CONSUMER BEHAVIOR

IB SECOND SEMESTER

UNIT 1: OBJECTIVE QUESTIONS:

1. Dr. Lars Perner explains that as well as the study of how products are purchased,

consumer behavior also involves their use and ........., since many environmental problems result from the latter. (a) disposal (b) disturbance (c) perusal (d) reuse

2. Consumer behavior involves services and ideas as well as ......... products.

(a) durable (b) malleable (c) marketable (d) tangible

3. Product use is often of great interest to the marketer, because this may influence how a

product is best ......... or how we can encourage increased consumption.

(a) inventoried (b) manufactured (c) positioned (d) stationed

4. For example, by understanding that consumers are more ......... to food advertising when

they are hungry, we learn to schedule snack advertisements late in the afternoon. (a) attendant (b) attractive (c) receptive (d) related

5. The impact of consumer behavior on society is also of relevance; for example, aggressive

marketing of high fat foods may have serious ......... for the national health. (a) affectations (b) aftereffects (c) repercussions (d) retributions

6. Since new products are usually initially adopted by a few consumers and only spread

later and gradually to the rest of the population, companies that introduce new products must be well financed so that they can stay ......... until their products become a commercial success.

(a) aboard (b) abreast (c) afloat (d) aloft

7. It is important to please initial customers, since they will in turn influence many .........

customers' brand choices. (a) consecutive (b) consequent (c) subsequent (d) subservient

8. Common sense suggests that if you buy a 64-ounce bottle of laundry detergent, you

should pay less per ounce than if you bought two 32-ounce bottles; in practice, however, you often pay a size ......... by buying the larger quantity. (a) discount (b) increase (c) percentile (d) premium

9. Consumer surveys, as any kind of research, are vulnerable to .........: the wording of a

question can influence the outcome a great deal.

(a) ambiguity (b) bias (c) bigotry (d) weighting

10. ......... measures are occasionally used to examine consumer response; for example,

advertisers may want to measure a consumer's level of arousal during various parts of an advertisement. (a) Paramedical (b) Physiological (c) Psychiatric (d) Psychotic

Subjective Questions: Q. 1. Q:2 Q:3 Q:4 Q:5 A detailed study of consumer behaviour is essential for the success of any business organization in the present environment. Examine the statement in the Indian context. What are the factors that influence the consumer buying behavior? Explain in details the consumer buying behavior. What is the need of study of consumer behavior? List out five different characteristics of consumer behavior. Why is a study of consumer behavior important from the marketers viewpoint?

Sample Answers:

Q. 1.

A detailed study of consumer behaviour is essential for the success of any business organization in the present environment. Examine the statement in the Indian context.

Ans.1 Consumer behaviour is a rapidly growing application-oriented discipline of study. The recent advancement in the technological and digital communication are also influencing consumer behaviour. This study is not just restricted to how a person buys a product but it is dynamic, complex and multi-dimentional process and reflects the totality of consumers' decisions with respect to acquisition, consumption or use and disposal activities. Consumer behaviour can be defined as "The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs" (Leon G. Schiffman and Leslie Lazar Kanuk, "Consumer Behaviour" 2007) Consumer behaviour focuses on how individuals make decisions to spend their available resources (time, money,effort) on consumption related items. That includes what they buy, why they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase, the impact of such evaluations on future purchases and how they dispose of it. So in Consumer Behaviour we not only learn what is the behaviour of the consumer when he buys it but also before the consumption, during the consumption and after the consumption. Scope of consumer behaviour Consumer behaviour can be looked upon as a study of how individual make decision on how to spend their available resource like time, money and effort on various consumption-related items. A marketer is interested in knowing answers to the following questions Why do consumers buy a particular product/service brand? How do they buy them? Where do they buy these products?

 How often do they buy them? When do they buy them? How often do they buy them? Importance of Consumer Behaviour The present business scenario is extremely complex and some highlights of it are as under: Ever increasing intensity of competition More aggressive competitors emerging with greater frequency Changing bases of competition. Geographic sources of competition are becoming wider. Niche attacks are becoming frequent. Pace of innovation is rapid. Price competition becoming more aggressive Product differentiation is declining. Focus plans of firms marketing function Customer Driven Mission and Values Customer Driven Strategy Customer Driven Goals Customer Retention New Customer Customer Driven Rewards

Characteristics of consumer behaviour Consumer behaviour is dynamic

The feelings, thinking, perceptions and actions of the consumers and the society at large keep changing frequently. Consumer behaviour involves interactions Consumer behaviour involves interactions among peoples thinking, feelings, and actions, and the environment. This forces marketers to understand three things: What products and services mean to customers. What influences shopping purchase and consumption? What consumers need to do to purchase and consume products and service? Consumer behaviour involves exchange Consumer behaviour involves exchanges between human beings. People give up something of value to others receive something in return. Problems in consumer behaviour The problem in it is the lack of unified, well-defined and established theory on consumer behaviour. What we have only relevant ideas on buying behaviour. These ideas are based on their studies of: 1. Economics 2. Psychology and psychoanalysis 3. Social science

Q:2

What are the factors that influence the consumer buying behavior?

Ans:2 A consumers buying behaviour is influenced by cultural, social, personal and psychological factors.

I. Culture, sub-cultures and social class are particularly important in buying behaviour. Culture is a fundamental determinant of a persons wants and behaviour. The growing child acquires a set of values, perceptions, preferences and behaviours through his or her family and other key institutions.

Each culture consists of smaller subcultures that provides more specific identification and socialization for their members. Subcultures include nationalities, religions, social groups and geographic regions. Enough companies often design specialized marketing programs to serve them. Such are known as diversity marketing

Virtually all human societies exhibit social satisfaction, stratification sometimes takes the form of caste system where the members of different castes are reared for certain roles and cannot change their caste membership. More frequently, it takes the form of Social Classes relatively homogeneous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests and behaviour. Social classes show distinct product and brand preferences in many areas, including clothing, home furnishings, leisure activities and automobiles. Social classes differ in media, magazines & books and lower class consumers preferring television. Even within a media category such as TV, upper-class consumers prefer news and drama, and lower-class consumers prefer soaps operas and sports programmes

II. Social Factors In addition to cultural factors, a consumers behaviour is influenced by such social factors as reference groups, family and social roles and statuses.

