Consumer Behaviour Book

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CONSUMER BEHAVIOUR
COURSE DESIGN COMMITTEE

Content Reviewer
Dr. Richa Arora

Visiting Faculty, NMIMS Global Access School for Continuing Education
Specialization: Marketing and
Environmental Management
Dr. Richa Arora

Visiting Faculty, NMIMS Global Access School for Continuing Education
Specialization: Marketing and
Environmental Management
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TOC Reviewer
Author : S H H Kazmi
Reviewed By : Dr. Richa Arora
Copyright:
2015 Publisher
ISBN:
978-81-8323-121-3
Address:
A-45, Naraina, Phase-I, New Delhi 110 028
Only for
NMIMS Global Access - School for Continuing Education School Address
V. L. Mehta Road, Vile Parle (W), Mumbai 400 056, India.
NMIMS Global Access School for Continuing Education
iii
CHAPTER NAME
PAGE NO.
Understanding Consumer Behaviour
01
Market Segmentation, Targeting and Positioning
31
Consumer Motivation and Involvement
49
Consumer Learning and Memory
73
Consumer Personality and Lifestyle
101
Consumer Attitude and Perception
127
Consumer in Social and Cultural Setting
165
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CHAPTER NO.
Consumer Decision Making Process
197
Consumer Behaviour in Retail Environment
231
10
Consumer Protection: Laws in India
247
11
Case Studies
261
iv
CONSUMER BEHAVIOUR
C U R R I C U L U M
Understanding Consumer Behaviour: Consumer Behaviour Defined, Nature
and Scope of Consumer Behaviour, Types of Consumers, Individual Determinants

of Consumer Behaviour, External Environmental factors influencing Consumer
Behaviour, Theoretical approaches to the study of consumer behaviour, Consumer
Research, Disciplines involved in the study of consumer behaviour Applications
of Consumer behaviour in marketing
Market Segmentation, Targeting and Positioning: Introduction to
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Segmentation, Target Market Segments, Product positioning
Consumer Motivation & Involvement: Concept of Motivation, Consumer

motivation, Involvement and Consumer Decision-making, Malsows Hierarchy of
Needs, Frustration and Defense, Motivational Research, Consumer Involvement,
Measuring Consumer Involvement
Consumer Learning and Memory: Behavioural Learning Theories, Memory:
Structure and Functioning, Involvement and Four types of consumer Behaviour,

Central and Peripheral route to Persuasion
Consumer Personality and Lifestyle: Theories of Personality, Consumer

Lifestyle, Emotions in Advertising, Brand Personality
Consumer Attitude and Perception: Relationship between Consumer
behaviour and Consumer decision making, constituents of Consumer Attitude,

Functional Theory of Attitude, Attitude Models, Sensory Threshold, Concept
of Perception, Stages in Perceptual Process, Sensory System and Perception,
Interpretation of Stimuli, Perceived Product and Service Quality, Consumers
Risk perception
Consumer in Social and Cultural Setting: Characteristics of Culture, Cross-
cultural Analysis, Aspects of Sub-Cultures, Rural versus Urban Consumer

Behaviour, Opinion Leaders, Reference Groups, Family life cycle stages, Diffusion
of Innovation, Culture/Sub-cultures impact on 7 Ps of product/service
Consumer Decision Making Process: Types of consumer decision, Problem Recognition,

Information Search, Evaluation of Alternatives and Selection, Post-Purchase Action, Using
Consumer Behaviour in designing Products, Organisation buying Behaviour
Consumer Behaviour in Retail Environment: Outlet Selection, Consumer shopping

orientation, Retail Outlet Atmosphere
Consumer Protection: Laws in India: Consumer Protection Act, 1986, Sale of Goods Act,
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1979, Supply of Goods and Services Act, 1982
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UNDERSTANDING CONSUMER BEHAVIOUR
CONTENTS
1.1
Introduction
1.2
Nature and Scope of Consumer Behaviour
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1.2.1
Nature of Consumer Behaviour
1.2.2
Scope of Consumer Behaviour
1.3
Types of Consumers
1.3.1
Buyer and User
1.3.2
Consumer and Customer
1.4
Individual Determinants of Consumer Behaviour
1.4.1
Motivation and Involvement
1.4.2
Attitude
1.4.3
Personality and Self-concept
1.4.4
Learning and Memory
1.4.5
Information Processing
1.5 External Environmental Factors Influencing Consumer

Behaviour
1.5.1
Cultural Influence
1.5.2
Subcultural Influence
1.5.3
Social Class Influence
1.5.4
Social Group Influence
1.5.5
Familys Influence
1.5.6
Opinion Leaders Influence
1.6 Theoretical Approaches to the Study of Consumer

Behaviour
1.6.1
Economic Man Model
1.6.2
Behaviourist Model
1.6.3
Cognitive Model
1.6.4
Humanistic Model
2 CONSUMER BEHAVIOUR
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1.7
Consumer Research
1.7.1
Consumer Research Defined
1.7.2
Consumer Research Process
1.8 Disciplines Involved in the Study of Consumer Behaviour
1.9 Applications of Consumer Behaviour in Marketing
1.10 Summary
1.11
Descriptive Questions
1.12
Answers and Hints
1.13
Suggested Readings for Reference
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UNDERSTANDING CONSUMER BEHAVIOUR 3
INTRODUCTORY CASELET
PACKAGING INFLUENCING CONSUMER BEHAVIOUR
Good things often come in small packages, but by no means, this
art is simple. Taking into consideration only packaging, if we study
consumer behaviour, aspects following things, comes into play.
Walter Landor of Landor Associates was one of the first to study
and incorporate consumer response into packaging in a scientific
way. He made it a practice to watch consumer behaviour in detail
and in fact, he even solicited their response to label design in real
life shopping situations. Walters philosophy of the package itself
must do the talking is a fundamental idea behind even the modern
day brand and packaging design practice.
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Package, of course, has a functional role to play. How a soap

dispenser or a ketch-up bottle cap works without soiling the nozzle
after repeated use, how an egg tray hold eggs without breakage are
the kind of things that new technologies and materials have been
trying to address. From the ecological perspective, what happens
to the package once the product is taken out of it is increasingly
becoming an important issue for a packaging designer.
Nature still remains a wonderful source of inspiration for how it

contains and transports things. Coconuts, oranges, eggs, beans,
bananas are some fantastic examples of delicate stuff being
transported with biodegradable covers. The advent of bio-resins
is rapidly changing the plastic container composition. In some of
the laboratories, researchers have created examples like filling an
orange membrane with orange juice, a tomato-flavoured skin with
soup and mini-membranes the size of grapes that are full of wine.
A package is the first direct interface of the product with the
consumer. It informs the user about the contents; it contains and
protects the contents and product what kind of experience a user
is going to subject himself. Above all, the package is the face of
the product in the retail environment. As promotional information
is shifting more to the pre-buying experience online, consumer
is looking to see a more engaging experience in the actual retail
environment.
Like all design, packaging is constantly getting cast into new
forms dictated by the larger trends in society. The good old ideas
of putting happy faces on puffed potato chips packs and pastel
shades with golden lines on shampoo bottles will be considered
highly uncreative in no time. Packages that stick to clarity and
transparency of function, enhance the experience of use, are done
with a larger purpose of sensitivity to ecology and trigger emotional
connect with the consumer are going to change landscape on
retail racks. Designers and marketers with an acute sense of these
emerging trends are going to make this difference felt.
After studying this chapter, you should be able to:

Understand the meaning of consumer behaviour and its
concept
Explore about types of consumers
Learn various internal and external determinants which
influence consumer behaviour
Explain in detail various theoretical approaches to the study
of consumer behaviour
Find several disciplines involved in the study of consumer
behaviour
Comprehend several applications of consumer behaviour in
marketing
1.1 INTRODUCTION
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Consumer behaviour is a rapidly growing application-oriented

discipline of study. Brisk strides in the areas of technology and digital
communication are influencing consumer behaviour in significant
ways. Consumer behaviour means more than just how a person
buys products. It is a dynamic, complex, and multi-dimensional
process and reflects the totality of consumers decisions with respect
to acquisition, consumption or use and disposal activities. There is
perpetual interaction among peoples environment, thinking, feelings,
and behaviours. We, as consumers, exhibit very significant differences
in our buying behaviour and play an important role in local, national
or international economic conditions. One of the very few aspects
common to all of us is that we are all consumers and the reason for
a business firm to come into being is the presence of consumers who
have unfulfilled, or partially fulfilled needs and wants. No matter
who we are urban or rural, male or female, young or old, rich or poor,
educated or uneducated, believer or non-believer, or whatever we are
all consumers. We consume or use on a regular basis food, shelter,
clothing, vehicle, fuel, education, stationery, entertainment, domestic
help, healthcare services, comforts, luxuries, necessities and even
ideas etc. Business and other organisations realise that their marketing
effectiveness in satisfying consumer needs and wants depends on
a deeper understanding of consumer behaviour. Our consumption
related behaviour influences the development of technology and
introduction of new and improved products and services.
Most marketers today understand the significance of marketing

concept, which means they are keen to understand their customers
and are committed to serving them by developing quality products
and services and selling them at a price that gives consumers high
value.
In developed and developing countries, consumers have access to an

abundance of information about products and services. They are no
more dependent on marketer controlled information sources. The
Internet has emerged as a powerful marketing tool. It has become
necessary for companies to have sophisticated approaches and
detailed data about consumers and develop marketing strategies.
Some of the important issues that marketing executives in business
organisations face include:
What do consumers think about our products and those of our
competitors?
2.
What do they think of possible improvements in our products?
3.
How do they actually use our products?
4.
What are their attitudes toward our products and our promotional
efforts?
5.
What do they feel about their roles in the family and society?
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1.
6. What are their hopes and dreams for themselves and their
families?
To succeed in a dynamic and increasingly complex marketing

environment where individuals and businesses are faced with more
and more choices, marketers have an urgent need to learn and
anticipate whatever they can about consumers. The better they know
and understand consumers, the more advantageous it would prove
in accomplishing their organisational objectives. Marketers want to
know what consumers think, what they want, how they work, how
they entertain themselves, how they play etc. They also need to
comprehend personal and group influences, which have a significant
impact on consumer decision-making process.
Consumer Behaviour Defined:
The American Marketing Association has defined consumer

behaviour as, The dynamic interaction of affect and cognition,
behaviour, and the environment by which human beings conduct
the exchange aspects of their lives.
Peter D. Bennett, ed. Dictionary of Marketing Terms,
2nd ed. 1995.
Consumer behaviour refers to the actions and decision processes of
people who purchase goods and services for personal consumption.
James F. Engel, Roger D. Blackwell and Paul W. Miniard,
Consumer Behaviour (1990).
Consumer behaviour refers to the mental and emotional processes

and the observable behaviour of consumers during searching for,
purchasing and post consumption of a product or service.
(Authors).
1.2
ATURE AND SCOPE OF CONSUMER

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BEHAVIOUR
1.2.1 NATURE OF CONSUMER BEHAVIOUR

The subject deals with issues related to cognition, affect and behavior
in consumption behaviors, against the backdrop of individual and
environmental determinants. The individual determinants pertain
to an individuals internal self and include psychological components
like personal motivation and involvement, perception, learning and
memory, attitudes, self-concept and personality, and, decision making.
The environmental determinants pertain to external influences
surrounding an individual and include sociological, anthropological
and economic components like the family, social groups, reference
groups, social class, culture, subculture, cross-culture, and national
and regional influences.
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The subject can be studied at micro or macro levels depending upon

whether it is analyzed at the individual level or at the group level.
The subject is interdisciplinary. It has borrowed heavily from
psychology (the study of the individual: individual determinants in
buying behavior), sociology (the study of groups: group dynamics in
buying behavior), social psychology (the study of how an individual
operates in group/groups and its effects on buying behavior),
anthropology (the influence of society on the individual: cultural and
cross-cultural issues in buying behavior), and economics (income and
purchasing power).
Consumer behavior is dynamic and interacting in nature. The three

components of cognition, affect and behavior of individuals alone or
in groups keeps on changing; so does the environment. There is a
continuous interplay or interaction between the three components
themselves and with the environment. This impacts consumption
pattern and behavior and it keeps on evolving and it is highly dynamic.
Consumer behavior involves the process of exchange between the
buyer and the seller, mutually beneficial for both.
As a field of study it is descriptive and also analytical/ interpretive.
It is descriptive as it explains consumer decision making and behavior in
the context of individual determinants and environmental influences.
It is analytical/ interpretive, as against a backdrop of theories borrowed
from psychology, sociology, social psychology, anthropology and
economics; the study analyzes consumption behaviour of individuals
alone and in groups. It makes use of qualitative and quantitative tools
and techniques for research and analysis, with the objective is to

understand and predict consumption behavior.
It is a science as well as an art. It uses both, theories borrowed from
social sciences to understand consumption behavior, and quantitative
and qualitative tools and techniques to predict consumer behavior.
1.2.2 SCOPE OF CONSUMER BEHAVIOUR
The study of consumer behavior deals with understanding
consumption patterns and behavior. It includes within its ambit the
answers to the following:
What the consumers buy: goods and services
2.
Why they buy it: need and want
3.
When do they buy it: time: day, week, month, year, occasions etc.
4.
Where they buy it: place
5.
How often they buy it: time interval
6.
How often they use it: frequency of use
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1.
The scope of consumer behavior includes not only the actual buyer
but also the various roles played by him/different individuals.
Fill in the blanks:
Our consumption related behaviour .................. the development

of technology and introduction of new and improved products
and services.
2.
.................. refers to the actions and decision processes of people

who purchase goods and services for personal consumption.
1.
3. The individual determinants pertain to an individuals

internal self and include .................. components like personal
motivation and involvement, perception, learning and memory,
attitudes, self-concept and personality, and ...................
Hold a discussion on the topic Consumer behaviour is Science or

an Art.
The concept evolved in late 1950s as a result of challenges

experienced in the market place. This leads to fresh thinking of
conducting business more effectively and the field of consumer
behaviour is deeply rooted in this concept.
1.3 TYPES OF CONSUMERS

There are different types, classes or categories of consumers of goods
and services and in this chapter each of them will be discussed in
detail.
1.3.1 BUYER AND USER
The person who buys a particular product may not necessarily be the
user, or the only user of this product. Likewise, it is also true that the
person who purchases the product may not be the decision-maker.
For example, the father buys a bicycle for his school-going son (the
son is the user), or he buys a pack of toothpaste (used by the entire
family), or the mother is the decision maker when she buys a dress for
her three-year-old daughter. The husband and wife together may buy
a car (both share the decision). It is clear that in all cases buyers are
not necessarily the users of products they buy. They also may not be
the persons who make the product selection decisions.
TABLE 1.1: SELECTED CONSUMER BEHAVIOUR ROLES
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Role
Initiator
Gatekeeper
Influencer
Decider
Buyer
User(s)
Description
The initiator is the individual who ascertains that some
need or want is not being satisfied and authorises a
purchase to correct the situation.
Influences the familys imformation processing. The
gatekeeper has the most expertise in obtaining and
evaluating the information.
The influencer is someone who intentionally or
otherwise, by word or action, influences the purchase
decision, actual purchase and/or the use of product
or service.
The decider is the person or persons who actually
decides which product or service will be chosen.
Buyer is any individual who actually makes the final
purchase transaction.
User is a person most directly involved in the use or
consumption of the purchased product.
The question faced by marketers is whom should they target for

their promotional messages, the buyer or the user? Some marketers
believe that the buyer of the product is the suitable prospect, while
others believe that the user of the product is the right choice; still
others believe that it is safe to direct their promotional messages to
both buyers as well as users. These approaches are visible when ads
for toys and games appear during TV programmes meant for children,
same products are promoted in magazines meant for parents, or there
are dual campaigns designed to reach parents and children both (such
as Discovery Channel programmes).
Whenever consumer behaviour occurs in the context of a multiperson household, several different tasks or roles (Table 1.1) may be
performed in acquiring and consuming a product or service.
1.3.2 CONSUMER AND CUSTOMER
A consumer is anyone who typically engages in any one or all of the
activities mentioned in the definition. Traditionally, consumers have
been defined very strictly in terms of economic goods and services
wherein a monetary exchange is involved. This concept, over a period
of time, has been broadened. Some scholars also include goods and
services where a monetary transaction is not involved and thus the
users of the services of voluntary organisations are also thought of as
consumers. This means that organisations such as UNICEF, CRY, or
political groups can view their public as consumers.
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The term consumer is used for both personal consumers and

organisational consumers and represents two different kinds of
consuming entities. The personal consumer buys goods and services
for her or his personal use (such as cigarettes or haircut), or for
household consumption (such as sugar, furniture, telephone service
etc.), or for just one member of the family (such as a pair of shoes for
the son), or a birthday present for a friend (such as a pen set). In all
these instances, the goods are bought for final use, referred as end
users or ultimate consumers.
The other category of consumer is the organisational consumer, which

includes profit and not-for-profit organisations. Government agencies
and institutions (such as local or state government, schools, hospitals
etc.) buy products, equipment and services required for running these
organisations. Manufacturing firms buy raw materials to produce and
sell their own goods. They buy advertising services to communicate
with their customers. Similarly, advertising service companies buy
equipment to provide services they sell. Government agencies buy
office products needed for everyday operations. The focus of this
book is on studying behaviours of individual consumers, groups and
organisations who buy products, services, ideas, or experiences etc.
for personal, household, or organisational use to satisfy their needs.
Anyone who regularly makes purchases from a store or a company is
termed as customer of that store or the company. Thus, a customer
is typically defined in terms of specific store or company.
Fill in the blanks:

4. It is clear that in all cases buyers are not necessarily the
.................. of products they buy.
5.
Organisations such as UNICEF, CRY, or political groups can

view their public as ........................
Make a presentation on various roles of consumers in various buying

situations. Also identify the relevance of playing and experiencing
each role in purchase process.
Impulse customers do not have buying a particular item at the top

of their To Do list, but come into the store on a whim. They will
purchase what seems good at the time.
1.4
I NDIVIDUAL DETERMINANTS OF
CONSUMER BEHAVIOUR
1.4.1 MOTIVATION AND INVOLVEMENT

Motivation is an inner drive that reflects goal-directed arousal.
In a consumer behavior context, the result is a desire for a product,
service, or experience. It is the drive to satisfy needs and wants, both
physiological and psychological, through the purchase and use of
products and services 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.
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1.4.2 ATTITUDE
An attitude represents what we like and dislike. An attitude is a
lasting general evaluation of something it has knowledge of that
something, liking or disliking, and the strength of the feelings.
They are lasting, but changeable. An individual with a positive attitude
towards a product/service offering is more likely to make a purchase;
this makes the study of consumer attitudes highly important for a
marketer.
1.4.3 PERSONALITY AND SELF-CONCEPT
Recent advances in personality psychology can help us predict
consumer motivation.Traits are defined as enduring and
stable patterns of behaviour, attitudes, emotions, that vary
between individuals.Traditionally, researchers were interested in
understanding how individuals differ, and so they put a great deal of
effort into discovering how to measure, map, and define personality
traits. However, by the mid-1990s, a consensus was reached about
a universal structure of personality. Now almost all personality
psychologists agree thattheBig Five should be the common
framework for personality. Consumers form their self-concepts

through psychological development and social interaction. Because
the individuals self concept has value to him, he will act to define,
protect, and further it.
1.4.4 LEARNING AND MEMORY
Learning that occurs when a stimulus eliciting a response is paired
with another stimulus that initially does not elicit a response, but will
cause a similar response when paired over time with the first stimulus.
Memory is the process of encoding information and stored and
retrieved when needed; contemporary approach is an informationprocessing approach.
1.4.5 INFORMATION PROCESSING
Information processing is the process through which consumers are:
exposed to information
attend to it
comprehend it
place it in memory and
retrieve it for later use.
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Fill in the blanks:
Consumer information processing behavior is influenced by the

structure and format of the available product information (alternatives
X attributes) in the choice task.
6. .................. refers to a heightened state of awareness that

motivates consumers to seek out, attend to, and think about
product information prior to purchase.
7. An individual with a positive attitude towards a product/
service offering is more likely to make a .................. .
8.
.................. is the process of encoding information and stored

and retrieved when needed; contemporary approach is an
.................. approach.
Pick out an advertisement of your choice and analyse if all the above
mentioned factors influence choice of consumer buying behaviour
or not. Also try to find out if the brand has been done tweaking in
its offerings after studying these factors?
1.5
XTERNAL ENVIRONMENTAL FACTORS

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INFLUENCING CONSUMER BEHAVIOUR
The external factors that affect consumer choices can drastically

affect the companys performance. Therefore, marketers should
take into account all those factors by tailoring and monitoring the
possible changes that may affect the profit and their sustainability
in the respective industries. Moreover, these external factors can be
categorized from Socio-cultural, Economical, Technological, under
socio-cultural, consumers can be influenced by their peers or groups.
In a society, there are different groups that distinguish the social status
of an individual. Therefore, consumers can definitely be influenced by
their workmates in choosing what really suit in their group in order to
be up to the level as the people who are in its network.
1.5.1 CULTURAL INFLUENCE
Culture is crucial when it comes to understanding the needs and
behaviors of an individual. Throughout his existence, an individual
will be influenced by his family, his friends, his cultural environment
or society that will teach him values, preferences as well as common
behaviors to their own culture.
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For a brand, it is important to understand and take into account the

cultural factors inherent to each market or to each situation in order
to adapt its product and its marketing strategy. As these will play a role
in the perception, habits, behaviour, or expectations of consumers.
1.5.2 SUBCULTURAL INFLUENCE
A society is composed of several subcultures in which people can

identify.
Subcultures are groups of people who share the same values based
on a common experience or a similar lifestyle in general.
Subcultures are the nationalities, religions, ethnic groups, age groups,
gender of the individual, etc.
The subcultures are often considered by the brands for the
segmentation of a market in order to adapt a product or a
communication strategy to the values or the specific needs of this
segment. For example, in recent years, the segment of ethnic
cosmetics has greatly expanded. These are products more suited to
non-Caucasian populations and to types of skin pigmentation for
African, Arab or Indian populations for example.
Its a real brand positioning with a well-defined target in a sector that
only offered makeup products to a Caucasian target until now (with
the exception of niche brands) and was then receiving critics from
consumers of different origin.
1.5.3 SOCIAL CLASS INFLUENCE

Individuals belonging to same social classes are characterised by
similar values, lifestyles, interests and behaviors.
Social classes are defined as groups more or less homogenous and

ranked against each other according to a form of social hierarchy.
We often assume three general categories among social classes: lower
class, middle class and upper class.
People from different social classes tend to have different desires and
consumption patterns. Disparities resulting from the difference in
their purchasing power, but not only. According to some researchers,
behavior and buying habits would also be a way of identification and
belonging to its social class.
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1.5.4 SOCIAL GROUP INFLUENCE
The membership groups of an individual are social groups to which

he belongs andwhich will influence him. The membership groups
are usually related to its social origin, age, place of residence, work,
hobbies, leisure, etc.
The influence level may vary depending on individuals and groups.
But is generally observed common consumption trends among the
members of a same group.
The understanding of the specific features (mindset, values, lifestyle,

etc.) of each group allows brands to better target their advertising
message. Some brands have understood this very well and
communicate, implicitly or not, on the social benefit provided by
their products.
1.5.5 FAMILYS INFLUENCE
The family is maybe the most influencing factor for an individual.
It forms an environment of socialization in which an individual
will evolve, shape his personality, acquire values. But also develop
attitudes and opinions on various subjects such as politics, society,
social relations or himself and his desires. Perceptions and family
habits generally have a strong influence on the consumer buying
behavior. People will tend to keep the same as those acquired with
their families.
For example, if you have never drunk Coke during your childhood
and your parents have described it as a product full of sugar and
not good for health. There is far less chance that you are going to
buy it when you will grow up that someone who drinks Coke since
childhood.
1.5.6 OPINION LEADERS INFLUENCE

Opinion Leaders (OLs) are respected sources of information who are
connected to novel ideas and possess sufficient interpersonal skills
to exert influence on others decision-making. We discuss methods to
identify OLs and the limited evidence that supports their influence
on clinical practice. An understanding of the role of OLs may assist
emergency physicians with incorporating new ideas into their own
groups.
Fill in the blanks:

9.
...................... are groups of people who share the same values

based on a common experience or a similar lifestyle in general.
10. Social classes are defined as groups more or less ......................

and ranked against each other according to a form of social
...................... .
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11. An understanding of the role of ............................ may assist

emergency physicians with incorporating new ideas into their
own groups.
List any ten purchase decisions in your life being influenced by any
of the above groups. Analyze the impact of these groups in your life
with reference to consumer behaviour.
Marketers can identify reference group members only by

conducting appropriate research, which has to be product specific.
Such research must include questions about the involvement levels
of the respondent, level of knowledge, social standing in groups,
inclination to adopt new products and ability to influence others.
1.6
HEORETICAL APPROACHES TO THE

T
STUDY OF CONSUMER BEHAVIOUR
Consumer models are nothing but a framework based on particular

study by particular researcher provides guidelines for consumer
buying behaviour understanding. The consumer behaviour models
provide better insight to the marketers for taking important decisions
regarding various marketing mixed elements. It describes various
factors influence on ultimate consumer buying behaviour, specifically
with reference to Indian consumer. Economic models and Haward
Sheth models are important. Indian consumer behaviour for consumer
durables followed more or less resembled factors in such two models.
1.6.1 ECONOMIC MAN MODEL

Under economics, it is assumed that man is a rational human being,
who will evaluate all the alternatives in terms of cost and value received
and select that product/service which gives him/her maximum
satisfaction (utility). Consumers are assumed to follow the principle
of maximum utility based on the law of diminishing marginal utility.
It is assumed that with limited purchasing power, and a set of needs
and tastes, a consumer will allocate his/her expenditure over different
products at given prices so as to maximize utility.
The law of equimarginal utility enables him to secure maximum
utility from limited purchasing power. Economic model of consumer
behaviour is unidimensional. This means that buying decisions of a
person are governed by the concept of utility. Being a rational man he
will make his purchase decisions with the intention of maximising the
utility/benefits.
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Economic model is based on certain predictions of buying behaviour:
Lesser the price of the product, more will be the quantity

purchased,
Lesser the price of the substitute product, lesser will be the

quantity of the original product bought (substitution effect),
More the purchasing power, more will be the quantity purchased

(income effect).
The assumption about the rational behaviour of human beings has

been challenged by the behavioural scientists. They are of the opinion
that while the predictions are useful, the model only explains how
a consumer ought to behave. It does not throw light on how the
consumer actually behaves.
1.6.2 BEHAVIOURIST MODEL
In 1920 John B. Watson published a landmark study into behaviour
which became known as Little Albert (Watson and Rayner 1920). This
study involved teaching a small child (Albert) to fear otherwise benign
objects through repeated pairing with loud noises. The study proved
that behaviour can be learned by external events and thus largely
discredited the Psychodynamic approach that was predominant at
the time.
Essentially Behaviourism is a family of philosophies stating that
behaviour is explained by external events, and that all things that
organisms do, including actions, thoughts and feelings can be
regarded as behaviours. The causation of behaviour is attributed to
factors external to the individual. The most influential proponents
of the behavioural approach were Ivan Pavlov (1849-1936) who
investigated classical conditioning, John Watson (1878-1958) who
rejected introspective methods and Burrhus Skinner (1904-1990) who
developed operant conditioning. Each of these developments relied

heavily on logical positivism purporting that objective and empirical
methods used in the physical sciences can be applied to the study of
consumer behaviour (Eysenck and Keane 2000).
There are a number of branches of research that conform to the
major tenets of behaviourism, but differ subtly in other ways. Initially
Classical Behaviourism, established by John Watson, required the
entirely objective study of behaviour, with no mental life or internal
states being accepted. Human thoughts were regarded by Watson
as covert speech (Sternberg 1996), and strict monism was adhered
to (Foxall 1990). Between 1930 and 1950 Skinner founded Radical
Behaviourism which acknowledges the existence of feelings, states
of mind and introspection, however still regards these factors as
epiphenomenal (Skinner 1938 and Nye 1979). The assumed role of
internal processes continued to evolve in subsequent decades, leading
to more cognitive approaches with a new branch of study Cognitive
Behaviourism claiming that intrapersonal cognitive events and
processes are causative and the primary irreducible determinants of
overt behaviour (Hillner 1984, p107).
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While behavioural research still contributes to our understanding

of human behaviour, it is now widely recognised as being only part
of any possible full explanation (Stewart 1994). Behaviourism does
not appear to adequately account for the great diversity of response
generated by a population exposed to similar, or even near identical
stimuli.
1.6.3 COGNITIVE MODEL
In stark contrast to the foundations of Classical Behaviouralism,

the cognitive approach ascribes observed action (behaviour) to
intrapersonal cognition. The individual is viewed as an information
processor. This intrapersonal causation clearly challenges the
explicative power of environmental variables suggested in Behavioural
approaches, however an influential role of the environment and social
experience is acknowledged, with consumers actively seeking and
receiving environmental and social stimuli as informational inputs
aiding internal decision making.
Early Stimulus-Organism-Response models 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.
Most modern theorists now, however, acknowledge that information
processing is conducted by an active organism whose past experience
will influence not only the processing of such information but even
what information is sought and received. Information processing
will be both stimulus driven and concept driven. This development
has resulted in more recent depictions of consumer decision making
being circular in fashion, or drawn through a Venn diagram.
Four key strengths of cognitivism as a means of explaining consumer

behaviour:
Its closeness to the common-sense explanations of everyday
discourse make it an intuitively attractive means of offering
explanations of everyday behaviours such as purchasing and
consuming;
2.
The ability of consumers to describe their experiences in terms

of their attitudes, wants, needs and motives ensures that an
explanation proceeds in the same terms as the description of
what is explained;
3.
It brings a measure of unity and consensus to a still young field

of inquiry;
4.
The extensive use made by other social science and humanity

disciplines of cognitive explanation has assisted the conceptual
development of this line of consumer research by making possible
the borrowing of theoretical and methodological inputs.
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1.
A cognitive approach is more appropriate in the examination of

ethical purchasing behaviour. Firstly, the complexity of such actions
cannot be accommodated through behavioural models and secondly,
the benefits of ethical consumption are largely vicarious in nature,
requiring extensive intrapersonal evaluation.
1.6.4 HUMANISTIC MODEL
Of the three key areas that Nataraajan and Bagozzi identified (1999),
it is the study of the volitional stages of decision making that has
received the most productive theoretical effort.
The cognitive models appear well covered in generic Consumer
Behaviour texts, and are often portrayed as providing the best
available explanation of consumer decision making. Despite this,
however, there are a growing number of academic writers highlighting
limitations of the Cognitive approach and publishing new research
attempting to further understanding of specific aspects of behaviour.
These new approaches can be described as humanistic as they seek
to explore concepts introspective to the individual consumer rather
than describe generic processes.
Theory of Trying
The Theory of Trying (Bagozzi and Warshaw 1990) depicted in
Figure 1.1 provides an interesting alternate approach to the models
previously considered. Rather than examining explicit behaviour, the
model assesses trying to act. Subjective norms, attitude toward the
process or means of trying, attitudes and expectations of success and
attitudes and expectations of failure are posed as the key antecedent
variables to intention to try; itself the key precursor to trying. Past
behaviour has been found to influence consumer choice in a number

studies (Bagozzi and Kimmel 1995, Leone, Perugini et al. 1999,
Norman and Conner 1996), and is thus integrated as a key influence
within the theory.
Bagozzi et al. (2002) suggest in discussion of this theory that rather
than consumers having behavioural intentions, they rather have
behavioural goals in many situations, and they must expend effort
and make purposive endeavour to fulfil these goals.
To date the theory of trying has mostly been applied to health related
decisions, and only few studies have applied it to retail consumption
decisions. Some parts of the theory have been supported empirically,
but not all of the variables have been found to be significant in every
test (Bay and Daniel 2003).
In a fillip to the theory, Gould et al. (1997) published research into
the reasons for consumers failing to try to consume. In this case
consumers are said to either fail to see or be ignorant of their options,
or make a conscious effort not to consume (Schiffman and Kanuk
2007). The first of these two points may have relevance in the field of
ethical clothing.
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Attitude toward
success
Expectation of
success
Frequency of past
trying and/or past
behaviour
Recency of past
trying and/or past
behaviour
Attitude toward
failure
Expectation of
failure
Intention to try
Attitude toward
process or means
Subjective Norm
Figure 1.1: Theory of Trying
Trying
Fill in the blanks:

12. Consumers are assumed to follow the principle of ...................
based on the law of diminishing marginal utility.
13. Lesser the price of the substitute product, lesser will be the
quantity of the original product bought ................... effect.
14. Classical Behaviourism, established by ..................., required
the entirely objective study of behaviour, with no mental life
or internal states being accepted.
15. Early Stimulus-Organism-Response models suggest a
................... relationship between the three stages with
environmental and social stimuli acting as external ...................
to the organism.
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16. Subjective norms, attitude toward the process or means of

trying, attitudes and expectations of success and attitudes
and expectations of failure are posed as the key antecedent
variables to ................... .
Prepare a report on the significance of each model with respect to

the choices which consumers make in making a purchase decision.
Also highlight the usage of each model in present day context by
marketers.
The primary purpose of studying consumer behavior is for marketers

to better understand and therefore better target consumers in their
marketing strategies. It is a very complicated science, and marketers
can observe and make some correlations between advertising and
consumer response, but the main question of what makes a person
buy or not buy a product is too individual and cant be explained
easily, with one or even several behavior models.
1.7 CONSUMER RESEARCH

Consumer research has emerged as an extension and an integral part
of marketing research. The purpose is to identify the needs and wants,
and then develop products and services to satisfy those needs and
wants. The focus of consumer research is exclusively on exploring
consumer behaviour. In the beginning, consumer research was used
to help marketers predict the consumer reactions to marketers
promotional messages and to understand why consumers made
the purchase decisions that they did. Marketers were reasonably
convinced that if they could know everything about consumer decision
process, they would be in a position to design marketing strategies and

promotional campaigns that would influence the consumers in such a
manner that they would buy the companys products or services.
1.7.1 CONSUMER RESEARCH DEFINED
Consumers are the people and businesses that buy things from other
people or businesses. Consumer research is how both the buyers and
the sellers get information that will help them make decisions and
plans for future purchases. It involves collecting data, analyzing it,
creating reports, and making predictions. The subject of consumer
research encompasses brands, advertising, customer behaviour, and
product performance.
Consumer research can be defined as a part of market research in

which the preferences, motivations, and buying behaviour of the
targeted customer are identified through direct observation, mail
surveys, telephone or face to face interviews, and from published
sources (such as demographic data).
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1.7.2 CONSUMER RESEARCH PROCESS

Here we discuss some of the popular approaches used by consumer
analysts to unearth answers they seek for a variety of reasons.
Specify Research Objectives: At the outset, it is important to

clearly specify the purpose and objective of research study on
which the marketing manager and the researcher agree. This
will ensure the development of appropriate research design. For
example, if the purpose of the research study is to come up with
new ideas for advertising campaigns, then a qualitative study
might be fruitful. The sample size would be small due to cost of
each interview and a highly trained professional will spend more
time face-to-face with respondents and subsequently would also
analyse and interpret the data. The findings however, may not be
representative of the entire marketplace.
Collect and Evaluate Secondary Data: Secondary data is any

information originally generated for some other purposes rather
than the current problem under consideration and can be either
internal or external to the organisation. It includes findings
based on data generated in-house for earlier studies, customer
information collected by companys sales or credit departments
and research conducted by outside organisations. The act of
locating secondary data is called secondary research. Original
research done by individuals or organisations to meet specific
objectives is called primary research.
Design Primary Research: The selection of a research design

depends on the purposes of the study. If a marketer needs
descriptive information, then a quantitative research study is
called for, but if the purpose is to generate new ideas, then a

qualitative study is appropriate.
Qualitative or Motivational Research Design: The researcher
first takes into consideration the purpose of the research study
and the kind of data needed. Data collection techniques for
qualitative studies include focus group, depth interviews
and projective techniques. All these techniques relate to
psychoanalytic and clinical aspects of psychology. The emphasis
is on open-ended and free-response types of questions so that
the respondents reveal their unconscious thoughts and beliefs.
These techniques are frequently used in early stages of attitude
research to learn product-related beliefs or attributes and the
resulting attitudes.
Sample Design: A sample design addresses three questions: who

is to be surveyed (sampling unit), how many to survey (sample
size) and how should the respondents be chosen (the sampling
procedure).
Deciding whom to survey (sampling unit) requires that the

researcher must define the target population (universe) that
would be sampled. For example, if Indian Airlines conducts a
survey, should the sampling unit be business travellers, vacation
travellers, or both? Should travellers under age 30 years be
interviewed? Interviewing the correct target market or the
potential target market is basic to the validity of research.
Collecting Primary Data: Data collection phase of research is

probably the most expensive and quite prone to error. The four
major problems encountered are: some respondents will not be
available at home and must be either contacted again or replaced,
other respondents will refuse the interview, still others will give
biased or dishonest answers and some interviewers themselves
will be biased or dishonest.
Analyzing Data: The last-but-one step in the research process

is to extract relevant findings from the collected data. In
qualitative research the moderator/analyst usually analyses the
respondents responses. The researcher supervises the data
analysis in quantitative research. The responses are converted
into numerical scores then tabulated and analysed with the help
of computers using sophisticated analytical techniques.
Report Preparation: The researcher prepares a report of her/

his findings to be presented to the relevant parties. It may or
may not include any recommendations for action depending
on the requirements of the management. The report includes
a description of the methodology used, as well as tables and
graphics to support the research findings. The researcher should
present major findings that are relevant to decisions facing
management and avoid detailing numbers and fancy jargon such
as multivariate analysis of variance.
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Fill in the blanks:

17. Data collection techniques for qualitative studies include focus
group, depth interviews and ...................... techniques.
18. Consumer research involves collecting data, analyzing it,
creating reports, and making ...............................
Conduct a focus group with six of your classmates about their special
possessions. What does it reveal to you about these possessions?
Likert Scale is the most popular form of attitude scale, being easy
to prepare and interpret and simple for respondents to answer.
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1.8
ISCIPLINES INVOLVED IN THE STUDY

D
OF CONSUMER BEHAVIOUR
Consumer behaviour was a relatively new field of study during the

second half of the 1960s without a history or research of its own.
It is in fact a subset of human behaviour and it is often difficult to
draw a distinct line between consumer-related behaviour and other
aspects of human behaviour. The discipline of consumer behaviour
has borrowed heavily from concepts developed in other disciplines
of study such as psychology, sociology, social psychology, cultural
anthropology and economics.
1.
Psychology is the study of the individual, which includes

motivation, perception, attitudes, and personality and learning
theories. All these factors are critical to an understanding of
consumer behaviour and help us to comprehend consumption
related needs of individuals, their actions and responses to
different promotional messages and products and the way their
experiences and personality characteristics influence product
choices.
2.
Sociology is the study of groups. When individuals form groups,

their actions are sometimes quite different from the actions
of those very individuals when they are operating alone. The
influences of group memberships, family and social class on
consumer behaviour are important for the study of consumer
behaviour.
3.
Social psychology is a combination of sociology and psychology

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

in their consumption behaviour.
4.
Cultural anthropology is the study of human beings in society. It

explores the development of core beliefs, values and customs that
individuals inherit from their parents and grandparents, which
influence their purchase and consumption behaviour. It also
studies subcultures and helps compare consumers of different
nationalities and cultures.
5.
Economics is an important aspect of this subject is the study of

how consumers spend their funds, how they evaluate alternatives
and how they make decisions to get maximum satisfaction from
their purchases.
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Despite the fact that consumer behaviour as a field of study is relatively

of recent origin, it has grown enormously, has become a full-blown
discipline of its own and is used in the study of most programmes of
marketing study.
The marketing concept was accepted and adopted by a large number
of companies in the developed countries, particularly the United
States and this provided an impetus to study the consumer behaviour.
Companies had to engage in extensive marketing research to identify
unsatisfied consumer needs. In this process, marketers learnt that
consumers were highly complex as individuals and had very different
psychological and social needs, quite apart from their survival needs.
They also discovered that needs and priorities of different consumer
segments differed significantly.
They realised that to design products and develop suitable marketing

strategies that would satisfy consumer needs, they had to first study
consumers and the consumption related behaviour in depth. In this
manner, market segmentation and marketing concept paved the way
for the application of consumer behaviour principles to marketing
strategy.
Fill in the blanks:

19. ................. studies subcultures and helps compare consumers
of different nationalities and cultures.
20. Market segmentation and ..................... paved the way for the
application of consumer behaviour principles to marketing
strategy.
Prepare a presentation showing the contribution of every field in

shaping consumer behaviour a significant subject of marketing.
PPLICATIONS OF CONSUMER
A
BEHAVIOUR IN MARKETING
1.9
Consumer behaviour principles are applied in many areas of

marketing as discussed below:
1.
Analyzing market opportunity: Consumer behaviour study helps

in identifying the unfulfilled needs and wants of consumers. This
requires examining the trends and conditions operating in the
marketplace, consumers lifestyles, income levels and emerging
influences. This may reveal unsatisfied needs and wants. The
trend towards increasing number of dual income households
and greater emphasis on convenience and leisure have led
to emerging needs for household gadgets such as washing
machine, mixer grinder, vacuum cleaner and childcare centers
etc. Mosquito repellents have been marketed in response to a
genuine and unfulfilled consumer need.
2.
Selecting target market: A review of market opportunities

often helps in identifying distinct consumer segments with
very distinct and unique wants and needs. Identifying these
groups, learning how they behave and how they make purchase
decisions enables the marketer to design and market products
or services particularly suited to their wants and needs. For
example, consumer studies revealed that many existing and
potential shampoo users did not want to buy shampoo packs
priced at ` 60 or more and would rather prefer a low-priced
sachet containing enough quantity for one or two washes. This
finding led companies to introduce the shampoo sachet, which
became a good seller.
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3.
Marketing-mix decisions: Once unsatisfied needs and wants

are identified, the marketer has to determine the right mix of
product, price, distribution, and promotion. Here too, consumer
behaviour study is very helpful in finding answers too many
perplexing questions.
(a) Product: The marketer designs the product or service that
would satisfy unfulfilled needs or wants. Further decisions
regarding the product concern the size, shape and features.
The marketer also has to decide about packaging, important
aspects of service, warranties, and accessories etc.

Nestle first introduced Maggi noodles in masala and capsicum

flavours. Subsequently, keeping in view the consumer
preferences in some regions, the company introduced garlic,
Sambar, Mixed Vegetables, Dal Atta Noodles, etc.
(b) Price: The second important component of marketing mix

is price. Marketers must decide what price to charge for the
product or service. These decisions will influence the flow
of revenue to the company. Should the marketer charge the
same, higher, or lower price in comparison to competition?
Is the consumer price sensitive and would a lower price

stimulate sales? Should there be any price with discounts?
Do consumers perceive lower price indicative of poor
quality?

To answer such questions, the marketer must understand the

way the companys product is perceived by consumers, the
importance of price as a purchase decision variable and how
different price levels would affect sales. It is only through
consumer behaviour study in actual buying situations that
the marketer can hope to find answers to these important
issues.
In most cases of industrial products, there is very little or no

advertising. Brochures containing technical specifications
are often posted to clients and the salespeople make followup visits. Consumer products get the maximum share of
advertising. The pharmaceutical industry exclusively uses
personal selling for prescription drugs. Insurance companies
use both advertising and personal selling.
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(c) Promotion: Promotion is concerned with marketing

communications to consumers. The more important
promotion methods are advertising, personal selling, sales
promotion, publicity, and direct marketing. The marketer
has to decide which method would be most suitable to
effectively reach the consumers. Should it be advertising
alone or should it be combined with sales promotion? The
company has to know the target consumers, their location,
what media do they have access to and what are their media
preferences, etc.
(d) Distribution: The next decision relates to the distribution

channel, that is, where and how to offer products and
services for sale. Should the products be sold through
allthe retail outlets or only through selected ones? Should
the marketer use only theexisting outlets, which also sell
competing brands, or should new exclusive outlets selling
only the marketers brands are created? Is the location of
retail outlets important from consumers point of view?
Should the company think of direct marketing?
The answers to these questions are furnished by consumer behaviour
research. For example, when Eureka Forbes introduced its vacuum
cleaners many years ago, few stores knew anything about this product
and many were not willing to buy it. Consumer awareness about the
product was also low and no retail shops carried the product. Under
these circumstances, the company decided to sell the product only
through personal selling, with salespeople calling directly on the
consumer at her/his home. These salespeople had enough time to
explain and demonstrate the vacuum cleaner and convince prospects
about its usefulness. Retail outlets would not have been suitable for
this sales approach. This strategy was based on understanding of

consumer behaviour and yielded good results.
Use in Social and Non-profits Marketing: Consumer behaviour studies
are useful to design marketing strategies by social, governmental, and
not-for-profit organisations to make their programmes more effective
such as family planning, awareness about AIDS, and crime against
women, safe driving, environmental concerns, and others. UNICEF
(greeting cards), Red Cross, and CRY etc. make use of consumer
behaviour understanding to sell their services and products and also
try to motivate people to support these institutions.
Fill in the blanks:

21. Once ......................... needs and wants are identified, the
marketer has to determine the right mix of product, price,
distribution, and promotion.
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22. The marketer must understand the way the companys product
is .......................... by consumers, the importance of price as a
purchase decision ........................ and how different price levels
would affect sales.
1.10 SUMMARY
We all are consumers but we exhibit significant differences in our

buying behaviour. Our consumption related behaviour influences
new product development and success or failure of businesses.
Consumer behaviour refers to the observable behaviour of

consumers during searching, purchasing and post consumption
of products or services. There are two important groups of
consumers: the personal consumer and the organisational
consumer.
Consumers final purchase activity is the only aspect that is

visible. The study of consumer behaviour involves what they buy,
why they buy, how they buy it, when they buy it, where they buy
it, how frequently they buy it, and what are the post purchase
activities.
The study of consumer behaviour is an important field of study

and is a separate branch in the marketing discipline.
Consumer preferences are shifting and becoming highly

diversified and the purchase behaviour is becoming fairly
complex and less predictable.
Consumer behaviour studies can help unearth much information

to help marketers to segment markets, selection of the target
segment(s), developing the positioning strategy and, develop
appropriate marketing mixes for different markets and groups
of consumers.
Consumer research is an integral part of marketing research and

makes use of a set of methods to explore and predict consumer
behaviour to identify their needs and preferences etc.
Earnest Ditcher is believed to be the originator of motivation

research, which is widely used by marketers and consists of
projective techniques and depth interviews.
Some researchers have become interested in the act of

consumption rather than buying decision-making.
The research so conducted is mostly based on depth interviews

and is qualitative in nature. Quantitative research is used to
collect hard data and makes use of observation, experimentation,
and survey method.
Consumer behaviour: The study of individuals, groups, or

organizations and the processes they use to select, secure,
and dispose of products, services, experiences, or ideas to
satisfy needs and the impacts that these processes have on the
consumer and society.
Customer: An individual or business that purchases the goods

or services produced by a business. The customer is the end
goal of businesses, since it is the customer who pays for supply
and creates demand.
Consumer: An individual who buys products or services for

personal use and not for manufacture or resale.
Marketers: A person whose duties include the identification

of the goods and services desired by a set of consumers, as
well as the marketing of those goods and services on behalf of
a company.
Marketing Mix: The set of actions, or tactics, that a company

uses to promote its brand or product in the market. The 4Ps
make up a typical marketing mix Price, Product, Promotion
and Place.
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1.11 DESCRIPTIVE QUESTIONS

1. Define consumer behaviour.
2. Throw light upon the nature of consumer behaviour.
3. What are the various categories of consumer behaviour? Describe
them by quoting examples as well.
4. Mention the internal determinants of consumer behaviour.
5. Why attitude is an important aspect of studying consumer
behaviour?
6. How social class influences consumers behaviour?
7. Write a short note on:

(a) Economic man model
(b) Applications of Consumer behaviour
1.12 ANSWERS AND HINTS

ANSWERS FOR SELF ASSESSMENT QUESTIONS
Topic
Introduction
Nature and Scope of
Consumer Behaviour
Types of Consumers
Individual Determinants of
Consumer Behavior
Q. No.
1.
2.
3.
4.
5.
6.
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7.
8.
External Environment
Factors Influencing Consumer
Behaviour
9.
10.
Theoretical Approaches to the

Study of Consumer Behavior
Consumer Research
Disciplines Involved in the
Study of Consumer Behaviour
Applications of Consumer
Behaviour in Marketing
Answers
Influences
Consumer behaviour
Psychological;
decision making
users
consumers
Involvement
purchase
Memory; informationprocessing
Subcultures
11.
12.
homogenous;
hierarchy
Opinion Leaders
maximum utility
13.
14.
15.
16.
17.
18.
19.
substitution
John Watson
linear; antecedents
intention to try
projective
predictions
Cultural anthropology
20.
21.
marketing concept
unsatisfied
22.
perceived; variable
HINTS FOR DESCRIPTIVE QUESTIONS

1. Refer 1.1

The American Marketing Association has defined consumer

behaviour as, The dynamic interaction of affect and cognition,
behaviour, and the environment by which human beings conduct
the exchange aspects of their lives.
2. Refer 1.2

The subject can be studied at micro or macro levels depending

upon whether it is analyzed at the individual level or at the group
level.
3. Refer 1.3

Buyer and User; Customer and Consumer
4. Refer 1.4

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5. Refer 1.4.2
An attitude represents what we like and dislike. An attitude is a
lasting general evaluation of something.
6. Refer 1.5.3

The membership groups of an individual are social groups to

which he belongs andwhich will influence him. The membership
groups are usually related to its social origin, age, place of
residence, work, hobbies, leisure, etc.
7. Refer 1.6.1 & 1.9

Under economics, it is assumed that man is a rational human

being, who will evaluate all the alternatives in terms of cost and
value received and select that product/service which gives him/
her maximum satisfaction (utility).
Consumer behaviour principles are applied in many areas of

marketing as discussed.
1.13 SUGGESTED READINGS FOR REFERENCE

SUGGESTED READINGS
Dr. A Sarangapani, (2009), A Textbook on Rural Consumer

Behaviour in India - A Study of FMCGs, Laxmi Publications Ltd.
Satish K Batra and S.H.H. Kazmi, (2009), Consumer Behaviour2nd, Excel Books
S. Ramesh Kumar, (2009), Consumer Behaviour and Branding:

Concepts, Readings and Cases The Indian Context, Pearson
Education
Ramanuj Majumdar, (2010), Consumer Behaviour: Insights From

Indian Market, PHI Learning Pvt. Ltd.
Evans, Jamal and Foxall, (2007), Consumer Behaviour, John Wiley

& Sons
E-REFERENCES
http://www.consumerpsychologist.com/
http://www.udel.edu/alex/chapt6.html
http://hbswk.hbs.edu/topics/consumerbehavior.html
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MARKET SEGMENTATION, TARGETING

AND POSITIONING
CONTENTS
2.1
Introduction to Segmentation, Targeting and Positioning
2.1.1
Bases for Market Segmentation
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2.2
Target Market Segments
2.3
Product Positioning
2.3.1
Process of Determining the Positioning Strategy
2.4
Summary
2.5
2.6
Answers and Hints
2.7
LIFE INSURERS AND CUSTOMER SEGMENTATION
Life insurers are increasingly adopting a customer segmentation
approach with respect to selling insurance plans.
HDFC Life has filed a life insurance cover with estate planning
features targeting the HNI (High Net Worth Individuals) for
approval. This plan is similar to those offered in the developed
world that focuses on a corpus creation for dependents and payout
to the heirs in the event of death. In addition, HDFC is also actively
targeting the wisdom investor category (40-45 years) and those
who can pay annual premiums upwards of ` 60,000.
Similarly, Max Life high value customers are those who pay
premium upwards of ` 1 lakh. In Maxs case, marketing to its high
value clients revolves around providing differentiated, enhanced,
and consistent experience at every touch point.
The customer proposition for such members includes priority
on-boarding, priority service delivery, faster policy issuance,
smoother claim settlement, dedicated toll free number to handle
their queries on a priority basis, a special team of relationship
managers to service customers better.
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Industry observers have found that insurers are increasingly

looking at specific clusters. Life insurers are increasingly looking
at specific customer segments and building a business around
them. Many of them have a separate team that focuses on such
HNI clients. Women too are an important focus area for HDFC Life.
Insurers embarked on a customer segmentation drive in 2011
based on the results of a focus group study. They had around
50 lakh customers and the whole idea was to target those segments
which are viable and where we can offer differentiated services
and product levels. Their woman plan takes into life changing
factors like child birth, death of spouse and illness while computing
premium and payout. Some companies like Aegon Religare Life
Insurance and Bajaj Allianz Life Insurance focus on lifestyle
segmentation when it comes to selling of insurance plans.
With increase in disposable incomes and concepts like dual income

families, customers power to spend is only going up. But, on the
other hand, the idea of saving a corpus for purchasing any item is a
pass, given the availability of options like EMI (Equated Monthly
Installment).
In sync with these, dreams and aspirations have also changed a
lot. Therefore, there is a bigger need for segregating the customers
based on their priorities and needs and importance of financial
investment in insurance or any other investment.
MARKET SEGMENTATION, TARGETING AND POSITIONING 33

Understand the concept of segmentation
Learn various bases for market segmentation
Explore about target market segments
Learn concept and strategies of product positioning
Get knowledge of process of determining the positioning
strategies
2.1
I NTRODUCTION TO SEGMENTATION,
TARGETING AND POSITIONING
Segmentation, targeting, and positioning together comprise a three

stage process:
To determine which kinds of customers exist, then
To select which ones we are best off trying to serve and, finally,
To implement our segmentation by optimizing products/services

for that segment and communicating that we have made the
choice to distinguish ourselves that way.
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Segmentation involves finding out what kinds of consumers with

different needs exist. Each segment will respond to a different
marketing mix strategy, with each offering alternate growth and
profit opportunities. In the next step, marketer decides to target one
or more segments. Being able to develop specific strategies for your
target markets is very important. Positioning involves implementing
the marketers targeting. Positioning is developing a product and
brand image in the minds of consumers.
The concept of market segmentation emerged as an extension of
the marketing concept in the latter part of 1950s. It is based on the
simple observation that all the existing and potential consumers
are not alike; there are significant differences in their needs, wants,
tastes, background, income, education and experience etc. and these
characteristics change over time with lifestyle changes. Had they been
alike, it would have eliminated the need to have different variations
of the same basic product and one promotional campaign is all that
would have been needed. For example, there would have been only
one type of soap, one detergent, one car, one computer, one washing
machine and so on.
A market is composed of individuals with dissimilar needs and wants
and for this reason it is called a heterogeneous market.
A market segment is a portion of a larger market in which the
individuals, groups, or organisations share one or more characteristics
that cause them to have relatively similar product needs.
Market segmentation is the process of dividing the total

heterogeneous market into relatively distinct homogeneous
sub-groups of consumers with common needs or characteristics and
selecting one or more segments to target with distinct marketing
programme.
When marketers provide a range of product or service options to
serve diverse consumer preferences, they are more satisfied and
happy. Market segmentation is a positive force for both marketers
and consumers alike. In his book, Competitive Advantage, Michael
E. Porter says:
The competitive advantage of a firm lies in being everything to a
select few. To be everything to everyone is a sure recipe for a strategic
failure.
2.1.1 BASES FOR MARKET SEGMENTATION
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A segmentation variable is a characteristic of individuals, groups

or organisations that marketers use to divide and create segments
of the total market. Variables, such as geographic location, age, sex,
or product benefits sought are used frequently to segment markets.
One approach to segmentation is on a priori basis. In this case, the
marketer may assume that differences must exist among heavy users
and light or medium users of a product category. Before collecting
any data on the market, the basis for segmentation is decided and
afterwards the data is collected and analysed. The marketer can also
assume that dual-income households are growing in urban areas and
then develop a programme for this segment.
Selecting the right segmentation variable is critical. For example,

small car producers might segment the market on the basis of income
but they probably would not segment it on the basis of political beliefs
or religion because politics or religion do not normally influence
consumers automobile needs. Segmentation variable must also
be measurable to segment the market accurately. For example,
segmenting the market on the basis of intelligence would be difficult
because this characteristic cannot be measured accurately. Marketers
can use one or more variables to segment the market.
Different variables are used to segment consumer markets. Broadly
speaking, segmentation variables fall under two categories: consumer
characteristics or consumer responses. The most popular bases for
market segmentation include geographic factors, demographic
factors, psychological characteristics, social/cultural variables;
use related factors, use situation variables, benefits sought and
combination of several segmentation bases called hybrid formats,
such as demographic/psychographic profiles, geo-demographic
variables, values and lifestyles.
Geographic Segmentation
Geographic location of consumers is usually the starting point of all
market segmentation strategy. The location of consumers does help
the company in planning its marketing offer.
Segmentation on the basis of geographic units may be nations,

states, regions, areas of certain climatic conditions, urban and rural
divide.
The assumption is that consumers in a particular geographic area
have identical preferences and consumption behaviour. For example,
people in West Bengal have different food habits and dress code than
people in South India. Exporters often segment the market as Western
countries, African countries and CIS countries etc.
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Demographic Segmentation
Demographic characteristics are commonly used to segment the
market.
Factors such as age, sex, education, income, marital status, family

size, and social class etc. are used singly, or in a combination, to
segment a market comprises demographic segmentation.
Shaving products for women are based on the demographic variable of

gender. Toy manufacturers such as Funskool and Mattel toys segment
the market on the basis of age of children. Auto manufacturers
segment the market by considering income as an important variable.
Producers of refrigerators, washing machines, microwave ovens etc.
take income and family size as important variables in segmenting the
market. Ready-to-wear garment producers often segment the market
on the basis of social class.
Examples: Chirag Din, Arrow, Van Heusen, Louis Philippe, Levi
and others. In general, the social class can represent lower, middle
and upper class depending on education, income and status etc.
For example, an engineer and a clerk are considered as members of
different social classes.
Psychographic Segmentation
Consumers have a certain self-image and this describes their
personality. There are people who are ambitious, confident, aggressive,
impulsive, modern, conservative, gregarious, loners, extrovert, or
introvert etc.
When the segmentation is based on personality or lifestyle

characteristics, it is called psychographic segmentation.
Some motorcycle manufacturers segment the market on the basis
of personality variables such as macho image, independent and
impulsive. Some producers of liquor, cigarettes, and apparel etc.
segment the market on the basis of personality and self-image.
Marketers often are not concerned about measuring how many people
have the characteristic as they assume that a substantial number of
consumers in the market either have the characteristic or want to
have it.
Behaviouristic Segmentation
Buyers can be identified according to the use occasion when they
develop a need and purchase or use a product. For example, Archies
greeting cards are used on many different occasions. User status,
such as non-users, potential users, or first time users can be used
to segment the market. Markets can also be segmented into light,
medium, or heavy users of a product.
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Dividing the market on the basis of such variables as use

occasion, benefits sought user status, usage rate, loyalty status,
buyer readiness stage and attitude is termed as behaviouristic
segmentation.
Brand loyalty of varying degrees can be present among different

groups of consumers and may become the basis to segment the market.
There are consumers who are very loyal to cigarette brands, beer, and
even toothpaste. Markets may also be divided by considering level of
product awareness such as unaware of the product, aware, interested,
desirous, or contemplating to purchase the product. Based on attitude,
consumers may be enthusiastic, indifferent, or hostile towards the
product and these differences can be used to segment the market.
Fill in the blanks:

1. A .................... is a portion of a larger market in which the
individuals, groups, or organisations share one or more
characteristics that cause them to have relatively similar
product needs.
2.
Segmentation variables fall under two categories: consumer

.................... or consumer .................... .
Contd...
3.
Geographic location of consumers is usually the .................... of

all market segmentation strategy.
4. When the segmentation is based on personality or lifestyle

characteristics, it is called .................... segmentation.
5. Dividing the market on the basis of such variables as use
occasion, benefits sought user status, usage rate, loyalty status,
buyer readiness stage and attitude is termed as ....................
segmentation.
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You are a marketing consultant. A new company is planning to

introduce a line of pre-cooked food items. It will be quite convenient
and far less time consuming to prepare the meals within minutes.
How should the company segment the market?
Demographic segmentation focuses on the characteristics of

the customer whereas Psychographics refers to the customer
groups lifestyle. Behavioural segmentation is based on customers
behaviour.
2.2 TARGET MARKET SEGMENTS
Instead of aiming a single product and marketing programme at

the mass market, most companies identify relatively homogeneous
segments and accordingly develop suitable products and marketing
programmes matching the wants and preferences of each segment. It
should, however, be realized that all segments do not represent equally
attractive opportunities for a company. Companies need to categorize
segments according to their present and future attractiveness and
their companys strengths and capabilities relative to different
segments needs and competitive situation. The following sequential
steps present a useful framework, managers can use for this purpose:
Establish criteria to measure market attractiveness and business

strength position.
Evaluate market attractiveness and business strength factors to

ascertain their relative importance.
Assess the current position of each potential segment on each

factor.
Project the future position of each market segment based on

expected environmental, customer, and competitive trends.
Evaluate Segment Profitability.
Evaluate implications of possible future changes with respect to

strategies and requirement of resources.
Segment Attractiveness and Business Strength Factors

The attractiveness of a market segment can be evaluated based
on the companys current business strength and market potential
assessment.
Determining the segment attractiveness requires, first of all, the
degree of unmet or partially met customer needs. More often it is
difficult to get going with Me-too type of products in todays fiercely
competitive markets. It also involves that the marketer estimate
the segment size, growth rate, and the influence of various macro
environmental factors that influence the demand in the market
segment.
Assess Each Factor to Identify Segment Attractiveness
Each of the factors should be assigned a numerical weight to denote
the factors relative importance in overall assessment. Let us assume
that a company wants to assess the fairness cream segment in India.
Some users would rate each factor in the boxes, assigning a weight to
each one.
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Rate Market Segments on Each Factor
This step requires quantitative and qualitative data to make an objective

assessment on each criteria identified. It is extremely important to
make a detailed analysis of major competitors with respect to their
objective, strategy, resources, and marketing programmes. Another
aspect to be carefully assessed is the evidence that, by entering the
segment, the company can more completely satisfy unmet consumer
needs in the target segment and gain competitive advantage.
Assess Segment Profitability

The fact that a segment has positive attraction factors and the company
has desired strengths does not necessarily mean that the segment
can be served profitably. Many segments are large and the market
is growing, but the customers seek low prices and the competing
companies have a chance of making profits only by airtight control
on their costs. It would be advantageous to enter a smaller segment
if the customers are prepared to pay a price premium for a product
or service for which cost of differentiation is less than the premium
charged.
Plot Future Position for Each Segment
A companys management should assess the likely changes in the
segments attractiveness over the coming three to five years. This
would require projecting the possible shifts in consumer needs,
lifestyle, behavioural patterns, entry, and exit of competitors, and
changes in their strategies. The company management should
also assess the possible changes in product or technology, shifts in
macro trends, and bargaining power of customers. The company
management should anticipate the possible shifts in its competitive

position in the market assuming that the company would respond
appropriately to projected environmental changes without making
any changes in its basic strategy.
Choose Target Segments and Allocate Resources
Before making the final decision of choosing the market segment, it
is necessary to examine that the segment is at least strongly positive
on one of the two dimensions of market attractiveness and business
strength and is at least moderately positive on the other.
A company may decide to enter a segment that otherwise does not
currently appear to be a positive under certain conditions, such
as when there is belief among the managers that the segments
attractiveness or the companys business strength is likely to improve
in the coming few years, or they believe such segments would offer
opportunity to enter more attractive markets in the coming years.
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There are three basic targeting strategies:
Undifferentiated Mass Marketing.
Differentiated Multiple Segment Marketing.
Single Segment Specialisation or Niche Marketing.
These are explained as follows:
Undifferentiated Mass Marketing: This strategy involves

ignoring any differences among consumers and offer one product
or service to the entire market. This strategy of mass marketing
focuses on what is common in the needs of consumers rather than
what is different. For more than 90 years, Coca-Cola offered only
one product version to the whole market and hoped that it would
appeal to everyone. Hamdard offers its Rooh Afza based on this
strategy. Undifferentiated marketing provides cost economies.
Differentiated Multiple Segment Marketing: The marketer

decides to enter several market segments and develops separate
offers for each. For instance, Maruti is producing different
models of cars for various segments, Nike offers athletic shoes for
different sports and Coca-Cola and Pepsi are offering different
versions of their soft drinks. Companies producing toiletries are
offering different versions of toilet soaps for dry skin, oily skin
and normal skin. These companies expect higher sales volumes
by offering product versions and a stronger position within
each segment. Differentiated marketing strategy increases costs
considerably.
Single Segment Specialisation or Niche Marketing: Many

companies succeed by producing a specialised product aimed
at a very focused market or a niche. This strategy also appeals
to firms with limited resources. The company targets a segment
and goes for a larger market share instead of a small share in a
larger market segment. Recycled paper producers often focus on

the market for greeting cards or wedding cards. Oshkosh Truck
is the largest producer of airport rescue trucks. Concentrated
strategy may involve more than normal risks. If a large competitor
decides to enter the same segment, the going may become quite
tough for the smaller company.
Fill in the blanks:

6.
Evaluate market ........................ and business strength factors

to ascertain their relative importance.
7.
It would be advantageous to enter a smaller segment if the

customers are prepared to pay a price ........................ for a
product or service for which cost of differentiation is less than
the premium charged.
8. ........................ Strategy involves ignoring any differences

among consumers and offer one product or service to the
entire market.
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9.
In ........................ marketing marketer decides to enter several

market segments and develops separate offers for each.
10. In ........................ marketing the company targets a segment

and goes for a larger market share instead of a small share in
a larger market segment.
Plot a perceptual map of tooth paste brands and find which segment
is not been tapped yet by the marketers in the market.
There are two main approaches to constructing a perceptual map.

The first approach is used where management of the organization
utilizes their collective knowledge and experience of the market to
construct a perceptual map, and the second approach is where you
have access to the results of a suitablemarket research study.
2.3 PRODUCT POSITIONING

We live in an over-communicated society. Everyday, an average
consumer is exposed to numerous marketing related messages and the
marketer must successfully create a distinct and persuasive product
or service image in the mind of the consumer. Brand positioning is
a major decision in marketing. It is believed to be the source from
which all other decisions of the marketing mix should flow. The entire
combination of marketing mix elements attempts to communicate
the brands position to consumers. Product positioning is a decision
reached by a marketer to try to achieve a defined brand image

relative to competition within a market segment. Product positioning
decisions are strategic decisions and have an impact on long-term
success of the brand. A product cannot exist unless it finds a place
in the consumers perception of the world of products around her/
him. This perception of product is subjective and is governed by the
individuals needs, values, beliefs, experience, and environment.
Each brand is noticed only when it occupies a particular point or
space in the individual consumers mind relative to other brands. The
position is the way the product or the brand is defined by consumers
on important attributes.
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Positioning is the perception of a brand or product it brings about

in the mind of a target consumer and reflects the essence of that
brand or product in terms of its functional and non-functional
benefits as judged by the consumer.
Nestles Maggi noodles has been successfully positioned as the two
minute noodle in the minds of target consumers and has created
a distinctive brand image. HLLs soap Lux is the beauty soap of
female film stars and Dettol is the antiseptic for minor nicks and
cuts. BMW car is positioned as the ultimate driving machine As
markets become more crowded and competitive with similar types
of products, consumers rely more on the products image than on its
actual characteristics in making their buying decisions.
The right positioning is probably more important to the ultimate

success of a brand than are its actual attributes. Marketers sometimes
assign different images to the same product or service in different
market segments or at times, reposition the same product without
actually making it any different physically. They attempt to create a
distinct position for their brand so that consumers perceive it as being
different and occupying a niche no other product does and thereby try
to create a product image congruent with the relevant self-image of
the target consumers. Marketers strive to differentiate their products
or services by emphasizing attributes that they claim to be better able
to satisfy consumer needs and wants than competing brands.
Positioning theory is significantly different from target marketing.
It puts emphasis on the target consumers perceptions of brands
in relation to other brands in the same product category. A major
contribution of positioning theory is that it has introduced the concept
of distance and dissimilarity between brands in the perceptual
space of the consumers. This concept can present many opportunities
for perceived differentiation of products and brands. Prof. Levitt says
that there is no such thing as a commodity; all the goods and services
are differentiable.
To be meaningful, a differential advantage has to be persuasive and
sustainable. With rapid developments in science and technology,
more and more brands in a given product category tend to become

physically similar and more or less equal in performance. The product
or brand manager has little choice but to fall back more and more on
non-functional factors to distinguish her/his brand and meaningfully
persuasive differentiation becomes an increasingly challenging task.
Positioning exercise is in fact an effort to create a meaningful and
sustainable differential advantage. Brands can be expected to
create a loyal following only when they are perceived as different
in some way, which is convincingly meaningful and persuasive for
the members of the target segment. It is not really what the product
is or does, but actually what the marketer does to the mind of the
consumer. According to Subroto Sengupta, positioning strategies
revolve around answering the following four questions convincingly
by the brand itself:
Who am I? (The identity, lineage, family)
What am I? (The functional capabilities)
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For whom am I? (Who do I serve best)
Why me? (Why at all a consumer should choose me and not the
other alternative).
2.3.1PROCESS OF DETERMINING THE POSITIONING

STRATEGY
Jack Trout and Al Ries suggest that managers should ask themselves
six basic questions to create a position for a product or service:
What position, if any, do we already have in the prospects mind?

(This information must come from the market place, not the
managers perceptions.)
What position do we want to own?
What companies must be outgunned if we are to establish that

position?
Do we have enough marketing money to occupy and hold the

position?
Do we have the guts to stick with one consistent positioning

strategy?
Does our creative approach match our positioning strategy?
The brand or product manager must determine which strategy is best

suited in a given situation to position the brand or the firm, as the case
may be. The exercise to determine the positioning strategy is not easy
and could prove to be difficult and quite complex. Six steps need to be
taken to reach a decision about positioning.
Identify competitors: It may appear simple but it is not. This

requires broad thinking. The competing products may not be only
those, which come from the same product category with which
the brand competes directly. For example, Maggi competes not
only with Top Ramon and other noodles, but also with all other
products, which are used as snacks. The marketer must consider
all likely competitors, various use situations, and usage effects on
the consumer.
Assessment of consumers perceptions of competition:
After defining the competition, it is important to determine
how consumers perceive the competing products. To do this,
a set of product attributes, such as product characteristics,
consumer benefits, product uses or product users are chosen for
comparison. The task is to identify relevant attributes to avoid
any which would be superfluous. The most useful and relevant
attributes are chosen which describe the brand images.
Determining competitors position: This exercise is undertaken

to reveal how all the competing brands, including the companys
own are positioned and what is their relative position in the
consumers perceptual map. Which are the competing brands
that consumers consider as similar and which are the ones
considered dissimilar.
Marketing research can be used to plot a perceptual map that

would show the position of different competing brands. Twodimensional and multi-dimensional scaling techniques are
available to help the researcher. (For a comprehensive discussion
of these research techniques, the reader should refer to some
good text on marketing research).
Analysing the consumers preferences: The analysis so far

discussed would determine where in the perceptual map the
product should be positioned. The next step requires the
identification of segments or clusters of customers who prefer this
product location in the perceptual maps. Customers who value a
certain set of attributes or benefits would form a segment. An
ideal product would be the one that is preferred over all others.
Making the positioning decision: Up to this point, it may

become reasonably clear to make some subjective decision as to
which position can be appropriate. In many situations, however,
it may become necessary to rethink. Positioning usually involves
segmenting the market and choosing one or more segments. This
would require ignoring the remaining parts of the market and
focusing on only a selected part. It is to be considered whether
the selected segment or segments would support the brand
entry. A specific chosen position may lead consumers to believe
that this is what the product is for and those not looking for that
specific benefit may not consider the brand. If the decision is
for undifferentiated strategy, it may be possible to be general in
positioning approach, encouraging consumers that they will get
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what they are looking for. For instance, the Toyota slogan, I love
what you do for me Toyota, communicates to consumers that
they will get whatever they are looking for in this brand.
Fill in the blanks:

11. The entire combination of marketing mix elements attempts
to communicate the brands ................ to consumers.
12. The position is the way the product or the brand is defined by
consumers on important .................
13. Marketing research can be used to plot a ................ that would
show the position of different competing brands.
14. An ................ product would be the one that is preferred over
all others.
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Collect some ads for different brands of cars in the Indian market.
Determine how each car is positioned and is the positioning distinct.
Jack Trout is an owner of Trout & Partners, a consulting firm. He

is one of the founders and pioneers of positioning theory and also
marketing warfare theory. Trout started his business career in the
advertising department of General Electric.
2.4 SUMMARY
The concept of market segmentation is based on the fact that

all consumers are not alike. They differ in their needs, wants,
desires, income, education, lifestyles and so on. When a marketer
selects one of more segments and develops a distinct marketing
programme to accomplish marketing objectives, it is called
target marketing. There are certain conditions that must exist
for segmentation to be meaningful.
Many approaches are used for segmenting the market. Some of

the popular bases for segmentation are geographic, demographic,
psychographic, and behavioural.
The marketer generally has options either to adopt

undifferentiated marketing, differentiated marketing, or
concentrated marketing.
A target market is a group of customers towards which a

business has decided to aim its marketing efforts and ultimately
its merchandise. A well-defined target market is the first element
to a marketing strategy.
Product positioning is a very important concept in modern

marketing. It is the decision by a marketer to try to achieve a
well-defined and differentiated brand image relative to
competition in a targeted market segment.
Important positioning strategies revolve around answering

certain questions convincingly and more effectively than the
competitors.
Segmentation: The process of segregating a heterogeneous

market into a set of homogeneous groups of customers
Market Targeting: The process of segmenting, targeting and

positioning an offer in the market
Psychographics: It is the science of using psychology and

demographics to study the lifestyle patterns of consumers.
Demography: The statistical study of human population and

its distribution
Behavioural Segmentation: Market segmentation based on

consumers product related behavior; typically the benefits
desired from a product.
Social Class: The division of members of a society into a

hierarchy of distinct status classes, so that members of each
class have either higher or lower status than members of the
other classes
Target Market: A group of customers for whom a seller

designs a particular marketing mix
Positioning: The act of developing a product offer and

selecting an image to occupy a distinctive place in the minds
of the target market
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1. Describe the concept of segmentation in your own words.
2. Discuss various bases of market segmentation.
3. What are a target market segments? Mention some steps followed
by marketers in segmenting target markets.
4. Elaborate upon the basic targeting strategies.
5. Describe the concept of product positioning along with relevant
examples from contemporary brands.
6. Explain the process of determining the positioning strategy.

Topic
Introduction to
Segmentation, Targeting
and Positioning
Target Market Segments
Q. No.
1.
Answers
market segment
2.
3.
4.
5.
6.
7.
8.
characteristics; responses
starting point
psychographic
behaviouristic
attractiveness
premium
Undifferentiated Mass
Marketing
Differentiated Multiple
Segment
Niche
position
Attributes
perceptual map
ideal
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9.
Product Positioning
10.
11.
12.
13.
14.
1. Refer 2.1

The concept of market segmentation emerged as an extension of

the marketing concept in the latter part of 1950s. It is based on the
simple observation that all the existing and potential consumers
are not alike.
2. Refer 2.1.1

Geographic, psychographic and behavioral segmentation
3. Refer 2.2

Instead of aiming a single product and marketing programme

at the mass market, most companies identify relatively
homogeneous segments and accordingly develop suitable
products and marketing programmes matching the wants and
preferences of each segment.
4. Refer 2.2

Undifferentiated Mass Marketing, Differentiated Multiple

Segment Marketing and Single Segment Specialisation or Niche
Marketing.
5. Refer 2.3

The entire combination of marketing mix elements attempts

to communicate the brands position to consumers. Product
positioning is a decision reached by a marketer to try to achieve
a defined brand image relative to competition within a market
segment.
6. Refer 2.3.1

Jack Trout and Al Ries suggest that managers should ask

themselves six basic questions to create a position for a product
or service.

SUGGESTED READINGS
C.L. Tyagi, Arun Kumar, (2004), Consumer Behaviour, Atlantic
Publishers & Dist
Jim Blythe, (2013), Consumer Behaviour, SAGE
Frank Kardes, Maria Cronley and Thomas Cline, (2014), Consumer

Behaviour, Cengage Learning
Leon G. Schiffman and Leslie Lazar Kanuk, (2007), Consumer

Behavior, Pearson Education

E-REFERENCES
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http://www.wpp.com/wpp/marketing/consumerinsights/
threegenerationsonebigmarket/
http://fleurrance.wordpress.com/2014/03/03/new-affluentsconsumer-segmentation-of-indias-emerging-luxury-market/
http://articles.economictimes.indiatimes.com/2011-10-03/
news/30238332_1_largest-food-brand-amul-indian-youth
http://www.indiahowto.com/positioning.html
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CONSUMER MOTIVATION AND INVOLVEMENT
CONTENTS
3.1
Introduction
3.2 Concept of Consumer Motivation, Involvement and
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Consumer Decision-making

3.2.1
Concept and Topology of Needs
3.2.2
Theories of Consumer Needs
3.2.3
Goals
3.2.4
Classifying Motives
3.2.5
Motive Arousal
3.3
Maslows Hierarchy of Needs
3.3.1
3.4
3.5
Evaluation of Maslows Need Hierarchy
Frustration and Defense Mechanism

Motivational Research
3.5.1
Observation
3.5.2
Depth Interview
3.5.3
Projective Techniques
3.5.4
Motivational Conflicts
3.6
Consumer Involvement
3.6.1
Purchase Involvement
3.6.2
Message-Response Involvement
3.6.3
Ego Involvement
3.7
Measuring Consumer Involvement
3.8
Summary
3.9
3.10
Answers and Hints
3.11
CONSUMER MOTIVATION IN SOFTDRINK MARKET
With increasing competition in the declining market, it is ever
important for drinks companies to appreciate consumer motivation,
attitudes, and behaviour; in order to develop successful products
that fit with the lifestyle of their target consumer.
Research techniques are thirsted upon that delves deeper into the
day to day lives of consumers. These techniques focus on how and
when drinks fit into their daily routines using a mix of traditional
qualitative approaches and new technologies.
The range of mobile ethnographic tools includes, Be-There a mobile
phone app and See-Me a range of cameras worn by respondents
which have been used to great effect in our lifestyle research
projects to help:
1.
Bring consumers to life: Live in their world, go for a tour, see
a day in their life; what they get up to, which pubs, bars and
shops do they visit
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2. E
valuate product and packaging: Choosing, opening, using
and disposing; see unedited footage of how consumers behave
with your and competitor brands
3.
Understand purchasing decisions: See customers experience
in on and off trade environments
4. I dentify exposure to advertising: Check opportunities to view
and see the context in which your brand is presented
By using these methods companies are able to provide a true
insight into consumer lifestyle. This enables them to develop
products that are particularly attractive to a target group, improve
communication and brand planning that are grounded in consumer
value/behaviours; and to develop advertising strategies that target
consumer lifestyle.
CONSUMER MOTIVATION AND INVOLVEMENT 51

Understand the concept of consumer need and various
theories of need
Discuss in detail about Maslows need hierarchy theory
Learn concept and meaning of frustration and defense
mechanism
Find in detail about motivational research
Get knowledge of consumer involvement
Learn about measuring consumer involvement
3.1 INTRODUCTION
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Scholars and researchers have identified four major psychological

factors motivation, perception, learning, beliefs and attitudes that
influence consumers buying behaviour. Motivation is said to be the
driving force within individuals produced by a state of tension caused
by unfulfilled needs and wants. Individuals strive to reduce this
tension through appropriate behaviour that they expect will satisfy
their needs. In this chapter we shall attempt to study various facets
of consumer motivation and involvement. We attempt to main more
insights about how consumer behaves in making purchase decision
when his motivations drives his behaviour.
ONCEPT OF CONSUMER MOTIVATION,

C
3.2 INVOLVEMENT AND CONSUMER
DECISION-MAKING
3.2.1 CONCEPT AND TOPOLOGY OF NEEDS
Topology is a branch of mathematics which deals with transformation

in space. Kurt Lewin used topological concepts in his field theory.
Kurt Lewins descriptive system of psychology in which phenomena
are described and classified in terms of formal relationships or
valences, those obtain in individual life space. The result is a geometric
map of topology of needs, purposes and movements.
3.2.2 THEORIES OF CONSUMER NEEDS
The psychological definition of a need is that it is a trait that impels an
individual to pursue a goal through an action that also gives purpose,
meaning and direction for the behaviour of the individual.
Kanos Model
As Kanos model suggests this is achieved by addressing three specific
requirements, ranging from dissatisfiers to delighters:
Satisfying basic needs: Allows a company to enter the market

and thus overcome incumbency by competing with enterprises
already there. This is typical of red ocean strategy.
Satisfying performance needs: Allows a company to remain in

the market and continue to compete with existing competing
enterprises.
Satisfying excitement needs: Allows a company to excel, to be

world class, best-in-class and thus dominate the marketplace.
This is especially true for blue ocean strategy.
Dissatisfiers or Basic Needs: Expected features or

characteristics of a product or service that are not declared
but expected e.g. hotel room cleanliness, reliability, empathy
in case of complaint etc. If this basic need is not met
consumers will be extremely dissatisfied. When consumers
are dissatisfied they will voice that negativity strongly while
on the contrary consumers say little at all.
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Satisfiers or Performance Needs: Typically this is where

the product or service offering is correctly positioned and
delivered e.g. quality versus price, user friendliness, speed,
professionalism. Again if this need is satisfied not necessarily
is it expressed explicitly although it does provide a longer
sensation of satisfaction and is a key motivator for further
consumer purchases.
Delighters or Excitement Needs: Unexpected features or

characteristics of product or service offering that distance
the enterprise from the competition but also the consumer
from other consumers. These needs, if met, are very strongly
voiced when communicated to thirds and extremely
appreciated by consumers. However, they are typically
latent [Nishino et al, 2008] and remain unspoken. They can
be trivial, such as anticipating a customers preferred dish,
wine, table etc. at a restaurant or unsolicited personalization,
or whopping such as replacing broken products free of
charge even through it was the consumers fault.
Doyal and Goughs Model

Doyal and Gough suggest eleven broad categories of intermediate
needs that define how the need for physical health and personal
autonomy are fulfilled:
Adequate nutritional food and water.
Adequate protective housing.
A safe environment for working.
A safe physical environment.
Appropriate health care.
Security in childhood.
Significant primary relationships with others.
Physical security.
Economic security.
Safe birth control and child-bearing.
Appropriate basic and cross-cultural education.
3.2.3 GOALS
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Personal circumstances however, are key to the satisfaction of such

needs, for example, a person with adequate physical capacity and
education will find these needs much easier to attain and sustain.
Consequently old age people, the handicapped, those with learning
difficulties etc. will have less chance because of a deficiency in
capabilities. In fact academics agree that Doyal and Goughs theory
should be associated to the capability approach developed by Amartya
Sen and Martha Nussbaum [1993] that discusses substantial
freedoms including the ability to live to an old age, engage in
economic transactions, participate in political activities etc. A further
consideration is that the capability of individual and relative needs
will determine just how far he or she is included in society6. Hence
Doyal and Gough also provide insight into the degree of inclusion or
exclusion in society for individuals and, with the help of the capability
approach, indirectly explain poverty measures from their needs
theory.
Human behaviour is goal-oriented. Marketers are particularly

interested in consumers goal-oriented behaviour that concerns
product, service or brand choice. They want consumers to view their
products or brands as those that would best satisfy their needs and
wants.
A Goal is an observable and measurable end result having one or

more objectives to be achieved within a more or less fixed timeframe.
To satisfy any specific need there are a number of solutions or goals.
For example, to satisfy hunger any type of food is good enough but the
individual consumers goal may be a chicken roast. The goal selection
depends on an individuals personal experiences, physical capacity
and prevailing cultural norms and values and whether the goal
object is accessible. Another important factor is the self-image the
individual holds about herself/himself. A person acquires or would
like to acquire products perceived as closely reflecting the self-image
the individual holds about self. Specific goal objects are often chosen
not only because they satisfy specific needs, but also because they are
perceived as symbolically reflecting the individuals self image.
Without needs there are no goals. Needs and goals are interdependent
and neither can exist without the other. Generally, we are quite aware
of what specifically we want; what is our goal and we may not really be
aware of the underlying need(s). For example, many politicians may
not be consciously aware of a power need and would say that they
want to be elected so that they can serve the people. We are generally
more aware of our primary needs than the psychological or secondary
needs.
3.2.4 CLASSIFYING MOTIVES
Several schemes of classifying motives have been suggested which
group motives on the basis of one unique characteristic of interest. One
such scheme distinguishes physiological versus psychogenic motives.
Physiological motives are concerned with satisfying biological needs
of the individual such as hunger, thirst and safety etc. and psychogenic
motives focus on satisfying psychological needs such as achievement,
affection, or status etc. One important characteristic of psychological
motives is that they are learned. These acquired or secondary motives
exert very powerful influence on people.
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According to another scheme, motives are classified as conscious

versus unconscious. Conscious motives are those of which people are
quite aware such as hunger, while for unconscious motives people are
often not aware, such as consumers buy expensive clothes for their
good fit and may not be aware that they are satisfying the need for
status.
Motives have also been classified as positive versus negative. Positive
motives attract consumers towards desired goals, while negative
motives direct them to avoid unpleasant consequences. For example,
fear can induce consumers into buying water purifiers.
3.2.5 MOTIVE AROUSAL

The concept of motive arousal concerns what actually energises
consumers behaviour. Many of the needs of an individual remain
dormant for long periods. The arousal of any particular set of needs at
any given point of time gets triggered by an individuals physiological
condition, emotional or thinking processes or due to situational
stimuli.
Physiological Arousal: Deprivation of any bodily need such as

food, water and other life sustaining necessities activates the
need. Most of the physiological cues are involuntary and often
arouse some related needs. For example, a person may heat up
water to take a bath and may also make a note to buy a geyser.
Emotional Arousal: Sometimes latent needs are stimulated

because a person gets involved in thinking or daydreaming about
them. This occurs when consumers deliberate about unfulfilled
needs. For example, a young man who wants to become a cricket
player may identify with Sachin Tendulkar and use products

endorsed by him commercially.
Cognitive Arousal: Sometimes just random thoughts may
stimulate arousal of needs. An ad home away from home may
remind a person of home and he may suddenly become aware of
his need to call his wife or children.
Situational Arousal: A certain situation confronting a consumer

may also trigger arousal. This can occur when the situation
attracts attention to an existing bodily condition. For example,
seeing an ad of Coca-Cola or a display suddenly makes one aware
of being thirsty. The need would have been present but was not
strong enough to trigger arousal. Similarly, seeing an ad or a
kitchen gadget in use may activate the need to buy that gadget.
Fill in the blanks:
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.................. used topological concepts in his field theory.
2.
Doyal and Gough suggest eleven broad categories of ...............

that define how the need for physical health and personal
autonomy are fulfilled.
3.
Marketers are particularly interested in consumers ..................

behaviour that concerns product, service or brand choice.
4.
A person acquires or would like to acquire products perceived

as closely reflecting the .................. the individual holds about
self.
1.
5. .................. motives are concerned with satisfying biological

needs of the individual such as hunger, thirst and safety etc.
and .................. motives focus on satisfying psychological needs
such as achievement, affection, or status etc.
Prepare a list of products/services you have recently purchase and

which you plan to buy in coming month. Try to find the basic need
which is driving you to buy those things. Also try to relate various
motive arousals involved in buying those products/services.
The concept of involvement originated in social psychology.

The study of ego involvement addresses the question of how a
Consumers value system is engaged when purchasing a product.
3.3 MASLOWS HIERARCHY OF NEEDS

In a hierarchy of motives, the most influential motive is seen as
enjoying the most dominant position and so on through the entire list.
The hierarchy of needs proposed by Abraham H. Maslow is perhaps
the best known and is good guide to general behaviour. Maslow
classified needs into five groupings, ranking in order of importance
from low-level (biogenic) needs to higher-level (psychogenic) needs
and suggested the degree to which each would influence human
behaviour. According to this scheme, individuals strive to fulfil lowerlevel needs first before higher-level needs become active. The lowest
level unfulfilled need of an individual serves to motivate her/his
behaviour. When this need is fairly satisfied, a new higher-order need
becomes active and motivates the individual. If a lower-order need
again becomes active due to renewed deprivation, it may temporarily
become more active again.
Maslows hierarchy of need reminds us that people attach different
priorities to different needs that they become aware of but it should
not be seen as a definitive specification as what these priorities may be.
There is a possibility that this ordering of needs may correspond with
the priorities of many of us, it definitely does not represent everyones
priorities in all situations. It is likely that some individuals may ignore
needs on the lower rung sometimes in pursuit of higher-order needs.
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Physiological Needs: According to Maslow, the first and most

basic level of needs is physiological. These needs are essential to
sustain biological life and include air, water, food, shelter, clothing
and sex: all the primary or biogenic needs. Physiological needs
are very potent when they are chronically unfulfilled. In his book,
A Theory of Human Motivation, Maslow says, For the man who
is extremely and dangerously hungry, no other interest exists but
food. He dreams food, he remembers food, he thinks about food,
he emotes only about food, he perceives only food and he wants
only food. The huge global success of the anti-impotency drug
Sildenafil Citrate (Viagra etc.) and other similar salts furnishes a
strong proof to the importance of our sexual needs.
Safety Needs: After physiological needs, safety and security

needs acquire the driving force and influence an individuals
behaviour. These needs are concerned with much more than
only the physical safety and health but also include routine,
familiarity, security, certainty and stability etc. For example, the
labour unions in India provide members security of employment.
Safety needs motivate us to purchase personal protection devices.
Auto and tyre manufacturers appeal to consumers safety needs.
Ads of OTC medicines, exercise equipments, and health foods
etc. focus on our health needs.
Social Needs: The third level, social needs include love, affection,
acceptance, belonging and friendship etc. By and large, humans
are social creatures and need warm and satisfying human
relationships with others. People have strong attachment with
their families and are motivated by love and affection. Products

are often used as symbols of love and caring. For example, flowers,
greeting cards, chocolates, jewelry and diamonds are given as
tokens of affection for someone. Ads of personal care products
often emphasise appeals based on social acceptance.
Ego Needs: The fourth level is concerned with ego needs. These
needs include reputation, prestige, status, self-esteem, success
and independence etc. Many ads of ego intensive products
emphasize ego appeals such as expensive watches, jewelry and
designer dresses etc. The term conspicuous consumption is
related to ego needs. It describes consumer purchases motivated
to some extent by the desire to show others just how successful
one is.
Self-actualisation Need: Maslow believed that most people

are unable to satisfy their ego needs sufficiently and as a
result of this are unable to move to the fifth and last level.
Self-actualisation refers to a persons desire to achieve or become
what one is capable of. People express this need in different
ways. The only common thing is that they all seem to be striving
for excellence in whatever they are doing. They work singlemindedly for years to achieve what they want.
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Source: http://timvandevall.com/wp-content/uploads/2013/11/Maslows-Pyramid.jpg
Figure 3.1: Maslows Hierarchy of Needs

3.3.1 EVALUATION OF MASLOWS NEED HIERARCHY
The theory has received wide recognition among practising managers
and in social disciplines as it appears to reflect the inferred human
motivations. This can be attributed to the theorys intuitive logic and
ease of understanding. The five need-levels are generic enough to
cover most human needs. The major problem with need hierarchy
theory is that research does not generally validate the theory. It is not
at all possible to measure accurately how satisfied one need is before
the next higher-level need becomes active.
Despite criticisms, Malows theory is widely used by marketers
to understand how various products or services fit into the plans,
goals and lives of potential consumers. It is used to develop suitable
advertising appeals, enabling marketers to focus on a need level
that is shared by large number of audience in the target market. For
example, soft drink commercials directed at the younger generation
stress on social appeal by showing a group of young people sharing
good times and the advertised soft drink. It also facilitates developing
product positioning so that the product is perceived in a manner
desired by the marketer.
State whether the following statements are true or false:
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6.
Maslow classified needs into five groupings, ranking in order

of importance from psychogenic needs to biogenic needs.
7. The lowest level fulfilled need of an individual serves to

motivate her/his behaviour.
8. Self-actualisation refers to a persons desire to achieve or
become what one is capable of.
9.
The fourth level of Maslows hierarchy need is concerned with

self-actualization needs.
10. Maslows need hierarchy theory is irrelevant in enabling

marketers to focus on a need level that is shared by large
number of audience in the target market.
You are the advertising manager for a sports footwear company.

Develop three different themes based on three different levels in
the need hierarchy for the ad campaign.
Henry Murray (1938) prepared a list of 28 psychogenic motives. He

believed that everyone has the same basic set of needs. What differs
among individuals is that they attach different priority and ranking
to these needs. Some important psychogenic motives pointed
out by Murray include acquisition, achievement, recognition
and exhibition, which are believed to play an important role in
consumer behaviour.
3.4
RUSTRATION AND DEFENSE

F
MECHANISM
Probably there is nobody who has not experienced frustration that

comes from the inability to achieve some goal. Individuals react
differently to frustration. Some are adaptive and find a way to
circumvent the barrier while some others choose a substitute goal if
modified efforts fail.
Failure to achieve a goal often gives rise to feelings of frustration.

Still others may take it as a personal failure and become a victim of
anxiety. Some more common forms of individual reaction to frustration
can be of the following type:
Aggression: As a result of experiencing frustration, some
individuals exhibit aggressive behaviour in an attempt to keep
their self-esteem intact. Frustrated consumers write letters to
editors, or take the help of consumer forums.
Rationalisation: A person who rationalises is not really telling lies

because the individual is not consciously aware of the cognitive
distortion as a result of experiencing frustration. The individual
convinces herself/himself that the goal is not really worth the
effort. Another defensive approach adopted by individuals is to
redefine a frustrating situation by coming up with explanations
as to why they could not attain their goals.
Regression: In reaction to frustration people sometimes exhibit

immature or childlike behaviour by throwing the merchandise
or fighting with shopkeeper rather than settling the matter
amicably.
Withdrawal: People often resolve their frustration by

withdrawing from the situation. For example, a person who feels
difficulty in driving a car may stop doing so and may decide that
it is cheaper and convenient to use a three-wheeler auto or a taxi.
Projection: Sometimes an individual redefines a frustrating

situation by blaming other persons or objects as the reason for
her/his failures. It is common to see auto drivers blaming the
other person after an accident. After failing in an examination,
students often blame the prevailing conditions in the institution.
Autism: The thinking, which is almost completely dominated by

needs and emotions (daydreaming) without relating to reality, is
called autism. This is a way to achieve imaginary fulfillment of
ones needs. For example, some consumers may daydream that
by using a certain product they would become very attractive.
Identification: Sometimes, subconsciously, people identify with

other persons or situations to resolve their feelings of frustration.
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From the marketers point of view this is an important defence

mechanism that consumers use. We often see commercials and
ads using slice-of-life format in which an individual experiences
a frustrating situation and then overcomes the problem by using
the advertised product or service. If the consumer identifies
with the frustrating situation, it is likely that she/he would adopt
the suggested solution and purchase the advertised product
or service. A number of commercials are seen everyday for
antidandruff shampoos, skincare products, deodorants, mosquito
repellents, detergent, and so on.
Repression: Some people resolve frustration by forcing the need

out of their conscious mind. The suppressed needs sometimes
emerge in an indirect manner. For example, a couple not having
children may have many pets to fulfil their need. Socially
acceptable form of repressed behaviour is termed as sublimation.
There are countless ways that people use to face frustration in an

attempt to protect themselves against tension resulting from failure.
Much depends on individuals early experiences in life that help them
in handling frustrating situations.
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Fill in the blanks:
11. ...................... consumers write letters to editors, or take the

help of consumer forums.
12. A person who ...................... is not really telling lies because the
individual is not consciously aware of the cognitive ......................
as a result of experiencing frustration.
13. Sometimes an individual redefines a frustrating situation by

blaming other persons or objects as the reason for her/his
failures. This is known as ...................... .
14. The thinking, which is almost completely dominated by
...................... without relating to reality, is called ......................
15. We often see commercials and ads using ...................... format
in which an individual experiences a frustrating situation and
then overcomes the problem by using the ...................... product
or service.
Pick out ten advertisements and analyse how marketers have used
the forms of frustration to advertise their products.
A repercussion of consumer frustration is an increasing reliance on

other people, which has, in turn, created a desire to have humans
at the center of brand experiences. Some brands are responding by
reinvesting in both offline and online customer service.
3.5 MOTIVATIONAL RESEARCH

Consumers just do not buy products or services. Instead, they actually
buy motive satisfaction or problem solutions. It has been noted that
motives influence consumers purchase behaviour and in many cases
some motives may not reach the consumers consciousness. Motives
are hypothetical constructs and no one has ever tangibly observed
them. Due to this reason, any method of motive measurement cannot
be considered as completely reliable.
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Dr Ernest Ditcher and James Vicary were among the first to use
motivation research by adopting psychoanalytic techniques such as
depth interview and projective techniques.
Marketers were fascinated by explanations offered for consumer
behaviour and before long, almost every advertising agency on
Madison Avenue had had a psychologist to conduct motivational
studies.
The term motivation research refers to type of marketing

research (qualitative research) employed to uncover subconscious
motivations of consumers that influence their behaviour.
It seeks to discover and comprehend what consumers do not fully
understand about them. It also attempts to identify forces and
influences that consumers may not be aware of such as cultural factors
and sociological forces that influence their behaviour. Typically,
these below-awareness or unconsciousness motives are interlinked
and complicated by conscious motives, cultural biases, economic
variables, and fashion trends.
The methods used (three major motivation research techniques
include observation, focus group, and depth interviews) involve
disguised and indirect techniques to probe consumers feelings,
attitudes, and emotions concerning a product, or service, without
triggering defence mechanisms that can lead to misleading results.
3.5.1 OBSERVATION
Observation of consumers can help in developing hypotheses about
human motives. It is easier to observe consumers in buying situations
than in their homes and can be accomplished in-person or by using

video cameras. Video cameras are less intrusive than a person as
an observer. However, observation by human eye or video cameras
cannot answer every question. Generally, observation needs to be
supplemented by focus group or depth interviews to fully understand
why consumers are behaving the way they do.
3.5.2 DEPTH INTERVIEW
The heart and soul of motivational research is the depth interview.
It is a lengthy, one-on-one personal interview conducted by a
professionally trained motivational researcher.
The researcher relies heavily upon non-directive interviewing
techniques. The goal of the researcher is to get the respondent to talk,
and keep talking. The researcher begins the interview by introducing
general topics, rather than asking direct questions. She/he probes by
raising eyebrows, by giving a questioning look, by paraphrasing what
the respondent has said, or by repeating the respondents own words
in a questioning manner. These techniques are non-threatening to the
respondent.
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During the interview, the researcher watches for clues that might
indicate that a sensitive nerve has been touched. Some of the clues
that the researcher watches for include long pauses by the respondent,
slips of tongue, fidgeting, strong emotions, variations in voice pitch,
facial expressions, eye movements, avoidance of question, fixation on
an issue, and other body language indicators. These sensitive topics
and issues are then the focus of additional probing and exploration
later in the interview.
Each respondent interview is tape-recorded and transcribed. During

the interview, the researcher makes notes about respondents
behaviour,
mannerisms,
physical
appearance,
personality
characteristics, and non-verbal communication. These notes help the
researcher to understand and interpret the verbatim transcript of the
interview.
3.5.3 PROJECTIVE TECHNIQUES
Projective tests require the respondent to decide what the other
person would do in a certain situation. These techniques explore the
underlying motives of individuals who consciously or unconsciously
get involved in rationalizations and concealment because they may be
reluctant to admit certain weaknesses or desires. Projective techniques
involve a variety of disguised tests containing ambiguous stimuli such
as untitled pictures, inkblots, incomplete sentences, word-associations
and other-person characterisations. The respondent taking the test, is
required to describe, complete or explain the meaning of different
ambiguous stimuli. It is believed that respondents inner feelings
influence their perceptions of ambiguous stimuli. By taking the tests,
they project their inner thoughts revealing their underlying needs,
wants, aspirations, fears and motives, whether or not the respondents

are fully aware of them. Some examples of projective techniques are:
Thematic Apperception Techniques (TAT): Respondents are
shown pictures or cartoons concerning the product or the topic
under study and asked to describe what is happening in the
picture. It is believed that respondents will actually reveal their
own motivations, attitudes, personalities, and feelings about the
situation.
Word Association Test: This is a relatively old and simple

technique. Respondents are asked to read a series of words or
phrases, one at a time and asked to answer quickly with the first
word that comes into mind after hearing each one. By responding
in rapid succession, it is assumed that they indicate what they
associate most closely with the word or phrase spoken and reveal
their true feelings.
Sentence Completion Test: The interviewer reads the beginning

of a sentence and the respondent is required to finish it. This
technique is believed to be useful in uncovering the images
consumers have about products and stores. The information
collected can be used to develop promotional campaigns.
The Third-Person Technique: The interviewer asks the

respondent to describe a third person. For this, respondents are
presented with some information about the person. It is believed
that when they describe a neighbour or a third person, they
usually respond without hesitation and in doing so, they express
their own attitudes or motives as they infer the attitudes or
motives of someone else.
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3.5.4 MOTIVATIONAL CONFLICTS

Sometimes the urge to do something worthy or good or pleasurable
is directly opposed by the fact that it involves pain or inconvenience
or hard work. Then the organism is in conflict between two opposite
motives. That is one form of motivational conflict called an approach/
avoidance conflict. One may also feel torn between two different
pleasures. Or one may be forced to choose between two pains. Each
of these is a classic motivational conflict.
Approach/avoidance conflicts: The organism is attracted and

repulsed by the same stimulus or situation.
Approach/approach conflicts: The organism is forced to choose

between two different desirable stimuli.
Avoidance/avoidance conflicts: The organism is forced to choose

between two different undesirable alternatives.
Fill in the blanks:

16. Consumers buy motive .................. or problem solutions.
17. Dr Ernest Ditcher and .................. were among the first to use
motivation research by adopting .................. techniques such
as depth interview and projective techniques.
18. .................. needs to be supplemented by focus group or depth
interviews to fully understand why .................. are behaving
the way they do.
19. During the interview, the researcher makes notes about
respondents behaviour, .................., physical appearance,
personality characteristics, and non-verbal communication.
20. .................. techniques involve a variety of disguised tests
containing ambiguous stimuli such as untitled pictures,
.................., incomplete sentences, word-associations, and
other-person characterizations.
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21. In approach avoidance conflict the organism is attracted and

.................. by the same stimulus or situation.
Conduct a focus group interview and try to find out what motives
influence the purchase of cars.
3.6 CONSUMER INVOLVEMENT
Consumer involvement is defined as a state of mind that motivates

consumers to identify with product/service offerings, their patterns,
and consumption behavior. Involvement creates within consumers
an urge to look for and think about the product/service category and
the varying options before making decisions on brand preferences
and the final act of purchase. It is the amount of physical and mental
effort that a consumer puts into a purchase decision. It creates within
a person a level of relevance or personal importance to the product/
service offering and this leads to an urge within the former to collect
and interpret information for present/future decision making and
use. Involvement affects the consumer decision process and the
sub processes of information search, information processing, and
information transmission.
As Schiffman has put it Involvement is a heightened state of

awareness that motivates consumers to seek out, attend to, and
think about product information prior to purchase.
It is the perceived interest and importance that a consumer attaches

to the acquisition and consumption of a product/service offering.
Nature of Consumer Involvement
It is an inner urge that creates within an individual an interest/

desire to hold certain product/service offerings in greater
relevance/importance.
Involvement possesses certain properties:

It has a level of strength and intensity that determines the
degree of involvement that a consumer possesses. This
could be high or low.
The length of time that the consumer remains in this

heightened state determines the level of persistence. It could
be short term and situational interest in the product/service
category; or it could be long term and enduring.
A mechanism underlies the very process of involvement. As a

process, involvement is impacted by certain antecedents that
get restrained by moderating factors, and finally affect its
degree of intensity and level of persistence.
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3.6.1 PURCHASE INVOLVEMENT
Since it was first introduced to marketing, the concept of involvement

has been extensively used as a moderating or explanatory variable in
consumer behaviour. It is regarded as a central framework, vital to
understanding consumer decision-making behaviour and associated
communications.
Product involvement is commonly defined as a consumers enduring

perceptions of the importance of the product category based on the
consumers inherent needs, values, and interests.
Consumers look for more personal, experimental, and symbolic gain,
other than maximising product functionality, in a high involvement
situation than in a low involvement one.
3.6.2 MESSAGE-RESPONSE INVOLVEMENT
This is a state of arousal directed towards attaching relevance to a
person/object/situation for a short term. As an affective state, it creates
a level of involvement when a person thinks about a particular person/
object/situation. It is specific to a situation and is thus temporary in
nature. It could vary from low to high, depending upon the situational
factors.
For example, a middle aged lady suddenly decides to gift a laptop
to her son on his birthday. She is not techno savvy and has little
interest with the product category. She goes to the electronics mall
and visits the various stores that sell computers and laptops. She
collects information on the product features, prices, etc and finally
takes the help of her middle aged neighbor to reach a final decision.
Her involvement with the purchase activity would be regarded as a
situational involvement.
3.6.3 EGO INVOLVEMENT
When the level of involvement towards the product/service category
extends over a period of time across situations, it is referred to as
enduring involvement. The person shows a high-level of interest
in the product category and spends time collecting and processing
information and integrating it within his memory.
For example, a person desires to buy a laptop for his son to be
gifted to him when he goes to college, which would be three years
later. The father plans well in advance, tries to collect information
through advertisements, brochures, trade journals, visits to dealers,
and word of mouth from peers and colleagues. Within this period he
gets involved with the product category and after three years is in a
position to take a decision based on the facts that he has collected.
This is referred to as enduring involvement.
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Ego involvement with a product category often gives birth to an opinion

leader. An opinion leader is a person who holds interest in a particular
product/service category, and becomes a specialist; he makes efforts
to gather all information about the category, the brand offering etc.;
he talks about and spreads the information and the knowledge that
he possesses. When a person wants to make a purchase, he seeks the
advice and guidance of such an opinion leader who helps him make a
decision. Opinion leaders are product specific. In the example above,
if the lady approaches her neighbour and takes his advice/guidance
because the neighbour is young, techno savvy and knows a lot about
electronics and in particular laptops, she would actually be taking
help of what is known as an opinion leader.
Fill in the blanks:

22. ....................... creates within consumers an urge to look for
and think about the product/service category and the varying
options before making decisions on brand ....................... and
the final act of purchase.
23. The length of time that the consumer remains in this
heightened state determines the level of ....................... .
24. Product involvement is commonly defined as a consumers
enduring ....................... of the importance of the product
category based on the consumers inherent needs, values, and
interests.
Marketers measure consumer involvement. In this respect choose

one industry, such as FMCG, Consumer durable etc. and prepare
a presentation providing the insights about consumer involvement
practises taking place in making purchase.
Understanding what type of buying decision your customer is

making will help marketer know, what type of content to publish,
as High involvement decisions are becoming more common with
the digitization of the marketplace.
3.7 MEASURING CONSUMER INVOLVEMENT
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Although the study of consumer behaviour began as a specialization

in the field of marketing, it is recently when it gains relevance as the
consumer becomes a central agent in an organizations marketing
strategies. Involvement research has received considerable attention
till our days, and it is recognised as one of the most important variables
in consumer research. Involvement includes an assessment of the
importance of the stimulus for the consumer but it produces certain
behaviour as a consequence, in other words, involvement motivates
an action.
The study of involvement includes three main dimensions: intensity,

address, and length.
The first relates to the level of consumer perceived involvement

which is totally subjective for each person and to a particular
degree or level.
Involvement address relates to the stimulus producing that

perception; it can be a product category (tangible or intangible),
a particular product or brand, an advertisement, a purchase
decision or even a current political issue.
Length refers to timing and there are two types: enduring

involvement and situational involvement. Enduring involvement
is related to the values and the self concept of the person to a
product category independently of a particular purchase decision.
Situational involvement includes purchase involvement because
its interest and concern is considered perishable.
The typology stated by Stone (1984) which tries to assess involvement

by a persons behavioural response (time and effort employed) has
not been supported, probably because it may assess a consequence of
the involvement and not the level of involvement itself.
Fill in the blanks:

25. Involvement includes an ....................... of the importance of the
stimulus for the consumer.
26. The first relates to the level of consumer perceived involvement
which is totally ....................... for each person.
Find out how do brands measure consumer involvement in todays

time. What benefits have been derived by those brands after
measuring consumer involvement.
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.
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3.8 SUMMARY
Motivation is the driving force within individuals and is the result

of a state of tension resulting from unfulfilled needs, wants, or
desires.
Consumers strive to reduce this tension through appropriate

behaviour that in their view will satisfy the underlying felt state
of deprivation.
An individuals pattern of behaviour to reduce the felt tension

will depend on what she/he thinks or has learned and believes as
appropriate.
Every person has needs. Some of these are basic to sustaining life
and individuals are born with them. Such physiological needs
are called primary needs or motives.
Secondary needs are acquired as a result of being brought up

in a culture and society, such as needs for power, prestige and
achievement etc.
Most human behaviour is goal-oriented and this is the aspect in

which marketers are most interested as it significantly influences
the consumers consumption decisions.
The goal selection depends on an individuals personal

experiences, physical capacity and the prevailing cultural
norms and values. Another important factor that influences goal
selection is the self-image the individual holds.
Needs are never completely satisfied. As soon as one need is

satisfied, others emerge.
Maslow has proposed a need hierarchy that is divided into five

levels. He has proposed that higher level needs become active
only after lower order needs are satisfied.
Motivational research is widely used by marketers for different

applications.
The level of involvement reflects how personally important

or interested you are in consuming a product and how much
information you need to make a decision.
The level of involvement in buying decisions may be considered

a continuum from decisions that are fairly routine to decisions
that require extensive thought and a high level of involvement.
In psychology, a projective test is a type of personality test in

which the individual offers responses to ambiguous scenes,
words or images.
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Motivation: The driving force that causes the change from

desire to trying to achieve in life.
Acquired Needs: McClelland proposes each person falls into

one of these three categories based on their own personal
preference and in relation to personal experiences.
Physiological Needs: The physical requirements for human

survival. If these requirements are not met, the human body
cannot function properly and will ultimately fail.
Self-actualization: This level of need refers to what a persons

full potential is and the realization of that potential. Maslow
describes this level as the desire to accomplish everything that
one can, to become the most that one can be.
Repression: Repression acts to keep information out of

conscious awareness. However, these memories dont just
disappear; they continue to influence our behaviour.
Archetypes: Swiss psychiatrist Carl Jung believed that

archetypes are models of people, behaviours, or personalities.

1. Explain Kanos theory of consumer need.
2. Enumerate various motive arousals triggered by an individual.
3. What is a goal? Why marketers are particularly interested in
consumers goal-oriented behaviour?
4. Elaborate Maslows hierarchy of needs in detail and critically
evaluate it.
5. What is the relevance of Maslows need hierarchy for marketers?

Describe using examples.
6. Mention some common forms of individual reaction to frustration.
Cite example for each too.
7. What is motivational research? Which techniques are used in
this research?
8. Explain various modes of conducting projective techniques in
detail.
9. Describe in brief classic motivational conflict.
10. Define Involvement. Why do we measure consumer involvement?
11. Write a short note on message response involvement.

ANSWERS FOR SELF ASSESSMENT
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Topics
Concept of Consumer
Motivation, Involvement and
Consumer Decision-making
Maslows Hierarchy of need
Frustration and Defense

Mechanism
Motivational Research
Q. No.
1.
Answers
Kurt Lewin
2.
3.
4.
5.
intermediate needs
goal-oriented
self-image
Physiological;
psychogenic
False
False
True
False
False
Frustrated
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
rationalizes; distortion
projection
daydreaming; autism
slice-of-life; advertised
satisfaction
James Vicary;
psychoanalytic
Observation; consumers
mannerisms
Contd...
Consumer Involvement
Measuring Consumer
Involvement
20.
21.
22.
23.
24.
25.
Projective; inkblots
repulsed
Involvement;
preferences
persistence
perceptions
assessment
26.
subjective

1. Refer 3.2.2
2. Refer 3.2.5

Physiological Arousal; Emotional Arousal; Cognitive Arousal &

Situational Arousal
3. Refer 3.2.3

Marketers want consumers to view their products or brands as

those that would best satisfy their needs and wants.
4. Refer 3.3

The hierarchy of needs proposed by Abraham H. Maslow is

perhaps the best known and is good guide to general behaviour.
5. Refer 3.4

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As Kanos model suggests this is achieved by addressing three

specific requirements, ranging from dissatisfiers to delighters.
Auto and tyre manufacturers appeal to consumers safety needs.

