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Consumer Behaviour
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Understanding Consumer
Behavior
How is CB Different from different
from other disciplines Like?
Organizational Behavior:
How individuals act within organizations?
Psychology:
Study of mind and social behavior
Sociology:
Study of society (Groups)
Anthropology:
How are social relations among humans organized?
How is CB Different from different
from other disciplines? When situation clues lead people to perceive
themselves as customers, they interpret world differently
Experiment: Half class as students Half class as Customers Perception of being CUSTOMER-Activates
knowledge domain with behavior changing in accordance to knowledge
Ownership: Controlling ones world, People use their possessions to impress others
Consumer Behavior
Behavior consumers display in searching, purchasing, using, evaluating and disposing off goods and services that they expect to satisfy their needs
CB focuses on how consumers or families take decision to spend available resources (time, money, efforts) on consumption related items
Consumer Behavior focuses on-
Consumers make buying decisions all the time. The Marketing Task is to understand
What do they buy Product & Services Why do they buy Motivation to
purchase When do they buy Timing of purchase Where do they buy Channel decisions How do they buy Decision process How often do they buy Purchase cycle How do they evaluate it after purchase How do they dispose it of
CB
Two Different Consuming Entities
Personal Organizations
(Own, Households) Profit Org
Non Profit Org.
Govt Agencies
Institutions
Evaluation of CB with Marketing
Concept
3 Business Orientations-
Product Orientation (1850-1920)
Gear up mfg skill to enhance production
Demand exceeded supply
Sales Orientation (1930-1960)
Sell more than what mfg dept can produce
Supply greater than demand
Evaluation of CB with Marketing
Concept Marketing Orientation (1960s.)
Even in 1930s some companies realized that Understanding of CB for future growth
Eg 1 (KFC)-Colonel Sanders (Road Side Restaurant, recipes based on T & P. Popularity grew, Opened up a motel, bad reputation (nice people avoided it). Decides to overcome bad image, puts a sample clean, comfortable, hygienic room.
Eg 2 (McDonalds-1950)-Brothers have to select locations-Fly over towns and look for Churches Where there were Churches, there were good American Families
CHANGES IN CONSUMER
BEHAVIOR
1. Increasing shift towards
CONSUMERISM
Strong and Sustainable economy (8%)
1/5th of worlds citizens below 20 are
Joining ranks of Indian consumer
Youthful population waiting to explore
2. Getting more and more
materialistic
Work hard and get rich
More purchasing power
Findings of survey (Gallop)-Average work week- Indian (50 hrs), American (42 hrs), European (Less than 40 hrs)
Means- 1.5 hours extra every day, want to get rewarded.
Admit we want money, but ready to work to get that money-PURCHASING POWER
3. Consumerism becoming way of
life Set aside money and show desire to buy
durables (Indicators of things to come)
Looking for life pleasures Here and now PLEASURE
Difference between older gen and younger generation.
Travel and Entertainment Industry Multiplexes, Theme Parks, Resorts Mobile-Growth 1600%, 3 mill subsribers in a
month
Lots of new customers entering market-BPO
4.Comfort of Indians in borrowing
Older generations-No one was comfortable unless it was for survival
Desire for good life..
EMIs..(65 % of salaries)
5. Liking for foreign products
decreasing
Earlier-They dumped obsolete technology, passed on products well pass date.
Now-MII Label has credibility
Survey
1996-34% expressed faith in Indian cos
2006-60% expressed faith in Indian cos
6.Changing role of women
I can and I will
Parallel role in running household
Influencing factors in purchase decision if not deciding factors
Survey
83% surveyed approved working outside their homes
74% approved their delaying marriage for education and career
Trends of eating out-Convenience items
7.Comfort with technology
Mushrooming of call centers (BPO/ KPO)
E-Chaupal ITC
Consumer getting better deals
Cyber Grand Maas
CONSUMERISM AND CONSUMER
BEHAVIOR IN CONTEMPORARY
ENVIRONMENT
Consumerism
It is a social and economic order that is based on the systematic creation and fostering of a desire to
purchase goods or services in ever greater amounts.
The term is often associated with criticisms of consumption starting with Thorstein Veblen or, more
recently by a movement called Enoughism.
Veblen's subject of examination, the newly emergent middle class arising at the turn of the twentieth century,
comes to full fruition by the end of the twentieth century
through the process of globalization.
Consumerism
The term "consumerism" is also used to refer to the consumerist movement or consumer activism, which seeks to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards.
In this sense it is a movement or a set of policies aimed at regulating the products, services, methods, and standards of manufacturers, sellers, and advertisers in the interests of the buyer.
