besan, multani mitti, talcs, creams,
etc. Indians have a tendency to believe that fairness and beauty are synonymous.
Fair & Lovely encashed this prejudice and generated z revolution in the market.
Specially focusing on the fairness benefits, Fair & Lovely was launched in 1988.
Today, with a successful positioning, Fair & Lovely leads the Rs.1000 crore Indian
fairness cream market with a share of over 70%. Krack cream was also a big hit in
Indian market because it addressed to the issues of winter scratches and crack
marks by the ‘fati ediah’ advertisement.
Knowledge function Consumers strongly insist on more information about
the products they use or want to use, often to assure their right selection. This
information helps the marketers to make the customers recall about the advertising
messages or themes and in resorting subsequent positioning/repositioning
decisions. This facilitates the consumer’s evaluation of alternatives and, thereby,
assists their decision-making process. For example, Dell, Apple or Sony laptops
always advertise about their performance superiority and dependability features,
and form the consumers’ presumption about certain configuration of the systems.
This trims down uncertainty and perceived risk of buying the product from
consumer’s view point. For majority of the hi=tech products’/brands’ advertising
message is primarily designed to inform the consumers about the key features or
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appeals of the product and, thereby, help the customers to understand why the
brand would fit with their requirements.
Value-expressive function Attitudes are shaped to exhibit consumer’s own
values, lifestyle, and outlook. Sometimes, advertisers appeal to self-upgradations,
accomplishments, or liberty. For stylish or noticeable consumption objects, most of
the products/brands take an attempt to highlight their value-expressive functions
or advanced lifestyle. This distribution outlets of Alley Solley, Louis Philippe, Peter
England, provide a portrayal of their lifestyle positioning while targeting towards the
urban elites.
Impact of fast Changing Lifestyle
Internet marketing, Mobile marketing, Digital Marketing, Social Media
Marketing bring about changes in the life style of youth consumers. Just a decade
ago, people sent letters and hand-made cards to each other. People used to think
twice before calling in the odd hours of the day. Emails, mobile phones, social
networking Web sites, and digital camera have changed the dynamics of
communication. People who grew up in the end of the last century were always in a
psychological pressure to communicate. It’s like what the others would think is
they did not frequently update their status message on Facebook. No doubt
technology has made life faster but in no way simpler. This throws more challenges
to marketers to live long in the minds of the customers and pull them towards
purchase of their brands.
CONSUMER ATTITUDE FORMATION AND CHANGE
An Attitude is a learned predisposition to behave in a consistently favorable
or unfavorable way toward a given object. In the context of consumer behaviour, an
“object” can be a product, brand, service, price, package, advertisement,
promotional medium, or the retailer selling the product, among many other aspects
of consumption.
Attitudes are learned from direct experience with the product, word-of-mouth,
exposure to mass media, and other information sources, that consumers are
exposed to. Attitudes reflect either favorable or unfavorable evaluations of the
attitude object and motivate consumers to either buy or not buy particular
products or brands. Consumers buy products toward which they have positive and
favorable feelings; therefore, marketers must ensure that consumers maintain
these attitudes following the purchase so that they keep buying same products
repeatedly.
Marketers who introduce new items strive to form favorable consumer
attitudes toward the new products in order to get consumers try them, like them,
and continue buying them. Doing so is difficult because people are often
unreceptive to the unfamiliar, at least initially. One way to establish positive
consumer attitudes toward new products is to capitalize on products that
consumers already like and buy regularly. When a new product is introduced in a
market that is unfamiliar with it, the brand has to build an attitude toward both
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the category and the brand. Hand sanitizer is a very new category in India and so
the ad explains the concept of a sanitizer and the necessity for such a product
(through the mention of swine flu, along with other infections) in order to build
attitudes toward the brand and the category.
Attitudes and Their Formation
As consumers, all of us have many attitudes toward products, services,
advertisements, the Internet, and retail stores, among many others. Whenever we
are asked whether we like or dislike a product (e.g., Choco and Oats cookies), a
service (Indian Airlines), a particular retailer (e.g., Relaince), a specific direct-online
marketer (e.g., Amazon.com), or an advertising theme (e.g., “ Life’s Good ”), we are
being asked to express our attitudes. By studying consumers’ attitudes, marketers
try to determine whether consumers will accept new products the company is
considering, gauge why market segments were not persuaded by promotional
themes, or learn how target customers are likely to react to new products,
packages, and the like. To illustrate, Nike or Reebok frequently study consumers’
attitudes towards the functional and aesthetic design of athletic footwear. They
regularly gauge reactions to their latest advertising and other marketing messages
designed to form and change consumer attitudes.
Consumers Learn Attitudes
Consumers form new attitudes and also change existing attitudes. They often
form positive attitudes towards new items under the same brand that they have
been buying repeatedly and have been satisfied with. Nevertheless, consumers often
try new products, product models, and different brands. If such trial purchases
meet or exceed their expectations, then they develop favorable attitudes toward
those objects. Generally, the more information consumers have about a product or
service, the more likely they are to form attitudes about it, either positive or
negative. However, if the product is irrelevant to them, the consumers will not
cognitively process any of the available and applicable information. Furthermore,
consumers often use only a limited amount of the information available to them.
Typically, only two or three prominent beliefs about a product play a role in the
formation of attitudes, and less important beliefs carry little weight. Therefore,
advertisements should be focused on the key points that differentiate products from
competitors, and not detail too many of the products’ features.
How do consumers form their initial attitudes toward “things?” For example
how do young adults form attitudes toward Hanes or Calvin Klein underwear, or
J. Crew or Gap casual wear, or Anne Klein or Brooks Brothers business clothing?
Would they buy their underwear, casual wear, and business clothing at Walmart,
Sears, Saks Fifth Avenue, or Nordstrom? How do family members and friends,
admired celebrities, mass-media advertisements, and even cultural memberships,
influence the youngsters’ attitudes about buying apparel? Why do some attitudes
persist for a long time while others change often? Marketers must know the
answers to such questions in order to influence the applicable attitudes.
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Sources of Attitude Formation

Personal experience, family and friends, media the internet and social media
strongly affect attitudes. A primary source of attitudes toward products is the
customers direct experiences in trying and evaluating them. Recognizing the
importance of direct experience, marketers attempt to get consumers to try new
products by offering cents-off coupons, free samples, and other inducements. If
consumers try and like the new products, they will form positive attitudes and buy
them again. In additional to personal experience, the family strongly impacts
people’s initial shopping-related attitudes. For instance, young children who were
rewarded for good behaviour with sweet foods and candy often retain a taste for
(and positive attitude towards) sweets and adults.
Marketers increasingly use online advertising to shape the attitudes of small
and specialized customer niches, because new technologies enable them to
customize advertising messages and also some products. Online, marketers can
target consumers on the basis of their demographic, psychographic or geo-
demographic profiles with personalized product offerings (e.g., watches or sets of
golf clubs for left-handed people), and messages demonstrating that they
understand consumers’ special needs and desires. Targeted online marketing can
shape attitudes more effectively than other media because the promotional
messages addresses the needs and concerns of precise micro-segments, whereas
messages carried by traditional media generally reach diverse and large segments,
as well as many consumers who have neither need nor interest in the product
advertised. Research has also shown that attitudes stemming from direct
experience (e.g., product usage are more enduring and resistant to competitors
messages than attitudes originating from promotional messages only (i.e., those
developed without trying the product).
Attitude Formation toward Product Categories/Brands
Though a number of article deal with attitudes towards brands, marketers are
not interested only in brands. They are also interested in product categories,
especially when new product categories come in market. Brands can diffuse in a
specific market only when awareness about a new product category is created and
a favorable attitude is build up towards these categories. When a new product
category is introduced, the market does not usually have too many brands.
Washing machines, vacuum cleaners, and water filters are few examples in the
Indian context. Consumers form an attitude toward the category . A small section
may start trying out the product. The new category gets diffused through word of
mouth and also through communication strategies of the few brands in the market.
It takes time for a category to be” created “in the minds of a larger number of
consumers. Once many consumers start using the product, consumer familiarity
with regard to the product category is established.
Eventually, consumers develop attitude toward various brands. This, in turn,
affects their decision-making with regard to brand preference. The marketing
implication is that the pioneer in a new product category should build its brand
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effectively to ensure that consumers have a top-of-the-mind recall with respect to

the brand. Videocon in washing machines and Aquaguard in water filters seems to
have effectively adopted this approach when they entered the market early.
Samsung and LG were late entrants in several categories of durable products. But
these brands have been able to create very positive attitudes among consumers
with their products and marketing communication. These brands now have a
substantial share of the market in a number of categories.
(a)The Role of Personality Factors
Personality traits significantly influence the formation of attitudes. For eg,
individuals with a high need for cognition (i.e., those whose crave information and
enjoy thinking) are likely to form positive attitude in response to promotions that
include a lot of detailed, product-related information. In contrast, consumers who
are relatively low in this need are more likely to form positive attitudes in response
to ads that features attractive models or celebrities, or other peripheral cues about
the products advertised. Attitudes toward new products are particularly influenced
by personality characteristics related to one’s innovations.
(b) Attitudes Are Consistent with Behaviours
Similar attitudes consistently lead to the same Behaviours. However, despite
their consistency, attitudes are not permanent and can change either seldom or
frequently. Normally, we except consumers’ Behaviour to correspond with their
attitudes. For example, if a study showed that Mexican consumers prefer Japanese
cars over Korean automobiles, we would expect that a Mexican consumer will buy a
Japanese car when he replaces his current vehicle. However; circumstances often
disrupt the consistency between attitudes and Behaviour. For example, the
Mexican consumer might be unable to afford the car he prefers and buy the Korean
car instead. In this case, affordability is a “situational “factor.
(c) Attitudes Occur Within Situations
Attitudes occur within and are affected by situations. In this context,
”situations” are events and circumstances that influence the relationships between
attitudes and Behaviours at particular times. Situation can cause consumers to
behave in ways seeming inconsistent with their attitudes. For instance, if Margaret
purchases a different brand of sun protection lotion each times she runs low; her
brand switching may reflect a negative attitude towards the brands she has tried.
In reality, she may have purchased different brands because she wanted to save
money and bought only the ones on-sale. The opposite may also be true. If Edward
stays at a Hampton Inn each time he goes out of town for business, we may
erroneously infer that he has a particularly favorable attitude toward Hampton Inn.
In fact, Edward may find Hampton Inn to be merely “acceptable” and prefer to stay
at the Hilton or Marriott. However, because he owns his own business and travels
at his own expenses, he may feel that Hampton Inn is “good enough”.
Consumers may have different attitudes toward a particular object, each
corresponding to particular circumstances.
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ALTERING CONSUMERS ATTITUDE

From the earlier section, especial the multi-attribute attitude model of
Fishbein, it may be concluded that there can be eight major ways to alter the
consumer’s attitude.
(a) By altering the consumer’s beliefs Consumers beliefs can be altered by
several ways. Marketers normally believe that shifting beliefs about products will in
effect derive more positive attitude and persuade the consumers in favour of their
products. Government, sometimes, deliberately looks to alter many myths, false
beliefs, and irrelevant predisposition. The advertisement of pulse polio vaccination
by superstar Amitabh Bachchan or the widespread HIV awareness campaigns are
some of the recent examples.
(b) By developing new beliefs Apart from altering the existing beliefs, new
beliefs can be formed by means of non-personal endorsements and genuine source
message. For example, to make consumers believe that the women’s Horlicks has a
special nutritional value suitable for busy ladies.
(c) By changing attribute importance Change attribute’s importance is far
more intricate than altering beliefs about a brand. Nonetheless, various marketers
have productivity used own strategies to contradict this. In general, it is a time-
taking procedure where marketers try to communicate to the consumers (by means
of understand commercials, teaser campaigns, and others promotion stuffs) that
the most significant attribute are nothing but the unique selling proposition of their
own brand .
(d) By changing ideal points Many new products/brands are comings up
with completely innovation traits. The marketers of the existing products are also
putting their effort to incorporate innovation some innovation traits in their
products. In this case, the marketers opt for changing consumers perception about
the ideal product attribute. This, undoubtedly, is not an easy job. Nonetheless, in
the present era of information snowed under, some level of innovation, proper
planning, and foreseeing the changing trend of perception of the customers can get
purpose served.
(e) Changing the relative evaluation of attributes When too many brands
clutters in the same product category, brands try to emphasize on some distinct
features or attributes. Sometimes, this can be done with product differentiation. For
example, Garnier is advertised as a root-nourishing shampoo, while Clinic All Clear
as an anti-dandruff shampoo.
(f) Changing brand beliefs: This is done by changing the attitude of the
consumer by altering beliefs or predispositions about a brand in the already
established product category. Sometimes, there may be disputes in terms of brand
perception. Example Actress Radhika’s Campaign for Coco Cola trying to change
the mindset of consumers.
(g) Adding new attribute: A new attribute can be identified by the marketers
about a product. They may also add an attribute for improvisation of the product.
For instance, Colgate, an almost hereditary brand in India, had added the content
‘active salt’, as salt helps the guns and teeth to be stronger. Close-up toothpaste
had also made a number of renovations like ‘micro granules’ and so on.
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(h) Shifting general brand rating This implies to changing the consumer’s
overall assessment of a brand depending on the changed notion about the product
and brand attributes. For example, due to rapid escalation of trendy designs and
value-added service of the mobile handsets, the product’s positioning has evolved
from being just a ‘communication medium’ to a ‘style statement’.
ATTITUDE CHANGE STRATEGIES.
Changing attitudes is generally very difficult, particularly when consumers
suspect that the marketer has a self-serving agenda in bringing about this change
(e.g., to get the consumer to buy more or to switch brands).
Changing affect. One approach is to try to change affect, which may or may not
involve getting consumers to change their beliefs. One strategy uses the approach
of classical conditioning try to “pair” the product with a liked stimulus. For example,
we “pair” a car with a beautiful woman. Alternatively, we can try to get people to
like the advertisement and hope that this liking will “spill over” into the purchase of
a product. For example, the Pillsbury Doughboy does not really emphasize the
conveyance of much information to the consumer; instead, it attempts to create a
warm, fuzzy image. Although Energizer Bunny ads try to get people to believe that
their batteries last longer, the main emphasis is on the likeable bunny. Finally,
products which are better known, through the mere exposure effect, tend to be
better liked--that is, the more a product is advertised and seen in stores, the more
it will generally be liked, even if consumers to do not develop any specific beliefs
about the product.
Changing Behaviour. People like to believe that their Behaviour is rational; thus,
once they use our products, chances are that they will continue unless someone is
able to get them to switch. One way to get people to switch to our brand is to use
temporary price discounts and coupons; however, when consumers buy a product on
deal, they may justify the purchase based on that deal (i.e., the low price) and may
then switch to other brands on deal later. A better way to get people to switch to our
brand is to at least temporarily obtain better shelf space so that the product is more
convenient. Consumers are less likely to use this availability as a rationale for their
purchase and may continue to buy the product even when the product is less
conveniently located. (Notice, by the way, that this represents a case of shaping).
Changing beliefs. Although attempting to change beliefs is the obvious way to
attempt attitude change, particularly when consumers hold unfavorable or
inaccurate ones, this is often difficult to achieve because consumers tend to resist.
Several approaches to belief change exist:
Change currently held beliefs. It is generally very difficult to attempt to change
beliefs that people hold, particularly those that are strongly held, even if they are
inaccurate. For example, the petroleum industry advertised for a long time that its
profits were lower than were commonly believed, and provided extensive factual
evidence in its advertising to support this reality. Consumers were suspicious and
rejected this information, however.
Change the importance of beliefs. Although the sugar manufacturers would
undoubtedly like to decrease the importance of healthy teeth, it is usually not
feasible to make beliefs less important--consumers are likely to reason, why, then,
would you bother bringing them up in the first place? However, it may be possible
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to strengthen beliefs that favor us--e.g., a vitamin supplement manufacturer may

advertise that it is extremely important for women to replace iron lost through
menstruation. Most consumers already agree with this, but the belief can be made
stronger.
Add beliefs. Consumers are less likely to resist the addition of beliefs so long
as they do not conflict with existing beliefs. Thus, the Soya industry has added
beliefs that Soya (1) is convenient and (2) can be used to make a number of creative
dishes. Vitamin manufacturers attempt to add the belief that stress causes vitamin
depletion, which sounds quite plausible to most people.
Change ideal. It is usually difficult, and very risky, to attempt to change ideals,
and only few firms succeed. For example, Several cosmetics have attempted to
change the ideal away from traditional beauty toward more unique self expression.
INDIVIDUAL AND SITUATIONAL FEATURES THAT AFFECT ATTITUDE CHANGE
The Elaboration Likelihood Model (ELM)
The ELM suggests that consumers will scrutinize claims more in important
situations than unimportant ones. Attitude change is determined by the individual
and the situation as well as the activities of the firm or social agency. There are
individual differences in how easily individuals will shift attitudes. Some people are
more stubborn or closed minded or less subject to social influence than are others.
Attitudes that are strongly held are more difficult to change than are those that are
weakly held.
The Elaboration Likelihood Model (ELM) is a theory about how attitudes are
formed and changed under varying conditions of involvement. The ELM suggests
that brand involvement (the degree of personal relevance of the brand, which may
change with the situation) and decision motivation are key determinants of how
information is processed and attitudes are changed.
This model suggests that there can be two routes to persuade consumers. One
is the central route or the ‘issue relevant’ route and the other is the peripheral or
the ‘non-issue relevant’ route. The central route has a focus on product attributes
or core functional benefits and the peripheral route is oriented towards ‘non-
attribute’ aspects like the celebrity and/or background used in the advertisement,
excellent packaging or free samples. The central route primarily seems readily
applicable to consumer durables as they are likely to commit the cognitive
resources of consumers, these (being high-involvement products). But even in
certain product categories of consumables, there is scope for the application of the
Elaboration Likelihood Model (ELM). For example, a brand like Colgate Total (which
promises a number of benefits) may appeal to consumers who may like information
on the chemicals used and their benefits. Mouthwash brands like Listerine and
Prudent can explain the rationale of the benefits they provide.
The following figure shows the application of the ELM model with regard to
attitude creation/change. MAO represents Motivation, Ability (to comprehend
several aspects of the given information) and Opportunity (time pressure or a wrong
media selection strategy).
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Consumers and
Durables
MAO
High Low
Central route Peripheral route
Focus on celebrity or
Attribute/ Benefit- Based
background in
Communication
advertisement
Figure 1: The ELM Model