A persons reference group consists of all the groups that have a direct (face to face) or indirect influence on the persons attitudes or behaviour. Groups having direct influence on a person called membership groups. Some members groups are primary groups, such as family, friends, neighbours and co-workers with whom the person interacts fairly continuously and informally. People also belong to secondary groups, such as religious, professional and tradeunion groups, which tend to be more formal and require less continuous interaction. People are significantly influenced by their reference groups in at least three ways. Reference group expose an individual to new behaviours and lifestyles and influence attitudes and selfconcept; they create pressure for conformity that may effect actual product and brand choices.

Family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group. The family orientation consists of parents and siblings. From parents a person acquires an orientation towards religion, politics and economics and a sense of personal achievement, self-worth and love. Even if the buyer no longer interacts very much with is parents, their influence on the buyers behaviour can be significant. Role and statuses: A person participates in many groups- family, clubs, organizations. The person position in each group can be defined in terms of role and status. A role consists of the activities a person is expected to perform. Each role carries a Status. A Supreme Court justice has more status than a sales manager, and a sales manager has more status than an office their role and status in society.

III Personal Factors: A buyers decision are also influenced by personal characteristics. These include the buyers age and stage in the life cycle, occupation, economic circumstances, lifestyles and personality and self concept. People buy different goods and services over a lifetime. The eat baby food in the early years, most foods in the growing and mature years and special diets in the later years. Taste in clothes, furniture and recreation is also age related. Occupation also influences consumption pattern. A blue-coller worker will buy work clothes, work shoes and lunch boxes. A company president will buy expensive suits, air travel and country club membership.

IV. Psychological Factors: A Person buying choices are influenced by four major psychological factors- motivation perception, learning and beliefs and attitudes. A Person has many needs at any given time. Some needs are biogenic, they arise from psychological states of tension such as hunger, thurst or discomfort. Other needs are psychogenic; they arise from psychological states of tension such as the need for recognition, esteem or belonging. A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is need that is sufficiently pressing to drive a person to act. When people act, they learn. Learning involves changes in an individuals behaviour arising from experience. Most human behaviour is learned. Learning theorists believe that learning produced through the interplay of derives, stimuli, cues, responses and reinforcement. A derive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where and how a person responds. Learning theory teaches marketers that they can build up demand for a product by cues and providing positive reinforcement.

Through doing and learning, people acquire beliefs and attitudes. These in turn influence buying behavior. A belief is a descriptive thought that a person holds about something. Peoples beliefs about product or brand influence their buying decisions.

Q:3 Ans:

What is the need of study of consumer behavior? The study of consumers helps firms and organizations improve their marketing strategies

by understanding issues such as how The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The the psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. One "official" definition of consumer behavior is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society." Although it is not necessary to memorize this definition, it brings up some useful points: Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use). Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest.

Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy.

There are four main applications of consumer behavior:

The most obvious is for marketing strategyi.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers brand choices.

A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers.

Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic.

As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry

detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain. There are several units in the market that can be analyzed. Our main thrust in this course is the consumer. However, we will also need to analyze our own firms strengths and weaknesses and those of competing firms. Suppose, for example, that we make a product aimed at older consumers, a growing segment. A competing firm that targets babies, a shrinking market, is likely to consider repositioning toward our market. To assess a competing firms potential threat, we need to examine its assets (e.g., technology, patents, market knowledge, awareness of its brands) against pressures it faces from the market. Finally, we need to assess conditions (the marketing environment). For example, although we may have developed a product that offers great appeal for consumers, a recession may cut demand dramatically.

UNIT II:

SUBJECTIVE QUESTIONS: Q:1 Q. 2. Define consumer learning Explain the various components of learning process. How can the principles of instrumental conditioning be applied in advertising? In what way do applications of instrumental conditioning differ from those of classical conditioning? Q:3 Q:4 What do you mean by perception. What are the various elements of perception? Which do you mean by learning? What are the components or elements of learning process? Q:5 Write a short note on he following: a) The Howard Sheth Model b) The Nicosia Model c) The Engel Kollat- Blackwell Model

Q: What do you mean by perception. What are the various elements of perception? Ans: Perception: Different people see things, events, and ideas from different view point, and hold different opinions, views for them. In other words they have different Perception of the world. Definition of perception: Perception is defined as the process by which the individual selects, organises, and interprets various stimuli into a meaningful & coherent picture of the world. Marketers are deeply interested in such perceptions the consumers hold about their products & services, brands, company etc. Elements of perception: The following are the elements of perception: 1. Sensation is the immediate & direct response of the sensory organs to stimuli. A stimulus is a single input of any of the senses. Human beings have sensory receptors called sensory organs. They are : a. Eyes for sights & seeing, b. Ears for sounds & hearing, c. Nose for smells & smelling, d. Tongue for tastes & tasting, e. Skin for textures, touch & feeling, 2. Marketers try to stimulate the sensory organs of a consumer to create a favourable perception towards their products Q: WhAT do you mean by learning? What are the components or elements of learning

process?

Ans:

Background. Learning involves "a change in the content or organization of long term

memory and/or behavior." The first part of the definition focuses on what we know (and can thus put to use) while the second focuses on concrete behavior. For example, many people will avoid foods that they consumed shortly before becoming ill. Learning is not all knowledge based. For

example, we may experience the sales people in one store being nicer to us than those in the other. We thus may develop a preference for the one store over the other; however, if pressed, we may not be able to give a conscious explanation as to the reason for our preference. Much early work on learning was actually done on rats and other animals (and much of this research was unjustifiably cruel, but that is another matter). Classical conditioning. Pavlovs early work on dogs was known as classical conditioning. Pavlov discovered that when dogs were fed meat powder they salivated. Pavlov then discovered that if a bell were rung before the dogs were fed, the dogs would begin salivating in anticipation of being fed (this was efficient, since they could then begin digesting the meat powder immediately). Pavlov then found that after the meat had been "paired" with the meat powder enough times, Pavlov could ring the bell without feeding the dogs and they would still salivate. In the jargon of classical conditioning, the meat powder was an unconditioned stimulus (US) and the salivation was, when preceded by the meat powder, an unconditioned response (UR). That is, it is a biologically "hard-wired" response to salivate when you are fed. By pairing the bell with the unconditioned stimulus, the bell became a conditioned stimulus (CS) and salivation in response to the bell (with no meat powder) became a conditioned response (CR). Many modern day advertisers use classical conditioning in some way. Consider this sequence:

Operant conditioning. Instrumental, or operant, conditioning, involves a different series of events, and this what we usually think of as learning. The general pattern is:

There are three major forms of operant learning. In positive reinforcement, an individual does something and is rewarded. He or she is then more likely to repeat the behavior. For example, you eat a candy bar (behavior), it tastes good (consequence), and you are thus more likely to eat a similar candy bar in the future (behavioral change).