Consumerism A Social Phenomenon
Beginning in the 1990s, the most frequent reason given for attending college had
changed to making a lot of money,
outranking reasons such as becoming an
authority in a field or helping others in
difficulty.
This correlates with the rise of materialism.
Businesses have realized that wealthy consumers are the most attractive targets
of marketing.
The upper classs tastes, lifestyles, and
Consumerism A Social Phenomenon
Emulation is also a core component of 21st century consumerism. As a general
trend, regular consumers seek to emulate
those who are above them in the social
hierarchy.
Overall Model of Consumer
Behavior Culture
Subculture
Demographics
Social Status
Reference Groups
Family
Marketing
Activities
Perception
Learning
Memory
Motives
Personality
Emotions
Attitudes
Self-Concept
and
Lifestyle
Decision Process
(Situations)
Problem Recognition
Information
Search
Alternative
Evaluation
and Selection
Outlet Selection
and Purchase
Postpurchase
Processes
Exte
rnal
Influences
Inte
rna
l In
fluences
Consumer Needs and
Motivation
Needs and Motivation
Needs are the essence of the marketing concept.
Motivation is the driving force within individuals that impels them to action.
Consumer Motivation
Represents the drive to satisfy both psychological and physiological needs
through product purchase and
consumption.
gives insights into why people buy certain products.
stems from consumer needs: industries have been built around basic human
needs.
Types of Consumer Needs
Physiological needs-
Fundamental human needs, including
food, water and shelter
Safety and Health needs-
Threats to our safety and health motive
purchases for personal security and
protection.
Safety and Health needs
Protecting our personal information and
computers represents new types of safety
needs.
Businesses provide a variety of products
and services to appeal to safety and
health conscious consumers.
Types of Consumer needs
Need for love and companionship-
Humans are social creatures who need
to experience and express love and
companionship.
Need for love and companionship
Services and products help individuals
find and attract others
products are often used as symbols of
love and caring
need for pleasure
products, services and consumption
activities provide fun and excitement.
need to possess
Consumers often acquire products simply
because of their need to own such
products such as collectors.
need for variety
marketers may introduce different
versions of original brands.
variety may become focus of product
positioning.
Motivational conflicts and need
priorities
satisfying a need often comes at the expense of another need- this causes
motivational conflicts.
Types of motivational conflicts
Approach-approach: deciding between two or more desirable options.
Avoidance-avoidance: deciding between two or more desirable options.
Approach-avoidance: behavior has both positive and negative consequences.
Motivational conflicts and need
priorities
resolving motivational conflicts requires prioritizing needs.
Maslows hierarchy:
some needs take precedence over other
needs- physiological needs take top
priorities.
Differences in the importance attached to
various needs affects how consumers
evaluate products.
Motivational conflicts and need
priorities
Because of consumers' different motivational priorities, companies use
benefit segmentation: dividing consumers
into different market segments based on
the benefits they seek from purchase and
consumption.
Maslows Hierarchy of Needs
Model of the Motivation Process
Goals
The sought-after results of motivated behavior
Generic goals are general categories of goals that consumers see as a way to
fulfill their needs
Product-specific goals are specifically branded products or services that
consumers select as their goals
Goals Structure for Weight Control
The Selection of Goals
The goals selected by an individual depend on their:
Personal experiences
Physical capacity
Prevailing cultural norms and values
Goals accessibility in the physical and social environment
Motivations and Goals
Positive Motivation
A driving force toward some object
or condition
Approach Goal
A positive goal toward which
behavior is directed
Negative Motivation
A driving force away
from some object or
condition
Avoidance Goal
A negative goal from which behavior is
directed away
Rational versus Emotional Motives
Rationality implies that consumers select goals based on totally objective criteria
such as size, weight, price, or miles per
gallon
Emotional motives imply the selection of goals according to personal or subjective
criteria
The Dynamic Nature of Motivation
Needs are never fully satisfied
New needs emerge as old needs are satisfied
People who achieve their goals set new and higher goals for themselves
Substitute Goals
Are used when a consumer cannot attain a specific goal he/she anticipates will
satisfy a need
The substitute goal will dispel tension
Substitute goals may actually replace the primary goal over time
Frustration
Failure to achieve a goal may result in frustration.
Some adapt; others adopt defense mechanisms to protect their ego.