The ELM suggests that for “unimportant” products, elaboration will be low.
However, for products which are either expensive or important for some other
reason (e.g., a pain reliever given to a child that could be harmed by using
dangerous substances), elaboration is likely to be more extensive, and the endorser
is expected to be “congruent,” or compatible, with the product. For example, a
basket ball player is likely to be effective in endorsing athletic shoes, but not in
endorsing automobiles.
ATTITUDE MODELS
• Structural Models of Attitudes
 Tri-component Attitude Model
 Multi-attribute Attitude Model
Both assume a rational model of human behaviour
• Other models of attitude formation
 Cognitive dissonance model
 Attribution theory
 Tri-component Attitude Model
• Cognitive component
 knowledge and perceptions acquired
 through direct experience and information from various sources.
• Affective component
 Emotions and feelings about the object
• Conative or Behavioural Component
 Action tendencies toward the object
Multi-Attribute Attitude Model
Attitude models examine the composition of consumer attitudes in terms of
selected product attributes or beliefs multi attribute models portray consumers'
attitudes with regard to an attitude object (product, service, etc...) as function of
consumer’s perceptions and beliefs about a particular product. According to
these models, attitude change can be brought about in four ways:
1. Changing the relative evaluation of attributes
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2. Changing brand beliefs

3. Adding an attribute
4. Changing the over-all brand rating
Example: TRA
Theory of Reasoned Action (TRA)
Adhering to the social psychology framework, the story of reasoned action was
developed by Martin Fishbein and Icek Ajzen in 1975 and 1980, respectively. TRA
not only focuses on the steps of attitude formation but also appraises social and
marketing parameters. TRA can be analyzed based on three broad constructs. They
are as follows:
i) Behavioural intention (BI)
ii) Attitude towards Behaviour (AB)
iii) Subjective Norm related to Behaviour (SN)
As per TRA, a person’s behavioural intention is a function of his attitude the
behaviour related to the product and subjective norms. As a matter of facts, the
behavioural intention calculates the consumers extent of intention to reveal certain
behavioural actions. Attitude comprises of beliefs about the underlying impact of
the behavioural multiplied by a person’s assessment of these effects. Subjective
norms, on the other hand, can be viewed as a blend of perception and
predisposition of pertinent reference groups and opinion leaders, and the persons
inclination to behave in compliance to their expectations and perceptions. Hence,
TRA model can be expressed by the following equation
BI=W1 (AB)+W2 (SN)
Where B=behaviour intention, AB= attitude towards performing the behaviour,

SN= the subjective norms, W1 and W2 are empirically determined weights through
regression analysis.
AB and SN can be derived straight from the survey of consumers. Hence TRA
can be presented diagrammatically based on the Fishbein’s theory (1980) as shown
on fig
• Beliefs about the

behaviour
• Evaluation of the Behavioural
behaviour intention
Attitude Behaviour
• Beliefs of what Subjective
others think norms
• What experts think
• Motivation to
comply with others
Figure 2: Theory of Reasoned Behaviour

Here attitude refers to the summation of various probable beliefs about
behaviour multiplied by weights of those to the customers subjective norms are
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mostly the social and environment pressures that the consumers come across as
restraining or forming parameters for developing behavioural intention. The beliefs
of customers, weighted by the importance one attribute to each of these opinions,
influence one’s behavioural intention. Hence, behavioural intention is a function of
both attitude towards behaviour and subjective norms towards that behaviour.
 Cognitive dissonance model
 Holds that discomfort or dissonance occurs when a consumer holds
conflicting thoughts about a belief or an attitude object.
 Post-purchase Dissonance
 Cognitive dissonance that occurs after a consumer has made a purchase
commitment
 Attribution theory
 Examines how people assign casualty to events and form or alter their
attitudes as an outcome of assessing their own or other people’s
behaviour.
 Examples
 Self-perception Theory
Self-Perception Theory: Consumers are likely to accept credit for successful
outcomes (internal attribution) and to blame other persons or products for failure
(external attribution).
Foot-In-The-Door Technique
It specifies that making people to agree to large request through small and
modest request first.
Door-in-the-face Technique
This is in contrast to the above, in which a large, costly first request that is
likely to be declined by a second one more realistic and less costly request.
1) Concept of Attitude
2) Functions of Attitude
3) Consumer attitude formation and change
4) Alteration of Attitude
5) Attitude change strategies
6) Individual and situational features that affect Attitude
7) Attitude models
1) What do you understand by consumer Attitude? Do you feel Attitudes can be
changed?
2) Explain TRA model
3) Sketch ELM Model and explain.
4) What are the functions of Attitude?
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5) List the strategies used to alter Attitude of consumers?

6) Detail on the Models of Attitude
20.6 SUMMARY
Attitudes are cognitions and not easily observable, but researchers can assess
them by asking questions or making inferences from Behaviour. Attitudes are
directed at objects, such as products, product categories, brands, services,
promotional messages, websites, media, retailers, and many other entities. We
must note that although attitudes generally lead to Behaviour, they are not
synonymous with behaviour. Sometimes, attitudes reflect either a favorable or an
unfavorable evaluation of the attitude object, which might or might not lead to
Behaviour. Attitudes might propel consumers toward a particular Behaviour or
repel them away from such. The lesson has focused on the functions of Attitude,
Components of Attitude, strategies to alter Attitude and Models of Attitude.
1) Celebrity endorsements and objects that bring positive feeling in attitude
formation of customers is classified in
A. Central cues B. Value cues C. Peripheral cues D. Value route
Ans: C
2) Influential model of attitude change and attitude formation is
A. Elaboration likelihood model B. Value likelihood model
C. Expectancy elaboration model D. Value elaboration model
Ans:A
3) All brand's related thoughts, images, experiences and attitudes towards a
particular brand is classified as
A. Word associations B. Sentence associations
C. Company associations D. Brand associations
Ans: D
4) When consumers are inclined to pay attention and process any information
they feel is relevant to achieving their goals. This state is termed
A. Involvement B. Motivation C .Attribution D. Participation
Ans: A
5) Smokers are faced with a problem. They like to smoke but they know that
smoking has been linked to cancer. Their solution seems to find a middle
ground by smoking low tar and nicotine cigarettes or by reducing the amount
they smoke This example would be an illustration of consumer response based
on which of the following?
A. Theory of cognitive dissonance B. Self-perception theory.
C. Social judgment theory. D. Balance theory.
Ans: D
1) http://www.zeepedia.com/read.php?attitude_change_strategies_resolving_two
_conflicting
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20.9 ASSIGNMENTS
1) Assume you wanted to create a favourable attitude among consumers of
products like McDonalds, KFC, Pizza Hut. What strategies would you apply
and justify?
2) Visit entertainment sites and describe an advertisement that attempts to
change the attitude.
Consumer Behaviour, Tata McGraw Hill, New Delhi
3) Srabanti Mukherjee (2013), Consumer Behaviour, Cengage Learning, New
Delhi, India.
1) Describe a situation in which you have changed your attitude towards a
product after watching an advertisement.
2) Find advertisements that illustrate each of the functions of Attitude.
20.12 KEY WORDS
Affective component
Attitude
Behavioural intention
Beliefs
Cognitive dissonance
Conative Component
Door-in-the-face technique
Ego-defensive function
Elaboration Likelihood Model
Foot-in-the-door technique
Knowledge function
Multi- Attribute Attitude Model
Self-Perception
Theory of Reasoned Action
Tri-component Attribute Model
Utilitarian function
Value-expressive function
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LESSON - 21
BUYING PROCESS
21.1 INTRODUCTION
Consumer Behaviour includes mental, physical and emotional activities which
people do or use when they want to select, purchase, use or throw away the
product or the service that provide their needs and demands (Jeddi et al., 2013).
Knowing these attitudes help marketers to get familiar with the way costumers
think and feel, as well as the way they choose various brands, products and etc.
Understanding consumer buying Behaviour can help marketers get more familiar
with their customers; moreover, it could be the basis for marketers to develop
appropriate marketing strategies. If marketers be familiar with consumer buying
process, they know how costumers try to get information about the thing they want
to buy, what factors can encourage them and what factors influence their decision
to buy it (Bakhshi, 2012). The classical principle of consumer Behaviour was a five-
step Decision-Making Model includes: 1. Identifying problem, 2. Information
Retrieval, 3.Evaluating Alternatives, 4.Selecting the product, 5.Evaluating after the
purchase (Bakhshi, 2012).
21.2 OBJECTIVES
• To identify the problem recognition process as the first stage of buying
process.
• To find the sources of information available for purchase decision
• To know the techniques of evaluation of alternatives
• To identify how alternatives are shortlisted and purchase made finally.
21.3 CONTENTS
Consumer Decision process and Problem recognition
Information Search
Alternative Evaluation and Selection
Outlet Selection and Purchase
CONSUMER DECISION PROCESS AND PROBLEM RECOGNITION
Consumer decision on purchasing a product involves evaluating attributes of a
set of products, brands or services and rationally select out of the choices available.
This decision making process was categorized as Nominal Decision making
(habitual decision making), Limited Decision making (internal search and select
from few alternatives), Extended decision making (extensive information search and
complex evaluation of several alternatives and focus on post purchase evaluation).
The buying process has certain stages which starts with problem recognition and
ends with post purchase evaluation.
Customers Becoming Loyal
A marketer to be aware of the process which is stated below which explains a
person’s pattern of becoming a loyal customer.
1) Awareness: They notice that you offer something that could help.
2) Interest: They decide to find out a little bit more.
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3) Evaluation: They see if you look credible.

4) Trial: They find out what it would be like to buy from you.
5) Adoption: They become a customer.
6) Loyalty: They keep buying, buy more, and/or tell others about you.
Figure 1:Making customers Loyal

The sequence explains how a marketer can create awareness (e.g Social
media), Create interest (e.g send pamphlets or Newsletters), evaluate options( e.g
Webinars), exercise trail (e.g attend meeting), adopt to the product (e.g product
customisation) and build loyalty (e.g loyalty bonus).
To understand the buying processes thoroughly these steps on making a loyal
customer to be considered while designing strategies.
Consumer Buying Process
The following image depicts the consumer buying process-
Figure 2:The Consumer Buying Process

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The 6 stages are:

1) Problem Recognition (awareness of need)--difference between the desired state
and the actual condition. Deficit in assortment of products. Hunger--Food.
Hunger stimulates your need to eat. For example,Hungry, want to go out and
eat, evoked set is
• Chinese food
• Indian food
• Burger king
2) Information search--
• Internal search, memory.
• External search if you need more information. Friends and relatives (word of
mouth). Marketer dominated sources; comparison shopping; public sources
etc.
A successful information search leaves a buyer with possible alternatives,
the evoked set.
3) Evaluation of Alternatives--need to establish criteria for evaluation, features
the buyer wants or does not want. Rank/weight alternatives or resume search.
May decide that you want to eat something spicy, Indian gets highest rank etc.
If not satisfied with your choice then go back to the search phase .Take the
help of Just Dial etc. Information from different sources may be treated
differently. Marketers try to influence by "framing" alternatives.
4) Purchase decision--Choose buying alternative, includes product, package,
store, method of purchase etc.
5) Purchase--May differ from decision, time lapse between 4 & 5, product
availability. A marketer should strongly make the customer buy the product.
6) Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive
Dissonance, have you made the right decision. This can be reduced by
warranties, after sales communication etc.
After eating an Indian meal, may think that really you wanted a Chinese meal
instead. The stage are explained in detail in the following section-
The Process of Problem Recognition
A day rarely passes in which a person does not face multiple problems that are
resolved by consuming products and services. Routine problems of depletion, such
as the need to get the Gas Cylinder, or the need to replace a frequently used item,
are readily recognized, defined, and resolved. The unexpected breakdown of a major
appliance such as a Washing Machine creates an unexpected problem that is also
easily recognized but is often more difficult to resolve. Recognition of other
problems, such as the need for a palm-sized electronic organizer, may take longer,
as they may be subtle and evolve slowly over time.
Feelings, such as boredom, anxiety, or the “blues,” may arise quickly or slowly
over time. Such feelings are often recognized as problems subject to solution by
purchasing Behaviour (I’m happy, I think I’ll go to a movie/to a restaurant). At
other times, such feelings may trigger consumption Behaviours without deliberate
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decision making. A person feeling restless may eat snack food without really
thinking about it. In this case, the problem remains unrecognized (at the conscious
level) and the solutions tried are often inappropriate (eating may not reduce
restlessness).
Marketers develop products to help consumers solve problems. They also
attempt to help consumers recognize problems, sometimes well in advance of their
occurrence .
The Nature of Problem Recognition
Problem recognition is the first stage in the consumer decision process.
Problem recognition is the result of a discrepancy between a desired state and an
actual state that is sufficient to arouse and activate the decision process. An actual
state is the way and individual perceives his or her feelings and situations to be at
the present time. A desired state is the way an individual wants to feel or be at the
present time. For example, you probably don’t want to be bored on Friday night. If
you find yourself alone and becoming bored, you would treat this as a problem
because your actual state (being bored) and your desired state (being pleasantly
occupied) were different. You could then choose to consume a television program,
rent a video, call a friend, go out, or take a wide array of other actions.
Marketers often attempt to cause consumers to recognize potential problems
for which the marketer has a solution. As this ad illustrates, this sometimes
involves making consumers aware of problems well before they arise.
The kind of action taken by consumers in response to recognized problems
relates directly to its importance to the consumer, the situation, and the
dissatisfaction or inconvenience created by the problem.
Without recognition of a problem, there is no need for a decision. when there is
no discrepancy between the consumer’s desired state (what the consumer would
like) and the actual state (what the consumer perceives as already existing). If as a
consumer, he wants to enjoy good music during week end and he gets tickets from
his friend, therefore there is no need to such an alternative.
On the other hand, when there is a discrepancy between a consumer desire
and the perceived actual state, recognition of a problem occurs, it means a problem
exists. For example, being actively work occupied (desired state) would generally
exceed being bored (actual state) and result in problem recognition.
i. The Process of Problem Recognition
Perceptions of the actual state are also determined by a consumer’s lifestyle
and current situation. Consumers’ lifestyles are a major determinant of their actual
state because that is how they choose to live given the constraints imposed by their
resources. Thus, a consumer who has to chose a raise a family, have significant
material possessions, and pursue a demanding career is likely to have little free
time for outdoor activities (actual state). The current situation-a day off work, a big
project due, or a sick child-also has a major impact on how consumers perceive the
actual situation.
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Willingness to Resolve Recognized Problems - The level of one’s desire to

resolve a particular problem depends on two factors: (1) the magnitude of the
discrepancy between the desired and actual states, and (2) the relative importance
of the problem. If the magnitude is less, the consumer may not pursue a different
alternative. If a consumer searches a herbal based shampoo locally manufactured
may settle with a branded shampoo, if the local product is not in shelf at the time of
purchase. Here the discrepancy between desired and actual has less deviation.
On the other hand, a large discrepancy may exist and the consumer may not
proceed to information search because the relative importance of the problem is
small. A consumer may desire a new independent Villa and own a Flat. The
discrepancy is large. However, the relative importance of this particular discrepancy
may be small compared to other consumption problems such as those related to
utilities, and food. Relative importance is a critical concept because all consumers
have budget constraints, time constraints, of both. Only the relatively more
important problems are likely to be solved. In general, importance is determined by
how critical the problem is to the maintenance of the consumer’s desired lifestyle.
(a)Types of Consumer Problems
Often, marketers need to trigger problem recognition in market segments.
Consumer problems may be either active or inactive. An active problem is one the
consumer is aware of or will become aware of in the normal course of events. An
inactive problem is one of which the consumer is not aware. The following example
should clarify the distinction between active and inactive problems.
As this example indicates, active and inactive problems require different
marketing strategies. Active problems only require the marketer to convince
consumers that its brand is the superior solution. Consumers are already aware of
the problem. In contrast, inactive problems require the marketer to convince
consumers that they have the problem and that the marketer’s brand is a superior
solution to the problem. This is a much more difficult task.
(b)Uncontrollable Determinants of Problem Recognition
A discrepancy between what is desired by a consumer and what the consumer
has is the necessary condition for problem recognition. A discrepancy can be the
result of a variety of factors that influence consumer desires, perceptions of the
existing state, or both.
The factors that can give a lead to problem recognition are Culture/
subculture, social status, reference group, household characteristics, financial
status/ expectations, previous decisions, individual development, emotions,
motives and situation.
If we consider Individual development, it causes many changes in the desired
state. As people age, their needs and desires evolve noticeably. For example, an
advertisement on new chocolate may evoke interest.
Government agencies and various consumer groups actively attempt to trigger
problem recognition, often in relation to the consumption of various products.
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(c)Marketing Strategy and Problem Recognition