Punishment is the opposite. You eat what looks like a piece of candy (behavior), only to discover that it is a piece of soap with a foul taste (consequences), and subsequently you are less likely to eat anything that looks remotely like that thing ever again (changed behavior). It should be noted that negative reinforcement is very different from punishment. An example of negative reinforcement is an obnoxious sales person who calls you up on the phone, pressuring you into buying something you dont want to do (aversive stimulus). You eventually agree to buy it (changed behavior), and the sales person leaves you alone (the aversive stimulus is terminated as a result of consequences of your behavior). In general, marketers usually have relatively little power to use punishment or negative reinforcement. However, parking meters are often used to discourage consumers from taking up

valuable parking space, and manufacturers may void warranties if the consumers take their product to non-authorized repair facilities. Several factors influence the effectiveness of operant learning. In general, the closer in time the consequences are to the behavior, the more effective the learning. That is, electric utilities would be more likely to influence consumers to use less electricity at peak hours if the consumers actually had to pay when they used electricity (e.g., through a coin-slot) rather than at the end of the month. Learning is also more likely to occur when the individual can understand a relationship between behavior and consequences (but learning may occur even if this relationship is not understood consciously). Another issue is schedules of reinforcement and extinction. Extinction occurs when behavior stops having consequences and the behavior then eventually stops occurring. For example, if a passenger learns that yelling at check-in personnel no longer gets her upgraded to first class, she will probably stop that behavior. Sometimes, an individual is rewarded every time a behavior is performed (e.g., a consumer gets a soft drink every time coins are put into a vending machine). However, it is not necessary to reward a behavior every time for learning to occur. Even if a behavior is only rewarded some of the time, the behavior may be learned. Several different schedules of reinforcement are possible:

Fixed interval: The consumer is given a free dessert on every Tuesday when he or she eats in a particular restaurant.

Fixed ratio: Behavior is rewarded (or punished) on every nth occasion that it is performed. (E.g., every tenth time a frequent shopper card is presented, a free product is provided).

Variable ratio: Every time an action is performed, there is a certain percentage chance that a reward will be given. For example, every time the consumer enters the store, he or she is given a lottery ticket. With each ticket, there is a 20% chance of getting a free hamburger. The consumer may get a free hamburger twice in a row, or he or she may go ten times without getting a hamburger even once.

Variable ratio reinforcement is least vulnerable to extinction. Sometimes, shaping may be necessary to teach the consumer the desired behavior. That is, it may be impossible to teach the consumer to directly perform the desired behavior. For example, a consumer may first get a good product for free (the product itself, if good, is a reward), then

buy it with a large cents off coupon, and finally buy it at full price. Thus, we reinforce approximations of the desired behavior. Rather than introducing Coca Cola directly in Indonesia, fruit flavored soft drinks were first introduced, since these were more similar to beverages already consumed. Vicarious learning. The consumer does not always need to go through the learning process himself or herselfsometimes it is possible to learn from observing the consequences of others. For example, stores may make a big deal out of prosecuting shop lifters not so much because they want to stop that behavior in the those caught, but rather to deter the behavior in others. Similarly, viewers may empathize with characters in advertisements who experience (usually positive) results from using a product. The Head n Shoulders advertisement, where a poor man is rejected by women until he treats his dandruff with an effective cure, is a good example of vicarious learning. Memory ranges in duration on a continuum from extremely short to very long term. Sensory memory includes storage of stimuli that one might not actually notice (e.g., the color of an advertisement some distance away). For slightly longer duration, when you see an ad on TV for a mail order product you might like to buy, you only keep the phone number in memory until you have dialed it. This is known as short term memory. In order for something to enter into long term memory, which is more permanent, you must usually rehearse it several times. For example, when you move and get a new phone number, you will probably repeat it to yourself many times. Alternatively, you get to learn your drivers license or social security numbers with time, not because you deliberately memorize them, but instead because you encounter them numerous times as you look them up. Several techniques can be used to enhance the memorability of information. Chunking involves rearranging information so that fewer parts need to be remembered. For example, consider the phone number (800) 444-1000. The eight digits can be more economically remembered as an 800 number (1 piece), four repeated 3 times (2 pieces), and 1000 (1-2 pieces). Rehearsal involves the consumer repeating the information over and over so that it can be remembered; this is often done so that a phone number can be remembered while the memoree moves to the phone to dial it. Recirculation involves repeated exposure to the same information; the information is not learned deliberately, but is gradually absorbed through repetition. Thus, it is to the advantage to a marketer to have an advertisement repeated extensivelyespecially the brand name. Elaboration involves the consumer thinking about

the objecte.g., the product in an advertisementand thinking about as many related issues as possible. For example, when seeing an ad for Dole bananas, the person may think of the color yellow, going to the zoo seeing a monkey eating a banana, and her grandmothers banana-but bread. The Dole brand name may then be activated when any of those stimuli are encountered. Memories are not always easily retrievable. This could be because the information was given lower priority than something elsee.g., we have done a lot of things since last buying a replacement furnace filter and cannot remember where this was bought last. Other times, the information can be retrieved but is not readily availablee.g., we will be able to remember the location of a restaurant we tried last time we were in Paris, but it may take some thinking before the information emerges. Spreading activation involves the idea of one memory triggering another one. For example, one might think of Coke every time one remembers a favorite (and very wise) professor who frequently brought one to class. Coke might also be tied a particular supermarket that always stacked a lot of these beverages by the entrance, and to baseball where this beverage was consumed after the game. It is useful for firms to have their product be activated by as many other stimuli as possible. There are numerous reasons why retrieval can fail or, in less fancy terms, how we come to forget. One is decay. Here, information that is not accessed frequently essentially rusts away. For example, we may not remember the phone number of a friend to whom we have not spoken for several months and may forget what brand of bullets an aunt prefers if we have not gone ammunition shopping with her lately. Other times, the problem may rest in interference. Proactive interference involves something we have learned interfering with what we will late later. Thus, if we remember that everyone in our family always used Tide, we may have more difficulty later remembering what other brands are available. You may be unable to remember what a new, and less important, friends last name is if that person shares a first name with an old friend. For example, if your best friend for many years has been Jennifer Smith, you may have difficulty remembering that your new friend Jennifers last name is Silverman. In retroactive interference, the problem is the reverselearning something new blocks out something old. For example, if you once used WordPerfect than then switched to Microsoft Word, you may have trouble remembering how to use WordPerfect at a friends housemore so than if you had merely not used any word processing program for some time.