Arousal of Motives
Physiological arousal
Emotional arousal
Cognitive arousal
Environmental arousal
Philosophies Concerned with
Arousal of Motives
Behaviorist School
Behavior is response to stimulus
Elements of conscious thoughts are to be ignored
Consumer does not act, but reacts
Cognitive School
Behavior is directed at goal achievement
Needs and past experiences are reasoned, categorized, and transformed into attitudes and
beliefs
Murrays List of Psychogenic Needs
Needs Associated with Inanimate Objects:
Acquisition, Conservancy, Order, Retention, Construction
Needs Reflecting Ambition, Power,
Accomplishment, and Prestige:
Superiority, Achievement, Recognition, Exhibition, Infavoidance
Needs Connected with Human Power:
Dominance, Deferrence, Similance, Autonomy, Contrariance
Cont. Murrays List of Psychogenic Needs
Sado-Masochistic Needs : Aggression, Abasement
Needs Concerned with Affection between People: Affiliation, Rejection, Nurturance, Succorance, Play
Needs Concerned with Social Intercourse: Cognizance, Exposition
A Trio of Needs
Power individuals desire to control environment
Affiliation need for friendship, acceptance, and
belonging
Achievement need for personal accomplishment
closely related to egoistic and self-actualization needs
Consumer Perception
Consumer Experience,
Learning and Knowledge
Perception
The process by which an individual selects, organizes, and interprets stimuli
into a meaningful and coherent picture of
the world
How we see the world around us
Elements of Perception
Sensation
Absolute threshold
Differential threshold
Subliminal perception
Sensation
The immediate and direct response of the sensory organs to stimuli
A stimulus is any unit of input to any of the senses.
The absolute threshold is the lowest level at which an individual can experience a
sensation.
Differential Threshold
Minimal difference that can be detected between two similar stimuli
Also known as the just noticeable difference
Subliminal Perception
Stimuli that are too weak or too brief to be consciously seen or heard may be strong
enough to be perceived by one or more
receptor cells.
Is Subliminal Persuasion
Effective? Extensive research has shown no
evidence that subliminal advertising can
cause behavior changes
Some evidence that subliminal stimuli may influence affective reactions
Aspects of Perception
Selection
Organization
Interpretation
Perceptual Selection
Consumers subconsciously are selective as to what they perceive.
Stimuli selected depends on two major factors Consumers previous experience
Consumers motives
Selection depends on the Nature of the stimulus
Expectations
Motives
Perceptual Selection
Selective Exposure
Selective Attention
Perceptual Defense
Perceptual Blocking
Consumers seek out messages which: Are pleasant They can sympathize Reassure them of
good purchases
Concepts
Perceptual Selection
Selective Exposure
Selective Attention
Perceptual Defense
Perceptual Blocking
Heightened awareness when
stimuli meet their
needs
Consumers prefer different messages
and medium
Concepts
Perceptual Selection
Selective Exposure
Selective Attention
Perceptual Defense
Perceptual Blocking
Screening out of stimuli which are
threatening
Concepts
Perceptual Selection
Selective Exposure
Selective Attention
Perceptual Defense
Perceptual Blocking
Consumers avoid being bombarded by: Tuning out TiVo
Concepts
Organization
Figure and ground
Grouping
Closure
People tend to organize perceptions into figure-
and-ground
relationships.
The ground is usually hazy.
Marketers usually design so the figure is the
noticed stimuli.
Principles
Organization
Figure and ground
Grouping
Closure
People group stimuli to form a unified
impression or
concept.
Grouping helps memory and recall.
Principles
Organization
Figure and ground
Grouping
Closure
People have a need for closure and organize
perceptions to form a
complete picture.
Will often fill in missing pieces
Incomplete messages remembered more than
complete
Principles
Interpretation
Physical Appearances
Stereotypes
First Impressions
Jumping to Conclusions
Halo Effect
Positive attributes of people they know to
those who resemble
them
Important for model selection
Attractive models are more persuasive for
some products
Perceptual Distortion
Doves campaign stresses the
everyday woman.