Marketing managers have four concerns related to problem recognition. First,
they need to know the problems consumers are facing. Second, managers must
know how to develop the marketing mix to solve consumer problems. Third, they
occasionally want to cause consumers to recognize problems. Finally, there are
times when managers desire to suppress problem recognition among consumers.
The remainder of this chapter discusses these issues.
(d) Discovering Consumer Problems
A wide variety of approaches are used to determine the problems consumers
face. The most common approach undoubtedly is intuition; that is, a manager can
analyze a given product category and logically determine where improvements could
be made. Thus, soundless vacuum cleaners or lawnmowers are logical solutions to
potential consumer problems. The difficulty with this approach is that the problem
identified may be of low importance to most consumers. Therefore, several research
techniques are also employed.
A common research technique is the survey, which asks relatively large
numbers of individuals about the problems they are facing. This was the technique
used by Timberlane, as described earlier. A second common technique is focus
groups. Focus groups are composed of 8 to 12 similar individuals-such as male
college students, lawyers, or teenage girls-brought together to discuss a particular
topic. A moderator is present to keep the discussion moving and focused on the
topic, but otherwise the sessions are free flowing.
Both surveys and focus groups tend to take one of three approaches to
problem identification: activity analysis, product analysis, or problem analysis. A
fourth approach, human factors research, does not rely on surveys or focus groups.
Emotion research, a fifth effort, attempts to discover the role emotions play in
problem recognition.
Activity Analysis - focuses on a particular activity such as preparing dinner,
maintaining the lawn, or Washing Clothes. The survey or focus group attempts to
determine what problems consumers encounter during the performance of the
activity. For example, how to dispose the left over food.
Product Analysis – It is similar to activity analysis but examines the purchase
or use of a particular product or brand. Thus, consumers may be asked about
problems associated with using their regular shoes or laptop computers.
Problem Analysis - takes the opposite approach from the previous techniques.
It starts with a list of problems and asks the respondent to indicate which
activities, products, or brands are associated with those problems. For e.g. opinion
about the package of the product.
Human Factors Research - Human factors research attempts to determine
human capabilities in areas such as vision, strength, response time, flexibility, and
fatigue and the effect on these capabilities of lighting, temperature, and sound. This
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type of research can sometimes identify functional problems that consumers are
unaware of. For example, the difficulties in handling electronic gadgets.
Emotion Research – Understand customers through research on the role of
emotions in the decision process. Common approaches are focus group research
and one-on-one personal interviews that focus on either (1) the emotions associated
with a certain product or (2) the products associated with reducing or arousing
certain emotions..
(e) Responding to Consumer Problems
The problems of a consumer need to be identified, and accordingly the
manager may design the marketing mix to solve the problem. This can involve
developing a new product or altering an existing one, modifying channels of
distribution, changing pricing policy, ore revising advertising strategy. For example,
after completion of graduation, there are several organizations helps in career
identification or Higher education abroad. Companies need to help consumers to
identify their problem and provide a solution.
(f ) Helping Consumers identify Problems
There are instances when the manager will want to cause problem recognition
rather than react to it. Sometimes companies need to work on problem
identification itself and later move on to solution.
Generic versus Selective Problem Recognition- Two basic approaches to
causing problem recognition are generic problem recognition and selective problem
recognition. Generic problem recognition involves a discrepancy that a variety of
brands within a product category can reduce. Generally, a firm will attempt to
influence generic problem recognition when the problem is latent or of low
importance and one of the following conditions exists:
• It is early in the product life cycle.
• The firm has a high percentage of the market.
• External search after problem recognition to be limited.
• It is an industry wide cooperative effort.
Marketers will focus on this as they feel a distinctive factor in their product
can pull more customers. The products in this category provide the same value and
help to solve the problem and the distinctiveness is less.
Selective problem recognition involves a discrepancy that only brand can solve.
For example, Insurance policy to specifically available to suit the need of the
customer like House, life, Unit linked, Medical etc.,
Activating Problem Recognition - How can a firm influence problem
recognition? Recall that problem recognition is a function of the (1) importance and
(2) magnitude of a discrepancy between the desired state or the perceptions of the
existing state. Or the firm can attempt to influence the perception of the importance
of an existing discrepancy. Many marketing efforts attempt to influence the desired
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state; that is, marketers often advertise the benefits their products will become
desired by consumers.
INFORMATION SEARCH
Consumers after understanding the problem, it necessitates information
search both internally and externally. Once a problem is finalised, relevant
information from long-term memory is used to determine if a satisfactory solution is
already stored, It may be related to what the characteristics of potential solutions
are, what are appropriate ways to compare solutions, and so forth. This is internal
search, if a resolution is not reached through internal search, then the search
process is focused on external information relevant to solving the problem. This is
external search.
It is important to note that even in extended decision making with extensive
external search, the initial internal search generally produces a set of guides or
decision constraints that limit and guide external search. Such constraints might
be a price range, a set of manufacturers, “must have” performance criteria etc.
Many problems are resolved by the consumer using only previously stored
information. If, in response to a problem, a consumer recalls a single, satisfactory
solution (brand or store), no further information search or evaluation may occur.
The consumer purchases the recalled brand and nominal decision making has
occurred. For example, a consumer who catches a cold may recall that syrup
provided relief in the past. He or she then purchases same syrup at the nearest
store without further information search or evaluation.
Likewise, a consumer may notice a new product in a store because of the
attention-attracting power of a point-of-purchase display. He or she reads about the
attributes of the product and recalls an unresolved problem that these attributes
would resolve. The purchase is made without seeking additional information. This
represents limited decision making, involving mainly internal information.
As we move into extended decision making, the relative importance of external
search tends to increase. External information can include,
• The opinions, attitudes, Behaviours, and feelings of friends, neighbors,
relatives, and, increasingly, strangers contacted on the Internet.
• Professional information that is provided in pamphlets, articles, books,
websites, and personal contacts.
• Direct experiences with the product through inspection, trial, or observation.
• Marketer-generated information presented in advertisements, websites, and
displays and by sales personnel.
(i) Types of Information Sought
A consumer decision needs information on the following:
1) The appropriate evaluative criteria for the solution of a problem.
2) The existence of various alternative solutions.
3) The performance level or characteristics of each alternative solution on each
evaluative criterion.
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(a) Evaluative Criteria

Thus, one potential objective of both internal and external search is the
determination of appropriate evaluative criteria. Government agencies and
consumer organizations want consumers to use sound evaluative criteria such as
the nutrition content of foods. Marketers want consumers to use evaluative criteria
that match their brand’s strengths. Thus, both marketers and government agencies
provide information designed to influence the evaluative criteria used by
consumers. If consumers want to purchase Computers, they prepare a long list of
points to be considered to get a competitive price to decide on the brand finally
shortlisted.
(b) Generate Alternatives
If you are initially satisfied with the evoked set, information search will be
focused on the performance of the brands in the evoked set on the evaluative
criteria. Thus, the evoked set is of particular importance in structuring subsequent
information search and purchase.
The brand you found completely unworthy of further consideration is a
member of what is called the inept set. Brands in the inept set are actively disliked
or avoided by the consumer. Positive information about these brands is not likely to
be processed even if it is readily available.
The evoked set is substantially smaller than the awareness set. Because the
evoked set generally is the one from which consumers make final evaluations and
decisions, marketing strategy that focuses only on creating awareness may be
inadequate. Thus, marketers must strive to have consumers recall their brand in
response to a recognized problem and consider the brand a worthy potential
solution.
(c) Alternative Characteristics
To choose among the brands in the evoked set, the consumer compares them
on relevant evaluative criteria. This process requires the consumer to gather
information about each brand on each pertinent evaluative criterion. In our
example of a computer purchase, you might collect information on the price,
memory, processor, weight, screen clarity, and software package for each brand you
are considering.
(ii) Sources of Information
These represent the five primary sources of information available to consumers.
• Memory of past searches, personal experiences, and low-involvement learning.
• Personal sources, such as friends, family, and others.
• Independent sources, such as magazines, consumer groups, and government
agencies.
• Marketing sources, such as sales personnel, and advertising.
• Experiential sources, such as inspection or product trial.
Thus, a purchase decision requires a subset of decisions concerning
information seeking.
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Internal information is the primary source used by most consumers most of

the time (nominal and limited decision making). However, note that information in
long-term memory was initially obtained from external sources. Thus, a consumer
may resolve a consumption problem using only or mainly stored information. At
some point, however, the individual acquired that information from an external
source, such as direct product experience, friends, or low-involvement learning.
(iii) Information Search on the Internet
The Internet is becoming an important source of information as well as a place
to purchase products and services. Marketers often use traditional mass media ads
to encourage consumers to visit their websites. The Internet is altering consumer
information search in ways that are not yet fully understood. Consider the
prediction of one expert:
More than half the population now uses the Internet, and more than a third of
all consumers report using it for product/service information searches. Surveys
support this by indicating that the Internet is a preferred source of product-related
information among Internet users. Clearly, it has become an important information
source for purchase decisions.
A home page or Internet presence site (IPS) is a website developed and
maintained by a firm (or another organization or individual) that provides product
and company data (or independent data from government and private sources).
Among those consumers who had used the Internet in the past six months, more
than 75 percent had visited a company website and the reasons for these visit
included.
(iv) Amount of External Information Search
Marketing managers are particularly interested in external information search,
as this provide them with direct access to the consumers. How much external
information search do consumers actually undertake?
Different measures of external information search have been used: (1) number
of stores visited, (2) number of alternatives considered, (3) number of personal
sources used, and (4) overall or combination measures. Each of these measures of
search effort assesses a different aspect of Behaviour.
(v) Costs versus benefits of external search
The benefits of external information search can be tangible, such as a lower
price, a preferred style, or a higher- quality product. Or the benefits can be
intangibles- reduced risk, greater confidence in the purchase, or even providing
enjoyment. Perceptions of these benefits are likely to vary with the consumers
experience in the market, media habits, and the extent to which the consumers
interact with others or belong to differing reference groups.
Furthermore, acquisition of external information is not free, and consumers
and may engage in limited search because the costs of search exceed the perceived
benefits. The costs of search can be both monetary and non-monetary. Monetary
costs include the cost of transportation, parking, lost wages, charges for child care,
and so forth. Non-monetary costs of search are less obvious but may have an even
greater impact than monetary costs. Almost every external search effort involves
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time physical and psychological effort. Frustration and conflicts between the search
task and other more desirable activities, as well as fatigue, may shorten or
otherwise alter the search effort.
(vi) Market characteristics
Market characteristics include the number of alternatives, price range, store
distribution, and information availability. It is important to keep in mind that it is
the consumer’s perception or beliefs about, the market characteristics that
influence shopping Behaviour.
When there are more number of alternatives (products, stores brands)
available to resolve a particular problem, the more external search there is likely to
be. At the extreme, there is no need to search for information in the face of a
complete monopoly such as utilities or driver licenses.
(vii) Product Characteristics
Product differentiation – features and quality variation across brands – is
associated with increased external search.
In addition, consumers appear to enjoy shopping for positive products – those
whose acquisition results in positive reinforcement. Thus, shopping for flowers and
plants, dress clothing, sports equipment, and cameras is viewed as a positive
experience by most consumers.
(viii) Consumer Characteristics
A variety of consumer characteristics affect perception of expected benefits,
search costs, and the need to carry out a particular level of external information
search.
A satisfying experience with a particular brand is a positively reinforcing
process. It increases the probability of a repeat purchase of that brand and
decreases the likelihood of external search. As a result, external search is generally
greater for consumers who have limited purchase experience with brands in a
particular product category.
Consumers tend to form general approaches or patterns of external search.
These general approaches are termed shopping orientations. While individuals will
exhibit substantial variation from the general pattern across situations and product
categories, many do take a stable shopping approach to most products across a
wide range of situation. Consumers who are highly involved with a product category
generally seek information relevant to the product category on an ongoing basis.
(ix) Perceived Risk
The perceived risk is associated with unsatisfactory product performance, either
instrumental or symbolic, increases information search prior to purchase. Higher
perceived risk is associated with increased search and greater reliance on personal
sources of information and personal experiences.
Perceived risk is a function of the individual, the product, and the
situation. It varies from one consumer to another and for the same consumers from
one product to another and from one situation to another. Perceived risk is high for
products whose failure to perform as expected would results in a high
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• Social cost (e.g., a new suit that is not appreciated by one’s peers)
• Financial cost (e.g., an expensive vacation during which it rained all the time).
• Time cost (e.g., an automobile repair that required the car to be taken to the
garage, left, and the picked up later).
• Effort cost (e.g., a computer that is loaded with important software before the
hard drive crashes).
• Physical cost (e.g., a new medicine produces a harmful side effect).
(x) Situation Characteristics

Situational variables can have a major impact on search behaviour. For
example, recall that one of the primary reactions of consumers to crowded store
conditions is to minimize external information search. Temporal perspective is
probably the most important situational variable with respect to search behaviour.
As the time available to solve a particular consumer problem decreases, the amount
of external information is reduced.
Gift-giving situations (task definition) tend to increase perceived risk, which,
as we have seen, increases external search. Likewise, multiple-item purchase tasks
such as wedding purchase will increase the level of information search. Shoppers
with limited physical or emotional energy (antecedent state) will search for less
information than others. Pleasant physical surroundings increase the tendency to
search for information, at least within that outlet. Social surroundings can increase
or decrease search, depending on the nature of the social setting.
ALTERNATIVE EVALUATION AND SELECTION
It is to be noted that shoppers involve in little or no evaluation before
purchase.
How Consumers Make Choices
Any attempt to describe a complex, nonlinear process such as consumer
choice necessarily simplifies it and removes much of it richness. Thus, our
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discussion will make consumer choice seem more logical, structured, rational, and
deliberated than it often is. Fortunately, we have all made numerous consumer
choices and we know that they are frequently circular, emotional, incomplete, and
based on expediency rather than optimality. We also know that the situation plays
an important role in the processes we use to make consumer choices. For example,
when we are tired or hurried, we are very likely to use different choice processes
than we would if we had more energy or time.
A substantial amount of research and marketing strategy has assumed a
rational consumer decision maker with well-defined, stable preferences. The
consumer is also assumed to have sufficient skills to calculate which option will
maximize his or her value, and will choose on this basis. This approach is referred
to as rational choice theory. The task in rational choice theory is to identify or
discover the one optimal choice for the decision confronting the decision maker.
The decision maker simply collects information on the levels the attributes of the
alternatives, applies pre-existing values to those levels, applies the appropriate the
choice rule, and the superior option is revealed.
Figure 3:Alternative Evaluation and Selection

In reality, all the consumers have bounded rationality – a limited capacity for
processing information. Moreover, consumers often have goals that are different
from, or in addition to, selecting the optimal alternative.
(a)Affective Choice
The purchase of Refrigerator is an example of an attribute – based choice,
discussed in the following section. It was based on a conscious evaluation of
various features of the refrigerator considered. The purchase of the dress is
primarily an affective choice. Affective choices tend to be more holistic in nature.
Affective choice is most likely when the underlying motive is consummatory
rather than instrumental. Consummatory motives underlie behaviour that are
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intrinsically rewarding to the individual involved. Instrumental motives activate

behaviour designed to achieve a second goal. For example, one person might watch
a Movie for the pleasure of watching (consummatory motive), whereas another
might watch the same Movie to be able to appear “with it” to his or her friends
(instrumental motive).
(b)Attribute – Based versus Attitude – Based Choice Processes
Attribute-based choice requires the knowledge of specific attributes at the
time the choice is made, and it involves attribute-by-attribute comparisons across
brands.
Attitude-based choice involves the use of general attitudes, summary
impressions, intuitions, or heuristics; no attitude-by-attitude comparisons are
made at the time of set to be formed using attitude-based processing, with the final
choice being made on the basis of a brand-by-brand comparison on a few important
attributes such as price and colour.
A. Evaluation Criteria
Evaluation criteria are the various dimensions, features, or benefits a
consume looks for in response cost, speed, memory, operating system, display and
warranty. These would be your evaluation criteria. Someone else could approach
the same purchase with an entirely different set of evaluation criteria.
Evaluation criteria are typically product features or attributes associated with
either benefits desired by customers or the costs they must incur. For example,
consumers use Herbal Hair Oil because of the benefits attached with the product.
In such cases, marketers should emphasize the benefit the feature will provide the
consumer, not just the feature itself. Evaluative criteria can differ in type, number,
and importance. The type of evaluative criteria a consumer uses in a tangible cost
and performance features to intangible factored such a style, taste, prestige,
feelings generated and brand image.
Measurement Evaluative Criteria
It is often difficult to determine which criteria they are using in a particular
brand-choice decision, particularly if emotion are feeling are involved. This is even
more of a problem when trying to determine the relative importance they attach to
each evaluative criterion. In the research that led to the development of sunbeam’s
new food processor line, consumers readily described their desired product feature
and benefits. However direct questioning is not always as successful.
Indirect measurement techniques differ from direct in that they assume
consumers will not or cannot state their evaluative criteria. Hence, frequent use is
made of indirect methods such as projective techniques, which allow the
respondent to indicate the criteria someone else might use.
Perceptual mapping is another useful indirect technique for determining
evaluation criteria. First, consumers judge the similarity of alternative brands. This
generally involves the consumer looking at possible pairs of brands indicating
which pair is most similar, and so forth until all paired are ranked.
Determination of Consumers’ Judgments of Brand Performance of
Specific Evaluation Criteria A variety of method are available for measuring
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consumers’ judgments of brand performance on specific attributes. These include

rank ordering scales, semantic differential scales, and Likert scales.
i) Individual Judgment And Evaluative Criteria
(a)Accuracy of Individual Judgments
The average consumer is not adequately trained to judge the performance of
competing brands on complex evaluative criteria such as quality or durability. For
more straightforward criteria, however, most consumers can and do make such
judgments. The ability of an individual to distinguish between similar stimuli is
called sensory discrimination. This could involve such variables as the sound of
stereo systems, the taste of food products, or the clarity of display screens. The
minimum amount that one brand can differ from another with the difference still
being noticed is referred to as the just noticeable difference.
(b) Use of Surrogate Indicators
Consumers frequently use an observable attribute of a product to indicate the
performance of the product on a less observable attribute. For example, most
consumer use price as a guide to the quality of at least some products. An attribute
used to stand for or indicate another attribute is known as a surrogate indicator.
Consumers’ reliance on an attribute as a surrogate indicator of another
attribute is a function of its predictive value and confidence value. Predictive value
refers to the consumers perception that one attribute is an accurate predictor of the
other. Confidence value refers to the consumers’ ability to distinguish between
brands on the surrogate indicator. Thus, a consumer might believe that ingredients
accurately indicate (high predictive value) the nutritional value of foods but not use
them as indicators because of an inability to make the complex between-brand
comparison (low confidence value).
Price has been found to influence the perceived quality of shirts, radios, and
aftershave lotion, appliances, carpeting, automobiles, and numerous other product
categories. These influences have been large, but as might be expected, they decline
with increases in visible product differences, prior product use, and additional
product information. Unfortunately, for many products the relationship between
price and functional measures of quality is low. Thus, consumers using price as a
surrogate for quality frequently make suboptimal purchases.
Brand name often is used as a surrogate indicator of quality. It has been found
to be very important when it is only information the consumer has available and to
interact with or, on occasion, replace the impact of price. Warranties are another
cue that consumers use to indicate quality. The longer and more inclusive the
warranty, the better the quality of the product is assumed to be. Advertised brands
and service are often assumed to be superior to unadvertised brands. Likewise,
national brands are frequently considered to be superior to store brands.
Packaging, colour, and style have also been found to affect perceptions of quality.
Evaluation Criteria, Individual Judgments, and Marketing Strategy
Marketers must also identify and react to the ability of individuals to judge
evaluation criteria, as well as to their tendency to use surrogate indicators. For
example, most new consumer products are initially tested against competitors in
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blind tests. A blind test is one in which the consumer is not aware of the product
and to determine if an advantage over a particular competitor has been obtained
without the contaminating, or halo, effects of the brand name or the firm’s
reputation. Marketers also make direct use of surrogate indicators.
OUTLET CHOICE AND PURCHASE
There are three basic sequences a consumer can follow when making a
purchase decision: (1) brand (or item) first, outlets second; (2) outlet first, brand
second; or (3) brand and outlet simultaneously.
On the basis of this information, the consumer may select a brand and
purchase it from the outlets with the lowest price (or easiest access, best image,
service, or other relevant attributes).
Table 1 Marketing Strategy Based on the Consumer Decision Sequence
Levels in the channel
Decision Sequence Retailer Manufacturer
Outlet first, Image advertising. Distribution in key outlets.
brand second Margin management on shelf Point-of-purchase, shelf
space, displays. spacing, and position.
Location analysis. Programs to strengthen
Appropriate pricing. existing outlets.
Brand first, Many brands or key brands. More exclusive distribution.
outlet second Co-op ads featuring brands. Brand availability advertising
Pricing specials on brands. (Yellow pages).
Yellow Pages listings under Brand image management.
brands.
Based on point of Sale displays, price reduction, promotional deals, outlet
atmosphere, stocks available, sales persons deployed, the purchase of a product or
a brand is decided. Once the consumer has selected the brand and the shop, the
purchase transaction is completed. Marketers need to reduce the cumbersome
purchase formalities due to advent of on line shopping mode. Consumers moving
out of home for stores to purchase is getting reduced even in recent future, petrol
and diesel are going to be home delivered. It is also to be noted that not only the
external factors are responsible for the final purchase of a product but the product
itself. The marketers need to help consumers in recognising their problem,
information search, choices for comparison and final purchase.
• Consumer Decision process and Problem recognition-Process-Determinants-
Marketing Strategy
• Information Search – Internal and External- marketing Strategies
• Alternative Evaluation and Selection
• Outlet Selection and Purchase
1) What is problem recognition?
2) How can firm cause problem recognition?
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3) Identify the differences between active and inactive problem.

