Detailed Notes for Unit 2 of Cb

8/14/2019 Detailed Notes for Unit 2 of Cb

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Consumer behaviour Unit 2

Individual determinants of consumer behavior

Motivation

Its the driving force within individuals that impels them to action.This force is developed due to the state of tension, as a result of an unfulfilled need. So, we tend to reduce this tension bothconsciously and subconsciously to reduce it.Motivation is a state of need-induced tension that drives the individuals to engage in behaviour that he/she believes willsatisfy the need and thus reduce the tension.

Model of motivation process

Needs- There are basically two kinds of needs:

INNATE NEEDS- They are the physiological needs that include the needs for food, water, air, clothing, and shelter. They arealso the primary needs.

ACQUIRED NEEDS- They are the needs that we learn in response to our culture or environment. They include needs for self-esteem, prestige, affection, power and learning. Since these needs are more psychological, so they are often termed assecondary needs.

BY:- SHASHANK GUPTALecturer

Department of management studies

Unfulfilledneeds,desiresand wants

Tension Drive Behavior Goal orneed

fulfillment

Learning

Cognitive processes

Tensionreduction

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Consumer behaviour Motivation can be of two major types:

Positive motivation Negative motivation

Theories of motivation

1. Maslows theory of motivation

Dr. Abraham Maslow , formulated a widely accepted theory of human motivation. He identified five basic levels of human needs and ranked them in the order of their importance from lower level to higher level needs.

Physiological needs - They are the first and most basic human needs which are required for human life to sustain. For eg a

person who is damn hungry, no other interest exists but food. Till the time hell not satisfy this most dominant need, hell not be able to think of the other higher order needs.

Safety needs - These needs are not only concerned with physical safety but also include order, safety, routine, familiarity, andcontrol over ones life and environment. It includes health concerns, insurance, savings, education etc.

Social needs - It includes love, affection, belonging, acceptance, warm and satisfying human relationships with other people.



Ego needs(prestige,status,selfe

steem)

Social needs(affection,friendship,belonging)

Safety and security needs(protection,order,stability)

Physiological needs(food,water,air,shelter)

Self actualization

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Consumer behaviour Ego needs - These needs can take either inwards or outward orientation. Inward-directed ego needs reflects an individualsneed for self-acceptance, success, independence and personal satisfaction. Outward-directed includes needs for prestige,reputation, status and recognition.Self-actualization needs - this refers to an individuals desire to fulfill his/her potential- to become everything of their capability. Its self-fulfillment. Its basically what a man can be, he must be.

INVOLVEMENT

This concept is proposed to highlight and characterize differences in the intensities of interests with which consumersapproach their dealings with the market place. So, it can be simply defined as being related to the consumers values and self-concept, which will influence the degree of personal importance ascribed to a particular product or situation. As a whole itincorporate two critical properties: Intensity- degree of arousal and directional influence.

Dimensions of involvement

Antecedents - These are the bases or sources that interacts with each other to generate the degree of involvement that theconsumer will experience at a particular time. They influence the nature and extent of the involvement as well as helps ingrouping the variables into person, stimulus and situational categories.

Person- It includes the needs, values, experiences and interests. For example a person who has a highinterest in economy will have a greater interest in THE ECONOMIC TIMES.

Stimulus - A consumer shows more involvement towards products/stimuli that he perceives to be closelyrelated to his values, beliefs, interests etc. for e.g. consumer level of involvement is comparatively higher towardsthe products that are promoted at a wider scale by the use of different media vehicles.

Situations- The higher is the importance of a particular situation for the consumer, the greater is theinvolvement. For eg purchase of a rope for a clothesline may not matter so much but if a rope is required for achilds swing, the purchase becomes more intense and involves more involvement.