Memorability can be enhanced under certain conditions. One is more likely to remember favorableor likable stimuli (all other things being equal). Salienceor the extent to which something is highly emphasized or very clearly evidentfacilitates memory. Thus, a product which is very visible in an ad, and handled and given attention by the actors, will more likely be remembered. Prototypicality involves the extent to which a stimulus is a perfect example of a category. Therefore, people will more likely remember Coke or Kleenex than competing brands. Congruence involves the fit with a situation. Since memory is often reconstructed based on what seems plausible, something featured in an appropriate settinge.g., charcoal on a porch next to a grill rather than in a garage or kitchenis more likely to be remembered (unless the incongruence triggers an elaborationlife is complicated!) Redundancies involve showing the stimulus several times. Thus, if a given product is shown several places in a houseand if the brand name is repeatedit is more likely to be remembered. Priming involves tying a stimulus with something so that if that something is encountered, the stimulus is more likely to be retrieved. Thus, for example, when one thinks of anniversaries, the Hallmark brand name is more likely to be activated. (This is a special case of spreading activation discussed earlier). A special issue in memory are so called scripts, or procedures we remember for doing things. Scripts involve a series of steps for doing various things (e.g., how to send a package). In general, it is useful for firms to have their brand names incorporated into scripts (e.g., to have the consumer reflexively ask the pharmacist for Bayer rather than an unspecified brand of aspirin). Positioning involves implementing our targeting. For example, Apple Computer has chosen to position itself as a maker of user-friendly computers. Thus, Apple has done a lot through its advertising to promote itself, through its unintimidating icons, as a computer for non-geeks. The Visual C software programming language, in contrast, is aimed a techies. Repositioning involves an attempt to change consumer perceptions of a brand, usually because the existing position that the brand holds has become less attractive. Sears, for example, attempted to reposition itself from a place that offered great sales but unattractive prices the rest of the time to a store that consistently offered everyday low prices. Repositioning in practice is very difficult to accomplish. A great deal of money is often needed for advertising and other promotional efforts, and in many cases, the repositioning fails.

Q.. Define consumer learning Explain the various components of learning process.

Ans:

Consumer learning: Learning is defined as a permanent change in the behavior of

consumer as a result of past experience. Learning involves change in behaviour. It is a process it can occur by increase in knowledge through reading of books, articles, observation, and thinking and through discussions. Components of learning process Everyday an individual receives a variety of stimulus inputs. When a specific stimulus becomes associated with a specific response in a sufficiently permanent manner then the occurrences of the stimulus tends to bring a particular responses. The components are as under: Drive Drive is said to be a strong stimuli that forces action. The drive arouses in an individual an urge to respond to the stimuli and thus forms the basis of motivation. One needs to differentiate motive from a drive. Cues A cue is an object existing in the environment, as perceived by the individual cues give direction to the motives. Hence marketers need to determine the conditions that a cue will increase the probability of getting a specific response. Responses A stimulus leads to responses. It is the reaction of an individual to a stimulus. Such a response may be in the physical form or maybe in terms of complex phenomena such as attitudes, perceptions etc. psychologists have the opinion that responses must be operationally defined and physically observable. Reinforcement Reinforcement is a very basic condition of learning. Without it we cannot observe any

measurable modification of behaviour. Reinforcement is closely associated to the psychological process of motivation. Reinforcement refers to those environmental events. Retention The stability of learned behaviour maintained by the individual over a period of time is called retention. Under repeated conditions of positive reinforcement, there is a tendency for the condition response to continue for a long period of time.

Unit 3 SUBJECTIVE QUESTIONS Q:1 Q:2 What are the various stages in personality development? Describe the personality trait theory. Give five examples of how personality traits can be used in consumer research? Q:3 Define Attitude. Highlight the characteristics of attitude and briefly explain the Functional Theory of Attitude? Q:4 Q:5 What do you mean by motivation? Highlight the dynamic characteristics of motivation. Write a short note on motivation and marketing strategy.

SAMPLE ANSWERS

Q:3

Define Attitude. Highlight the characteristics of attitude and briefly explain the Functional Theory of Attitude?

Ans3: Definition : Attitude is defined as a mental, emotional or rational predisposition with regard to a fact, state, person or an object. In the context of consumer behaviour we are studying the attitude of buyers towards all the relevant attributes of a product or services as well as the marketer and markets. The study includes the following major areas. Characteristics of Attitude The attitudes that have significant influence on an individuals behaviour & personality have certain characteristics. Attitude is formed on the basis of learning, knowledge, information, education, upbringing, thinking, lifestyle, experience, predisposition, belief, faith, outlook, communication, observation, etc. It can be good or bad, optimistic or pessimistic, positive or negative, broad or narrow friendly or unfriendly & so on. It may be consistent, may change with several external factors like time or environment, may be influenced or even can influence another attitude. Functional Theory of Attitude From the marketing point of view this is based on the need fulfilment of a buying behaviour. The functions that attitudes perform are : 1. Utilitarian Consumers buy products to fulfil their need, enjoy some benefit, get some extra features & receive after-sales service. If they get it as per their expectations, they develop a positive attitude towards that product. If not then a negative attitude is developed. Marketers usually stress & highlight the positive aspects of their products to form a positive attitude.

2. Value-expressive The importance of values in our life cant be over emphasised. We learn it thro our upbringing & training. This value system prevents or encourages the buyers to buy certain products related to smoking, drugs, environment, health, ethics, wildlife, etc. 3. Ego-defensive We are all concerned about our self-esteem & ego and always try to safe guard those. Products related to boosting the ego or self esteem are the target of such a kind of attitude. 4. Knowledge function Man is ever inquisitive, curious, seeking knowledge. He gets new information and understanding about products and services which help in creating, modifying & changing the attitude towards it. 5. Combination function More often individuals develop attitudes towards a product, which are a combined effect of all these functions. Formation of Attitude People are not born with an attitude. But they develop it over the growing & learning period. There are several ways the attitude can be formed : 1. Classical conditioning Attitudes about the products are formed over the years by continuous tutoring & exposing the consumers to products attributes. Thus slowly the consumers attitude is reinforced. 2. Instrumental conditioning Sometimes this attitude is formed out of an incidence. This is not intentional, but due to some reason if the consumer tries some new product & develops a favourable or unfavourable attitude, which lays the foundation of future strengthening of attitude. 3. Cognitive learning theory This is similar to classical conditioning, with a difference that it is associated with learning thro mental processing & evaluation, experience of using the products over a period of time

Q:4 Q:4

What do you mean by motivation? Highlight the dynamic characteristics of motivation. What do you mean by motivation? Highlight the dynamic characteristics of motivation.