4) Enumerate the role of emotion in the consumer decision process.
5) Explain in detail the buying process
6) Explain the evaluative criteria and how do they relate to information search.
7) What roles do the evoked set, inert set and inept set play in a consumer’s
information search?
8) Discuss about the methods available to measure judgments on brand
performance
9) What in-store characteristics can persuade brand and product choice. Give
Suitable examples.
21.6 SUMMARY
The buying process starts with problem recognition and proceeds to
information search. Consumers engage in internal and external search for (1)
appropriate evaluative criteria, (2) the existence of potential solutions, and (3) the
characteristics of potential solutions. However, extensive search generally occurs
for only a few consumption decisions. Finally, even though the focus is on
searching for functional information, emotions and feelings are more important in
many purchases. After effective information search, criteria based evaluation
conducted ad alternatives generated are subjected to deep analysis. Finally,
purchase transaction is done.
1) In 'stages of adoption process', customer decides to become regular user in
A) awareness stage B) interest stage
C) evaluation stage D) adoption
Ans: D
2) Listing alternatives that will solve the problem at hand and determining the
characteristics of each occurs during which stage of the final consumer’s
decision process?
A) Information search B) Purchase
C) Evaluation of alternatives D) Post purchase
Ans: C
3) The five-stage model of the consumer buying process includes all of the
following stages except ________.
A) problem recognition B) information search
C) social interaction D) purchase decision
Ans: C
4) ___________________ constitutes moderate consumer Behaviour, but still
involves time and effort searching for and comparing alternatives.
A) Limited decision making B) Need recognition
C) Routine decision making D) Post purchase evaluation
Ans: A
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1) http://managementation.com/5-stages-of-consumer-buying-decision-process/
2) http://www.yourarticlelibrary.com/consumers/top-5-stages-of-consumer-
buying-process/
21.9 ASSIGNMENTS
1) Compare two purchases you made recently. What uncontrollable factors
helped you to understand the problem?
2) Visit the websites of three firms in each product category and report on the
information available. (a) Digital cameras (b) Computers
Consumer Behaviour, Tata McGraw Hill, New Delhi.
1) Identify two products for which surrogate indicators may be used as evaluative
criteria in a brand choice decision.
2) Monitor the social media and prepare a report as to how they attract the
consumers to purchase their brands or products.
21.12 KEY WORDS
Active problem
Actual state
Desired State
Generic problem recognition
Evaluative Criteria
Perceptual mapping
Sensory discrimination
Problem recognition
Shopping orientations
Perceived risk
Socla cost
Financial cost
Time cost
Effort cost
Physical cost
Temporal perspective
Task definition
Antecedent state
Affective choice
Consummatory motives
Instrumental Motives
Rational Choice Theory
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LESSON - 22
POST PURCHASE CONSUMER BEHAVIOUR

22.1 INTRODUCTION
Organisations focus not only on closing the purchase transaction but also to
increase the satisfaction, and retention of key customers. Therefore it is essential to
analyse the post purchase processes that produce customer satisfaction and
commitment the marketing strategies these processes suggest.
The indicators of customer satisfaction after purchases are followed by a
phenomenon called post purchase dissonance. This occurs when a consumer
examines the purchase he or she has made. The consumer keeps or returns the
product without using it, in case the consumer decided not to use the product.
Most purchases are followed by product use, even if purchase dissonance is
present. The result of all these processes is a final level of satisfaction, which in
turn can result in a loyal, committed customer, one who is willing to repurchase or
customer who switches brands or discontinues using the product category or a
particular brand.
22.2 OBJECTIVES
• To recognize the post purchase process as a major indicator for designing
marketing strategies.
• To analyse the factors that cause positive Behaviour in consumers after
purchase of products.
• To understand the concept of post purchase dissonance.
• To find out when customers are satisfied or dissatisfied.
22.3 CONTENTS
Post purchase Process
Post Purchase dissonance
Product disposition
Purchase Evaluation and Customer satisfaction
POST PURCHASE PROCESS
According to Post Purchase Behaviour Theory, there is a inclination for
individuals to seek consistency among their cognitions (i.e., beliefs, opinions). When
an inconsistency between attitudes or behaviour (dissonance) occurs, some
modifications must be made in order to change this behaviour. In the case of
incongruity between attitudes and behaviour, it is most likely that the attitude will
change to accommodate the behaviour.
Wells and Prensky (1996: 320) comment that a person will experience feelings
of discomfort, known as cognitive dissonance, when he or she has knowledge, holds
attitudes, or takes actions that conflict with one another. When dissonance occurs
the individual will seek to reduce it by changing the inconsistent cognitive
elements. Dylan (2003: 1) shows that cognitive dissonance is a theory of human
motivation that asserts that it is psychologically uncomfortable to hold
contradictory cognitions.
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Figure 1: Post Purchase Consumer Behaviour

Once customers or prospects are motivated to suit their needs and wants, the
purchase process begins. Based on certain standards they have established in their
own minds, they assess various alternative products or services. If none of the
alternatives meets their evaluation criteria, they may experience cognitive
dissonance in the form of post purchase doubt and concern or anxiety about the
wisdom of the purchase. This is known as post purchase dissonance/cognitive
dissonance. It is most likely to happen among individuals with a tendency to
experience anxiety, after an irreversible purchase, when the purchase was
important to the consumer, and when it involved a difficult choice between two or
more alternatives. An important role of marketers is to assist people cope with
dissonance by applying their rationality in their purchase decision.
The explanation for the model is discussed in detail which exemplifies all the
factors mentioned in the model-
Once a purchase has been made by a customer, normal process is that he
would use the product, evaluate the product based on his satisfaction and then he
displays a Behaviour that might end up as a committed customer, repeat purchase,
increase the usage of the product, discontinued use and decide to switch to some
other brand. On the other hand, after purchase of a product it might result either
in dissonance or non usage of a product. After the product’s performance, a
complaint is made if there are any issues related to matching the product with the
expectations of the customer. The experience of buying and using the product
provides information that the consumer will use in future decision making. In some
cases, the consumer will be pleased with the experience and will buy the same
product from the same supplier again. In other cases, the consumer will be
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disappointed and may even return or exchange the product. In general, the post-
purchase process includes four steps: decision confirmation, experience evaluation,
satisfaction or dissatisfaction, and future response.
POST PURCHASE DISSONANCE
This is a common consumer reaction after making a difficult, permanent
decision. Doubt or anxiety of this type is referred to as post purchase dissonance.
The probability of a consumer experiencing post purchase dissonance, as well as
the magnitude of such dissonance, is a function of
• The degree of commitment or irrevocability of the decision. The easier it is to
alter the decision, the less likely the consumer is to experience dissonance.
• The importance of the decision to the consumer. The more important the
decision, the more likely dissonance will result.
• The difficulty of choosing among the alternatives. The more difficult it is to
select from among the alternatives, the more likely the experience and
magnitude of dissonance. Decision difficulty is a function of the number of
alternatives considered, the number of relevant attributes associated with each
alternative, and the extent to which each alternative offers attributes not
available with the other alternatives.
The individual’s tendency to experience anxiety. Some individuals have a
higher tendency to experience anxiety than do others. The higher the tendency to
experience anxiety, the more likely the individual will experience post purchase
dissonance. Hawkins et al. (2001: 629)
After the purchases made, the consumer may utilize one or more of the
following approaches in reduce dissonance:
• Increase the desirability of the brand purchased.
• Decrease the desirability of rejected alternatives.
• Decrease the importance of purchase decisions.
• Reverse the purchase decisions.
Although post purchase dissonances maybe reduced by internal re-
evaluations, searching for additional external information that serves to confirm the
wisdom of a particular choice is also a common strategy. Normally, information that
supports the consumer’s choice acts to strengthen confidence in the correctness of
the purchase decision.
To build customer confidence is choosing their brand, many marketers of
consumer durables such as major appliances and automobiles send purchasers
direct-mail materials designed in large part to confirm the wisdom of the purchase.
Local retailers can place follow-up calls to make sure the customer is not
experiencing any problems with the car or appliance and to reduce any dissonance.
Even a simple message such as “Thanks for Visiting”, “Is there anything we can do
to help you enjoy your food ?” can reduce dissonance and increase satisfaction.
A concept very similar to post purchase dissonance is consumption guilt.
Consumption guilt occurs when negative emotions or guilt feelings are aroused by
the use of a product or a service.
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PRODUCT DISPOSITION
Product Use
Most consumer purchases involve nominal or limited decision making and
therefore arose little or no post purchase dissonance. Instead, the purchaser or
some other member of the household uses the product without first worrying about
the wisdom of the purchase.
Marketers need to understand how consumers use their products for a variety
of reasons. Understanding both the functional and symbolic ways in which a
product is used can lead to more effective product designs. For example, marketers
observe the consumers like for Eg., Milo distributed the products in Schools and
understood straight how do they enjoy the taste of Milo and what changes are
required further.
Product Nonuse
Product non use occurs when a consumer actively acquires a product that is
not used. For many products and most services, the decision to purchase and to
convince on made simultaneously. A person who orders a meal in a restaurant is
also deciding to eat the meal at the time. However, a decision to purchase food at a
supermarket requires a second decision to prepare and consume the food. The
second decision occurs at a different point in time and in a different environment
from the first. For example, a point of purchase display featuring a new food item
shown as part of an appealing entrée might cause a consumer to imagine an
appropriate usage situation and to purchase the product.
Disposition
Disposition of the product or the products container may occur before, during
or after product are or for product that are completely consumed, such as an ice
cream cone, no disposition maybe involved. This after use containers and packing
causes greater challenges.
Millions of pounds of products packages are disposed of everyday. These
containers are throws way a garbage or litter, used in some capacity by the
consumer or recycled. Creating packages that utilizes normal amount of resources
is important for economic reasons as well as being a matter of social responsibility.
Many firms are responding to this issue as the examples below illustrate:
• Rubber maid repositioned its trash barrel line to a recycling container line. The
new line has four model designed to store newspaper, cans, bottles and yard
waste.
• Procter and gamble uses recycled paper in 80% of its product packaging and
its packaging liquid and span, tide, cheer and downy in container made from
recycled packages.
Product Disposition and Marketing Strategy
Why should a marketing manager be concerned about the disposition of a
used product? The cumulative effect that these decisions have on the quality of the
environment on the current and future generation is of much concern. However,
there are also short term economic reasons for concern.
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Disposition Alternatives
There are five major ways in which disposition decisions can affect a firm’s
marketing strategy.
• First in most durable goods, consumers are reluctant to purchase a new item
until they have ‘received their money worth’.
• Second disposition sometimes must occur before acquisition of a replacement
because of the space for financial limitations.
• Third, frequent decisions by consumers to sell trade or give away used
products may result in a large used-product market that can reduce the
market for new products.
• Fifth reason is that environmentally sound disposition decisions benefit society
as a whole
Figure 2: Product Disposition Alternatives

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The different alternatives of disposition also are a part of a consumer’s

decision and when that becomes a shortcoming, the consumers may not prefer the
product itself.
PURCHASE EVALUATION AND CUSTOMER SATISFACTION
After buying a product, consumers formally or informally evaluate the outcome
of the purchase. In particular, they consider whether they are satisfied with the
experience of making the purchase and with the good or service they bought. A
consumer who repeatedly has favourable experiences may develop loyalty to the
brand purchased.
Post-buying assessment involves a customer’s evaluation of the performance of
the product or service, in relation to the criteria, once it has been bought, i.e. it is
the customer’s perception of the outcome of the consumption process. The post
buying phase involves different forms of psychological processes that customers
can experience after buying something. After purcahse, the customer discovers
something about a product or service, stores this new knowledge in long-term
memory, modifies relevant attitudes, and is prepared for the next decision process
with an improved base of knowledge (Cant et al. 2002).
Consumers evaluation of a purchase can be influenced by the purchase
process itself, post-purchase dissonance, and Product use and product/package
disposition. Further the outlet or the product or both may be involved in the
evaluation. Consumers may evaluate each aspect of the purchase, ranging from
information availability to price to retail service to product performance.
There are three possible outcomes of post-purchase evaluation- (a) actual
performance matches expectations, leading to a neutral feeling; (b) performance
exceeds expectations, causing what is known as positive disconfirmation of
expectations (which leads to satisfaction); (c) performance is below expectations,
causing negative disconfirmation of expectations and dissatisfaction.
The Evaluation Process
A particular alternative such as a product, brand, or retail outlet is selected
because it is thought to be the overall choice than other alternatives considered in
the purchase process. Whether the particular item is selected because of its
presumed superior functional performance or because of some other reason such
as generalized liking of the item or outlet, the consumer has a level of expected
performance for it.
Outlet or brand whose performance confirms a low performance in comparison
to the expectation generally results in neither satisfaction nor dissatisfaction but
rather what can be termed as dissatisfaction. That is the consumer is not likely to
feel disappointment or engage in complaint Behaviour. Hence the performance will
not reduce the likelihood that the consumer will search for a better alternative for
the problem arises.
A brand whose perceived performance fails to confirm expectations generally
produces dissatisfaction. The discrepancy between performance and expectation is
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sufficiently large, or if initial expectation for the consumer may restart the entire
decision process.
Figure 3: Perceived Performance, Satisfaction and Expectation level
Product performance that exceeds expected performance will generally result

in the satisfaction and sometimes in commitment, it means that consumer is
enthusiastic about a particular brand and is somewhat immune to actions by
competitors. The need to develop realistic consumer expectation poses a difficult
problem for the Companies. For a brand or outlet selected the consumer must view
it as superior with the relevant combination. Therefore the marketing manager
naturally wants to emphasise its positive aspects. Negative evaluation can result in
brand switching, like Unfavorable word-of-mouth communication, and complaint
Behaviour. Thus the marketing manager must balance enthusiasm for the product
with a realistic view of the products attribute.
Determinants of satisfaction and dissatisfaction
Because performance expectations and actual performance are major factors
in the evaluation process, we need o understand the dimensions of product and
service performance. A major study of the reasons customers switch service
providers found competitors actions to be relatively minor cause.
According to Cant et al. (2002: 183), a positive assessment of the purchase
decision results in post-buying satisfaction. Satisfaction occurs when the outcome,
which may be a product, brand or store, and the conditions surrounding its
purchase, are matched with the customer’s expectations. Certain indicators of
satisfaction or dissatisfaction are listed below-
• Core Service failure.
• Service encounter failure
• Pricing
• Inconvenience in hours of operation or system followed
• Expensive service failure
• Competitors
• Safe or unhealthy practices
• Switching
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Consumers have particularly negative reaction to delays over which they

believe the service provider has control and during which they have little to occupy
their time, obviously form should attempt to minimise the delays encounter by their
customers. If delay is unavoidable, the cost should be clearly indicated as well as
accurate estimate of the duration. To the extent possible, consumer should be
provided with activities or entertainment during the delay.
Other research has found that negative performance on a feature such as the
waiting time or ease of use has a stronger effect on satisfaction than does positive
performance on that same feature. This suggests that both products and services
focuses on meeting expectation across all relevant features before maximizing
performance on a few.
For many products, there are two dimensions to performance: Instrumental
and Expressive or Symbolic.
Instrumental Performance relates to the physical functioning of the product.
Symbolic performance relates to aesthetic image enhancement performance. For
example, durability of a sport suit is an aspect of instrumental performance,
Wedding hairdo represents symbolic performance. Complete satisfaction requires
adequate performance on both dimensions.
In addition to symbolic and instrumental performance, products also provide
affective performance. Affective performance is the emotional response that owning
or using the product or outlet provider. Arise from the instrumental or symbolic
performance or from the product itself; example, a dress gains complements may
produce a positive effective response. Cardozo (1975) points out the customer
satisfaction can boost repeat purchase and cross purchase. Some other scholars
such as Churchill and Surprenant (1982), Engel, Blackwell and Miniard (1984) all
report the customer satisfaction is a kind of evaluation about purchase and using,
and it is produced by the buyer anticipated result reward and the investment cost.
Dissatisfaction responses
The first decision is whether or not to take any external action. By taking no
action, decide to live with the unsatisfactory situation. This decision is the function
of the important of the Purchase to the consumer, is of taking action, the
consumers exciting level of overall satisfaction with the brand outlet, and the
characteristics of the consumer involved.
It is important to note that even when no external action is taken, the
consumer is likely to have a less favourable attitude towards the store or brand. Not
all dissatisfied customers express their dissatisfaction directly toward sellers. Some
consumers may take no action; some ones may complain to their friends and
relatives or even third parties.
Consumers are satisfied with the vast majority of the purchases. Still, because
of the large number of purchases they make periodically, most individual
experiences dissatisfaction with some of the purchases.
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Figure 4: Dissatisfaction Responses