Involvement properties

It is an internal state that has a directional influence on how consumers will behave. It have three main properties: intensity,direction and a level of persistence.Intensity is the degree of involvement that a consumer experiences which is viewed as high and low



Moderating factorsOpportunity to processAbility to process

AntecedentsPersonStimulusSituation

Involvement propertiesIntensityDirectionPersistence

Response factorsSearchInformation processingDecision

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Consumer behaviour Direction is the focus or target of involvement while the persistence deals with the length of time during which the consumer remains in state of involvement. The continuing heightened commitment is termed as enduring involvement

Response factors

It highlights how a consumer behaves under a different involvement conditions. It describes the mental and physical actionsthe consumers gets engaged in.

PERSONALITY AND SELF CONCEPT

It can be defined as those inner psychological characteristics that both determines and reflects how a person responds tohis/her environment. The inner characteristics are the specific qualities , traits, etc that distinguishes an individual from theother.

Nature of personality

It reflects individual differences It is consistent and enduring It is dynamic It is vastly varying

Theories of personality

There are majorly three theories of personality:

FREUDIAN THEORY

Freuds psychoanalytic theory of personality proposed that every individual personality is the product of a struggle of threeinteracting forces- the id, ego and superego.ID is the source of strong inborn drives and urges that acts to avoid tension and seeks immediate pleasure. It generallyoperates at an unconscious and subjective level and does not deals with objective reality.EGO operates on the principle of reality and allows postponement of tension to an appropriate time.SUPEREGO constitutes the moral part of the individuals psychic structure and controls the basic strivings of the ID andinfluence EGO to strive for socially approved goals.

NEO FREUDIAN THEORY



SUPEREGO

EGOID

GRATIFICATION

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Consumer behaviour This theory believed that social relationships are fundamental to the formation and development of personality. Theindividual develops a personality through numerous attempts to deal with others in a social setting. They viewed individualsas striving to overcome feelings of inferiority an searching for new ways to obtain love, security and brotherhood. Thesefeelings motivate the individuals to perfect themselves and develop methods to cope with anxieties produced due to suchinferiority feelings.

Horney proposed three individual personality groups:

Compliant orientation are those individuals who move towards others(they desired to be loved,appreciated and wanted) Aggressive individuals are those who move against others(they desire to excel and win admiration) Detached individuals are those who move away from others (they desire independence, self-reliance, self

sufficiency and individualism or freedom from obligations).A CAD instrument was developed to measure peoples interpersonal orientations within a consumer which reflected thatdifferent products and brands were used by individuals having different personality types.

TRAIT AND FACTOR THEORY

The orientation of this theory is primarily quantitative and focus on the measurement of personality in terms of psychologicalcharacteristics called traits.A trait is defined as any distinguishing, relatively enduring way in which one individual differs from another. The concept of trait is based on three assumptions-

Every individual possess relatively stable behavioral tendencies These tendencies differs in degrees in individuals When identified and measured, they help in characterizing personalities.

Personality tests measure such traits as consumer innovativeness (how receptive a person is to new experiences), consumermaterialism (the degree of consumers attachment to worldly possessions and consumers ethnocentrism (the consumerslikelihood to accept or reject the foreign products.

SELF CONCEPT

This approach investigates the possible relationships between how individuals perceive themselves and what behavior theyexhibit as consumers. It helps marketers in getting an exact information due to self description by the consumer.

How the self-concept developsThere are three major views-

Self appraisalBy observing ones own behavior, a person might develop an awareness that whether hi/her behavior falls in social or antisocial category.

Reflected appraisalIts the looking-glass self. It holds that the appraisal a person receives from others molds the self-concept which ultimatelydepends upon the characteristics of the appraiser and his/her appraisal.

Social comparisonIt emphasizes that people are passive and merely reflects the appraisal of others. Its the end sought by accumulation to rank high in comparison with the rest of the community.



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Consumer behaviour

CONSUMER BEHAVIOR AND SELF CONCEPT

It can be explained as follows:

Consumers form their self concepts through psychological development and social interaction. Products and brands are perceived by consumers as having symbolic meanings. Selective possession, display and use of these good-symbols assists an individual in defining and enhancinghis self-concept for himself and for others. Individuals behavior is motivated towards enhancing self-concept through the consumption of goods. The brands that the consumer prefers are those that matches and are consistent with his self-concept.