Interpretation
Physical Appearances
Stereotypes
First Impressions
Jumping to Conclusions
Halo Effect
People hold meanings related to stimuli
Stereotypes influence how stimuli are
perceived
Perceptual Distortion
Interpretation
Physical Appearances
Stereotypes
First Impressions
Jumping to Conclusions
Halo Effect
First impressions are lasting
The perceiver is trying to determine which
stimuli are relevant,
important, or
predictive
Perceptual Distortion
Interpretation
Physical Appearances
Stereotypes
First Impressions
Jumping to Conclusions
Halo Effect
People tend not to listen to all the
information before
making conclusion
Important to put persuasive arguments
first in advertising
Perceptual Distortion
Interpretation
Physical Appearances
Stereotypes
First Impressions
Jumping to Conclusions
Halo Effect
Consumers perceive and evaluate multiple
objects based on just
one dimension
Used in licensing of names
Important with spokesperson choice
Perceptual Distortion
Positioning
Establishing a specific image for a brand in the consumers mind
Product is positioned in relation to competing brands
Conveys the concept, or meaning, of the product in terms of how it fulfills a consumer need
Result of successful positioning is a distinctive, positive brand image
Positioning Techniques
Umbrella Positioning
Positioning against Competition
Positioning Based on a Specific Benefit
Finding an Unowned Position
Filling Several Positions
Repositioning
Perceived Quality
Perceived Quality of Products
Intrinsic vs. Extrinsic Cues
Perceived Quality of Services
Price/Quality Relationship
Perceived Risk
The degree of uncertainty perceived by the consumer as to the consequences (outcome) of
a specific purchase decision
Types
Functional Risk
Physical Risk
Financial Risk
Psychological Risk
Time Risk
How Consumers Handle Risk
Seek Information
Stay Brand Loyal
Select by Brand Image
Rely on Store Image
Buy the Most Expensive Model
Seek Reassurance
Personality and Consumer
Behavior
What Is Personality
The inner psychological characteristics that both determine and reflect how a
person responds to his or her environment
The Nature of Personality
Personality reflects individual differences
Personality is consistent and enduring
Personality can change
Theories of Personality
Freudian theory Unconscious needs or drives are at the heart
of human motivation
Neo-Freudian personality theory Social relationships are fundamental to the
formation and development of personality
Trait theory Quantitative approach to personality as a set
of psychological traits
Freudian Theory
Id
Warehouse of primitive or instinctual needs for which individual seeks immediate satisfaction
Superego
Individuals internal expression of societys moral and ethical codes of conduct
Ego
Individuals conscious control that balances the demands of the id and superego
A Representation of the Interrelationships
Among
the Id, Ego, and Superego
Freudian Theory and
Product Personality
Consumer researchers using Freuds personality theory see consumer
purchases as a reflection and extension of
the consumers own personality
Neo-Freudian Personality Theory
We seek goals to overcome feelings of inferiority We continually attempt to establish relationships
with others to reduce tensions
Karen Horney was interested in child-parent relationships and desires to conquer feelings of anxiety. Proposed three personality groups Compliant move toward others, they desire to be
loved, wanted, and appreciated
Aggressive move against others Detached move away from others
Trait Theory
Personality theory with a focus on psychological characteristics
Trait - any distinguishing, relatively enduring way in which one individual differs from another
Personality is linked to how consumers make their choices or to consumption of a broad product category - not a specific brand
Trait Theory
Innovativeness
Dogmatism
Social character
Need for uniqueness
Optimum stimulation level
Variety-novelty seeking
The degree to which consumers are
receptive to new
products, new
services, or new
practices
Consumer Innovators
And Noninnovators
Trait Theory
Innovativeness
Dogmatism
Social character
Need for uniqueness
Optimum stimulation level
Variety-novelty seeking
A personality trait that reflects the degree of
rigidity a person
displays toward the
unfamiliar and toward
information that is
contrary to his or her
own established beliefs
Consumer Innovators
And Noninnovators
Trait Theory
Innovativeness
Dogmatism
Social character
Need for uniqueness
Optimum stimulation level
Variety-novelty seeking
Ranges on a continuum for inner-directedness to other-
directedness
Inner-directedness
rely on own values when evaluating products
Innovators
Other-directedness
look to others
less likely to be innovators
Consumer Innovators
And Noninnovators
Trait Theory
Innovativeness
Dogmatism
Social character
Need for uniqueness
Optimum stimulation level
Variety-novelty seeking
Consumers who avoid appearing to
conform to
expectations or
standards of others
Consumer Innovators
And Noninnovators
Trait Theory
Innovativeness
Dogmatism
Social character
Need for uniqueness
Optimum stimulation level
Variety-novelty seeking
A personality trait that measures the level or
amount of novelty or
complexity that individuals
seek in their personal
experiences
High OSL consumers tend to accept risky and novel
products more readily than
low OSL consumers.
Consumer Innovators
And Noninnovators
Cognitive Personality Factors
Need for cognition (NC) A persons craving for enjoyment of thinking
Individual with high NC more likely to respond to ads rich in product information
Visualizers versus verbalizers A persons preference for information
presented visually or verbally
Verbalizers prefer written information over graphics and images.
