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INTRODUCTION
Definition:
Consumer behaviour is defined, as a behaviour that consumers display in
searching for, purchasing, using, evaluating and disposing of products and services that
they expect will satisfy their needs.
- Schiffman
Observable activities chosen to maximize satisfaction through attainment of
economic goods and services such as choice of retail outlet, preference of particular
brands and so on.
- Dictionary of marketing and advertising
The decision process and physical activity individual engage in when evaluating,
acquiring, using or disposing of goods and services.
- Loudon & Della Bitta
Types of consumers:
• Personal consumers
• Organizational consumers
Consuming - how, where, when and under what circumstances use product
Feedback to consumer
Individual
Consumer Consumer
Consumer
Response
Decision Making
Environmental
Influence
Feedback to environment
Observational approach
In home observation
Interviews and surveys
Focus group
Field experimentation
Consumption research products
Managerial approach:
- It is more micro and cognitive in nature.
- Micro: emphasizes the individual consumer like his attitude, perception, life
style, etc.
- Cognitive: emphasizes the thought process of individual consumers and factors
in influencing their decision.
- Marketers are interested in this approach because all marketing strategy is to
satisfy the individual consumers need.
- Risks in managerial approach:
Overemphasizes the rationality of consumers
Overlook the dynamics of environmental factors independent of
individual
Focus is on purchase rather than consumption
Holistic approach:
- It is more macro in nature.
- It focuses on consumption experience rather than purchasing process.
- It helps in understanding the environmental context of consumer action.
- Risks in holistic approach are:
No emphasize on purchase decision.
No understanding of cognitive process, which is necessary for the
marketer to meet consumer needs.
Balanced approach:
In balanced approach both the managerial view and holistic view are taken by
eliminating the drawbacks.
Market-mix determination:
Marketing mix variables are:
Product
Price
Place
Promotion
CONSUMER AS AN INDIVIDUAL
CONSUMER NEEDS
Need:
Basic feel of desire
Want:
The means of satisfying the need
Types of needs:
o Biogenic need.
o Physical need.
o Psycogenic need.
o Utilitarian or hedonic need
Biogenic need:
The need for air, water and sunlight .
Physical need:
The need for food, shelter and clothing.
Psycogenic need:
The needs acquired in the process of becoming a member of a particular
society or culture.
This include need for affection, power, self-esteem, etc.
Eg: In India need to accumulate wealth for daughter’s marriage shows
attachment and affection.
Utilitarian or Hedonic Need:
This need satisfies consumer’s dreams and builds up self confidence.
This need implies that consumer will emphasize the tangible quality of the
product.
Eg: Need for efficient washing powder.
Need to own a car.
Hierarchy of needs:
• Dr.Abraham Maslow , a clinical psychologist formulated the theory of
human needs.
• This theory identifies five basic level of human needs ranked in the order
of importance.
• Individual seek to satisfy lower-level of needs before higher-level of needs
emerge.
• The hierarchy of needs are:
o Physiological needs.
o Safety and security needs.
o Social needs.
o Ego needs.
o Self-actualization needs.
Physiological needs:
Basic level of human needs.
This need is required to sustain biological life.
This need is also called as biogenic need or physical need.
Ads for products and services that promote physical health is an appeal to
this level of the need hierarchy.
Eg: need for food, water, shelter, clothing, etc.
Safety and security needs:
Once the first level is satisfied this need become the driving force for
human behavior.
Focus on tomorrow’s life.
Eg: savings account, insurance policies, education, etc.
Social needs:
This level satisfies the need for human relationship.
Ads of personal care products appeal to this need.
Eg: Need for love, affection, belonging and acceptance.
Ego needs:
Either inward or outward oriented.
Inwardly directed ego needs reflects need for self-acceptance, self-esteem,
success, etc.
Outwardly directed Ego needs reflects need for prestige, reputation, status,
etc.
Self-actualization needs:
This need refers to individual desire to fulfill his or her potential or fully
exploiting ones potential.
Only few satisfy this need.
Eg: Player working single-mindedly for many years to excel in his sports.
Trio of needs:
Need for affiliation:
It is a social motive and it influences consumer behaviour.
Based on the desire for friendship,for acceptance,etc.
People with high affiliation needs are socially dependent on others.
Need for power:
This relate to individual desire to control his or her environment, to
control other persons,etc.
It is related to ego needs.
Need for achievement:
People with high achievement need regard personal accomplishment as an
end in itself.
They are more self-confident and risk-taking.
It is related to both ego need and self-actualization need.
MOTIVATION
Definition:
Motivation is a driving force within an individual that impels them to action.
Model of motivation:
This model portrays motivation as a state of need induced tension that drives the
individual to engage in behaviour that he or she believes will satisfy the need and thus
reduce the tension.
Learning
Learning
Goal
Goaloror
Needs
Needswants,
need
need
and
wants,
desires
Tension
Tension Drive
Drive Behavior
Behavior
and desires fulfill-
fulfill-
ment
ment
Cognitiv
Cognitiv
ee
processes
processes
Tension
Tension
reduction
reduction
Role or functions of motives:
The role of motive is to arouse and direct the behaviour of consumers. Some of
the functions of motives are:
Defining basic striving:
Motives influence consumers to develop and identify their basic striving
which includes general goals such as safety, affiliation, etc which
consumer seeks to achieve.