Single component perspective

Actual self

Multiple component perspective

Self

IdealExpressive

SocialIdeal self

Actual self

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Consumer behaviour

CONSUMER PERCEPTION

Its defined as the process by which an individual selects, organizes and interprets stimuli into a meaningful picture. Its basically how we look at the world around us. Many people comes across the same stimuli but they perceive it altogether ina different fashion based on the individuals needs, values and expectations.

According to S.P.Robbins , perception may be defined as a process by which individuals organize and interpret their sensoryimpressions in order to give meaning to the environment.

NATURE

Intellectual process - Its how efficiently one selects and organizes the stimuli.Cognitive process - Its how the environment is perceived by you and to what extent it affects your behavior.Subjective process - The subject matter of the received stimuli varies among people.

CONSUMER PERCEPTION PROCESS

It consists of several sub-processes and is an input-throughput-output process.

RECEIVING- The stimulus can be received from the environment in the form of subject, object or people.

SELECTION- It depends upon the external and internal factors that influence the perceiver.



PERCEIVEDSELF IMAGE

PECEIVEDBRAND IMAGE

COMPARISON

PREFFEREDBRANDS

UNACCEPTABLE BRANDS

Perceptual

inputs(STIMULUS)

Perceptual

mechanism(R,S,O,I)

Perceptual

output(ACTION)

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Consumer behaviour External factors are related to the stimulus like intensity, status, size, contrast, novelty, familiarity etc. Internal factors are related to the perceiver like need expectation, self concept, beliefs, past experiencesetc.

ORGANISATION- Its to organize the received inputs into meaningful patterns. Its often termed as gestalt process .Gestalt is a German word that means to organize.It can be done by:

Figure and ground- Its the tendency to focus on certain and keep other as background. E.g. - Page of a book.

Grouping- Its to group the stimulus on the basis of similarity or proximity. Simplification- In case of overloading we try to simplify by subtracting less important information andconcentrating on the more important one.

INTERPRETATION - Stimuli are often highly ambiguous in terms of visibility, exposure, noise level, fluctuation etc. So,consumers try to interpret the stimuli based on their past experiences and social interactions.

COMMON PERCEPTUAL ERRORS

Selective perception

Halo effect- judging a stimulus in a single characteristic trait. Stereo typing- judging something on the basis of the group to which it belongs. First impression

LEARNING

Consumer learning can be defined as a process by which an individual acquire the purchase and consumption knowledge andexperience that they apply to future related behavior.Its viewed as a relatively permanent change in behavior occurring as a result of experience.

NATURE

Its a dynamic process that changes and evolves continually. Its a relatively permanent change in the behavior as a result of the past experiences. It can be intentional as well as incidental.

PRINCIPAL ELEMENTS OF LEARNING

The four basic elements of learning are-

MOTIVE - Its a arousal function that is essential to activate the energy needed to engage in some learning activity. It isreduced due to any unpleasant situational experience and vice-versa. For this reason, advertisements , air conditioners etctends to increase in summers.

CUES - They are the stimuli that give direction to the motives. It influences the manner in which the consumers respond tothe motive. For eg, the promotions, pamphlets, product colors etc acts as a clue to influence their purchase.

RESPONSE- Its how individuals react or behave to a clue and constitutes the response. It can be a favorable or unfavorableresponse.

REINFORCEMENT- It increases the likelihood that a specific response will occur in the future as the result of particular cues or stimuli. Its the tendency for the response to reoccur in a similar situation.

BEHAVIORAL LEARNING THEORIESBY:- SHASHANK GUPTA

Lecturer Department of management studies

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Consumer behaviour

They are also termed as stimulus-response theories because they are based on the premise that observable responses tospecific external stimuli signal the occurrence of learning. Two behavioral theories with great relevance to marketing are-CLASSICAL CONDITIONING AND OPERANT(INSTRUMENTAL) CONDITIONING.