Ads of OTC medicines, exercise equipments, and health foods
etc. focus on our health needs.
6. Refer 3.4

Aggression; Rationalisation; Regression; Withdrawal; Projection;

Autism; Identification & Repression.
7. Refer 3.5

The methods used (three major motivation research techniques

include observation, focus group, and depth interviews) involve
disguised and indirect techniques to probe consumers feelings,
attitudes, and emotions.
8. Refer 3.5.3

Thematic Apperception Techniques, Word Association Test,

Sentence Completion Test, The Third-Person Technique
9. Refer 3.5.4

Approach/avoidance conflicts, Approach/approach conflicts,

Avoidance/avoidance conflicts
10. Refer 3.6

Involvement includes an assessment of the importance of the

stimulus for the consumer but it produces certain behaviour as a
consequence, in other words, involvement motivates an action.
11. Refer 3.6.2

This is a state of arousal directed towards attaching relevance to

a person/object/situation for a short term. As an affective state,
it creates a level of involvement when a person thinks about a
particular person/object/situation.

SUGGESTED READINGS
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C.L. Tyagi and Arun Kumar, (2004), Consumer Behaviour, Atlantic

Publishers & Dist


Behaviour in India - A Study of FMCGs, Laxmi Publications, Ltd.
E-REFERENCES
http://www.decisionanalyst.com/publ_art/motive.dai
http://www.ejcr.org/curations-6.html
http://www.consumerpsychologist.com/
CONSUMER LEARNING AND MEMORY
CONTENTS
4.1
Introduction
4.2
Behavioural Learning Theories
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4.2.1
Classical Conditioning
4.2.2
Operant Conditioning
4.2.3
Reinforcement Theories
4.2.4
Observational Learning
4.3
Memory: Structure and Functioning
4.3.1
Sensory Memory
4.3.2
Short-term Memory
4.3.3
Long-term Memory
4.3.4
Memory Process
4.3.5
Measuring Memory
4.3.6
Problems with Memory Measurement
4.4
Involvement and Four Types of Consumer Behaviour
4.5
Central and Prepherial Route to Persuasion
4.6
Summary
4.7
4.8
Answers and Hints
4.9
BHELPURI AND PEPSODENT...
When Manoj bought four packets of bhelpuri from a roadside
vendor in Mumbai late last month, they all came wrapped in similar
green colour papers with childrens drawings and messages about
brushing teeth and fighting germs, bringing a smile to his face. He
found the same eye-catching design on the paper cone in his next
chaat outing he realised it wasnt a coincidence.
It was part of a marketing campaign by Hindustan Unilever for
its oral care brand Pepsodent. HUL has tied up with 48 bhelpuri
walas across Mumbai, asking them to wrap their popular roadside
snack in leaflets of Pepsodents campaign about fighting germs and
brushing twice a day.
The idea was, how can we spread the oral care message to adults
in a manner that is relevant for them? Bhel is a popular evening
snack and that is the time to tell adults to brush twice a day.
Marketing experts say such initiatives create a bigger impact than
promoting brands through paid media channels.
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At a very low cost, you get high recall and people talk about it. So
the engagement quotient is high too. HULs initiative is a part of
earned media, which means creating a buzz by virtue of your own
action. This is not the first time HUL has come up with such an
innovative idea to take its message directly to consumers.
A year ago, at the Kumbh Mela, it stamped Did you wash your
hands with Lifebuoy? message in Hindi onto millions of rotis in a
campaign that was awarded the Grand Effie as well as Bronze Lion
at Cannes earlier this year.
HUL started its Pepsodent campaign about brushing twice a day

early last year. It teamed up with over 1.5 lakh kids across schools
who expressed their creativity through paintings to promote the
message. The leaflet distributed through bhelpuri walas carries
one of these paintings.
Now, HUL plans to launch an advertisement based on the whole
campaign, from tying up with schoolchildren to using the leaflets for
wrapping bhelpuri. The company plans to launch this commercial
digitally before airing it on television, hoping that it will go viral.
CONSUMER LEARNING AND MEMORY 75

Learn about behavioural learning theories in detail
Understand the structure of memory and its functioning
Find problems associated with measuring memory
Understand involvement and four types of consumer
behaviour
Discuss clearly about central and peripheral route to
persuasion
4.1 INTRODUCTION
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How does learning take place? There is no single, universally accepted

theory of learning and for this reason it is difficult to define learning
precisely. For the purpose of this book, learning can be viewed as
a relatively permanent change in behaviour occurring as a result of
experience.
Schiffman and Kanuk have defined learning, from a marketing
perspective, as
The process by which individuals acquire the purchase and

consumption knowledge and experience that they apply to future
related behaviour is known as Learning.
Behaviour has two aspects, observable behaviour, as well as
non-observable cognitive activity. This means that learning can also
occur without any change in observable behaviour as may happen
when a consumers attitudes change as a result of new learning.
Except for instinctive behaviour (such as sucking in infants) or the
ability to walk, which is largely based on physical maturity, all the
observable as well as non-observable behaviour of consumers is the
result of learning. Learning is a concept and no one has ever seen
learning. It is a continuous process and gets modified or changed as a
result of exposure to new information and personal experiences and
often becomes the basis for future observable behaviour. We infer that
learning has taken place if an individual behaves, reacts, or responds
as a result of experience in a manner different from the way this
person formerly behaved. For example, as consumers are exposed to
advertising, gain experience in purchasing and consuming products
and services, they learn about features, attributes and form opinions
about brands and their future behaviour is based on past knowledge
and experience.
Four components seem to be fundamental to almost all the learning

situations, motivation, cues, response, and reinforcement.
Motivation: If an individual has strong motivation to learn

something, there is increased likelihood that learning will take
place.
Motivation is the driving force that impels individuals to action and

is the result of unfulfilled need(s).

For example, students who want to pursue a course in computer

application would be motivated to seek information concerning
the courses offered by different institutes and possibly the
quality of faculty and lab facilities. Conversely, students
who are not interested are unlikely to pay any attention or
ignore all information about computer courses. The degree
of involvement in the goal object will influence an individuals
degree of motivation to acquire information or knowledge about
the product or service. Marketers use motivation research to
unearth consumer motives and use it in developing marketing
programmes.
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Cues: Cues are relatively weak stimuli, not strong enough to

arouse consumers but have the potential of providing direction to
motivated activity. For example, an ad about a computer course
is a cue that suggests a way to satisfy the motive of learning
computer application. Consumers are exposed to various cues
almost everyday such as advertising, displays, packaging and
prices etc. These cues serve to help consumers satisfy their needs
by purchasing certain brands.
Response: The way an individual reacts to a cue or stimulus

is the response and could be physical or mental in nature,
leading to learning. For example, a computer marketer keeps on
providing cues to a student through promotional activities and
may not be successful in eliciting the final purchase behaviour
for a variety of reasons, though the student is motivated to buy. It
is also possible that the student forms a favourable image about a
particular model, has enough resources and buys the computer.
Consumers are exposed to many cues providing direction at the
same time and each cue competes for attention. The responses to
particular cues or stimuli may be significantly affected by earlier
learning as a result of response-reinforcement.
Reinforcement: Most scholars agree that reinforcement of a

specific response increases the likelihood for the response to
reoccur. Reinforcement can be anything that both increases
the strength of response and tends to induce repetitions of
the behaviour that preceded the reinforcement. According to

Edward L. Thorndike:

Of several responses made to the same situation, those which are

accompanied or closely followed by satisfaction (reinforcement)
will be more likely to recur; those which are accompanied or
closely followed by discomfort (punishment) will be less likely to
occur.
(Edward L. Thorndike, Animal Intelligence, The Macmillan

Company, 1911)
Fill in the blanks:

1. Learning can also occur without any change in .................
behaviour as may happen when a consumers attitudes change
as a result of new learning.
Learning is a ................. process and gets modified or changed
as a result of exposure to new information and ................. and
often becomes the basis for future observable behaviour.
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2.
3. ................. are relatively weak stimuli, not strong enough to

arouse consumers but have the potential of providing .................
to motivated activity.
4.
The responses to particular cues or stimuli may be significantly

affected by earlier learning as a result of ................. .
5. Reinforcement can be anything that both increases the

strength of response and tends to induce ................. of the
behaviour that preceded the reinforcement.
4.2 BEHAVIOURAL LEARNING THEORIES

Behavioural learning theories are sometimes also referred to
as connectionist or stimulus response theories. Behaviourist
psychologists believe in observing changes in an individuals responses
that result due to exposure to specific external, environmental
stimuli. Behavioural theories are based on stimulus-response
(SR) orientation and the belief is that learning occurs through the
connection between the stimulus and a response. When an individual
responds in a predictable manner to a known stimulus, the person is
said to have learned. Two important behavioural theories, classical
conditioning (also called respondent conditioning) and instrumental
conditioning (also called operant conditioning) are of great relevance
to marketing.
4.2.1 CLASSICAL CONDITIONING
In everyday life, we think of conditioning as a kind of automatic
response to something as a result of repeated exposure to it. For
example, if a child gets excited every time she/he thinks of going to
McDonalds, the reaction may be conditioned from many pleasant

visits to the restaurant. Classical conditioning pairs one stimulus
with another that already elicits a given response and over a period
of repeated trials, the new stimulus will also start causing the same or
quite similar response.
The Russian psychologist, Ivan Pavlov, was the first who pioneered
the study of classical conditioning. He noticed that since his
hungry dogs salivated (unconditioned response) at the sight of food
(unconditioned stimulus), the connection between food and salivation
is not taught and is just a reflex reaction. Pavlov reasoned that a
neutral stimulus such as the sound of a ringing bell could also cause
the dogs to salivate if it was closely associated with the unconditioned
stimulus (food). To test this reasoning, Pavlov rang a bell while giving
food to the dogs. After a sufficient number of repetitions, the dogs
learned the connection between bell and food. When they heard the
bell (conditioned stimulus) even in the absence of food, they salivated
(conditioned response).
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According to N.J. Mackintosh, classical conditioning was formerly

viewed as being a reflexive action. However, according to new
thinking, it is now viewed as cognitive associative learning, leading
to the acquisition of new knowledge about the world. The association
of conditioned stimulus (bell) and unconditioned stimulus (bell and
food) influenced the expectations of dogs and this in turn influenced
their behaviour (salivation). According to Chris Janiszewski and Luk
Warlop, conditioning encourages attention to the advertised brand in
the promotions that follow.
Unconditioned stimulus
(food)
(outdoor activities)
Unconditioned response
(salivation)
(fun and refreshment)
Conditioned stimulus
(bell)
(Coca Cola)
Conditioned response
(salivation)
(fun and refreshment)
Figure 4.1: Classical Conditioning

Two factors are important for learning to occur through the
associative process. The first is contiguity (conditioned stimulus and
unconditioned stimulus must be close in time and space). The second
factor is the repetition (the frequency of association). The more
the frequency of unconditioned and conditioned stimuli occurring
together, the stronger the association between them will develop.
Consumers can be conditioned to develop positive impressions and
images of brands through the associative process.
From classical conditioning emerge three basic concepts important
for understanding consumer behaviour: repetition, stimulus
generalization and stimulus discrimination.
4.2.2 OPERANT CONDITIONING

Instrumental conditioning also involves developing association
between stimulus and response but requires the subject to discover a
correct response that will be reinforced. Any response elicited is within
the conscious control of the subject. For instance, let us assume that
in a Pavlov-like experiment, dogs or rats are provided with two levers
instead of just one. Pushing one lever will produce food (reward) and
the other an electrical shock (punishment). When hungry, the animals
would quickly learn to press the lever that produced food and avoid
the lever that produced an electrical shock. Learning occurs because
the consequence of a repeated behaviour is rewarding.
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The foremost proponent of instrumental conditioning was B.F.

Skinner. In his experiments, the subjects were free to respond in
several ways. Skinner worked with small animals in his experiments,
such as rates and pigeons. He developed a box, called after his name as
Skinner box, in which he placed experimental animals. Whenever
the animals made suitable movements such as pressed a lever or
pecked keys, they received food (reward). Classical conditioning
depends on an already established stimulus-response connection.
However, the learner in instrumental conditioning is required to
discover a correct or appropriate behaviour through trial-anderror that will be reinforced. Over a number of reinforced trials, the
experimental animal learns a connection between the lever or key
(unconditioned stimulus) and pushing it (response). According to
instrumental conditioning learning theory, behaviour is a function of
its consequences.
Behaviour elicited
Likelihood of increase
or decrease in response
probability
Reward or
Punishment
Figure 4.2: Instrumental Conditioning
With regard to consumer behaviour, instrumental conditioning
suggests that most learning takes place by means of a trial-and-error
process and consumers experience more satisfying results (outcomes
or rewards) in case of some purchases than others. Favourable
consequences reinforce the behaviour and increase the likelihood of
its repetition, that is, the consumer will purchase the product again;
unfavourable outcomes will decrease that likelihood. For example,
almost everyday we see commercials of one or the other detergent
depicting the agony of a mother or housewife washing clothes,
dissatisfied or embarrassed and ultimately finding the rewarding

experience with a particular (advertised) brand of detergent. The
message for the target audience is loud and clears that to avoid
unfavourable outcomes with other detergents; they should use the
advertised brand. There are other similar commercials such as those
of common cold remedies (readers might be familiar with Coldarin
commercial), balms for waist and joint pains, pimple and acne
remedies, anti-itch creams, anti-dandruff shampoos and deodorants
etc. The common theme is the same in all the commercials that to
avoid uneasy feelings and embarrassment, consumers should use the
advertised product.
4.2.3 REINFORCEMENT THEORIES
Reinforcement or repeated positive outcome influences the likelihood
that a response will be repeated. Reinforcement can be of two types:
positive reinforcement and negative reinforcement.
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Reinforcement is anything that increases the strength of response

and tends to induce repetitions of the behaviour that preceded it.
Positive reinforcement consists of events that strengthen and increase
the likelihood of specific behaviour by the presentation of a desirable
consequence. For example, using a cold remedy that relieves the
painful symptoms is likely to result in repeat purchase in future,
if there is need. The negative reinforcement is an undesirable or
unpleasant outcome that strengthens and encourages the likelihood
of a specific behaviour by the termination or withdrawal of an
undesirable consequence. Example: Colgate toothpaste.
Commercial shows the consequence of bad breath and encourages

consumers to buy Colgate toothpaste. Punishment and negative
reinforcement are not the same. Punishment is applied to discourage
behaviour. For example, fines for driving under the effect of alcohol
are a form of punishment to discourage motorists from driving after
consuming liquor.
Advertisers of toothpastes, anti-wrinkle creams, headache and cold
remedies, mouthwash, deodorants, burglar alarms, life insurance and
many other products and services make use of fear appeals, relying
on negative reinforcement. In all these ads, the consumer is suggested
a solution to avoid negative consequences by buying the advertised
product or service.
To buy a product for the first time, the consumer undergoes a
decision process (high or low-involvement). Repeated reinforcement
(favourable outcomes) resulting from product usage increases the
likelihood that the consumer will continue buying the same brand
until the consumer forms a habit. The habit formation will result only
if there is reinforcement of the past purchase behaviour.
Eric Lapersonne, Guiles Laurent and Jean-Jacques Le Goff

conducted a study and found that 17 percent of French car buyers
did little or no pre-purchase search and considered only the make
of car they currently owned. The conclusion was that the value of
additional information they may collect was small compared to the
level of satisfaction with their present model and dealer.
Theories of instrumental conditioning help us understand that when
a learned behaviour is no longer reinforced, it diminishes to the point
of extinction and the consumer ceases buying by habit.
Subcultures are groups of people who share the same values based
on a common experience or a similar lifestyle in general.
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For instance, effective anti-smoking, or discouraging gutka (a tobacco

chewing mixture) ads will cause extinction by eliminating the link
between smoking, gutka and the pleasure of their use.
It is natural for memories to grow weaker over time. There is a

difference between extinction and forgetting. Forgetting, results
when the stimulus is no longer repeated or is not perceived by the
consumer. By simply maintaining a competitive parity in advertising
expenditures, a company can generally avoid serious level of forgetting
on consumers part. Marketers can combat forgetting by repetition
of advertising, preferably not the same ad again and again because
this may prove to be boring or irritating, but conveying the same core
message and changing only the execution style. For example, Pepsi
and Coca Cola commercials are shown everyday, only the settings
change. Reduced advertising of Promise toothpaste has caused
decline in its sales and loss of market share.
If the exposures to repetitive advertising increase the probability
of repurchase, reinforcement occurs. On the other hand, extinction
will rapidly decrease that probability because there is no reward or
favourable outcome even if the consumer is repeatedly exposed to the
product ad.
Forgetting occurs due to decrease in advertising frequency, resulting
in a gradual and fairly long-term decline in repurchase likelihood.
Another reason that may cause forgetting is the competitive
advertising and advertising clutter, leading to consumer confusion
which may result in weakening the link between stimulus and
favourable outcome.
Instrumental conditioning has important marketing applications in
influencing the likelihood that consumers will repurchase a product
or service. Repurchase may result only when they are satisfied with
usage or consumption experience.
Negative stimulus
50%
Reinforcement
Forgetting
Extinction
0
1
2
3
4
5
6
7
Number of exposure repetitions over time
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Figure 4.3: Reinforcement, Extinction and Forgetting Related to

Advertising Exposure
4.2.4 OBSERVATIONAL LEARNING
Observational learning is sometimes also referred to as shaping,

modeling, and vicarious reinforcement. While it can take place at
any point in life, it tends to be the most common during childhood as
children learn from the authority figures and peers in their lives. It
also plays an important role in the socialization process, as children
learn how to behave and respond to others by observing how their
parents and other caregivers interact with each other and with other
people.
Psychologist Albert Bandura is the researcher perhaps best-identified

with learning through observation. He and other researchers
have demonstrated that we are naturally inclined to engage in
observational learning. In fact, children as young as 21 days old have
been shown to imitate facial expressions and mouth movements.
If youve ever made faces at an infant and watched them try to
mimic your funny expressions, then you certainly understand how
observational learning can be such a powerful force even from a very
young age. Banduras social learning theory stresses the important of
observational learning.
In his famous Bobo doll experiment, Bandura demonstrated that
young children would imitate the violent and aggressive actions of
an adult model. In the experiment, children observed a film in which
an adult repeatedly hit a large, inflatable balloon doll. After viewing
the film clip, children were allowed to play in a room with a real Bobo
doll just like the one they saw in the film. What Bandura found was
that children were more likely to imitate the adults violent actions
when the adult either received no consequences or when the adult
was actually rewarded for their violent actions. Children who saw film
clips in which the adult was punished for this aggressive behavior
were less likely to repeat the behaviors later on.
Factors that Influence Observational Learning
According to Banduras research, there are a number of factors that
increase the likelihood that a behavior will be imitated. We are more
likely to imitate:
People we perceive as warm and nurturing
People who receive rewards for their behaviour
When you have been rewarded for imitating the behavior in the
past
When we lack confidence in our own knowledge or abilities
People who are in a position of authority over our lives
People who are similar to us in age, sex, and interests
People who we admire or who are of a higher social status
When the situation is confusing, ambiguous, or unfamiliar
Fill in the blanks:
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6. Behavioural theories are based on ...................... orientation

and the belief is that learning occurs through the connection
between the stimulus and a response.
7. Classical conditioning pairs one ...................... with another
that already elicits a given response and over a period of
...................... trials, the new stimulus will also start causing the
same or quite similar response.
8. The Russian psychologist, ......................, was the first who
pioneered the study of classical conditioning.
9. The foremost proponent of instrumental conditioning was
.......................
10. Positive reinforcement consists of events that ___________
and increase the likelihood of specific behaviour by the
presentation of a desirable.......................
11. ...................... occurs due to decrease in advertising frequency,
resulting in a gradual and fairly long-term decline in repurchase
likelihood.
12. Psychologist ...................... is the researcher perhaps bestidentified with learning through observation.
13. In his famous ...................... experiment, Bandura demonstrated
that young children would imitate the violent and aggressive
actions of an adult model.
Contd...
14. The ...................... is an undesirable or unpleasant outcome

that strengthens and encourages the likelihood of a specific
behaviour by the ...................... or withdrawal of an undesirable
consequence.
Collect and describe three advertisements: (a) Based on

cognitive learning, (b) instrumental conditioning, and (c) classical
conditioning. Discuss the nature of these ads and how each uses
these learning concepts.
Behaviourist approach might be more relevant when consumers

cognitive activity is minimal, as happens in low involvement
purchase situations. For instance, a consumer may be inclined
to buy the same product she/he purchased earlier, as long as the
results were reasonably satisfactory.
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4.3
EMORY: STRUCTURE AND

M
FUNCTIONING
Experience has shown that whatever material consumers learn, often

they are unable to retrieve it readily. Memory processes are extremely
important to the understanding of consumers. Cognitive theorists are
particularly concerned in learning how the information gets stored
in memory, how it is retained and how consumers retrieve the stored
information during brand evaluation.
Memory represents the information that an individual retains and

stores and that she/he can recall for future use.
There are several views regarding the structure of memory and
how it operates. According to one concept called activation model,
consumers have a large memory store. At any given point in time only
a portion of that memory can be activated for use and the remaining
inactive portions of memory are not available to recall information
stored in memory. A general belief is that there are three separate
storehouses for sensory memory, short-term memory and long-term
memory. However, each of these should not be taken as a separate
physical entity but as a distinct process of memory functioning having
separate characteristics. The information is retained temporarily in
the first two stores before being finally stored in long-term memory.
N
Maintenance rehearsal
Sensory
input
Sensory
memory
Short-term
memory
Long-term
memory
Retrieval
Elaborate
rehearsal
(Encoding)
Forgotten material
Figure 4.4: Diagrammatic Representation of Memory System
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4.3.1 SENSORY MEMORY
Input in the form of sensation is first produced by senses. According

to Sandra Blakeslee, the senses do not relay the complete images like
a camera; instead each sense organ receives a fragmented portion of
information such as a flowers shape, colour, smell, or feel etc. Each
sense transmits its bit of sensation to the brain at the same time,
where all the sensations are coordinated and perceived as a single
image, in a single moment of time.
It is generally believed that there exist memory stores for sensations,

which accumulate all the sensory inputs and appear to reproduce
information in a form that closely resembles the actual stimuli. For
example, if we close our eyes just after observing an object, or viewing
an image on TV, we can see the after-image in our minds eye for
just a fraction of a second. Different stores do not physically exist
but only appear to exist because of different levels of processing in
the memory. For example, some stimuli may receive only a cursory
processing such as a white, medium-sized washing machine. In
this same case the consumer might also process the stimuli more
elaborately.
If the image of sensory input is not processed, it is lost immediately.
In everyday life, all of us are exposed to a considerable amount of
information and a substantial part of it being of no use to us, fails to
make any lasting impression. According to Daniel Coleman, the brain
automatically and unconsciously tags all perceptions with a positive
or negative value. This tagging of value to perceptions takes place
within the first fraction of a second of perception and tends to remain
unless further information is processed. This explains the reason why
it is generally believed that first impressions are often lasting.
4.3.2 SHORT-TERM MEMORY

Short-term memory is real and is more like a workspace for information
processing. It is believed to have short capacity, that is, less than
a minute and an average of seven pieces of information. Here, the
information is processed and interpreted to understand its meaning
by combining past experiences and knowledge etc. Individuals react
to this restriction of seven pieces of information for less than a minute
by chunking information (assembling information into a type of
organised unit that is manageable for an individual).
Example: 91-0141-550053 can be chunked in three groups to recall it
easily.
Brand names and symbols etc. can serve as chunking devices
to organise information in short-term memory. For instance, the
Munched Apple (logo of Apple computers), or the name Intel is
able to furnish quite a number of thoughts the consumer may have
about these companies. Information in the short-term memory store
undergoes a process called rehearsal. There are two types of rehearsal
processes in short-term memory.
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Elaborative rehearsal occurs in short-term memory and involves

using previously stored experiences, values, beliefs, attitudes,
and feelings to interpret and evaluate information and add
meaningful previously stored information.
Maintenance rehearsal also occurs in short-term memory and

refers to silent, mental repetition of a piece of information to hold
it in short-term memory to solve a problem or transfer it to longterm memory store).
If the information in the short-term memory is not rehearsed and

transferred to long-term memory, it will be forgotten through the
process of decay within less than a minute.
4.3.3 LONG-TERM MEMORY
An almost unlimited amount of information can be retained here for
several years or for just a few minutes. This information is constantly
organised and updated as new links between chunks of information
are formed.
Long-term memory can be viewed as a relatively permanent place

of storage for information that has undergone elaborative rehearsal.
It is very difficult to prove or disprove the position advocated by Allan
G Reynolds and Paul W Flagg that people never forget anything that
has reached long-term memory, what is really forgotten is the key
that unlocks the material located in the memory. Another view is that
information stored in the long-term memory does not just decay over a
period of time but appears to be forgotten because of interference with
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retention. Interference can be of two types: retroactive inhibition and

proactive inhibition. When new learning interferes with information
already stored in the long-term memory, it is referred to as retroactive
inhibition. Proactive inhibition refers to interference with new
learning by the material already stored in the memory. This shows that
interference works both ways; the new material interferes with the
old and the old interferes with new learning. According to Raymond
R Burke and Thomas K Srull, greater the similarity between the old
and new material (several ads competing for consumers attention),
more the interference with each other. Repetitive advertising can
ensure continued activation of the linkages that consumers relate with
the brand in the long-term memory. Itamar Simonson, Joel Huber
and John Payne have reported that product information stored in the
long-term memory is brand-based and fresh information is interpreted
in a manner consistent with the way it is presently organised. Robert
J Kent and Chris T Allen found that consumers showed better recall
of familiar new product information (line extensions and brand
extensions).
4.3.4 MEMORY PROCESS
Processing of information requires that first of all it should be filtered

through short-term memory, then stored in long-term memory and
finally retrieved when needed. Information available for storage in
long-term memory depends on the amount of rehearsal it gets by an
individual. In case there is no rehearsal for an input, it would lead to
fading and ultimately the loss of material. There are two views about
rehearsal. According to one, rehearsal is needed to amplify the weak
signals furnished by sensory memory store. The other view is that
rehearsal involves relating new data to old to make the information
meaningful.
Example: An individual may remember by repetition that Nizoral is
a more effective anti-dandruff shampoo and remember its price by
relating to another anti-dandruff shampoo.
As mentioned earlier, the capacity of short-term memory is extremely
limited and only one to three bits of information can be conveyed in
a 15-second commercial. Only sufficiently simple information stands
a better chance of being absorbed without much loss. The encoding
process selects and assigns a word or visual image to a perceived
material.
Rehearsal serves the purpose of holding material long enough for
encoding to occur. Learning a picture or visual takes lesser time than
verbal inputs. However, both visual and verbal inputs are important
in forming a complete mental image. Terry Childers and Michael
Houston are of the view that memory potential for visual material has
important implications for designers of product packaging, company
logos and promotional messages. Each image or word in long-term
memory that depict some kind of social relationship than men.
However, no difference has been observed for commercials that focus
on the product itself. Kenneth R. Lord and Robert E. Burnkrants study

found that a TV commercials encoding is related to the environment
of the programme in which it is shown. Highly involving portions of
a programme may require viewers to allocate a significant portion
of their cognitive resources to such scenes. This results in reduced
encoding and storing of commercial related information. Because of
this, commercials shown within or adjacent to high involving settings
are likely to be more effective with relatively less elaboration.
Procedural memory is used for knowing how to perform specific
functions and stores knowledge about skills and approaches to deal
with facts, concepts, and events. It plays an important role in problem
solving behaviour.
Example: When someone makes a statement, Check the fine print in
ads offering loans at low-interest rates, it reflects procedural memory.
Semantic memory holds our knowledge about the world based
on objects and their attributes, facts and concepts. However, this
knowledge is not associated with any means or the time frame in
which it was acquired as happens in the case of episodic memory.
For example, most of us have stored some information about earth,
moon, stars; and brands such as Burnol, Lux soap, VicksVaporub,
but usually cannot recall how and when we stored this information.
While retrieving material from semantic memory, there is no need to
remember events sequentially. Apple computers are better than PCs
but are more expensive, is a statement reflecting semantic memory.
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Retrieval process is concerned with accessing information from

long-term memory store and activating it into consciousness. When
retrieving information from long-term memory, briefly it is held in
short-term memory, combined with other information available
there, elaborated upon and formed into a meaningful collection of
information. For retrieval of information from long-term memory,
three factors are required:
Activation of linkages between nodes, for example advertising

of iMac will activate various nodes linked with Apple computer
schema.
Placement that determines which other nodes consumers

connect to an activated node. The consumer buying a desktop
computer may link iMac to superior graphics and processing
speed based on more recent information.
Transfer process that determines the information consumers will

retrieve from long-term memory and place in short-term memory.
Consumers usually transfer more important information relevant
to decision-making. In case of iMac, it might be the uniqueness,
performance, reliability, and price etc.
4.3.5 MEASURING MEMORY

Recognition versus Recall
Recall or retrieval of memory refers to the subsequent re-accessing
of events or information from the past, which have been previously
encoded and stored in the brain. In common parlance, it is known as
remembering. During recall, the brain replays a pattern of neural
activity that was originally generated in response to a particular
event, echoing the brains perception of the real event. In fact, there is
no real solid distinction between the act of remembering and the act
of thinking.
The Starch Test
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Recognition is the association of an event or physical object with

one previously experienced or encountered, and involves a process
of comparison of information with memory, e.g. recognizing a known
face, true/false or multiple choice questions, etc. Recognition is
usually considered to be superior to recall (in the sense of being
more effective), in that it requires just a single process rather than
two processes. Recognition requires only a simple familiarity
decision, whereas a full recall of an item from memory requires a
two-stage process (indeed, this is often referred to as the two-stage
theory of memory) in which the search and retrieval of candidate
items from memory is followed by a familiarity decision where the
correct information is chosen from the candidates retrieved. Thus,
recall involves actively reconstructing the information and requires
the activation of all the neurons involved in the memory in question,
whereas recognition only requires a relatively simple decision as to
whether one thing among others has been encountered before.
The Starch Tests are a classic series of tests pioneered during the
1920s by Daniel Starch (1883-1979), a psychologist who specialized
in advertising research. The tests measure audience recall of
advertisements in newspapers and magazines.
The tests were the first examples of what Mr. Starch named
recognition research, a method that is now widely accepted and
used.
He founded Daniel Starch and Associates, which conducted the tests
for decades. The firm is now part of United Business Media plc.
How You Do It
The researcher interviews readers of print publications and asks each
interviewee if he has recently read certain publications. (Methods
may vary from researcher to researcher.)
If an interviewee has recently read a publication, the researcher asks
the interviewee which issue he read, and which ads he noticed in that
issue (this is unaided recall).
Then the researcher produces the issue and asks the interviewee to
look inside it.
After the interviewee has looked, the researcher asks him about a
certain advertisement in that issue (this is aided recall).
The researcher keeps track of the percentage of subjects who:
Remembered seeing a specific ad (noted).
Saw or read part of the ad (seen/associated).
Read at least half of the ad (read most).
4.3.6 PROBLEMS WITH MEMORY MEASUREMENT

Response Bias
The results we obtain from a measuring instrument are not necessarily
based on what we are measuring, but rather on something else about
the instrument or the respondent. This form of contamination is a
response bias.
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Example: People tend to give yes responses to questions, regardless

of what they are asked. In addition, consumers often are eager to be
good subjects by pleasing the experimenter. They will try to give the
responses.
Response bias would occurs when search cost for a particular brand
increase as a result of shelf positioning in stores or the failure of a
supermarket to carry a wide spectrum of available brands.
Memory Lapse
People are also prone to unintentionally forgetting information.

Typical problems including omitting (leaving facts out), averaging
(the tendency to normalize memories by not reporting extreme
cases), and telescoping (inaccurate recall of time). These distortions
call into question the accuracy of product usage database that rely
on consumers to recall their purchase and consumption of food and
household items.
Example: One study asked people to describe what portions of various
food-small, medium, or large-they ate in typical meal.
Memory versus Feeling
Where were you during the terrorist attacks of 9/11? For most,
recalling this information is easier than remembering, for example,
the details of Wednesday morning last week.
Feelings are a part of emotions and emotions influence information
processing and memory in different ways. For example, people
generally feel anger when something is keeping them from reaching
their goals. As a result, angry people tend to focus on what they perceive
to be the obstacle and may retain obstacle-related information. In
contrast, happiness signals that all is well, and happy people will
perceive and recall a scene broadly without focusing in on particular
detail. Even when not in immediate peril, people experiencing
negative emotions tend to focus in on specific details, while happy
people take in a situation more broadly.
Happiness works like a broad-tipped highlighter, illuminating an
event in memory and capturing many details.
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Many people talked for days or months after 9/11 about where they
were and how they felt at the time of the attacks. As people fill in
missing details, it can lead to a false sense of accuracy about a memory.
Memory helps people use their experiences to inform their future
actions. By highlighting important information or even including
things that did not happen, emotion-bound memory may allow us to
make better decisions than a picture-accurate memory would.
15. A general belief is that there doesnt exist any separate

storehouses for sensory memory, short-term memory and
long-term memory.
16. Maintenance rehearsal occurs in short-term memory and
involves using previously stored experiences, values, beliefs,
attitudes, and feelings to interpret and evaluate information
and add meaningful previously stored information.
17. Input in the form of sensation is first produced by senses.
18. If the image of sensory input is not processed, it is lost

immediately.
19. Brand names and symbols etc. never serve as chunking devices
to organise information in short-term memory.
20. Semantic memory holds our knowledge about the world based
on objects and their attributes, facts and concepts.
21. Short-term memory can be viewed as a relatively permanent
place of storage for information that has undergone elaborative
rehearsal.
22. Retrieval process is concerned with accessing information from
long-term memory store and activating it into consciousness.
List any five advertisements and all their details which might be
atleast 10 years old, which you can recall. Also list their USP which
made you remember those advertisements for this long.
Emotions have been traditionally neglected by scientists

researching the mind, as if they were a secondary aspect
(or simply a malfunction) of the brain activity. The fact is surprising
because emotions have so much to do with our being aware, with
differentiating intelligent life from dead matter and non-intelligent
life.
4.4
I NVOLVEMENT AND FOUR TYPES OF

CONSUMER BEHAVIOUR
Considering the level of consumer involvement and the complexity

of decision-making, four types of consumer choice processes emerge.
Most consumer purchases are less involving and consumers may act
without thinking. For instance, it is unlikely that a consumer will start
a process of information search to determine brand attributes of salt,
evaluate two or three brands and finally purchase Captain Cook salt.
While viewing a TV programme, the consumer sees a commercial
for Captain Cook salt that says it is easy to pour even during rainy
season. The consumer is thinking about anything but salt and not
really evaluating the ad contents and absorbs few bits of information
in a passive manner. Over time, with several repetitions of the
commercial, the consumer forms an association of Captain Cook salt
with ease in pouring. This amounts to information catching rather
than information processing.
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The consumer feels the need for salt because the pack is nearly
finished. She/he buys Captain Cook salt because of the familiarity
with the brand and not because of attitude toward the brand and has
no favourable or unfavourable reaction. The consumer may or may
not engage in post-purchase evaluation.
In low-involvement situation, consumers do very little information

processing and according to Robert S. Wyer and Thomas K. Srull, they
are generally governed by a principle called the cognitive economy
and look for only as much information as they feel is essential to
properly evaluate brands.
In case of low-involvement purchases, Wayne D. Hoyer and Steven
P Brown have reported that consumers who are aware of one brand
in a product category will repeatedly purchase it even if it is lower in
quality than other brands. John G. Lynch, Howard Marmorstein and
Michael F. Weigold found that less involved consumers make purchase
decisions by recalling previously formed brand evaluations.
Complex decision-making (extended decision-making) best describes
the traditional hierarchy model. The consumer develops beliefs, forms
attitudes about the product and makes a thoughtful purchase decision.
Consumers are highly involved and aware of important differences
among brands and possess little knowledge about the product
category. Cognitive-learning theory best describes this sequence as

it involves detailed information processing before making a decision.
Brand loyalty describes consumers making buying decision with
little deliberation, though they are highly involved. This reflects a
deliberate move because of past satisfaction with the product and a
strong commitment to the brand. Because there are few differences
among brands, another possibility is that a consumer will shop around
and learn what is available and then quickly make purchase decision.
In the post-purchase period she/he might experience dissonance that
results from noticing some disturbing features or hearing favourable
things about competing brands.
The theory that best describes brand loyalty is instrumental
conditioning, showing positive reinforcement based on satisfaction and
causing behaviour repetition. In the box, beliefs and evaluation
have been put within brackets denoting that steps of forming beliefs
and brand evaluation are not an important part of purchase decision.
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Limited decision-making describes a situation that occasionally

involves some information processing. This is characterised by lowinvolvement but there are important brand differences. This may
happen in case of new product introductions, product modifications,
or just a desire for variety might stimulate the consumer to shift from
habitual decision-making to limited decision-making. Though the
involvement with the product category is low, yet the new product
or incorporation of new features in the existing product evokes mild
interest and curiosity. There is little information search and brand
evaluation, the consumer forms beliefs about the brand, purchases it
and finally makes an evaluation. Brand switching occurs because of
consumers desire for variety rather than dissatisfaction with earlier
brand.
There is some cognitive processing but the relevant learning process
is passive as there is no search and brand evaluation prior to purchase.
Sometimes consumers, out of boredom or just to try something new,
seek variety and try a variety of brands (such as soft drinks, potato
chips, chocolates etc.) and make evaluation during consumption.
Inertia describes buying behaviour where a consumer forms beliefs
passively, makes decision as a habit with little information processing
and makes post-purchase evaluation. Inertia causes repeat purchasing
of the same brand, avoiding decision-making and evaluates the brand
after few purchases. If the brand proves satisfying at a minimum
level, the consumer will continue buying the same brand routinely.
This type of purchase behaviour is sometimes referred to as spurious
brand loyalty.
Fill in the blanks:

23. In ................... decision-making consumer develops beliefs,
forms attitudes about the product and makes a thoughtful
purchase decision.
24. In the ................... period she/he might experience dissonance
that results from noticing some disturbing features or hearing
favourable things about competing brands.
25. Brand ................... occurs because of consumers desire for
variety rather than dissatisfaction with earlier brand.
26. ................... causes repeat purchasing of the same brand,
avoiding decision-making and ................... the brand after few
purchases.
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Interview three male and three female consumers and attempt to

find out products and situations leading to high and low involvement
conditions for them. What are the implications for marketing to
influence such consumers?
Problem-solving is a mental process that involves discovering,

analyzing and solving problems. The ultimate goal of problemsolving is to overcome obstacles and find a solution that best
resolves the issue.
4.5
ENTRAL AND PREPHERIAL ROUTE TO

C
PERSUASION
Psychologists Richard E. Petty and John T. Cacioppo developed

the Elaboration Likelihood Model (ELM). This theory furnishes
understanding of low-involved consumers by illustrating how
consumers process information in situations of low and highinvolvement. They observed that the depth of information processing
is a key factor in persuasion by influencing attitudes and depends
on the degree of elaboration which, in turn, depends on consumers
motivation to process information. The consumer may consciously
and diligently consider the information content in an ad message in
developing or changing the existing attitude towards the advertised
brand. In this situation, the attitudes are formed or changed as a result
of careful consideration, analysis, scrutiny of the message arguments
and integration of relevant information with regard to advertised
product or service. Basically, the consumer is highly involved in
processing the advertisement. Information processing of this type is
called the central route to persuasion. Attitude changes, occurring

as a result of central processing, are relatively enduring and more
resistant to subsequent efforts to change with respect to attitude
object.
Consumers motivation to process information is closely associated
to its relevance in satisfying needs. If the message is more relevant,
the consumer is more likely to develop thoughts in support or against
its contents, elaborating on the message. For example, a consumer
suffering from the problem of pimples and viewing a commercial of
anti-pimple cream is more likely to elaborate on the message. The
thoughts can be, This seems like a promising remedy and may help
me or This product probably contains X ingredient and could
cause rashes. Consumers who are not afflicted with pimples would
be uninvolved and unlikely to develop such message related thoughts
and probably not motivated to process the information.
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In case of peripheral route to persuasion, the message receiver is

viewed as less involved, lacking the motivation or the ability and is
unlikely to engage in detailed cognitive processing.
Instead of deeply considering and evaluating the message arguments,
the consumer takes cognitive shortcuts and concludes that the
brand is superior or inferior.
Favourable attitudes may be formed because the brand endorser
is viewed as an expert or attractive, or the consumer likes certain
aspects connected with ad execution, such as music or imagery etc.
Favourable attitudes may be formed because the brand endorser

is viewed as an expert or attractive, or the consumer likes certain
aspects connected with ad execution, such as music or imagery etc.
David W. Schumann, Richard E. Petty and D. Scott Clemons have
reported that less involved consumers are likely to be influenced by
cosmetic changes in the ad such as picture, layout and spokesperson
etc. More involved consumers tend to be influenced by actual variations
in message content about the product attributes and benefits.
Central processing can predict behaviour better than attitudes
formed by peripheral processing. According to Scott B. McKenzie and
Richard A. Spreng, higher motivation predicted purchase intentions
more strongly. Attitudes formed by peripheral processing can still
determine choice when information available through central route
does not help much in making a choice. For example, according to
Paul W. Miniard, Deepak Srideshmukh and Daniel E. Innis, when
alternative brands under consideration are highly similar, or no brand
has clear domination, the peripheral cues may become important in
brand selection.
When both motivation and ability to process information are high,
consumers are most likely to engage in central processing. When
either of the two is low, peripheral processing is more likely to
occur. For example, comparative advertisements get consumers
more motivated to use central route to persuasion, compared with

non-comparative ads.
Fill in the blanks:

27. Attitude changes, occurring as a result of ...................., are
relatively enduring and more resistant to subsequent efforts
to change with respect to attitude object.
28. Favourable attitudes may be formed because the .................... is
viewed as an expert or attractive, or the consumer likes certain
aspects connected with ad execution
29. Attitudes formed by .................... can still determine choice
when information available through central route does not
help much in making a choice.
30. When both .................... and ability to process information are
high, consumers are most likely to engage in central processing.
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Collect any 10-15 newspaper advertisements and try to find,

which route of persuasion has been adopted by marketer to reach
consumer.
4.6 SUMMARY
Learning can be viewed as a relatively permanent change in

behaviour occurring as a result of experience. Behaviour has
two aspects observable behaviour as well as non-observable
cognitive activity.
There are two forms of conditioned learning: Classical and

instrumental. Classical conditioning refers to the process of
using an existent relationship between a stimulus and response
to bring about the learning of the same response to a different
stimulus.
In instrumental conditioning, reinforcement plays a more

important role than in classical conditioning. There is no
automatic stimulus, response relationship in this case, so the
subject must first be induced to engage in the desired behaviour
and then this behaviour must be reinforced.
The cognitive learning involves the mental activities of humans

as they work to solve problems, cope with complex situations, or
undertake activities in their environment.
Memory is the result of learning and represents the information

that an individual retains and stores, which can be recalled for
future use.
The information goes directly to short-term memory for

problem solving or elaboration where two basic processes occur
elaborative activities and maintenance rehearsal.
Long-term memory can be viewed as a relatively permanent

place of storage for information that has undergone elaborative
rehearsal. Depending on their level of involvement and the
product brand differentiation, consumer information processing
related to decision-making process is very significantly
influenced. Brand loyalty and equity are recognised as very
important concepts. Brand loyalty refers to a strongly favourable
attitude towards a brand resulting in intentional and consistent
purchase over time.
Learning: The act of acquiring new, or modifying and

reinforcing, existing knowledge, behaviours, skills, values, or
preferences and may involve synthesizing different types of
information.
Reinforcement: Anything that increases the likelihood that a

response will occur. Note that reinforcement is defined by the
effect that it has on behaviour - it increases or strengthens the
behaviour.
Generalisation: Inductive thought process (see inductive

reasoning) by which one or few experiences or impressions
come to represent the entire class or category of events,
objects, or phenomenon.
Retrieval: A process of accessing stored memories.
Brand Equity: The value of having a well-known brand name,

based on the idea that the owner of a well-known brand name
can generate more money from products with that brand
name than from products with a less well-known name, as
consumers believe that a product with a well-known name is
better than products with less well-known names.
Brand Loyalty: A result of consumer behaviour and is affected

by a persons preferences. Loyal customers will consistently
purchase products from their preferred brands, regardless of
convenience or price.
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1. Define learning. Also explain the relevance of behavioural
learning theories.
2. How is a response different from reinforcement?
3. Give clear distinction between classical conditioning and operant
conditioning theory of learning.
4. Describe various modes of practising reinforcement theory of

learning.
5. Why does consumer forget certain brands while making actual
purchase?
6. Elaborate upon the Bobo Doll Experiment performed by
Bandura.
7. Which test is applied to check memory recall with respect to
advertisement? Give information about it.
8. Differentiate between Central and Peripheral route to persuasion.
9. What is Inertia with respect to a consumer? What is the relevance
of this concept in consumer behaviour?

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Topic
Introduction
Behavioural Learning
Theories
Memory: Structure and

Functioning
Q. No.
Answers
1.
observable
2.
3.
continuous; personal
experiences
Cues; direction
4.
response-reinforcement
5.
repetitions
6.
stimulus-response
7.
stimulus; repeated
8.
Ivan Pavlov
9.
B.F. Skinner
10.
strengthen; consequence
11.
Forgetting
12.
Albert Bandura
13.
Bobo doll
14.
15.
negative reinforcement;
termination
False
16.
False
17.
True
18.
True
Contd...
Involvement and Four

Types of Consumer
Behaviour
False
20.
True
21.
22.
23.
False
True
extended
24.
25.
26.
27.
post-purchase
switching
Inertia; evaluates
central processing
28.
29.
30.
brand endorser
peripheral processing
motivation
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Central and Peripheral

Route to Persuasion
19.

1. Refer 4.1 & 4.2

The process by which individuals acquire the purchase and

consumption knowledge and experience that they apply to future
related behaviour is known as Learning.
2. Refer 4.1 & 4.2.3
The way an individual reacts to a cue or stimulus is the response

and could be physical or mental in nature. Reinforcement can
be anything that both increases the strength of response and
tends to induce repetitions of the behaviour that preceded the
reinforcement.
3. Refer 4.2.1 & 4.2.2

Classical conditioning pairs one stimulus with another that

already elicits a given response and over a period of repeated
trials, the new stimulus will also start causing the same or
quite similar response. Instrumental conditioning also involves
developing association between stimulus and response but
requires the subject to discover a correct response that will be
reinforced.
4. Refer 4.2.3

Positive reinforcement, Negative reinforcement, Punishment,

Extinction
5. Refer 4.2.3

Forgetting occurs due to decrease in advertising frequency,

resulting in a gradual and fairly long-term decline in repurchase
likelihood.
6. Refer 4.2.4

In his famous Bobo doll experiment, Bandura demonstrated that

young children would imitate the violent and aggressive actions
of an adult model.
7. Refer 4.3.5

Starch Test
8. Refer 4.5

Psychologists Richard E. Petty and John T. Cacioppo developed

the Elaboration Likelihood Model (ELM). This theory furnishes
understanding of low-involved consumers by illustrating how
consumers process information in situations of low and highinvolvement.
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9. Refer 4.4

Inertia (lower right-hand box) describes buying behaviour where

a consumer forms beliefs passively, makes decision as a habit
with little information processing and makes post-purchase
evaluation.
SUGGESTED READINGS

Behaviour in India A Study of FMCGs, Laxmi Publications Ltd.

Education
Ramanuj Majumdar, (2010), Consumer Behaviour: Insights from

Indian Market, PHI Learning Pvt. Ltd.
Evans, Jamal, Foxall, (2007), Consumer behaviour, John Wiley &

Sons
E-REFERENCES
http://k3hamilton.com/cb/cb3.html
http://www.memorylossonline.com/glossary/memory.html
http://alistapart.com/article/pers uasion-apply ing-th e elaboration-likelihood-model-to-design
CONSUMER PERSONALITY AND LIFESTYLE
CONTENTS

5.1
Introduction
5.1.1
5.1.2
Ideal Self
5.1.3
Extended Self
5.2
Actual Self
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Theories of Personality
5.2.1
Psychoanalytic Theory
5.2.2
Neo-Freudian Theory
5.2.3
Trait Theory
5.2.4
Self-concept Theory
5.3
Consumer Lifestyle
5.3.1
Characteristics of Lifestyle
5.3.2
Influence of Lifestyle
5.3.3
Application of AIO Studies
5.3.4
Lifestyle Profile in Indian Customers
5.3.5
VALS System of Classification
5.3.6
Application of Lifestyle Marketing
5.3.7
Optimal Stimulation Level
5.3.8
Need for Cognition
5.3.9
Dogmatism
5.3.10
Self-monitoring Behaviour
5.3.11
Susceptibility to Influence
5.4
Emotions in Advertising
5.5
Brand Personality
5.5.1
Self-image versus Brand Image
5.6
Summary
5.7
5.8
Answers and Hints
5.9
APPARELS MAKE POLITICAL TREND
Just as packaging design maketh the consumer product brand,
dress design maketh the personality!
M K Gandhi used to wear a suit when he was a student and a
practicing lawyer in London and later in South Africa. But when
he returned to India and joined the freedom struggle he gave up
those clothes to sport the attire of the Indian farmer. His dhothi
was always in spotless white and he was often bare-chested.
Interestingly the cap he wore got rechristened as the Gandhi
Topi. So while MK Gandhi could go about his business in a suit,
Mahatma Gandhi the freedom fighter needed a set of clothes that
was seen as a common mans attire.
Jawaharlal Nehru did something different. He combined the
formal western suit with Indian nawabi attire to create the
Bundhgala Suit, which got named the Nehru suit. It stood
for a modern India, yet reflected western style and taste.
We now note that the Nehru suit has been reinvented in many
new avatars to suit the million dollar big Indian weddings. It was
therefore very interesting to read about the buzz that Narendra
Modis half sleeve kurta has created in the apparel world.
#ModiKurta even trended soon after the election results came
out. Personality brands need to see how to use dress as a signal to
their various audiences. Some leaders do it with style and panache.
Nelson Mandela frequently appeared in traditional African attire,
suitably modified for the modern age. In his heyday, Mahatir
Mohammad the president of Malaysia used to appear in Malay
Batik shirts. Hamid Karzai is reported to sport the nicest of clothes
his embattled country produces.
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If Mahatma Gandhi adopted the farmers attire and almost appeared

as a Hindu saint just go to Shanmukhanda Auditorium in Mumbai
and see how vividly this comes out; on one wall is an illustration of
Mahatma Gandhi and on the other a picture of Chandrashekara
Saraswati of Kanchi Kamakoti Mutt Modi has done something
interesting with the humble kurta. He has trimmed it to suit the
new ethos. And the Modi Kurta appears in many attractive colors.
A loose fitting kurta is not the most ideal form of attire for someone
who is speaking of industrialization and liberal economics. It is
loose to start with and flaps about in the wind. You cannot operate
a lathe wearing the kurta. Neither can you plough the fields in one.
However Indian politicians have made the white kurta the uniform
of their class. It is white to signify purity; it is the common mans
attire and makes the political class appear a lot more approachable.
Or so they believe.
CONSUMER PERSONALITY AND LIFESTYLE 103

Learn about the concept of consumer personality
Discuss in detail about theories of personality
Explore various components of consumer lifestyle
Understand the significance of emotions in advertising
Discuss about brand personalitys concept
5.1 INTRODUCTION
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The word personality itself stems from the Latin word persona, which
referred to a theatrical mask work by performers in order to either
project different roles or disguise their identities.
Personality can be defined as consistency in a persons way of being

that is, long-term consistency in their particular ways of perceiving,
thinking, acting, and reacting as a person.
Personality is organised patterns of thought and feeling and behaviour.
Although no single definition is acceptable to all personality theorists,

we can say that personality is a pattern of relatively permanent traits
and unique characteristics that give both consistency and individuality
to a persons behavior.
Feist and Feist, 2009
Personality refers to individuals characteristic patterns of thought,

emotion, and behavior, together with the psychological mechanisms
hidden or not behind those patterns. This definition means
that among their colleagues in other subfields of psychology, those
psychologists who study personality have a unique mandate: to
explain whole persons.
Funder, D.C., 1997
5.1.1 ACTUAL SELF
There is in fact no one actual self because consumers have different
role identities. A consumer can be a husband, father, employee and a
member of some club or voluntary association. In specific situations,
one of these roles will be dominant and influence the individuals
behaviour. The actual self is the outcome of the combination of
individuals different roles. Consumers actual self influences their
purchases in accordance with the images they have of themselves and
thereby attain self-consistency.
Research studies confirm that consumers purchases are influenced
by their self-concept. An owners self-Image is reflected in her/his
car and also this Self-image is similar to her/his Image of others who
own the same car. Robert E. Burnkrant and Thomas J. Page have
reported that self-concept and brand Image relationship is somewhat
complicated as consumers change their self-concept in different
situations. For instance, an individual may have one self-concept
during a business negotiation and another one on the occasion of
friends marriage.
5.1.2 IDEAL SELF
The concept of ideal self is closely related to an individuals self-esteem.
The gap between actual self and Ideal Self determines the degree
of ones self-esteem. Greater the difference between the two, lower
the self-esteem. Marsha L. Richnis has reported that ad themes and
images often produce greater discrepancy between consumers actual
self and Ideal Self. Glamour advertising that depicts attractive models
and luxurious lifestyles creates a world that is unreachable for most
consumers. As a consequence, consumers feel a sense of inadequacy
based on a comparison of their actual self with the portrayed idealised
images. Advertising tends to pull down consumers self-esteem when
it attempts at increasing the disparity between actual self and ideal
self.
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The desire for both self-consistency and self-esteem could be

conflicting. Consumers making purchases in accordance with their
actual self may be attaining self-consistency but may be falling short
of enhancing their self-esteem. Consumers usually purchase products
or services in accordance with their actual self. However, if there is
greater discrepancy between actual self and ideal self, resulting in
lower self-esteem, they are more likely to purchase products on what
they would like to be (ideal self) rather than what they are (actual self).
Such consumers are more likely to be influenced by appeals to their
fantasy, such as a product use attracting opposite sex, or products
with macho image etc.
The role of self-concept is expressed in the following sentences:
An individual has a self-concept, which is formed through

interaction with parents, peers, teachers and influential others.
The self-concept is of significant value to the individual.
Since the self-concept is valued, individuals strive to enhance or

maintain it.
Certain products serve as social Symbols and communicate a

social meaning about those who own or use them.
Products used as symbols communicate meaning to oneself and

others, creating an impact on the individuals self-concept.
Individuals often purchase or consume products, services, and

media to enhance or maintain a desired self-concept.
A popular approach to measure self-concept is the Semantic

Differential Scale. Naresh K. Malhotra has developed a set of
15 pairs of adjectives, which have been found effective in describing
the actual, ideal and social self-concepts of individuals and the images
of products/brands and celebrities. Consumers are required to mark
each set of adjectives to point out how well one or the other adjective
describes the consumer, the product/brand, or celebrity of interest.
The instrument can be used to ensure a match between the selfconcept of consumers in a target market, what image consumers have
of a product/brand and the characteristics of a spokesperson.
5.1.3 EXTENDED SELF
Some products become significantly meaningful to us or are used to
indicate some important aspects of ourselves to others. The Extended
Self (R. W. Belk) is different from actual self and consists of the self
plus possessions. He notes:
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People seek, express, confirm and ascertain a sense of being through

what they have.
Russell W. Belk, Possessions and the Extended Self, Journal of
Consumer Research 15 September, 1988
This means that we tend to define ourselves, in part, by our possessions
and some possessions become an integral part of our self-identity. S.S.
Kleine and R.E. Kleine observe that we would be somewhat different
individuals if we lost our key possessions.
Some products take on meaning and value as they are used over time.
This allows them to get associated with many memories. Some other
products quickly become part of Extended Self because they are
central to ones actual self or serve as an important symbol of ones
Social Self. Examples include computers, hairstyles and tattooing etc.
5.2 THEORIES OF PERSONALITY

Personality psychology is the focus of some of the best known
psychology theories by a number of famous thinkers including
Sigmund Freud. Psychodynamic theories of personality are heavily
influenced by the work of Sigmund Freud, and emphasize the influence
of the unconscious mind. Non-Freudian theories emphasize the
importance of free will and individual experience in the development
of personality. Behavioral theories suggest that personality is a result
of interaction between the individual and the environment. According
to this theory, personality is made up of a number of broad traits.
5.2.1 PSYCHOANALYTIC THEORY
Freuds psychoanalytic theory proposes that every individuals
personality is the result of childhood conflicts. These conflicts are
derived from three fundamental components of Personality: Id, Ego
and Superego. According to the theory, the id (or libido) is the source
of an individuals strong basic drives and urges such as hunger, sex,

Aggression and self-preservation. The id operates on what is called
the Pleasure principle, that is, to seek immediate pleasure and avoid
pain. The id is entirely unconscious and not fully capable of dealing
with objective reality. Many of its impulses are not acceptable to the
Values of organised society. A newborn babys behaviour, for example,
is governed totally by the id.
The ego is the individuals conscious control. It comes into being
because of the limitations of the id in dealing with the real world by
developing individuals capabilities of realistic thinking and ability to
deal suitably with her/his environment. Ego operates on what is called
the reality principle. It is capable of postponing the gratification until
that time when it will be suitably and effectively directed at attaining
the goals of the id in a socially acceptable manner. For example, rather
than manifesting the need for aggression in an antisocial manner, a
consumer can partially satisfy this need by purchasing a powerful
motorcycle. The ego is the individuals self-concept.
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The superego constitutes the moral part of an individuals

personality. It represents the ideal rather than the real, defines
what is right and good and it influences the individual to strive for
perfection.
It operates in the unconscious and often represses certain behaviour
that would otherwise occur based on the id, which could disrupt the
social system.
According to Freud, the ego manages the conflicting demands of the

id and the superego. This usually results in realistic compromises
between very basic strivings and socially acceptable behaviour.
These compromises are believed to be occurring at an unconscious
level. Freudian Psychology says that quite a sizeable part of human
behaviour is unconsciously motivated. The way the child manages
these conflicts, especially the sexual conflicts, determines the adult
Personality. Unresolved conflicts in childhood result in defence
mechanisms, which are said to be unconsciously determined tensionreducing strategies used by ego.
5.2.2 NEO-FREUDIAN THEORY
Freuds understanding of Personality focused mainly on observations
of emotionally disturbed people. A number of Freuds foremost
disciples, particularly Carl Jung and Alfred Adler, disagreed from his
view of personality. They believed that social and cultural variables,
rather than biological drives, are more important in the development
of an individuals personality. They also believed that insights into
personality development should also be based on normal persons
functioning in their environment and not by focusing on Observation
of emotionally disturbed people alone.
These social theorists also referred as neo-Freudian school, viewed

individuals as striving to win over the feelings of inferiority and
searching for ways to gain love, security and relationships. They
emphasised that childhood experiences in relating to others produce
feeling of inferiority, insecurity and lack of love. Such feelings motivate
people to make themselves perfect and device methods to cope with
anxieties resulting from feelings of inferiority.
Carl Jung believed that an individuals culture created an
accumulation of shared memories from the past such as caring and
nurturing female, heroes and old wise men. He called these shared
memories archetypes. It is not unusual to see such Archetypes in
advertisements that strive to take advantage of positive shared
meanings in a particular culture. For instance, a large number of ads
show a caring mother, devoted housewife, heroes with macho Image,
rishis and a wise grandmother etc.
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Jung identified a number of Personality types, such as sensingthinking, sensing-feeling, intuiting-thinking, and intuitive-feeling etc.
Sensing-thinking Personality: Individuals with this personality
type make rational, objective decisions. They are logical and
empirical in their approach, are inclined to be highly involved,
Extensive Problem Solving orientation, weigh economic
considerations, are price-sensitive and avoid any risks. They
identify themselves with material objects or things and have
short-term perspective in making decisions.
Sensing-feeling Personality: They are moved by personal

Values rather than logic and believe in personal experience.
They follow a subjective orientation in making decisions, are
inclined to consider others when making a decision and share
risks. They are status-conscious and have short-term perspective
in decision-making.
Intuiting-thinking Personality: Such individuals take a broad

view of their own situation and the world. Though they heavily
rely on imagination and consider a wider range of options, yet
use logic in making decisions. Such individuals are not averse
to taking risks while making decisions and their perspective in
long-term.
Intuiting-feeling Personality: Their view of personal situations

or world is broad. They use imagination in considering a wide
range of options in making a decision, are quite likely to consider
others views and show least sensitivity towards prices. They are
also inclined to seek novelty, take risks and their time horizon is
indefinite in making decisions.
Alfred Adler took a separate direction. He was the foremost

proponent of social orientation in the development of Personality.
Instead of emphasizing the importance of sexual conflicts like Freud
or culturally shared meaning of Jung, he focused on the importance
of an individuals striving for obtaining superiority in a social context.