Identifying goal objects:
Consumers view product or service as a mean to satisfy their motives.
The product is the goal to consumers.
Influencing choice criteria:
Motives guide consumers to buy certain products and not the other.
Influencing consumer perception and learning:
Motives influences consumer perception and learning process.
Types of motives:
The types are:
Strong vs. weak motive
Conscious vs. unconscious motive
Positive vs. negative motive
Rational vs. emotional motive
Arousal of motives:
Four arousal of motives are:
Physiological arousal
Emotional arousal
Cognitive arousal
Environmental arousal
Physiological arousal:
Physiological cues are involuntary and it cause uncomfortable tension.
Eg: stomach contraction will trigger awareness of a hunger need.
Emotional arousal:
Autistic thinking(Daydreaming) arouse emotional need and drive them
into goal oriented behaiour.
Eg: fear of examination drives the student to sit and study.
Cognitive arousal:
Random thought can lead to cognitive awareness of needs.
Eg: ads that provide reminder of home make one feel to speak with
parents.
Environmental arousal:
Certain cues in the environment arouse a set of needs.
Eg: End of school day will arouse a need for food.
Dynamics of motivation:
Needs are never fully satisfied
New needs emerges as old needs are satisfied
Success and failure influence goals
Substitute goal
Frustration
Measurement of motives:
Motives are hypothetical constructs and are not tangibly observed.
No single measurement exists so combination of various qualitative
research techniques is used.
Motivational research includes all type of measures into human motives.
Motivational research:
Motivational research is a qualitative research designed to uncover the
consumers subconscious or hidden motivation.
Sigmund freud’s psychoanalytical theory of personality provide the
foundation for the development of motivational research.
Limitations:
This research is qualitative and experiment can be performed for
only small group so generalization of the result for large group will
sometimes give wrong result.
This research generate more subjective opinion and it is difficult
for the marketer to understand consumer behaviour.
PERSONALITY AND CONSUMER BEHAVIOUR
Definition:
Personality is defined as the inner psychological characteristics that both
determine and reflect how a person responds to his or her environment.
Nature of personality:
Personality reflects individual difference:
Individual personality are unique combination of factors so no individuals
are alike.
Many individuals may be similar in terms of single personality
characteristic which help marketers to categorize consumers into different
groups and identify their market segment.
Personality is consistent and enduring:
Personality has both consistency and endurance.
Personality can change:
Some major life events and gradual maturing process changes the
personality.
Theories of personality:
Personality theories are:
Freudian theory.
Neo-Freudian theory.
Trait theory.
Freudian theory:
This theory is proposed by Sigmund Freuds’.
This theory is built on the premises “Unconscious needs or drives are at
the heart of human motivation”.
Human personality consist of 3 interacting systems:
o Id
o Superego
o Ego
Id:
Warehouse of primitive or instinctual needs for which individual seeks immediate
satisfaction. Eg: hunger, thirst, etc.
Superego:
Individual’s internal expression of society’s moral and ethical codes of conduct.
It sees whether individual satisfies the need in the socially acceptable fashion.
Ego:
Individual’s conscious control that balances the demands of the id and superego
Trait Theory:
This theory is a quantitative measure.
Personality theory with a focus on psychological characteristics
Trait - any distinguishing, relatively enduring way in which one individual
differs from another
Personality is linked to how consumers make their choices or to
consumption of a broad product category - not a specific brand.
The traits that are measured are:
o Consumer innovativeness: how receptive a person is to a new
experience.
o Consumer materialism:: the degree of consumer attachment to a
wordly possession.
o Consumer ethnocentrism: the consumers likelihood to accept or
reject foreign made products
Consumer innovativeness:
How receptive a person is to a new experience.
Consumer innovators are the first to try new product.
Some of the personality traits that differentiate innovators and
noninnovators.
Consumer innovativeness:
The degree to which consumers are receptive to new products, new
services or new practices.
Dogmatism:
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.
High dogmatic-discomfort with new product.
Low dogmatic-like to try new product.
Social character:
It is a personality trait that range from inner-directedness to other-
directedness.
Inner-Directed:
o Consumers who tend to rely on their own inner values
o More likely to be innovators
o Tend to prefer ads that stress product features and benefits
Other-Directed
:
o Consumers who tend to look to others for direction
o Less likely to be innovators
o Tend to prefer ads that feature social acceptance
Need for uniqueness:
Consumers who avoid appearing to conform to expectations or standards
of others.
Optimum stimulation level:
A personality trait that measures the level or amount of novelty or
complexity that individuals seek in their personal experiences. High OSL
consumers tend to accept risky and novel products more readily than low
OSL consumers.
Sensation seeking:
A personality trait characterized by the need for varied, novel, and
complex sensations and experience, and the willingness to take physical
and social risks for the sake of such experience
Variety-novelty seeking:
A personality trait similar to OSL, which measures a consumer’s degree to
variety seeking
Examples:
Exploratory Purchase Behavior
Use Innovativeness
Vicarious Exploration
Cognitive personality factors:
Two cognitive personality traits are:
Need for cognition.