Marketing strategy and dissatisfied Consumers.
Companies need to satisfy consumer expectation by 1) creating reasonable
expectation through promotional offer, 2) maintaining consistent quality so that the
reasonable expectation of fulfilled dissatisfied consumer tend to express
dissatisfaction to their friends, dissatisfaction may cause the firm to have less
future sales to the consumers friend as well as to the consumer.
When consumer is this dissatisfied, the most unfavourable consequence is for
the person to communicate the dissatisfaction to the company but to no one else.
This signals the firms to problems, enables it to make where necessary and
minimises negative word- of- mouth Communications. Many firms have discovered
that customers whose complaints are resolved ot their expectation are sometimes
even more satisfied then are those who did not experience a problem in the first
place. In addition complaint generally work to the consumer advantage as firm
attempts to readdress the problem.
Complaints about products frequently go to the retailers and are not passed
onto manufacturers. Many firms attempt to overcome this by establishing and
promoting consumer hotlines - toll free numbers that consumers can use to contact
a representative of the firm when they have a complaint.
Although the hotline and other procedures increase the efficiency of resolving
consumer complaint, are not sufficient. Most consumers who complain want a
tangible result. Further results desired vary by customer type and the nature of the
problem, necessitates customised response capabilities. Failure to deal effectively
with the expectation can produce increase the dissatisfaction.
Customer satisfaction/dissatisfaction is the end result of the service
experience. In cases where customers‟ expectations exceed the perceived service
delivery they will be dissatisfied, and where the perceived service exceeds their
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expectations they will be satisfied. Total satisfaction can therefore be seen as

consistently exceeding customer expectations. Achieving this demands some basic
prerequisites, such as:
• Allowing customers to define service value,
• Exceeding customers expectations in key areas, not all areas,
• Differentiating the customer base and investing in serving profitable
customers,
• Investing in training, education and systems, because quality service may be
defined by customers, but it is delivered by employees.
Customer satisfaction is created through a combination of responsiveness to
customers‟ expectations and views, continuous improvement of the organisation’s
offering, as well as the continuous improvement of the overall customer
relationship.
Customer satisfaction, Repeat purchase, Customer commitment
Repeat purchases continue to buy the same brand so they do not have an
emotional attachment to it.
As we saw earlier, some dissatisfied customer may also become or remain
repeat customers. These individuals perceive the switching cost- the cost of finding,
evaluating and adopting another solution- to be too high. However, they may
engage in negative word -of -mouth and are vulnerable to competitor’s action.
Repeat Purchases are desirable, but mere repeat purchases are vulnerable to
competitor action. That is they are buying the brand out of habit or because it is
readily available shop lowest price, or for similar superficial reasons. These
customers have no commitment to the brand. They are not brand loyal. Brand
loyalty is defined as a biased behavioural response .
Service and store loyalty are generally defined in the same or similar manner.
Thus a consumer loyal to a brand or a committed customer, has an emotional
attachment to the brand or a firm. Consumers used expressions such as “I trust
this brand”, “I like this outlet”, portray the commitment.
Committed customers are unlikely to consider additional information when
making a purchase. Hey are also resistant to competitors marketing efforts- for
example, Premiums. Even when loyal customers do buy different brand to take
advantage of a promotional deal, they generally return to their original brand in
their next purchase. Committed customers are more repetitive to line extensions
and other new products offered by the firm. They are also more likely to forgive an
occasional product or service failure.
Repeat purchases, committed customers and marketing strategy
An important step in developing a marketing strategy for a particular segment
is to specify the objectives being pursued it. Several distinct possibilities exist:
1. Attract new users to the product category
2. Capture competitors’ current customers
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3. Encourage current customer to use more

4. Encourage current customers to become repeat purchasers .
5. Encourage current customers to become committed customers.
Figure 5: Total Buyers - Committed Buyers

The figure 5 projects how the committed customers can be created out of the
total customers.
The objectives of attracting customers and capturing competitors customers
needs certain work towards potential customers to convince them about the
superior quality of the product. The objectives which focus on the current
consumers need customer satisfaction as the necessary pre-condition. The model
explains the delivery of value as expected by the customer. When organisations
focus on existing customers, it is known as Relationship Marketing.
Figure 6: Customer Satisfaction Outcome

Relationship marketing
An attempt to develop an ongoing, expanding exchange relationship with the
firm’s consumers is called relationship marketing. In many ways, it seeks to project
the relationship that existed between neighbourhood stores and their customers
many years ago. In these relationships, the store owner knew the customers not
only as customers but also as friend and neighbours. He could anticipate their
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needs and provide help and advice when needed. Relationship marketing attempts
to accomplish the same results, but because of the large sale of most operations,
the firm must use database, customised mass Communication and advanced
employee training and motivation.
Relationship marketing has five key elements :
1) Developing a core service or product around which to build a customer
relationship.
2) Customising the relationship to the individual customer.
3) Argumenting the core services or product with extra benefit.
4) Pricing in a manner to encourage loyalty.
5) Marketing to employees so that they will perform well for customers.
1) Post purchase consumer Behaviour
2) Product Use and Non-Use
3) Post Purchase dissonance
4) Product disposition
5) Perceived performance, satisfaction and Expectation levels.
6) Purchase Evaluation and Customer satisfaction
1) What are the major post-purchase processes experienced by customers?
2) Explain the Post-Purchase dissonance.
3) Give a note on Product Use and Non use
4) Explain in detail the Post Purchase Behaviour Process.
5) Enumerate on the courses of action a consumer can take in response to
dissatisfaction?
6) Comment on the perceived performance, satisfaction and expectation level of
customers
7) Write about product disposition
8) Examine Relation marketing and how important it is to hold customers?
22.6 SUMMARY
Marketers should seek to sell a product that satisfies the buyer‟s needs. In
doing so, it should be remembered that the sale is made only when the actual
purchase is complete and marketers should continue to reinforce the buyer’s
attitudes about the product at all times, even after the sale.
The chapter discussed the effects of cognitive dissonance on consumers. The
literature review shows that when consumers are faced with cognitive dissonance
they seek ways in which to reduce this phenomenon. It also shows that marketers
can develop ways in which they can help reduce the effects of cognitive dissonance
as these can also affect their products.
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1) The costs of finding, evaluating, and adopting another solution are known as
_____.
A. Incurred costs B. Switching costs C. Effort costs D. Balancing costs
Ans: B
2) Consumers that exhibit a positively biased Behaviour toward a specific brand
are exhibiting _____
A: Brand loyalty B. Brand leverage C. Brand image D. Brand equity
Ans: A
3) Which type of customer has an emotional attachment to the brand or firm?
A Repeat purchaser B. Satisfied buyer
C. Committed customer D. Affective customer
Ans: D
4) Doubt or anxiety regarding a purchase a consumer has made is known as
_____.
A. postpurchase worry B. postpurchase guilt
C. postpurchase dissonance D. postpurchase shame
Ans: C
5) Which of the following is true regarding post-purchase dissonance?
a) All consumer purchase decisions are followed by post-purchase
dissonance of some sort.
b) The importance of the decision to the consumer is one factor that
influences the probability and magnitude of postpurchase dissonance.
c) The individual's tendency to experience anxiety is not related to
postpurchase dissonance.
d) The easier it is to alter the decision, the more likely postpurchase
dissonance will be.
Ans: B
6) A consumer using a product in a new way is referred to as _____.
A. Counterfactual thinking B. Pre-factual thinking
C. Use innovativeness D. Usage expansion
Ans: C
7) For which product is no disposition involved?
A. ice cream cone B. laundry detergent
C. soft drink D. clothing
Ans: A
1) https://www.slideshare.net/BBAdvisor/bb-chapter-seven-post-purchase-
processes-customer-satisfaction-and-loyalty
2) http://www.zeepedia.com/read.php?post_purchase_dissonance_dissonance_re
duction_marketing_implication
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3) https://mrktspnkr.wordpress.com/2012/06/29/post-purchase-and-
satisfaction/
22.9 ASSIGNMENTS
1) Develop a list of non-use products among your friends and the reasons for it
2) Analyse the data base of an University and necessity to maintain that data.
1) Del I. Hawkins, Foula Kopanidis, Pascale Quester, Sally Rao Hill, Simone
Pettigrew (2013), Consumer Behaviour: Implications for Marketing Strategy,
McGraw-Hill, Australia.
Consumer Behaviour – Building Marketing Strategy, Tata McGraw Hill, New
Delhi.
1) Interview your neighbours and list out various loyalty programs they have
experienced as well as their expectations.
2) Identify the disposition Behaviour of your family for the products like New
papers, Food Cans, Worn out Dresses, Food waste.
22.12 KEY WORDS
Brand Loyalty
Cognitive Dissonance
Affective Performance
Post purchase Behaviour
Customer commitment
Product non-use
instrumental performance
Symbolic Performance
Repeat purchase
Brand Switching
Relationship marketing
Consumption guilt
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LESSON - 23
RURAL CONSUMER BEHAVIOUR

23.1 INTRODUCTION
Indian consumer segment is broadly segregated into urban and rural markets,
and is attracting marketers from across the world. The sector comprises of a huge
middle class, relatively large affluent class and a small economically disadvantaged
class, with spending anticipated to more than double by 2025. India stood first
among all nations in the global consumer confidence index with a score of 133
points for the quarter ending September 2016. Further, in the discretionary
spending category, 68 per cent respondents from India indicated the next 12
months as being good to buy, thus ensuring once again that India leads the global
top 10 countries for this parameter during the quarter.
Global corporations view India as one of the key markets from where future
growth is likely to emerge. The growth in India’s consumer market would be
primarily driven by a favourable population composition and increasing disposable
incomes. A recent study by the McKinsey Global Institute (MGI) suggests that if
India continues to grow at the current pace, average household incomes will triple
over the next two decades, making the country the world’s fifth-largest consumer
economy by 2025, up from the current 12th position. In addition to the consumer
profile becoming younger and younger, rural consumers are also beginning to
demand attention. There has also been a shift in the awareness levels of the rural
consumer and the increased media penetration has played a vital role in rural
India's values and attitudes. These economic trends, socio-economic changes and
recent advances in technology, have triggered major changes in how rural
consumers make purchase decisions and what they buy and from where they buy.
23.2 OBJECTIVES
• To provide understanding on the Rural Marketing with special reference to
Indian context.
• To comprehend the buying behaviour, the consuming pattern, motivation and
attitude of the rural consumers.
• To provide additional insights on rural consumer Behaviour.
23.3 CONTENTS
Classification of Rural Markets
Rural Marketing Environment
Rural Consumer Behaviour
Factors influencing rural consumers
Factors differ between rural and urban consumers
Rural Marketing Strategies
CLASSIFICATION OF RURAL M ARKETS
a) Consumer Market:
Constituents: Individuals and Households.
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Products : Consumables, Food- Products, Toiletries, Cosmetics, Textiles and

Garments, Footwear etc.
Durables : Watches, Bicycles, Radio
b) Industrial Market:
Constituents : Agricultural and allied activities, poultry farming, fishing,
Animal-husbandry, Cottage Industries, Health center, School, Co-operatives,
Panchayat office etc.
Products : Consumables, seeds, Fertilizers,
Durables : Tillers, Tractors, Pump sets, Generators, Harvesters, etc.
c) Services Market
Constituents : Individuals, Households, offices and Production firms.
Services : Repairs, Transport, Banking Credit, Insurance, Healthcare,
Education, communications, Power etc.
It is important to understand why rural marketing is different from urban
marketing. Due to significant differences in almost all the major marketing
variables, it becomes very difficult to optimally tap the rural market potential with
an urban mindset. In most cases, it requires a modified approach, philosophy and
marketing mix.
RURAL M ARKETING ENVIRONMENT
To understand the buying Behaviour of rural consumers, we must go into the
factors that influence their choice, buying Behaviour and finally the decision
making. The factors include: Social Environment, Cultural Environment,
Education, Occupation, Media and Involvement of the users. Rural consuming
system and its evolution are different from that of urban consumption. Material
propensity in the rural India due to the effect of liberalization and globalization
resulted in increased production and improved transportation and communication
facilities. Increased rural development investment had increased the purchasing
power of the rural folks. The increased purchasing power changes the dynamics of
rural consumption Behaviour. Thus it is worth to examine how the rural
consumers are being motivated, how far these determinants offer urban consumers
and how for the socioeconomic and cultural factors are influencing the rural
consumers.
The lower levels of literacy and limited exposure to product and services are
well-known, but there are also differences in consumption patterns with a direct
impact on income levels and income flows, and a high level of inter-dependency
affecting the dynamics of rural consumer Behaviour. All contribute to make rural
consumer Behaviour dissimilar from the urban consumer.
Features of Rural Marketing:
The main reason why the companies are focusing on rural market and
developing effective strategies is to tap the market potential that can be identified
as follows:
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1. Large and scattered population:

According to the 2001 census, 740 million Indians forming 70 per cent of
India’s population live in rural areas. The rate of increase in rural population is also
greater than that of urban population. The rural population is scattered in over 6
lakhs villages. The rural population is highly scattered, but holds a big promise for
the marketers.
2. Higher purchasing capacity:
Purchasing power of the rural people is on rise. Marketers have realized the
potential of rural markets, and thus are expanding their operations in rural India..
3. Market growth:
The rural market is growing steadily over the years. Demand for traditional
products such as bicycles, mopeds and agricultural inputs; branded products such
as toothpaste, tea, soaps and other FMCGs; and consumer durable such as
refrigerators, TV and washing machines has also grown over the years.
4. Development of infrastructure:
There is development of infrastructure facilities such as construction of roads
and transportation, communication network, rural electrification and public service
projects in rural India, which has increased the scope of rural marketing.
5. Low standard of living:
The standard of living of rural areas is low and rural consumers have diverse
socio-economic backwardness. This is different in different parts of the country. A
consumer in a village area has a low standard of living because of low literacy, low
per capita income, social backwardness and low savings.
6. Traditional outlook:
The rural consumer values old customs and traditions. They do not prefer
changes. Gradually, the rural population is changing its demand pattern, and there
is demand for branded products in villages.
7. Marketing mix:
The urban products cannot be dumped on rural population; separate sets of
products are designed for rural consumers to suit the rural demands. The
marketing mix elements are to be adjusted according to the requirements of the
rural consumers.
Rural Segment Quickly Catching Up
The national Sample Survey Organization (NSSO) defines rural markets as
those areas with fewer than 5,000 residents, a population density less than 400
people per square kilometer and at least 75 percent of male working population
employed as agriculturists.
March 2017 (source: https://www.ibef.org/industry/indian-rural-market.aspx)
• The Fast Moving Consumer Goods (FMCG) sector in rural and semi- urban
India is estimated to cross US$ 100 billion by 2025
• The rural FMCG market is anticipated to expand at a CAGR of 17.41 per cent
to US$ 100 billion during 2009–25
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• Rural FMCG market accounts for 40 per cent of the overall FMCG market in
India, in revenue terms
• Amongst the leading retailers, Dabur generates over 40-45 per cent of its
domestic revenue from rural sales. HUL rural revenue accounts for 45 per cent
of its overall sales while other companies earn 30- 35 per cent of their
revenues from rural areas
According to the Third Annual Edition of Accenture Research, “Masters of
Rural Markets: From Touch points to Trust points - Winning over India's Aspiring
Rural Consumers,” rural consumers are particularly aspiring or striving to
purchase branded, high quality products. Consequently, businesses in India are
optimistic about growth of the country's rural consumer markets, which is expected
to be faster than urban consumer markets. The report highlights the better
networking among rural consumers and their tendency to proactively seek
information via multitude sources to be better informed while making purchase
decisions. Importantly, the wider reach of media and telecommunication services
has provided information to India’s rural consumers and is influencing their
purchase decisions. In line with general trend, rural consumers are evolving
towards a broader notion of value provided by products and services which involves
aspects of price combined with utility, aesthetics and features, and not just low
prices.
The hinterlands in India consist of about 650,000 villages. These villages are
inhabited by about 850 million consumers making up for about 70 per cent of
population and contributing around half of the country's Gross Domestic Product
(GDP). Consumption patterns in these rural areas are gradually changing to
increasingly resemble the consumption patterns of urban areas. Some of India's
largest consumer companies serve one-third of their consumers from rural India.
Owing to a favourable changing consumption trend as well as the potential size of
the market, rural India provides a large and attractive investment opportunity for
private companies.
Figure 1: Rising Connected Consumer in Rural India.