Alfred Adler viewed human beings as striving to attain various rational
goals, which he referred as style of life. He also stressed that children
develop the feelings of inferiority and as adults their foremost goal is to
win over these feelings; in other words, strive for superiority. Another
neo-Freudian psychologists, Harry Stack Sullivan, emphasised that
human beings perpetually strive to establish significant and rewarding
relationships that serves as the fundamental factor in Shaping up
an individuals personality. He and Karen Horney (a neo-Freudian
psychoanalyst) were particularly concerned with the individuals
efforts to reduce tensions, such as anxiety.
5.2.3 TRAIT THEORY
These theories are relatively recent in origin and use very popular
personality concepts to explain consumer behaviour. The orientation,
unlike previously discussed theories, is quantitative or empirical.
J. P. Guilford describes a trait as any distinguishing and relatively
enduring way in which one individual differs from another.
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The Trait Theory states that human personality is composed of a

set of traits that describe general response patterns.
The concept is that traits are general and relatively stable
characteristics of personality that influence behavioural tendencies.
The concept can be summed up in three assumptions:
Behavioural tendencies in individuals are relatively stable.
A limited number of traits are common to most individuals. They

differ only in the degree to which they have these tendencies.
These traits and their relative degree when identified and

measured, are useful in characterising individual personalities.
Trait theorists construct personality inventories (Personality Tests)

and ask respondents to record their responses to many items.
Respondents are asked to agree or disagree with certain statements
as they please or express their likes or dislikes for certain situations
or kinds of people. The responses are then statistically analysed and
reduced to a few personality dimensions.
R. B. Cattell isolated 171 traits but concluded that they were superficial
and lacking in descriptive power. He sought a reduced set of traits
that would identify underlying patterns and identified 16 Personality
factors, which he called as source or primary traits.
Personality Tests that measure just one trait (such as self-confidence,
or innovativeness) are called single-trait Personality tests. Such tailormade tests are increasingly being developed for use in the study of
consumer behaviour. Ronald E. Goldsmith and Charles F. Hofacker
and also Marsha L Richins and Scott Dawson have reported that these
tests are used to measure traits such as innovativeness, susceptibility

to interpersonal influences and Materialism. There are a number of
standardised Personality tests and evaluative techniques available.
This offers the advantage and convenience of using Trait Theory
to studying the relationship between Personality and behaviour. A
large number of researchers have used these techniques and have
met with various degrees of success in finding a relationship between
consumers Personality and their behaviour.
5.2.4 SELF-CONCEPT THEORY
Self-concept is the image that we have of ourselves. This image is
formed in a number of ways, but is particularly influenced by our
interactions with important people in our lives.
Humanist psychologist Carl Rogers believed that there were three
different parts of self-concept:
Self-image or how you see yourself. It is important to realize
that self-image does not necessarily coincide with reality. People
might have an inflated self-image and believe that they are better
at things than they really are. Conversely, people are also prone
to having negative self-images and perceive or exaggerate flaws
or weaknesses. For example, a teenage boy might believe that he
is clumsy and socially awkward when he is really quite charming
and likeable. A teenage girl might believe that she is overweight,
when she is really quite thin. Each individuals self-image is
probably a mix of different aspects including your physical
characteristics, personality traits, and social roles.
Self-esteem or how much you value yourself. A number of

different factors can impact self-esteem, including how we
compare ourselves to others and how others respond to us. When
people respond positively to our behaviour, we are more likely
to develop positive self-esteem. When we compare ourselves to
others and find ourselves lacking, it can have a negative impact
on our self-esteem.
Ideal-self or how you wish you could be. In many cases, the way
we see ourselves and how we would like to see ourselves do not
quite match up.
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Fill in the blanks:

1. The ......................... is the outcome of the combination of
individuals different roles.
2.
Advertising tends to pull down consumers self-esteem when

it attempts at increasing the ......................... between actual self
and Ideal Self.
Contd...
3. An individual has a self-concept, which is formed through

.................... with parents, peers, teachers and influential others.
4.
The id operates on what is called the ........................., that is, to

seek immediate pleasure and avoid pain.
5.
...................... operates in the unconscious and often represses

certain behaviour that would otherwise occur based on the id,
which could ...................... the social system.
6.
...................... Personality follow a ...................... orientation in

making decisions, are inclined to consider others when making
a decision and share risks.
7. ...................... stressed that children develop the feelings of

...................... and as adults their foremost goal is to win over
these feelings.
8. ...................... describes a trait as any distinguishing and
relatively enduring way in which one individual differs from
another.
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9. When we compare ourselves to others and find ourselves

lacking, it can have a ...................... impact on our self-esteem.
Collect some advertisements and find out, which personality state

has been targeted by the marketer as per Freudian Psychoanalytic
Theory. Is it Id, Ego or SuperEgo.
Today the problem to understand human nature is more pressing

than ever, huge population explosion, global unrest, ecological
pollution, racial prejudice, poverty are brought about by the
behavior of people. It may not be overstating the case, therefore,
to say that the quality of human life in the future, indeed our very
survival, may depend upon an increased understanding of human
nature. Psychology is deeply committed to this undertaking.
5.3 CONSUMER LIFESTYLE

When people are passionate about a brand it becomes a part of their
lifestyle.
Lifestyle marketing is a process of establishing relationships

between products offered in the market and targeted lifestyle
groups.
It involves segmenting the market on the basis of lifestyle dimensions,

positioning the product in a way that appeals to the activities, interests
and opinions of the targeted market and undertaking specific
promotional campaigns which exploit lifestyle appeals to enhance the
market value of the offered product.
5.3.1 CHARACTERISTICS OF LIFESTYLE
Given below are the characteristics of lifestyle:
Lifestyle is a Group Phenomenon: A persons lifestyle bears
the influence of his/her participation in social groups and of his/
her relationships with others. Two clerks in the same office may
exhibit different lifestyles.
Lifestyle Pervades Various Aspects of Life: An individuals

lifestyle may result in certain consistency of behaviour. Knowing
a persons conduct in one aspect of life may enable us to predict
how he/she may behave in other areas.
Lifestyle Implies a Central Life Interest: For every individual

there are many central life interests like family, work, leisure,
sexual exploits, religion, politics etc. that may fashion his
interaction with the environment.
Lifestyles Vary according to Sociologically Relevant Variables:

The rate of social change in a society has a great deal to do
with variations in lifestyles. So do age, sex, religion, ethnicity
and social class. The increase in the number of double income
families and that of working women have resulted in completely
different lifestyles in the 1980s in India.
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5.3.2 INFLUENCE OF LIFESTYLE
Cultural and societal variables establish the outer boundaries of

lifestyle specific to our culture. The interaction of group and individual
expectations and values creates a systematic pattern of behaviour.
This is the lifestyle pattern that determines purchase decisions. When
goods and services available in the market are in tune with lifestyle
patterns and values, consumer market reactions are favourable.
And purchases that reinforce these patterns further illuminate these
lifestyles. Lazers lifestyle hierarchy brings out these interactions.
5.3.3 APPLICATION OF AIO STUDIES
Studying the lifestyle closely through the AIO inventory of heavy/
medium/light users of a product has been found to be immensely useful
for marketers. In the US studies have been done regarding the heavy
use of beer, eye make-up and bank credit cards. When it was revealed
that 23% of the people who drink beer consume 80% of the beverage
sold, the heavy beer user became the advertising target of the new
campaign. Willian Wells and Douglas Tigert used an AIO inventory
to probe the heavy user of eye cosmetics. Demographic data revealed

that such women were young, well-educated and metropolitan. But
she also tended to be a heavy smoker and more inclined than the
average woman to make long distance telephone calls. From the
responses to statements, she emerged as one who fantasises about
trips around the world, and as one who wanted a very stylish home. In
a study Plummer applied to bank credit card users, males who used
bank charge cards heavily were described as urbane and active with
high income level and occupational and educational achievements.
The heavy card user places high value on personal appearance
consistent with his career and lifestyle. He was found to buy at least
three new suits a year, to belong to several organisations and revealed
contemporary attitudes and opinions. Thus, a study of personality,
lifestyle and social class gives a more comprehensive consumer profile
and not a mere physical description of demographics. Using the AIO
inventory, the Chicago based advertising agency of Needham, Harper
and Steers have identified five female lifestyle groups and five male
lifestyle groups. We have Indian parallels of these types and you may
try to recall the advertisements given alongside in brackets to identify
the lifestyle portrayed through these characters and decide whether
they conform.
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5.3.4 LIFESTYLE PROFILE IN INDIAN CUSTOMERS

In India, one of the agencies is trying to create a psychographic profile
of the Indian child based on a sample of over 4463 in 8 metros and
mini-metros. Advertisements are featuring children in advertisements
for varied products and marketers feel that this makes the whole
family involved and is consistent with our life experience. As an
outcome of these studies the emerging profiles of the Indian children
are given below:
6-7 years: A fun seeker heavily influenced by the family and by

teachers.
8-10 years: A role player, influenced primarily by school and by

friends.
11-15 years: An emulator, influenced by the peer group. At this

stage, gradual non acceptance of the family begins.
16-18 years: Young adults, almost entirely conforming to the

group.
5.3.5 VALS SYSTEM OF CLASSIFICATION

Stanford Research Institute (SRI) developed a popular approach to
psychographics segmentation called VALS (Values and Lifestyles).
This approach segmented consumers according to their values and
lifestyles in USA. Researchers faced some problems with this method
and SRI developed the VALS2 programme in 1978 and significantly
revised it in 1989. VALS2 puts less emphasis on activities and interests
and more on psychological drivers to consumer behaviour. To measure

this, respondents are given statements with which they are required
to state a degree of agreement or disagreement. Some examples of
statements are:
I am often interested in theories.
I often crave excitement.
I liked most of the subjects I studied in school.
I like working with carpentry and mechanical tools.
I must admit that I like to show off.
I have little desire to see the world.
I like being in charge of a group.
I hate getting grease and oil on my hands.
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According to the present classification schemer, VALS has two

dimensions. The first dimension, primary motivations, determines
the type of goals that individuals will pursue and refers to pattern
of attitudes and activities that help individuals reinforce, sustain or
modify their social self-image. This is a fundamental human need.
The second dimension, resources, reflects the ability of individuals
to pursue their dominant motivations that includes the full range
of physical, psychological, demographic and material means such
as self-confidence, interpersonal skills, inventiveness, intelligence,
eagerness to buy, money, position and education etc. The questions
above are designed to classify respondents based on their primary
motivations. Stanford Research Institute (SRI) has identified three
basic motivations:
Ideals (principle): individuals are guided in their choices by their

beliefs and principles and not by feelings, desires and events.
Achievement: individuals are heavily influenced by actions,

approval and opinions of others.
Self-expression (action): individuals desire physical and social

activity, variety and risk taking.
Based on the concepts of basic motivations and resources, the typology

breaks consumers into eight groups.
VALS suggests that a consumer purchases certain products and
services because the individual is a specific type of person. The
purchase is believed to reflect a consumers lifestyle, which is a
function of motivations and resources. People with high resources and
high innovation are at the top and the ones with low resources and low
innovation are at the bottom of this typology. Each of the eight groups
exhibits a distinctive behaviour and decision-making approach. VALS
represents an interconnected network of segments, which means that
adjoining segments have many similar characteristics and can be
combined to suit particular marketing objectives.
Innovators (formerly actualisers): This segment is small in

size compared to other seven but may be the most attractive
market because of their high incomes and they are the leading
edge of change. They are among the established or getting
established leaders in business or government, yet they seek
challenges. Image is important to them as an expression of
their taste, independence, and character. These people are
successful, sophisticated, active, and with high self-esteem. They
are interested in growth and development; they explore, and
express themselves in many different ways. They have social
and intellectual interests, and are open to social change. They
are guided sometimes by ideals and at other times by desire and
are fond of reading. They prefer premium products to show their
success to others.
Thinkers (formerly fulfilled): Thinkers are motivated by ideals

and exhibit behaviour according to the views of how the world
is or should be. They are mature in their outlook, satisfied,
comfortable, are well-educated, reflective people who value order,
knowledge and responsibility. They like their home and family,
are satisfied with their careers, and enjoy their leisure activities at
home. They are open-minded about new ideas and accept social
change. As consumers, they are conservative and practical. They
purchase products for their durability, functionality, and value.
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Believers: Like thinkers, believers are also motivated by ideals;

their basic approach to decision-making is rational. Believers
are not well-educated and the moral code of conduct is deeply
rooted in their psyche and is inflexible. They are conservative,
conventional and have deep beliefs based on tradition, family,
religion and community. Their routines are established and largely
influenced by home, family, religion, and social organisation.
Their behaviour as consumers is predictable and conservative.
Their income is modest, but enough to meet their needs.
Achievers: They are motivated by the desire for achievement

and make choices based on a desire to enhance their position,
or to facilitate their move to another groups membership for
which they aspire. They have goal-oriented life-styles and a deep
commitment to career and family. They are more resourceful
and active. Achievers are inclined to seek recognition and
self-identity through achievement at work and in their personal
lives. They have high economic and social status and patronise
prestige products and services and time saving devices that exhibit
success to their peers. They value consensus, predictability and
stability over risk, and intimacy.
Strivers: They are trendy and fun-loving and are motivated by

achievement. They are dependent on others to indicate what they
should be and do. They believe money represents success and
never seem to have enough of it. Their self-definition is based on

approval and opinion of others around them. They are impulsive
by nature, get easily bored, are unsure of themselves, and low
on economic, social, and psychological resources. Strivers try
to mask the lack of enough rewards from their work and family,
and to conceal this, they attempt to appear stylish. They try to
emulate those with higher incomes and possessions, generally
beyond their reach. Strivers are active consumers, shopping to
them is both a social activity and an opportunity to show their
peers their ability to buy. They read less but prefer to watch
television.
Survivors (formerly strugglers): They have narrow interests;
their aspirations and actions are constrained by low level
of resources. Strivers are comfortable with the familiar and
are basically concerned with safety and security. They are
ill-educated, with strong social bonds, low-skilled, and are poor.
They feel powerless and unable to have any impact or influence
on events and feel the world is changing too quickly. As consumers
they show the strongest brand loyalties, especially if they can
purchase them at a discount. They are cautious consumers and
represent only a modest market. They watch a lot of television,
read womens magazines and tabloids.
Experiencers: They are young, full of vitality, enthusiastic,

impulsive and rebellious and motivated by self-expression. They
are avid consumers and spend high proportion of their income on
fashion, entertainment and socialising. Their desire is to feel good
and having cool stuff. They are college-educated and much
of their income is disposable. They have an abstract disregard
for conformity and authority. Experiencers seek excitement
and variety in their lives and like to take risks. Their patterns
of values and behaviour are in the process of being formulated.
They are fond of outdoor recreation, sports and social activities.
They spend heavily on clothing, music and fast food.
Makers: Their motivation is self-expression. They like to be

self-sufficient, have sufficient income and skills to accomplish their
desired goals. Makers are energetic, like to experience the world,
build a house, have families, raise children, and have sufficient
skills backed with income to accomplish their projects. They are
practical people and have constructive skills and energy to carry
out their projects successfully. Their outlook is conservative, they
are suspicious of new ideas, respect government and authority,
but resent any intrusion on their rights. They are not impressed
with others wealth and possessions.
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Figure 5.1: VALS Framework
For several reasons, psychographic segmentation variables are used

on a limited scale. To accurately measure psychographic variables is
rather difficult compared to other types of segmentation bases. The
relationships between psychographic variables and consumer needs
are often difficult to document. Also, certain psychographic segments
may not be reachable. For example, it may be difficult to reach
introverted people at reasonable cost.
5.3.6 APPLICATION OF LIFESTYLE MARKETING
The most striking uses of lifestyle concept and allied research have
been made in positioning of new products, repositioning of existing
products, developing new product concepts and creating new product
opportunities in specific fields. In congruence to the product concept
chosen, lifestyle research is utilised for selecting media, formulating
media and promotion strategies and improving retail performance.
Lifestyle concept is also utilised as a framework for presenting
research recommendations, since it is capable of offering to the
marketers, portraits of target group expressed in an uncomplicated
manner.
5.3.7 OPTIMAL STIMULATION LEVEL

Some activities have more potential to provide individuals with
some sort of Physiological Arousal. There are others who prefer a
calm, simple and uncluttered life, while some others prefer a novel,
complex and exciting existence. Research in this area indicates that
high optimum stimulation levels are associated with more willingness
to take risks; to be innovative, try new products and actively seek
purchase related information. P. S. Raju has reported that OSL seems
to indicate an individuals desired level of Lifestyle stimulation.
Things, which are physically stimulating, emotionally energising,
exciting, or novel, have the potential to induce arousal. Research
shows that individuals prefer things that are moderately arousing
rather than too arousing or not arousing at all.
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Consumers with high and low levels of need for stimulation differ in
their purchase behaviour. If an individuals Lifestyle is such that it
offers the desired level of stimulation, she/he is quite satisfied. If the
level of stimulation falls short of the desired level, such a person is
bored. Consumers with high stimulation needs tend to be the first to
buy new products, actively seek information about them and engage
in variety-seeking buying behaviour. They tend to be curious about
the ads they see, but are also likely to get bored by them. Interestingly,
they are also likely to buy products with greater risk.
5.3.8 NEED FOR COGNITION
Some researchers (John T. Cacioppo and Richard E. Pettey) have

focused on need for cognition Personality trait.
Need for cognition refers to the degree of an individuals desire to

think and enjoy getting engaged in Information Processing.
Such individuals tend to seek information that requires thinking.
Opposite to this would be those who shy away from such information
and focus on peripheral information (ELM model). For instance,
a consumer high in need for cognition (NC) and looking at an ad
for Apple computer is more likely to study and concentrate on the
information contained in the ad. On the other hand, a consumer low
in need for cognition would be more inclined to look at the beautiful
picture of iMac, ignoring the detailed information about the computer
model.
Research by Curt Haugtvedt et al, has shown that consumers high in
need for cognition were more influenced by the quality of arguments
in the ad than those who were low in need for cognition. Further, those
low in need for cognition were influenced more by spokespersons
attractiveness than those who were high in need for cognition. These
results show an interesting aspect of Personality, which may have
important implications for advertising.
5.3.9 DOGMATISM
Consumers are also likely to vary in terms of how open-minded
or closed-minded they are. Dogmatism is a Personality trait that
indicates the degree of an individuals rigidity towards anything that
is contrary to her/his own established beliefs. Apparently, the person
is resistant to change and new ideas.
One would expect highly dogmatic consumers to be relatively resistant
to new products, promotions or advertising. However, they may tend
to be yielding to celebrities and experts who present authoritative
appeals. On the other hand, consumers low in Dogmatism are more
likely to accept new and innovative products to established alternatives
and be more receptive to ad messages that focus on product attributes
and benefits.
5.3.10 SELF-MONITORING BEHAVIOUR
Individual consumers differ in the degree to which they look to others
for indications on how to behave. Those persons who are high-self
monitors tend to look to others for direction and accordingly guide
their own behaviour. They are more sensitive and responsive to
Image-oriented ads and willing to try such products. They are less
likely to be consumer Innovators.
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5.3.11 SUSCEPTIBILITY TO INFLUENCE

Consumers differ in terms of their proneness to persuasion attempts
by others, especially when these attempts happen to be interpersonal
or face-to-face. William O. Bearden, Richard G. Netemeyer and
Jesse H. Teel have reported that some consumers possess a greater
desire to enhance their Image among others and show a willingness
to be influenced or guided by them. Consumers with lower social
and Information Processing confidence show more proneness to be
influenced by ads compared to those who have higher self-confidence.
Fill in the blanks:

10. ....................... is a process of establishing relationships between
products offered in the market and targeted lifestyle groups.
11. The interaction of group and individual expectations and
values creates a ....................... pattern of behaviour.
12. The age of ....................... years a child is an emulator, influenced
by the peer group. At this stage, gradual non acceptance of the
family begins.
13. Thinkers are motivated by ....................... and exhibit behaviour
according to the views of how the world is or should be.
14. ....................... are conservative, conventional and have deep
beliefs based on tradition, family, religion and community.
Contd...
15. Achievers are inclined to seek recognition and .......................

through achievement at work and in their personal lives.
16. Strivers are ....................... consumers, shopping to them is both
a social activity and an ....................... to show their peers their
ability to buy.
17. ....................... are energetic, like to experience the world, build
a house, have families, raise children, and have sufficient skills
backed with income to accomplish their projects.
18. Lifestyle concept is also utilised as a framework for presenting
......................., since it is capable of offering to the marketers,
portraits of target group expressed in an uncomplicated
manner.
19. Consumers with ....................... needs tend to be the first to
buy new products, actively seek information about them and
engage in variety-seeking buying behaviour.
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20. Research by ......................., has shown that consumers high

in need for cognition were more influenced by the quality
of arguments in the ad than those who were low in need for
cognition.
21. Consumers low in ....................... are more likely to accept new
and innovative products to established alternatives.
Pick atleast 35 brands of your choice and find out which personality
type of consumers the brand is catering to. Also comment upon the
lifestyle marketing strategies adopted by any two of those brands
to attract customers.
Brands helping people measure different aspects of their lives, such

as how much they eat or what their social graph is like on Twitter
and Facebook, is a trend that has been dubbed the quantified
self and is growing in popularity, according to research seen by
Marketing Week.
5.4 EMOTIONS IN ADVERTISING

Some researchers are of the opinion that it is just the beginning
to develop a sound understanding of how emotional responses to
advertising influence consumer behaviour, what causes ads to evoke
certain Emotions, (T. J. Olney, M. B. Holbrook, Rajeev Batra; and also
E. Kempf and Deborah McInnis).
The following observations about emotional content in advertising
must be taken only as tentative and not as conclusive.
Emotional content such as joy, warmth, or even disgust depicted

in ads increases their Attention getting ability and maintenance
capability. Attention is a critical factor in the perception process
and ad messages triggering emotional reactions are more likely
to capture Attention than neutral ad messages.
Emotions generate an aggravated state of Physiological Arousal

and consumers become more alert and active when aroused. H.
Mano observes that in a state of Emotional Arousal, more effort
and detailed elaboration activities may occur and emotional
messages may be processed more thoroughly compared to
neutral ones.
Ads that trigger positive emotion such as warmth by portraying

love, family, or Friendship etc., enhance liking of the ad itself.
Ad liking is viewed as important in developing liking for the
advertised product.
Emotion generating advertisements are more likely to be

remembered than neutral ads. Some researchers believe that
exposure to ads evoking positive Emotions may increase brand
preference through classical conditioning. We see several ads
that attempt repeated pairings of the Unconditioned Response
(positive Emotions) with the conditioned stimulus (brand name).
This may produce the positive affect when the brand name is
mentioned (for example, ads of Coke and Pepsi are always
associated with positive Emotions).
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Fill in the blanks:

22. Attention is a critical factor in the ................... process and ad
messages triggering emotional reactions are more likely to
capture Attention than neutral ad messages.
23. Emotion generating advertisements are more likely to be
remembered than ................... advertisements.
Pick out any five advertisements across different industries, such

as automobile, FMCG, consumer durables, Insurance, banking
etc. and depict how emotions play a viral role in differentiating
advertisements.
5.5 BRAND PERSONALITY

Brands may also take on Personality traits. The concept of Brand
Personality is believed to be an important element in building
Brand Equity. Kevin Lane Keller says that it is the extent to which
a consumer holds strong, favourable, and unique associations with
a brand in Memory, Conceptualisation, Measuring, and Managing
Customer-Based Brand Equity, Journal of Marketing, (January

1993). Brands acquire personalities no matter whether marketers
want or not. Brand Personality has been described as a set of human
characteristics that consumers associate with a brand. The assessment
of Brand Personality can be accomplished more definitively through
subjective checklists or ratings. Five dimensions of Brand Personality
(sincerity, Excitement, competence, sophisticated and Ruggedness),
with corresponding dimensions have been identified. Jennifer Aaker
of Stanford University undertook a research project to look at brand
personalities that provides an interesting insight into the personality
of a number of well-known brands. She collected extensive data
covering 114 personality traits on 37 brands by more than 600
individuals typical of multi-cultural U.S population.
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Some brands were found to be strong on one particular factor, such

as Levis was strong with ruggedness, Revlon with sophistication,
and MTV with Excitement. A cross-cultural study of this scale found
that three of the five factors applied in Japan and Spain, but that a
peacefulness dimension replaced Ruggedness both in Japan
and Spain, and a passion dimension emerged in Spain instead of
competency.
5.5.1 SELF-IMAGE VERSUS BRAND IMAGE
Self-image is how you perceive yourself. It is a number of selfimpressions that have built up over time: What are your hopes and
dreams? What do you think and feel? What have you done throughout
your life and what did you want to do? These self-images can be very
positive, giving a person confidence in their thoughts and actions, or
negative, making a person doubtful of their capabilities and ideas.
Consumers have a variety of enduring images of themselves. These
self-images, or perceptions of self, are very closely associated with
personality in that individuals tend to buy products and services
and patronize retailers whose images or personalities relate in some
meaningful way to their own self-images. In essence, consumers seek
to depict themselves in their brand choices they tend to approach
products with images that could enhance their self-concept and avoid
those products with images that do not.
Self-congruity is how much a consumers self-concept matches the
personality of a user of a brand. Aaker (1997) found that a number
of well-known brands tended to be strongly associated with one
particular trait. Hence these brands will attract consumers who
posses the same personality traits.
Brand image can be defined by saying that it is a concept of a

product held by the customer, based on reason and emotion that is
subjective and perceptual, with perception being more important
than reality.
Brand image represents the total set of brand related activities

engaged by a firm.
Example: Clothing, perfume, and cars are the most frequently
mentioned products that consumers use as means of self-expression.
However, since a much wider variety of products have a brand or user
image associated with them, the associations of a brand user with
brand image may affect consumers brand choice, especially when
many other individuals observe the brand consumption.
Fill in the blanks:

24. The assessment of _______________ can be accomplished more
definitively through subjective checklists or ratings.
25. ____________ is how much a consumers self-concept matches
the personality of a user of a brand.
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Collect information on Curiosity Quotient and its relevance in

marketing.
Good brand writing does more than share your benefits. It gives
your company a distinct personality human traits that can make
your business more relatable and unique.
5.6 SUMMARY
The personality is a dynamic concept that describes the growth

and development of an individuals whole psychological system,
which includes motives, beliefs, attitudes, habits, and overall
outlook. Personality is generally believed to be consistent and
enduring over time.
Personality traits help describe and differentiate between

individuals.
Various theories of personality have been proposed. Marketers

have generally paid more Attention to four theories of personality.
Self-concept Theory is considered as most relevant and focuses

on how the Self-image of individuals influences their purchase
and other behaviour. Self-concept refers to the totality of an
individuals thoughts and feelings with regard to herself/himself
as an object.

personality is the result of childhood conflicts. These conflicts
are derived from id, ego and superego.
Social/cultural theories view individuals as striving to win

over feelings of inferiority, which emanate from childhood
experiences in relating to others; searching for ways to gain love,
security and relationships. Several personality types have been
identified such as Sensing-thinking Personality, sensing-feeling
personality, intuiting-thinking personality, and intuiting-feeling
personality etc.
Trait theories are of the view human personality is composed

of a set of traits that describe general response patterns. Unlike
theories already mentioned, which are qualitative in approach,
the Trait Theory is quantitative or empirical.
Brand Personality is an important concept. It is the description

of a brand in terms of human traits. Brand Personality can be
measured in different ways. Perhaps the simplest and most direct
measure is to seek open-ended responses to probes.
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Personality: The persons distinguishing psychological

characteristics that lead to relatively consistent responses to
his or her own environment.
Lifestyle: A persons activities, interests, attitudes, opinions,

values and behaviour patterns in explaining his way of living.
Psychoanalytic Theory: A system of ideas developed by

Sigmund Freud that explains personality and behaviour in
terms of unconscious wishes and conflicts.
Trait Theory: An approach to the study of human personality.

Trait theorists are primarily interested in the measurement of
traits, which can be defined as habitual patterns of behavior,
thought, and emotion.
Ideal Self: The ideal self is how we want to be. It is an idealized

image that we have developed over time, based on what we
have learned and experienced.
Brand Personality: It is something to which the consumer can

relate, and an effective brand will increase its brand equity by
having a consistent set of traits.

1. Differentiate between Actual self and ideal self.
2. What is personality? Discuss the Trait Theory of personality.
3. Distinguish between Id, Ego and Superego. How can these
influence product choice?
4. What is neo-Freudian theory? What are its implications for
marketers?
5. Enumerate upon the role of emotions in advertising.
6. Throw some light upon the OSL and Self-monitoring personality

type.
7. Discuss the significance of creating brand personalities by
marketers.
8. Elaborate upon the VALS system of classification.
9. What is lifestyle marketing? Describe its applications.

Topic
Theories of
Personality
Q. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Consumer Lifestyle 10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
Emotions in
22.
Advertising
23.
Brand Personality
24.
25.
Answer
actual self
disparity
interaction
Pleasure principle
Superego; disrupt
Sensing-feeling; subjective
Alfred Adler; inferiority
J. P. Guilford
negative
Lifestyle marketing
systematic
1115
ideals
Believers
self-identity
active; opportunity
Makers
research recommendations
high stimulation
Curt Haugtvedt
Dogmatism
perception
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neutral
Brand Personality
Self-congruity

1. Refer 5.1

Consumers actual self influences their purchases in accordance

with the images they have of themselves and thereby attain selfconsistency. The concept of Ideal Self is closely related to an
individuals self-esteem. The gap between actual self and Ideal
Self determines the degree of ones self-esteem.
2. Refer 5.1

Personality can be defined as consistency in a persons way of

being that is, long-term consistency in their particular ways of
perceiving, thinking, acting and reacting as a person.
Refer 5.2.3
The Trait Theory states that human personality is composed of a

set of traits that describe general response patterns.

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3. Refer 5.2.1

personality is the result of childhood conflicts. These conflicts
are derived from three fundamental components of Personality:
Id, Ego and Superego.
4. Refer 5.2.2
A number of Freuds foremost disciples, particularly Carl Jung

and Alfred Adler, disagreed from his view of personality. They
believed that social and cultural variables, rather than biological
drives, are more important in the development of an individuals
personality.
5. Refer 5.4

Emotional content such as joy, warmth, or even disgust depicted

in ads increases their Attention getting ability and maintenance
capability.
6. Refer 5.3.7 & 5.3.10

Research in this area indicates that high optimum stimulation

levels are associated with more willingness to take risks; to be
innovative.
Those persons who are high-self monitors tend to look to others

for direction and accordingly guide their own behaviour.
7. Refer 5.5

Brands may also take on Personality traits. The concept of Brand

Personality is believed to be an important element in building
Brand Equity.
8. Refer 5.3.5

Stanford Research Institute (SRI) developed a popular approach

to psychographics segmentation called VALS (Values and
Lifestyles). This approach segmented consumers according to
their values and lifestyles in USA.
9. Refer 5.3

The most striking uses of lifestyle concept and allied research

have been made in positioning of new products, repositioning
of existing products, developing new product concepts, and
creating new product opportunities in specific fields.

SUGGESTED READINGS
C.L. Tyagi and Arun Kumar, (2004), Consumer Behaviour, Atlantic

Publishers & Dist
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Leon G. Schiffman, Leslie Lazar Kanuk, (2007), Consumer


E-REFERENCES
http://k3hamilton.com/cb/cb6.html
http://www.warc.com/fulltext/esomar/80217.htm
http://www.euromonitor.com/consumer-lifestyles-in-india/report
CONSUMER ATTITUDE AND PERCEPTION
CONTENTS
6.1
Introduction
6.2 Relationship between Consumer Behaviour and Consumer
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Decision Making

6.3
Constituents of Consumer Attitude
6.4
Functional Theory of Attitude
6.4.1
Utilitarian Function
6.4.2
Value-expressive Function
6.4.3
Ego-defensive Function
6.4.4
Utility Function
6.5
Attitude Models
6.5.1
Tri-component Attitude Model
6.5.2
Multi-attribute Attitude Models
6.5.3
Fishbeins Attitude toward Behaviour Model
6.5.4
Theory of Reasoned Action Model (TORA)
6.6
Sensory Threshold
6.6.1
Multi-Attribute Model and Attitude Change
6.6.2
Elaboration Likelihood Model and Attitude Change
6.6.3
Cognitive Dissonance Theory
6.7
Concept of Perception
6.7.1
Sensation
6.7.2
Absolute Threshold
6.7.3
Differential Threshold
6.7.4
Subliminal Perception
6.7.5
Attention
6.7.6
Perceptual Selection
6.7.7
Selective Exposure
6.7.8
Selective Attention
6.7.9
Adaptation
6.7.10
Perceptual Blocking
6.7.11
Figure and Ground
6.7.12
Grouping
6.7.13
Closure
6.8
Stages in Perceptual Process
6.8.1
Primitive Categorization
6.8.2
Cue Check
6.8.3
Confirmation Check
6.8.4
Confirmation Completion
6.9
Sensory System and Perception
6.9.1
Sound
6.9.2
Smell
6.9.3
Vision
6.9.4
Touch
6.9.5
Taste
6.10
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Interpretation of Stimuli
6.10.1
Physical Apperance
6.10.2
Stereotyping
6.10.3
First Impression
6.10.4
Halo Effect
6.11
Perceived Product and Service Quality
6.11.1
Price Perceptions
6.12
Consumers Risk Perception
6.13
Summary
6.14
6.15
Answers and Hints
6.16
CONSUMER ATTITUDE AND PERCEPTION 129
PORSCHES CAMPAIGN TO SHIFT CONSUMER PERCEPTION
Porsche is rolling out an integrated marketing campaign featuring
direct mail, mobile, online and TV elements with the goal of
changing consumer perceptions about its products. The car maker
worked with agency Cramer-Krasselt on the campaign.
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Porsche conducted research late last year that found that

consumers viewed its cars as impractical purchases for everyday
use. The campaign is targeting luxury auto consumers and a subset
of auto enthusiasts. Consumers perception of the car was almost
that every 911 [model] was like a GT3, like it was almost like a race
car instead of a car that could be driven every day. Hence Porsche
is not going away from the core brand values of performance,
engineering and state of the art technology, but they want to put a
little bit of focus on that every day side of it. All campaign elements
direct consumers to a dedicated website featuring company
and consumer-generated content, including videos, photos, and
testimonials from customers about the everyday use of their cars.
Consumers can share the content through social networks.
Porsche launched the initiative on March 24 with TV commercials

in select markets, such as New York, Miami, and Los Angeles,
during the NCAA Mens Basketball Division I Championship
tournament. The company will launch other campaign elements,
including direct mail brochures, print advertisements, a mobileoptimized website and a short-film contest, next week. The winning
video submission will air in movie theaters prior to the trailers,
said Pryor.
Porsche will distribute direct mail pieces to consumers outside the
companys customer base to make sure that we can demonstrate
this everyday magic notion to some people who have not driven a
Porsche in a very long time or have Porsche in their consideration
set but havent pulled the trigger.
To submit content to the website, consumers are asked to provide
their name, ZIP codes and e-mail addresses, and asked to opt-in
to monthly e-mail newsletters from Porsche. Consumers can also
submit their buying interest, such as when they might buy a new
car, the budget for their next car, and what Porsche models they are
interested in. Porsche will relay that data to their local dealerships
which can contact consumers regarding upcoming events in their
areas, so that way they can make sure that those consumers are
engaged moving forward from the campaign.
Porsche could repurpose consumer-generated content for future
marketing or promotions, but the company has no plans to do so
in near future.

Find out relationship between consumer behaviour and
consumer decision making
Learn functional theories of attitude
Discuss about various attitude models
Understand meaning and types of sensory threshold
Understand concept of perception in detail
Find out about our sensory system and perception
Gain knowledge of interpretation of stimuli
Know about perceived product and service quality and
consumers risk perception
6.1 INTRODUCTION
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Martin Fishbein has reported that there are more than 100 different
definitions of attitude. More than five decades ago, Gordon W. Allport
presented a frequently used definition of attitudes. He said,
Attitudes are learned predispositions to respond to an object or

class of objects in a consistently favourable or unfavourable way.
A cognitively oriented definition given by D. Krech and R. Crutchfield
says, An attitude is an enduring organisation of motivational,
emotional, perceptual and cognitive processes with respect to
some aspect of our environment. This definition views attitudes as
being composed of cognitive (knowledge), effective (emotional), and
conative (behavioural) components. The word object used in this
definition is broad in its meanings and includes specific consumption
or marketing related things (e.g. product category, product, brand,
service, possessions, issues, people, ads, price, or retailer etc.).
Richard E. Petty, D. T. Wegener and I. R. Fabriger have noted that an

attitude is the way we think, feel and act towards some aspect of our
environment such as a retail store, television programme, or product.
According to Martin Fishbein, a more recent approach views
attitudes as being multi-dimensional as opposed to earlier definitions.
According to this thinking, an individuals overall attitude towards an
object is believed to be a function of (1) the strength of each belief (the
consumer has a number of beliefs) the individual holds about various
attributes of the object and (2) the evaluation she/he gives to each
belief as it relates to the attitude object. Beliefs represent the cognitive
component and denote the probability an individual attaches to a
given piece of knowledge as being true.
There is general agreement that attitudes are learnt. In a consumer

behaviour context, this would mean that our attitudes are formed
as a result of what we learn from our personal experiences with
reality, product usage, the exposure to advertising, or word-of-mouth
information from relatives, friends and acquaintances etc.
Attitudes are relatively consistent and are reflected in an individuals
behaviour but are not necessarily unchangeable. Attitude consistency
is more observable when all the conditions are favourable. For
example, an Indian consumer may have a highly favourable attitude
towards German cars but the matter of affordability may intervene
and she/he finds Maruti Esteem a more realistic choice.
Fill in the blanks:

Attitudes are learned ................. to respond to an object or class
of objects in a consistently favourable or ................. way.
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1.
2. Attitudes are relatively ................. and are reflected in an

individuals behaviour but are not necessarily ..................
3.
................. represent the cognitive component and denote the

probability an individual attaches to a given piece of .................
as being true.
Pick out any two products of your choice which has been
re-positioned in market. Study the attitude-change which
consumers have undergone in accepting or rejecting those products.
Attitude formation refers to the shift from having no attitude toward

an object to having some attitude toward the object. The shift from
no attitude to attitude formation is the result of learning.
ELATIONSHIP BETWEEN CONSUMER

R
6.2 BEHAVIOUR AND CONSUMER DECISION
MAKING
The activities directly involved in obtaining, consuming, and disposing
of products and a service, including the decision processes that
precede and follow these actions comprises consumer behaviour.
A consumer decision is a means of describing the processes that
consumers go throughbefore, during, and after making a purchase.
For brands, the most important thing is to successfully retain their
customers to develop in them a purchase habit. Some consumers may
get bored of a product after a while.
The consumer has a clear vision of its expectations and decision

criteria. He already had an experience with the product and knows
it. However, he is still undecided about the brand or a particular
model to choose and which one will best meet his needs. The level of
consumer involvement is moderate and information seeking is more
limited. He will compare available products and especially want to
determine which brand is best for him. The purchasing process will
be shorter. This is the kind of behavior found for occasional purchases
such as clothing, video games, and cosmetics.
6.3 CONSTITUENTS OF CONSUMER ATTITUDE

Consumer attitudes are a composite of a consumers (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.
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Figure 6.1: Constituents of Attitude
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 well on a hot summer evening when one
wants to sleep). Note also that the beliefs that consumers hold
need not be accurate (e.g., that pork contains little fat), and some
beliefs may, upon closer examination, be contradictory (e.g., that
a historical figure was a good person but also owned slaves).
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.
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Fill in the blanks:

4.
The ...................... intention is what the consumer plans to do

with respect to the object.
5.
Some beliefs may be ...................... and some may be differ in

valance depending on the person or the .......................
Take any five situations and find out if all the three components
have the same role in constituting your perception.
Attitudes are expressed in the way we think, feel, and act towards
everything in our lives and reflect the lifestyle of individuals.
6.4 FUNCTIONAL THEORY OF ATTITUDE

Understanding functions of attitudes helps in learning how they serve
consumers. Using this approach, marketers attempt to influence
effective responses by using messages that appeal to consumers on
the basis of one or more of these four types of functions. According
to Daniel Katz, attitudes perform four important functions for
individuals:
1.
Utilitarian function
2.
Value-expressive function
3.
Ego-defensive function
4.
Utility function
6.4.1 UTILITARIAN FUNCTION

This attitude function serves consumers in achieving desired benefits.
We hold certain brand attitudes partly because of a brands utility. If
a product has been useful in the past, our attitude towards it is likely
to be favourable. For example, a consumer who considers quick relief
as the most important criteria in selecting an anti-cold remedy will
be directed to the brand that offers this benefit. On the other hand,
attitudes will discourage the consumer away from brands that are
unlikely to fulfill the quick relief criteria. The Coldarin (an anti-cold
remedy) commercial reflects the utilitarian function of attitudes when
it ensures quick relief.
6.4.2 VALUE-EXPRESSIVE FUNCTION
Attitudes reflect the consumers self-image, values and outlook,
particularly in a high-involvement product. If a consumer segment
holds positive attitudes towards being in fashion, then their
attitudes are likely to be reflected in this viewpoint. For example, the
self-image of a young man buying a motorcycle may be of a macho,
domineering person who likes to gain an upper hand. Aggressiveness
may reflect itself in purchasing a Royal Enfield Bullet 500 cc or a Bajaj
Pulsar 180 cc. Advertisers often appeal to the value-expressive nature
of attitudes by implying that purchase or use of a certain product will
lead to desired achievement, self-enhancement, or independence.
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6.4.3 EGO-DEFENSIVE FUNCTION
Attitudes formed to protect the ego, or self-image, from anxieties and

threats help fulfill this function. Ads for many personal care products
such as mouthwashes, toothpastes, deodorants, anti-pimple creams
and cosmetics, etc. serve as a good example. Advertising capitalises
on the fear of social embarrassment and rejection and greater
social acceptance through use of certain products. This encourages
consumers in developing a positive attitude towards brands linked
with social acceptance, confidence, appreciation, or being attractive
and desirable to the opposite sex.
6.4.4 UTILITY FUNCTION

Individuals generally have a strong need for knowledge and seek
consistency, stability, and understanding. To fulfill this need, attitudes
help people organise the considerable amount of information to
which they are exposed every day. They ignore irrelevant information
and store what is meaningful to them. The knowledge function
also reduces uncertainty and confusion. Advertising is a means of
acquiring information about products and services. Comparative
advertising attempts to change consumers negative attitudes towards
the advertised brand, based on prior knowledge, by emphasizing its
advantages over the competing brand.
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6. Advertising capitalises on the fear of social embarrassment
and rejection.
7. Utilitarian attitude function serves consumers in achieving
desired benefits.
8. Attitudes reflect the consumers self-image, values and outlook,
particularly in a low-involvement product.
9. If a product has been useful in the past, our attitude towards it
is likely to be unfavourable.
10. Advertisements for many personal care products such as
mouthwashes, anti-pimple serve ego-defensive function.
11. Comparative advertising attempts to change consumers
positive attitudes towards the advertised brand.
Pick any four advertisements, each related to the given attribute

model. Make a presentation showing how each theory of attitude
has been catered to in each TVC.
6.5 ATTITUDE MODELS
Psychologists have devoted considerable efforts to understand how

attitudes are formed and the relationship between attitudes and
behaviour. A number of models have been developed to understand
underlying dimensions of an attitude (Richard J. Lutz).
6.5.1 TRI-COMPONENT ATTITUDE MODEL
According to this model, attitudes consist of three main components:
1.
Cognitive component (knowledge, beliefs)
2.
Affective component (emotions, feelings)
3.
Conative component (behavioural aspect)
Figure 6.2: A Simple Representation of Tri-component

Attitude Model
Cognitive Component
Beliefs refer to subjective judgements about the relationship between
two or more things. Consumers beliefs about an object are the
attributes they ascribe to it. These beliefs are based on a combination
of the knowledge, experience, and perceptions about the attitude
object. For most attitude objects, consumers have a number of beliefs
and that a specific behaviour will result in specific outcomes. For
example, an individual may believe that ThumsUp:
Is popular with younger consumers
Is moderately sweet
Contains a lot of caffeine
Is competitively priced
Is marketed by a large multinational company.
The total configuration of beliefs about ThumsUp represents the

cognitive component of attitude about this brand of soft drink. It is
important to realise that beliefs need not be correct or true. They just
need to exist.
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Affective Component
Consumers feelings and emotional reactions to an object represent

the effective component of an attitude. This relates to consumers
overall evaluation of the attitude object. Consumer beliefs about a
brands attributes are multi-dimensional, but the feeling component
is only one-dimensional. The consumer who says, I like ThumsUp,
or ThumsUp is no good, is expressing the results of an affective
evaluation. The evaluation can either be good or bad, favourable
or unfavourable. Emotionally charged evaluations can also be
expressed as happiness, elation, sadness, shame, or anger etc.
Consumers often evaluate products in the context of a specific

situation and a consumers feeling evaluation may change as the
situation changes. For example, a student studying for a test believes
that caffeine content in ThumsUp will keep me alert. These beliefs
may lead to a positive feeling (evaluative) response. The same student
might avoid drinking ThumsUp late in the evening after the test is
over.
Consumers feelings are often the result of specific attribute
evaluations of a product but sometimes feelings can precede and
influence beliefs (cognition, thinking). In some instances, people like
or dislike a product without acquiring any beliefs about the product.
R. B. Zajonc has reported that our initial reaction to a product may be
one of like or dislike without any cognitive basis for the feelings. This
initial effect can influence how we react to the product itself.
Conative Component
Behavioural (conative) component is the likelihood or tendency of an
individual to respond in a certain manner towards an attitude object.
For example, a series of decisions to purchase or not to purchase a
Canon Bubble jet printer, or recommend it to friends, would reflect
the behavioural component of an attitude. In the context of consumer
research and marketing, conative component is treated as intention to
buy. P. A. Dabholkar has noted that all the three attitude components
tend to be consistent. As a result of this, change in one attitude
component tends to trigger related changes in the other components.
This tendency is the basis for a substantial amount of marketing
strategy.
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In certain situations, beliefs and feelings about a chosen brand do not

have to change for consumers to establish an intention to buy if the
economic reward is large enough. For example, a sharp reduction in
price or a special deal offer may work as powerful inducement for
consumer to try a less-favoured brand.
6.5.2 MULTI-ATTRIBUTE ATTITUDE MODELS
According to these models, consumers attitudes about an attitude

object is a function of consumers perception and assessment of
important attributes or beliefs held about a certain attitude object.
The attitude object may be a product, service, or issue etc. In other
words, many beliefs about attributes are evaluative in nature. For
example, in case of an automobile, more mileage per litre of petrol,
attractive styling, reliable performance etc. are viewed as favourable
beliefs. There are several versions of multi-attribute model, but Martin
Fishbein and Icek Ajzen models have stimulated much research
interest.
6.5.3 FISHBEINS ATTITUDE TOWARD BEHAVIOUR MODEL
The revised Fishbein model focuses on an individuals attitude
towards her/his engaging in purchase behaviour or acting with
respect to an object rather than only the attitude towards the object
itself. Top put it different words, this model focuses on the perceived
consequences of a purchase. According to Michael J. Ryan and
Edward H. Bonfield, learning how an individual feels about buying
and using an object turns out to have greater validity than mere
knowing someones evaluation of the object itself. A person might have
a positive attitude towards a product but her/his attitude regarding
purchase behaviour might be negative due to any number of reasons.
For example, a consumers attitude towards Apple MacBook Pro
(object) may be very positive, but her/his attitude towards the act of
purchasing such an expensive laptop may be negative. The appeal of
this model is that it seems to be a better predictor of an individuals
actual behaviour than the attitude-toward-object model.
The Attitude toward Behaviour Model is expressed as:

n
AB= bie i
f=1
Where,
AB = the individuals overall attitude towards performing the specific
behaviour
bi = the persons belief that performing that behaviour results in
consequence 1
ei = the persons evaluation of consequence of 1
n = the number of relevant behavioural beliefs.
6.5.4 THEORY OF REASONED ACTION MODEL (TORA)
Fishbein recognised that attitudes of individuals towards an object
may not be strongly or systematically related to their specific
behaviours. In an attempt to better explain the link between attitudes
and behaviour, Fishbein modified multi-attribute model. Theory of
Reasoned Action (TORA) is the third modification of the original
Fishbein model. This theory assumes that consumers consciously
consider the consequences of the alternative behaviours being
contemplated and choose the one that leads to the most desirable
consequences. The end product of this reasoned choice process is an
intention to engage in the chosen behaviour.
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In this model, the consumers subjective norms include individuals

beliefs regarding how important others, such as family, friends, and
colleagues etc. would think about her/his behaviour being considered.
Are they likely to view the behaviour favourably or unfavourably?
Would she/he be approved or criticised for engaging in that specific
behaviour? This is important because individuals are influenced by
social environment and the normative influences from others can
play a powerful role in how people behave. Normative influences
could also make people act in a certain manner, even though one
may have negative attitude towards doing so. Here, the motivations
of an individual to comply with what important others want can also
influence behavioural intentions.
Figure 6.3: Simplified Representation of Theory of Reasoned

Action Model
Theory of Reasoned Action can be put as follows:

B ~ BI = AB (w1) + SN (w2)
Where:
B
= A specific behaviour
BI
= Individuals intention to engage in specific behaviour
AB
= Individuals attitude towards engaging in that behaviour
SN = Subjective norms about whether important others want
the individual to engage in that behaviour
w1, w2 = Weights denoting the relative influence of (AB) and (SN) on
behavioural intention.
Behaviours (B) refer to particular actions aimed at some target
object. These behaviours always occur in some specific situations,
and at particular time.
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Behavioural Intention (BI) is a proposed behaviour linking self and

an action in future. It is a plan to engage in some specific behaviour
in order to achieve a goal. Behavioural intentions are determined
through a choice-evaluation process by examining beliefs and
considering two types of alternative behaviours and choose one
among them. The strength of behavioural intentions varies and can
be determined by having people to rate the probability that they will
engage in the contemplated behaviour.
Subjective Norms (SN) indicate individuals perceptions of what

other important people want them to do and also individuals
motivations to comply or please other important people. These
can be measured by asking consumers to indicate how favourable
is the opinion of important others regarding the behaviour, and to
determine motivation, individuals are asked to rate how much they
want to comply or please other important people.
Fill in the blanks:

12. Beliefs refer to ................... judgements about the relationship
between two or more things.
13. Consumer beliefs about a brands attributes are ...................,
but the feeling component is only ....................
14. The ................... model focuses on an individuals attitude
towards her/his engaging in purchase behaviour or acting with
respect to an object rather than only the ................... towards
the object itself.
15. In the theory of reasoned action model, the consumers
............................... norms include individuals beliefs regarding
how important others, such as family, friends, and colleagues
etc.
Contd...
16. ................... influences could also make people act in a certain

manner, even though one may have negative attitude towards
doing so.
17. The strength of ................... intentions varies and can be
determined by having people to rate the probability that they
will engage in the ................... behaviour.
Describe the role of attitude models, for marketers, in designing

marketing/promotional campaigns.
An attitude is a lasting general evaluation of something it has

knowledge of that something, liking or disliking, and the strength
of the feelings.
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6.6 SENSORY THRESHOLD
Sensation occurs when sensory areas in the cerebral cortex receive

nerve impulses, usually when body sensors such as the touch
receptors of the skin are stimulated. The first systematic studies of
sensory thresholds were conducted by physiologist Ernst Weber at
the University of Leipsig in Leipsig, Germany, the same university
where Wilhelm Wundt would later transform psychology into
an experimental science. Webers experiments were designed to
determine sensory thresholds, of which there are two types:
Absolute threshold: The minimum intensity of a stimulus that

one can detect
Difference threshold: The minimum difference in intensity

between two stimuli that one can detect.
6.6.1 MULTI-ATTRIBUTE MODEL AND ATTITUDE CHANGE

On the basis of Fishbeins multi-attribute model, four strategies can
be considered to change attitudes:
By changing the values consumers place on product attributes