Visualizers vs verbalizers.
• Need for cognition
o A person’s craving for enjoyment of thinking
o Consumers high in NC are more likely to respond to ads rich in
product-related information
o Consumers low in NC are more likely to be attracted to
background or peripheral aspects of an ad.
• Visualizers versus verbalizers
o A person’s preference for information presented visually or
verbally
Consumer materialism:
The degree of consumer attachment to a worldly possession.
The extent to which a person is considered “materialistic.
Characteristic of materialistic people:
Value acquiring and showing-off possessions
Are particularly self-centered and selfish
Seek lifestyles full of possessions
Have many possessions that do not lead to greater happiness
Consumer Ethnocentrism:
The consumers likelihood to accept or reject foreign made products
Ethnocentric consumers feel it is wrong to purchase foreign-made products
They can be targeted by stressing nationalistic themes.
Brand Personality
Personality-like traits associated with brands.
Examples:
Volvo - safety
Perdue - freshness
Nike - the athlete
BMW - performance
Levi’s 501 - dependable and rugged
Brand personification:
Associating a human-like character to a brand is called as brand
personification.
Eg: dishwashing liquid – demanding task master.
CONSUMER PERCEPTION
Definition:
The process by which an individual selects, organizes, and interprets stimuli into a
meaningful and coherent picture of the world. [How we see the world around us]
Elements of perception:
The elements of perception are:
Sensation
Absolute threshold
Differential threshold
Subliminal perception
Sensation:
o Sensation is the immediate and direct response of the sensory organs to
stimuli.
o Stimulus or stimuli is any unit of input to any of the senses. e.g.: ads,
brand name, etc.
o Sensory receptors are human organs like eyes, nose, ears, mouth and skin.
o Weber’s law states that “stronger the initial stimulus, the greater the
additional intensity needed for the second stimulus to be perceived as
different”.
o Eg: Increase of 25 cent to a orange juice worth$5.50 is not
noticeable(below j.n.d) but same increase of 25 cent to a gasoline is
quickly noticed by the consumer(above j.n.d)
o Marketing Applications of the JND
o :
o Marketers use this concept for the following reasons:
o Negative change is not noticed by the consumers (below j.n.d).eg:
reduction in product size or quality
o Product improvement is noticed by the consumers (above j.n.d).eg:
improved packing , lower price, etc.
Subliminal perception
:
o Perception of very weak or rapid stimuli received below the level of
conscious awareness is called as subliminal perception.
o Perception of stimuli that are above the level of conscious awareness is
called as supraliminal perception or perception.
Perceptual selection:
Consumers subconsciously exercise a great deal of selectivity in the
environment.
e.g: women in a supermarket gets exposed to numerous stimuli but select
the item she needs and leave because she exercise selectivity in
perception.
Stimuli get selected depends on two major factors:
Consumers’ previous experience
Consumers’ motives at that time
Selective Exposure:
Consumers view messages that are pleasant and sympathetic and avoid
painful or threatening one.
Selective Attention:
Consumer exhibit high awareness for the stimuli that meet their needs
and lo awareness for stimuli that are irrelevant.
Perceptual Defense:
Consumers subconsciously avoid stimuli that are psychologically
threatening.
Perceptual Blocking:
Consumers are bombarded with numerous stimuli and they block from
conscious awareness.
Perceptual organization:
Perceptual organization principles are based on gesalt psychology.
People do not experience the numerous stumili as separate instead they
perceive them as unified whole.
The basic principles are:
Figure and ground
Grouping
Closure
Figure and ground:
Stimuli that contrast with their environment are more likely to be
noticed.
Eg: Lufthansa ad featured a jet flying between two glass high-rise
building.
Grouping:
Consumers group the stimuli to form a unified picture and
facilitate their memory.
Grouping is advantageous to the marketer to associate a meaning
for their product.
Eg:ad for tea which shows a couple associate tea drinking with
romance and fine living.
Closure:
Incomplete message are better remembered than complete ones.
Perceptual interpretation:
The interpretation of stumili is uniquely individual.
Influences of Perceptual Distortion:
o Physical Appearances
o Stereotypes
o First Impressions
o Jumping to Conclusions
o Halo Effect
Physical Appearances:
People tend to attribute the quality of the product based on the
qualities of personality featuring in the ad.
Attractive models are perceived to have more expertise regarding
enhancing product(jewelry) and problem solving products(product to
avoid dandruff).
Stereotypes:
People tend to form their own picture in their mind for various stimuli.
First Impressions:
First impression is ever lasting and it is the challenge for the marketer
to form so.
Jumping to Conclusions:
Consumer jump to conclusion before examining all the complete
evidence.
E.g.: hearing the first line of ad consumer draw conclusion about
the product.
Halo Effect:
Evaluation of multiple objects on the basis of the evaluation of just one
dimension.