Ans 4: Human needs consumer needs are the basis of all modern marketing. Needs are the essence of the marketing concept. The key to a companys survival, profitability & growth in a

highly competitive market place is its ability to identify & satisfy unfulfilled consumer needs better & sooner than the competition. Definition of Motivation Motivation is the driving force within individuals that impels them to action. It is defined as the stimulation of any emotion or desire operating upon ones will and prompting or driving it to action. The study of Motivation refers to all the processes that initiate the drive in a person to perceive a need and pursue a definite course of action to fulfil that need. 1. Needs : every individual has needs that are to be fulfilled. They are : a. Primary, Innate, Physiological, Biogenic types are the basic needs of food. Air, water, clothing & shelter. b. Secondary, Acquired, Psychological, Psychogenic types are the needs which we learn in response to the interaction with our immediate surrounding, like culture, environment, society, etc. 2. Wants : needs are basic, but wants are something more in addition to the needs that will have a desirable effect. Food is a need & the type of food is a want. 3. Goals : Goals are objectives of desire that ought to be fulfilled. They are : a. Generic goals are the desires of a general nature, where as b. Product-specific goals are the desires of a specific nature with the particular object specified. 4. The process of motivation : It starts when the consumer comes to know of a particular need. If this need is not satisfied it creates a state of tension within the minds of the consumer. This state will drive the consumer to adopt a behaviour that will help reduce the tension. The type & nature of the behaviour people adopt depends on their learning, knowledge, perception, belief, way of thinking, reasoning, etc. Dynamic Nature of Motivation : Needs & their fulfilment are the basis of motivation. Needs change, so also motivation. Both internal & external factors are responsible for change. The fact is that not all needs are satisfied

fully. When some are satisfied, some others arise. Sometimes because of personal, financial, social & cultural limitations, people cant fulfil some of their needs, wants & goals. Failure of need fulfilment may give rise to the following states : 1. Rationalisation trying to justify the situation & excusing oneself, 2. Aggression getting angry & frustrated, and resorting to unsocial actions, 3. Regression trying to settle without that particular need & try something else, 4. Withdrawal trying to disassociate oneself from the very thought of it. Types of Motives This is already described to some extent in the context of Buying Motives in Chapter-3 Buying Decision Making. We can add a few terms & concepts : The role of motives in influencing behaviour : 1. Physiological arousal when a consumer become aware of his needs due to changes in his physiological state, it will give rise to physiological motives, 2. Emotional arousal at times the mundane nature of routine life leads a person to fantasise or day dream, and this stimulates his latent needs to satisfy his emotion. 3. Cognitive arousal this occurs when we come across some information incidentally & this triggers our thought process & arouses a need in us. 4. Environmental arousal the various signals that we come across in our environment in the form of the sights smell & sound surrounding us also prompt many needs. THEORIES OF MOTIVATION : Maslows Theory of Need Hierarchy : Dr Abraham Maslow, a clinical psychologist formulated a widely accepted theory of human motivation based on the notion of a universal hierarchy of human needs. This identifies five basic levels of human need which rank in order of importance from lower level needs (biogenic) to higher level needs (psychogenic). The theory says that individuals need to satisfy the lower level needs before higher level needs arise. The lowest level of unsatisfied need that the individual experiences serves to motivate its behaviour. Only when it is satisfied fairly well then he can think of the next level & so on. According to this theory its the dissatisfaction which motivates and not the satisfaction. Marketers need to know how to satisfy a need at what level, by studying the need hierarchy.

1. Physiological needs food, water, air, clothing, shelter. These are the lowest or the first level needs. They are also called basic, frugal, primary, biological, biogenic, physiological, innate etc. 2. Safety or Security needs physical safety, protection, stability, security, mental piece. Once the first level needs are satisfied, the individuals go for the next level where they need an uninterrupted fulfilment of the above needs, like regular income, permanent shelter, etc. 3. Social needs affiliation, friendship, and belonging. Once the second level is more or less satisfied, this level comes. In social needs they need to maintain themselves in a society and try to be accepted in that so that they can interact with other members of the society. 4. Egoistic needs prestige, status, self-esteem, fame. Then comes the egoistic needs of a person that must be satisfied. He wants to rise above the general level/status of other members so that he gets some mental satisfaction. 5. Self-Actualisation self fulfilment. This is extreme or highest end of the hierarchy, where the individuals try to excel in any field attaining very high order of achievement. These people are called self-actualisers. The Trio of Needs : Psychologists point out that sometimes it is not necessary that the individuals go thro the same systematic process of going from one level of needs to the next while fulfilling them. Or how much a level must be satisfied to move to the next level, for no needs are absolutely satisfied and there is no way to measure precisely. Also some intermediate levels may be skipped. This has given rise to another concept of Trio of needs where it is envisaged that human behaviour is influenced by the needs of power, affiliation & achievement. They are given below : 1. Need of Power the power need relates to individuals desire to control their environment including other persons & objects around them. The need appears to be closely related to the ego need, in that many individuals experience increased self esteem when they exercise power over objects or people. 2. Need of Affiliation affiliation is a well known & well researched social motive that has far reaching influence on consumer behaviour. This suggests that behaviour is strongly influenced by the desire for friendship, acceptance and belonging. People with high affiliation needs tend to be socially dependent on others.

3. Need of Achievement individuals with a strong need for achievement often regard personal accomplishment as an end in itself. This is closely related to both the egoistic need & the selfactualisation need. The above two theories of motivation gives a clear picture of the way individuals are motivated by specific needs. The marketers need to study & understand each one of them separately and try to cater to their needs specifically.

Q:5

Write a short note on motivation and marketing strategy.