(ei component in the model)
By changing consumers brand beliefs (bi component in the

model)
By changing brand evaluations (Attitude component)
By changing behavioural intentions (Attitude)
These are explained below:
Changing Values Placed on Product Attributes: Most consumers

consider some product attribute to be more important than
others. Marketers often try to convince consumers about the

superiority or importance of those attributes on which their
brands are relatively strong. This requires attempting to convince
consumers to reassess the value associated with a certain
attribute. For example, Apple computers do not have a floppy
drive and convince consumers that floppies are not reliable for
storing data. Epson attempts to convince consumers that its
inkjet printers need no change of printing head every time the
ink cartridge is changed. A marketer may convince consumers
that bad taste is good quality in a mouthwash.
Changing Consumers Beliefs: A common and effective approach
adopted by most marketers to changing attitudes is to focus
on the cognitive component. The strategy of changing beliefs
focuses on shifting beliefs about the performance of brand on
one or more attributes. Alternatively, marketers attempt to shift
the importance consumers place on certain attributes to those
attributes on which their brand is stronger. This can be done
by introducing new attributes in the brands and emphasizing
the importance of existing ones. Epson printers emphasise the
importance of Micro Peizo technology leading to superior colour
reproduction in prints. Apple convinces consumers that its
computers use the power processor. This makes these computers
technologically different and superior. Nizoral shampoo ads
convince consumers that Ketoconazole ingredient gives better
protection against dandruff.
Changing Brand Evaluations: This strategy focuses on

influencing consumers overall brand attitudes without any
reference to specific attributes. This can be accomplished
by associating a positive feeling with product usage. Nescafe
commercial ho shuru har din aise is one such attempt. When
you care enough to send the very best ads of Hallmark cards
is another example of associating feelings with the brand. Some
brands make a claim that it is the largest selling brand, or the
others are trying to imitate.
Changing behaviour: Consumers purchase or use behaviour

may precede the development of cognition and effect. According
to D.S. Kempf, behaviour can lead directly to effect, to cognitions,
or to both at the same time. Consumers frequently try inexpensive
new brands in the absence of any prior knowledge or effect. For
example, a consumer feels thirsty and notices a new brand of
cold drink with a vendor and uses it. Such purchases are often as
much for knowledge as for satisfaction of some need such as thirst.
Sometimes, marketers induce consumers to buy a brand that is
not preferred by offering some concession. The assumption is
that once consumers try the brand there may be a change in their
attitudes. For example, a detergent is offered at a discount price
and the consumer, after using it, realises that there is hardly any
difference in the performance of the new brand and the regular
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brand. The consumer decides to continue using the new brand

and stays with it even when the price returns to normal list price.
6.6.2 ELABORATION LIKELIHOOD MODEL AND ATTITUDE
CHANGE
As discussed earlier, under conditions of high-involvement, consumers
process information through a central route. They deliberately and
consciously examine and process message elements that in their
belief have relevance to a meaningful and logical evaluation of the
brand. Under conditions of low-involvement, consumers use more
peripheral route in which non-message elements such as music,
colour or spokesperson are more likely to be processed. This means
that under high-involvement conditions, attitude change can best
be accomplished through messages that convey information about
product attributes, benefits and performance. Under conditions of lowinvolvement, attitude change can best be achieved through the use of
effective spokesperson and brand symbols. For example, to influence
consumers attitudes different competing brands of soft drinks use
famous film stars and sports personalities as the spokespersons.
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ELM model also considers the importance of consumers thoughts

(referred to as cognitive responses) when they are processing
marketing related messages. According to this thinking, under
conditions of high-involvement, consumers produce thoughts that are
more relevant to messages. For instance, a weight-conscious consumer
who sees an ad of Personal Point Weight Reduction Programme may
think, This looks like quite a promising programme, I think I should
join it. Or, the consumer may think, I dont believe their claims, no
one can lose weight so fast without serious repercussions. In the first
case, the thoughts support the ad message and are called Support
Arguments (SAs). The second type of thinking represents Counter
Arguments (CAs) to the ad message. The presence of such thoughts
indicates that the consumer is processing information in a highinvolvement context.
Under conditions of low-involvement, consumers may react with

thoughts about the models looks, spokespersons voice or dress, or the
background etc., which are all peripheral cues and not related to the
ad message. For example, a consumer who is not interested in weightloss or gain may think, Personal Point is a modern organisation
and they have used a very pretty-looking model. Such favourable
thoughts about the message source are referred to as source bolsters.
On the other hand, the consumer might think, This ad is released
by Personal Point and their aim is to sell this programme, so why
should anyone believe their claims? Such negative thoughts about
the source are called source derogations.
To influence attitudes favourably, the marketer must discourage the
development of counter arguments and encourage support arguments.
To accomplish this, one way is to develop two-sided refutational
messages. For example, Personal Points ad message might say, You

might think that Personal Points programme is not as effective as
claimed, or may have side effects. Well, you have a surprise waiting
for you because the programme is 100% effective and without any
side effects as confirmed by actual users. To reinforce, some names
and addresses and their before and after photographs are presented.
Under low-involvement conditions, marketers may attempt to
discourage source derogators and increase source bolsters. This
can be accomplished by using more attractive, likeable and credible
spokespersons or models to draw attention to the ads. Another
effective way is to use testimonials from independent institutions or
experts.
Post-purchase Attitude Change
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So far we have looked at some of the popular strategies to influence

attitudes, which can be used before the purchase. However, marketers
may also seek to influence attitudes after the purchase as well. Two
theories are more relevant to post-purchase attitude change:
Cognitive dissonance theory
Attribution theory
6.6.3 COGNITIVE DISSONANCE THEORY
Leon Festinger suggested that consumers experience a feeling

of doubt, discomfort, or anxiety after making a relatively highinvolvement purchase decision. These feelings have been referred to
as cognitive dissonance. Purchase decisions, particularly of expensive
items, require some amount of compromise and due to this reason
feelings of dissonance are quite normal; nevertheless, they are likely
to cause uneasiness about the choice made.
The probability that consumers will experience dissonance and the
intensity of this dissonance depends on:
The degree of commitment. If it is easier to alter the decision, the

consumer is less likely to experience dissonance.
The importance of the decision. If the purchase decision is more

important, it is more likely that the consumer will experience
dissonance.
The difficulty of choosing among alternatives. Decision difficulty

depends on the number of alternatives considered, the number
of relevant attributes linked with each alternative, and the extent
to which each alternative possesses the attributes not present in
the other alternatives. If it is difficult to choose from among the
alternatives, it is more likely that the consumer will experience
dissonance.
The individuals personality characteristics. Some individuals

have a greater tendency of experiencing anxiety than others.
If the individual happens to be of nervous type, it is more likely

that she/he would experience dissonance.
Fill in the blanks:

18. The first systematic studies of sensory thresholds were
conducted by physiologist ..........................
19. Changing Brand Evaluations strategy focuses on influencing
.......................... overall brand attitudes without any reference
to specific attributes.
20. Marketers induce consumers to buy a brand that is not
preferred by offering some ...........................
21. Under conditions of low-involvement, consumers use more
....................... in which non-message elements such as music,
colour or spokesperson are more likely to be processed.
22. Under conditions of low-involvement, attitude change can
best be achieved through the use of effective ...........................
23. To influence attitudes .........................., the marketer must
discourage the development of counter arguments and
encourage .......................... arguments.
24. If it is difficult to choose from among the alternatives, it is
more likely that the consumer will experience ...........................
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Pick any online shopping website. Carefully observe its promotional

offers. Mention how an online e-retailer makes an effort to influence
the perception of buyers, without physical touch and feel of the
product.
Our hearing or sight is not as acute as that in some members of the

animal kingdom. If a message is below our sensory threshold it is
just possible that although the message is not perceived consciously
it might be subconsciously.
6.7 CONCEPT OF PERCEPTION

6.7.1 SENSATION
Exposure only requires presence of a stimulus within an individuals
relevant environment. For example, a person is exposed to a
commercial (stimulus) if she/he were in the room when the
commercial was shown, even when the person paid no attention to it
or noticed it. Sensory receptors are human sense organs (eyes, ears,
nose, mouth and skin) involved in receiving sensory inputs. Though
there are numerous stimuli present in our environment, we are

exposed to only an extremely small fraction of them. We are exposed
to a large number of stimuli on a more or less random basis every
day, but most of us deliberately seek exposure to selected stimuli in
a self-selected manner and ignore or avoid others (zapping and
muting of TV commercials, or zipping of pre-recorded videotapes
are good examples of this stimuli avoidance). Obviously, we look for
information that we consider will help us in some way to accomplish
our desired goals.
Sensation is the immediate and direct response of sense organs

to simple stimuli such as an advertisement, a brand name, or a
package etc.
6.7.2 ABSOLUTE THRESHOLD
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At this point, an individual can detect a difference between something

and nothing and this point would be that individuals absolute
threshold for that stimulus. For instance, one individual may sense
the sound pitch at 20 cycles per second and the second individual
may sense the sound pitch at 30 cycles per second. Absolute threshold
for sound in case of these two individuals would be different. Many
individuals ability to discriminate sensory characteristics such as
taste, smell, hearing, or feel is small.
Absolute threshold refers to the lowest level at which an individual

can experience a sensation.
The senses are likely to become increasingly dull under conditions
of constant stimulation and the absolute threshold increases. For
example, if someone drives for half an hour through a corridor of
billboards, it is doubtful that any particular billboard will register any
impression. This is known as adaptation and refers to getting used
to certain sensations.
6.7.3 DIFFERENTIAL THRESHOLD
A German scientist of nineteenth-century, Ernst Weber discovered
that the just noticeable difference between two stimuli was an
amount relative to the intensity of the initial stimulus. To measure
the differential threshold for a stimulus, one commonly changes its
intensity in very small amounts.
Differential threshold is the smallest detectable difference between

two values of the same stimulus. This is also referred to as j.n.d (just
noticeable difference).
An individuals threshold exists when she/he first notices that the

stimulus has changed. The difference between this value and the
starting value is the just noticeable difference. Webers Law (after the
name of the scientist) states that stronger the initial stimulus, greater
the additional intensity needed for the second stimulus to be perceived
as different. For example, if a producer raises the price of its car by
four hundred rupees, probably it would not be noticed because the
increase would fall below j.n.d. The difference in price may become
noticeable if the increase were to be one thousand rupees or more.
To be noticed, an additional level of stimulus equivalent to j.n.d must
be added to make the difference perceptible. Likewise, if the reduction
in price of the same car is ` 400, it again is unlikely to be noticed falling
below the level of j.n.d.
6.7.4 SUBLIMINAL PERCEPTION
People can also perceive stimuli, which are below their level of
conscious awareness. In this situation, the stimuli which are otherwise
too weak or brief to be consciously seen or heard prove strong enough
to be perceived. When the stimulus is below the threshold of awareness
and is perceived, the process is called subliminal perception. This
shows that the threshold of conscious awareness is higher than the
absolute threshold for effective perception.
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Subliminal perception became a topic of hot discussion during late

1950s when it was reported that advertisers could expose consumers
to subliminal messages without their being consciously aware of this.
It was believed that such messages could motivate people to buy
products or act in ways beneficial to advertiser without really being
aware of why they did so. A series of experiments were conducted and
the findings were that individuals could perceive below their level of
conscious awareness but their purchase behaviour was not affected
by subliminal perception.
Subliminal research studies are inconclusive as far as impact of

advertising is concerned. Research on subliminal perception seems
to be based on two theoretical approaches (1) the affect of constant
repetition of very weak stimuli adds up to produce response strength
and (2) subliminal stimuli of a sexual nature arouse unconscious
sexual motivations. Research studies have so far failed to indicate
that any of these theoretical approaches can be put to effective use in
advertising to increase sales.
6.7.5 ATTENTION
Human beings are constantly exposed to numerous stimuli every
minute of the day. This heavy intensity of stimulation to which we
are exposed should serve to confuse us totally but it does not. The
reason is that perception is not a function of sensory input alone. An
important principle of perception is that raw sensory input alone does
not elicit or explain the coherent picture of the world that most adults
possess.
Attention occurs when one or more stimuli activate one or more

sensory receptor nerves and the resulting sensations reach the
brain for further processing.
Perception is the outcome of interaction of physical stimuli from
external environment and an individuals expectations, motives and
learning based on earlier experiences. The interaction of these two
types of very different stimuli creates, for an individual, a very private
and personal picture of the world. Since every individual is unique
because of needs, wants, desires, expectations and experiences, no
two people perceive the world precisely the same way.
6.7.6 PERCEPTUAL SELECTION
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Human beings, subconsciously, are quite selective in their perception.

Everyday we look at so many things, ignore others, and do not even
notice many others. We really perceive only a very small fraction of
stimuli to which we are exposed. In a marketplace, a consumer is
exposed to numerous marketing-related stimuli besides numerous
others. Even then, on a regular basis, consumers visit the market
and make desired purchases without any disorientation or losing
sanity. The reason is that we all unconsciously exercise selectivity in
perception. The selectivity of stimuli depends on consumers previous
experience and motives, besides the nature of stimulus itself. One or
more factors related to experience and motives affect consumers
selective exposure and selective attention at a given time and can
increase or decrease the probability that a certain stimulus will be
perceived.
6.7.7 SELECTIVE EXPOSURE
Exposure occurs when consumers senses are activated by stimulus.

Consumers are attentive to stimuli that are relevant, pleasant, or
towards which they may be sympathetic and ignore unpleasant
and painful ones. For instance, a consumer who is contemplating
the purchase of a scanner is more likely to look for scanner ads and
tobacco users avoid messages that link it with cancer and take note
of those few that deny any relationship. Similarly, consumers readily
expose themselves to ads of products they prefer or admire, or ads
that reinforce their purchase decisions. For example, a consumer who
has bought an expensive Mac computer is more likely to see or read
its advertisements to reassure her/his purchase decision.
6.7.8 SELECTIVE ATTENTION
Attention is the momentary focusing of a consumers cognitive

capacity on a particular stimulus.
Consumers have increased awareness of stimuli that are relevant to

their felt needs or interests and decreased awareness of irrelevant
stimuli. They would readily notice ads of products that they need or
want. Some consumers are price-sensitive, for some quality is more
important and accordingly they pay attention to such ad messages.
Consumers use considerable selectivity in terms of attention they pay
to different stimuli.
6.7.9 ADAPTATION
Because of adaptation, consumers do not notice the stimuli to which
they have become adjusted. For instance, an air-conditioned picture
theatre feels quite cool in the beginning but a short time later we
adapt to temperature and become less aware of it. Consumers
become adapted to advertising messages over time due to boredom
or familiarity. They reduce their attention level to frequently repeated
advertisements and eventually fail to notice them. Because of this
reason marketers introduce attention-getting features in their ad
campaigns and change their advertising.
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Adaptation refers to gradual adjustment to stimuli to which

consumers are exposed for prolonged periods.
The level of adaptation varies among consumers and some get adapted
more quickly than others.
6.7.10 PERCEPTUAL BLOCKING
Consumers are exposed to innumerable stimuli in a typical day. They

protect themselves from being overwhelmed and overburdened by
blocking such numerous stimuli from their conscious awareness. For
instance, consumers screen out enormous amounts of TV advertising
by tuning out.
6.7.11 FIGURE AND GROUND
This is one of the most basic and automatic organisational processes
that perceivers use. People have a tendency to organise their
perceptions into figure and ground relationship. In order to be noticed,
stimuli must contrast with their environment. We notice black against
white and do not notice white in white. Similarly, a sound must be
louder or softer to be noticed. The figure usually appears well-defined,
solid, and perceived more clearly than the ground (background) that
is usually perceived as hazy, indefinite and continuous. The common
line separating the figure and the ground is perceived as belonging to
the figure and not to the ground. This gives greater definition to the
figure.
The application of these findings is important in advertising. The ads
must be planned carefully to ensure that the figure and ground are
perceived the way the advertiser intended. For example, in many
print ads the background is kept white so that the intended product
features can be clearly perceived. Often, white letters are used on a
black background to achieve contrast. In case of commercials, the
background music must not detract from the product message or
jingle. Advertisers, in some cases, deliberately blur the figure and
ground so that consumers search for the advertised product, which is
usually cleverly hidden in the ad.
6.7.12 GROUPING
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The tendency to group stimuli may result as a consequence of

proximity, similarity, or continuity. When an object is associated with
another because of its closeness to that object, it is due to proximity.
Because of their vertical proximity, the 15 dots are seen as three
columns of five dots and not as five rows of three dots. Advertising
often uses this principle by associating a product with positive
symbols and imagery close to the product. In the second case (b),
consumers group 8 rectangles and 4 circles as three sets because they
look similar. Consumers also group stimuli to attain continuity by
grouping stimuli into uninterrupted forms rather than discontinuous
pattern (c). The dots in this figure are more likely to be seen as an
arrow projecting downward than as two columns of dots. Individuals
tendency of grouping makes it easier for their memory and recall.
6.7.13 CLOSURE
Individuals have an inherent tendency to grouping or chunking a

variety of information or items close to each other in time or space
and form a unified picture.
Individuals have a need for closure and fulfill it by organising their

perceptions in a manner that leads to forming a complete picture. In
the event that they are exposed to a pattern of stimuli, which in their
view is incomplete, they tend to perceive it as complete by filling in
the missing pieces. This phenomenon may be the result of conscious
or subconscious efforts. For example, if a portion of a circle is left
incomplete, it is mostly perceived as a complete circle and not an
arc. Because of this need for closure, individuals experience tension
when some task is incomplete and a feeling of satisfaction and relief
develops with its completion.
Fill in the blanks:

25. Though there are numerous ...................... present in our
environment, we are exposed to only an extremely small
...................... of them.
26. ...................... refers to the lowest level at which an individual
Contd...
27. Webers Law states that stronger the initial stimulus, greater
the additional ...................... needed for the second stimulus to
be perceived as .......................
28. People can also perceive stimuli, which are below their level of
...................... awareness.
29. ...................... messages could motivate people to buy products
or act in ways beneficial to advertiser without really being
aware of why they did so.
30. Consumers become adapted to ...................... messages over
time due to boredom or familiarity.
31. The ads must be planned carefully to ensure that the figure and
ground are ...................... the way the advertiser .......................
32. The ...................... to group stimuli may result as a consequence
of proximity, similarity, or continuity.
33. Individuals have a need for ...................... and fulfil it by
organising their perceptions in a manner that leads to forming
a ...................... picture.
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Create one ad and make use of each closure, figure and ground,
subliminal perception and selective exposure principle.
6.8 STAGES IN PERCEPTUAL PROCESS

No consumer forms perception in a single step. Rather, perception is
an outcome process consisting of the following parts:
6.8.1 PRIMITIVE CATEGORIZATION

The basic characteristics of a stimulus are isolated by the person
to form his perception. Thus, anything shining may be seen with
an amount of suspicion by the consumer. This is what is known as
primitive categorization. A slight error of judgment on the part of the
marketer in not appreciating this may lead to a marketing pitfall.
For instance, sample bottles of Sunlight, a dishwashing liquid in the
US market, were mailed to consumers. The liquid contained 10 per
cent lemon juice. Almost 80 people were treated at poison-centers
after drinking some of the detergent. These individuals apparently
assumed that the product was actually lemon juice, since many of the
packaging cues resembled Minute Maid a popular brand of frozen
lemon juice.
6.8.2 CUE CHECK
The cue characteristics are analyzed by the person in preparation for
the selection of a schema. In the context of the sunlight liquid example
quoted above the cue check stage in the perceptual process was the
pairing the yellow bottle with prominent picture of a lemon.
6.8.3 CONFIRMATION CHECK
Once the schema is selected, a confirmation check is run by the
person to see the validity of the schema chosen. In the context of the
continuing example of the Sunlight liquid detergent, a juice schema
was selected instead of a dishwashing liquid schema. The confirmatory
check was the picture of the lemon. Juice, as found on the leading
brand of a reveal lemon juice.
6.8.4 CONFIRMATION COMPLETION
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The last and the final stage is confirmation completion where a

perception is formed by the consumer or any person that matter
and decision is made. The act if drinking the detergent illustrates it.
Unfortunately, the consumers found out their mistake the hard way.
Explain stages of perceptual process a person encounters while

making purchase of durable goods.
6.9 SENSORY SYSTEM AND PERCEPTION
A sensory system is a part of the nervous system responsible for

processing sensory information.
A sensory system consists of sensory receptors, neural pathways, and

parts of the brain involved in sensory perception.
Commonly recognized sensory systems are those for vision, hearing,
somatic sensation (touch), taste, and olfaction (smell).
6.9.1 SOUND
The ear is the organ of hearing. The human ear can perceive
frequencies from 16 cycles per second, which is a very deep bass, to
28,000 cycles per second, which is a very high pitch. Bats and dolphins
can detect frequencies higher than 100,000 cycles per second. The
human ear can detect pitch changes as small as 3 hundredths of one
percent of the original frequency in some frequency ranges. Some
people have perfect pitch, which is the ability to map a tone precisely
on the musical scale without reference to an external standard. It
is estimated that less than one in ten thousand people have perfect
pitch, but speakers of tonal languages like Vietnamese and Mandarin
show remarkably precise absolute pitch in reading out lists of words
because pitch is an essential feature in conveying the meaning of
words in tone languages. The Eguchi Method teaches perfect pitch to
children starting before they are 4 years old. After age 7, the ability to
recognize notes does not improve much.
6.9.2 SMELL
The nose is the organ responsible for the sense of smell. The smell
receptors are sensitive to seven types of sensations that can be
characterized as camphor, musk, flower, mint, ether, acrid, or putrid.
The sense of smell is sometimes temporarily lost when a person has
a cold. Dogs have a sense of smell that is many times more sensitive
than mans.
6.9.3 VISION
The eye is the organ of vision. It has a complex structure consisting
of a transparent lens that focuses light on the retina. The brain
combines the input of our two eyes into a single three-dimensional
image. In addition, even though the image on the retina is upsidedown because of the focusing action of the lens, the brain compensates
and provides the right-side-up perception. The range of perception of
the eye is phenomenal. In the dark, a substance produced by the rod
cells increases the sensitivity of the eye so that it is possible to detect
very dim light. In strong light, the iris contracts reducing the size of
the aperture that admits light into the eye and a protective obscure
substance reduces the exposure of the light-sensitive cells.
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6.9.4 TOUCH
The sense of touch is distributed throughout the body. Nerve endings

in the skin and other parts of the body transmit sensations to the
brain. Some parts of the body have a larger number of nerve endings
and, therefore, are more sensitive. Four kinds of touch sensations can
be identified: cold, heat, contact, and pain. Hairs on the skin magnify
the sensitivity and act as an early warning system for the body. The
fingertips and the sexual organs have the greatest concentration of
nerve endings.
6.9.5 TASTE
The receptors for taste, called taste buds, are situated chiefly in the
tongue, but they are also located in the roof of the mouth and near the
pharynx. They are able to detect four basic tastes: salty, sweet, bitter,
and sour. The tongue also can detect a sensation called umami from
taste receptors sensitive to amino acids. Generally, the taste buds close
to the tip of the tongue are sensitive to sweet tastes, whereas those in
the back of the tongue are sensitive to bitter tastes. The taste buds on
top and on the side of the tongue are sensitive to salty and sour tastes.
At the base of each taste bud there is a nerve that sends the sensations
to the brain. The sense of taste functions in coordination with the
sense of smell. The number of taste buds varies substantially from
individual to individual, but greater numbers increase sensitivity.
Women, in general, have a greater number of taste buds than men.
Fill in the blanks:

34. A sensory system consists of sensory .................., neural
................., and parts of the brain involved in sensory perception.
35. The human ear can perceive frequencies from ..................
cycles per second to .................. cycles per second.
36. In the dark, a substance produced by the .................. cells
increases the sensitivity of the eye so that it is possible to
detect very dim light.
37. Hairs on the skin magnify the .................. and act as an early
warning system for the body.
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With respect to sensory organs, mention the role of each of them

in influencing perception of a consumer planning to opt for a fine
dining restaurant.
6.10 INTERPRETATION OF STIMULI
Individuals, in their own unique manner, interpret the stimuli. As

the old saying goes, a person sees what he/she expects to see,
Interpretation of stimuli by individuals is based on their earlier
experiences, plausible explanations they can assign, their motives,
beliefs and interests at the time of perception.
Perceptual interpretation refers to assigning of meaning to

sensations.
For a number of reasons, stimuli can often be weak or strong and
may prove to be quite ambiguous to individuals. For example, brief
exposure, poor visibility, changing levels of illumination, low pitch,
high noise level, or constant fluctuations can create difficulties in
interpreting the stimuli.
6.10.1 PHYSICAL APPERANCE
People may or may not consciously recognise that they tend to attribute
the qualities, which in their opinion are associated with certain
individuals, to others who may resemble those persons. According
to Kathleen Debevec and Jerome B Kernan, research indicates that
attractive looking men are perceived as more successful in business
than average looking men. Attractive models in ads and commercials
prove more persuasive and have a more positive impact on consumer
attitudes and behaviour than average looking models. This has
important implications in selecting the models for ads or commercials,

as it may be the key factor in their ability to be persuasive.
6.10.2 STEREOTYPING
People tend to form pictures in their minds of the meanings of
different types of stimuli. This stereotyping the stimuli helps them
develop expectations about how specific events, people, or situations
will turn out to be. For example, many people carry the picture of
politicians or police behaviour in their minds.
6.10.3 FIRST IMPRESSION
First impressions are often lasting even when the perceiver is
not exposed to sufficient relevant or predictive information. For
instance, just a few years ago, the word imported was enough for
a large number of consumers to form favourable impressions about
many products such as wristwatches, shoes, clothes and many other
different products.
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6.10.4 HALO EFFECT
This refers to a tendency to evaluate one attribute or aspect of

stimulus to distort reactions to its other attributes or properties.
This is frequently seen in case of brand or line extensions where the
marketer takes advantage of a brands reputation.
Example: Dettol soap, Lux shampoo and Ponds soap etc.
Fill in the blanks:

38. .................. are often lasting even when the perceiver is not
exposed to sufficient relevant or predictive information.
39. .................. refers to a tendency to evaluate one attribute or
aspect of stimulus to distort reactions to its other attributes or
properties.
40. Consumers like to be thought of as objective or rational in their
.................. of products and believe that their product choices
are based on ...................
Mention the role of Halo effect and stereotyping for brands which
plan further promotion or launch of products.
6.11
ERCEIVED PRODUCT AND SERVICE

P
QUALITY
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Consumers often tend to assess the quality of a product or service on

the basis of different types of information they relate with the product
or service. Intrinsic cues (cues are stimuli that direct motives) relate to
the physical attributes of the product such as the size, colour, or smell
etc, which are sometimes used to judge the quality of a product. For
example, quality of perfumes is often judged on the basis of fragrance,
physical appearance of the container, packaging and its colour. Many
detergent powders and cakes are traditionally coloured blue to
influence the perceived quality because consumers associate bluing
with brightening and whitening their laundry. Consumers like to be
thought of as objective or rational in their assessment of products and
believe that their product choices are based on intrinsic cues. It is a
different matter that quite often the physical attributes considered to
judge the quality have no intrinsic relationship with product quality.
For example, consumers who claim that one brand of soft drink is
tastier than the other often fail in blind taste tests. According to
Michael J. McCarthy, consumers often fail to differentiate among
different cola drinks and actually base their preference on extrinsic
cues such as advertising, pricing, packaging or even group pressure.
6.11.1 PRICE PERCEPTIONS
Whether a consumer perceives the price of a product or service as

high, low, or fair has significant influence on buying intentions and
post-purchase satisfaction. There is considerable evidence to suggest
that the meaning of price variable for consumers is quite complex. For
example, seeing the explosive growth of cheap ballpoint pens, Parker
Pen repositioned its pens based on price during the 1980s and offered
low-priced pens. The results were nothing but disastrous because
the Parkers image was inconsistent with its price. The company in
1989 reverted back to its strength of high-priced pens and became
profitable again.
Consumers have certain expectations of what the price is or

should be of a product or service.
Their expectations may or may not reflect the actual price of the
product or service.
Consumers often associate the price of a product or service with

quality.
Consumers consider differential pricing used by some marketers to

benefit certain classes of consumers such as club members, senior
citizens, women etc., for which they are not eligible, as unfair. We
certainly feel unhappy to learn that others are paying half the price
for the same service or product. Marielza Martins and Kent B. Monroe
have reported that price unfairness affects consumer perceptions of
product value and purchase intentions and reducing perceptions of
price unfairness increases products perceived value.
6.12 CONSUMERS RISK PERCEPTION

Whenever consumers make decisions to purchase any new brands,
there is an element of uncertainty about the consequences and a
perception of risk is involved in most such purchases. Risk perception
can be defined as the consumers perceptions of uncertainty that they
face when they are unable to foresee various consequences of their
purchase decisions. The relevant risk dimensions are the uncertainty
and the consequences. It is worth noting that the influence of risk
depends on individuals perception. This means that the risk actually
may or may not exist and even if a real risk exists but is not perceived,
it will not influence consumer behaviour.
Several situations may influence the consumers perception of
uncertainty or consequences. For example, there may be uncertainty
regarding buying goals, uncertainty about alternatives, or uncertainty
about perceived possible undesirable consequences.
Consumers may face several different types of risks in making
purchase decisions. The major ones are:
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Financial or monetary risk is the risk that the product will not be
worth its cost. Expensive products and services are most subject
to this risk.
Performance risk, which is associated with the possibility that

the product will not perform as anticipated or may even fail. The
consumer wastes time in getting it repaired, or replaced. The
risk is greatest when the product is technically complex.
Example: An expensive computer.
Physical risk refers to bodily harm to self and others due to

product usage. For example, food and beverages, electrical or
mechanical appliances, or medical services etc. can sometimes
prove risky. When cooking gas (LPG) was first introduced in
India, consumers physical risk perception about it was high.
Similarly, some consumers consider the use of pressure cooker
as risky.
Social risk, which means that a poor product purchase may not
meet the standards of an important reference group and may
result in social embarrassment.
Example: Clothes, jewelry, carpet, or car etc.
Psychological risk relates to loss of self-esteem or self-image as a

result of poor choice and making her/him feel stupid.
Example: High-involvement category products or services.

The degree of risk perception among consumers varies and depends
upon the person, product, situation and the culture. Some consumers
who are high-risk perceivers or risk avoiders, limit their product
choices to a limited number of safe alternatives to avoid risking a poor
selection. More often than not, they stay brand loyal to avoid risk.
Consumers who are low-risk perceivers or risk takers tend to consider

their choices from a wider range of available product alternatives.
They are prepared to risk poor selection instead of not considering
several alternatives from which they can make a selection. They are
more likely to buy new products before they are well established.
Risk takers are often higher-income consumers, having upward social
mobility and show personality traits such as need for achievement,
dominance and change.
Fill in the blanks:

41. Consumers often associate the price of a product or service
with .....................
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42. Risk perception can be defined as the consumers .....................

of uncertainty that they face when they are unable to foresee
various consequences of their purchase ......................
43. Social risk, which means that a poor product purchase may
not meet the ..................... of an important reference group and
may result in social ......................
Interview any 10 friends of yours and analyse what risk they might
perceive before buying a newly launched brand of mobile phone,
having exceptional features and superior quality.
6.13 SUMMARY
Attitudes are learnt predispositions and represent an enduring

organisation of motivational, emotional, perceptual, and cognitive
processes with respect to some aspect of our environment.
The three components of attitude generally tend to be consistent

with each other.
Multi-attribute attitude models propose that consumers

attitudes about an attitude object is a function of perception and
assessment of important attributes or beliefs held about a certain
attitude object.
Attitudes perform several functions. Utilitarian function serves

consumers in accomplishing desired benefits; value-expressive
function serves to reflect the consumers self-image, values,
and outlook; ego-defensive function helps protect ones ego or
self-image from anxieties and threats; and knowledge function
serves to organise information and reduces uncertainty and
confusion for individuals.
Perception consists of those activities by which an individual

acquires and assigns meaning to stimuli.
Reality to an individual is that individuals perception. It begins

with the exposure, which occurs when a stimulus comes within
range of one of our primary sensory receptors.
Individuals are exposed to only a small fraction of the available

stimuli, and this is usually the result of self-selection.
Sensation is the immediate and direct response of sense organs.

Sensitivity to stimuli varies among individuals and depends on
the quality of sensory receptors.
Absolute threshold refers to the lowest level at which an individual

Differential threshold is the smallest detectable difference

between two values of the same stimulus and is referred to as
j.n.d (just noticeable difference).
Attention occurs when the stimulus activates one or more of the

sensory receptors and the resulting sensations reach the brain
for processing.
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Individuals selectively attend to only those stimuli that physically

attract them (stimulus factors) or personally interest them
(individual factors). Stimulus factors are physical characteristics
of the stimulus itself, such as contrast, size, intensity, colour,
movement, and position etc.
Marketers are particularly interested in how consumers

differentiate between brands, how they interpret images, what
type of risks they perceive, and how they deal with risk.
Attitude: An expression of favor or disfavor toward a person,

place, thing, or event (the attitude object).
Behaviour: The range of actions and mannerisms made by

organisms, systems, or artificial entities in conjunction with
themselves or their environment, which includes the other
systems or organisms around as well as the (inanimate)
physical environment.
Perception: The process by which people translate sensory

impressions into a coherent and unified view of the world
around them.
Sensation: Stages of processing of the senses in human and

animal systems, such as vision, auditory, vestibular, and pain
senses.
Threshold: Boundary beyond which a radically different state

of affairs exists.
Stimuli: A detectable change in the internal or external

environment.

1. Define attitude. How does consumer attitude affect marketers?
2. Mention and describe the constituents which form attitude.
3. Give clear point of distinction between ego-defensive and
value-expressive function of attitude.
4. Elaborate Tri-component model of attitude formation.
5. Enumerate theory of reasoned action model in detail.
6. Describe various attitude change strategies as per multi-attribute
model.
7. What is the role of central and peripheral route of persuasion in
elaborate likelihood model?
9. Write short note on:
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8. Give detailed account of description of cognitive dissonance

along with an example.
(a) Subliminal perception
(b) Perceptual selection
(c) Adaptation
10. Mention a clear distinction between differential and absolute

threshold.
11. Why is closure a significant concept of perception for marketers?
12. What is figure and ground principle? How is it relevant for

marketers?
13. Explain the human sensory system in brief.
14. How do intrinsic cues influence perceived product and service
quality?
15. Describe various risks assumed by the consumer before making
any purchase.

Topics
Introduction
Constituents of
Consumer Attitude
Q. No.
1.
2.
3.
4.
Answers
predispositions; unfavourable
consistent; unchangeable
Beliefs; knowledge
behavioural
5.
neutral; situation
Contd...
Functional Theory of
Attitude
Attitude Models
Sensory Threshold
6.
True
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
True
False
False
True
False
subjective
multi-dimensional;
one-dimensional
Fishbein; attitude
subjective
Normative
behavioural; contemplated
Ernst Weber
consumers
concession
peripheral route
spokesperson
favourably; support
dissonance
stimuli, fraction
26.
27.
28.
29.
30.
31.
32.
33.
34.
Absolute threshold
intensity ; different
conscious
Subliminal
advertising
perceived; intended
tendency
closure; complete
receptors; pathways
35.
36.
37.
38.
16; 28,000
rod
sensitivity
First impressions
39.
Halo effect
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Concept of
Perception
Sensory System and

Perception
Interpretation of
Stimuli
Contd...
Consumers Risk
Perception
40.
41.
assessment; intrinsic cues

quality
42.
43.
perceptions; decisions
standards; embarrassment

1.
Refer 6.1
Attitudes are learned predispositions to respond to an object or

class of objects in a consistently favourable or unfavourable way.
2. Refer 6.3
Consumer attitudes are a composite of a consumers (1) beliefs
about, (2) feelings about, (3) and behavioural intentions toward
some object within the context of marketing.
3. Refer 6.4.2 & 6.4.3

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Attitudes reflect the consumers self-image, values and outlook,

particularly in a high-involvement product. Attitudes formed to
protect the ego, or self-image, from anxieties and threats help
fulfill this function.
4. Refer 6.5.1
According to this model, attitudes consist of three main

components:
Cognitive component (knowledge, beliefs)
Affective component (emotions, feelings)
Conative component (behavioural aspect)
5. Refer 6.5.4

Theory of Reasoned Action theory assumes that consumers

consciously consider the consequences of the alternative
behaviours being contemplated and choose the one that leads to
the most desirable consequences.
6. Refer 6.6.1

On the basis of Fishbeins multi-attribute model, four strategies

can be considered to change attitudes:
By changing the values consumers place on product attributes

(ei component in the model)
By changing consumers brand beliefs (bi component in the

model)
By changing brand evaluations (Attitude component)
By changing behavioural intentions (Attitude)
7. Refer 6.6.2

Under conditions of high-involvement, consumers process

information through a central route.
8. Refer 6.6.3

Consumers experience a feeling of doubt, discomfort, or anxiety

after making a relatively high-involvement purchase decision.
9. Refer 6.7
10. Refer 6.7.2 & 6.7.3
11. Refer 6.7.13

In the event that they are exposed to a pattern of stimuli, which

in their view is incomplete, they tend to perceive it as complete
by filling in the missing pieces.
12. Refer 6.7.11

In order to be noticed, stimuli must contrast with their

environment. We notice black against white and do not notice
white in white.
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13. Refer 6.9

Commonly recognized sensory systems are those for vision,

hearing, somatic sensation (touch), taste, and olfaction (smell).
14. Refer 6.11

Intrinsic cues (cues are stimuli that direct motives) relate to the
physical attributes of the product such as the size, colour, or smell
etc, which are sometimes used to judge the quality of a product.
15. Refer 6.12

Financial risk
Performance risk
Physical risk
Social risk
Psychological risk
6.16 SUGGESTED READING FOR REFERENCE

SUGGESTED READINGS



Education
E-REFERENCES
www.iimrohtak.ac.in/wp-content/uploads/2011/05/JJRC710.pdf
umu.diva-portal.org/smash/get/diva2:553342/FULLTEXT01.pdf
http://www.icpsr.umich.edu/icpsrweb/ICPSR/studies/32453
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CONSUMER IN SOCIAL AND CULTURAL SETTING
CONTENTS
7.1
Concept and Characteristics of Culture
7.2
Cross-cultural Analysis
7.3
Aspects of Sub-cultures
7.4
Family Life Cycle Stages
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7.4.1
Nature of Influence
7.4.2
Type of Influence
7.4.3
Nature of Household or Family Purchase
7.5
Rural versus Urban Consumer Behaviour
7.6
Opinion Leaders
7.6.1
7.7
Marketing Implications of Opinion Leaders
Reference Groups
7.7.1
Types of Reference Groups
7.7.2
Reference Group Influences on Consumers
7.8
Diffusion of Innovation
7.8.1
Diffusion Process
7.8.2
Culture and Diffusion of Innovation
7.9
Culture/Sub-cultures Impact on 7 Ps of Product/Service
7.10
Summary
7.11
7.12
Answers and Hints
7.13
INDIAS MIDDLE CLASS
The growing middle class in India and their consumption pattern
has drawn global attention not only because India is a large market
but it is also different from other emerging markets. A large
proportion of Indias GDP is consumed. The share of consumption
in total GDP is higher than that of investment. According to the
Central Statistical Organisation (CSO) estimates, 60 percent of
the GDP was consumed in 2010 which is much higher than that in
China. In India, the majority of the consumption expenditure is on
food compared to other countries. However, this pattern is likely to
change in the future. With the rise in income there will be a shift in
Indian population from low-income to middle-income and middle
class will spend less on food than the low-income group.
The consumption pattern in India in 2025 is likely to be different
from 2005. This class will be able to and willing to spend on
healthcare, education, recreation, personal products and services.
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A recent survey conducted by the Boao Review Magazine across

nine cities in Asia including New Delhi, India, found that the
consumption pattern of middle class in large cities in India is not
widely different from their global counterparts of other Asian
cities, especially with respect to spending on food.
The growing Indian middle class and their consumption will
drive the consumer goods market in the future. For instance,
commodities such as cars and air-conditioners, which were in the
past considered as luxury items, are now considered as necessities.
In fact, small car ownership in India has shown a double-digit
growth. It has grown at a compound annual growth rate of
12.7 percent for the period 2004-05 to 2010-11.
With the growth of the middle class, a number of Indians have

upgraded from owning two wheelers and using public transport
to owning small cars. Due to the high demand in this segment a
number of international and Indian manufacturers such as Nissan,
Renault and Tata motors have forayed into the small car segment.
This challenge is further propelled by the fact that the Indian
middle class is not a homogenous group. There are regional
differences in branded and non-branded products and willingness
to pay for such products. Indian consumers in cities like Kolkata
and Chennai prefer Indian brands and mid-price ranges for
products like shoes and handbags while those in cities like Mumbai
and Delhi prefer high-end/luxury brands or unbranded products.
In future, the rise of the middle class and their consumption pattern
is expected to bring noticeable changes in the Indian economy.
Rise in per capita income of the growing middle class will further
propel urbanization.
CONSUMER IN SOCIAL AND CULTURAL SETTING 167

Learn characteristics of culture
Understand more about cross-cultural analysis and aspects
of sub-cultures
Find the distinction between rural and urban consumers
Discuss about reference groups, family life cycle stages,
opinion leaders and diffusion of innovation
Know more about culture/sub-culture and its impact on 7 Ps
of product/services
7.1
ONCEPT AND CHARACTERISTICS OF

C
CULTURE
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How does culture affect the needs we recognize?

Culture is crucial when it comes to understanding the needs and
behaviors of an individual.
For a brand, it is important to understand and take into account the
cultural factors inherent to each market or to each situation in order
to adapt its product and its marketing strategy. As these will play a
role in the perception, habits, behavior or expectations of consumers.
Consumer behavior is largely dependent on cultural factors consisting

of mutually shared operating procedures, unstated assumptions, tools,
norms, and values, standards for perceiving, believing, evaluating,
and communicating.
Cultural factors vary by country but become increasingly complex
when people immigrate to foreign countries that have different
cultural dimensions. In these situations, people are subjected to a
wide variety of cultural reference groups that ultimately affect their
purchase behavior. In addition, reference groups may consist of
familiar groups or external peer groups with each group providing
specific and often conflicting information that affects purchase and
consumption behaviour.
Below mentioned are certain specific characteristics, which defines a
culture and its attributes:
Culture is invented: It cannot be viewed as something that just

exists and is waiting to be discovered. People are responsible
for inventing their culture and this invention consists of three
interdependent components:
Ideological component refers to ideas, beliefs, values and

approaches to defining what is right and wrong, or desirable
and undesirable.
Technological component is concerned with the skills,

arts and crafts that provide humans with the means to
produce goods by using what is available to them in their
environment.
Organisational component enables humans to live in the

family system and makes it possible to coordinate their
behaviour effectively with others actions.
Culture is learnt: It is not like biological features or instinctive.

The process of learning cultural values begins early in life largely
through social interactions among families, friends, in settings
such as educational and religious institutions. Growing children
are firmly indoctrinated with ways of behaving, thinking, and
feeling. Some of the core cultural values that have been passed
down through generations in India are belief in God, respecting
elders, domination of the husband, being polite to ladies,
accepting arranged marriage, viewing marriage as a union
between two families and living in joint families etc.
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Culture is shared by a fairly large group of human beings living

in organised societies and works as a linking force. Generally,
a common religion and language are the critical elements that
largely help people share values, customs, norms and experiences.
We observe that the American pop culture is being shared by

a large number of other countries through the availability of
several products such as Coca Cola, McDonalds burgers, Levis
jeans, movies, and music etc.
Culture satisfies needs: Its components are passed down through

generations because they are gratifying. Culture offers order,
direction and guides societies in all phases of life by providing
tried and trusted ways of meeting physiological, personal, and
social needs and due to these reasons people feel comfortable in
doing things in the customary way. Cultural values and customs
etc. are followed as long as they keep on offering satisfaction,
even when we are exposed to other cultures.
Though advertising is considered an important agent in bringing

about social change, from marketers point of view an important
mission of advertising is to reinforce established cultural values
and aiding in the development of new tastes, habits, and customs.
Cultures are similar but different: There are certain similarities

among all cultures and many elements are present in all societies
such as athletic sports, adornment of body, cooking of food,
a calendar, family, government, language, religious rituals,
dancing, music and many other elements. There are, though, very
significant variations in the nature of these elements in different
societies and may exhibit important differences in consumer
behaviour.
7.2 CROSS-CULTURAL ANALYSIS

The theme of cultural influences in a given country has two variations.
Cross-cultural influences are norms and values of consumers in foreign
markets that influence strategies of multinational organisations
marketing their products and services abroad. The second variation
refers to sub-cultural influences that concern differences in values
among different groups within a country that distinguish them from
society as a whole.
In its international operations, Levi Strauss closely follows both
cross-cultural and sub-cultural trends. The basic principle it follows
is think globally but act locally.
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The company recognizes that tastes in fashion, music, and technology

etc. are becoming increasingly similar across most countries of the
world because of global reach of media such as MTV, the Internet and
greater facilities for travel. There seems to be increasing influence of
American culture on consumption vales as more and more consumers
are shifting their preferences for American goods.
Multinational corporations such as Proctor & Gamble, Pepsi, Coca
Cola, IBM, Gillette, Johnson and Johnson, Kelloggs, ColgatePalmolive, Nestle, Canon, Epson, Honda, Suzuki and many others
earn large revenues abroad. As more foreign markets emerge and
offer opportunities for growth, marketing in foreign countries is likely
to increase in importance.
Marketing across cultural boundaries is a difficult and challenging

task because cultures may differ in demographics, languages, values
and non-verbal communications. When managers venture abroad,
they experience a series of psychological jolts when they face new
customs, value systems, attitudes, and behaviours. This often reduces
their effectiveness in foreign business environments.
Cross-cultural analysis helps marketers determine to what extent
the consumers of two or more nations are similar or different. The
greater the similarity between consumers, the more feasible it is to
use relatively similar strategies in each country. In case the crosscultural analysis reveals that there are wide cultural differences, then
a highly individualised marketing strategy may be indicated for each
country.
A study reported by Rosabeth Moss Kanter of almost 12,000
managers around the world (Transcending Business Boundaries:
12,000 World managers View Change, Harvard Business Review 69,
May-June 1991) found that although in every country, culture and
corporation changes were occurring, there is still no common culture
of management. In fact, the views of managers tend to relate more to
their own countrys culture and less to its geographic location.
Some experts argue that marketing strategies, particularly advertising,

should be standardised because this can result in substantial cost
savings. The differences in cultural values across countries make
it difficult and a risky proposition. An ad for a beauty care product
showing a model wearing a short dress with very low neckline may be
appealing in most Western cultures but would be probably banned in
most Muslim cultures.
Fill in the blanks:

1. ....................... component refers to ideas, beliefs, values and
approaches to defining what is right and wrong, or desirable
and undesirable.
2. The process of learning cultural values begins early in life
largely through ....................... among families, friends, in
settings such as educational and religious institutions.
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3. Culture offers order, direction and guides societies in all

phases of life by providing tried and trusted ways of meeting
.................., personal, and social needs and due to these reasons
people feel comfortable in doing things in the .................. way.
4.
....................... influences are norms and values of consumers

in foreign markets that influence strategies of multinational
organisations marketing their products and services
........................
5. Marketing across cultural boundaries is a difficult and

....................... task because cultures may differ in demographics,
languages, values and ....................... communications.
Recall a historical or religious serial that was shown on television.

Describe how the serial transmitted cultural and sub-cultural
beliefs, values and customs.
While an increasing number of educated and employed urban

males and females express preferences for the modern lifestyle as a
general concept, attitudes and behaviours towards specific aspects
of that lifestyle remain strongly conservative. In most Eastern
cultures, the traditional role of women is somewhat strongly held.
7.3 ASPECTS OF SUB-CULTURES

A culture is viewed to consist of basic behavioural patterns that exist in
a society. Within this national culture, all segments of a society do not
possess the same cultural patterns and one can distinguish relatively
more homogenous and sizable groups within the larger society. They
will have distinct beliefs, values, customs and traditions that set them
apart from the larger cultural mainstream, though they follow most
of the dominant cultural values and behaviours of the larger society.
The influence of sub-culture on consumer behaviour depends on
factors such as sub-cultural distinctiveness, sub-cultural homogeneity,
and sub-cultural exclusion.
Sub-cultural distinctiveness: When a sub-culture strives harder
to maintain a separate identity, its potential influence is more.
For example, Indians settled in many countries have maintained
their language and religious practices as a means of cultural
identity.
Sub-cultural homogeneity: A sub-culture with homogeneous

values is more likely to exert influence on its members. For
example, Hindus, Muslims and Sikhs of Indian origin appear
to be members of separate sub-cultures. However, the common
thread among all of these groups is that they have strong family
ties, are basically religious, mostly conservative, have a common
language (some Indian language), celebrate their festivals and
are male-dominated.
Sub-cultural exclusion: At times sub-cultures are excluded

by society. Exclusion tends to strengthen the influence of subculture and encourages the maintenance of sub-cultural norms
and values. Even today, in India, scheduled castes are excluded
from upper caste society. There are different tribal groups in
India with distinct norms, customs and values and excluded by
larger society. Afro-Americans have, at times been excluded from
a white dominant society through the denial of education and job
opportunities.
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Sub-cultures may be based on religion, region, language, age, gender

and many other differences. As in most other countries, one may easily
notice several sub-cultures in India. For example, based on geographic
location it is possible to broadly identify North Indian, South India,
East Indian and West Indian sub-cultures. However, the diversity
of sub-cultures in India is mind-boggling and in every geographic
division one can identify several sub-cultures. For example, North
India has Punjabi, Kashmiri and Hindi belt cultures, besides others.
Religion serves another parameter to distinguish sub-cultures in
India such as Hindu, Muslim, Sikh, Christian, Buddhist and join etc.
Even these religious sub-cultures have further sub-cultures within,
such as Arya Samaji, Sanatan Dharmi; Sunni, Shia; Protestant and
Catholic etc.

6. When a sub-culture strives harder to maintain a separate
identity, its potential influence is less.
7. Even today, in India, scheduled castes are excluded from
upper caste society.
8. A sub-culture with heterogeneous values is more likely to
exert influence on its members.
9. The diversity of sub-cultures in India is mind-boggling
and in every geographic division one can identify several
sub-cultures.
Select any sub-culture in India of your choice and interview some

members to find out their attitudes towards foreign made products.
What in your view are the implications for companies marketing
these products?
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Religious groups can be regarded as sub-cultures because of

traditions and customs that are tied to their beliefs and passed on
from one generation to the next.
7.4 FAMILY LIFE CYCLE STAGES
The concept of household or family life cycle is important for marketers

in segmenting the market. In 1966, William Wells and George Gubar
proposed eight stages to describe the family life cycle (Life Cycle
Concept in Marketing Research, Journal of Marketing Research,
November 1966). The following life cycle stages are typical of families:
The bachelor stage: Young, single persons under the age of

35 years. Incomes are generally low since they have started
careers, but they may have few financial burdens and sufficient
discretionary income.
Newly married: Young couples, no children. If both spouses are

employed, they will have high levels of discretionary income.
Full nest I: Young married couples with youngest child under

6 years of age. There would be greater squeeze on income
because of increased expenses on childcare. However, if they are
members of a joint family, the level of discretionary income is
likely to be high.
Full nest II: Young married couples with children from 6 years
to 12 years of age. Better financial position because income of
both parents is rising. Children spend more hours outside their

parents influence.
Full nest III: Older married couples with dependent teenage
children living at home. Financial position of the family continues
to improve. There are increasing costs of college education for
children.
Empty nest I: Older married couples with no children living with

them, parents still employed. Reduced expenses result in greater
savings and highest discretionary income.
Empty nest II: Older married couples with no children living

with them and parents retired. Drop in income and couple relies
on savings and fixed income from retirement benefits.
Solitary survivor I: Older single persons with low income and

increasing medical needs (widow or widower).
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Source: http://3.bp.blogspot.com/-We_PZZswAd0/UF94aiJvd_I/AAAAAAAAAD0/DRK4yHM7V
Y0/s1600/lifecycle.png
Figure 7.1: Family Life Cycle Stages

7.4.1 NATURE OF INFLUENCE
The differentiation of roles is believed to result from small group
interaction. Leaders that emerge take up either instrumental roles or
expressive roles. Leaders taking up instrumental roles are concerned
with tasks that help the group take decisions about its basic purpose
or goal (also called functional or task leaders). For example, decisions
on budgets, timing and product specifications would be task-oriented.
Leaders with expressive roles facilitate expression of group norms
and provide the group with social and emotional support in order to
maintain intra-group cohesion such as design, colour and style, reflect
group norms.
Historically, the instrumental role within the family has typically been
associated with husband and expressive role with wife. Thus, men
tend to be task-oriented leaders, while women lead in social-emotional
behaviour. Husbands tend to be more concerned with functional
product attributes and are inclined to exert more influence on the
purchase decision. The wife is more concerned with the aesthetic
aspects of products and suggesting the purchase.
These historical roles are undergoing some degree of change and
instrumental as well as expressive roles are becoming increasingly
intermingled between husband and wife as more wives are taking
up employment. Working wives tend to be less inclined to accept
traditional homemaking tasks associated with expressive roles. Robert
Ferber and Lucy Chao Lee (Husband-Wife Influence in Family
Purchasing behaviour, Journal of Consumer Research 1, June 1974)
have suggested that wife may be just as likely as the husband to fulfil
certain instrumental roles such as payment of bills and keeping track
of other family expenditures. This is an instrumental rather than
expressive role as it concerns budgetary aspects.
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7.4.2 TYPE OF INFLUENCE

Parent-child Influences
Children are playing an increasingly important part in family decisionmaking. No sooner do they posses the basic communication skills
needed to interact with parents and other family members, they start
their I want this campaign. In the context of consumer behaviour,
parent-child relationship is viewed as a situation of influence and
yield. Children strive to influence parents to buy something and
parents yield to their demand.
Older children with greater media exposure are more likely to directly
influence decisions concerning purchase of food items, personal care
and beauty products, TV, stereo and computer etc. Dual-income
households foster greater self-reliance among children. As a result of
this, they are likely to influence decisions for products that the whole
family consumes.
Consumer Socialisation of Children
The family provides the basic framework in which consumer
socialisation takes place. Television may also be instrumental in
exerting persuasive influence on what children see and how they
react to certain brands. Scott Ward has defined consumer socialisation
as the process by which young people acquire skills, knowledge
and attitudes relevant to their functioning as consumers in the
marketplace. Learning is a lifelong process and includes acquisition
of consumption-related knowledge as well. The quantity and nature of
what children learn before they are about 18 years of age is important.
Consumer learning can be usefully categorised as directly relevant and
indirectly relevant. Directly relevant learning refers to those aspects
that lead to actual purchase and use. For example, a child has to learn
certain skills such as how to shop, compare brands and budget the
available money etc. Examples of directly relevant consumer learning
content are: knowledge and attitude about shops or stores, products,
brands, advertising, salespeople and various sales promotions etc.
Indirectly relevant consumer learning content includes everything
that motivates people to want certain products or services and
influence buying and use behaviour. For instance, they may have
learned that Nike is a valued brand name and may respond favourably
to products that carry this brand name. This information alone about
Nike is not necessary for precipitating directly relevant behaviour
(actual buying), but it is certainly important in influencing indirectly
relevant behaviour (deciding to purchase and what to purchase).
Parents Role in Consumer Socialisation
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Les Carlson and Sanford Grossbart have identified four types of

parents in their study of parents role in childrens socialisation.
Authoritarian Parents: Such parents tend to exercise a high
degree of control over their children and expect total obedience
from them. They attempt to protect children from outside
influences.
Neglecting Parents: Parents of this type do not show much

concern for their children and neglect them. They show little
concern in controlling the children or encouraging their
capabilities.
Democratic Parents: Parents with this approach encourage a

balance between their own and childrens rights and encourage
childrens self-expression. They are warm and supportive; expect
mature behaviour from children and value autonomy. If needed,
democratic parents take steps to maintain discipline in children.
Permissive Parents: Such parents believe in as much freedom

as possible for children without putting their safety in jeopardy.
Their thinking is that children have rights equal to adults, but
unlike adults, have no responsibilities.
7.4.3 NATURE OF HOUSEHOLD OR FAMILY PURCHASE

Much depends on income limitations coupled with family
responsibilities. These two factors influence many of the buying
decisions of families. As already pointed out, young bachelors as well as
newly married young couples (assuming that both are employed) are
quite likely to have significant discretionary income. Young bachelors
are more likely to spend money on clothes and entertainment etc.,
while newly married couples will spend more on furnishings, timesaving home appliances, TV and music system etc. as they are
establishing their new household. The pattern of purchases will
change when they are blessed with children, wife may leave her job
and their level of discretionary income will fall. During the next two
stages (Full Nest II and Full Nest III), the household financial position
improves because husband draws a higher salary and wife returns to
work, the children and teens are in school and consumption patterns
are heavily influenced by the requirements of children. The family
replaces many household items and also buys new appliances.
During the stage of Empty Nest, the discretionary income of parents
increases and they can afford to spend money on themselves such
as luxury items and travel etc. In the later stages of Empty Nest and
Solitary Survivor, parents are retired resulting in decreased income
and increasing expenditures on medical bills.
In case of non-traditional family lifecycle sequences, single parents are
more likely to be females. In general, divorced women face significant
decrease in their financial resources and this influences their buying
patterns. Single parents are compelled to spend much less time with
children and are likely to spend more money on day-care services for
children and toys.
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Fill in the blanks:
10. Leaders taking up ..................... roles are concerned with tasks

that help the group take decisions about its basic purpose or
goal.
11. Men tend to be ..................... leaders, while women lead in
social-emotional behaviour.
12. Children strive to influence parents to buy something and
parents yield to their ......................
13. Learning is a lifelong process and includes ..................... of

consumption-related knowledge as well.
14. Indirectly relevant consumer learning content includes
everything that ..................... people to want certain products
or services and influence buying and use ......................
15. ..................... Parents encourage a balance between their own
and childrens rights and encourage childrens self-expression.
16. ....................., parents are retired resulting in decreased income
and increasing expenditures on medical bills.
The locality in which you live, contact two friends, one living in a
traditional family and the other in a nuclear family. Compare the
consumption behaviour of the two families with respect to clothes,
furniture, and entertainment.
Many companies attempt to influence childrens consumer

socialisation in a manner that children recognise brand names
and company at an early age. Marketers use fun themes to target
children. Children of various age groups constitute a very large
market. Many critics point out that younger children have limited
ability to process information and to make informed purchase
decisions.
7.5
URAL VERSUS URBAN CONSUMER

R
BEHAVIOUR
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A customer from a rural area is called a rural customer. What is not

clear is the term rural. The term rural is defined differently by
different people. Government of India has defined rural area as that
which is not urban and urban area is defined as:
All locations within a municipality/corporation, cantonment

board or a notified town area committee,
All other locations satisfying all of the following criteria:
Minimum population of 5,000,
At least 75% of male workforce engaged in non-agricultural

activities, and a population density of over 400 persons
per sq.km.
However, this definition of rural area does not meet the requirements
of marketers. Most of the companies have their own interpretation of
what is rural. Companies, depending on the products they sell, have
classified places ranging from below 20,000 to 50,000 population as
rural. There is yet another classification of India, as Urban, Rural and
Rurban (Jha, 2003) in a continuum from urban and rural. With the
rapid strides in economy, technology and population, a large number
of settlements have grown larger to be a typical rural area. However,
they are not yet urban. These areas which have a population of more
than 5,000 are now called as Rurban areas. Rurban is an area which
rural in nature and has some urban amenities. It may have basic
sewerage, drainage, health care unit, water supply and transport
facilities. It might have more people involved in non-agricultural
activities. In a marketing sense, they neither behave like a rural
market or an urban market.
The Differences
The economic growth experienced in India may have reduced the
absolute number of poor (depending on which report one refers to)
and lifted millions out of poverty, however, income disparities and
regional imbalances persist. The variations in the level of development
in a region have resulted in tremendous heterogeneity. The success of

marketing lies in understanding these differences.
A rural customer is very conscious of value for money, and may

not always go for cheap products or premium or image products.
As he may not afford high price, he does not fancy products with
features that do not enhance the basic functions of the product.
Rural customers do not trust the outsiders easily. It is not very

easy to convenience a rural customer. It is a challenge to introduce
anything new to rural customers.
Rural customers are more brand loyal than urban customers.