CONSUMER LEARNING:
Definition:
Consumer learning is the process by which individuals acquire the purchase and
consumption knowledge and experience that they apply to future related behaviour.
Importance of Learning:
Marketers must teach consumers:
–where to buy
–how to use
–how to maintain
–how to dispose of products
Motivation
Cues
Response
Reinforcement
Learning theories:
Classical conditioning:
Ivan Pavlov ,a Russian physiologist was first to propose this theory.
According to this theory “Conditioned learning results when a stimulus is paired
with another stimulus that elicits a known response that serves to produce the same
response when used alone”.
Dog experiment.
Unconditioned Stimulus
Meat paste
Unconditioned Response
Salivation
Conditioned Stimulus
Bell
Neo-Pavlovian Conditioning:
Creation of strong association between CS and US requires:
Repetition
Stimulus Generalization
Stimulus Discrimination
Repetition:
Repetition increase the strength of association between CS and US so reduce the
process of forgetting.
Advertising wearout: though overlearning aids retention, at some point an
individual will become satiated to numerous exposure and both attention and retention
will decline. This is known as advertising wearout.
To avoid this marketers use cosmetic variation(change in background, print
types,etc) and substantive variation(change in the ad content).
Three hit theory: three exposures to an ad are necessary for the ad to be effective
.
Stimulus Generalization:
The inability to perceive differences between slightly dissimilar stimuli.
Imitative “Me-too” product succeed in the market place because of this.
Stimulus Discrimination:
The ability to select a specific stimulus from among similar stimuli because of
perceived differences is called as stimulus discrimination
Positioning: the image or position that the product or service holds in the mind of
consumer is critical for its success.
Product differentiation: this strategy is designed to distinguish a product or brand
from its competitors on the basis of attribute that is relevant and valuable to the
consumers.
Reinforcement of behaviour:
Positive Reinforcement: Positive outcomes that strengthen the likelihood of a
specific response
Example: Ad showing beautiful hair as a reinforcement to buy shampoo
Negative Reinforcement: Unpleasant or negative outcomes that serve to
encourage a specific behavior
Example: Ad showing wrinkled skin as reinforcement to buy skin cream.
Observational Learning
A process by which individuals observe the behavior of others and consequences
of such behavior. Also known as modeling or vicarious learning.
Eg: associating with dad and imitating the same behaviour.
Information processing:
Information processing is related to both consumers cognitive ability and
complexity of information to be processed.
A cognitive theory of human learning patterned after computer information
processing focuses on how information is stored in human memory and how it is
retrieved.
Retention:
Information is stored in long-term memory
Episodically: by the order in which it is acquired
Semantically: according to significant concepts.
Left brain:
Information is actively processed in left brain with high involvement.
Media strategy: Print media is high involvement media.
This theory proposes that highly involved consumers are best reached through
ads that focus on the specific attributes of the product (the central route(left)) while
uninvolved consumers can be attracted through peripheral advertising cues such as the
model or the setting (the peripheral route(right)).
Involvement
Central
HIGH Peripheral
LOW
Route Route
Message Peripheral
Arguments Cues
Influence Influence
Attitudes Attitudes
CONSUMER ATTITUDES
:
Definition:
A learned predisposition to behave in a consistently favorable or unfavorable
manner with respect to a given object.
Cognitive Component:
The knowledge and perceptions that are acquired by a combination of direct
experience with the attitude object and related information from various sources.
This knowledge and perception take the form of belief.
Affective Component:
A consumer’s emotions or feelings about a particular product or brand.
Conative Component
The likelihood or tendency that an individual will undertake a specific action or
behave in a particular way with regard to the attitude object.
Cognitive component shows the consumer intension to buy.
Attitude-toward-object model:
Attitude towards a product is function of evaluation of product-specific beliefs or
attributes.
Consumers have favorable attitude towards brand which have adequate level of
attributes.
Consumers have unfavorable attitude towards brand which do not have adequate
level of attributes.
Attitude-Toward-Behavior Model:
A model that proposes that a consumer’s attitude toward a specific behavior is a
function of how strongly he or she believes that the action will lead to a specific outcome
(either favorable or unfavorable).
Attitude-Toward-the-Ad Model:
A model that proposes that a consumer forms various feelings (affects) and
judgments (cognitions) as the result of exposure to an advertisement, which, in turn,
affect the consumer’s attitude toward the ad and attitude toward the brand.
ATTITUDE FORMATION AND CHANGE:
Attitude formation is the process of shifting from having no attitude to having
some attitude about the given object.
Personality factors:
Personality plays a role in attitude formation.
Eg: individual with high need for cognition form positive attitude towards ad that
are rich with information and vice–versa.
Attribution theory:
A theory concerned with how people assign casualty to events and form or alter
their attitudes as an outcome of assessing their own or other people’s behavior.
Self-perception Theory:
A theory that suggests that consumers develop attitudes by reflecting on their own
behavior.
SELF IMAGE:
Enduring image of themselves is called as self- image.
Individual’s self-image is unique.
There is a relationship between brand preference and consumers self-image.
Consumers try to enhance their self-image by selecting the product with image
that they believe will enhance their own self-image.