Ans:5 Motivational theory & Marketing strategy : Marketers who understand the motives of their potential customers enjoy good sales & brand loyalty of their customers. Often it is also important to understand the motivational conflict the consumers face. A buyer has several motives and each change with cognitive, emotional and environmental elements. In such cases the marketers can readily help their customers by changing their marketing strategy so that the conflict is resolved. This can happen by readjustment of the marketing mix. The following three major conflicts may arise : 1. Approach approach conflict happens when the consumer has two different choices of similar or dissimilar category of product or services which he gives equal importance, but unable to choose one over the other. The marketer can come in to make his offer more attractive & important in any sense & help the customer to decide in its favour. 2. Approach avoidance conflict happens when the consumer has decides in favour of a product but somehow not satisfied with a particular feature or wants to avoid it. The marketer can come in to make some modifications in the products features to suit & help the customer to decide in its favour. 3. Avoidance avoidance conflict happens when the consumer has to decide between two negative choices. The choices are said to be negative in relation to certain personal attributes of the consumer. The marketer can come in to make some suggestion in the decision making process to suit & help the customer to decide in its favour. Involvement : Involvement is defined as a persons perceived relevance of the object based on their inherent needs, values and interests. Involvement in marketing parlance is the deep and special interest

the consumer has for a particular product or services. When the consumers involvement is high, then he tries to learn, collect all information, updates his knowledge about that product/service. This will give a high leverage & scope to the marketers to help build a brand loyalty in & relationship with the customer.

UNIT IV Q:1 Explain with suitable examples with the importance of customer satisfaction in todays

environment. Describing the various sources of customer dissatisfaction. Explain in brief various measures that can be used for enhancing customer satisfaction. Q:2 Q:3 family. Q:4 What do you mean by reference group? Write a note on group dynamics and Reference Group. Q:5 Write a note on group dynamics. what do you mean by social class and social status? Explain in detail the external influence on consumer behavior with special reference to

Q. Explain with suitable examples with the importance of customer satisfaction in todays environment. Describing the various sources of customer dissatisfaction. Explain in brief various measures that can be used for enhancing customer satisfaction. Source of customer dissatisfaction When the expected needs of the consumer are met, Consumer Satisfaction occurs. When the consumer gets a value from the product or service in excess of his expectation we say customer delight occurs. Such situation may occur due to many reasons. Lack of experience with an existing product when a customer buys a CD-Rom package, he may not know what to expect, since this may be his first experience at buying the package The product under consideration may be new product or an innovation. Doing marketing on the Internet The quality of service varies spontaneously. Many customers having air travel fright expect that the plane should land smoothly every time. But this may not be possible every time since it depends on the climate, mood of the pilot etc. Enhancing Consumer Satisfaction Customer satisfaction is a continuous process, which does not being, or end with a purchase it covers the entire ownership experience, from selecting a product, to purchase through after sales service to repeat purchase. Customer satisfaction process has three phases, which are as under: Pre-sales During sales After sales Pre-sales

During this stage the customers expectations start developing through the various marketing stimuli like advertising, word of mouth, product packaging etc. here the critical issue is the availability of clear and useful information on: The product or service Its quality aspects Core benefits Price Availability at sales outlets How to obtain it. During sales: When the customer is experiencing the use of the product to his specific needs through the product catalogue or a sales talk of sales persons for this to happened, the following needs to exist. Opportunity to inspect the product Attractive sales environment Courteous and attentive service Reasonable and reliable delivery Enhancing the quality of goods or services Prompt redressed in case of complaint receipt. Freedom to choose without undue sales pressure After sales It refers to the period when the customer has started using the product or service to meet his specific needs. This will include the following: Necessary support or advice to be provided.

 Prompt replacement or refund if necessary A smooth and straight forward complaints procedure Efficient repair and maintenance service. Efficient and effective consumer follow-up process.

Ans:

External influence on consumer behavior

The changing structure of family Three other basic functions provided by the family are particularly relevant to a discussion of consumer behavior. These include: Economic well being Emotional support Suitable family lifestyles Emotional well-being Although families in the affluent nations of North America, Europe and Asia are no longer formed primarily for economic security, providing financial means to its dependents unquestionably a basic family function. How the family divides its responsibilities for providing economic well-being has changed considerably during past 30 years. No longer are traditional husband as economic provider and wife as home maker and child-rearer still valid. For instance, it is very common for married women with children in the United States and other industrial countries to be employed outside the home for their husbands to share household responsibilities. The economic role of children also has changed. Today, despite the fact that many teenage children work, they rarely assist the family financially. Instead, many teenagers are expected to pay for their own amusements. Emotional support

The provision of emotional nourishment (including love, affection, and intimacy) to its members is an important core function of the contemporary family. In fulfilling this function, the family provides support and encouragement and assists its members in coping with decision making and with personal or social problems. To make it easier for working parents to show their love, affection, and support to their children, greeting card companies have been increasingly creating cards for parents to give to their children (vice versa) Suitable family lifestyle Another important family function in terms of consumer behavior is the establishment of a suitable lifestyle for the family. Upbringing, experience, and the personal and jointly held goals of the spouses determine the importance placed on education or career, on reading, on television viewing, on the learning of computer skills, on the frequency quality of dining out, and on the selection of other entertainment and recreational activities. Family lifestyle commitments, including the allocation of time, are generally influencing consumption patterns. 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. The following life cycle stages are typical of families: 1. The bachelor stage: young, single person under age of 35 years. Incomes discretionary income. 2. 3. Newly married: young couples, no children. If both spores are employed, they will have high level of discretionary income. Full nest 1: young married couples with youngest child under 6 years of age. There would be greater squeezes on income because of increased on childcare. However, if they are members of a joint family, the level of discretionary income is likely to be high. 4. Full nest 2: young married couples with children from 6 years to 12 years of age. Better financial position because income of both parents rising. Children spend more hours outside their parents influence. are generally low since they have started careers, but they may have few financial burdens and sufficient

5.

Full nest 3: older married couples with dependent teenage children living at home. Financial position of family continues to improve. There are increasing costs of college education for children.

6. 7. 8.

Empty nest 1: older married couples with no children living with them, parents still employed. Reduced expenses result in greater savings and highest discretionary income. Empty nest 2: 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 1: older single persons with low income and increasing medical needs. Family decision making and consumption-related roles When two or more family members are directly or indirectly involved in the decision making process, it is called family decision making. Such family decisions differs from individuals decisions in many ways. For example, if we consider the purchase of a bicycle for a child, some of the relevant aspects to think about can be: who recognizes the need for bicycle? How a brand is selected? What role the concerned child plays? Joint decisions are more likely to operate in the early stages of family life cycle when both spouses are relatively less experienced. After gaining experience, they usually delegate responsibilities concerning buying decisions to each other. Key family consumption roles For a family to function as a cohesive unit, tasks such as doing the laundry, preparing meals, setting the dinner table, taking out the garbage, and walking the dog must be carried out by one or more family members. In a dynamic society, family related duties are constantly changing however, we can identify either distinct roles in the family decision making process. For example, a family member may be walking down the cookie aisle at a local supermarket when she picks out an interesting new fat-free cookie. Her selection does not directly involve the influence of other family members. She is the decider, the buyer and, in a sense, the gatekeeper, however, she may not be the sole consumer. Products may be consumed by a single family member, consumed or used directly by two or more family members, or consumed indirectly by the entire family. Dynamics of husband-wife decision making