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As is the trend with urban India, consumers in the rural regions are also
expected to embrace online purchases over time and drive consumption digitally.
The rural regions are already well covered by basic telecommunication services and
are now witnessing increasing penetration of computers and smart phones. Taking
advantage of these developments, online portals are being viewed as key channels
for companies trying to enter and establish themselves in the rural market. The
Internet has become a cost-effective means for a company looking to overcome
geographical barriers and broaden its reach.
Accenture is major objective of the research is to understand how Indian rural
consumers' behaviour and attitudes have evolved in the past few years and what
influences their buying behaviour the most. First, rural consumers are more
inspirational. Accenture research findings indicate that Indian rural consumers are
fuelled by a deep desire to provide their children a better future through education
and healthcare.
Figure 2: Touch points to Trust Points

Market research firm Nielsen expects India’s rural FMCG market to reach a
size of US$ 100 billion by 2025. Another report by McKinsey Global Institute
forecasts the annual real income per household in rural India to rise to 3.6 per cent
2025, from 2.8 per cent in the last 20 years.
About 50 per cent of the survey respondents claimed that they plan to spend
more on education of their children and healthcare of their family in the coming
year. Today's rural consumer is also more brand savvy and is willing to spend more
as long as quality is assured. As per Accenture's report, about 71 per cent of
respondents purchase branded products only. About 60 per cent of respondents, in
fact, believe brands are trustworthy and reliable. As consumers are becoming
brand conscious, they are also trading up and seeking more features and better
product designs that enhance their social image. About 42 per cent of our survey
respondents indicated product upgrading as a reason for spending more in a
category.
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Second, rural consumers are better networked. They are better connected in
both the physical and digital sense. Technological developments, particularly
deeper penetration of mobile telephony and direct-to-home (DTH) television into
India's hinterlands, have also reshaped lifestyle and consumption patterns
among rural consumers. The total number of telecom subscribers (mobile plus
landline) in rural India crossed 378 million in July 2014. And of the 205 million
internet users in India in 2013, 68 million lived in rural areas. Even more
impressive, one-fourth of the 100 million people in India who access the Internet
using mobile devices live in rural areas. Women and children now play a more
empowered role in purchase decisions.
Third, rural consumers are more discerning. Rural consumers are street-smart
about common retailer ploys and schemes and view value through a broader lens
and share more information with more peers. While companies might feel that a
rural consumer can be swayed by celebrity endorsements or catchy ad lines, in
reality, consumers don't fall for such tactics.
While the rural consumers' needs at different points in the purchase cycle are
evolving, they are also quite different from those of their urban counterparts.
Companies need to develop products and services that address the unique needs of
customers, innovate on the mobility platform to drive awareness for
their brands and increase their physical as well as mental reach to win loyalty.
Government Initiatives
The Government of India has planned various initiatives to provide and
improve the infrastructure in rural areas which can have a multiplier effect in
increasing movements of goods, services and thereby improve earnings potential of
rural areas subsequently improving consumption.
• The Government has introduced various reforms in the Union Budget 2017-18
to uplift the rural markets. Some of the key highlights of the Budget are:
• Rs 187,223 crore (US$ 28.08 billion) has been allocated towards rural,
agriculture and allied sectors.
• The Allocation for Pradhan Mantri Aawas Yojana-Gramin has been increased
from Rs 15,000 crore (US$ 2.25 billion) to Rs 23,000 crore (US$ 3.45 billion) in
the year 2017-18 with a target to complete 10 million houses for the houseless
by the year 2019.
• The pace of roads construction under Pradhan Mantri Gram Sadak Yojana
(PMGSY) has been accelerated to 133 kms per day as against an average of 73
kms per day during the years 2011-14.
• The allocation to the Mahatma Gandhi National Rural Employment Guarantee
Act (MGNREGA) has been Rs 48,000 crore (US$ 7.2 billion) in the year 2017-
18, which is the highest ever allocated amount.
• The Government of India is looking to install Wi-Fi hotspots at more than
1,000 gram panchayats across India, under its ambitious project called Digital
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Village, in order to provide internet connectivity for mass use, as well as to

enable delivery of services like health and education in far-flung areas.
• In the Union Budget 2017-18, the Government of India mentioned that it is on
course to achieve 100 per cent village electrification by May 1, 2018.
• The Government of India has sought Parliament’s approval for an additional
expenditure of Rs 59,978.29 crore (US$ 8.9 billion), which will be used to
support the government’s rural jobs scheme, building rural infrastructure,
urban development and farm insurance.
• The Government of India plans to integrate villages with country’s economic
mainstream by purchasing around 80,000 mini-buses, which will connect over
125,000 villages to markets and thereby provide access to better job and
education prospects.
• Prime Minister Mr. Narendra Modi has launched the National Urban Mission
with the aim of enabling cluster based development and creating smart villages
which will complement the smart cities initiative.
• The Government of Gujarat plans to undertake several steps to promote micro,
small and medium enterprises (MSMEs) in the state, including setting up a
separate department for this segment and providing dedicated industrial
estates for MSMEs.
• The Union Government plans to build 2.23 lakh km of roads in the rural areas
and has proposed a total spending of Rs 27,000 crore (US$ 4.05 billion) until
March 2017.
• E-commerce players like Flipkart, Snapdeal, Infibeam and mobile wallet major
Paytm have signed Memoranda of Understanding (MoUs) with the government
to reach rural areas by connecting with the government’s common service
centres (CSCs) being setup in villages as part of the ‘Digital India’ initiative.
• With the increasing demand for skilled labour, the Indian government plans to
train 500 million people by 2022, and is looking out for corporate players and
entrepreneurs to help in this venture. Corporate, government, and educational
organisations are joining in the effort to train, educate and produce skilled
workers.
• The Union Cabinet has cleared the Pradhan Mantri Krishi Sinchaee Yojana
(PMKSY), with a proposed outlay of Rs 50,000 crore (US$ 7.5 billion) spread
over a period of five years starting from 2015-16. The scheme aims to provide
irrigation to every village in India by converging various ongoing irrigation
schemes into a single focused irrigation programme.
The Government of India aims to spend Rs 75,600 crore (US$ 11.34 billion) to
supply electricity through separate feeders for agricultural and domestic
consumption in rural areas. This initiative is aimed at improving the efficiency
of electricity distribution and thereby providing uninterrupted power supply to
rural regions of India.
• To promote agriculture-based businesses, the Government of India has started
‘A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’
(ASPIRE). Under this scheme, a network of technology centres and incubation
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centres would be set up to accelerate entrepreneurship and to promote start-

ups for innovation and entrepreneurship in agro-industry.
• The Government of India plans to form a committee to study various
innovations and submit their reports to the concerned Department or Ministry.
The programme called the ‘Nav Kalpana Kosh’ aims to improve rural areas at
various levels, such as governance, agriculture and hygiene.
FACTORS WHICH INFLUENCE THE RURAL CONSUMER
Let us understand the factors which influence the rural consumer New
attitudes, priorities and Behaviours are reshaping the purchase decisions of India's
rural consumers. These consumers are becoming far more aspiration, networked...
Culture
Culture is one of the significant determinants of a person‘s Behaviour in rural
area. As a child grows up in the rural atmosphere, he acquires a set of values,
perception, preferences and Behaviours through the family and other key
association involved at each stage of his life. The time tested true Behaviour
exhibited by a collective group is determined by culture. However the degree of
impact that culture will have on Behaviour will depend on the narrowness of a
culture or its merger with other cultures.
Product Packaging
Packaging plays a major role in the product offering for rural markets as it is
related with affordability, the ability to identify, ease to users and the appeal of the
product. Packaging at the primary level involves protecting the product, whereas at
the secondary level, it adds to the aesthetics and sales appeal of the product.
Packaging for rural markets needs a special focus because of various troubles like
poor transport system, difficulties of safe storage due to poor cold storage and
insufficient power supply
Price
It is the amount of money a consumer must pay to obtain the right to use a
product (Hawkins, Best and Coney 2001).The right price influences the quantities
of various products or services that the rural consumers will buy. Marketers often
erroneously perceive price as their only bludgeon when targeting rural consumers.
High priced products with difficult to handle features is generally not liked by rural
consumers. Gillette Guard was launched to provide high quality shave at an
affordable price for men in the rural areas. Rural consumers generally compare a
products price to a reference price considered reasonable for a certain type of
product. The reference price is based on either the memory of past prices or on the
price of other products on the same shelf or the same product line.
Family Size
Rural consumer Behaviour is also influenced by family size and structure. As
the family size increases so does the consumption of products. In such a case, the
demand for family pack or the economy refill pack increases. Likewise large families
have more bread earners which mean higher family income and thus more
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consumption of products. This often leads to multi brand consumption of a product

category among different family members.
Age
The purchase of products and their forms are influenced by age. Like urban
areas this is highly visible in case of rural areas. For instance in the age group of
twenty to forty the consumption of motorcycle, mobile, readymade clothes is more
as compared to a person above sixty.
Advertising
Low literacy level, poor media reach and exposure and the huge and diverse
rural audience characterized by variations in language, culture and lifestyle poses
multiple challenges for communicating with the rural audience. For rural
consumers the message has to be simple and logical. The use of education with
entertainment and slice of life appeals gets more acceptances
The rural consumers in India account for about 73 percent of the total
consumers. In recent years, the lifestyle of a large number of rural consumers in
India has changed dramatically and the process of change is on. The buying
behaviour of the rural consumers is influenced by several factors such as socio-
economic conditions, cultural environment, literacy level, occupation, geographical
location, efforts on the part of sellers, exposure to media etc. The consumer
movement in India till now has been confined to the middle class citizens in urban
areas. It has yet to spread among the masses in rural areas.
Literacy levels, family structure, occupational patterns, social customs and
norms, and several other features are unique to rural India. A complex set of
factors influence rural consumer's Behaviour. Social norms, traditions, castes, and
social customs have greater influence on the consumer Behaviour in rural areas
than in urban areas. The seasonality of agricultural production influences the
seasonality of rural consumers' demand. Although rural areas offer attractive
opportunities to marketers at an aggregate level, about 68 percent of these markets
remain untapped mainly due to inaccessibility. It is uneconomical to access a large
number of small villages with a very low population density spread over a large
geographic area. Factors such as limited physical access, low density of shops,
limited storage facilities, need for a large number of intermediaries in the
distribution channel to reach the end customers, and low capacity of intermediaries
to invest in business (investments for keeping stock, storage facilities, vehicles for
distribution) make the tasks of reaching rural consumers very complex. It is in this
context we need to understand the importance of alternative means of reaching
rural consumers through periodic village markets (or haats), agricultural markets
(mandis), and rural fairs (melas).
Rural market is dynamic and has stood for centuries on its own. Nobody can
ignore rural India which comprises one tenth of the world population. A revolution
is sweeping the Indian countryside which has compelled companies to go rural.
RURAL CONSUMERS BEHAVIOUR
Rural consumers are fundamentally different from their urban counterparts
and different rural geographies display considerable heterogeneity calling for rural
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specific and region specific strategies. Buying Behaviour of rural consumers

involves perception, motivation and attitude during purchase decision as that of
urban consumers. The myth that rural consumers don’t prefer branded products,
no much awareness about brands available in a particular category, prefer to
purchase cheap and less cost items, not very quality conscious, rural markets are
homogenous need to be changed. There are certain factors that influence the
Behaviour of rural consumers-
Influence of Culture
Culture and tradition influences perception and buying Behaviour. For
example, the preference in respect of colour, size and shape is often the result of
cultural factors.
Geographic Location
Rural consumer Behaviour is also influenced by the geographic location of the
consumers. For example, nearness to feeder towns and industrial projects influence
the buying Behaviour of consumers in the respective cluster of villages.
Urban Lifestyles
Extent of exposure of rural consumers to urban life styles also influence their
buying Behaviour.
Utilisation of the product differs
The situation in which the consumer utilise the product also influences their
buying Behaviour. Since rural consumers cannot use washing powders/ detergent
powders that much, as they wash their clothes in streams or ponds, they go in
more for washing bars and detergent cakes.
Place of Purchase
Buying Behaviour of rural consumer also varies depending on the place of
purchase. Different segments of rural buyers buy their requirements from different
places/outlets. Some buy from the village shopkeepers; some from village
markets/hats/melas; others buys from town that serves as the feeder to the rural
area. Nowadays they purchase from online also (e.g)Mobile Phones
Involvement of others in the purchase
In the past, the head of the family used to make purchase decision all by him.
In contrast, the involvement of the other members of the family in the purchase
decision has been growing in recent years. An increase in literacy coupled with
greater access to information has resulted in this development.
Buying Behaviour subject to change:
The buying Behaviour of rural consumers has been undergoing a change. In
recent years, some convergence in aspirations seems to be taking place between the
urban and rural markets.
FACTORS DIFFER BETWEEN RURAL AND URBAN MARKETS
1. Infrastructure Development
Electricity supply, availability of finance facility, education level, roads,
connectivity, And presence of organized markets: In these infrastructural aspects,
the rural market varies widely from the urban market.
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2. Income fluctuations
The pattern of income generation in rural areas based on agriculture is
seasonal and highly unreliable unlike the fixed monthly income in the urban areas.
This created a consumption pattern that is quite different from the urban one.
3. Lifestyle
The lifestyle and daily routine of consumers in two markets is markedly
different. This creates significantly different profile of urban and rural consumers
for the same product.
4. Context
Because of variation in infrastructure, lifestyle and the income aspects, the
context in which an individual exists in rural areas is very different from the one
urban area. This creates difference in nature and priorities.
5. Socio-cultural Profile
Value system and thus perception towards goods/services and consumption in
general is quite different. Cultural pattern in rural areas determine whether a
culture is traditional or modern in its outlook and that is a factor that can have a
major impact on consumption pattern.
6. Accessibility
The cost and logistics of accessing consumers in a highly widespread and
heterogeneous rural market are very different as compared to reach urban
consumers who generally are concentrated in good number in a single location.
7. Media reach and habits
The reach of media vehicles and the media habits, varying widely in rural and
urban markets, requires different type of promotional strategy in these two
markets. But social media seems to be a better option in both markets.
8. Nature of competition
The nature and intensity of competition amongst the brands is very different in
the two markets.
9. Consumer Behaviour
It is in the purchase of high-involvement products that a rural consumer
display different motives relating to the problem recognition, source of information,
Evaluation procedures, collective decision and different post purchase Behaviour.
This creates need to treat each stage of the marketing process differently for rural
and urban consumers.
RURAL M ARKETING STRATEGIES
Rural Marketing has a number of strategies, which comprise:
Client and Location specific promotion involves a strategy designed to be
suitable to the location and the client.
Joint or co-operative promotion strategy involves participation between the
marketing agencies and the client.
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'Bundling of inputs' denotes a marketing strategy, in which several related

items are sold to the target client, as a bundle offer of arrangements of credit, after-
sale service, and so on.
Management of demand specifies continuous market research of buyer's
needs and desires at various levels so that continuous improvements and
innovations can be adopted for a sustainable market performance.
Developmental marketing refers to taking up marketing programmes keeping
the development objective in mind and using various managerial and other inputs
of marketing to achieve these objectives.
Media, both traditional as well as the modern media, is used as a marketing
strategy. Even social media getting popularised.
Unique Selling Propositions (USP) involves presenting a theme with the
product to attract the client to buy that particular product.
Rural markets in India have assumed significance in the recent past with the
growth of the Indian economy. More income and employment opportunities in rural
areas has increased the purchasing power of rural consumers. Rural reach is on
the rise and it is fast becoming the most important route to growth for the Industry.
New approaches, new strategic alternatives and new operational techniques
are being evolved to gain competitive advantage. Rural markets hitherto, found
unattractive have become the new targets to corporate enterprises, mainly for two
reasons. Urban market has become congested with too many competitors. Also
markets have reached a near saturation point.
Rural markets have become the main street with potential for consumption
variety of products and services. For many a product a product rural market
provides a promise owing to gap in adaptation. It makes market entry easy. Large
population raising prosperity, growth in consumption, life style changes, and life
cycle advantages market growth rates higher than urban and inexpensive strategies
are the various factors which have made rural market viable.
1) Classification of Rural Markets
2) Rural Marketing Environment
3) Rural Consumer Behaviour
4) Factors influencing rural consumers
5) Factors differ between rural and urban consumers
6) Rural Marketing Strategies
1) Give a note on Classification of rural markets.
2) How do you find the rural marketing environment favourable for high growth
rate?
3) What are the factors that influence rural consumer Behaviour?
4) How do you differentiate between a rural and an urban consumer?
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5) Write about rural marketing strategies

6) Enumerate on Touch points to Trust points
7) Detail on the Government initiatives to develop rural markets.
23.6 SUMMARY
The buying preferences of India's rural consumers are changing fast and several
factors - economic, psychological, and technological - are coalescing to fuel this
transformation. Rural consumers' income levels are on the rise, enabling more of
them to buy products and services that improve the quality of their lives.
Marketers need to address the perceived risk of rural buyers by showcasing
the experience of users and ensuring service delivery close to the consumer‘s
doorstep. Quality and value are vital for the success of a new product as they bring
improvement to consumer lives in terms of productivity. The rural consumer also
depends upon observed source like exhibitions and road shows because they
provide an opportunity to evaluate the product personally and absorb relevant
information at their own relaxed pace.
Marketers need to focus on reducing the information search time by inducing
product trials and successfully reaching out to the consumer through ideal
information channels. Marketers also need to understand the product specific
evaluation process from primary research to mapping the succession of their brand
from consideration set to choice set. This deal with the product deficiencies in
relation to competition and improves its chances of selection during evaluation.
Customer satisfaction is the key to building a profitable and sustainable
relationship with rural customers.
It is said India lives in villages. Rural market with 70% of the total population
of country offers opportunities and challenges for marketers. The opportunity is to
tap vast rural market with right kind of product, price, place and promotion. The
challenge is that majority of villages are thinly populated compelling marketers to
think about innovative ways to reach rural consumers. Melas, Haats and self help
groups are one of the way to reach rural markets cost effectively.
1) Rural markets and rural marketing involve a number of strategies, which
include:
a. Management of demand b. Developmental marketing
c. Unique selling proposition (USP) d. All of these
Ans:d
2) The starting point to understanding how consumers respond to various
marketing efforts is the ________ model of a buyer's Behaviour.
a) Post purchase dissonance b. Post purchase feeling
c. Stimulus-response d. Belief
Ans: c
3) At the centre of any marketing process is:
a) Target consumers. b. The product.
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c. The price charged for the product. d. The marketing intermediary.