Kinds of self-image:
Actual self-image: how consumers see themselves.
Ideal self-image: how consumers would like to see themselves.
Social self-image: how consumers feel others see them.
Ideal social self-image: how consumers would like others to see them.
Expected self-image: how consumers expect to see themselves at some specified
future time.
Virtual personality:
Online individuals have an opportunity to try on different personalities
Virtual personalities may result in different purchase behavior
Definition:
Communication is the transmission of a message from a sender to a receiver via a
medium or channel of transmission.
Components of communication:
Sender
Receiver
Medium
Message
Feedback
Communication process:
Message initiator(source).
Target audience(receiver).
Feedback(receivers response).
Classification of groups:
Membership group: A membership group is one to which a person either belongs
or would qualify for membership
Symbolic group: A symbolic group is one in which an individual is not likely to
receive membership despite acting like a member
Reference group:
Reference group is
any person or group that serves as a point of comparison (or reference) for an individual
in the formation of either general or specific values, attitudes, or behavior.
Celebrities:
Famous personalities hold the viewers attention and promote the product.
Eg: sharukhan promoting the navarathana talc powder.
The expert:
A person by his occupation is in unique position to help the consumers
evaluate the product the advertisement promotes.
Eg: ad for frying pan feature a chef explaining the product.
The “common man”:
Reference group appeal that uses a testimonial of satisfied customers.
Eg: slice-of-life advertisement like Aswini hair oil.
The executive and employee spokesperson:
Top executives festure as a spokesperson in the ad.
Eg: Frank Perdue CEO of Perdue chicken feature in the ad.
Trade or spokes-characters:
Familiar cartoon character feature in the ad to promote the product.
Eg:
Other reference group appeals
FAMILY:
Family is defined as two or more persons related by blood, marriage or adoption
who reside together.
Households:
Family Households:
Married couple,
Nuclear family,
Extended family
Households
Non-Family Households:
Unmarried couples,
Friends/ Roommates,
Boarders
Types of families:
Married couple: a husband and a wife.
Nuclear family: A husband and wife and one or more children.
Extended family: a husband, wife, children and atleast one grandparent.
Single-parent family: one parent and atleast one child.
Consumer socialization:
The process by which children acquire the skills, knowledge, and attitudes
necessary to function as consumers.
Socialization begins in early childhood and extends throughout a persons
entire life.
Intergenerational socialization:
Some product loyalties or brand preferences is transferred from one generation to
another.
Functions of a family:
Economic well-being.
Emotional support.
Suitable family lifestyles.
Importance:
Subcultural analysis enables the marketers to focus on sizable and natural market
segments.
Subculture is the relevant unit of analysis for market research.
Categories of subculture:
Categories examples
Nationality Indian, American
Religion Hindu, Muslim
Geographic region Northeast, Midwest
Race Tamilian, keralite
Age senior citizen, teenager
Gender male, female
Occupation engineer, doctor
Social class lower, middle, upper
Nationality subculture:
Nationality is an important subcultural reference that guides in what customer
value and what they buy.
Hispanic subculture:
Traditional Characteristics of the Hispanic American Market:
Prefer well-known brands.
Buy brands perceived to be more prestigious.
Are fashion conscious.
Historically prefer to shop at smaller personal stores.
Buy brands advertised by their ethnic-group stores.
Tend not to be impulsive buyers
.
Increasingly clipping and using cents-off coupons.
Likely to buy what their parent brought.
Prefer fresh to frozen or prepared items.
Religious Subcultures
Racial subculture:
African-American Consumer
Largest racial minority in U.S.
Purchasing power estimated at $572 billion
They are brand loyal.
Prefer high fashions and name brands “as a signal of their success”.
Asian-American Consumers
Currently about 12 million in size
Estimated at 13 million in 2005
Gain of 54% since 1990
Age subculture:
Four groups under this are:
Generation Y
Generation X
Baby boomers
Older consumers
Generation Y:
Born between 1977 and 1994;
Also called echo boomers and millennium generation
3 Subsegments of Gen Y:
Gen Y Adults(age 19-24)
Gen Y Teens(age 13-18)
Gen Y Tweens or kids(age 8-12)
Appealing to generation Y:
Shifts from TV viewing to using internet so they prefer internet shopping.
Less likely to read newspaper.
Not trust the stores their parents shop in.
Generation X:
Baby Boomers
:
Individuals born between 1946 and 1964 (approximately 45% of the adult
population).
The largest age category alive today
Frequently make important consumer purchase decisions
Include a small subsegment of trend setting consumers (yuppies) who influence
consumer tastes of other age segments.
They are motivated consumers.
They enjoying buying for themselves and for their homes.
Seniors:
Generally older consumers.
Consist of subcultures, including the 50-plus market and the “elderly consumers”
market.
Three Senior Subsegments
Gender as a subculture:
Working woman:
Segmentation issues:
Four Segments of women are:
Stay-at-Home Housewives
Plan-to-Work Housewives
Just-a-Job Working Women
Career-Oriented Working Women
Shopping pattern:
Working women spend less time in shopping.
They brand and store loyal.