Marketers are interested in the relative amount of influence that a husband and a wife have when it comes to family consumption choices. The relative influence of husbands and wives can be classified as: husband dominated, wife dominated, joint, and autonomic. The relative influence of a husband and wife on a particular consumer decisions depends in part on the product and service category. For instance, during 1950s, the purchase of a new automobile was strongly husband dominated, whereas food and financial banking decisions more often were wife dominated. Fifty years later, the purchase of the familys principal automobile is still often husbands dominated in many households. However, in other contexts or situations, female car buyers are a segment to which many car manufacturers are currently receiving a great deal of marketing attention. Also, in the case of financial decision making, there has been a general trend over the past decade to have the female head of household make financial decisions. Husband wife decision making also appears to be related to cultural influence. Research comparing husband wife decision making patterns in the peoples republic of china and in the United States revels that among Chinese there were substantially fewer joint decisions and more husband dominated decisions for many household purchases. However, when limiting the comparison to urban and rural Chinese households, the research showed that in a large city such as Beijing, married couples were more likely than rural couples to share equally in purchase decisions. Still further, because of chinas one child policy and the ensuring custom of treating a single child as a little emperor, many of the parents purchase decisions are influenced by the input of their child. In another recent cross-culture study, husband-wife decision making was studied among three groups: Asian Indians living in India, Asian Indians living in the United States, and American nationals. Results show a decrease in husband decisions and an increase in wife dominated decisions, going from Asian Indians in India, to Asian Indians in the United States, to American nationals. This pattern seems to indicate the impact of assimilation on decision making.

Q: Write a note on group dynamics. Ans: Groups:

Groups exist in every formal and informal type of organisations. Such groups are created by the members for its satisfaction. Very often groups get formed automatically because of the operation of various socio psychological factors. Such groups affect the behaviour of its members. Group dynamics is related to determining the interactions and forces between group members in a social situation. The term dynamics originated from the Greek word meaning force. Thus if this term can be extended to group dynamics, it refers to the study of forces operating within a group. Here it would be proper to mention the difference between aggregates and groups. Aggregation of individuals refers to where individuals are not aware of each other, or if aware, do not interact with each other in a meaningful way. A group will comprise of: 1. Two or more people who are interdependent on each other, with group members and 2. The group share a set of beliefs, valves and norms, which regulates their mutual conduct.

Meaning of Group: Marvin E. Shaw has defined groups as two or more persons who are interacting with one another in a such a manner that each person influences and influenced by each other People generally tend to define a group differently, mainly because it is difficult to define a group independent of some specific reference or purpose. As per the above definition when two or more people interact together such that each member is influence as well as be influenced by other group members, it is referred to as a group Clouis R. Shepherd defines groups as A group may be defined as the aggregation of small number of persons who work for common goals, develop a shared attitudes and are aware that they are part of a group and perceive themselves as such.

Characteristics of Groups:

1.

Two or more persons: To form a group there should be atleast two persons, because a single individual cannot interact. Though no maximum limits have been set, the size of the group should be such so as to allow meaningful interaction among the members of group.

2.

Collective identity: Each member of the group must believe that he is member of the group and also be aware of his participation in the group activity. For instance a group of boys are roommates staying together in the hostel. Though they may not be studying in the same class but because of their identity of room-mates they would prefer to go out together for shopping.

3.

Interaction: Members of the group will interact with each other. Though it is not necessary for all members of the group to interact simultaneously but each member must atleast occasionally interact with the members of the group.

4.

Shared goal interest: Members of the group should concur to the attainment of objectives each one must atleast share one of the groups concerns

Reasons for formation of groups: The reasons for the formation of groups are as follows 1. Solution for mindedness: Though the group members bring with them expertise in the form of knowledge and experience sometimes due to want of time the group members may pressurise all concerned with the group to arrive at solution to the problem quickly. In such cases the decisions arrived at may be improper/ hasty/ premature one and need not be the correct one. 2. Compromised results: In case of problems the group members though interactions and discussions will understand the problem hold discussions and try to arrive at a consensus. However sometimes when consensus is arrived at, the group may perceive group harmony as more important than any given task decision. This results in a compromise on the solution arrived at. Under the circumstances this may not be the best solution but rather a compromised one.

3.

Untimely decisions: One of the characteristic features of a group is that decisions can be taken very fast. But at a times leader of the group will as a rule of the thumb take a decision and then communicate it group. In such cases the very purpose for formation of a group is defeated. By following the thumb rule the group leader will be taking a unilateral decisions and not the united one. Moreover since the decision taken is single handedly and also arrived at quickly it may be an untimely decision.

4.

Conflicts: Since the informal group exist to meet and satisfy the social needs of its members, there are chances of occurrences of role conflict. This problem arises when the individual group member becomes more committed to his/her own goal and seem to undermine their group members problems. In case of imbalance between the two and if the group as such is not constituted properly conflict may arise.

5.

Dominance: Groups are useful for transmitting and sharing information. In case of a problem all members can discuss it together and decisions can be arrived at with opportunities for clarification. However there is is always a fear of a single person a dominant personality assuming unofficial authority.

Types of Groups: 1. Family life cycle: Even though it is the family unit which purchases home appliances, toys, furniture etc, it is cannot be implied that all the families are in the market at the same time or for that matter at any time. This means that along with family decision making the family life cycle also plays a role in influencing consumer behaviour and also helps in gaining insight into consumption related behaviour. Peoples consumptions patterns of goods and services they buy and consume changes over their lifetime. As babies they consume baby food in the earlier years, most food items in their growing and mature years and specific diets in the later years. Individuals taste and preference related to

cloths, automobiles, idea of re-creation etc. is also related to stage of the family life cycle and age. Some writers like Gail Sheehy in his papers predictable crisis in adult life and Roger Gould in transformation has identified certain psychological life cycle stages that adults experience certain passage or transformation as they go through life. This means that changing consumption interest can also associated with these adult passages. Thus marketers very often try to identify their target markets in terms of family life cycle and develop appropriate product and marketing plans. Further they also have to pay attention to the changing consumption interests that might be associated with these adult passages and develop marketing programmes accordingly. 2. Friendship groups: An individuals for his/her protection self awareness and enhancement needs others around him/her Leon Festinger in his A theory of social comparison processes has claimed that there exists in the human organisms a drive to evaluate his opinions and abilities. If objective non social means are not available of others. In other words human beings prefer the company of other and these peoples opinion also matters to them. Consumers also enjoy the company of their friends when purchasing certain types of goods. Such friendship group influence the consumer especially products like clothing, fine jewellery, cosmetics and personal care items, food items etc. The influence of the friends is also seen in buyers choice of food habits and drinks. Marketers have realised the important role played by the friends in influencing the consumption pattern of individuals in certain category of products and also involved in designing suitable marketing communication programmes. To mention a few advertisements- coca-cola,(all soft drinks) close up, colgate etc (tooth paste) rin bar , life bouy, life bouy plus,(soaps and detergents) Hero tribe ranger (cycle) Four square, Gold Flake etc. (cigarettes) and so on are based on themes of evolved around friendship. 3. Formal social clubs:

Human beings are generally considered to be sociable in nature, spend much of his/her time in group situations. They like to be associated with formal social clubs like the Rotary Club, Lions Club etc. The reason for their getting associated with such social groups may be to achieve a specific goal like making new friends, career advancement or pursuing a special interest or promoting a specific cause. Such formal social systems generally comprises of three elements Activities

Interaction

Sentiments

Activities are the tasks that people perform. Interactions are the behaviour that occurs between people in performing the tasks. And the sentiments are the attitudes that develop between individuals within the group. George C. Homans argues that these concepts through separate and closely related. A change in any of these three elements will produce some change in the other two. In a formal organisation setup, job (activities) has to be done that require people to work together (interactions). These jobs must be sufficiently satisfying (sentiments) for people to continue doing them. With more and more positive interaction with each other, more and more positive sentiments will be developed by the people towards each other. As, this process continues there is tendency for the group members to become more alike in their activities and their sentiments.

Markets releasing the role played by the formal groups on their individual members can work out a suitable sales promotion and communication programme and deliver the same to its target segment. 4. Shopping friends/groups: According to psychology group refers to the number of people who interact with one another are psychologically aware of one another and perceive themselves to be a group. In the same way, shopping groups can be assumed to exists because the friends or the group members need to relate to each other mainly because of the physical location of the people same perception of things matching personality, styles ,outlooks etc. These factors are responsible for the increase in the frequency of the interactions between the members of a shopping group. So depending on the product category and target market segment the marketer should develop a marketing programme keeping in mind the shopping group who are likely to be involved in the decision making process and who will are also likely to influence the individual buyer. 5. Work Group: This group can comprises of formal work group and informal work group. The formal work groups are those which are deliberately created by companies in order to fulfil specific tasks or functions clearly related to the total organisational goals and objectives. Based on their duration, the formal work groups can be of two types.

a).Permanent formal work group: are part of the top management team, work units in various departments of the organisation staff groups proving specialised services to the line people in the organisation, permanent committees and so on. b) Temporary formal work groups: are committees or tasks forces created for a particular purpose/mission. They may be created to study and review the salary policies to suggest measures to improve the relationship between the union and management or to think of new

products and services and so on. These temporary formal groups may exist till the tasks assigned to them have been completed. Very often the committee /temporary work group will comprise of members, who are already on the permanent payroll of the company. However till the completion of work assigned to the committee there will be close interactions between the members. Markets must realise that the work group also plays a very important role in promoting their products and work out marketing programmes to communicate information about their product and its usage to the work groups.

Q:, What do you mean by reference group? Write a note on group dynamics and Reference Group.

Ans: Group:

GROUP DYNAMICS AND CONSUMER REFERENCE GROUPS:

Group may be defined as two or more people who interact to accomplish either individual or mutual goals. Classification of groups Membership group: A membership group is one to which a person either belongs or would qualify for membership Symbolic group: A symbolic group is one in which an individual is not likely to receive membership despite acting like a member Reference group: Reference group is any person or group that serves as a point of comparison (or reference) for an individual in the formation of either general or specific values, attitudes, or behavior. Classification of reference groups: Normative Reference Groups:

Reference groups that influence general or broadly defined values or behaviour. It influence in the development of basic code of behaviour. Eg: a childs normative reference group is its immediate family. Comparative Reference Groups : Reference groups that serves as a benchmark for specific or narrowly defined behaviour or attitude. It influence in the expression of specific consumer attitude and behaviour. Eg: a persons normative reference group might be its neighboring family whose life style appears to be admirable. Direct reference group: Those groups with which the individual interact on daily basis. Eg: family,close friends,etc. Indirect reference groups: Individuals or groups with whom a person identifies but does not have direct face-to-face contact. Eg: Movie stars, sports heroes, political leaders, or TV personalities. Factors that effect reference group influence: The degree of influence depends on nature of the individual, the product and the specific social factor. Information and experience: Person who have experience with the product and can obtain full information about the product is not influenced by the reference group. On the other hand they seek for advice and are influenced .Credibility, attractiveness and power of reference group: A reference group that is perceived as credible, attractive and powerful can induce consumer attitude and behaviour change. Conspicuousness of the product: Visually conspicuous product: not influenced by reference group. Verbally conspicuous product: influenced by the reference group. Consumer conformity

Reference group change the consumer attitude by encouraging conformity. Factors Encouraging Conformity: A Reference Group Must ... Inform or make the individual aware of a specific product or brand Provide the individual with the opportunity to compare his or her own thinking with the attitudes and behavior of the group Influence the individual to adopt attitudes and behavior that are consistent with the norms of the group Legitimize the decision to use the same products as the group Selected Consumer-Related Reference Groups : Friendship groups. Eg: influence product such as snack food, brand-name clothing, etc. Shopping groups. Eg: influence product such as Tupperware. Work groups. Eg: influence product such as Avon. Virtual groups or communities Consumer-action groups: youth development group, education group, etc. Reference Group Appeals: Celebrities: Famous personalities hold the viewers attention and promote the product. Eg: sharukhan promoting the navarathana talc powder. The expert: A person by his occupation is in unique position to help the consumers evaluate the product the advertisement promotes. Eg: ad for frying pan feature a chef explaining the product. The common man: Reference group appeal that uses a testimonial of satisfied customers. Eg: slice-of-life advertisement like Aswini hair oil. The executive and employee spokesperson: Top executives festure as a spokesperson in the ad. Eg: Frank Perdue CEO of Perdue chicken feature in the ad.

Trade or spokes-characters: Familiar cartoon character feature in the ad to promote the product. Eg: Other reference group appeals