From Consumer Materialism to
Compulsive Consumption Consumer materialism
The extent to which a person is considered materialistic
Fixated consumption behavior
Consumers fixated on certain products or categories of products
Compulsive consumption behavior
Addicted or out-of-control consumers
Consumer Ethnocentrism
Ethnocentric consumers feel it is wrong to purchase foreign-made products
They can be targeted by stressing nationalistic themes
Brand Personality
Personality-like traits associated with brands
Examples
Fa and freshness
Nike and athlete
BMW is performance driven
Levis 501 jeans are dependable and rugged
Brand personality which is strong and favorable will strengthen a brand but not necessarily
demand a price premium
A Brand Personality Framework
Product Personality Issues
Gender Often used for brand personalities
Some product perceived as masculine (coffee and toothpaste) while others as feminine (bath soap and shampoo)
Geography Actual locations like Philadelphia cream cheese and Arizona
iced tea
Fictitious names also used such as Hidden Valley and Bear Creek
Color Color combinations in packaging and products denotes
personality
Self and Self-Image
Consumers have a variety of enduring images of themselves
These images are associated with personality in that individuals consumption
relates to self-image
Different Self-Images
Actual Self-
Image Ideal Self-Image
Ideal Social
Self-Image Social Self-Image
Expected
Self-Image
CONSUMER LEARNING
Learning
The process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior
Marketers must teach consumers: where to buy
how to use
how to maintain
how to dispose of products
Learning Theories
Behavioral Theories
Based on observable behaviors (responses)
that occur as the result
of exposure to stimuli
Cognitive Theories
Learning based on mental information
processing
Often in response to problem solving
Elements of
Learning Theories
Motivation
Cues
Response
Reinforcement
Models of Classical Conditioning
Strategic Applications of Classical
Conditioning
Repetition
Stimulus generalization
Stimulus discrimination
Increases the association between
the conditioned and
unconditioned
stimulus
Slows the pace of forgetting
Advertising wearout is a problem
Basic Concepts
Strategic Applications of Classical
Conditioning
Repetition
Stimulus generalization
Stimulus discrimination
Having the same response to slightly
different stimuli
Helps me-too products to succeed
Useful in product extensions
Basic Concepts
Strategic Applications of Classical
Conditioning
Repetition
Stimulus generalization
Stimulus discrimination
Selection of a specific stimulus from similar
stimuli
This discrimination is the basis of
positioning which
looks for unique ways
to fill needs
Basic Concepts
Instrumental
(Operant)
Conditioning
A behavioral theory of
learning based on a
trial-and-error process,
with habits forced as
the result of positive
experiences
(reinforcement)
resulting from certain
responses or
behaviors.
Types of Reinforcement
Positive
Negative
Forgetting
Extinction
A Model of Instrumental Conditioning
Instrumental Conditioning and
Marketing
Customer Satisfaction (Reinforcement)
Reinforcement Schedules
Shaping
Massed versus Distributed Learning
Cognitive
Learning
Theory
Holds that the kind
of learning most
characteristic of
human beings is
problem solving,
which enables
individuals to gain
some control over
their environment.
Information Processing
Relates to cognitive ability and the complexity of the information
Individuals differ in imagery their ability to form mental images which influences
recall
Information Processing and Memory Stores
Information Processing
Movement from short-term to long-term storage depends on
Rehearsal
Encoding
Retention
Information is stored in long-term memory Episodically: by the order
in which it is acquired
Semantically: according to significant concepts
Total package of associations is called a schema
Models of Cognitive Learning
Attention Cognitive
Action Conative Purchase
Postpurchase
Evaluation
Trial
Adoption
Decision
Confirmation
Affective
Evaluation
Interest
Evaluation
Persuasion
Knowledge
Awareness Awareness
Knowledge
Interest
Desire
Sequential
Stages
of
Processing
Innovation
Adoption
Model
Decision-
Making
Model
Tricompetent
Model
Innovation
Decision
Process
Promotional
Model
Consumer Relevance
Involvement depends on degree of personal relevance.
High involvement is:
Very important to the consumer
Provokes extensive problem solving
Measures of Consumer Learning
Recognition and Recall Measures Aided and Unaided Recall
Cognitive Responses to Advertising
Attitudinal and Behavioral Measures of Brand Loyalty
Brand Loyalty
Function of three groups of influences Consumer drivers
Brand drivers
Social drivers
Four types of loyalty No loyalty
Covetous loyalty
Inertia loyalty
Premium loyalty
Brand Equity
Refers to the value inherent in a well-known brand name
Value stems from consumers perception of brand superiority
Brand equity reflects learned brand loyalty
Brand loyalty and brand equity lead to increased market share and greater profits
CONSUMER ATTITUDE
FORMATION AND CHANGE
Attitude
A learned
predisposition to
behave in a
consistently
favorable or
unfavorable manner
with respect to a
given object.