However, as the literacy level is low they recognize the brand
more through colour, symbol, and logo.
The rural customers involvement in purchase of any product is

high. In some cases such as buying TV, he consults a number of
people. Both rural and urban consumers experience significant
influence of their families for buying the select products.
However the rural consumers experience greater influence of
their families as compared to their urban counterparts.
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TABLE 7.1: RURAL VERSUS URBAN CUSTOMER

INVOLVEMENT PROCESS
Urban
Rural
High
Low
High
Low
Involvement Involvement Involvement Involvement
High Brand
Differentiation
Complex
buying
behaviour
Varietyseeking
buying
behaviour
(Economy
Wrist Watch)
Complex
VarietyBuying
seeking
Behaviour
behaviour
(Economy
Wrist Watch)
Low Brand
Differentiation
Dissonancereducing
buying
behaviour
(Cereals
& pulses;
medical
services)
Habitual
buying
behaviour
(pressure
cooker;
footwear; life
insurance
policy)
Dissonancereducing
Buying
behaviour
(pressure
cooker;
footwear; life
insurance
policy)
Habitual
Buying
Behaviour
(Cereals
& pulses;
medical
services)
Another important difference is that the rural customers life is highly

routinized and laid back. Sunday is not a holiday in the village and the
he cannot be made to hurry through.
The rural income mostly depends on the agriculture and hence income
and purchase reaches greater heights after harvest time. Hence, the
disposable income varies across the nation depending on the area,
crop, weather etc. Consequently, the buying patterns vary with urban
buying patterns.
Traditional values, customs and perceptions have a stronger hold on

the rural customers than urban customers. This impacts developing
common communication programme for entire country.
TABLE 7.2: CONSUMPTION PATTERNS IN RURAL AND

URBAN INDIA
Life-cycle stages
Below 12
Child
13-19
Teenage
20-40
Young
40-60
Middle aged
Above 60
Old
Video games,
chocolates,
beverages/
health, drinks
Cell phones,
motorcycles,
Internet
Car, personal
computer,
branded
clothing,
alcohol, stores/
malls
Luxury car,
credit card,
house, health
insurance,
holiday trips
Clubs, theaters,
parks
Rural
Toys, ice candy,
daliya
Bicycle, T.V.,
Cinema
Motorcycle,
telephone,
LPG, tailored
unbranded
clothes, local
liquor, haat
Tractor, Kisan
credit card,
postal savings,
mela
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Age
Products &
Services
Urban
Chaupal,
playing cards,
pilgrimage
The rural market (68.84%) is larger than urban market (31.16%) and
the marketers cannot afford to ignore studying the rural consumer
behavior. When one reads accounts of rural India of the 1950s and
1960s, it appears as if we are describing another country.
With so much of changes happening in the major part of market with
the fortune lying at the bottom of pyramid it is vital that the marketers
understand the rural customers well.
Fill in the blanks:

17. Companies, depending on the products they sell, have classified
places ranging from below ................. to ................. population
as rural.
Contd...
18. A rural customer is very conscious of ....................., and

may not always go for cheap products or premium or image
products.
19. Rural customers are more ..................... than urban customers.
20. The rural income mostly depends on the .................... and hence
income and purchase reaches greater heights after ....................
time.
Pick any two commercials. One targeted towards urban consumers

and one towards rural customers. Try to analyze the difference
between the execution and presentation of both commercials.
7.6 OPINION LEADERS

Opinion leaders are those people who, in a given situation, are able
to exert personal influence. They are the ones most likely to influence
others through word-of-mouth communication because others seek
advice and information from them.
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Opinion leaders can informally influence the behaviour of consumers

towards products or services, either positively or negatively. If they are
satisfied with a product and like it, their word-of-mouth communication
can be helpful in ensuring its success; their dissatisfaction and dislike
can exert more influence in its failure.
In a marketing context, opinion leadership is important and is found
at all levels in society. Consumers tend to be influenced by those with
whom they identify. Opinion leaders are present at each status level
and in every group. However, personal influence seems to be more
functional at higher income and status levels.
7.6.1 MARKETING IMPLICATIONS OF OPINION LEADERS

An obvious fact is that consumers talk to other consumers about
their personal experiences with products, services and retail stores.
Therefore, it is extremely important that marketers pay serious
attention to product quality and service and meet or exceed consumer
expectations with regard to their products or services. The firm must
make arrangements to respond to customer complaints quickly and
fairly.
Stimulating opinion leadership involves having an acknowledged
opinion leader. For example, the print ad of Colgate Total toothpaste
says, Approved by independent dental associations in 30 countries.
Marketers may target experts in their fields, such as doctors, to help
consumers learn about health related products and services. Opinion
leaders may also be used in advertising as spokespersons. Although
their influence may be less effective when it is delivered through a

marketer-dominated than a non-marketer dominated source, their
expertise and association with product or service can still make them
effective. For example, spokespersons dressed as doctors are used
in ads to communicate about toothpaste benefits. Attractive movie
actresses, Miss World or Miss Universe are used as spokespersons
for beauty care products. Marketers can also target consumers and
ask them to refer to a knowledgeable opinion leader such as a doctor
about how the advertisers product can help the consumer.
Fill in the blanks:
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Sending a sample of a product, to a group of potential and

influential customers, such as beauty care clinics, can help generate
communications concerning the product from opinion leaders.
Cosmetic manufacturers can create advisory boards composed of
skin and beauty care experts from their target market, clothing stores
can also constitute fashion advisory boards from their target market.
Salespeople and retailers can encourage their current customers to
pass along information to friends and other potential new customers.
21. If opinion leaders are satisfied with a product and like it, their
..................... communication can be helpful in ensuring its
success.
22. ..................... opinion leadership
acknowledged opinion leader.
involves
having
an
23. Opinion leaders may also be used in advertising as ......................

24. Salespeople and ..................... can encourage their current
customers to pass along information to friends and other
..................... new customers.
Interview five of your classmates/friends and find out who would

they go for information for the products mentioned below, and also
indicate why do you view her/him as the source of information and
advice?
(a) Cell phones, (b) Latest fashion clothes, (c) College for
management education, (d) Holiday resort
Opinion leadership can be a result of passive exchange of

information in a group discussion or of information being actively
exchanged.
7.7 REFERENCE GROUPS

A reference group serves as a frame of reference for an individual and
influences his/her behavior. A reference group can have considerable
influence on the consumption decisions of an individual consumer.
An individuals reference group can range from family to a nation or
a culture.
7.7.1 TYPES OF REFERENCE GROUPS
Reference groups furnish points of comparison by which one can
evaluate attitudes and behaviour. An individual can be a member of
a reference group such as the family and would be said to be part of
a membership group. This same individual may aspire to belong to a
cricket club and would be said to be apart of an aspiration group. A
disclaimant group is one to which an individual may belong to or join
and then reject the groups values. An individual may also regard the
membership in a specific group as something undesirable and to be
avoided. Such a group is a dissociative group.
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Membership groups and aspiration groups are viewed positively;

disclaimant and dissociative groups are viewed negatively. Marketers
advertise to appeal to the desire to be part of a group and very rarely
appeal to the desire to avoid or disclaim a group. Even ad appeals used
to encourage non-conformity are made on a positive note to being
different from everyone else. Marketers tend to focus on membership
and aspiration groups.
Membership Groups
Positive reference groups are important and classified as primary or

secondary and formal and informal. If a person maintains regular
contact with family members, friends and business associates, all
those individuals constitute a primary group. People, who meet
less frequently such as those who meet during morning walk, or
club members, constitute a persons secondary groups. From the
marketers point of view, primary groups are more important because
they influence consumers product beliefs, tastes and preferences and
have a more direct effect on buying behaviour. Research supports the
view that members of primary groups are more likely to buy the same
brands.
Groups can also be divided on the basis whether they have a formal
structure such as a president, executive and secretary etc. in a
hierarchical order with specific roles. The structure of an informal
group is loosely defined. For example, when three individuals become
friends while pursuing a course on computer applications and on
every last Saturday of each month meet for dinner, then it would be
considered an informal group.
Aspiration Groups
Non-membership groups, with a positive attraction, are called
aspiration groups and exert a strong influence. Two types of such
groups are anticipatory aspiration groups and symbolic aspiration
groups. Individuals frequently purchase products that they believe
are used by a desired group in order to achieve actual or symbolic
membership in the group.
Anticipatory Aspiration Groups: These are groups that an
individual anticipates to join at some future time. The individual,
generally, has some direct contact with such group(s). For
instance, the individual may wish to join a group higher in the
organisational hierarchy. The individuals aspiration is more
likely to be an outcome of anticipated rewards that go with higher
position in an organisation such as power, status, prestige, money
and other perks. Marketers appeal to the desire of individuals to
increase their position by moving to a higher aspiration group and
frequently advertise clothing, autos, liquors and other products
within the context of business success and prestige.
Symbolic Aspiration Groups: The individual admires these

groups but is unlikely to join them despite acceptance of the
groups beliefs and attitudes. In a study Robert J. Fisher and
Linda L. Price found that individuals establish a vicarious
connection with such a group by purchasing a product associated
to the aspiration group. For example, a tennis fan may buy a
Nike sports jacket and shoes because many tennis stars wear
these. It is important for such an influence that the product is
visually obvious. Marketers use certain celebrities to advertise
the product and thereby appeal to the symbolic aspirations of
consumers.
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7.7.2 REFERENCE GROUP INFLUENCES ON CONSUMERS

Reference groups have been found to exert influence on a wide
range of consumption behaviour. Research indicates that groups
exert informational influence, comparative influence and normative
influence.
Informational Influence
Reference groups and other influence sources can exert informational
influence by offering information to help make decisions. For example,
chat-groups on the Internet often provide information on subjects such
as Internet travel sites. This type of influence occurs when a consumer
accepts information as credible from a reference group member and
believes that the information will enhance knowledge about product
choice. Informational influence is important because it can affect how
much time and effort consumers devote to information search and
decision-making. Consumers who can get reliable information from

others may easily be reluctant to engage in time intensive information
search when making purchase decisions. Although informational
influence can reduce time devoted to information search, it is
sometimes important for marketers to increase the likelihood that
consumers engage in information search. If a product or service is
new and superior, few consumers are likely to know about its benefits.
Thus, ad campaigns that enhance product awareness and encourage
consumers to compare products may be necessary.
Informational influence is based on either the similarity of the groups
members to the individual or the expertise of the influencing group
member. For instance, an individual may notice several members of
a given group using a particular brand of sports shoes. She/he may
then take it as evidence that it is a good brand and decide to buy it. Or,
one may decide to buy a particular brand and model of inkjet printer
because a friend who is very knowledgeable about printers owns or
recommends it. In these instances, the conformity is the result of
information shared by the group members.
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Comparative Influence
Consumers tend to constantly compare their attitudes with reference

to those of members of important groups. They serve as a benchmark
and the individuals urge is to seek support to her/his attitudes and
behaviour. To accomplish this, individuals are inclined to associate
with groups with which they agree and stay away from groups with
which they disagree. As a result of this, the process of comparing
oneself to other members of the group and evaluating whether
the group would be supportive becomes the basis for comparative
influence.
The consumers objective is self-maintenance and enrichment in

accepting the comparative influence. To enhance her/his self-concept,
the individual associates with groups that have similar attitudes and
behaviour. This provides reinforcement and ego gratification. The
source of power is referent power and the individual identifies herself/
himself with the group.
Normative Influence
There is a fine residential educational institution for women in
Rajasthan, Banasthali Vidyapith, having the status of a deemed
university. Teachers, students and other staff members are required
to wear only khadi and remain vegetarian. Although many students
or teachers may love non-vegetarian dishes and prefer wearing
dresses not made from khadi, they have to conform to expected code
of conduct on the campus.
Robert J. Fisher and D. Ackerman note that normative influence,
also called utilitarian influence, refers to social pressure designed to
encourage conformity to the expectations of others to gain a direct
reward or to avoid any sanctions. Consider, for example, the type

of clothes, music, or shoes etc. you buy, or for that matter hairstyle
you adopt and compare with your friends. Chances are you and your
friends have made similar choices.
TABLE 7.3: REFERENCE GROUP INFLUENCE ON

CONSUMERS
Objectives
Perceived
source
characteristics
Types of power
Behaviour
Information
Knowledge
Credibility
Expert
Acceptance
Comparative
Selfmaintenance
and enrichment
Similarity
Referent
Identification
Normative
Reward
Power
Reward or
coercion
Conformity
Fill in the blanks:
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Nature of
influence
25. A ..................... group is one to which an individual may belong

to or join and then ..................... the groups values.
26. If a person maintains regular contact with family members,
friends and business associates, all those individuals constitute
a ..................... group.
27. ..................... groups, with a positive attraction, are called
aspiration groups and exert a strong influence.
28. Marketers use certain ..................... to advertise the product

and thereby appeal to the symbolic aspirations of ......................
Collect three print ads of different products in which the same

personality has been used as the endorser. Why do you think the
endorser would succeed/not succeed in influencing the consumers?
Broadly there are four types of family decisions husbanddominated, wife-dominated, completely autonomous decisions
by either husband or wife, and joint decisions. In todays fast
changing world, there has been a shift in economic, social, and
cultural environments of countries, leading to a shift or, sometimes,
complete reversal of the traditional husband-wife role, i.e., the wife
is the bread earner and the husband, the child-rearer.
7.8 DIFFUSION OF INNOVATION

The ability to develop successful new products is critical to a
companys sales, future growth, and long-term survival. Gabriella
Stern has reported that 49 percent of the total revenue of some of the
worlds leading companies has come from the new products that they
have developed.
Innovations bring about changes in consumers consumption
patterns. Some innovations influence how, when, where, why, or
whether we acquire products. For example, a comparatively recent
innovation is Internet shopping, which has altered the way we buy
certain types of products. The list of innovations keeps going on and
on with the passage of time. Consumers thirst for better and more
efficient products and services seems to be insatiable. Rapid strides
in the fields of science and technology are responsible for developing
and offering radically new and highly complex products that promise
more convenience and comfort to consumers.
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7.8.1 DIFFUSION PROCESS
The diffusion process is the manner in which innovations spread over

time to other consumers through communication across a market.
Diffusion research traces the penetration and acceptance of an
innovation across its life cycle. A new products phases of life cycle
start from introduction and progress up to its decline in a typical case.
With this progression, there are associated categories of adopters by
the time of adoption.
Figure 7.2: Profile of Adopter Groups

The diffusion process identifies innovators in the introductory phase
of life cycle; there are early adopters during growth period, the
early majority and late majority adopts the product in its maturity
period and laggards (late adopters) are the last to adopt the product.
These life cycle phases are important because they are linked to
different marketing strategies during the product life cycle. During
the introductory phase, the marketers objectives are related to

establishing distribution, building brand awareness among members
of the target market, and encouraging trial to begin the diffusion
process. As the product gains some acceptance, the marketer can
define its early adopters. It now tries to strengthen its foothold in the
market by shifting from the objective of creating brand awareness to
one of broadening product appeals and increasing product availability
by increasing its distribution.
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As the brand matures, competition intensity gradually increases and

sales begin to level off. The marketer starts emphasizing price appeals,
starts sales promotions, and may consider modifying the product to
gain competitive advantage. The majority of the adopters enter the
market at this stage largely because of the influence of early adopters.
The majority that has already gone through the process of product
adoption does not rely much on mass media anymore for information.
When the brand is viewed to have entered in its decline phase, lower
prices become more relevant and the marketer considers revitalizing
the brand, or adopts the strategy of harvesting or divesting. It is during
the decaying maturity and the decline phase of product life cycle that
laggards enter the market.
7.8.2 CULTURE AND DIFFUSION OF INNOVATION
Culture may have an important influence on the diffusion of innovation.

Two concepts are worth considering in this regard: cultural context
and cultural homogeneity.
Low-context cultures are those that rely primarily on verbal

and written communication in transmitting meaning. They place
more value on individual initiative and rely more on mass media
for communication. The concept of heterophilous groups can be
applied to low-context cultures, which are more disparate with wider
differences among groups. United States and Western Europe would
be described as low-context/heterophilous cultures.
High-context cultures rely primarily on non-verbal communication,
with little difference in norms, values and socio-economic status
among groups. The emphasis on non-verbal communication means
that such cultures will place more value on interpersonal contacts
and associations. In high-context cultures, more value is placed on
group than on the individual and the emphasis is on subscribing to
the norms and long-standing rituals of society. Most of the Far Eastern
countries would qualify as high-context/homophilous cultures.
One would expect the rate of diffusion to be rapid in high-context/
homophilous cultures because of their uniformity, leading to relative
ease of transmitting information from one dissimilar group to another.
Another important aspect is that the credibility of information on
new products, services, or ideas is higher because the source is more
likely to be friends or relatives rather than commercial mass media.
Hirokazu Takada and Dipak Jain conducted a study to compare the
rate of diffusion of calculators, washing machines and air conditioners

in Japan, South Korea and Taiwan (considered as high-context
cultures) and United States (considered low-context culture). They
reported that in most cases the rate of adoption was faster in all the
three high-context cultures than it was in United States.
Fill in the blanks:

29. It is during the ..................... maturity and the decline phase of
product life cycle that ..................... enter the market.
30. The diffusion process is the manner in which .................. spread
over time to other consumers through communication across
a market.
31. As the product gains some acceptance, the marketer can
define its ......................
32. The emphasis on non-verbal communication means that such
cultures will place more value on ..................... contacts and
associations.
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33. Diffusion research traces the ................... and acceptance of an

..................... across its life cycle.
Select an innovation which has just entered or is likely to be

introduced in the Indian market. Why in your view would it be
adopted quickly/very slowly/or fail?
Information regarding innovation is communicated rapidly and

is accessible to the consumers conveniently. Obviously, the more
quickly consumers become aware and gain knowledge about
a new product through mass media and Internet, the faster is
communication to various groups.
7.9
ULTURE/ SUB-CULTURES IMPACT ON

C
7 PS OF PRODUCT/SERVICE
As a result of rapid advancement and all-round development, we find

ourselves exposed to people from various cultures. There has been
a great deal of opening up, and the society has been impacted on all
fronts, be it social, economic, cultural or technological. The cultural
fabric has undergone a transformation and we see changes in our
values and beliefs, customs and traditions, etc.
It is important for a marketer to give consideration to three major
issues; (i) how do consumers in one culture get exposed to good/services
being used by people of other cultures; (ii) how should a marketer

design/adapt his 7Ps so as to be accepted by people influenced by
newer cultures (if he is serving in the home market only); (iii) how
should a marketer design/adapt his 7Ps so as to accepted by people
of other cultures (in foreign markets).
Every component of culture should be carefully studied and a
marketing program designed accordingly.
The marketer must make sure that the product or service offering
appeals to the needs and wants of people from foreign cultures.
Product names or brands should not have double meanings; they
should not be insensitive in any manner, and they should not hurt the
sentiments of people in the country where the marketer is planning
to enter.
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While taking decisions on packaging and labeling as also design of

advertisements, he must make sure of colors and symbols. Colors and
symbols have varied meanings and connotations.
The marketer should be careful that he should not be insensitive to
people of foreign cultures.
The marketer would get inputs into how the foreign culture is different
to his native culture.
This would help him decide whether to have a marketing program
similar to the one that is present in the native country or to have a
program that is individualized to the foreign country.
Examples:
McDonalds is a perfect example; when they entered India, they adapted

their product offering by offering chicken burgers instead of the beef
and pork (as consumption of beef and pork is a taboo with Hindus
and Muslims). Further they introduced the McTikki Aloo Burger for
vegetarians; they positioned themselves a family restaurant keeping
in line with the Indian family concept. Companies that do not localize
their offerings may find penetration into foreign cultures a difficult
exercise. An example that can be quoted is Kelloggs Breakfast Cereal.
They found it difficult to penetrate the Indian market as the very
concept of cold milk at breakfast was against the traditional Indian
belief (where hot milk was preferred especially at breakfast and cold
milk was regarded as unhealthy). It is thus concluded that a world
brand may not always be favored. The marketer needs to adapt his
product/service offerings.
Companies like Unilever, Nestle, Proctor and Gamble follow a mixed
approach. They have standardized offerings in terms of their brands,
but they blend and adapt their 7Ps to suit the needs of the local culture.
Their offerings are generally standardized but the implementation
strategy local. Thus, they introduce under the same family brand
name, soaps for different kinds of skin, shampoo for different kinds
of hair (depending on the skin and hair types across countries and
cultures), and detergents for different water types (hard water or soft
water).

34. Product names or brands should not have double meanings.
35. The marketer neednt make sure that the product or service
offering appeals to people from foreign cultures.
36. The marketer need not gain any inputs into how the foreign
culture is different to his native culture.
37. Companies like Unilever, Nestle, Proctor and Gamble follow
customization approach.
7.10 SUMMARY
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Culture has been defined as the complex whole that includes

knowledge, belief, art, law, morals, customs, and any other
capabilities and habits acquired by humans as members of
society.
The impact of culture on society is profound. Culture provides

the background of important human factors such as motivation,
personality, attitude, family, and social class etc.
Reference groups transmit cultural, sub-cultural, crosscultural norms and values. Culture sets somewhat loose norms
or boundaries for individual behaviour within a society and
influences the functioning of other institutions such as family
and mass media etc. Members of a society obey cultural norms
without deliberation because behaving otherwise is viewed as
unnatural.
Culture is learnt as a result of social experiences. In the course

of growing up, children acquire through formal, informal, and
technical learning a set of beliefs, values, norms, and customs.
Four major social institutions, the family, the school, the religion,
and the mass media play a very significant role in transmitting
the culture.
Value system refers to the total set of values and the relative
importance culture places on them. At the broadest level are
global values that represent the core value system and are very
enduring and strongly held.
Opinion leaders are those people who, in a given situation, are

able to exert personal influence through word-of-mouth because
others seek advice or information.
Opinion leaders can informally influence the behaviour of

consumers towards products or services, either positively or
negatively.
The family or household is composed of two or more

persons related by blood, marriage, or adoption living in an
accommodation. A nuclear family consists of two married adults
of opposite sex and an extended or joint family may include grand
parents and cousins etc.
The family is a major influence on the consumption behaviour of

its members and generally the target market for most products.
The consumption patterns of family members are seldom
independent from those of other family members.
Families are classified by life cycle stages. The traditional family

begins with bachelorhood, the next is the married stage, then the
expanding family stage, subsequently the contracting family as
the children become adults and start their own family, and finally
the end with the demise of a spouse.
The social class, lifestyle, role orientation, importance of purchase,

perceived risk, family life cycle stage, and time constraints
generally influence a familys approach to decision-making.
The family provides the basic framework in which consumer

socialisation takes place.
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Diffusion of Innovation: A theory that seeks to explain

how, why, and at what rate new ideas and technology spread
through cultures.
Laggard: A person who makes slow progress and falls behind

others in adopting any trend or innovation.
Innovation: The process of translating an idea or invention

into a good or service that creates value or for which customers
will pay.
Reference Groups: A group to which an individual or another

group is compared. Sociologists call any group that individuals
use as a standard for evaluating themselves and their own
behaviour a reference group.
Opinion Leaders: Leadership by an active media user who

interprets the meaning of media messages or content for
lower-end media users. Typically the opinion leader is held in
high esteem by those who accept his or her opinions.
Peer Group: A group of people of approximately the same age,

status, and interests.
Aspiration Group: A group of individuals to which one desires

to belong.

1. How can you justify that culture is invented?
2. How does culture satisfy need of an individual?
3. What do you mean by cross-cultural analysis?
4. Mention and explain various aspects of sub-cultures in consumer
behaviour.
5. Compare and contrast rural and urban customer with in context
of consumer behaviour and their purchase patterns.
6. State marketing implications of opinion leaders.
7. Give a description of family life cycle stages and their relevance
in consumer behaviour for marketers.
8. What do you mean by diffusion of innovation and what is its
significance?
9. Elaborate upon the impact of culture and sub-culture on 7Ps of
marketing.
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10. Mention various types of reference groups and their impact on

consumers.
11. Give clear distinction between anticipatory aspirational group
and symbolic aspirational group.
12. Consumers tend to constantly compare their attitudes with
reference to those of members of important groups. Justify the
statement with relevant examples.

Topics
Cross-cultural Analysis
Aspects of Sub-cultures
Family Life Cycle Stages
Q. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Answers
Ideological
social interactions
physiological; customary
Cross-cultural; abroad
challenging; non-verbal
False
True
False
True
Instrumental
Task oriented
Contd...
Opinion Leaders
Reference Groups
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
value for money

brand Loyal
agriculture; harvest
word-of-month
stimulating
spokes person
retailers; potential
disclaimant; Rejects
primary
non-membership
celebrities; consumers
decaying; laggards
innovations
early adopters
interpersonal
penetration; innovation
True
35.
36.
37.
False
False
True
Diffusion of Innovation
demand
acquisition
Motivates; behaviour
Democratic
Solitary Survivor
20000, 50000
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Rural v/s Urban

Consumer Behaviour
12.
13.
14.
15.
16.
17.
Culture/Sub-cultures
Impact on 7Ps of
Product/Service

1. Refer 7.1

It cannot be viewed as something that just exists and is

waiting to be discovered. People are responsible for inventing
their culture and this invention consists of three interdependent
components.
2. Refer 7.1

Culture offers order, direction and guides societies in all phases of

life by providing tried and trusted ways of meeting physiological,
personal, and social needs and due to these reasons people feel
comfortable in doing things in the customary way.
3.
Refer 7.2
Cross-cultural influences are norms and values of consumers

in foreign markets that influence strategies of multinational
organisations marketing their products and services abroad.
4. Refer 7.3

Sub-cultural distinctiveness
Sub-cultural homogeneity
Sub-cultural exclusion
5. Refer 7.5

The economic growth experienced in India may have reduced the

absolute number of poor (depending on which report one refers
to) and lifted millions out of poverty, however, income disparities
and regional imbalances persist.
6. Refer 7.6.1

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It is extremely important that marketers pay serious attention

to product quality and service and meet or exceed consumer
expectations with regard to their products or services. The firm
must make arrangements to respond to customer complaints
quickly and fairly.
7. Refer 7.4

The concept of household or family life cycle is important for

marketers in segmenting the market.
8. Refer 7.8
The ability to develop successful new products is critical to a

companys sales, future growth, and long-term survival. Diffusion
research traces the penetration and acceptance of an innovation
across its life cycle.
9. Refer 7.9

There has been a great deal of opening up, and the society has
been impacted on all fronts, be it social, economic, cultural or
technological. The cultural fabric has undergone a transformation
and we see changes in our values and beliefs, customs and
traditions.
10. Refer 7.7.17.7.2

Dissociative group
Membership groups
Aspiration groups
11. Refer 7.7.1

The individual, generally, has some direct contact with such

group(s) and the individual admires these groups but is unlikely
to join them despite acceptance of the groups beliefs and

attitudes.
12. Refer 7.6.1

To accomplish this, individuals are inclined to associate with

groups with which they agree and stay away from groups with
which they disagree.

SUGGESTED READINGS



E-REFERENCES
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http://www.crvp.org/book/series05/v-4/chapter_vi.htm
http://www.ejcr.org/curations-5.html
http://www.economist.com/news/briefing/21595019-marketgrowing-furiously-getting-tougher-foreign-firms-doing-it-theirway
http://www.theguardian.com/culture/2014/mar/20/youthsubcultures-where-have-they-gone
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CONSUMER DECISION MAKING PROCESS
CONTENTS
8.1
Introduction
8.2
Types of Consumer Decision
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8.2.1
Nominal Decision Making
8.2.2
Limited Decision Making
8.2.3
Extended Decision Making
8.3
Problem Recognition
8.3.1
Approaches to Active Problem Solving
8.3.2
Marketing Strategies and Problem Recognition
8.4
Information Search
8.4.1
8.4.2
8.5
Consumers Sources of Information
Evaluation of Alternatives and Selection
8.5.1
8.6
Appropriate Alternatives
Decision Rules
Post-purchase Action
8.6.1
Post-purchase Evaluation
8.6.2
Product Disposal
8.7
Using Consumer Behaviour in Designing Products
8.8
Organisational Buying Behaviour
8.8.1
Identify Organisation Customers
8.8.2
Process of Organisational Buying
8.8.3 Different Buying Situations Involved in Organisational

Buying
8.8.4
Influences on Organisational Buying Behaviour
8.9
Summary
8.10
8.11
Answers and Hints
8.12

INDIAN MIDDLE CLASS & BEHAVIOURAL ECONOMIST
Do consumers buy more when faced with fewer options, as
some studies have shown? Are they swayed by uninformative
advertising? To address such questions, behavioural economists
need data on consumer behaviour. It is time for the Indian middle
class to come to their aid. There are an estimated 50-250 million
middle-class Indians.
Through their everyday choices, they can help economists refine
existing models of decision-making. In the past, markets were local,
informal affairs and data was hard to obtain. Economic theories
of decision-making have been based on biased samples that are
unrepresentative of the population at large. The behavioural
economics revolution has in part been enabled by economists
growing access to data.
We now have a more nuanced understanding of actual, rather
than idealized, psychology. By analyzing savings and borrowing
decisions, we have learned how self-control problems manifest
themselves in credit markets. By comparing stock and bond
purchases, we better understand how aversion to losses can affect
risk-taking. As Indians expand their engagement with the formal
economy, they will inadvertently generate data that sheds further
light on the intricacies of individual behaviour, not just in the
market but wherever there is decision-making under scarcity.
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Even more can be learned from combining real-world observations

with lab experiments in controlled environments. Consider trust
experiments, where players are paired with anonymous partners.
Within a pair, player A is given, say, ` 100. She must then decide
how much of this to transfer to player B, with the understanding
that any amount she chooses will be tripled by the experimenter
(so, if A chooses to transfer ` 60, B will get ` 180). Finally, player B
must decide how much to transfer back to player A.
If people were purely self-interested, we should see no transfers.

This is because B has no incentive to return anything to A, and
knowing this, A has no incentive to give anything to B. As a result,
these rational individuals would be unable to take advantage of the
opportunity to convert ` 100 to ` 300.
In practice, however, we observe transfers taking place. A recent
survey of trust experiments around the world shows that, on
average, A sends around ` 50 and B returns around ` 55 (from the
tripled amount).
This is viewed as evidence of trust and reciprocity B reciprocates As
gesture, and A trusts that this will happen. The survey also reports
some limited results from India. Does this mean that Indians are
trusting but untrustworthy? If so, are there any implications for
entrepreneurship, investment, and consumption?
CONSUMER DECISION MAKING PROCESS 199

Understand types of consumer decisions in detail
Learn in detail about the process of consumer buying
behaviour
Find the relevance of using consumer behaviour in designing
products
Understand organisational buying behaviour
8.1 INTRODUCTION
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Traditionally, consumer researchers have approached decisionmakers from a rational perspective. The term consumer decision
process brings to mind the image of an individual who is facing a
clearly recognised problem and is carefully involved in evaluating the
attributes of a set of products, brands, or services and very deliberately
and rationally choosing the one that would deliver the maximum
satisfaction at the lowest cost. Such a purchase decision begins to
resemble a full-time job. For example, a consumer may literally
spend days or weeks thinking about an important purchase such as
a new house, even to the point of obsession. Richard W. Olshavsky
and Donald H. Granbois note that such a process is not an accurate
portrayal of many purchase decisions. If consumers followed this
elaborate process for each decision, their entire lives would be spent
making such decisions, allowing them little or no time to enjoy the
things they actually buy. No doubt, some decisions are made in this
manner, but many others involve little conscious effort and consumers
seem to make snap decisions based on very little information. Because
some purchase decisions are more important than others, the amount
of effort consumers put into each one differs. J. C. Mowen found that
the focus of many consumer decisions is on the feelings and emotions
associated with acquiring or using the brand or with the environment
in which it is purchased or used rather than its attributes. Whether
consumer decisions are attribute-based or driven by emotional or
environmental needs, the decision process discussed helps us gain
insights into all types of purchases.
8.2 TYPES OF CONSUMER DECISION

A large number of consumer purchase decisions are related to
apparently a single problem such as running low on laundry detergent
or table salt. At other times, the problem may be associated with
discarding the old car, causing a feeling of inadequacy and buying a
new but economical one, to boost self-esteem and more in line with
the present job status. The decision process may become further
complicated when consumer begins to consider the initial cost and the
running cost and evaluates whether to buy a petrol or diesel driven
vehicle. Finally, the consumer may wind up buying a higher-priced
diesel model. In another situation, a consumer noticing a simple need

for laundry detergent may want to economize and avoid one or more
relatively expensive national brands and decide to buy a mediumpriced brand that is on promotion and gets a small pack of toothpaste
free.
There are various types of consumer decision processes. It is useful
to view purchase decision involvement as a continuum and as the
consumer moves from a low level of involvement with the purchase
situation to a high level of involvement, purchase decision-making
becomes progressively complex. Based on the amount of effort that
goes into decision-making, consumer researchers have found it
convenient to think that on one end is the habitual purchase decisionmaking or nominal decision-making and at the other extreme is
extended decision-making. Many decisions fall somewhere in the
middle and are characterised by limited decision-making. It should
be kept in mind that the types of decision processes are not distinct
but rather blend into each other.
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8.2.1 NOMINAL DECISION MAKING
Nominal decision-making is generally the outcome of continued

satisfaction with a brand which was initially chosen after an extended
decision-making process, or the consumer does not attach much
importance to the product category or purchase. The consumer buys
Aquafresh toothpaste without further consideration because it meets
her/his overall needs, even though using the best available toothpaste
is important to her/him. In the second situation, consumers may
not attach much importance to salt or sugar they buy for household
consumption. Having tried Tata Salt and found it satisfactory, they
now repeat purchase it without any thought when needed. In this
category, sales promotions can lead to considerable brand switching.
8.2.2 LIMITED DECISION MAKING

Limited decision-making is usually more straightforward and simple.
It involves internal (long-term memory) and limited external search,
consideration of just a few alternatives, simple decision rules on a few
attributes and little post-purchase evaluation. As pointed out earlier,
it covers the middle ground between nominal and extended decisionmaking. Buyers are not as motivated to search for information, or
evaluate each attribute enthusiastically, but actually use cognitive
shortcuts. According to Wayne D. Hoyer, when the level of consumer
involvement is lowest, limited decision-making may not be much
different than nominal decision-making. For example, while in a store,
the consumer notices a point-of-purchase display of Nescafe, and
picks up one pack based on her/his memory that its aroma and taste
is good. If the consumers decision rule is to buy the cheapest brand of
instant coffee available, she/he looks at different brands of coffee for
prices and buys the least priced brand. Sometimes, emotional factors
may influence limited decision-making. For instance, a consumer may
buy Colgate Total toothpaste instead of her/his regular brand just

because she/he desires a change and not because of dissatisfaction
with the earlier brand. Such a decision may involve just reading of
what is written on the carton and noticing that it has some different
flavor than the brand she/he had been using.
8.2.3 EXTENDED DECISION MAKING
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Consumer purchases involving extended decision-making correspond

most closely to the traditional decision-making perspective. Such
decisions involve extensive internal (long-term memory) and external
(outside sources) information search followed by a rigorous evaluation
of several alternatives because consumers do not possess any
meaningful information about the product or service and need much
of it. The evaluation often involves careful consideration of attributes
of one brand at a time and taking stock of how the attributes of each
brand measure up to a set of desired characteristics. All this happens
in response to a high level of consumers involvement in making a
purchase decision. Such complex decisions are relatively few and
may relate to buying a computer, stereo system, washing machine,
laser printer, or a new house etc. Post purchase evaluation is more
likely to be complex and dissonance causing.
Extended decision-making may also be involved in certain emotional

decisions such as choosing a birthday gift for the girlfriend, decision
to buy jewelry for the wife, choosing a designer dress, or going on a
holiday abroad with family etc. Some of these decisions may appear
to be related to cognitive effort. However, the needs being met and the
criteria being evaluated are largely emotions or feelings rather than
product or service attributes. Because of the involvement of emotions
or feelings, there is less external information to search for.
Fill in the blanks:

1.
The term ................. brings to mind the image of an individual

who is facing a clearly recognised problem and is carefully
involved in evaluating the attributes of a set of products.
2.
If consumers followed this ................. process for each decision,

their entire lives would be spent making such decisions,
allowing them little or no time to enjoy the things they
....................... buy.
3. Whether consumer decisions are ................. or driven by

emotional or environmental needs, the decision process
discussed helps us gain insights into all types of purchases.
4.
As the consumer moves from a low level of involvement with

the purchase situation to a high level of involvement, purchase
decision-making becomes progressively simple.
Contd...
5. Nominal decision-making is generally the outcome of

continued satisfaction with a brand.
6. Limited decision-making is usually more complex and
confusing. It involves external search.
7. When the level of consumer involvement is lowest, limited
decision-making may not be much different than nominal
decision-making.
8. Extended decision-making may also be involved in certain
emotional decisions.
List down any 20 products/services from your household and

identify which type of purchase decision you will get involved in,
while making purchase for them?
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The funnel analogy suggests that consumers systematically narrow

the initial-consideration set as they weigh options, make decisions,
and buy products.
8.3 PROBLEM RECOGNITION

Before studying the first step of consumer decision-making process,
let us first understand in short all the steps which usually a consumer
undergoes before and after making purchase.
Problem recognition: If there is no need, there is no purchase.

This recognition happens when there is a lag between the
consumers actual situation and the ideal and desired one.
Information search: Once the need is identified, its time for

the consumer to seek information about possible solutions to
the problem. He willsearch more or less information depending
on the complexity of the choices to be made but also his level of
involvement.
Alternative evaluation: Once the information collected, the

consumer will be able to evaluate the different alternatives that
offer to him, evaluate the most suitable to his needs and choose
the one he think its best for him.
Purchase decision: Now that the consumer has evaluated the

different solutions and products available for respond to his need,
he will be able to choose the product or brand that seems most
appropriate to his needs. Then proceed to the actual purchase
itself.
Post-purchase behavior: Once the product is purchased and

used, the consumer will evaluate the adequacy with his original
needs. Whether he has made the right choice in buying this

product or not. He will feel either a sense of satisfaction for the
product. on the contrary, a disappointment if the product has
fallen far short of expectations.
Problem recognition is the first stage in the consumer decision process
and occurs whenever the consumer perceives a difference of sufficient
magnitude between what is perceived as the desired state of affairs
and what is the current state of affairs, enough to arouse and activate
the decision process to achieve the desired or ideal state. The current
state is the way a consumer perceives her/his feelings and situation
to be at the present time and the desired state refers to the way a
consumer wants to feel or be at the present time.
8.3.1 APPROACHES TO ACTIVE PROBLEM SOLVING
There are two basic approaches to activating problem recognition:
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Generic problem recognition focuses on helping consumers feel

a discrepancy that a number of brands within a product category
can reduce. Generally, a marketer will use this approach when
the problem is either latent or of low importance and one of the
following conditions exists.
Product is in the early stage of its life cycle.
The marketer has very high market share.
After problem recognition, consumers external search

tends to be limited.
It is a situation of industry-wide cooperative effort.
Several banks offering personal loans to consumers use telephone

sales programmes and attempt to evoke problem recognition,
in part, because the salesperson can then limit external search
to one bank. We often see cooperative advertising campaigns
at promoting milk or egg consumption. An increase in generic
problem recognition generally leads to expansion of total market
for the category. In certain cases, when a firm has the dominant
market share in a product category, it may focus on generic
problem recognition hoping that sales increase will probably
come to their brand. However, it is also possible that a large
market share firm can lose share to other marketers offering
brands in the same product category if problem recognition
campaign is not done carefully.
Selective problem recognition focuses on a discrepancy that

only a particular brand can solve. Marketers use this approach
to causing problem recognition in an attempt to increase or
maintain market share.
It is possible that the consumer may develop a disposition to act.

However, buying dispositions may not get converted into actual
buying because of a change of mind, insufficiency of funds, forgetting
about the intention, or non-availability of the product. Furthermore, in

the process of shopping, the consumer may develop new beliefs about
product availability and attributes of other alternatives. Generally,
consumers are likely to fulfil those buying intentions that they view
as consistent with their long-term best interests.
8.3.2 MARKETING STRATEGIES AND PROBLEM
RECOGNITION
Marketers use a variety of approaches to determine consumers
problems. Generally, they conduct surveys or use focus groups to
determine the problems consumers face. Both surveys and focus
groups tend to use one of the following approaches:
Activity Analysis: This approach focuses on a particular activity

such as cleaning the house, preparing meals, or travel by train
etc. The survey or the focus group is conducted to determine
what problems consumers face in the course of performing the
activity.
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Product Analysis: Product analysis focuses on examining the

purchase and/ or use of a particular product, service, or brand.
Respondents may be asked about problems they encounter while
using the product, or consuming the service.
Problem Analysis: Problem analysis starts with a list of problems

and the respondents are asked to identify which activities,
products, or brands do they associate with the problems listed.
Human Factors Research: This type of research is quite helpful

in identifying consumers functional problems of which they
are not aware. It is employed to determine the effect of lighting,
temperature, sound and product design on human capabilities
such as vision, fatigue, response time and flexibility etc. Such
research usually makes use of observational methods such
as video recording, time-lapse and slow-motion photography.
For example, computer usage can influence vision adversely.
Computers can also cause a physical condition resulting from
repeating the same movements over time (called carpel tunnel
syndrome).
Emotion Research: It is believed that emotions often have a very

powerful effect on problem recognition. T Collier and others
have noted that marketers use focus group research, personal
interviews or projective techniques to determine consumers
emotions associated with a particular product or products that
generate or reduce certain emotions.
Problem recognition depends on the importance and magnitude of

discrepancy between the desired state and the current state. Thus,
marketers can seek to influence the degree of discrepancy by altering
consumers desired state or the perceptions about the current state,
or influence the perceptions about the importance of an existing
discrepancy. Marketers also attempt to influence the desired state

by advertising the attributes and benefits of products or services and
hope that consumers will be influenced, to a degree, that they will
desire these benefits.
Marketers also attempt to influence consumers perceptions about
their existing state. For instance, many ads of personal care products
adopt this approach. Women do not want to use a soap that dries their
skin. They desire to have fresh and smooth skin and the advertisement
of Dove soap is designed to generate concern about the existing state
of their skin. It provides the desired benefit that presumably other
soaps do not. Such ad messages are designed to instigate individuals
to question if the current state coincides with this desired state.
Fill in the blanks:

................. is the first stage in the consumer decision process
and occurs whenever the consumer perceives a difference of
sufficient ................. between what is perceived as the desired
state of affairs and what is the current state of affairs.
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9.
10. The survey or the ................. is conducted to determine what

problems consumers face in the course of ........................ the
activity.
11. ......................... Research is quite helpful in identifying
consumers functional problems of which they are not aware.
12. Marketers can seek to influence the degree of ................. by

altering consumers desired state or the perceptions about the
................. state.
Collect a print advertisement that attempts to activate problem

recognition in the area of professional education. Analyse the
advertisement and recommend how this ad can be improved in
terms of problem recognition.
Perceiving a difference between a persons ideal and actual

situations big enough to trigger a decision. It can be as simple as
noticing an empty milk carton or it can be activated by marketing
efforts.
8.4 INFORMATION SEARCH

Once consumers recognise their problems and have no inhibiting
constraints to take the next step in their decision-making process,
they need adequate information to choose the appropriate solution.

Problem recognition is an ongoing process for consumers and
they use internal and external searches to solve these problems.
Information search takes time, energy, money, or giving up desirable
activities and may involve both mental as well as physical activities.
The benefits of information search often exceed the cost of search. For
instance, the search may lead to finding a better price, higher quality,
or greater confidence in product choice. Consumers vary in their
propensity to actively seeking information. Some are active searchers
of information and want to interact with the firm while others buying
the same product spend little or no effort to acquire product or brand
information before making a purchase.
8.4.1 CONSUMERS SOURCES OF INFORMATION
There are five primary sources of information available to consumers:
Long-term memory: Stored information based on earlier

searches, personal experiences and low-involvement learning.
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Personal sources: These include family, friends, neighbours and

peer groups.
Independent sources: Such sources include newspapers,

magazines, journals, consumer reports and government agencies.
Marketer controlled sources: These include advertising, sales

personnel, direct mail etc.
Experiential sources: This refers to inspection of products or

product trial.
It is the consumers prerogative to decide how many and which

sources of information to use. According to C.B. Jarvis, a purchase
decision requires a subset of decisions associated with information
search. At some point in time, consumers acquire information from
external sources that gets stored in long-term memory. For most
consumers usually this stored information, referred to as internal
information, serves as the primary source of information most of the
time as is evident in nominal or limited decision-making.
Of the five sources of information mentioned above, marketercontrolled sources represent just one potential source. A.A. Wright
and J.G. Lynch, Jr, found that marketer-controlled messages have
only limited direct value for consumer decisions. It is possible that
consumers may report only limited direct influence by marketercontrolled sources of information; other evidence indicates that the
influence may be stronger. L.M. Lodish et al report that there is
substantial evidence indicating that advertising for consumer nondurables can have significant effect on sales even in the short run.
Consumers tend to view personal sources, such as friends, as more
important in case of professional services. It is, however, interesting
to note that marketing activities of organisations influence all of the
five sources of consumers information. Marketing activities, such as
product attributes, promotional messages, and product distribution

determine the basic information available about the product in the
market. Product reports that appear in magazines or journals, which
are independent sources of information, are based on functional
attributes of the product. Similarly, friends, family members, or
neighbours - all personal sources of information - also base their
word-of-mouth information either on personal experience with the
product, views of others who have had contact with the product or
marketer-controlled promotional messages.
Internet as a Source of Information
It is assumed that every educated person today knows that Internet
represents information, e-commerce, e-mail and entertainment.
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The Internet or World Wide Web is a network of computers that is

accessible to anyone with a computer, modem, telephone connection
and an Internet account. The Internet consists of websites that
are specific addresses or files in the network and search engines
(programmes designed to search the various websites and provide
address of and/or access to those with the requested attributes).
According to recent figures (Readers Digest, July 2002), there are an
estimated 6.4 million PCs in India as against 16.3 million in China.
The number of Internet users in India is estimated to be about
10 million and 30 million in China. According to D.L. Hoffman and T.P.
Novak, the Internet is altering consumer information search in ways
that are not yet fully understood.
Some other companies, besides providing information about products

and company contain additional features and activities such as
contests, entertainment and other relevant information, designed to
draw consumers to the website and are called active sites. Such
sites help marketers in developing a relationship with customers
over time. Active sites should generally have a natural tie-up to the
activities that they provide for consumers.
8.4.2 APPROPRIATE ALTERNATIVES
Once the consumer has established the evaluative criteria, she/
he probably starts searching for the appropriate alternative which
could be brands or perhaps stores. As a result of internal search or
inquiry, the consumer may recall or learn that the available brands
of computers include IBM, Compaq, Dell, Wipro, Zenith, Vintron and
Apple. Of course, the consumer is unlikely to be aware of all the brands
in the market. Wayne D. Hoyer and Deborah J. McInnis (Consumer
Behaviour, 2nd ed. 2001) note that consumers tend to recall a subset
of two to eight brands. The seven brands of computers that the
consumer has recalled of or learnt about as potential solutions, are
known as the awareness set or the consideration set. Awareness set
is composed of evoked set, inept set and inert set. D. R. Lehman and
Y. Pan note that these three categories of the awareness set are of
considerable importance to marketers.
Evoked set comprises those brands that the consumer will evaluate
for the solution of a particular problem. If a consumer does not have
a evoked set for computers (desktop or laptop), or lacks confidence
about the adequacy of her/his evoked set, she/he would probably
engage in external search to learn about additional alternatives. The
consumers evoked set is of particular importance in structuring
further information search and making a purchase decision.
Those brands that the consumer finds totally not worthy of any
consideration constitute the inept set. The consumer actively dislikes
or avoids these brands to the extent that even if positive information
is readily available, she/he tends not to process it. Generally, inept
set is made up of brands that have been rejected from purchase
consideration because of an unpleasant experience or negative
feedback from reliable others.
All alternatives
known and
unknown
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Awareness set
Brands known to
consumer
Evoked
set Brands
considered
Inept set
Brands
avoided
Brands
purchased
Brands
considered but
not purchased
Awareness set
Brands known to
consumer
Inert set
Backup
brands
Figure 8.1: Decision-alternative Categories

The consumers inert set includes alternatives that she/he is aware
of but would not consider buying and these brands are treated with
indifference. The consumer does not have any positive or negative
evaluative opinion about these brands. Consumers will generally
accept favourable information about brands in the inert set and
which may be acceptable when preferred brands are not available.
Generally, consumers make final evaluations and make purchase
decision from the brands in the evoked set and, due to this reason,
marketers must strive to help consumers in not only recalling their
brand in response to recognised problem but also consider the brand
a worthy potential solution.
Fill in the blanks:

13. .............................. takes time, energy, money, or giving up
desirable activities and may involve both mental as well as
physical activities.
14. For most consumers usually this stored information, referred
to as ......................, serves as the primary source of information.
15. Consumers tend to view personal sources, such as friends, as
more important in case of ...................... services.
16. ...................... sites should generally have a natural tie-up to the
activities that they provide for consumers.
17. The seven brands of computers that the consumer has recalled
of or learnt about as potential solutions are known as the
...................... or the .......................
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18. ...................... comprises those brands that the consumer will

evaluate for the solution of a particular problem.
19. Those brands that the consumer finds totally not worthy of
any consideration constitute the .......................
Determine, from five of your friends, the list of products/brands they

have in their evoked set, inept set, and inert set for the following
products:
(a) Restaurants, (b) Detergents, (c) Anti-dandruff shampoos,
(d) Sports shoes, (e) Deodorant and (f) Computers.
A successful information search leaves a buyer with possible

alternatives, the evoked set.
8.5
VALUATION OF ALTERNATIVES AND

E
SELECTION
As already pointed out, most purchase situations involve little or no

evaluation of alternatives. Any discussion of consumer decision-making
seemingly describes a situation in which consumers apparently make
logical, structured, rational, and deliberate decisions. The reality is
that consumers often make purchase decisions that appear to be far
from being rational and more likely to be viewed as emotional and
less than optimal.
8.5.1 DECISION RULES

There are two approaches to making decisions:
1.
Non-compensatory decision rules
2.
Compensatory decision rules
In case of non-compensatory decision rules, negative evaluation

leads to immediate rejection of the brand from the evoked set. Good
performance on one evaluative criterion does not offset or compensate
for low performance on another evaluative criterion of the brand. For
instance, the knowledge that a product is foreign-made might prevent
staunch believers in the swadeshi concept from considering the
brand. Non-compensatory rules are easier to apply and require less
cognitive effort than compensatory rules. Consumers may use several
varieties of non-compensatory rules such as conjunctive, disjunctive,
elimination-by-aspects, and lexicographic decision rules.
Conjunctive Decision Rule
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Following this rule, the consumer establishes minimum levels of

acceptability for each evaluative criterion (brand attributes) and
selects one or more brands that surpass these minimum performance
levels. In effect, each evaluative criterion important to the consumer
will have a cut off point. For example, if the consumers cut off criterion
for laptop computer processor is 800 MHz, she/he will consider only
those brands that have this attribute and select the one that exceeds
all others on this attribute. Similarly, the decision rule will be applied
to the other remaining evaluative criteria. Any of the brands falling
below any of the minimum established standards would be eliminated
from further consideration.
Disjunctive Decision Rule

Consumers use disjunctive rules when they establish a minimum
acceptable performance level that each brand must meet. That is, all
brands that meet or exceed the minimum performance standard for
any key attribute are viewed as acceptable. The decision rule will then
be to choose the brand that beats others by the maximum margin
with regard to criterion selected. Let us assume that consumer A is
using disjunctive decision rule in case of laptop computer and the cut
off points for attributes are as follows:
TABLE 8.1: DISJUNCTIVE DECISION RULE

Price
Processor
Display quality
Memory
Weight
Battery life
5
5
5
Key attribute
Not key attribute
Key attribute
Not key attribute
Key attribute
Not key attribute
Elimination-by-aspects Decision Rule

In this approach to decision-making, attributes are first listed in terms
of their importance and a cut off point for each criterion is established.
First of all, the brands are evaluated on the most important criterion
and the ones that do not exceed the cut off point are dropped from
further consideration. In case two or more brands exceed the cut
off point, the second most important criterion is compared on
these brands. The process continues until only one brand emerges
as meeting all the criteria. The rank order and cut off points are as
follows for laptop computer:
TABLE 8.2: ELIMINATION-BY-ASPECTS DECISION

RULE
Rank
1
2
3
4
5
6
Cut off point

3
4
4
3
3
3
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Attribute
Price
Weight
Display quality
Processor
Memory
Battery life
Lexicographic Decision Rule
In the lexicographic decision approach, consumers rank the criteria

in order of importance and select the brand that outperforms others
on the most important attribute. If a tie develops among two or more
brands on this attribute, they are evaluated on the second most
important attribute. The process of attribute evaluation continues
until only one option emerges as the winner, outperforming all others.
In case of lexicographic rule, the highest ranked attribute often may
reveal something about the consumers shopping orientation. For
example, the consumers buy the best approach might indicate that
the consumer places more value on quality. If the consumer happens
to be status conscious, probably her/his approach might be to buy
the most prestigious brand.
In using compensatory decision rules, consumers choose the brand
that has maximum number of positive features compared to negative.
This approach represents a type of mental cost-benefit analysis. An
important aspect of this approach is that positive features on others
can compensate for a negative evaluation on one attribute. The idea is
that brand strengths can compensate for brand weaknesses.
Much research has focused on brand-based compensatory decision
rules (also called multi-attribute decision models). The theory of
reasoned action discussed under the topic of attitudes presents
one such decision rule. It indicated that the attitude of consumers
towards an intended behaviour, their belief about what others think
is appropriate behaviour; predict the consumers buying intentions

of products or services. According to William L. Wilkie and Edgar
A. Pessimier, various other models have been proposed and most of
them are computed mathematically. These models differ with respect
to inclusion of (1) belief strength (2) evaluation and (3) the importance
consumers attach to the attribute or outcome. An example of a multiattribute model is presented here which is the same as multi-attribute
attitude model:
n
Rb = Wi Bib
I=1
where:
Rb
Overall rating of brand b
Wi
Importance of weight attached to evaluative criterion I
Bib
Evaluation of brand b on evaluative criterion I
Number of evaluative criteria considered relevant
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If our consumer of earlier examples used the relative importance

scores mentioned below, she/he would get the highest preference
score for Acer.
Attribute
Price
Weight
Display quality
Processor
Memory
Battery life
Importance score
30
25
20
10
10
05
By applying the rule, the score for Acer will be:

Racer = 30 (4) + 25 (4) + 20 (3) + 10 (5) + 10 (3) + 05 (3)

= 120 + 100 + 60 + 50 + 30 + 15 = 375
According to additive difference decision rules, consumers compare

two brands at a time by attributes. The positive differences on
one attribute can offset a negative difference on another attribute.
Consumers evaluate the differences between brands on each attribute,
make trade-offs between positive and negative differences and then
combine them into an overall preference.