They shop during evenings ad week-ends.
Imperative to be multinational:
All major companies market their products beyond their original home country.
The vocabulary of marketing denotes the term as glocal.
EU-European Union forms a single market and used euro as a common currency.
NAFTA-North American Free Trade Agreement consist of United states,
Canada and Mexico and provide free market access to more than 400 million
consumers.
Reason for being multinational:
Opportunity for future growth.
Consumers are eager to try foreign products.
Acquiring exposure to other cultures:
Some consumers get exposure to other culture by their own initiatives like travel,
working in foreign, etc.
Consumers taste different culture from contact with foreign movie.
Consumers taste different culture by buying unfamiliar or different product.
Marketers bring new products, services, practices or ideas for international
marketing and it gives cultural transfer.
Country-of-origin effects:
Consumers make purchase decision in considering country of origin of their
choice.
Eg: consumers associate France with Wine, Fashion clothing and perfume,
Germany with cars and machinery.
Some consumers restrict buying product from other countries due to animosity.
Eg: Many Chinese consumers consider Sony high-end and high-quality, but may
refuse to buy due to animosity toward Japan
High-animosity consumers own fewer Japanese products than low-animosity
consumers
Acculturation:
Acculturation is the learning of a new “foreign” culture
.
Marketers should learn the culture of other countries where they want to sell their
product.
Cross-cultural acculturation is a dual process for marketers:
Marketers must be sensitive to the prevailing attitudes, behaviors and
values to appropriately position and market their product.
To gain acceptance of their product in the foreign nation, marketers should
develop a strategy that encourage members of that society to change their attitude and
alter their behaviour.
Global Vs local:
World markets are becoming more similar so the challenges for the marketers are:
Whether to use shared needs and values as a segmentation strategy.
Whether to use national borders as a segmentation strategy.
PRODUCT COMMUNICATON
STRATEGY STRATEGY
STANDARDIZED LOCALIZED
COMMUNICATIONS COMMUNICATIONS
Product Problems:
Sometimes marketers neglect to modify their products to meet local customs and
taste.
Eg: Snapple failed because Japanese consumers preferred clear, less sweet iced
tea but it is unwilling or too slow to alter its ingredients.
Colour is a critical variable because it has different meaning in different culture.
Eg: Meanings of Blue:
Holland - warmth
Iran - death
Sweden - coldness
India - purity
Promotional problem:
The promotional message must be consistent with the language and customs of
the particular target society.
Social comparison theory: individuals quite normally compare their own material
possession with those owned by others in order to determine their relative social standing.
Status and consumer purchasing power are related, individuals with more
purchasing power have more status.
Status consumption: The process by which consumers endeavor to increase their
social standing through conspicuous consumption or possession.
Socioeconomic variables as expression of status are family income, occupational
status and educational attainment.
Social class is hierarchical and a natural form of segmentation:
Social class categories are ranked in hierarchy ranging from low to high status.
Hierarchical aspects of social class are important for the marketers because
consumers purchase certain products favored by the members of higher social class and
avoid certain product, as they are perceived as lower class products.
Social class membership serves as a important reference group in the
development of attitude and behaviours.
Reputational measures:
The Reputational approach requires selected community informants to make
initial judgment concerning the social class membership of others within the community.
The final task of assigning the community members to the social class position
belongs to the trained researcher.
It is proved as impractical because this approach gives the understanding of social
class structure and not the consumption behaviour within the class, which is the purpose
of the measure.
Objective measures:
Objective measure consists of some socioeconomic variables like occupation,
education and amount of income.
These variables are measured through questionnaires, which have some factual
questions about themselves, their family and the place of residence.
Two categories of objective measures are:
Single-variable indexes: occupation, education and income.
Composite-variable indexes: combine a number of socioeconomic factors.
Social-class mobility:
Individual can move either up or down in the social-class position held by their
parents.
Higher education and high-income level favours upward mobility.
Upward mobility is common in American society.
Geodemographic clustering:
Linking of consumer-related geographic and socio-economic data is called as
geodemographic clustering.
Affluent consumers:
Affluent consumers are rich or well off people.
Affluent consumers constitute an attractive target segment because they have
larger share of discretionary (or disposable) income.
Positive relationship exists between health and economic status. ie. Healthiest
people are economically advantaged.
Non-affluent consumers:
Lower income or downscale consumers are called as non-affluent consumers.
These consumers reflect modest lifestyles
They are more brand loyal because they are not affordable to make mistake by
switching over to unfamiliar brands.
Arrival of techno-class:
Techno-class is a new type of social class category.
The degree of literacy, familiarity and competency with technology is the base for
this class standing.
Technological class structure centers the amount of computer skills that one
possesses.
Lack of computer skill is referred as technologically underclassed.
CULTURE:( (slide)
Definition:
The sum total of learned beliefs, values, and customs that serve to regulate the
consumer behavior of members of a particular society
Issues in culture:
Enculturation and acculturation
Language and symbols
Ritual
Sharing of Culture
Sharing of Culture:
Culture is viewed as a group customs that link together the members of a society.
Other institutions, which share the responsibility of cultural transfer, are:
educational institution and houses of worship.