What Are Attitudes?
The attitude object
Attitudes are a learned predisposition
Attitudes have consistency
Attitudes occur within a situation
Structural Models of Attitudes
Tricomponent Attitude Model
Multiattribute Attitude Model
Cognition
A Simple Representation of the Tricomponent
Attitude Model
The Tricomponent Model
Cognitive
Affective
Conative
The knowledge and
perceptions that are
acquired by a
combination of direct
experience with the
attitude object and
related information
from various sources
Components
The Tricomponent Model
Cognitive
Affective
Conative
A consumers emotions or feelings
about a particular
product or brand
Components
Starbucks Coffee
The Tricomponent Model
Cognitive
Affective
Conative
The likelihood or
tendency that an
individual will
undertake a specific
action or behave in a
particular way with
regard to the attitude
object
Components
Multiattribute
Attitude
Models
Attitude models that
examine the
composition of
consumer attitudes
in terms of selected
product attributes or
beliefs.
Multiattribute Attitude Models
The attitude-toward-object model
The attitude-toward-behavior model
Theory-of-reasoned-action
model
Attitude is function of evaluation of product-
specific beliefs and
evaluations
Useful to measure attitudes toward
brands
Types
Multiattribute Attitude Models
The attitude-toward-object model
The attitude-toward-behavior model
Theory-of-reasoned-action
model
Is the attitude toward behaving or acting
with respect to an
object, rather than the
attitude toward the
object itself
Corresponds closely to actual behavior
Types
Multiattribute Attitude Models
The attitude-toward-object model
The attitude-toward-behavior model
Theory-of-reasoned-action
model
Includes cognitive, affective, and
conative components
Includes subjective norms in addition to
attitude
Types
Strategies of Attitude Change
1. Changing the Basic Motivational
Function
2. Associating the Product with an Admired
Group or Event
3. Resolving Two Conflicting Attitudes
4. Altering Components of the Multiattribute
Model
5. Changing Beliefs about Competitors Brands
Consumer Decision Making
Levels of Consumer Decision
Making
Extensive Problem Solving A lot of information needed
Must establish a set of criteria for evaluation
Limited Problem Solving Criteria for evaluation established
Fine tuning with additional information
Routinized Response Behavior Usually review what they already know
Models of Consumers: Four Views of
Consumer Decision Making
An Economic View
A Passive View
A Cognitive View
An Emotional View
Goal Setting and Pursuit
A Simple
Model of
Consumer
Decision
Making
The Process of Consumer Decision
Making
Need Recognition
Prepurchase Search
Evaluation of Alternatives
Need Recognition
Usually occurs when consumer has a problem
Need recognition styles
Actual state
Desired state
Prepurchase Search
Begins with internal search and then moves to external search
The impact of the Internet
Search may be personal or impersonal
Issues in Alternative Evaluation
Evoked set Criteria used for evaluating brands Consumer decision rules and their
application
Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy
The Evoked Set
Issues in Alternative Evaluation
Evoked Set Criteria used for evaluating brands Consumer decision rules and their
application
Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy
Consumer Decision Rules
Compensatory
Noncompensatory
Conjunctive Decision Rule
Disjunctive Decision Rule
Lexicographic Rule
Compensatory
Decision Rules
A type of decision
rule in which a
consumer evaluates
each brand in terms
of each relevant
attribute and then
selects the brand
with the highest
weighted score.
Non-
compensatory
Decision
Rules
A type of consumer
decision rule by which
positive evaluation of
a brand attribute does
not compensate for a
negative evaluation of
the same brand on
some other attribute.
Conjunctive
Decision
Rule
A noncompensatory
decision rule in which
consumers establish a
minimally acceptable
cutoff point for each
attribute evaluated.
Brands that fall below
the cutoff point on any
one attribute are
eliminated from further
consideration.
Disjunctive
Rule
A noncompensatory
decision rule in which
consumers establish a
minimally acceptable
cutoff point for each
relevant product
attribute.
Lexicographic
Rule
A noncompensatory
decision rule -
consumers first rank
product attributes in
terms of importance,
then compare brands
in terms of the
attribute considered
most important.
Affect
Referral
Decision
Rule
A simplified decision
rule by which consumers
make a product choice
on the basis of their
previously established
overall ratings of the
brands considered, rather
than on specific
attributes.