20. In case of compensatory decision rules, negative evaluation
leads to immediate rejection of the brand from the evoked set.
21. According to additive difference decision rules, consumers
compare two brands at a time by attributes. The positive
differences on one attribute can offset a negative difference on
another attribute.
22. Consumers use conjunctive rules when they establish a
minimum acceptable performance level that each brand must
meet. That is, all brands that meet or exceed the minimum
performance standard for any key attribute are viewed as
acceptable.
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23. The process of attribute evaluation continues until only one

option emerges as the winner, outperforming all others is
known as lexicographic decision rule.
Collect five print advertisements of different consumer durable

brands. Evaluate which type of decision rules the marketer is
encouraging consumers to apply.
Some shopping services or bots allowsconsumersto rate the

importance of each evaluative criterion and then provides
recommendations that are ranked on the basis of this input. The
top-ranked alternative is the one that Yahoo Shopping deems the
best fit for consumer preferences.
8.6 POST-PURCHASE ACTION

Many businesses have begun focusing on customer relationship and
loyalty programmes. The purpose is to increase customer satisfaction,
commitment and retention of important customers. Consumers
engage in a constant process of evaluating the things that they buy as
these products are integrated into their daily consumption activities.
In case of certain purchases, consumers experience post-purchase
dissonance. This occurs as a result of the consumer doubting her/his
wisdom of a purchase. After purchase, most products are put to use by
consumers, even when they experience dissonance. Other purchases
may be followed by non-use because the consumer returns or keeps
the product without using it.
8.6.1 POST-PURCHASE EVALUATION

Consumers post-purchase evaluation process is influenced by the
purchase process itself, post-purchase dissonance, product use and
disposal of product/package. These are potential influencing factors
and all purchases are not necessarily influenced by all these four
factors. Consumers may evaluate each aspect of the purchase decision
process right from the stage of information search to ultimately
the product performance. The satisfaction with one aspect such as
product performance may be affected by the degree of satisfaction
with other factors such as price or behaviour of the salesperson. In
case of nominal or limited decisions, a consumer gets involved in
active evaluation only if some component, such as an obvious product
malfunction, directs attention to the purchase decision.
Consumers choose a particular brand, or retail outlet, because they
perceive it as a better overall choice compared to other alternatives
that were evaluated while making the purchase decision. They expect
a level of performance from their selected item or retail store, which
can range from quite low to quite high. Expectations and perceived
performance are not independent and consumers tend to perceive
performance in line with their expectations. After using the product,
service, or retail outlet, the consumer will perceive some level of
performance, which could be noticeably more than the expected
level, noticeably below the expectations, or match the expected level
of performance. Thus, satisfaction with a purchase is basically a
function of the initial performance level expectations and perceived
performance relative to those expectations.
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TABLE 8.3: RELATIONSHIP OF EXPECTATION,

PERFORMANCE AND SATISFACTION
Perceived
performance
relative to
expectation
More than expected
Level of expectation
Below minimum
Above minimum
desired
desired
performance
performance
Satisfaction*
Same as expected
Not-satisfactory**
Worse than expected Dissatisfaction
Satisfaction/
Commitment
Satisfaction
Dissatisfaction
* Assumint the perceived performance exceeds the minimum desired level.

** Consumer is neither satisfied nor dissatisfied and doesnot complain.
As one may expect, a positive post-purchase evaluation, results

in satisfaction and the negative evaluation causes dissatisfaction.
Figure shows that if the performance expectations with product,
service, or retail outlet were low and the actual product or
outlet performance as perceived by the consumer matches up
to that level, the consumer is neither satisfied nor dissatisfied
(non-satisfaction). Such a purchase outcome is likely to encourage
the consumer to search for a better alternative on the next purchase

occasion. In case the consumers perceived performance level is below
expectations and fails to meet the expectations, this will definitely
cause dissatisfaction and the product or the outlet will be most likely
pushed in the inept set and dropped from being considered on future
occasions. Thus, the consumer is also likely to initiate complaint
behaviour and spread negative word-of-mouth.
8.6.2 PRODUCT DISPOSAL
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In its simplest form and at the most basic level, disposal is just
throwing away the used-up or meaningless items by consumers
without any thought. Disposal of the product or its container may
occur before, during, or after product use. This occurs on a regular
basis for most consumers except in cases where the product is
completely consumed such as an ice-cream cone. Disposal action by
consumers is increasingly becoming important for governments and
marketers because of major environmental concerns that involve
growing dioxins, lead and mercury. In India, many state governments
have banned the use of certain types of plastic bags.
Huge loads of product packages are disposed of every day in the form
of containers. These containers are thrown away as garbage, used
in some way by consumers, or recycled. There is growing concern
about using minimum amount of resources in creating packages for
economic reasons. It is also a matter of social responsibility. Many
consumers consider the recyclable nature of the product container
to be an important product attribute. Marketers are responding to
consumers concern with recyclable packaging.
Example: Canon, Epson and some others boldly mention on the
package that it is made from recycled material.
There are various alternatives for disposing of a product or package.
However, we live in a throwaway society and, by far, the most widely
used and perhaps the most convenient method from consumers point
of view seems to be throw it away. This creates problems for the
environment and also results in a great deal of unfortunate waste. The
problem is more severe in underdeveloped and developing countries
where, for a variety of reasons, consumers are simply not bothered
about garbage and filth. Throwing away empty packages, which they
think cannot be reused, is a somewhat reflexive action. In fact most
vacant plots are used as dumping ground in rural areas and in most
towns and cities.
Training consumers to recycle has become a priority in many countries.
For example, Japan recycles about 40 percent of its garbage. This
is because of the social value Japanese place on recycling. Garbage
trucks take periodic rounds through the streets playing classical music
or childrens songs and collect properly placed packets of waste.
There are several other disposal alternatives but little is known
about the characteristics of consumers such as demographic or
psychological characteristics of individuals who tend to favour certain

disposal methods. It is believed that situational variables, such as the
current needs of friends or colleagues, the availability of recycling or
charitable organisations, or the availability of storage space may also
influence disposal behaviour of consumers.
Product/package
Get rid of it
Throw
away
Trade
in
Sell
it
Give
away
Keep it
Recycle
Loan
Store
New
use
Figure 8.2: Disposal Alternatives
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Fill in the blanks:
24. In case of ...................... decisions, a consumer gets involved in

active evaluation only if some component, such as an obvious
product .................., directs attention to the purchase decision.
25. Expectations and ................................. performance are not
independent and consumers tend to perceive ...................... in
line with their expectations.
26. ...................... with a purchase is basically a function of the initial
performance level expectations and perceived performance
relative to those expectations.
27. It is believed that situational ......................, such as the current

needs of friends or colleagues, the availability of recycling or
charitable organisations, or the availability of storage space
may also influence ...................... behaviour of consumers.
Dissonance is uncomfortable and will motivate the person to reduce

it, and the dissonant individual will avoid situations which produce
further dissonance. Dissonance is a post-decisional phenomenon
and should therefore be a post-purchase phenomenon.
8.7
SING CONSUMER BEHAVIOUR IN

U
DESIGNING PRODUCTS
Knowing better what the consumer needs is the first step in being
able to design products that meet those needs. Launching new
products and services in the market represents an important source
of increasing the size of a business and the profits of a company. The

success of introducing new product on the market is a critical issue of
the current marketing programs. For example, coffee marketers have
discovered that heavy coffee drinkers tend to be high on sociability.
Thus, to attract customers, coffee houses and marketing companies
need to create environments in which people can relax and socialize
over a cup of steaming coffee. Personality is innate and has the
tendencies to influence individual product choices and adoption
behaviour.
Therefore, the identification of specific personality characteristics
associated with consumer behaviour has proven to be highly useful in
the development of a firms market segmentation strategies.
Companies, in developing new products are expected to exhibit some
high level of creativity and innovativeness which is consistent with
their customer perception of both their product and company image.
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Customers perception of a company and product will influence

his/her purchase behaviour. Individuals act and react on the bases
of their perception not on the basis of objective reality. Thus, to the
marketer, consumers perceptions are much more important than
their knowledge of objective reality. Firms in evolving new products
must take into cognizance the impact of consumers learning and all
the elements involved in consumer learning. Some consumers learn
of a products existence faster while others learn very slowly.
The reason that marketers are concerned with how individuals learn
is that they are vitally interested in teaching them, in their roles as
consumers, about products, products attributes and their potential
benefits; where to buy them, how to use them, how to maintain them,
and even how to dispose of them. They are also vitally interested in
how effectively they have consumers to prefer their brands and to
differentiate their products from competitive offerings
Shower pooling is a new initiative from AXE (known in the UK as
Lynx) asking people to shower together to save water. This campaign
not only highlights the benefits of taking action, its done in a fun way,
giving consumers another reason to get involved. Meanwhile, the
AXE work also highlights the fact that sustainability doesnt just run
through a companys business plan - in this case Unilevers - it is also
present in brand campaigns.
Today, more and more people are living more sustainable lifestyles.
They require new product lines to help them do it. A good example
is Levis 511 commuter clothing. As people get out of cars, buses
and trains and jump onto their bikes, the range has been designed
specifically to suit cyclists. Regardless of a brands ultimate goal, any
design project aimed at shifting commercial or consumer behaviour
needs to be founded on one key thing: simplicity. It must communicate
the benefits of taking action in a way that is impact ful yet extremely
easy to understand.

28. Personality is innate and has the tendencies to influence
individual product choices and adoption behaviour.
29. Firms in evolving new products neednt take into cognizance
the impact of consumers learning and all the elements involved
in consumer learning.
Interview two consumers who have had a complaint with their

purchase of a consumer durable. Find out what action they took
and what did the concerned company do about their complaints.
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To meet consumer expectations, marketers need to focus on creating

reasonable expectations among consumers through appropriate
promotional efforts, ensure consistency in product quality so
that expectations created through marketing communications
are fulfilled. Consumers, whose complaints are resolved to their
satisfaction, are comparatively more satisfied than consumers who
had no complaints and were actually satisfied with the product. The
firm should develop an efficient system of receiving complaints and
encourage consumers to record their complaints as soon as they
occur, and effectively resolve the cause of their complaints.
8.8 ORGANISATIONAL BUYING BEHAVIOUR
The goals of organisational buyers and personal consumers are

different. Organisational goals are concerned with producing a good
or providing a service, or reselling an item and all the purchases are
made to effectively perform the organisational activities.
The decision-making process by which organisations establish the
need for purchased products and services and identify, evaluate and
choose among alternative brands and suppliers.
Frederick E. Webster, Jr., and Yoram J. Wind,
Organisational Buying Behaviour, Prentice-Hall, (1972)
Organisational purchases are described as rational or economic.
Whether for-profit or not-for-profit, organisations are composed of
individuals performing various activities, including making purchase
decisions and are influenced by marketing inputs, which appear not
to be purely rational or economic.
8.8.1 IDENTIFY ORGANISATION CUSTOMERS

Many consumer purchases are individual. When purchasing a Mars
bar a person may make an impulse purchase upon seeing an array
of confectionery at a newsagents counter. However, decision-making
can also be made by a buying centre, such as a household. In this
situation a number of individuals may interact to influence the
purchase decision. Each person may assume a role in the decisionmaking process.
Blackwell, Miniard and Engel describe five roles. Each may be taken
by husband, wife, children or other members of the household:
Initiator: the person who begins the process of considering a
purchase. Information may be gathered by this person to help
the decision.
Influencer: the person who attempts to persuade others in

the group concerning the outcome of the decision. Influencers
typically gather information and attempt to impose their choice
criteria on the decision.
Decider: the individual with the power and/or financial authority

to make the ultimate choice regarding which product to buy.
Buyer: the person who conducts the transaction: who calls the
supplier, visits the store, makes the payment and effects delivery.
User: the actual consumer/user of the product
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The marketing implications of understanding who buys lie within the

areas of marketing communications and segmentation. Identifying
the roles played within the buying centre is a prerequisite for
targeting persuasive communications. As the previous discussion has
demonstrated, the person who actually uses or consumes the product
may not be the most influential member of the buying centre, nor may
they be the decision-maker. Even when they do play the predominant
role, communication to other members of the buying centre can make
sense when their knowledge and opinions may act as persuasive
forces during the decision-making process.
The second implication is that the changing role and influences
within the family buying centre are providing new opportunities to
creatively segment hitherto stable markets.
8.8.2 PROCESS OF ORGANISATIONAL BUYING
Organisational buying can be traced to a single need solving a
problem and involves decision-making units (also called buying
centres). These are composed of individuals within an organisation
who interact during making a given purchase decision. The size of
decision-making unit may vary according to how new, complex and
important the purchase decision is; and how centralized, structured
and specialised the organisation is Large and relatively more formal
organisations usually involve more individuals in a purchase decision
than smaller and less formal organisations. For non-routine decisions,

such buying centres are often formed on an ad hoc basis but for routine
decisions these centres are relatively permanent. H. Brown and
R. Brucker note that in case of more important organisational
purchases, individuals from various functional areas and
organisational levels take part in decision-making than in case of less
important purchase decisions.
The decision-making unit can be divided on the basis of functional
responsibility and type of influence. Functional responsibility can
include specific functions such as manufacturing, engineering,
research and development, purchasing and general management.
Each function evaluates the organisational needs differently and uses
different evaluative criteria.
The final purchase decision is largely determined by individual power,
expertise, the degree of influence of each functional area in a given
decision, how the organisation handles group decision conflicts and
the nature of decision.
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Various members of decision-making unit perform different roles,

such as recognising the problem, information gathering, exerting key
influence, decision-making, purchasing and/or using. For example, a
plant manager could play all the roles and the engineers may only
gather information. Decision-making units tend to vary depending on
the stage of product in its life cycle that is considered for purchase.
For example, consider an Original Equipment Manufacturer (OEM),
which purchases a microprocessor. In the early stage of the product life
cycle, the microprocessor presented a new-task decision that required
a large decision-making unit. As the use of microprocessor increased,
a modified re-buy decision evolved and required a change in the
structure of decision-making unit. Finally, when the microprocessor
moved into maturity stage, the decision-making became a low-priority
straight re-buy, involving basically the purchase function without the
participation of more individuals.
8.8.3 DIFFERENT BUYING SITUATIONS INVOLVED IN

ORGANISATIONAL BUYING
The purchase decision continuum for final consumers includes
nominal decision-making, limited decision-making, and extended
decision-making. The situation is slightly different in case of
organisations as their purchases involve a larger range of complexity
as compared with most individual or household decisions and involves
three categories.
Straight Re-buy: It is like making habitual purchase and involves

an automatic choice, as happens when the inventory level reaches
a predetermined reorder point. Most organisations maintain
an approved vendor list. These are rather routine purchases to
meet continuing and recurring requirements and are usually
under similar terms and conditions of purchase. The purchases
are of minor importance, involving little uncertainty because

satisfaction exists with past products, terms and service. The
buyer is likely to have limited purchase power such as purchase
of paper for printers and photocopiers. The typical purchase
process involves no search for information, no evaluation of
alternatives, no consideration is given to long-term issues and
procedural control is substantial.
Modified Re-buy: These are somewhat important and involve
limited decision-making. There is moderate level of uncertainty
as the organisation wants to repurchase a product or service but
with some minor modifications. There might be limited or many
choices. For example, an ice cream producer might seek lower
prices, faster delivery and higher quality of cream from suppliers
to meet the changing market conditions. In case of a modified
re-buy, situation competing suppliers may see an opportunity
to obtain the companys business and regular suppliers might
become more aggressive and competitive to keep a customers
business. P. Doyle, A. G. Woodside and P. Michell are of the
opinion that new tasks and modified re-buy are rather similar
but straight re-buys are quite different. The decision may involve
limited information search, usually by speaking to a few vendors
and moderate evaluation of alternatives that might probably
involve one or few people.
New Task: Such purchase involves extended decision-making

because the decision is new, and the item is being purchased for
the first time to perform a new job or solve a new problem.
There is often a serious risk that the product may not perform
as it should or that it will be too costly. New task purchase
may involve development of product specifications, vendor
specifications, and procedures for future purchase of the product.
In all such purchases, the organisational buyer needs a great deal
of information and careful establishment of criteria on which
to evaluate the product for purchase. This kind of purchase is
quite significant for the supplier because, if the organisational
buyer is satisfied with the new product and suppliers services,
it may develop into a continuing profitable relationship between
supplier and the buyer organisation.
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8.8.4 INFLUENCES ON ORGANISATIONAL BUYING

BEHAVIOUR
There are a number of factors that affect the consumer decisionmaking process and its outcome. These can be classified under three
headings:
1. Buying situation.
2. Personal influences.
3. Social influences.
Buying Situation
Howard and Sheth identified three types of buying situation:
(a) Extensive problem-solving;
(b) Limited problem-solving; and
(c) Automatic response.
When a problem or need is new, the means of solving that problem
is expensive and uncertainty is high, a consumer is likely to conduct
extensive problem-solving.
This involves a high degree of information search and close
examination of alternative solutions. Faced with this kind of buyer, the
salesperson can create immense goodwill by providing information
and assessing alternatives from the product range in terms of how
well their benefits conform to the buyers needs.
Limited problem-solving occurs when the consumer has some
experience with the product in question and may be inclined to stay
loyal to the brand previously purchased.
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However, a certain amount of information search and evaluation of a

few alternatives occurs as a rudimentary check that the right decision
is being made.
A key influence on whether a consumer conducts extensive or limited
problem solving or automatic response is their level of involvement
with the purchase. High involvement is associated with important
purchases that are of high personal relevance. When a purchase
affects ones self-image, has a high degree of perceived risk, has social
(e.g. status) implications, and the capacity to give a lot of pleasure, it
is likely to be high involvement. When the opposite is the case, the
consumer is likely to experience low involvement with the purchase.
Personal Influences
A second group of factors that influences the consumer decisionmaking process concerns the psychology of the individuals concerned.
Relevant concepts include personality, motivation, perception, and
learning.
Although personality may explain differences in consumer purchasing,
it is extremely difficult for salespeople to judge accurately how
extrovert or introvert, conventional or unconventional, a customer is.
Indeed, reliable personality measurement has proved difficult, even
for qualified psychologists. Brand personality is the characterisation
of brands as perceived by consumers. Brands may be characterised as
for young people (Levis), brash (Castlemaine XXXX) or intelligent
(Guinness).
Social Influences
Major social influences on consumer decision-making include social
class, reference groups, culture, and the family. The first of these
factors, social class, has been regarded as an important determinant

of consumer behaviour for many years. Social class in marketing
is based upon the occupation of the head of the household or main
income earner. The practical importance of social class is reflected
in the fact that respondents in market research surveys are usually
classified by their social class, and most advertising media give
readership figures broken down by social class groupings.
Reference group acceptability should not be confused with popularity.
The salesperson who attempts to sell a car using the theme that its
very popular may conflict with the buyers desire to aspire to an
exclusive reference group, for which a less popular, more individual
model may be appropriate.
Fill in the blanks:
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30. Organisational goals are concerned with producing a good or

providing a service, or ................. an item and all the purchases
are made to effectively perform the ....................... activities.
31. Identifying the roles played within the buying centre is a
................. for targeting persuasive communications.
32. For ................. decisions, such buying centres are often formed
on an ad hoc basis but for routine decisions these centres are
relatively permanent.
33. Decision-making units tend to vary depending on the stage of

product in its ................. that is considered for purchase.
34. In ................. no search for information, no evaluation of
alternatives, no consideration is given to long-term issues and
procedural control is substantial.
35. ................. purchase may involve development of product
specifications, vendor specifications, and procedures for
future purchase of the product.
36. In case of a ................., situation competing suppliers may see
an opportunity to obtain the companys business and regular
suppliers might become more ................. and competitive to
keep a customers business.
37. ...................... occurs when the consumer has some experience
with the product in question and may be inclined to stay
.................. to the brand previously purchased.
Interview a salesperson from a supplier organisation. Find out what

steps her/his company takes to sell supplies to buyer organisations?
Does the company believe in developing long-term relationship?
If yes, what steps it takes?
The last stage in purchase decision process involves an evaluation of

the product as well as vendor performance. In case of organisational
purchases such evaluations are more formal than are household
purchase evaluations. This stage is important in that it provides
feedback so that the buying organisation and the vendor will be
better able to work as a team.
8.9 SUMMARY
Buying decisions and consumption of products or services always

take place in the context of some specific situation.
Nominal decision-making occurs when the products are

low cost, frequently purchased, familiar brands/products, of
low-involvement category, and little thought or search time is
given to purchase.
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Limited decision-making is usually straightforward and simple.

It involves input from long-term memory and limited search, few
alternatives and attributes are considered, and there is little or
no post-purchase evaluation.
Extended decision-making occurs when the products are

expensive, risky, ego-intensive, are purchased infrequently,
consumer involvement is high, consumer considers much
information from internal and external sources; post-purchase
evaluation is more likely to be complex and dissonance-causing.
Problem recognition occurs whenever the consumer perceives

a difference of sufficient intensity between what is perceived as
the desired state and what is the state of affairs at present.
Consumers tend to view personal sources as more important in

most involving purchases.
Consumers attribute based choices require the knowledge of

specific attributes and comparison of each brand alternative
on specific attributes. In this situation, the consumer is much
concerned about the value of the product and considers the
consequences associated with a non-optimal decision.
Attitude-based choice involves the use of general attitudes,

beliefs, impressions, intuition, and heuristics. Consumers do
not make attribute-by-attribute comparisons between brands
under consideration. A common approach can be to form overall
preference on attitude-based information about brands and the
final choice is reached by comparing prices of each brand.
Organisational purchases involve consultative selling, that is

where the buyer and vendor work together to define the problem,
identify a solution and work together throughout a long process
of implementation and support.
Consumer Research: The action or activity of gathering

information about consumers needs and preferences,
especially in relation to a particular product or service.
Nominal Decision-Making: Nominal decisions are those

decisions where you dont need to consider picking a brand
because your past experiences with the brand or product led
you to make my decision the way that you did.
Consumer Dissonance: The mental stress or discomfort

experienced by an individual who holds two or more
contradictory beliefs, ideas, or values at the same time, or is
confronted by new information that conflicts with existing
beliefs, ideas, or values.
Convenience Products: A consumer item that is widelyavailable purchased frequently and with minimal effort.
Because a convenience good can be found readily, it does not
require the consumer to go through an intensive decisionmaking process.
Problem Recognition: Problem recognition results when

a consumer recognizes a difference of sufficient magnitude
between what is perceived as the desired state of affairs and
what is the actual state of affairs, enough to arouse and activate
the decision process.
Internal Search: This is the first response of the consumer

after the problem recognition - a mental process of recalling
and reviewing the information stored in memory that may
relate to the purchase situation.
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1. What is the significance of consumer purchase decision?
2. Differenciate between Extended and Limited decision making.
3. Mention few approaches to active problem solving.
4. Give a brief description of emotional research.
5. Elaborate upon consumer sources of information.
6. Throw light upon internet as a source of information in consumer
decision making process.
7. Mention clear distinction between evoked set and inept set.
8. Describe in detail various types of non-compensatory decision
rules.
9. Consumers post-purchase evaluation process is influenced by
the purchase process itself. Justify the statement.
10. Describe relationship of expectation,

satisfaction diagrammatically.
performance,
and
11. Why is product disposal an environmental concern? Support

your answer with relevant examples in this context.
12. Why is it significant to use consumer behaviour in designing
products?
13. Explain the process of organisational buying in your own words.
14. Describe different buying decisions and the buying behaviour
involved in them.

Topic
Types of Consumer
Decision
Q. No.
1.
Answers
consumer decision process
2.
3.
4.
elaborate; actually
attribute-based
False
5.
6.
True
False
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
True
True
Problem recognition; magnitude
focus group; performing
Human Factors
discrepancy; current
Information search
internal information
professional
Active
awareness set; consideration set
Evoked set
inept set
False
21.
True
False
True
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Problem Recognition
Information Search
Evaluation of
Alternative and
Selection
22.
23.
Contd...
Post-purchase Action
Using Consumer
Behaviour in
Designing Products
nominal; malfunction
perceived; performance
Satisfaction
variables; disposal
True
29.
30.
False
reselling; organisational
31.
32.
33.
34.
35.
36.
37.
prerequisite
non-routine
life cycle
straight re-buy
New task
modified re-buy; aggressive
Limited problem-solving; loyal
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Organisational
Buying Behaviour
24.
25.
26.
27.
28.

1. Refer 8.2
There are various types of consumer decision processes. It is

useful to view purchase decision involvement as a continuum
and as the consumer moves from a low level of involvement with
the purchase situation to a high level of involvement, purchase
decision-making becomes progressively complex.
2. Refer 8.2.2 & 8.2.3

Extended decision-making involve extensive internal (long-term

memory) and external (outside sources) information search
followed by a rigorous evaluation of several alternatives. Limited
decision-making involves internal (long-term memory) and
limited external search, consideration of just a few alternatives,
simple decision rules on a few attributes and little post-purchase
evaluation.
3. Refer 8.3.1

Generic problem recognition and Selective problem recognition.
4. Refer 8.3.2

T Collier and others have noted that marketers use focus

group research, personal interviews or projective techniques
to determine consumers emotions associated with a particular
product or products that generate or reduce certain emotions.
5. Refer 8.4.1

Long-term memory; Personal sources; Independent sources;

Marketer controlled sources and Experiential sources
6. Refer 8.4.1

The Internet or World Wide Web is a network of computers that

is accessible to anyone with a computer, modem, telephone
connection and an Internet account.
7. Refer 8.4.2

Evoked set comprises those brands that the consumer will

evaluate for the solution of a particular problem and inept set
is made up of brands that have been rejected from purchase
consideration because of an unpleasant experience or negative
feedback from reliable others.
8. Refer 8.5.1

Conjunctive Decision Rule
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Disjunctive Decision Rule
Elimination-by-aspects Decision Rule
Lexicographic Decision Rule
9. Refer 8.6.1
10. Refer 8.6.1
11. Refer 8.6.2

Disposal action by consumers is increasingly becoming important

for governments and marketers because of major environmental
concerns that involve growing dioxins, lead and mercury.
12. Refer 8.7

Personality is innate and has the tendencies to influence

individual product choices and adoption behaviour.
13. Refer 8.8.2

Organisational buying can be traced to a single need - solving a

problem - and involves decision-making units (also called buying
centres).
14. Refer 8.8.3

Straight Re-buy, Modified Re-buy and New Task

SUGGESTED READINGS
C.L. Tyagi and Arun Kumar, (2004), Consumer Behaviour,

Atlantic Publishers & Dist



E-REFERENCES
http://www.indianjournals.com/ijor.aspx?target=ijor:jims8m&vo
lume=16&issue=3&article=001
http://www.mckinsey.com/insights/marketing_sales/the_
consumer_decision_journey
h t t p : / / w w w. i c m r i n d i a . o r g / c o u r s e w a r e / M a r k e t i n g % 2 0
Management/Organiz-Market-Organiz-Buy-Behav.htm
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CONSUMER BEHAVIOUR IN RETAIL ENVIRONMENT
CONTENTS
9.1
Introduction
9.2
Outlet Selection
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9.2.1
Outlet Image
9.2.2
Retailer Brands
9.2.3
Location of Outlet and Size
9.2.4
Customer Attribute and Outlet Selection
9.3
Consumer Shopping Orientation
9.3.1
Point-of-Purchase Displays
9.3.2
Deals and Discounts
9.4
Retail Outlet Atmosphere
9.4.1
Sales Personnel
9.5
Summary
9.6
9.7
Answers and Hints
9.8
THE DIGITAL TRACKING STORES
Traditional brick-and-mortar retailers dont have a lot going
for them these days. On the one hand, high unemployment and
stagnant wage growth is sapping the purchasing power of the
average consumer, and on the other, the rise of e-commerce is
giving those consumers more information and choices than theyve
ever had before, making competition all the more fierce.
Firms like RetailNext can use security-camera systems to give
retailers a tremendous amount of information about customer
behavior in stores, allowing retailers to finely tune staffing levels
and product placement.
Other firms, like Euclid Analytics, provide the same information
by identifying customer smart-phone wi-fi signals. And while these
analytics firms provide invaluable intelligence to retailers that
are enabling them to improve their operations and boost profits,
privacy advocates are worried about how far companies will take
these technologies. After all, its one thing for a retailer to have
a general idea of how many people are in the store and how, in
the aggregate, consumers are interacting with the store; but its
another thing entirely for a retailer to be able to identify a customer
individually and tailor pricing and service based on his in-store
behavior and financial history.
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In 2010, the Association of Marketing in Retail produced a voluntary

code of conduct for marketers and retailers to use as a guide in
their tracking and marketing efforts. The code outlines the various
tracking capabilities available and rates them on a scale from low
risk to high risk.
Most companies are relying on smart-phone apps to track customers

locations and push relevant marketing material. This method of
tracking allows retailers to offer an explicit opt-in prompt when a
user downloads the app, mitigating many of the privacy concerns.
CONSUMER BEHAVIOUR IN RETAIL ENVIRONMENT 233

Learn about the concept of Outlet selection
Find more about consumer shopping orientations
Understand in detail retail outlet atmosphere
9.1 INTRODUCTION
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Making a purchase is often a simple, routine matter of going to a

retail outlet where the consumer looks around and quickly picks
out something needed. All consumers like to view themselves as
intelligent shoppers and make decisions regarding the retail outlet
choice in which they will shop. Generally, consumers decide about
the make of the computer first then choose the dealer to buy it from.
Frequently it happens that consumers choose the retail outlet first
and this influences their choice of the brand. For example, when
consumers shop for clothes, they generally decide about a retail outlet
first. Similarly, they often make a brand decision in the retail store
when they shop for appliances.
Retail outlet refers to any source of products or services for

consumers.
Increasingly, consumers are exposed to product introductions and

their descriptions in direct-mail pieces and catalogues, in various
print media vehicles, on television and on the Internet and buy them
through mail, telephone, or computer orders. So far, this in-home
shopping is not very common in India but is on the increase. A large
number of companies with websites are encouraging consumers to
buy products through computer orders.
W.R. Darden and M.J. Dorsch note that selecting the retail outlet
involves the same process as selecting a brand. To choose a retail
outlet, the consumer has a certain evaluative criteria in mind and
compares these with her/his perception of an outlets attributes to
characterise it either as acceptable or unacceptable. The outcome of
this evaluation will determine whether the consumer patronises the
retail outlet or not. If the shopping experience at the selected store is
positive, the learning experience is reinforced and the matter of outlet
selection becomes largely a matter of routine over a period of time.
9.2 OUTLET SELECTION

Consumers selection of outlet is important to managers of retail
establishments and also to consumer goods marketers. According to
J.J. Stoltman, J.W. Gentry, K.A. Anglin and A.C. Burns, a consumer
can follow three basic sequences when making a purchase decision
(1) brand first, outlet second (2) outlet first, brand second and (3)
brand and outlet at the same time.
Frequently, consumers select the brand first and subsequently decide
about the outlets. But for many consumers and product categories,
retail stores constitute the evoked set rather than brands. For instance,
our consumer of the laptop computer example might be familiar, let
us say, with a retail outlet named Hindustan Business Computers.
She/he may decide to visit this store and choose a brand from the
ones available there. Using the third approach, the consumer visits a
computer retail outlet in her/his evoked set and evaluates the brands in
her/his consideration set in the store. In this approach, the consumer
evaluates the attributes of store and brands at the same time. In such
a situation, the friendly behaviour of sales personnel and excellent
service facilities might shift the consumers preference to second best
laptop computer against a favourite laptop at an impersonal store
with few or no service facilities.
9.2.1 OUTLET IMAGE
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Whether a consumer chooses a specific retail outlet before or

after brand choice, she/he evaluates alternative outlets based on
predetermined evaluative criteria. The retail outlets may be thought
of as having personalities. Some stores have very clearly defined
images (good or bad) and some others that tend to blend into the
crowd. They may not have anything distinctive about them and
may be overlooked for this reason. Store image refers to consumers
perceptions of all the attributes associated with a retail outlet such
as its location; merchandise availability and the knowledge as well
as congeniality of sales personnel etc. This image is similar to the
concept of brand image. J. D. Lindquist has reported the following
nine dimensions of store image involving twenty-three components
of these dimensions.
TABLE 9.1: STORE IMAGE DIMENSIONS AND THEIR

COMPONENTS
Dimensions
Merchandise
Service
Clientele
Physical facilities
Convenience
Promotion
Store atmosphere
Institutional
Post-transaction
Components
Quality, selection, style and price
Layaway plan, sales personnel, easy
return, credit and delivery
Customers
Cleanliness, store layout, shopping ease
and attractiveness
Location and parking
Advertising
Congeniality, fun, excitement and comfort
Store reputation
Satisfaction
Consumers often evaluate stores using a general evaluation and this

overall feeling may have to do with intangibles. Besides functional
attributes such as price and merchandise selection, consumers also
view retail outlets as pleasant, unpleasant, active, or a sleepy place
to shop. As a result, some retail outlets are likely to consistently be
in consumers evoked set, whereas others will never be considered.
According to J. E. M. Steenkamp and M. Wedel, marketers make
extensive use of image data in developing marketing strategies
and in determining an outlets image to mach the target markets
expectations.
9.2.2 RETAILER BRANDS
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Traditionally, retail stores carried only manufacturers brands.

In the current retail store scenario, some stores carry their own
brands supposedly as low-price alternatives to expensive national or
international brands. Shoppers Stop, for example, carries its own
store brands. Such brands become an important attribute of an outlet
and also provide attractive margins for such outlets. A. K. Jam and
A. Dick report that the traditional pattern of providing reasonable
quality at low price is no longer necessarily optimal. An emphasis on
quality over price may be particularly advantageous for the outlet if
the brand carries the store name.
9.2.3 LOCATION OF OUTLET AND SIZE
Retail outlet location has an obvious impact on store patronage

and consumers outlet choice often depends on its location. If the
differences in other attributes are not significant, consumers generally
will choose the store that is closest. Similarly, the size of the store
is also an important factor that influences consumers outlet choice.
Consumers tend to prefer larger stores compared to smaller ones with
cramped spaces.
9.2.4 CUSTOMER ATTRIBUTE AND OUTLET SELECTION
For convenience items or minor shopping goods, consumers are
unwilling to travel very far. However, for high-involvement purchases,
consumers do not mind traveling to distant shopping areas. Distance
is not relevant for Internet retailers but ease of searching the site is.
Fill in the blanks:

1. .................... refers to any source of products or services for
consumers.
2.
To choose a retail outlet, the consumer has a certain evaluative

criteria in mind and compares these with her/his .................... of
an outlets attributes to characterise it either as acceptable or
unacceptable.
Contd...
3.
Whether a consumer chooses a specific retail outlet before or

after brand choice, she/he evaluates alternative outlets based
on .................... evaluative criteria.
4.
Besides .................... attributes such as price and merchandise

selection, consumers also view retail outlets as pleasant,
unpleasant, active, or a sleepy place to shop.
5.
In the current retail store scenario, some stores carry their

own brands supposedly as low-price alternatives to expensive
national or .................... brands.
6. Consumers tend to prefer .................... stores compared to

smaller ones with cramped spaces.
Visit a outlet of your choice and observe minutely its atmospherics,

brands it carries, and floor planning. Also try to find out the footfall
of the store on weekdays and weekends and compare it with your
classmates choice of outlets for better understanding.
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Atmospherics describes the physical elements in a stores design

that appeals to consumers and encourages consumers to buy.
Exterior Atmospherics includes store front, display windows.
Displays enhance and provide customers with information.
9.3 CONSUMER SHOPPING ORIENTATION
Orientations are closely related to general consumer lifestyle and

are subject to influences such as stage in household lifecycle and
household income etc.
Shopping orientation refers to a shopping style of consumers that

particularly emphasises certain activities or shopping motivations.
Consumers often dont shop simply to buy something they need.
They also go shopping for more complex reasons such as sensory
stimulation, diversion from routine, social interactions and acquiring
information about new trends. There are two distinct approaches to
classifying consumer shopping orientation:
Psycho graphics-based orientations describe seven types:
Inactive shoppers can best be described by their lack

of activity. They have extremely confined lifestyles and
shopping interests and do not engage in outdoor or do-ityourself activities. They do not exhibit any joy or interest
in shopping. They are also not particularly concerned

about shopping attributes such as price, service, or product
selection. They may favourably respond to home delivery
service.
Active shoppers are viewed as tough shoppers and their

lifestyles are demanding. They are fond of outdoor activities
and undertake do-it-yourself projects. They derive pleasure
out of shopping and their major concern is price in their
search for the desired item. Active shoppers orientation is
more of an expression of their demanding lifestyles and they
tend to balance price with quality, fashion and selection in
their search for value.
Service shoppers are focused on demanding substantial instore service when they shop and usually visit conveniently
located stores with friendly, helpful personnel. They are
inclined to become impatient if they have to wait for help
from store personnel.
Traditional shoppers like outdoor activities, but lack

enthusiasm for shopping. They are likely to be less pricesensitive and do not insist on store personnel help or
attention.
Dedicated fringe shoppers seem to be risk takers, enjoy do-ityourself activities and more are inclined to try new products.
They have almost a compulsion to exhibit to others that they
are different. True types in this category are not interested
in extensive socialising, not much interested in TV or radio
commercials and show little brand or store loyalty.
Price shoppers are extremely price conscious and are

willing to make extensive search efforts to meet their
price requirements. They are avid consumers of all type of
advertising to learn about lowest prices.
Transitional shoppers are consumers in the early stages of

family lifecycle and show practical interest in a number of
outdoor activities. Transitional shoppers display low level of
interest in searching for low prices and are more inclined
to try new products. Once they are interested in a product,
they tend to make up their minds quickly in buying it.
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Using projective research techniques to ascertain the ways that

college students shop has identified motivation-based shopping
orientations. Six shopping orientations have been uncovered:
Chameleons are those whose shopping styles change to suit

a particular situation. Their shopping approach is based on
the type of product, how rushed they feel for shopping and
the importance of purchase.
Collectors/gatherers tend to have a propensity to stockpile

products or buy large quantities either to save money or
lessen the need of frequent shopping. They bargain to get
the best price and take advantage of retailer guarantees.
Foragers specifically buy only the desired products and are

willing to get involved in extended search. They are not
particularly loyal to any store and prefer to go shopping
alone.
Hibernants show a significant degree of indifference towards

shopping and will often postpone buying products even
when required. Their shopping patterns are opportunistic
rather than based on need.
Predators are speed-oriented and shop with a purpose. They

carefully plan their purchases in advance and prefer to shop
alone. Predators do not enjoy shopping activity and tend to
select retail outlets where they are confident of getting the
required products quickly.
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Scavengers enjoy both the shopping activity and making

purchases. They prefer going to sales events and view
shopping as a means of entertainment. They tend to make
many impulse purchases.
9.3.1 POINT-OF-PURCHASE DISPLAYS

According to the Point-of-Purchase Advertising Institute
(Supermarket Consumer Buying Habits Study, 1987), more than 80
percent of supermarket shoppers make their final purchase decisions
inside the retail store this makes POP activities have become very
important. By creating an effective combination of attractive store
layout and displays, the retailer can change an unexciting retail
environment into one that is exciting and results in enhanced sales
turnover. Several studies have been conducted on the effectiveness
of displays in supermarkets and drug stores. Two findings mentioned
below are representative of such studies:
Howard Stumpf reported that 2,473 supermarket shoppers were

interviewed and 38 percent of the respondents had purchased
at least one item or brand they had never before bought. The
reason given for this first-time purchase was that the product
was displayed.
A study by the Point-of-Purchase Advertising Institute (Awareness,

Decision, Purchase, 1961) of 5,215 shoppers in supermarkets,
variety stores, liquor stores, hardware stores and service stations
reported that one-third had purchased at least one of the
displayed items.
It is clear that POP displays have a significant influence on consumers

in-store purchase behaviour. The sales impact of displays varies
widely by product type and location and between brands within a
product category; there is generally a strong increase in sales.
9.3.2 DEALS AND DISCOUNTS

Price discounts and other promotional deals that offer same-for-less
or more-for-the-same are generally associated with POP displays
and evidence suggests that in- store price reductions influence brand
decisions. Sharp increase in sales at the start of price reduction is
followed by near-normal sales over time or when the deal ends.
Increase in sales comes from four sources in response to price deals:
Those consumers, who do not normally visit the store announcing
a price deal, may come to buy the brand.
Current brand users may buy in advance of their anticipated

needs. Ready availability in excess often leads to increased
consumption of the brand.
Those consumers, who otherwise use competing brands, may

switch to the brand available at reduced price. A percentage of
such brand-switching consumers may become regular users of
the brand.
Non-product category buyers may buy the brand because it is

now a better value to substitute product.
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K. Sivakumar and S.P. Raj note that brands perceived as being of

higher quality tend to benefit more by price deals than brands with
lower quality image. D.R. Lichtenstein, S. Burton and R.G. Netemeyer
reported that consumers differ in their deal proneness to deals across
product categories and younger and less educated consumers are
more likely to respond to sales promotional deals.
Fill in the blanks:

7. Inactive shoppers have extremely confined .................... and
shopping interests and do not engage in .................... or do-ityourself activities.
8. .................... orientation is more of an expression of their
demanding lifestyles and they tend to balance price with
quality, fashion and selection in their search for value.
9. Traditional shoppers are likely to be less .................... and do
not insist on store personnel help or attention.
10. .................... shoppers display low level of interest in searching
for low prices and are more inclined to try new products.
11. Foragers specifically buy only the desired products and are
willing to get involved in .................... search.
12. .................... do not enjoy shopping activity and tend to select
retail outlets where they are confident of getting the required
products quickly.
13. Non-product category buyers may buy the brand because it is
now a better value to .................... product.
Find out deals and discounts usually floated by Automaker brands

to attract customers. Prepare a report by providing key findings
regarding:
(a) time when deals & discounts are offered,
(b) type of deal & discount and,
(c) impact of the discounts on sales of product.
According to a 2005 Economist article, consumers spend no more

than 6 seconds trying to find a preferred brand before they give up
and settle for a substitute.
9.4 RETAIL OUTLET ATMOSPHERE
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The layout, fixtures, lighting, colours, sounds, odours and the dress
and behaviour of its personnel affect a retail stores atmosphere. An
uncontrollable yet important component of store atmosphere is the
number of customers present in the store, their characteristics and
behaviour.
The outlet atmosphere produces a significant effect on customers
mood and their willingness to visit and shop around in the store. The
atmosphere also influences consumers assessment of the quality of
the store and the store-image they form. As a result of positive mood
induced by store atmosphere, consumers are more satisfied and this
increases their willingness to visit the store again. This may help in
building store loyalty.
Many elements of store design can be cleverly controlled to attract

customers and produce positive effects on consumers. For example,
light colours impart a feeling of spaciousness and serenity and signs
in bright colours create excitement. Charles S. Areni and David
Kim reported that brighter in-store lighting influenced shoppers to
examine and handle more products.
In case of service businesses such as banks, hospitals, beauty parlours
or restaurants, the term service space refers to atmosphere. Marketers
use the process of atmospherics to manipulate physical retail or service
environment with the objective of inducing specific mood responses
in consumers. Internet retailers attempt to create atmosphere with
the help of graphics, colours, layout, content and interactivity etc.
Music in the store environment can have a major effect. J.D.
Herrington and L. M. Capella found that music could influence the
time consumers spend in retail outlet or restaurant, the mood of the
customer and the overall impression of the outlet. Slow music appears
to relax and slow down the consumers and they tend to spend more
time in the store.
Studies indicate that odours can positively influence the shopping
experience. Odour preferences vary across consumers. Retailers
should use caution in using aromas in the store environment, as some
aromas can be offensive to certain consumers. In addition to this,
many consumers dislike anything artificial or unnecessary to the air
that they breathe. The appearance of store employees and the way
they behave and also other shoppers in the retail outlet influence the
store environment in a major way.
9.4.1 SALES PERSONNEL
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Sales personnel are considered one of the most important in-store

factors that influence consumers. This influence can be understood
in terms of exchange theory, which emphasises that every interaction
involves an exchange of values. Each participant gives something to
the other and hopes to receive something in return. The salesperson,
for example, might offer expertise about the product to make the
consumers choice easier. Or the customer may be reassured because
the salesperson is likeable; his tastes are similar and he is perceived
as someone who can be trusted. Several research studies in this area
conclusively attest to the impact of a salespersons appearance on
sales effectiveness. Peter H. Reingen and Jerome B. Kernan report
that in sales, as in much of life, attractive people seem to hold the
upper hand. In addition, more effective sales personnel usually know
their customers traits and preferences better than do ineffective
ones. This allows them to adapt their approach to meet the needs of
the specific customer.
In case of services, customers and service personnel often form fairly
warm personal relationships, termed as commercial friendships.
Commercial relationships are similar to other friendships and have
substantial impact on customer satisfaction, loyalty and positive
word-of-mouth.

14. Many elements of store design can be cleverly controlled to
attract customers and produce positive effects on consumers.
15. Internet retailers do not attempt to create any atmosphere.
16. Retailers shouldnt use any caution in using aromas in the
store environment.
17. Customers and service personnel often form fairly warm
personal relationships, termed as commercial friendships.
Choose any two restaurants and compare and contrast their

ambience and type of customers it targets to. What is the impact of
the ambience on the service receivers, analyse it carefully by taking
help of restaurant personnel.
9.5 SUMMARY
In many instances, consumers do not just walk in a retail outlet for

making a purchase and quickly pick up the product. Sometimes,
consumers choose the product first and choose the retail outlet
afterwards.
A retail outlet refers to any source of product or service for

consumers. The general approach to decision process is the same
as for selecting a product/brand.
The key dimensions of store image are the outlet location, size
of the store, product lines available, service, clientele, physical
facilities, convenience, promotion, store atmosphere, and
post-purchase policies.
Consumers might choose the retail outlet first if the store loyalty
is high, brand loyalty is low, or when the brand information is
inadequate.
Variables such as displays, price discounts, store atmosphere,

and behaviour of sales staff etc. can significantly affect sales.
After the brand and outlet selection, the consumer takes the final
step of completing the transaction. Credit facility often plays an
important role in completing the transaction.
Purchase action is generally the last contact a customer has on

that shopping trip and also offers the opportunity of creating a
lasting impression on the consumer.
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Retail Outlet: A retail outlet refers to a store that simply sells

merchandise directly to the consumer.
Retailers Brands: A line of products strategically branded by

a retailer within a single brand identity. They bear a similarity
to the concept of house brands, private label brands.
Point-of-Purchase Displays: Advertising display material

located at the retail store, usually placed in an area where
payment is made, such as a check-out counter.
Discounts: A deduction from the usual cost of something,

typically given for prompt or advance payment or to a special
category of buyers.
Contd...
Sales Personnel: It refers to those who works as part of the

sales team either in a retail store, call center or individually
from home.

1. Do you think the retail environment in India is changing? Explain
with examples.
2. What is store image and what key components go into creating
the store image?
3. Why is store location an important criteria in store selection?
4. What is a retailers brand? Give some examples.
5. Discuss about various consumer shopping orientations.
6. Describe the role of Point-of-Purchase displays.
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7. How do discounts and deals play an important role in influencing?

8. Elaborate upon the significance of retail store atmosphere in
influence consumers choice.
9. How Sales personnel help consumers value a particular outlet?

Q. No.
1.
2.
3.
4.
5.
6.
7.
Answer
Retail outlet
perception
predetermined
functional
international
larger
lifestyles; outdoor
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Active shoppers
price-sensitive
Transitional
extended
Predators
substitute
True
False
False
True
Topic
Outlet Selection
Consumer Shopping
Orientation
Retail Outlet Atmosphere

1. Refer 9.1

Increasingly, consumers are exposed to product introductions

and their descriptions in direct-mail pieces and catalogues, in
various print media vehicles, on television and on the Internet
and buy them through mail, telephone, or computer orders.
2. Refer 9.2.1

The retail outlets may be thought of as having personalities.

Some stores have very clearly defined images (good or bad) and
some others that tend to blend into the crowd.
3. Refer 9.2.3

Retail outlet location has an obvious impact on store patronage

and consumers outlet choice often depends on its location.
4.
Refer 9.2.2
Retail stores carried only manufacturers brands. In the current

retail store scenario, some stores carry their own brands
supposedly as low-price alternatives to expensive national or
international brands.
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5. Refer 9.3

Shopping orientation refers to a shopping style of consumers

that particularly emphasizes certain activities or shopping
motivations.
6. Refer 9.3.1
By creating an effective combination of attractive store layout

and displays, the retailer can change an unexciting retail
environment into one that is exciting and results in enhanced
sales turnover.
7. Refer 9.3.2

Those consumers, who do not normally visit the store announcing

a price deal, may come to buy the brand.
8. Refer 9.4

The outlet atmosphere produces a significant effect on customers

mood and their willingness to visit and shop around in the store.
9. Refer 9.4.1

This influence can be understood in terms of exchange theory,

which emphasises that every interaction involves an exchange of
values. Each participant gives something to the other and hopes
to receive something in return.

SUGGESTED READINGS
Berman Barry, Retail Management: A Strategic Approach,

Pearson Education
K. V. S. Madaan, Fundamentals of Retailing, Tata McGraw-Hill

Education
Arpita Mukherjee and Nitisha Patel, FDI in Retail Sector, India,

Academic Foundation
Tapan K Panda, Marketing Management, Excel Books
Nitin Mehrotra, Indian Retail Sector - A Primer, ICFAI Books
E-REFERENCES
http://www.iamwire.com/2013/11/indian-retailers- copingchanging-environments/21612
http://www.retaildesignworld.com/news/article/53a83cc114c3eopinion-indian-retail-is-a-balancing-act-says-raviraj-deshmukh
http://knowledge.ckgsb.edu.cn/2013/11/05/policy-and-law/fdi-inretail-in-india/
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10
CONSUMER PROTECTION: LAWS IN INDIA
CONTENTS
10.1
Introduction to Consumer Protection
10.2
Consumer Protection Act, 1986
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10.2.1
Who is a Consumer?
10.2.2
Objectives of Consumer Protection
10.2.3
Rights of a Consumer
10.2.4
Salient Features of Act
10.2.5
12th Plan Strategy and Implementation
10.3
Supply of Goods and Services Act, 1982
10.3.1
If the Implied Conditions are Breached
10.3.2
Effect of a Manufacturers Guarantee
10.3.3
Lapse of Possible Claim for Defective Goods
10.3.4
Trader and Responsibility for Liability for Negligence
10.4
Sale of Goods Act, 1979
10.5
Summary
10.6
10.7
Answers and Hints
10.8
FILING CONSUMER COMPLAINTS BECOMES A CAKE WALK
In a major move to empower consumers, the consumer affairs
department has proposed to allow filing of cases against entities
such as builders, companies, and service providers in the consumer
forum in the district where a complainant lives. This is one of the key
amendments, proposed in the Consumer Protection Act. Another
major change mooted is to ensure that the district forums admit
complaints within 24 days. At present, a consumer can file a case in
the district consumer dispute redressal forum where the defaulting
entity has its main office or a branch office. For example, if a Mumbaibased person has bought a flat in Delhi, he has to file complaint, if any,
only in Delhi if the entity doesnt have any branch office in Mumbai.
Now a new clause is being added to the jurisdiction of district
forums to allow the complainant to file a complaint in district
forum where he resides or works.
Its a welcome proposal, which will reduce inconvenience and
harassment of consumers to a large extent. Consumers time and
money will be saved. This will help them to pursue their cases
properly. It will also encourage more consumers to approach the
forums in case of disputes. At present people hesitate to file cases
if they shift their work place or reside in a different city. You cant
expect a man living or working in Mumbai to visit Delhi frequently
to pursue his case.
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Another major change mooted is to ensure that the district forums

admit complaints within 24 days. The draft proposal, circulated for
inviting comments, says that if the forums fail to do so within the
specified period it shall be deemed to have been admitted. The
only exception is where the complainant fails to appear before the
consumer forum on the day of hearing for admissibility without a
reasonable ground. The proposed amendment also says if another
date of hearing for admissibility is fixed within the next 21 days
from the date of last hearing for admissibility and the complainant
fails to appear without any reasonable ground, the admissibility
of the complaint shall be decided on merit based on the available
papers or if no date of hearing for admissibility is fixed within
21 days from the last date of hearing for admissibility, the complaint
shall be deemed to have been admitted on the expiry of such
21 days.
CONSUMER PROTECTION: LAWS IN INDIA 249

Learn the concept of consumer protection
Discuss in detail about Consumer Protection Act, 1986
Understand Sale of Goods Act, 1979
Get knowledge of Supply of Goods and Services Act, 1982
10.1
I NTRODUCTION TO CONSUMER
PROTECTION
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The consumer movement in India is as old as trade and commerce.