Ans:a
1) https://www.slideshare.net/satyapalkurmi/rural-marketing-22981751
2) https://www.slideshare.net/ashishkawle/consumer-behaviour-in-rural-
market
23.9 ASSIGNMENTS
1) Visit a nearby rural place and Interview the consumers on their shopping
2) Compare the rural consumers with the urban consumers how the purchase
process differs
1) R.V. Badi and N.V. Badi (2010),Rural Marketing, Himalaya publishing House,
New Delhi
2) Pradeep Kashyap, Siddhartha Raut (2010), The Rural Marketing Book- Text
and Cases, Dorling Kindersley (India) Pvt. Ltd,
3) T P Gopalaswamy (2006),Rural Marketing, Vikas Publishing House Pvt. Ltd,
New Delhi
4) Kashyap, P., and Rant, S. (2005) The Rural Marketing, Biztantra, Mumbai.
1) Design a Rural Consumer Behaviour Model after conducting a research on the
motivation, perception and attitude of rural consumers
2) On the basis of your understanding of the Rural Buyer Behaviour, what sales
promotional programmes would be most successful for Mobile Phones, launch
of a brand of cold drinks for the rural markets . Give a promotional Plan for
the products.
23.12 KEY WORDS
Bundling of Inputs
Buying Behaviour
Co-operative Promotion
Developmental Marketing
Management of Demand
Media
Rural Marketing
Rural Markets
Touch Points
Trust points
Unique selling preposition
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LESSON - 24
E-CONSUMER BEHAVIOUR
24.1 INTRODUCTION
E-commerce, Internet shopping, Digital Marketing and cyber malls have
become very common words among common consumers.. While the impact of
internet marketing (business to consumer) on the Indian environment has been
insignificant, it is also true that there is a niche market which is likely to develop in
the times to come. Marketers will have to adapt themselves to be a part of this
digital economy. Now IT experts denote Digital Economy as Global Grid. The niche
market is likely to grow significantly. Advances in technology, the ease and control
with which consumers can get high-quality information and the boundary-less
markets are some of the distinguishing features of this global grid.
One of the opportunities the growth of the Internet has provided is the ability
for users to browse commercial products shown on the Internet, and in some cases
to order them over from a computer. The act of ordering is called e-commerce. The
amount of spending by households depends on three factors ñ the percentage of
households that have access to the internet, the degree to which, having access,
households choose to use it for buying particular products, and the range of
products available.
A study by US-based networking solution giant CISCO, reveals that in India,
the second-largest smart phone market globally, the number of smart phones is
expected to grow strongly to over 650 million by 2019. Indian smart phone
shipments reached 103.6 million in 2015, thus crossing the 100 million mark, and
becoming one of the fastest growing smart phone markets in Asia Pacific region.
Smartphone shipments rose to 30 million in July-September 2016 quarter,
maintaining its healthy traction with 11 per cent of growth. It is estimated that
smart phone sales in India will be about 15 per cent to 125 million in 2017.India,
one of the world’s fastest growing Internet market. The online retail sector in India
is expected to be a US$ 1 trillion (Rs 660,000 crore) market by 2020.
Amazon expects India to become its quickest market to reach US$ 10 billion in
Gross Merchandise Value (GMV) and to become its largest overseas market
surpassing Japan, Germany and the UK. The Indian beauty, cosmetic and
grooming market is likely to reach US$ 20 billion by 2025 from the current US$ 6.5
billion, on the back of growing aspirations and rising disposable income of middle
class. Digital Revolution has brought a significant change in consumer Behaviour.
With the recent changes in demands and Behaviour of customers, only those
companies are succeeding who are able to understand these changing patterns of
their customers need.
24.2 OBJECTIVES
• To gain knowledge about e-consumer Behaviour
• To know the changes in consumer buying decision process
• To understand emerging trends towards e –consumers.
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24.3 CONTENTS
Product/Services Customisation
E-tailing
Importance of Technology for e-shopping
Behaviour patterns and Retail outlets
Consumer Behaviour and Internet Shopping
Consumer Behaviour of Online Shoppers
Bricks and Clicks Model
Characteristics of online Shoppers
Mobile marketing
PRODUCT/SERVICES CUSTOMISATION
Traditionally, marketers created market segments to divide consumers into
meaningful and similar groups to enable the formulation of strategies. Internet has
provided the discerning consumers the power and ability to monitor and track
information on prices and brands. These consumers are acutely aware of the value
of time and convenience. In such a scenario, marketers need data-mining
techniques to target individual consumers.
The objective of marketers should not be only to maximise the market share. It
should be also to maximise the lifetime value of the individual consumer. This
requires involving the consumer, establishing an ongoing dialogue with him/her
and customizing the product to his/her needs. There is an interesting implication of
the strategy of customization. While services (travel, financial, hotel and hospital)
offer a wide scope for customisation, product related customisation is limited.
Decades ago, Theodre Levitt published a simple but profound article (even in the
digital economy) which looks at products essentially as services because they result
in end benefits.
E-TAILING
The following observations remind us that e-commerce is a reality and not a myth.
• Amazon.com, which deals in books and music software, is accessible to
consumers around the world.
• B2B marketing is already experiencing the impact of the internet.
• Electrolux has introduced a web-based washing machine abroad.
• Hindustan Lever Ltd plans to use e-commerce to unlock an inventory worth
Rs. 1,400 crore, which is generally stocked by its 7,000 stockists and over a
million retailers. It has 14 manufacturing locations.
• Amazon.com looking for drone delivery of its products
E-commerce will certainly change the way consumers, manufacturers,
intermediaries and suppliers communicate with each other. But, with all these
developments, marketers have to consider a few fundamental questions before they
build brands on the Net or woo customers through it.
IMPORTANCE OF SUPPLEMENTARY TECHNOLOGIES
Internet marketers will have to, at a fundamental level, consider the
demographics and penetration levels of prerequisite durable to calculate the
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“critical mass” required to launch the internet infrastructure and promotional

strategies. Now a days everything is available at the touch of a key on smart phones
whether it’s buying online clothes, booking air tickets, ordering food or any service.
And with that the expectations of customers have reached a new level with the way
customer service is provided. There are techniques like Search Engine
Optimisation, Social Media marketing, Paid per Click, Mobile Marketing which
provides the information required by the consumers before a decision is taken. It is
the value of time and convenience which forces consumers to become e-shoppers.
BEHAVIOUR PATTERNS AND RETAIL OUTLETS
Internet shopping behaviour can be captured meaningfully at the point-of-sale
(retail outlets). But this pre-supposes (a) state-of-the-art tracking methods, and (b)
credit card transactions. Credit card culture is yet to fully develop in India, though
the market has been active with several brands in the last decade. One-to-one
marketing and loyalty programmes using the internet will blossom only if patterns
of purchase are monitored cost effectively in different markets. Besides, the major
percentage of retailing in India comes from neighborhood grocery shops and not
from departmental chains, as in developed countries. But now the scenes are
changing with online shopping platforms like bigbasket.com, Flipkart etc
Certain product categories, such as books and music, lend themselves easily
to internet shopping. Even FMCG products may be amenable to it. But again, the
“critical mass” is vital, as the e-tailer has to develop an effective supply chain
system and also stock a wide spectrum of products. This translates into an
investment-intensive infrastructure. The e-tailer has also to formulate feasible
delivery systems and may have to impose “minimum intake” norms on consumers.
Tesco, a UK-based retail chain, requires consumers to place orders worth at least
100. This e-tailer will have to plan an enhanced high-tech infrastructure to
accommodate more internet shoppers and increase purchase volumes. This makes
the proposition very investment and technology-oriented.
CONSUMER BEHAVIOUR AND INTERNET SHOPPING
Apart from the other important issues, consumer behaviour is a vital factor
and should be considered by any marketer. Internet Shopping looking at products
/Services through the internet. The Indian consumer follows the ‘hear-think/feel or
feel/think-do’ approach in the purchase of durables, given the inherent perceived
risks and high unit cost. A few years ago, TV companies offered consumers ‘book
now, delivery after a time period’ discount offers, though one has not come across
these offers in the recent times. An average consumer durable buyer will like to
shop around, compare brands, feel them, bargain and be convinced about the
‘value’ before eventually buying a brand. The tangible and physical experience
involved in shopping for durables cannot be substituted by internet shopping,
despite the plethora of information it can offer. Even in the category of readymade
garments, research has shown that Indian consumers like to shop in multi-brand
outlets. Titan is an example of the power of a pleasant shopping experience. The
dealer also has a strong ‘word-of-mouth’ impact on consumers in most markets.
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Target-segments
The companies selling durables also has to market his products to different
segments through a complete productline—washing machines can start from the
‘no-frill’ semi-automatic to ‘fuzzy logic’ ones. Even if internet shopping is
introduced, only a small segment with access to the internet may be interested. The
majority of the sales (for instance, 70 per cent of washing machines sold fall under
the semi-automatic sub-category) will be from non-internet shoppers.
Going by the demographics, it is likely that the major chunk of prospective
customers (first-time buyers as well as replacement buyers) may prefer the
conventional route to buy durables. There may be a small segment, probably a
“multiple-ownership” segment which may be interested in cyber transactions.
One area where internet may have a rapid and direct impact is online trading
of shares and securities. The ICICI has firmed up plans on these lines. Share
brokers may have to offer portfolio management packages to suit different segments
of investors, besides being a part of the trading process.
CONSUMER BEHAVIOUR OF ONLINE SHOPPERS
E-commerce and e-tailing has become a subject of some lively boardroom
discussions. Though there is skepticism about the feasibility of ‘e-models’, the
general feeling is that retailing in India can employ both ‘click and bricks’—meaning
most retailers (in consumer product categories or in business-to-business market)
can integrate e-commerce with their traditional methods. As the penetration of
PCs/ Smart Phone increases, marketers while attempt to employ different models of
e-commerce. This will strengthen their existing distribution system and logistics.
There is need to closely monitor the online behaviour of consumers (both causal
suffers or prospective consumers and serious shoppers) to ensure that e-commerce
is timed appropriately and meaningfully.
Unlike developed markets, the emergency of e-commerce in India is likely to
follow a unique pattern in terms of diffusion due to a host of factors, low
penetration of PCs, development of telecom infrastructure and the uniqueness of
the Indian consumer are some of them. Even in the developed markets which
appear to be idle for e-commerce, several e-ventures seem to be in the red
(including Amazon.com which is yet to post-profits though it is a very consumer
centric company).
Consumer behaviour offers several aspects to the internet marketer. There is
need to develop an infrastructure after ascertaining what a company wants to
accomplish over the internet in a given period. This approach also suggests that
there can be a few more objectives than just selling to the end-consumer. Hence,
internet usage will have to be tailored to the needs of the company. The prerequisite
is creating awareness about the website itself for which advertising in the
traditional media is imperative.
A few aspects of monitoring online consumer behaviour are discussed below-
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Product Interest to Online Shoppers

Books, Clothing, music, travel and airlines are categories which lend
themselves to online marketing. Van Heusen, a brand of readymade shirts can have
a website for detailing how fabrics are used, how quality is adhered to and the
benefits of different kinds of raw material combinations. Care should be taken to
ensure that the information subtly emphasizes the core strengths of the brand and
how these benefit consumers. It can highlight, for example, the durafresh range it
has introduced and how the latter prevents odour-causing bacteria. The limitation
of this approach is that only a small fraction of consumers may reflect category
involvement—interest in the category of textiles in this case. However, the brand
may gain certain positive publicity. If a brand consistently gets associated with the
product category and also informs the consumers of how it is updating its offerings,
the brand may be perceived to be an expert in the category in spite of little
advertising. Exclusive launch of an unknown brand on the Net may fail to attract
attention unless the offering is novel or is offered free.
The second option-of providing entertainment—is limited by competition. But
the approach may work to strengthen the equity of an established brand. Coke, for
example, has a website where consumers are ‘taken’ to places which are fun to be
in and refreshing (the two are the core values of the brand). Visitors can also make
their own jingles. Certain categories like soft drinks and confectionery may have to
find innovative ways of entertaining web visitors to ensure they keep coming back
and that their online effort rubs off on the equity of the brand.
Services like banking and travel can provide certain features of interest to the
target segment. American Express offers suggestions on investment options after
interacting with consumers. Travel, airlines and banking services involve a high
level of interaction and internet gets integrated into the core service itself.
Price Sensitivity
In the marketing era of today, a marketer has to consider the value of the
offering and not just, the price of the brand. But with the onset of Net-oriented
retailing, it looks as if price can emerge as the dominant factor which drives
consumers towards the Net. (Price, in this context, is used after assuming a brand
offers value). It appears retailing of consumer products is driven by price all over
the world. Dettol and Lifebuoy may be value brands but the consumer may look for
reduced prices (not as a part of sales promotion)on these brands when he visits a
retail outlet, especially the one which is oriented towards the middle class. A similar
mindset is also reflected in the ‘Buy and Save’ grocery stores which have
mushroomed in cities. The basic assumption here is that this approach does not
include premium niche markets like jewelry and artefacts
It may be mentioned that some prices on Amazon.com much lower than what
the consumer may find in retail outlets. Any company which hopes for a large base
of online shoppers by offering a range of products has to understand that price will
be a strong motivating factor for people to shop online. Hence, a back-up
infrastructure of vendor management and logistics systems has to be created to
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ensure the marketeer has a long-term and sustainable advantage. The price will
also have to factor in delivery costs.
Brand Switching Behaviour
Once a company has a base of online shoppers, it may want to probe the
switching behaviour of consumers. The findings can be useful in devising loyalty
programmes. While most consumers may switch because of prices, there may be a
group which may be interested in exclusive services. Consumers spend money on
different kinds of categories. There may be a need to introduce a loyalty programme
which goes beyond the products of the online store. The psychographics of a section
of consumers may reveal that they are movie buffs or theatre lovers. For example
Vodafone or Airtel provides exclusive user offers of their longtime loyalists.
The ‘Snowballing’ Effect on the Web
Research indicates that a huge number of surfers visit specific sites on
recommendation. It may be worthwhile for an online store to have a mechanism
which can help analyse the impact of this word of mouth on the sale or on the
traffic through the Net. The company can also get an idea on the profile of
consumers who spread the word of mouth either with regard to the online store or
on the brands which they had bought through the store.
Web as Interactive ‘Pull’ Medium
As internet evolves, marketers can use it as a medium for conventional
advertising pull. Though advertising on the internet is getting cluttered and there is
uncertainty regarding its effectiveness, it can be used to ‘pull’ the consumer to
retail outlets once interest in the brand is created. A brand like LG which has taken
the innovation route to enter India across durable categories (TV, refrigerator and
microwave) can use graphics to demonstrate the features and their benefits to
convey a ‘value’ proposition at a higher price point.
What is unique about advertising on the web is interactivity which is absent in
the traditional media. Messages and information can be customized to segments
and even individuals. This aspect could be used to explain a specific feature and its
benefits to a consumer. The website can provide pre-sale information which a
consumer expects at retail outlets before he/she buys the durable. Provision of
information isn’t exactly the tops in most outlets (including large outlets which deal
with the number of categories and brands and which also offer products at a lower
price). Internet can come in useful to cater to such a need.
Impact of reviews on consumer Behaviour
One of the great benefits of online shopping is the ability to read product
reviews, written either by experts or fellow online shoppers.
The Nielsen Company conducted a survey in March 2010 and polled more
than 27,000 Internet users in 55 markets from the Asia-Pacific, Europe, Middle
East, North America, South America to look at question such as “How do
consumers shop online?”, “What do they intend to buy?”, “How do and other factors
online shopping web pages?”, and the impact of social media and other factors that
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come into play when consumers are trying to decide how to spend their money on
which product or service. According to the research, reviews on electronics (57%)
such as DVD players, cell phones, or Play stations, and so on, reviews on cars
(45%), and reviews on software (37%) play an important role in influencing
consumers who tends to make purchases online. Furthermore, 40% of online
shoppers indicate that they would not even buy electronics without consulting
online reviews first.
In addition to online reviews, peer recommendations on online shopping pages
or social media websites play a key role for online shoppers when they are
researching future purchases.90% of all purchases made are influenced by social
media. Each day, over million buyers are shopping online for jewelry.
Impact on Markets and Retailers
Economists have theorised that e-commerce ought to lead to intensified price
competition, as it increases consumers’ ability to gather information about products
and prices. Research by four economists at the University of Chicago has found
that the growth of online shopping has also affected industry structure in two areas
that have seen significant growth in e-commerce, bookshops and travel agencies.
Generally, larger firms are able to use economies of scale and offer lower prices. The
lone exception to this pattern has been the very smallest category of bookseller,
shops with between one and four employees, which appear to have withstood the
trend. Depending on the category, e-commerce may shift the switching costs-
procedural m relational and financial-experienced by customers.
Individual or business involved in e-commerce whether buyers or sellers rely
on Internet –based technology in order to accomplish their transactions-commerce
is recognized for its ability to allow business to communication and to form
transaction anytime and anyplace. The power of e-commerce allows geophysical
barriers to disappear, making all consumers and businesses on earth potential
customers and suppliers. Thus, switching barriers and switching costs may shift.
eBay is a good example of e-commerce businesses are able to post their items and
sell them around the Globe.
In e-commerce activities, supply chain and logistics are two most crucial
factors need to be considered. Typically, cross-border logistics need about few
weeks time around. Based on this low efficiency of the supply chain services,
customer satisfaction will be greatly reduced.
BRICKS AND CLICKS BUSINESS MODEL
A Bricks and Clicks Business Model can benefit various members of a
customer base. For example, supermarkets often have different customer types
requiring alternative shopping options; one group may wish to see the goods
directly before purchase and like the convenience of quickly shopping on-the-fly,
while another group may require a different convenience of shopping online and
getting the order delivered when its suits them.
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Having a Bricks and Clicks Model means both customer groups is satisfied.
Online- retailers have stated that they have found benefit in adding a brick-and –
mortar presence to their online-only business, as customers can physically see and
test products before purchase as well as get advice and support on any purchase
they have made. Additionally, consumers are likely to feel safer and have more
confidence using a bricks- and –clicks business if they already know the brand
from a Brick-and-Mortar store.
For Consumers
• Some argue that online shopping, which makes price comparison easier for
customers, encourages a ‘race-to-the-bottom’, where retailers only compete on
price, with quality and service deteriorating as a result. This is especially
prevalent when comparison shopping websites such as my supermarket allows
prices to be compared without even visiting a retailers’ website.
• The prices listed online may not match the prices listed offline. The reasons for
this include mis-management, and economics (overhead cost of an online
purchase and offline purchase is different. This may result in confusion and
deviation of exceptions for the buyers.
• Buyers may end up buying more items than they need, because online
businesses are able to show them items, more promotions and more
advertisements.
More recently, brick and mortar business owners, and big-box retailers in
particular, have made an effort to take advantage of mobile commerce by utilizing a
number of mobile capabilities such as location-based services, barcode scanning,
and push notifications to improve the customer experience of shopping in physical
stores. By creating what is referred to as a ‘bricks and clicks’ environment, physical
retailers can allow customers to access the common benefits of shopping online
(such as product reviews, information, and coupons) while still shopping in the
physical store. This is seen as a bridge between the gap created by e-commerce and
in-store shopping, and is being utilised by physical retailers as a way to compete
with the lower prices typically seen through online retailers.
The Google Wallet Mobile App launched in September in 2011 and the M-
commerce joint venture formed in June 2011 between Vodafone, 02, Orange and T-
mobile are recent developments of note. A survey states that in 2012, 41% of
Smartphone customers have purchased retail products with their mobile devices.
Some people have suggested that the Internet may be a less expensive way to
distribute products than traditional “brick-and-mortar” stores. However, in most
cases, selling online will probably be more costly than selling in traditional stores
due to the high costs of processing orders and direct shipping to the customer.
Some products may, however, be economically marketed online.
Some factors that are relevant in assessing the potential for e-commerce to be
an effective way to sell specific products are:
• “Value-to-bulk” ratio. Products that have a lot of value squeezed into a small
volume (e.g., high end jewelry and certain electronic products) are often more
299
cost-effective to ship to end-customers than are bulkier products with less