The Decision Process for Functionally
Illiterate Consumers
A Purchase Can Involve a Number of
Decisions.
When purchasing car, the buyer is
involved in a number of decisions the
make, model, country of origin, the
dealer, the financing, and different
options.
Output of Consumer Decision
Making
Purchase behavior
Postpurchase evaluation
Postpurchase Evaluation
Actual Performance Matches Expectations
Neutral Feeling
Actual Performance Exceeds Expectations
Positive Disconfirmation of Expectations
Performance Is Below Expectations
Negative Disconfirmation of Expectations
Gifting Behavior
Gifting is an act of symbolic
communication, with explicit and implicit
meanings ranging from congratulations
and love, to regret, obligation, and
dominance.
Reported Circumstances and Motivations for Self-Gift Behavior
CIRCUMSTANCES
Personal accomplishment
Feeling down
Holiday
Feeling stressed
Have some extra money
Need
Had not bought for self in a while
Attainment of a desired goal
Others
MOTIVATIONS
To reward oneself
To be nice to oneself
To cheer up oneself
To fulfill a need
To celebrate
To relieve stress
To maintain a good feeling
To provide an incentive toward a goal
Others
Gifting Relationships
GIFTING
RELATIONSHIP
Intergroup
Intercategory
EXAMPLE DEFINITION
A Christmas gift from one
family to another family
A group giving a gift to
another group
A group of friends chips in
to buy a new mother a baby
gift
An individual giving a gift to a
group or a group giving a gift
to an individual
Intragroup
Interpersonal
A family buys a VCR for
itself as a Christmas gift
A group giving a gift to itself
or its members
Valentines Day chocolates
presented from a boyfriend
to a girlfriend
An individual giving a gift to
another individual
Intrapersonal A woman buys herself
jewelry to cheer herself up
Self-gift
A Simple Model of Consumption
Relationship
Marketing
Marketing aimed at
creating strong,
lasting relationships
with a core group of
customers by making
them feel good about
the company and by
giving them some
kind of personal
connection with the
business.
Reference Group and Opinion
Leadership
Reference Groups
Reference group: an actual or imaginary individual/group conceived of having significant
relevance upon an individuals evaluations, aspirations, or behavior
Influences consumers in three ways:
Informational
Utilitarian
Value-expressive
When Reference Groups Are
Important
Social power: capacity to alter the actions of others
Referent power Information power
Legitimate power Expert power
Reward power Coercive power
Types of Reference Groups
Any external influence that provides social clues can be a reference group
Cultural figure
Parents
Large, formal organization
Small and informal groups
Exert a more powerful influence on individual consumers
A part of our day-to-day lives: normative influence
Brand Communities and Consumer
Tribes
A group of consumers who share a set of social relationships based upon usage or interest in a
product
Consumer tribes share emotions, moral beliefs, styles of life, and affiliated product
Brandfests celebrated by community
Membership versus
Aspirational Reference Groups
Membership reference groups
People the consumer actually knows
Advertisers use ordinary people
Aspirational reference groups
People the consumer doesnt know but admire
Advertisers use celebrity spokespeople
Factors Predicting
Reference Group Membership
Propinquity
Mere exposure
Group cohesiveness
Positive versus
Negative Reference Groups
Avoidance groups: motivation to distance oneself from other people/groups
Antibrand communities: coalesce around a celebrity, store, or brandbut in this case theyre united by their disdain for it
Consumers Do It in Groups
Deindividuation: individual identities become submerged within a group
Social loafing: people dont devote as much to a task when their contribution is part of a larger
group
Risky shift: group members show a greater willingness to consider riskier alternatives
following group discussion than if members
made their own decisions
Factors Influencing Conformity
Cultural pressures
Fear of deviance
Commitment
Group characteristics
unanimity
size
expertise
Susceptibility to interpersonal influence
Opinion Leadership
Opinion leaders influence others attitudes and behaviors
Experts
Unbiased evaluation
Socially active
Similar to the consumer
Among the first to buy
Opinion Leaders
Is there a generalized opinion leader whose recommendations we seek for all types of
purchases?
Experts may be monomorphic or polymorphic
Old and New Social Networks
The Market Maven
Market maven: actively involved in transmitting
marketplace information of all types
Just into shopping and aware of whats happening in the marketplace
Overall knowledge of how and where to get products
The Surrogate Consumer
Surrogate consumer: a marketing intermediary hired to provide input into purchase decisions
Interior decorators, stockbrokers, professional shoppers, college consultants
Consumer relinquishes control over decision-making functions
Marketers should not overlook influence of surrogates!