In Kautilya Arthashastra, there are references to the concept of
consumer protection against exploitation by the trade and industry,
short weighment and measures, adulteration and punishment for
these offences. However, there was no organized and systematic
movement actually safeguarding the interests of the consumers.
With the advent of the 20th century due to rapid industrialization
and multifaceted development in India after the Independence, there
appeared a flood of consumer goods and services in the Indian Market,
which almost changed the relationship between the consumer and
the trader. Technological advancements in the field of media led to
flooding of advertisements of goods and services further worsening
the otherwise grim situation. Lack of consumer awareness, illiteracy,
poverty, etc. further led to the exploitation of consumers. Awareness
of consumer rights varies in different regions in the country. It is very
poor especially among the population in rural and far flung areas
of the country. Compared to the developed countries, the levels of
consumer awareness in such a vast country with a large population
like India is much lower. This is rooted in economic inequality, low
levels of literacy and ignorance. Because of this, consumers are not
able to assert their rights and on many occasions are exploited by the
trade and industry and service providers. Protecting and promoting
the welfare of consumers has thus become one of the major concerns.
10.2 CONSUMER PROTECTION ACT, 1986

10.2.1 WHO IS A CONSUMER?
All of us are consumers of goods and services. For the purpose of the
Consumer Protection Act, the word consumer has been defined
separately for goods and services.
For the purpose of goods, a consumer means a person belonging to
the following categories:
One who buys or agrees to buy any goods for a consideration

which has been paid or promised or partly paid and partly
promised or under any system of deferred payment
It includes any user of such goods other than the person who
actually buys goods and such use is made with the approval of
the purchaser.
A person is not a consumer if he purchases goods for commercial

or resale purposes. However, the word commercial does not
include use by consumer of goods bought and used by him
exclusively for the purpose of earning his livelihood, by means of
self employment.
For the purpose of services, a consumer means a person belonging

to the following categories:
One who hires or avails of any service or services for a

consideration which has been paid or promised or partly paid
and partly promised or under any system of deferred payment
It includes any beneficiary of such service other than the one

who actually hires or avails of the service for consideration and
such services are availed with the approval of such person.
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10.2.2 OBJECTIVES OF CONSUMER PROTECTION
To create suitable administrative and legal mechanisms which

would be within the easy reach of consumers and to interact
with both Government and non-Governmental Organizations to
promote and protect the welfare of the consumers.
To involve and motivate various sections of society including

consumer organizations, women and youth to participate in the
programme
To generate awareness among consumers about their rights and

responsibilities, motivate them to assert their rights so not to
compromise on the quality and standards of goods and services
and to seek redressal of their disputes in consumer if required.
To educate the consumers as to be aware of their rights & social

responsibilities
10.2.3 RIGHTS OF A CONSUMER

Right to Safety
According to this right. The consumers have the right to be protected
against the marketing of goods and services which are hazardous to
life and property, this right is important for safe and secure life.
This right includes concern for consumers long term interest as well
as for their present requirement.
Sometimes the manufacturing defects in pressure cookers, gas
cylinders and other electrical appliances may cause loss to life, health
and property of customers. This right to safety protects the consumer
from sale of such hazardous goods or services.
Right to Information
According to this right the consumer has the right to get information
about the quality, quantity, purity, standard and price of goods
or service so as to protect himself against the abusive and unfair
practices. The producer must supply all the relevant information at
a suitable place.
Right to Choice
According to this right every consumer has the right to choose the
goods or services of his or her likings. The right to choose means an
assurance of availability, ability and access to a variety of products
and services at competitive price and competitive price means just or
fair price.
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The producer or supplier or retailer should not force the customer to

buy a particular brand only. Consumer should be free to choose the
most suitable product from his point of view.
Right to be Heard or Right to Representation
According to this right the consumer has the right to represent him or
to be heard or right to advocate his interest. In case a consumer has
been exploited or has any complaint against the product or service
then he has the right to be heard and be assured that his/her interest
would receive due consideration.
This right includes the right to representation in the government and

in other policy making bodies. Under this right the companies must
have complaint cells to attend the complaints of customers.
Right to Seek Redressal
According to this right the consumer has the right to get compensation
or seek redressal against unfair trade practices or any other exploitation.
This right assures justice to consumer against exploitation.
The right to redressal includes compensation in the form of money
or replacement of goods or repair of defect in the goods as per the
satisfaction of consumer. Various redressal forums are set up by the
government at national level and state level.
Right to Consumer Education
According to this right it is the right of consumer to acquire the
knowledge and skills to be informed to customers. It is easier for
literate consumers to know their rights and take actions but this
right assures that illiterate consumer can seek information about the
existing acts and agencies are set up for their protection.
The government of India has included consumer education in the
school curriculum and in various university courses. Government is
also making use of media to make the consumers aware of their rights
and make wise use of their money.
10.2.4 SALIENT FEATURES OF ACT
The Act provides for establishing three-tier consumer dispute

redressal machinery at the national, state and district levels.
It applies to all goods and services.
It covers all sectors, whether private, public or any person.
The Act provides for relief of a specific nature and also for
compensation to the consumer as appropriate.
The Act also provides for setting up of Consumer Protection

Councils at the Central, State and District levels, which are
advisory bodies to promote and protect the rights of the
consumers.
The provisions of the Act are in addition to and not in derogation

of the provisions of any other law for the time being in force.
Consumer Protection Act has been in operation for about

25 years. A number of deficiencies and shortcoming in respect of
its operation have come to light thereby requiring Amendments
on three occasions, still leaving scope for further improvements.
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10.2.5 12th PLAN STRATEGY AND IMPLEMENTATION

Consumers need an inexpensive and quick grievance redressal
mechanism to ensure that manufacturers and service providers are
accountable for the price and quality that the consumers are entitled
to. Accordingly, it is necessary to provide several methods of grievance
redressal including those which are available in accordance with the
provisions of the Consumer Protection Act.
Thus, mediation or in-house grievance redressal should be tried, but

without giving up the right of the consumer to obtain legal redress;
Amendment of Consumer Protection Act to make it more effective
and tuned to reducing the backlog of cases.
Of recent there has been derogation or poaching on the jurisdiction
of Consumer Protection Act in some of the areas due to the orders
passed by the Courts. Such loopholes in the Act should be plugged
through appropriate amendments to the Act and Rules.
Computerisation and Networking of consumer across the

country so that consumers can file complaints and access their
case status online.
Setting up counselling and a mediation mechanism at prelitigation stage and so as to reduce the burden of consumer courts
and resolve disputes through out of court settlements.
Provision of adequate infrastructure to Consumer fora so as to

make them function effectively.
Moving from manual system to computer based system to bring

in more efficiency and transparency.
Provision for monitoring the performance of functioning of

District by developing dynamic MIS Reports on the performances
related to total no. of cases filed/ disposed and other related
performance indicators.
Provision of funds for the annual maintenance of confined

hardware items like computers, ups, replacement of ups batteries
etc. under the Scheme on Strengthening Consumer
Fill in the blanks:

In Kautilya ......................, there are references to the concept
of consumer protection against exploitation by the trade and
industry, short weighment and measures, adulteration and
punishment for these offences.
2.
Lack of consumer awareness, illiteracy, poverty, etc. further

led to the ...................... of consumers.
3.
To ...................... the consumers as to be aware of their rights &

social responsibilities.
4.
The right to choose means an assurance of availability, ability

and access to a variety of products and services at ......................
price and competitive price means just or ...................... price.
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1.
5. The right to redressal includes ...................... in the form of

money or replacement of goods or repair of defect in the goods
as per the satisfaction of consumer.
6. The Act also provides for setting up of ...................... at the

Central, State and District levels, which are advisory bodies to
promote and protect the rights of the consumers.
7. ...................... of Consumer Protection Act to make it more
effective and tuned to reducing the backlog of cases.
Find out few cases where in the customers benefited because of the
rights guaranteed under this Act.
The Consumer Protection Act, 1986 and several other laws like the
Weights, Standards & Measures Act can be formulated to make
sure that there is fair competition in the market and free flow of
correct information from goods and services providers to the ones
who consume them.
10.3
UPPLY OF GOODS AND SERVICES ACT,

S
1982
The area of law which the scenario relates to is the Supply of Goods
and Services Act (SGSA) 1982 and the Sale of goods Act (SOGA)
1979. Both acts complement each other by having numerous implied
obligations and if these terms are breached then the buyer can seek
a remedy under the specific section which applies to them. The
implied terms in both acts are very similar to each other such as to
the description and quality goods. The purpose of these obligations
is to protect the consumer from any contractual breach by the seller.
The legal position of the trader and the customer on the supply of goods
and services has come about as a result of many legal developments
but is now based on the Supply of Goods and Services Act, 1982 (note
that in Scotland the legal position is still based on common law). The
Act is described below but notice that it does allow a trader and a
customer to agree that the customers legal rights in any transaction
should not apply or should be limited in some way.
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The law says that certain terms are implied in every transaction for
the transfer of goods and that the goods must:
1.
Correspond with the description given
2.
Be of satisfactory quality
10.3.1 IF THE IMPLIED CONDITIONS ARE BREACHED

If the goods do not correspond with the description or are not of
satisfactory quality or are not fit for the purpose the customer can
reject the goods and is entitled to his money back. He does not have to
accept a credit note and he may even be entitled to compensation for
any losses or expenses incurred.
There are some exceptions to this rule for situations such as where
defects were brought to the customers attention before the sale or if
the trader had made clear he was not sure whether, e.g., a particular
part would be suitable for a particular purpose.
You may have read discussions of these types of issue in, e.g., motor
magazines where journalists try to identify when it might be possible
to reject a car which has been purchased.
10.3.2 EFFECT OF A MANUFACTURERS GUARANTEE
The rights of the customer under law are against the supplier rather
than the manufacturer and a manufacturers guarantee does not take
those rights away. Both the customer and the supplier will benefit
if customers complete and post manufacturers guarantee and
registration cards.
10.3.3 LAPSE OF POSSIBLE CLAIM FOR DEFECTIVE GOODS

Once goods have been accepted the customer loses his right to reject
them and therefore claim back what he has paid. Acceptance can be
either by an explicit acknowledgement or by, e.g., keeping them for
more than a reasonable time. This is an area where car dealerships
have attracted some doubtful publicity and where there have been
calls for changes to the law.
10.3.4 TRADER AND RESPONSIBILITY FOR LIABILITY FOR
NEGLIGENCE
Traders ability to limit their own liability is restricted by the Unfair
Contract Term Act, 1977 (applicable in England & Wales only) under
which traders cannot exclude or limit liability for death or personal
injury arising from negligence but can exclude or restrict their
liability for other loss or damage arising from negligence providing
the exclusion clause meets the test of reasonableness.
Fill in the blanks:

8.
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This test is very difficult to summarize but the court will consider
the circumstances that were known to the parties (or should have
been known) when the contract was made and will pay particular
attention to such issues as the relative bargaining strength of the
parties, whether the customer received any special inducements and
whether the customer knew or should reasonably have known about
the restriction clause. It is the trader who has to prove that the clause
was reasonable.
If the goods do not correspond with the description or are

not of ....................... quality or are not fit for the purpose the
customer can ....................... the goods and is entitled to his
money back.
Comment upon the significance of Supply of Goods and Services

Act, 1982 for Indian customers. Also suggest if changes are required
in this Act in present-day context.
The Supply of Goods and Services Act 1982 aims to protect

consumers against bad workmanship or the poor provision of
services. It covers contracts for work and materials, as well as
contracts for pure services, and remember this still applies even
in everyday situations such as going to the hairdressers or the dry
cleaners.
10.4 SALE OF GOODS ACT, 1979

Wherever goods are bought they must conform to contract. This
means they must be as described, fit for purpose and of satisfactory
quality (i.e. not inherently faulty at the time of sale).
Goods are of satisfactory quality if they reach the standard that

a reasonable person would regard as satisfactory, taking into
account the price and any description.
Aspects of quality include fitness for purpose, freedom from

minor defects, appearance and finish, durability and safety.
It is the seller, not the manufacturer, who is responsible if goods

do not conform to contract.
If goods do not conform to contract at the time of sale, purchasers

can request their money back within a reasonable time. (This
is not defined and will depend on circumstances).
For up to six years after purchase (five years from discovery in

Scotland) purchasers can demand damages (which a court would
equate to the cost of a repair or replacement).
A purchaser who is a consumer, i.e. is not buying in the course

of a business, can alternatively request a repair or replacement.
If repair and replacement are not possible or too costly, then the
consumer can seek a partial refund, if they have had some benefit
from the good, or a full refund if the fault/s has meant they have
enjoyed no benefit.
In general, the onus is on all purchasers to prove the goods did

not conform to contract (e.g. was inherently faulty) and should
have reasonably lasted until this point in time (i.e. perishable
goods do not last for six years).
If a consumer chooses to request a repair or replacement, then

for the first six months after purchase it will be for the retailer to
prove the goods did conform to contract (e.g. were not inherently
faulty).
After six months and until the end of the six years, it is for the
consumer to prove the lack of conformity.
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Inherent Fault
A fault present in the product at the time of purchase like:
An error in design and consequently the product is manufactured

incorrectly
An error in manufacturing where a faulty component was used.
The fault may not become apparent immediately but it was

there at the time of sale and so the product was not of satisfactory
standard.

9. An error in design and consequently the product is
manufactured incorrectly.
10. If repair and replacement are not possible or too costly, then
the consumer can seek a partial refund, if they have had some
benefit from the good, or a full refund if the fault/s has meant
they have enjoyed no benefit.
11. For up to six years after purchase purchasers can demand
damages in India as well.
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Present a short caselet related to Sale of Goods Act, 1979 and also
find out if justice was granted to the customer or not under the
provisions of this law.
All consumers should know about the Sale of Goods Act, 1979
(SoGA) as it provides consumers with protection when making
purchases, whether buying on the internet, over the phone, via the
shopping channel, by mail order or on the high street.
10.5 SUMMARY
The Consumer Protection Act was made to safeguard the

consumer from products that do not reach a reasonable level of
safety. The main areas dealt with can be described as Product
Liability and Consumer Safety.
Defective products are defined as being those where the safety

of the product is not such as persons generally are entitled to
expect. On the other hand a product will not be considered
defective simply because it is of poor quality or because a safer
version is subsequently put on the market.
Safe products are defined as being products which under normal

or reasonably foreseeable conditions of use, including duration,
present no risk or only the minimum risk compatible with
the products use, and which is consistent with a high level of
protection for consumers.
Wherever goods are bought they must conform to contract.

This means they must be as described, fit for purpose and of
satisfactory quality.
The Supply of Goods and Services Act says that certain terms
are implied in every transaction for the transfer of goods and
that the goods must: correspond with the description given be of

satisfactory quality; and be fit for the purposes.
If the goods do not correspond with the description or are not of

satisfactory quality or are not fit for the purpose the customer
can reject the goods and is entitled to his money back.
These new regulations apply where goods or services are sold to

consumers either on the internet or through digital television by
mail order, including catalogue shopping or by phone or by fax.
Contributory Negligence: Carelessness by the person making

a claim
Defective Products: Products whose safety is not as per

consumer standards
Inherent Fault: Faulty at the time of the sale

Test of Reasonableness: Proof that clause in the act was
reasonable.
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1. Who is a consumer as per consumer protection Act, 1986?
2. What are the various rights guaranteed to the consumer under
Consumer protection Act, 1986?
3. Elaborate upon 12th plan strategy and implementation of
consumer protection act.
4. Describe Sale of Goods Act, 1979.

5. What is the relevance of Supply of Goods and Services Act, 1982
for consumers?
6. Mention few salient features of consumer protection act.

Topic
Consumer Protection Act,
1986
Q. No.
1.
Answers
Arthashastra
2.
3.
4.
5.
6.
Exploitation
Educate
Competitive; fair
Compensation
Consumer Protection
Councils
Contd...
Supply of Goods and

Services Act, 1982
Sale of Goods Act, 1979
7.
8.
Amendment
Satisfactory; reject
9.
10.
11.
False
True
False

1. Refer 10.2

All of us are consumers of goods and services. For the purpose

of the Consumer Protection Act, the word consumer has been
defined separately for goods and services.
2. Refer 10.2.3
Right to Safety, Right to Information, Right to Choice, Right to be
Heard or Right to Representation, Right to Seek Redressal and
Right to Consumer Education
3. Refer 10.2.5
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Consumers need an inexpensive and quick grievance redressal

mechanism to ensure that manufacturers and service providers
are accountable for the price and quality that the consumers are
entitled to.
4.
Refer 10.4
Wherever goods are bought they must conform to contract.

This means they must be as described, fit for purpose and of
satisfactory quality (i.e. not inherently faulty at the time of sale).
5. Refer 10.3

The purpose of these obligations is to protect the consumer from

any contractual breach by the seller.
6. Refer 10.2.4

The Act provides for establishing three-tier consumer dispute

redressal machinery at the national, state and district levels.
It applies to all goods and services.

SUGGESTED READINGS
Vallanadu Narayanan Viswanathan, (2008), Consumer Rights in

Service Sector, Concept Publishing Company
Sanjay Kaptan, (2003), Consumer Movement in India: Issues and

Problems, Sarup & Sons
A.C. Fernando, (2011), Business Environment, Pearson Education

E-REFERENCES
http://www.ncdrc.nic.in/1_1.html
http://www.consumerlaw.in/consumer-protection-act-1986/
http://www.indiankanoon.org/search/?formInput=sale%20
of%20goods%20act%20%20%20section%2032
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11
CASE STUDIES
CONTENTS
Case Study 1: Chapter 1 Cadbury Dairy Milk: Understanding Consumers
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Diligently
Case Study 2: Chapter 2
STP through the Eyes of Johnsons & Johnsons
Case Study 3: Chapter 3 Why Focus Groups Still Works: A Researchers

Perspective
Case Study 4: Chapter 4 Khan Khajura Tesan: An Integral Part of

Consumers Memory
Consumers Involvement: Do You Vespa?

A Brands Personality
Case Study 7: Chapter 6 Mother Dairy: In Lieu of Changing Consumers

Perception
Coca-Cola India: Innovation is the New Name
Samsung Rules Hearts of Millions
The Digital Retail Environment
Case Study 11: Chapter 10 Consumer Protection Ensured by Caratlane

Case Study 12: Chapter 10 Trademark Story
CASE STUDY 1: CHAPTER 1

CADBURY DAIRY MILK: UNDERSTANDING CONSUMERS
DILIGENTLY
The target audience for a chocolate or a laddu is every human
being with an urge for a moment of joy and thats the core group
for Cadbury Dairy Milk at least over the last 20 years. Prior to
1994s The Real Taste of Life campaign, Cadbury Dairy Milk
(CDM) aka Cadbury, the generic word for chocolate in large
parts of the country, was already a well recognised brand. Early
commercials saw indulgent parents bestow CDM on kids after
trips out of town or for the tots lacing their own boots unassisted.
Around the late 80s, the pressure of stagnation set in. Cadburys
India realised it needed to widen its base. There were adults
who ate chocolate but in a furtive manner, guilty about such a
childish indulgence. Cadbury and Ogilvy pictured a film from the
late 80s showed a father wolfing down a bar of chocolate under
the pretext of telling his children a story. But the brand remained
reluctant to make a clean break from its primary target audience.
Further inspiration hit Piyush Pandey at a toy store in San
Francisco filled with signs that said By order of the management,
you are obliged to play. He spied an elderly couple crawling out
from beneath a table in hot pursuit of a toy. He wrote the jingle to
The Real Taste of Life on the back of a boarding pass. The ad was
presented and the account retained. The iconic cricket commercial
featuring first time model Shimona breaking out into a spontaneous
jig at a match. The ads very consciously showed adults consuming
the chocolate in a very public setting. It was the first major leap
forward to make the category acceptable for adult consumption.
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Distribution was expanded and smaller packs introduced at more

affordable prices. It led to 20% plus growth for 3 to 4 straight years.
The category doubled in size. The campaign continued with several
variations, the most significant of which was Khaane Waalon Ko
Khaane Ka Bahana Chahiye featuring Cyrus Brocha distributing
CDM at a wedding. The challenge was to get a functional message
across in whats not a functional category. People said they get
perked up by a chocolate when they feel low. So Cadbury had two
commercials about how to accept defeat with the line saat rahe
har pal. It soon discovered that whatever people said in research,
they didnt want to see it on air. In 2003, however, CDM itself was
on the defensive after a controversy about worms in the chocolates
gained traction. Celebrity spokesperson Amitabh Bachchan was
roped in to give it a clean chit. Instead of arguing about who was
right and wrong they looked at the brand and its responsibility.
The other great learning is when a consumer loves a brand; he
gives it a chance and is forgiving. Now the time was right for a
big change. The current phase has been built around Kuch Meetha
Ho Jaaye, marking a strategic shift for CDM. The brand tried to
crack the larger market for sweets as far back as the late 1980s.
Contd...
CASE STUDIES 263
The research conducted in Varanasi to found if Cadbury had a role

in mithai; only to conclude it didnt. But by 1999, the brand was
starting to revisit the idea.
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Indians consume as much sweet as anyone else if not more. And

meetha is such a strong part of tradition. The initial campaigns like
Pappu Paas Ho Gaya were about introducing CDM as a substitute
for traditional sweets like pedas. This has been followed by Pehli
Tareek and Shubh Aarambh. Cadbury was making the transition
from once in a while celebratory occasions to more everyday
events. Cadbury made sure the message only reached people who
had passed. Cadburys Shubh Aarambh campaign with unlikely
partners like jobsite naukri.com. Or placed ads immediately after
a commercial for a car or bike, recommending people who buy
something new also have a bar of CDM to mark a fresh start. So
where does the latest campaign featuring a couple romancing in a
snow fight fit into this? When a brand is this big and its succeeding
in expanding the market, it should not forget its larger role of
greater joy. So parallel to the activities you do in terms of increasing
consumption, theres the aura of a leader, the larger picture.
Cadbury feels that a timeless line like kuch meetha ho jaaye may just
need to be modified or refreshed. Each new entrant pecks at your
share. The first task is preserving share and the second remaining
relevant to an adult audience. By playing in the meetha space, the
brand has perhaps set itself up for a tough slog. When Cadbury
claims kuch meetha ho jaaye it is competing with thousands of
traditional sweets including regional favourites. Its a good piece of
strategy, but whether its effective is the question.
1. Carefully analyse the role of individual determinants of

consumer behaviour with reference to advertising and
promotional strategies adopted by Cadbury. [Hint: Refer
Para 2 & 3]
2.
Is consumer research necessary and significant in case of

Cadbury? Justify your answer. [Hint: Refer Para 3 & 4]

STP THROUGH THE EYES OF JOHNSONS & JOHNSONS
The advertising template for Johnsons Baby appears to be absurdly
simple: happy mothers enjoying the time they spend with infants.
Through several decades of ads and the brand has been here since
1948 weve seen babies bathed, take their first steps, gurgle and coo
at their mothers and commiserate with them on buddhu papas.
However, under the hood, these ads have been driven by a strategy
thats helped the brand maintain a leadership position. Today, it
has a 90% plus in Indian market. Several campaigns over the years
have highlighted the mother child relationship and particular
product benefits. One of the landmark ads according to Bangalore
is the clinically proven mild film starring actress Shernaz Patel. It
beautifully captures the life changing event that having a baby is.
That moment of uncertainty leading into joy that every new mom
faces the first time she holds her child. The fact that babies are
the most precious gift of all leads into why you need to care for
the babys skin and why J&J products are the safest. Pediatricians
are present at these events where the focus is on infant health and
consumer education. The marked difference between previous
campaigns and J&Js most recent work is the appearance of the
buddhu papa. The Power of Gentle acknowledges that babies
change lives of both parents. While the basics of parenting remain
unchanged, there are larger societal shifts at play. The challenge fir
the brand is to be relevant to every new set of moms.
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Moms in nuclear families have radically different sources of

information: the internet, family, friends or maybe even groups
on WhatsApp. Often, the support system offered by mothers or
mothers-in-law is absent and the young moms are racked by self
doubt. J&J needs to recognise the changing influencers and try to
make sure all of them provide the right information. Theres a great
feeling of aspiration among these consumers: a desire to make their
children capable of competing with the best from anywhere. This
is different from 10 or 15 years ago when parents assumed their
children would lead lives similar to their own. Johnsons Baby
connects via its million strong Facebook page and its sponsored
website baby-center.
In the rural areas, consumers get baby care tips via missed calls
and there are activations that link tips on infant health to sanskaar
or values. In some other countries in the 80s and 90s, J&J tried
expanding the offering to young adults and women since many
older consumers use the products. But then they were up against
brands like Olay and Ponds with no credentials in that market
and they suffered for the loss of focus on baby care. Expanding
the portfolio to oil, shampoo, and wipes has given it a lot more
legroom. But the final reason for its success is no sustained
competition, purely because the barriers to entry are so high.
Contd...
CASE STUDIES 265
The mother is a consumer only for two or three years, and is then
replaced by another set of moms. To make a mark, the competitor
has to be present over several such cycles. Such trust takes time
and credible competition will need to spend for a decade or two
before they can be taken seriously. The only possibility to end
the dominance is from two flanks: a range with a demonstrably
superior offering or one that touts herbal or ayurvedic benefits.
Analyse the case and comment upon the STP strategy of

Johnsons and Johnsons. Also mention is J&J moving in
right direction, if not recommend some changes from your
end. [Hint: Refer Para 1 & 3]
1.
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For Johnsons Baby, making the product more accessible counts a

big challenge. Price is a critical variable. J&Js first responsibility
is to provide a benefit and a product of the highest quality. In such
cases, J&J can typically either launch a lower priced variant or a
line extension. Instead Johnsons Baby has opted for a low cash
outlay option of `10 in the hopes that some of the people who try
the brand will move to being regulars. Being a price warrior is
counter productive in a category like baby care where theres a
need to give the child the best even if it means personal sacrifice.
Consumers who cant afford J&J go back to the trusted brands in
the adult category: Pears, Dove, or Lux. J&J aims to become a low
price brand with a credible cover story or a different brand; thats
the big opportunity.
2. As per you, do you think Johnsons strategy to position

its products in Indian market, considering all the 4 Ps, is
appropriate? Give reasons to justify your stand. [Hint: Refer
Para 4]

WHY FOCUS GROUPS STILL WORKS: A RESEARCHERS
PERSPECTIVE
Focus groups are a fantastic tool because they make use of a
simple truth that a discussion about a subject allows participants
to dig deep into their own selves, have conversations, to agree
and disagree. The dynamics that come into play, and as a result,
the rich understanding and insights, cannot be replaced by other
methodologies. The issues with focus groups are not about the
methodology, as about how they are conducted, the process getting
corrupted and not being rigorous. A poor way of doing something
shouldnt lead to the conclusion that the something itself is
damned. Naach na jaane aangan tedha (if you dont know to dance,
the floor is crooked) goes a Hindi idiom that one gets reminded of.
What we need to figure out is why focus group researches in India
leave so much to be desired. What has caused this decline in quality?
The root cause lies in extremely low budgets provided for focus
groups, and these not having changed over time. It is possibly the
biggest threat to the integrity of this important research tool and
possibly even to other methodologies. Coupled with extremely tight
timelines, it compels the entire value chain to make compromises.
The low budgets have, unwittingly, led to a vicious circle it has
incentivised doing focus groups where other methodologies should
have been used, contributing in part to unavailability of research
virgin respondents, thin and superficial researches being done
and asked for at short notice. The ultimate sufferers are the research
users, marketers, and brands that are making use of outputs that
at times are not complete and superficial, from something that
could provide deep and rich insights. More consumers (especially
among the upper socio economic classes and the affluent) are time
poor, reluctant to travel distances, leading un-uniform individual
schedules that make converging groups at a specific time difficult.
We need research methodologies and tools to address these very
real issues.
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A new tool is private online communities, used in many developed

markets. A private online community is a set of consumers
pre-recruited, with whom you interact, converse and dialogue
online, on a private website. Consumers are available 24 7. At a
time when speed is of essence research is turned around quickly.
With a community you can conduct the equivalent of a focus group
the biggest advantage being members respond at a time and from
a place convenient to them, within a specified time period but
without having to be available at a specified time. And, the critical
group dynamics is retained since members respond to what others
say. It offers speed and is effective and efficient. In a large country
like India with regional differences and where geographical
representation is needed to understand consumers, private online
Contd...
CASE STUDIES 267
communities save on time and cost. They allow access to consumers

as and when needed, and that too without consumers, researchers,
and research users having to travel. It is applicable to upper socio
economic classes today, but then they are the ones with greater
issues of access.
1.
After reading the whole case, analyse how focus group can
be integrated with other motivational research techniques
to make it more effective. [Hint: Refer Para 3]
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2. What loss can a marketer suffer, if focus group study

wont be conducted in an earnest manner? Give real time
examples from FMCG industry. [Hint: Refer Para 2]

KHAN KHAJURA TESAN: AN INTEGRAL PART OF
CONSUMERS MEMORY
Phoning it in is almost never a good thing; it refers to a job finished
with minimum effort and involvement. It comes to mind whenever
one hears about yet another missed call related marketing
programme. A mobile strategy is synonymous with asking people
to dial in and then calling them back with a marketing spiel. Khan
Khajura Tesan (KKT), Hindustan Unlievers latest attempt to reach
audiences in media dark parts of the country interesting. HUL
claims to have created the most popular radio station in Bihar and
Jharkhand. According to an AV from Lowe Asia Pacific created in
time for the award shows, KKT has clocked in 140 million minutes
of content including jokes, songs and of course ads, 13000 hours of
engagement daily, and has 8 million unique users. All delivered via
a feature phone, and activated by a missed call. Such ideas seem
like someone did it in a structured way but it happened by accident.
A missed call promotion on Wheel advertised on packs delivered
a few million calls, many from media dark areas. HULs next foray
included content from brand ambassador Salman Khans Ek Tha
Tiger. The result was close to 10 million calls. Mobile penetration
was at 65% in Bihar and Jharkhand with phones often used by the
entire family. The audience didnt know how to send SMS and after
accidental downloads cost them, were wary of being cheated.
And yet they craved entertainment.
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According to HUL, close to a third of the country is media dark if one

considers places with TV connectivity but poor electricity. In UP
and Bihar, this segment makes half the population. HUL reaches
these audiences via 15 minute programming blocks interrupted
every few minutes by advertising. Many years back Unilever and
P&G started sponsoring TV shows; thats how soap operas got
their name. They are doing the same with mobile. They are paying
for airwaves and talk-time, making it free for consumers. HUL
sources content from Hungama and leverages the many tie ups it
has with films and Bollywood. HUL is creating a database of users
with details like their phone number, the content they prefer they
tend to hang up if bored and the circles they come from. It could
lead to stations, content and ads aimed at groups like youngsters or
housewives. The time spent is on the rise too: from 25 to 30 minutes
to 45 minutes a day. Other languages on the agenda include Marathi
and Telugu. News of the station is spreading word of mouth and
calls come in from non media dark areas as well. HUL is gunning
for 25 million users by the end of the year. His only issue is with the
power consumed by the broadcast. Even a feature phone battery
runs down after two hours.
Contd...
CASE STUDIES 269
Comment upon the role of radio as a medium of rural reach.

Also analyse which type of consumer involvement the
marketer is trying to grab in this promotional campaign?
[Hint: Refer Para 1]
2.
Do you feel if similar such campaign was launched for urban

masses, it would have been a major success? Give examples
to support your stand. [Hint: Refer Para 2]
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1.

CONSUMERS INVOLVEMENT: DO YOU VESPA?
An important campaign for the iconic scooter brand it is also the
first TV campaign post the recently launched global positioning
of Do You Vespa? Vespa, meaning wasp in Italian, is a brand that
has inherited a very proud legacy ranging from the legendary
montages of Gregory Peck and Audrey Hepburn, riding it around
the Colosseum in Roman Holiday (1952) to the La Dolce Vita girl
Anita Ekberg escaping the paparazzi on the two-wheeler. Now the
brand is trying to become contemporary to an entire new generation
by showcasing the life of Vespa riders using the grammar of Do
You Vespa? Vespa is a brand with a relevant past behind but with
an even more important future beyond and to project it into the
future, we must keep innovating, in terms of products, quality,
technology, and communication.
The current campaign includes a slew of Do You montages, for
example, Do You Tick Tock that shows a young guy in an inflatable
pool on the roof of a skyscraper, taking time out to find his inner
peace and the Do You Heart sequence that shows a man running
towards a border post and finally across the barricade at the
check-post into the other nation. Other montages include Do You
Fantasy, Do You Against and Do You Me all symbolising people
who like to do their own thing. The current campaign is all about
the Vespa consumer and his mindset. It cuts across boundaries and
countries and is as relevant to India as to Vietnam or Italy. Vespa
in its current avatar was launched in India in 2012 and has been
working hard to make its presence felt in a market mostly used to
the kitna deti hai genre of mileage and benefit led offerings. In
such a scenario, Vespa does have something contrarian going for
it, or rather against it: at a showroom price of ` 70,000 apiece it sells
at a 40%-45% premium when compared to an average scooter. The
brands new positioning is not on its cc but on its coolness.
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The launch campaign for the brand in 2012, that was created by
Meridian had used Vespas fashion legacy lingo extensively across
print, television, and digital. The current campaign takes that
thought forward, with an expression of ones individuality and
gives the brand an ideology. People mostly do not have permanent
relationships with their two-wheelers and that is what Vespa is
setting out to create. Many would wonder if this is the best way to
sell a brand clocking just about 2500 units per month. The biggest
challenge that the brand faces is its premium positioning and it
is not an easy job to conquer large market shares in such a short
time. But then buying Vespa is not necessarily a rational decision
as shown by the campaign. The campaign seeks to jolt the young
and ask them the provocative question, and the question itself is
attempting to make the brand larger than life. However, some lines
are forceful, and some are forced, and that is the weakness of the
Contd...
CASE STUDIES 271
campaign. So, when India pops the Do You question, how many
young consumers are going to get back with I Do?
1. Considering the Vespas promotional campaign, which

route of persuasion has marketer adopted to influence the
potential consumers? Give appropriate justification. [Hint:
Refer Para 2]
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2. Analyse and elaborate which learning theory has been

adopted in Vespas campaigning. [Hint: Refer Para 3]

A BRANDS PERSONALITY
In the marketing universe, dissecting the fortunes of brands is a
favourite pastime. Most cautionary tales end with And now, nobody
knows what the brand even stands for! Indian manufacturers are
sometimes rather unfairly in such a large, complex and unwieldy
market expected to have a better idea of what works. And finally,
its because Indian brands more than their global counterparts,
have burnt their way through several different brand personalities,
changing what they say, how and why they say it. For example,
look no further than Onida which ruled the 1980s with a mascot,
the devil, and a clever tagline Neighbours Envy, Owners Pride.
The onslaught of the Korean manufacturers through the 1990s and
early 2000s, rendered its models not all that enviable. Ever since,
Onida has retired the devil and brought him back, retired him
again, tried to move to an accessible technology and innovation
platform and even got back the old tagline about envy.
Tata Nano started life as the worlds most affordable car; took
a detour into being the vehicle of choice for middle income
small town Bharat and is now driving through a crowded youth
marketplace trying to convince young India that its a celebration
of awesomeness, epicness and kickassness.
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Micromax that formerly prided itself on bling has joined the legions
of Samsung-alike phones with commercials bursting at the seams
with Caucasian models. While some of these cases point to brands
in trouble, trying to solve deeper issues via a new marketing
campaign, for others, a shifting mass of identities does not
necessarily signal a problem. Airtel remains Indias No.1 operator
even as some who were part of the agency team handling the brand
complained about it moving from a vague if pervasive, inclusive
positioning to one that focused sharply on youth. Internally, Airtel
is very clear about what the brand stands for.
Airtel defines the personality of the communication via three key

tenets. The first is that the world they operate in is very real. The
second is Airtel celebrates relationships and human connections.
And the last extremely important tenet is that Airtel plays a specific
role in these connections, as an enabler. It defines what they can or
cant do. What we do within this space can be varied from Har Ek
Friend to the Airtel Money campaign on a father-son relationship.
Big Bazaar has moved from being sabse sasta to the slightly more
nebulous sundar. At Big Bazaar, the change is part of a natural
progression. People are now looking beyond just cheap buying.
They want things that only the elitists could previously afford.
They understand if you remain the same person your entire life,
you risk becoming hugely boring, he says. A rule of thumb applied
by Future Group is that the new tonality should not contradict the
previous brand personality.
Contd...
CASE STUDIES 273
All of this leads to an interesting question. Does brand personality

really matter to Indian brands? Having a well defined personality
also helps provide guidelines to communication partners on what
is and isnt kosher. It is important for high involvement products
that have a lengthy purchase process. Especially if the category is
highly competitive leading consumers to rely on what they think
the brand stands for quality/safety/value/reliability et al. As long
as your brand is big, shiny and visible, its fine if theres no deeper
emotional connect. The danger of course is the threat from brands
that do have strong instantly identifiable personalities, and tone of
voice. Quite possibly the worst fate for a marketer Indian or global
is to have given up on an opportunity to define itself only to be
defined negatively by the competition. Is that a chance youd want
to take?
Considering profile of Indian middle class customers, which

personality traits of the brand will influence this segment
the most and why? [Hint: refer Para 3 & 4]
2.
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1. Analyse the role of lifestyle marketing in giving brand

a personality. Why is it necessary for a brand to have a
personality? [Hint: Refer Para 2 & 4]

MOTHER DAIRY: IN LIEU OF CHANGING CONSUMERS
PERCEPTION
How does it feel to be young but not youthful? Mother Dairy
feels they are not in sync with the youth. So, the brand has now
pressed the makeover button with its latest campaign that not only
gives it a new corporate identity good food, good people but also
repositions it with a tagline Taste That Lifts You. The brand it
seems has finally cut the umbilical cord that linked it with mothers
and motherhood since its inception. For the first time, there is no
depiction of mother-child bonding or images of dear old ma in the
latest ad something unthinkable for a brand that sported the Maa
jaisi koi nahin tagline. The TVC, made by Ogilvy & Mather, shows
young adults consuming Mother Dairy products, and how the taste
lifts their mood and makes them happy. Mother Dairy realised
that over the last few decades they had become too milk-centric
and North India centric-brand in terms of perception. So with this
campaign, they are not only contemporizing the brand but giving
it a uniform look, appeal and voice. Now Mother Dairy feels young
as well as youthful.
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The move clearly is to woo youth and get out of the imagery of childmother association something that was impeding its drive to expand,
especially in the ice-cream segment where it was losing out to its
rivals in youth appeal. The campaign seeks to build and reinforce
Mother Dairys corporate brand by bringing all its products under
one umbrella. The most important thing the TVC does in a subtle
manner is to liberate Mother Dairy from the narrow confines of
its children-centric target. The attempt clearly is aimed towards
changing consumers perception towards the old and dull mother
dairy brand towards becoming more youthfull and independent.
The brand seamlessly takes kids and young in its fold and blurs
the distinction between the two. This will expand consumption
and sales. However mothers, especially Indian mothers are not
known to give in without a fight. Mother Dairy has been targeted
to housewives and homemakers for a long time now. To target a
completely new segment is not easy. It requires an understanding
of their needs, creating the right products and packaging to meet
these needs, the right channels and relevant imagery, to change
and influence their already years old built beliefs and perceptions.
Mother Dairy should have strengthened its core and evaluated the
possibility of a completely new brand for the young adult segment.
Though everyone knows kids perceptions cant be changed
overnight and one communication cant change it, but its a move
in the right direction. Its a tough space to move into since many
aspects of youthfulness are closely associated with other brands.
Romance has already been appropriated by competitors. But
there are other cuts that we can make use of. However, the bigger
challenge for Mother Dairy is to ensure that it stays in touch with
Contd...
CASE STUDIES 275
its roots even as it gets a younger target audience into its fold. It
is repositioning itself to make the brand relevant to youth. But
this does not mean it can afford to ignore the kids segment which
contributes to its sales in a big way.
1.
Which functional theory of attitude, Mother dairy is trying

to cater to, in attempt to change consumers perception?
Support your answer with a reason. [Hint: Refer complete
case thoroughly]
2. Discuss the role of stereotyping and halo effect with

reference to Mother Dairy products. [Hint: Refer Para 2]
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How do you perceive Mother dairys product and service

quality as against other ice cream brands trending in
market? [Hint: Refer Para 3]
3.

COCA-COLA INDIA: INNOVATION IS THE NEW NAME
Beverage Company Coca-Cola India, keeps on introducing
variants of its own. There are various areas where Coke is focusing
on innovation. Innovation at Coca-Cola means that good ideas and
best practices can be scaled globally and can travel. Keeping in
mind the social and cultural settings of a country and its natives,
Coca-Cola delivers state-of-the art beverage in its category. In
2012, over 500 new beverage products around the world. Offering
over 100 products, it enables any kind of flavor mix, creating
new and unique flavor combinations. In India, in the month of
September 2014, Coca-Cola India has launched its zero sugar soft
drink Coca-Cola Zero in line with its strategy to make India its
fifth largest market by 2020. The new product will be available in
300 ml slim cans, 400 ml PET bottles and 600 ml PET. The
introduction of Coca-Cola Zero comes after the launch of Maaza
Milky Delite in Punjab and Kolkata, besides the expansion of
Schweppes this year.
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Maaza Milky Delite is another new beverage made of mangoes

combined with milk solids and it will be available in 200 ml TetraPak
at a price of `25. Consumers now have a wider choice of Coca-Cola
products spanning from Minute Maid range of juices to Maaza,
and from Limca to Thums Up and Coca-Cola in the sparkling
segment. The research and development on this product first
started when we saw a housewife in Kolkata mixing Maaza with
generous portion of milk, and serving it as a delicacy. Since then,
the company wanted to create that same taste in a very sanitized
and hygienic set up, and put the beverage in a pack that was handy
and convenient thereby making this fusion available to consumers
across India. Coca-Cola Zero will be available on Amazon, besides
being available across Subway, Inox Cinemas, and Reliance Retail.
The company hopes to target the urban population and plans to
make the product available across 100 towns.
Coca-Cola India found that Indian consumers are more aware today
about the choices that are available worldwide. So the company is
on course to invest $5 billion by 2020, thereby providing beverage
choices to consumers to complement their lifestyles and hydration
needs. While the diet and light segment in the beverage was still
small, urban consumers account for nearly 50 million and present
a huge opportunity. Focus on strengthening its distribution in the
rural regions had worked well for the company. Besides its glass
returnable bottles priced at `10 under its Happiness on the go
plan, the company has been offering sparkling drinks to its rural
consumers in 100 ml serves priced at `5 through its fountainsmounted trucks. Also, it has been offering its drinks through
Splash bars, which are low-cost chillers with dispensers in rural
regions, besides offering its brand Maaza in 100 ml packs. Coca
Cola has also started a pilot at Kolkata for Kinley Glucojal, which
Contd...
CASE STUDIES 277
offers vitamin fortified water in 100 ml tetrapouches to consumers.

Last year, the company opened three new sites, while earlier this
year, its bottling partners announced plans for opening plants
in Andhra Pradesh and Telangana. In India Cola Cola is leading
and serving as a supreme example, by responding to cultural and
sub-cultural needs of its present and potential customers.
How has Coca-cola as a brand benefited from its continuous

innovation strategy in Indian market? [Hint: Refer Para 1 & 2]
2.
Comment upon the role of Coca-cola with respect to rural

versus urban consumer market profile in India. Explain
what efforts the brand has taken in this direction and
are those efforts sufficient to woo the consumers in both
segments. [Hint: Refer Para 3 & 4]
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1.

SAMSUNG RULES HEARTS OF MILLIONS
The movement up the ranks of this years top brand is creditable
even if a little predictable. Samsung mobile phones rule the roost
this year, moving from 12 in 2012 to the number one spot in 2014.
Even before the survey was commissioned, at least this result
seemed self evident. You could see it in the legions of young teens
and twenty-somethings at malls, cafes and in transit. They raced
through levels of Subway Surfer, watched HD downloads of last
nights latest American soap or sitcom or tried to cram in as many
of the group as possible into the now ubiquitous selfie, many of
these on Samsungs phones. Love it or hate it, the Samsung default
ringtone has become the one piece of music that large parts of
urban India hear at least once a day. A lot less foreseeable shift is
in the case of Samsung laptops at No 5, up from 49 and the Galaxy
Tab at 11 up from 26. Samsung is a big player in technology with
a great overall brand image and that equity must have rubbed off.
When it comes to phones, the key to excitement is a strategy the
brand has been pursuing ever since the launch of its first Android
based model, Galaxy, back in 2010. Have a flagship at the cutting
edge of technology and then rapidly trickle down some of these
features into less expensive phones. Samsung has been focusing
very clearly on innovation as a key theme with young adults as
a primary segment. Rapid launches in quick succession showcase
their technical superiority. This has been a very successful strategy
for them. As soon as the next big thing hits the stores, Samsung
offers a hefty discount on a phone thats one generation removed
from the latest but which still packs quite the punch in terms of
horsepower. All of which, combined with leadership in the market,
has led to the belief that Samsung has it relatively easy on the
marketing front in India. That a continuous innovation cycle means
the products practically sell themselves.
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Samsungs energies instead are diverted towards digital and

activation, and aiding the conversion of people in the interested but
undecided category. Samsung has been able to energise their core
consumer with sharp marketing reflecting lives of this consumer
cohort. Next is what a campaign from few years ago reflects this
deep understanding of the motivations of this segment. Essentially
Samsung is a brand that has got the product-consumer balance
right. The drive towards making all phones regional language
compatible and the launch of Club Samsung a platform that
provides local content like movies, music, and videos, initially free
of cost. For now though, Samsung mobile is dominant and betting
big on categories like wearable under the Galaxy Gear brand to
corner both mind space and market share.
Contd...
CASE STUDIES 279
Which type of decision a consumer needs to make while

making purchase for a mobile? Why? [Hint: Refer Para 3]
2.
Describe the significance of post-purchase dissonance for a

consumer and marketer as well. [Hint: Refer Para 2]
3.
What could be the possible reasons for Samsungs grand

success in market, despite of numerous players in the
marketplace? Analyse with respect to the consumer
decision-making process (i.e how Samsung retained its
position to clear every stage of consumer buying decision)?
[Hint: Refer Para 1 & 3]
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1.

THE DIGITAL RETAIL ENVIRONMENT
Research reveals that while product and price are most important
in retail, ambience and environment are also key. In recent
months, Uniqlo (Japanese casual wear designer, manufacturer and
retailer) has displayed clothing lines in museum-style cases, Latino
shopping mall company Legaspi has turned its retail outlets into
cultural centres and Amsterdams Schiphol airport has created
an indoor park to encourage passengers to linger and buy. These
retail makeovers are tapping into a new demand from consumers,
for shops to put their appearance and atmosphere first. Recent
research suggests that when it comes to shopping, a stores
ambience is more important than its location or customer service.
In a study of consumers retail preferences by design consultancy
Dalziel & Pow, store ambience was selected by 41 per cent of
respondents, location (31 per cent), friendliness of staff (30 per
cent) and customer service (25 per cent). The quality of the store
environment was the fourth-most important consideration for high
street shoppers. Ranking top is the range of products in a shop, at 81
per cent, followed by value for money (59 per cent) and the quality
of products (54 per cent).The results form the basis of Dalziel &
Pows report, Influencing Shopper Behaviour, which is based on
a survey of 1,000 female shoppers plus focus groups. Women were
the subject of the survey because most of Dalziel & Pows retail
clients have predominantly female shopper bases.
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It was a surprise to see that store environment and ambience is

the most important thing after product and value proposition. It
suggests that people will almost forgive poor customer service and
abrupt staff as long as the retail experience supports the brand.
Elsewhere, lack of atmosphere is the most common reason for
shoppers dislike or avoidance of certain shops. Thirty-five per cent
of respondents cite this factor, closely followed by 34 per cent who
dislike overly expensive products and 33 per cent who object to poor
quality. The report suggests that shoppers are attaching increasing
importance to the brand experience in stores, particularly as
consumer confidence improves in line with economic recovery.
Shoe retailer Clarks is among the brands currently experimenting
with new in-store services. Last November, the company launched
a pilot of an iPad-powered piece of technology for measuring
childrens feet.
Clarks has developed several versions of its childrens foot gauge

over a period of 90 years. The latest version is intended to make
the measurement process easier, more interactive and more fun
for parents and children. A footplate and new digi-tape device
are used to measure the childs foot and the data is relayed to an
internal Clarks iPad app that instantly presents a shoe size guide
for that child. Retailers believe that customers are increasingly
Contd...
CASE STUDIES 281
digital and that young children customers are using iPads at home,
so they wanted to bring those experiences together for people when
they are in store. Shop assistants can bring the iPad to children
and parents wherever they are in the store, while Clarks animated
brand characters appear on the iPad display when younger
children use the gauge.
The technology launched in 50 stores initially but Clarks expects it
to be available across all of its UK shops by the summer. In addition,
the retailer is investigating other possibilities for the iPads, such as
helping shoppers look for products online or to bring advertising
campaigns to life through interactive applications. Despite the
rapid growth of online shopping, most people appreciate the ability
to touch and feel products in a physical retail setting.
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1. Comment upon the impact of digital retail environment

techniques on consumers, as discussed above. [Hint: Refer
Para 2]
2. Do you think the digital retail environment is threat to

consumers privacy and security? Why or why not? [Hint:
Refer Para & 4]

CONSUMER PROTECTION ENSURED BY CARATLANE
When online jewellery site Caratlane received an order for a
` 2.52-crore diamond ring the single-largest sale by an Indian
ecommerce firm its founder Mithun Sacheti knew he had the
wherewithal to make the transaction a smooth affair. He was
no stranger to high-value deals and had put in place special
arrangements for safe and secure purchases of jewellery online.
Caratlane is only concerned about the seriousness of the customer,
implying that the challenge of delivering was not such a big deal
for them. Caratlane, videographs a sale from start to finish and
transports jewels in armoured vehicles. Caratlane also insures
every piece of jewellery.
The eight-carat clear diamond ring, which was bought for the
engagement of an industrialists son, would have cost about 10%
more in an offline store. As people have become more comfortable
shopping online, Caratlane has seen high-value transactions
increasing.
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Bangalore-based rival Bluestone, too, has seen transaction values

go up as online jewellery retail picks up. This has meant addressing
specific client requirements. For an instance, a Caratlanes Mumbaibased buyer had initially insisted that an escrow account be set up
for the payment. In an escrow, the money is held in a third-party
account until the transaction is completed to the satisfaction of
the two parties involved. Values of online transactions have been
going up the past two years. Earlier, a sale of over `1 lakh would
happen once a quarter, now there are at least five such purchases
a day. The most expensive listing on three-year-old Caratlane is an
18-carat solitaire worth ` 6 crore.
Bluestone recently sold a solitaire ring worth ` 9 lakh and two

necklaces worth over ` 5 lakh each. The most expensive listing
on its site is a solitaire worth ` 12 crore. High-value transactions
online are a reality today. In jewellery, when products are not
standardised, the trust factor becomes more important and
when it is a high-value transaction, customers would want
an offline experience. Caratlane sends the finished product
to the Mumbai lab of the Gemological Institute of America,
where stones are recertified and sealed. This sealed packet
is only opened by the customer. Caratlane insure their entire
inventory from production until it reaches the customers hands.
Caratlane and Bluestone work with logistics partners like Sequel
and Malca-Amit that specialise in jewellery delivery. The company
has created a specially trained team for just ecommerce. While
all vehicles are tracked from their central command centre in
Bangalore, the company decides on the type of vehicle, like
armoured vans, and the number of armed guards according to the
Contd...
CASE STUDIES 283
value of the shipment. The company charges fees of between ` 450

and ` 3,000 per shipment. The prices online were lower than offline
for a similar piece.
Had Cash-on-delivery option, Try @ home options, brick

and mortar stored not been supported along with online
format of jewellery selling, do you think Caratlane or
Bluestone would have been able to make a mark online?
[Hint: Refer Para 1 & 2]
2.
Analyse carefully the trust factor which consumer lay upon

in online purchase of jewellery, with special reference to
absence of tangibility aspect in online format. [Hint: Refer
Para 3]
M
IM
S
1.

TRADEMARK STORY
A Delhi court has restrained the use of deceptively similar
trademark, visually or phonetically, of cosmetic products major
Natures Essence and its sub-brand Coloressence. The court
restrained the defendants from using registered trademarks of M/s
Natures Essence Pvt Ltd. The court has clearly mentioned that
the defendants, their proprietors, associates, dealers are restrained
from infringing the registered trademarks Natures Essence and
Coloressence by using the impugned trademark Care Essence
with any prefix and suffix or any phonetically or visually similar
trademark as that of the plaintiffs (M/s Natures Essence Pvt
Ltd) registered trademarks. The courts order came on the civil
suit of cosmetic products major M/s Natures Essence Pvt Ltd
seeking injunction restraining the defendants (Ram Kumar Singh,
ex-distributor of the company in Bihar and others) from
infringement of its trademark.
M
IM
S
In its suit, the company said that Singh was one of its distributors for
Bihar since 2005 and was carrying on the business of distribution
and marketing of the various products but his association with the
company had come to an end on March 31, 2014. It alleged that
in June 2014, the company came to know that Singh had started
promotion CARE ESSENCE range of products in the market,
the product it was about to launch and has been contacting various
dealers and distributors in Delhi and Bihar. The company alleged
the logo adopted by Singh for his products was imitation of the logo
and trademark of the company containing one-leaf whereas Singhs
logo contained two-leaves at the same space and placement and
would create confusion among customers. Singh has adopted the
identical trademark CARE ESSENCE along with the deceptively
similar trade name Nature Herbal as to Nature Essence to
market his product and to create a belief that their trade is just
extension of the trade of the company and under said impression,
people have started dealing with him.
Counsel for Singh refuted the companys allegation and claimed

that the logo and name of his products were not deceptive as the
word Essence is descriptive and company cant claim any exclusive
right or monopoly over it. The court, however, said Singhs product
having Nature Herbal mark would show similarity of arrangement
of the alphabetical letters, get up and art work including the colour
scheme somewhat deceptively similar to the registered device
mark Natures Essence of the plaintiff company. Court has also
said if at the first glance mark Nature Herbal of the defendant is
seen, the visual impact is that it closely resembles to the plaintiffs
registered device mark Natures Essence and it is likely to cause
confusion in the minds of the customers as if the product of the
company who would be purchasing these products. It said prima
Contd...
CASE STUDIES 285
facie it strengthens the apprehension of the company regarding

passing off goods by Singh under the trademark Care Essence
which was deceptively similar to that of the companys registered
trademark Natures Essence and Coloressence and to create a
confusion in the minds of the customers.
Comment upon the courts decision, is it correct in your

view. Why? [Hint: Refer Para 1 & 3]
2.
Now-a-days, there are many Me too products, trending in

the market. Justify if there trade is also illegal, as they give
major competition to companies such as PepsiCo, HUL etc.
in rural market. [Hint: Refer Para 2]
M
IM
S
1.
M
IM
S

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COURSE DESIGN COMMITTEE

Dr. Richa Arora

Dr. Richa Arora

Reviewed By : Dr. Richa Arora

NMIMS Global Access School for Continuing Education

Understanding Consumer Behaviour

Market Segmentation, Targeting and Positioning

Consumer Motivation and Involvement

Consumer Learning and Memory

Consumer Personality and Lifestyle

Consumer Attitude and Perception

Consumer in Social and Cultural Setting

Consumer Decision Making Process

Consumer Behaviour in Retail Environment

Consumer Protection: Laws in India

NMIMS Global Access School for Continuing Education

Understanding Consumer Behaviour: Consumer Behaviour Defined, Nature

and Scope of Consumer Behaviour, Types of Consumers, Individual Determinants

Market Segmentation, Targeting and Positioning: Introduction to

Segmentation, Target Market Segments, Product positioning

Consumer Motivation & Involvement: Concept of Motivation, Consumer

Consumer Learning and Memory: Behavioural Learning Theories, Memory:

Structure and Functioning, Involvement and Four types of consumer Behaviour,

Consumer Personality and Lifestyle: Theories of Personality, Consumer

Consumer Attitude and Perception: Relationship between Consumer

behaviour and Consumer decision making, constituents of Consumer Attitude,

Consumer in Social and Cultural Setting: Characteristics of Culture, Cross-

cultural Analysis, Aspects of Sub-Cultures, Rural versus Urban Consumer

NMIMS Global Access School for Continuing Education

Consumer Decision Making Process: Types of consumer decision, Problem Recognition,

Consumer Behaviour in Retail Environment: Outlet Selection, Consumer shopping

1979, Supply of Goods and Services Act, 1982

NMIMS Global Access School for Continuing Education

UNDERSTANDING CONSUMER BEHAVIOUR

Nature and Scope of Consumer Behaviour

Nature of Consumer Behaviour

Scope of Consumer Behaviour

Buyer and User

Consumer and Customer

Individual Determinants of Consumer Behaviour

Motivation and Involvement

Personality and Self-concept

Learning and Memory

1.5  External Environmental Factors Influencing Consumer

Social Class Influence

Social Group Influence

Opinion Leaders Influence

1.6  Theoretical Approaches to the Study of Consumer

Economic Man Model

NMIMS Global Access School for Continuing Education

Consumer Research Defined

Consumer Research Process

1.8 Disciplines Involved in the Study of Consumer Behaviour

1.9 Applications of Consumer Behaviour in Marketing

Answers and Hints

Suggested Readings for Reference

NMIMS Global Access School for Continuing Education

UNDERSTANDING CONSUMER BEHAVIOUR 3

Package, of course, has a functional role to play. How a soap

Nature still remains a wonderful source of inspiration for how it

NMIMS Global Access School for Continuing Education

After studying this chapter, you should be able to:

Consumer behaviour is a rapidly growing application-oriented

1.5 External Environmental Factors Influencing Consumer

1.6 Theoretical Approaches to the Study of Consumer

1.8 Disciplines Involved in the Study of Consumer Behaviour

1.9 Applications of Consumer Behaviour in Marketing

ATURE AND SCOPE OF CONSUMER

XTERNAL ENVIRONMENTAL FACTORS

HEORETICAL APPROACHES TO THE