Measurement of culture:
Content Analysis
Consumer Fieldwork
Value Measurement Instruments
Content Analysis
Content analysis is a
method for systematically analyzing the content of verbal, written and pictorial
communication.
The method is frequently used to determine prevailing social values of a society.
Consumer Fieldwork:
A cultural measurement technique that takes place within a natural environment that
focuses on observing behavior (sometimes without the subjects’ awareness).
List of Values (LOV): A value measurement instrument that asks consumers to identify
their two most important values from a nine-value list that is based on the terminal values
of the Rokeach Value Survey
Values and Lifestyles (VALS): A value measurement based on two categories:
self-definition and resources.
UNIT – IV
Definition:
Opinion leadership is the process by which one person (the opinion leader)
informally influences the consumption actions or attitudes of others who may be opinion
seekers or opinion recipients.
Opinion Opinion
Leader Opinion Receiver
Seeker
Opinion leader: individuals who influence the behaviour of others.
Opinion receiver or opinion recipients: individuals who receive information without
consciously searching for it.
Opinion seekers: individuals who actively seek information and advice about a product.
Viral Marketing:
It is named viral because it allows the message to spread like a virus.
Viral marketing describe any strategy that encourages individuals to pass on a
marketing message to others, creating the potential for exponential growth in the
message’s exposure and influence.
The other names of viral marketing are:
Buzz Marketing
Wildfire Marketing
Avalanche Marketing
Purchase Pals:
Purchase pals are information sources who actually accompany consumers on
shopping trips.
Male purchase pals are the source of product category expertise, product
information, retail store and price information.
Female purchase pals gives moral support and increase confidence in the buyers
decision.
OPINION LEADERSHIP
SAMPLE
MEASUREMENT DESCRIPTION OF METHOD
QUESTIONS ASKED
METHOD
Two-Step Flow:
A communication model that portrays opinion leaders as direct receivers of
information from mass media sources who, in turn, interpret and transmit this
information.
Step 1 Step 2
Mass Opinion Opinion
Media Leaders Receivers
(the
masses)
Multistep Flow:
A revision of the traditional two-step theory that shows multiple communication
flows.
Opinion leaders both influence and are influenced by opinion receivers.
DIFFUSION OF INNOVATIONS:
The framework of exploring consumer acceptance of new products is known as
diffusion of innovations.
Two important processes under the study of diffusion of innovations are:
Diffusion process.
Adoption process.
Diffusion Process
:
The process by which the acceptance of an innovation (new product, new idea or
new service) is spread by communication to members of social system (target market)
over a period of time.
It is a macro process.
The innovation:
Various definition of innovation or new products are:
Firm-oriented definitions
Product-oriented definitions
Market-oriented definitions
Consumer-oriented definitions
Firm-oriented definitions:
This approach defines a product as new when the company produces it or markets
it for the first time.
Product-oriented definitions:
This approach defines the newness of the product based on the feature inherent in
the product and on the effect these features are likely to have on consumers.
Market-oriented definitions:
This approach defines the newness of the product in terms of how much exposure
consumers have to the new products.
Consumer-oriented definitions:
Consumer-oriented approach a new product is any product that a potential
consumers judges to be new.
Time:
Time is a backbone of diffusion process.
Three aspects under this are:
The amount of purchase time
The identification of adopter categories
The rate of adoption
Purchase time:
Purchase time is the amount of time that elapses between consumer’s initial
awareness of a new product and point at which they purchase or reject it.
This gives information about the total time taken by the new product to achieve
widespread adoption.
Adopters categories:
A sequence of categories that describes how early (or late) a consumer adopts a
new product in relation to other adopters.
Adopter categories are:
Innovators:
Venturesome
Very eager to try new ideas
Acceptable if risk is daring
More cosmopolite social relationships
Communicates with other innovators
Early Adopters:
Respected
More integrated into the local social system
The persons to check with before adopting a new idea
Category contains greatest number of opinion leaders
Are role models
Early Majority:
Deliberate
Adopt new ideas just prior to the average time
Seldom hold leadership positions
Deliberate for some time before adopting
Late Majority:
Skeptical
Adopt new ideas just after the average time
Adopting may be both an economic necessity and a reaction to
peer pressures
Innovations approached cautiously
Laggards
:
Traditional
The last people to adopt an innovation
Most “localite” in outlook
Oriented to the past
Suspicious of the new
Rate of adoption:
The time taken by a new product to get adopted to the members of social system.
Marketers adopts two types of policy to increase the adoption rate:
Penetration policy
Skimming policy
Adoption Process
:
The stages through which an individual consumer passes in arriving at a decision
to try (or not to try), to continue using (or discontinue using) a new product.
It is a micro process.
Consumer decides whether or not to After talking to a knowledgeable friend, Janet decides that this
believe that this product or service MP3 player will allow her to easily download the MP3 files that
Evaluation
will satisfy the need--a kind of she has on her computer. She also feels that the unit’s size is
“mental trial.” small enough to easily fit into her beltpack.
Personality Traits:
Consumer innovators are
Less dogmatic: approach new product with openness.