How Do We Find Opinion
Leaders? The self-designating method
Simply ask individuals whether they consider themselves to be opinion leaders
Easy to apply to large group of potential opinion leaders
Inflation or unawareness of own importance/influence
Key informant method
Key informants identify opinion leaders
Sociometric Methods
Sociometric methods: trace communication patterns among group members
Systematic map of group interactions
Most precise method of identifying product-information sources, but is very difficult/expensive to implement
Network analysis
Referral behavior/network, tie strength
Bridging function, strength of weak ties
Word-of-Mouth Communication
WOM is product information transmitted by
individuals to individuals
More reliable form of marketing
Social pressure to conform
Influences two-thirds of all sales
We rely upon WOM in later stages of product adoption
Powerful when we are unfamiliar with product category
Negative WOM and Power of
Rumors
We weigh negative WOM more heavily than we do positive comments!
Negative WOM is easy to spread, especially online
Determined detractors
Information/rumor distortion
There are 3 themes to complaint Web sites
Injustice
Identity
Agency
Cutting-Edge WOM Influences
Social Networking
Crowd Power
Guerilla Marketing
Viral Marketing
Cultural Influence on
Consumer Behavior
Culture
The sum total of learned
beliefs, values, and
customs that serve to
regulate the consumer
behavior of members of
a particular society.
A Theoretical Model of Cultures Influence on Behavior
The Invisible Hand of Culture
Each individual perceives the world through
his own cultural lens
Lifestyle Matrix for Global Youth
188
Culture Satisfies Needs
Food and Clothing
Needs vs. Luxury
Culture Is Learned
Enculturation and acculturation
Language and symbols
Ritual
Sharing of culture
Enculturation The learning of ones
own culture
Acculturation The learning of a new
or foreign culture
Issues
190
Culture Is Learned
Enculturation and acculturation
Language and symbols
Ritual
Sharing of culture
Issues Without a common language, shared
meaning could not exist
Marketers must choose appropriate symbols in
advertising
Marketers can use known symbols for associations
Culture Is Learned
Enculturation and acculturation
Language and symbols
Ritual
Sharing of culture
Issues A ritual is a type of
symbolic activity
consisting of a series of
steps
Rituals extend over the human life cycle
Marketers realize that rituals often involve
products (artifacts)
Selected Rituals and Associated
Artifacts
SELECTED RITUALS TYPICAL ARTIFACTS
Wedding
Bridal make-up (dresses are mostly red for
brides in large parts of India); Grooms
wear sherwani.
Birth of child Savings Bond, silver baby spoon
Birthday Card, present, cake with candles
50th Wedding anniversary
Catered party, card and gift, display of
photos of the couples life together
Graduation Pen, card, wristwatch
Valentines Day Candy, card, flowers
New Years Eve Champagne, party, fancy dress
Culture Is Learned
Enculturation and acculturation
Language and symbols
Ritual
Sharing of Culture
Issues
To be a cultural characteristic, a belief, value, or practice must be shared by a significant portion of the society
Culture is transferred through family, schools, houses of worship, and media
194
Culture is Dynamic
Evolves because it fills needs
Certain factors change culture
Technology
Population shifts
Resource shortages
Wars
Changing values
Customs from other countries
The Measurement of Culture
Content Analysis
Consumer Fieldwork
Value Measurement Instruments
Content
Analysis
A method for
systematically analyzing
the content of verbal
and/or pictorial
communication. The
method is frequently
used to determine
prevailing social values
of a society.
Consumer Fieldwork
Field Observation
Natural setting
Subject unaware
Focus on observation of behavior
Participant Observation
Value Measurement Survey
Instruments
Rokeach Value Survey (RVS)
A self-administered inventory consisting of eighteen terminal values (i.e., personal goals) and eighteen instrumental values (i.e., ways of reaching personal goals)
List of Values (LOV)
A value measurement instrument that asks consumers to identify their two most important values from a nine-value list that is based on the terminal values of the Rokeach Value Survey
Values and Lifestyles (VALS)
A value measurement based on two categories: self-definition and resources
Scale to Measure Attitude
Toward Helping Others
Attitude toward helping others (AHO)
People should be willing to help others who are less fortunate
Helping troubled people with their problems is very important to me
People should be more charitable toward others in society
People in need should receive support from others
Toward a Shopping Culture
Is shopping what we do to create value in our lives?
The younger generation is shopping more
This has an effect on credit card debt