value (e.g., low end furniture).
• Absolute margins. Some products may have a rather high percentage margin.
This allows the merchant to spend money on processing, packaging, and
shipping the order. Ten dollars, in contrast, can only cover a small amount of
employee time and very limited packaging and shipping. Some online
merchants do charge for shipping, but doing so will ultimately make the online
merchant less competitive.
• Extent of customisation needed. Some products need to be customised— airline
tickets have to be issued for a specific departure site, destination time, and
travel time or online boarding passes. Here, online processing may be useful
because the customer can do much of the work.
• Willingness of customers to pay for convenience. Some consumers may be
willing to pay for the convenience of having products delivered to their door.
For example, delivering high bulk, generally low value groceries is generally
not efficient. However, for some customers, it may be worthwhile to pay to
avoid an inconvenient trip to the grocery store.
• Geographic dispersal of customers. Electronic commerce, when value-to-bulk
ratios and absolute margins are not favorable, is often not feasible when
customers are located conveniently close to a retail outlet. However, for some
products—e.g., Blue Tooth equipment—customers are widely geographically
dispersed and thus, a centralised distribution center may be more
economically viable. Specialty books—e.g., for collectors of vintage
automobiles—may not be worthwhile for bookstores to stock, and these may
thus be economically sold online.
• Vulnerability of inventory to loss of value. Some products—especially high tech
products—have a very high effective carrying costs. It has been estimated that
because of the rapid technological progress made in the computer field,
computer parts may lose as much as 1.5% of their value per week. If shipping
directly to the customer can reduce the channel time by five weeks, this
potentially “rescues” as much as 7.5% of the product value. In such a
situation, then, trying to reach the customer directly may make sense, even if
the direct costs of distribution are higher, because of the inventory value issue.
MOBILE MARKETING AND ADVERTISING
In the context of mobile commerce, mobile marketing refers to marketing sent
to mobile devices. Companies have reported that they see better response from
mobile marketing campaigns that from traditional campaigns. The primary season
for this is the instant nature of customer decision-making that mobile apps and
websites enable. The consumer can receive a marketing message or discount
coupon and, within a few seconds, make a decision to buy and go on to complete
the sale- without disrupting their current real-world activity. For example, a busy
mom tending to her household chores with a baby in her arm could receive a
marketing message on her mobile about baby products from a local store. She can
and within a few clicks, place an order for her supplies without having to plan
ahead for it. No more need to reach for her purse and hunt for credit cards, no need
300
to log in to her laptop and try to recall the web address of the store she visited last
week, and surely no need to find a babysitter to cover for her while she runs to the
local store.
Research demonstrates that consumers of mobile and wireline markets
represent two distinct groups who are driven by different values and behaviours,
and who exhibit dissimilar psychographic and demographic profiles. Research
shows that how individuals relate to four situational dimensions- place, time, social
context and control determine to what extent they are ubiquitous or situated as
consumers. These factors are important in triggering m-commerce from e-
commerce. As a result, successful mobile commerce requires the development of
marketing campaigns targeted to these particular dimensions and according user
segments.
Uses of the Internet in Marketing
Online marketing can serve several purposes:
• Actual sales of products—e.g., Amazon.com.
• Promotion/advertising: Customers can be quite effectively targeted in many
situations because of the context that they, themselves, have sought out. For
example, when a consumer searches for a specific term in a search engine, a
“banner” or link to a firm selling products in that area can be displayed.
• Customer service: The site may contain information for those who no longer
have their manuals handy and, for electronic products, provide updated
drivers and software patches.
• Market research: Data can be collected relatively inexpensively on the Net
There are a number of economic realities of online competition:
• The costs of handling online orders are often higher than that of distributing
through traditional stores.
• Even if online selling is more cost effective in some situations, a firm selling
online will, in the long run, be competing with other online merchants—not
just against traditional “brick-and-mortar” stores. By the forces of supply and
demand, online prices will then be driven down so that the profit from selling
online will be no greater than that from traditional retailing. Any reduced costs
would then be expected to go to customers.
• Competition will be greater for products that have large markets than for those
where markets are smaller and more specialized. Amazon.com, for example,
has found it necessary to discount bestselling books deeply. Higher prices—
closer to the list price—can be charged for specialty books, but for a large part
of the market, competition will be intense.
• A new online merchant will face competition from established traditional
merchants. These will often have the cash reserves to stay in business for a
long time even with temporary competition. The online merchant, if it has no
cash reserves other than stockholders’ investment, may run out of cash before
it can become profitable.
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Issues in Web Site Design

Web site design: The web designer must make various issues into consideration:
• Speed vs. aesthetics: As we saw, some of the fancier sites have serious
problems functioning practically. Consumers may be impressed by a fancy
site, or may lack confidence in a firm that offers a simple one. Yet, fancier sites
with extensive graphics take time to download—particularly for users dialing
in with a modem as opposed to being “hard” wired—and may result in site
crashes.
• Keeping users on the site: A large number of “baskets” are abandoned online
as consumers fail to complete the “check-out” process for the products they
have selected. One problem here is that many consumers are drawn away from
a site and then are unlikely to come back. A large number of links may be
desirable to consumers, but they tend to draw people away. Taking banner
advertisers on your site from other sites may be profitable, but it may result in
customers lost.
• Information collection: An increasing number of consumers resist collection
of information about them, and a number of consumers have set up their
browsers to disallow “cookies,” files that contain information about their
computers and shopping habits.
Cyber-Consumer Behaviour:
In principle, it is fairly easy to search and compare online, and it was feared
that this might wipe out all margins online. More recent research suggests that
consumers in fact do not tend to search very intently and that large price
differences between sites persist. There are challenges in keeping consumers from
prematurely departing from one’s site.
Site content. The content of a site should generally be based on the purposes
of operating a site. For most sites, however, having a clear purpose be evident is
essential. The site should generally provide some evidence for this position. For
example, if the site claims a large selection, the vast choices offered should be
evident. Sites that claim convenience should make this evident. A main purpose of
the Internet is to make information readily available, and the site should be
designed so that finding the needed information among all the content of the site is
as easy as possible.
Web Site Traffic Generation
The web is now so large that getting traffic to any one site can be difficult. One
method is search engine optimization, Google, base rankings strictly on merit
(although sites are allowed to get preferred paid listings on the right side of the
screen). Other search engines allow sites to “bid” to get listed first. Some sites may
end up paying as much as a dollar for each surfer who clicks through. If a potential
customer is valuable enough, it may be worth paying for enhanced listings. Often,
however, it is better to be listed as number two or three since only more serious
searchers are likely to go beyond the first site.
For Google, some of the main ranking factors appear to be:
• Number and quality of links to the site.
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• Relevant keywords. Note that the ranking algorithm tests for “spam.” Reckless
repeating keywords may actually count against the rating of the site.
• The “click-through” share of the site. Since late 2006 or early 2007, Google
reportedly fine-tunes rankings by observing the percentage of the time that a
particular site is chosen for a given set of search terms. Sites that are selected
more frequently may improve in rank .
Other methods include “viral” campaigns wherein current users are used to
spread the word about a site, firm, or service. Amazon.com at one point invited
people, when they had completed a purchase, to automatically e-mail friends whose
e-mail addresses they provided with a message about what they had just bought. If
the friend bought any of the same items, both the original customer and the friend
would get a discount.
Another method of gaining traffic is through online advertising. Sites like
Google are mainly sponsored by advertisers, as are many sites for newspapers and
magazines. Individuals who see an ad on these sites can usually click to go to the
sponsor’s web site. Occasionally, a firm may advertise their sites in traditional
media..
Viral marketing is more suitable for some products than for others. To get
others involved in spreading the word, the product usually must be interesting and
unique. It must also be simple enough so that it can be explained briefly. It is most
useful when switching or trial costs are low. For Google’s one gigabyte e-mail
account, for example, there are large costs that may be covered by advertising
revenues from ads aimed at people who can afford to buy products and services.
Advertisers, however, may not be willing to pay for targets who cannot afford their
products. It is also difficult to control “word of mouth” (or “word of keyboard).
Online promotions: One way to generate traffic is promotions. Many sites
often offer new customers discounts or free gifts. This can be expensive, but
sometimes, the gifts can be ones that have a low marginal cost. For example, once
the firms pays for the development of a game, the cost of letting new users
download it is modest. The U.S. army uses this approach in making a game
available. To be allowed to use some of the “cooler” features, the user has to go
through various stages of “basic training.”
The Retail Scene
Retail scene outlet to refer to any source of products or services for consumers.
In earlier editions of this text, we used the term store. However, increasingly
consumers see or hear descriptions of products in catalogues, direct-mail pieces, or
various print media; on television or radio; or on the internet; they then acquire the
products through mail, telephone, or computer orders. Generally referred to as in-
home shopping, these sources represent a small but rapidly growing percentage of
total retail sales.
Internet Retailing
Based on the purchase characteristics relative to internet shopping,
consumers are categorised as:
303
• Convenience items: low-risk discretionary items. Internet sales will be most

successful for those where huge selection and deep discounts are important
and easy shipping is available. Example are books and event tickets.
• Researched items: high- information, big-tickets planned purchase. Internet
sales will be led by items with low style content and those for which “touch” is
not important. Examples are leisure travel and consumer electronics.
• Replenishment goods: moderate cost, high frequency purchases. Items that are
relatively expensive and easy ship will be most successful. Example include
health care items such as vitamins, beauty aids etc.,
Consumers shop online for the reasons sated below:
Reasons
Conveniences
Price was right
Unique merchandise
Past experience with company
Wanted product delivered
No time to go to store
Recommendation from a friend
Impulse
CHARACTERISTICS OF ONLINE SHOPPERS
Scott and Swinyard (2001) identified eight online shoppers segments
based on their recent shopping behaviour and their attitudes and behaviour with
respect to the internet and online shopping. These segments and recommended
marketing strategies for each are as follows:
• Shopping lovers: they are competent computer users and likely continue their
shopping habits. They also spread the word to others about joys of online
shopping whenever they have the opportunity. They represent an ideal target
for retailers.
• Adventurous explorer: they require little special attention by internet vendors
because they believe online shopping is fun. They are likely the opinion leaders
for all the things online. Retailers should nurture and cultivate them to be
online community builders and shopping advocates.
• Suspicious learners: their reluctance to purchase online more often hinges on
their lack of computer training, but they are open to new ways of doing things.
In contrast to more fearful segments, they don’t have a problem giving a
computer their credit card number. Further guidance and training would help
coax them into online buying.
• Business users: they use the internet primarily for business purposes. They
take a serious interest in what it can do for their professional life. They don’t
view online shopping as novel and aren’t usually champions of the practice.
• Fearful browsers: they are capable internet and computer users, spending a
good deal of time “window shopping”. They could become a significant buying
304
group if their fears about credit card security, shipping charges, and buying
products sight unseen were overcome.
• Shopping avoiders: they have an appealing income level, but their values make
a poor target for online retailers. They don’t like to wait for products to be
shipped to them, and they like seeing merchandise in person before buying.
They have online shopping issues that retailers will not easily be able to
overcome.
• Technology muddlers: they spend less time than any other segment online and
show little excitement about increasing their online comfort level. They are not
an attractive market for online retailers.
• Fun seekers: they see entertainment value in the internet, but buying things
online frightens them. Although security and privacy issues might be
overcome, the spending power of segment suggests that only a marginal long-
term payback would be possible.
With the sudden rise of e-Commerce, most brand and cost conscious
consumers are turning towards portals for buying or comparing product price with
brick – N – Mortar stores. Currently the products Indian consumers are buying
through online are smart phones, clothes, books, low value white goods, stationery,
electronics, educational material and lately e Learning courses.
The Indian consumers today wants to lead a life full of luxury and comfort.
The want to live in present and does not believe in savings for the future.
Consumers now have the power of information at their fingertips, enabling them to
compare and shop wide range of goods and services anytime, anywhere. Lately, this
trend has accelerated, as mobile apps have been playing larger transformative role
to consumer fingertips. An online business must have their different identity from their
competitors so that it can sustain in business market among various online websites.
Consumer satisfaction is vital factor for the online business to remain competitive
1) E-tailing
2) Importance of Technology for e-shopping
3) Behaviour patterns and Retail outlets
4) Consumer Behaviour and Internet Shopping
5) Consumer Behaviour of Online Shoppers
6) Online Marketing
7) Issues in website designing
8) Bricks and Clicks Model
9) Characteristics of online Shoppers
10) Mobile marketing
1) Give a note on progress in e-commerce
2) State the reasons for why e-commerce is a reality
3) Explain the characteristics of e-shoppers
305
4) How do you think internet helps in retailing?

5) Write a brief note on importance of Technology for e-shopping
6) Name few social media sites
7) What do you understand by online marketing? Express the consumer
Behaviour of online buyers.
8) Enumerate on Bricks and Clicks Model
24.6 SUMMARY
Growth in e-commerce in recent years has been driven more by increased
numbers gaining access than by an increased propensity to use it by existing
internet users. The growth in access is likely to slow considerably, and increases in
usage have been only moderate, despite an increasing range of products for which
e-commerce purchases have been made. In customer prospective “Content is the
King” drives consumer to compel towards product. The Internet connects billions of
people across continents and people are actively grouping, discussing, reading,
inventing, sharing and trading online. In an environment like this, where people are
unlimitedly connected with each other, word-of-mouth, or “word-of-mouse” rather,
has a completely new meaning. Indeed, if one would describe the current
transformations with one characteristic it would be that consumers are gaining
increased control and empowering abilities.
1) Mobile technology affects consumer behaviour in which of the following way-
a) Facilitates the use of location-based services
b) Stops consumers comparing prices in store
c) Makes consumer decisions very complicated
d) Slows down consumer decision making
Ans: a
2) The main emphasis of Amazon Website belongs in which category?
a. Transactional b. Brand Building c. Relationship Building d. Media
Ans: a
3) Delivering e-mail based customer support is an example of
e) Identifying customer need
f) Satisfying customer needs
g) Anticipation of customer needs
h) None of the above
Ans:a
4) Urbanclap deals with
a) Banking c) Health
b) Travel and Tourism d) Household Services
Ans: d
5) Alibaba.com is head quarterted at
a) US b) UK c) China d) Australia
Ans: c
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1) https://www.statista.com/topics/2454/e-commerce-in-india/
2) https://www.entrepreneur.com/article/231668
3) http://www.marketingteacher.com/consumer-Behaviour-online-shopping/
24.9 ASSIGNMENTS
1) Visit 10 online shopping sites and find out the different categories of products
available online
2) Try to purchase a product online and report the experience
3) Compare the e-commerce sites available for products and services
2) Damian Ryan, Calvin Jones (2012), Understanding Digital Marketing:
Marketing Strategies for Engaging the Digital Generation, Kogan page
Publishers, UK
1) Compare the characteristics of Brick n Mortar Consumers and Bricks n clicks
Consumers
2) For the following products, suggest online sites based on the price, delivery
mode, payment ease and value as compared to physical retail stores and
factors influence the purchase decisions after viewing the site. Justify your
answer in each case
a. expensive watches b. refrigerators c. vacation packages
24.12 KEY WORDS
Gross Merchandise value
Data Mining
Search Engine Optimisation
Social Media marketing
Paid per Click
Mobile Marketing
Brand Switching Costs
Bricks and Clicks Business Model
Internet Retailing
M-Commerce
Situational dimensions
Brick and Mortar Stores
Cyber Consumer
Viral marketing


348 EN 230
ANNAMALAI UNIVERSITY PRESS : 2017-2018

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348 EN 230

M.B.A. Marketing Management

Dr. C. Samudhrarajakumar Dr. C. Madhavi

Dr. R. Thenmozhi Dr. R.V. Pazhani

M.B.A. Marketing Management

1 Consumer Behaviour Meaning 1

CONSUMER BEHAVIOUR MEANING

1. To satisfy need of customers

1) Need identification to buy the product

• ‘What’ the consumers buy: goods and services

3) CB focuses on how individuals make decisions to spend their available

London, UK (2012). Anvikshiki: The Indian Journal of Research, Volume 6,

Work together and come up with the following:

APPLICATION OF CONSUMER BEHAVIOUR

4. Designing the Marketing Mix:

2.8 SUPPLEMENTARY MATERIALS

BUYER BEHAVIOUR MODEL

THE ECONOMIC MODEL:

d. Higher the promotional expenses, higher are the sales

consumer choice is the perceived functional utilitarian or physical performance

3.4 REVISION POINTS

2) Discuss in detail about the models of consumer Behaviour

TYPES OF BUYING DECISION BEHAVIOUR

COMPLEX BUYING BEHAVIOUR:

is not necessarily a high-priced one, nor is a low-involvement good necessarily a

Product Buying Motives:

5.5 INTEXT QUESTIONS

3) Ramanuj Majumdar, Consumer Behaviour, Prentice Hall of India, New Delhi,

CONSUMER RESEARCH PROCESS

3. Examples: Technological breakthrough, new legal policy, social change, high

Occurrence of problem expected Routine Planning

• Exploratory Research has the goal of formulating problems more precisely,

• Demographic and socioeconomic characteristics

B. Sampling for academics, or "modelers". An academic is interested in

1. Probability Proportional to Size Sampling and Cluster Sampling

Step Five: Data Collection

4 Form of Question Response

iv. Thematic appreciation test: Respondents are shown an ambiguous picture

9) Soloman, Consumer Behaviour: Buying, Having and Being, Pearson / PHI.

FACTORS INFLUENCING CONSUMER BEHAVIOUR

segmentation is that it tends to be one-dimensional and does not differentiate

Regional Differences: Urban, sub-urban, rural or the regional disparities due to

Preferences: A buyer prefers certain characteristics of service over others also

Value-expressive function:-concept. Thus, consumers who value nature and the

results in sanctions, or penalties ranging from mild social disapproval to

Technological Advancements and e-consumer: Many new components of the

4) The levels of education achieved by buyer such as Graduate, Post Graduate

7.8 SUPPLEMENTARY MATERIALS

Perceptual outputs: The perceptual outputs will be the behaviour or actions of

Perceived Quality of Services

additional intensity needed for the second stimulus to be perceived as

2) Mascarenhas, O.A., R. Kesavan, and M. Bernacchi, Lasting customer loyalty: a

BEHAVIOURAL LEARNING THEORIES

Strategic Applications of Classical Conditioning

i) Fear appeals in ad messages are examples of negative reinforcement.

Information is constantly organized and reorganized as new links between

b) Advertisements for competing brands or for other products made by the

Right-brain theory is consistent with classical conditioning and stresses the

Comparison of Learning Theories

b. The affective component: The affective component of an attitude comprises of

The value expressive function: A. consumer develops an attitude based on his

of the source of the message. The major purpose of changing attitudes is to

2 Attributions toward others