Need for uniqueness: they feel to be seen unique by using new products.
Inner-directed: they rely on their own values and standards while making
decision
High optimum stimulation level: individuals who seek unusual experience.
Variety seeking: they are brand switcher and try new products.
Media Habits:
Consumer innovators are less likely to watch TV.
They used to read special interest magazines.
Social Characteristics:
Consumer innovators are more socially involved and socially accepted by others.
Demographic Characteristics:
The demographic characteristics of consumer innovators are:
Young person
Higher personal income
More formal education
Higher occupational status
NICOSIA MODEL:
Francesco Nicosia formulated this model.
He says the act of purchase itself is more complex decision process.
This model focus on conscious and deliberate decision making behaviour.
The fields are components are:
The firm’s attributes and outputs or communications and the consumers
psychological attributes.
The consumers search for and evaluation of the firms output and other
available attributes.
The consumers motivated act of purchase.
The consumers storage or use of the product.
Limitations:
The flow is incomplete in its treatment of numerous factors internal to the
consumers.
Assumption that consumer begins the decision process with no predisposition
regarding involved firms is restricting.
HOWARD-SHETH MODEL:
This model depicts rational brand choice behaviour by buyer under conditions of
incomplete information and limited abilities.
Four major components are:
Input variables
Output variables
Hypothetical constructs
Exogenous variables
Input variables:
Significant stimuli: these are actual elements of brands that the buyer confronts.
Symbolic stimuli: producers representing their products in symbolic form such as
in ad generate these.
Social stimuli: these are generated by social environment including family and
groups.
Output variables:
Attention: the magnitude of the buyers information intake.
Comprehension: the buyers’ store of information about a brand.
Attitude: the buyer evaluation of particular brand potential to satisfy his motives.
Intension: the buyers forecast of which brand he will buy.
Purchase behaviour: the actual purchase act.
Hypothetical constructs:
The perceptual constructs are:
Sensitivity to information: the degree to which the buyer regulates the
stimulus information flow.
Perceptual bias: distorting or altering information.
Search for information: active seeking of information about brands.
The learning constructs are:
Motive: general or specific goals impelling action.
Brand potential of the evoked set: the buyer perception that the brand in
the evoked set will satisfy his needs.
Decision mediators: the buyers’ mental rule of matching and ranking
purchase alternatives according to his motives.
Inhibitors: environmental factors such as price which restrain purchase of
a preferred brand.
Satisfaction
Exogenous variables:
These are not well defined as they are external to buyers.
Limitations:
No sharp distinction between exogenous and other variables.
Some variables are not well defined and difficult to measure.
This model is complex.
ENGEL-KOLLAT MODEL:
This model is developed in 1968 by Engel, Kollat and Blackwell.
The steps in decision process that occurs overtime are:
Motivation and need recognition
Search for information
Alternative evaluation
Purchase
Outcomes
The variables are grouped into four categories. They are:
Stimulus inputs
Information processing
Decision process
Variables influencing the decision process
Two different mode of operation by consumers are:
Extended problem solving: it is characterized by high level of involvement
and high perceived risk so satisfaction with the brand gives commitment to use the brand.
Limited problem solving: it is characterized by low level of involvement
and low perceived risk so motivation to search for brand information is low and
consumers will engage in nonrigirous evaluation of alternatives.
Limitations:
The role of some variables are vague.
The role of motives in influencing behaviour is also vague.
This model is mechanistic in its treatment of decision process.
Brand loyalty:
Expectations-confirmation theory:
Expectations-confirmation theory posits that expectations, coupled with perceived
performance, lead to post-purchase satisfaction.
The four main constructs in the model are: expectations, performance, satisfaction
and dissatisfaction.
Satisfaction
Expectation Perceived
Performance
Dissatisfaction
UNIT – V
ADDITIONAL DIMENSIONS
CONSUMERISM:
Definition:
Consumerism is defined as social force designed to protect consumers interests in
the marketplace by organizing and exerting consumer pressure on business.
Motive of consumerism:
To make the consumers aware of their rights and unite them into one force.
To check unfair trade practices like monopoly power and fight against
exploitation.
To effectively implement consumer protection law.
To educate the consumers with latest and complete information.
To fight against anti-social practice like black market, hoarding, adulteration, etc.
Rights of consumers:
The right of safety
The right to be informed
The right to choose
The right to be heard
The right to seek redressal
The right to basic needs
The right to consumer education
CONSUMER PROTECTION:
Consumer protection is the core of consumerism.
Consumer protection means protecting the consumers from the evils of marketing.
It strike a balance in the buyer-seller relation.
Consumers:
Consumers should be aware of their rights and should raise voice against illegal
practices.
Buying situation:
3 types of situation are:
Straight rebuy:
Straight rebuy is a repetitive or routine buying order placed by the buyer to the
supplier.
Modified rebuy:
This situation occurs when buyer wants to modify any purchase ie improvement
in product specification and this poses a threat and opportunity to suppliers.
New task:
This is most risky decision of buyer. Buyer goes for first time purchase so take lot
of time to decide about the purchase.