CLASSICAL CONDITIONING

This theory is based on the idea that response to a situation built up through repeated exposure.Ivan Pavlov, a Russian psychologist generated this theory to propose how learning occurs in his studies with dogs. Pavlovsounded a bell and then immediately applied a meat paste to the dogs tongue, which caused him to salivate.Learning(conditioning) occurs when after a number of repetitions of the bell sound followed immediately by the food, the

bell sound alone caused the dog to salivate. The dog associated the bell sound(conditioned stimulus) with the meat paste(unconditioned stimulus) and after a number of pairings gave the same unconditioned response(salivation) to the bellalone.



LEARNING

THEORIES

CONNECTIONIST COGNITIVE

CLASSICALCONDITIONING

OPERANTCONDITIONING

SOCIALLEARNING

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Consumer behaviour

INSTRUMENTAL CONDITIONING

It also requires a link between a stimulus and a response. It says that learning occurs through a trial-and-error process and thatthe habits are formed as a result of rewards received for certain responses or behaviors. According to B.F.Skinner, mostindividuals learning occurs in a controlled environment in which individuals are rewarded for choosing an appropriate

behavior. He distinguished two types of reinforcement that influence the likelihood that a response will be repeated.

POSITIVE REINFORCEMENT - It consists of events that strengthen the occurrence of a specific response. For e.g using ashampoo that leaves your hair feeling silky and clean is likely to result in its repeat purchase.NEGATIVE REINFORCEMENT - Its an unpleasant or negative outcome that serves to encourage a specific behavior. For e.g an ad featuring a model with wrinkled skin is designed to encourage consumers to buy and use the advertised skin cream.Insurance companies generally go for it by highlighting the sudden death of the senior-most earning source of a family and itsconsequences on their family.

SOCIAL LEARNING THEORY - This theory emphasis on the fact that individuals undergoes thelearning process by observing what is happening around them or being told by or by direct experiencing something.It includes what we learn from our parents, teachers, superiors, colleagues, subordinates etc.

It follows the model of:

COGNITIVE LEARNING THEORY

Learning based on mental activity is called cognitive learning. It holds that the kind of learning occurs through the complexmental processing of information. It involves learning ideas, concepts, attitudes and facts that contribute to our ability toreason, solve and learn relationships.It starts from simple information acquisition to creative problem solving. IT doesnt go for stimulus and responserelationship, rather emphasizes on the fact learning occurs as a result of discovering meaningful patterns which helps in

problem solving.

MEMORY



Unconditionedstimulus

Meat paste

Conditionedstimulus

bell

Unconditionedresponsesalivation

Conditionedstimulusbell

Conditioned responsesalivation

ATTENTION RETENTIONMOTOR REPRODUCTION

REINFORCEMENT

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Consumer behaviour Memory processes are of considerable importance to the understanding of consumers because consumers act on the basis of their cognitions, knowledge or beliefs about the world. These cognitions are stored in the memory and they influence howincoming stimuli are interpreted.

COMPONENTS OF MEMORY SYSTEM

There are basically three components of memory system. They are:

SENSORY MEMORY - The information is received here for the first time in the form of sensations produced by sensoryreceptors. The memory registers storing these sensations have a large capacity and represent the information in a form thatclosely resembles the actual state. Information is stored only for a fraction of a second and will be lost unless sufficientattention is paid in analyzing and transferring it to short-term memory. Advertisers concentrate a great deal of effort ondesigning stimuli in their ads to provide strong sensory impressions.

SHORT-TERM MEMORY - It can be viewed as the workspace for information processing. Its a portion of memoryactivated to temporarily store and process information so as to interpret a comprehend meaning. The information is storedlasting less than a minute while its capacity is quite limited. CHUNKING, the method of assembling information into a typeof organized unit and understandable form, takes place at this stage.

LONG-TERM MEMORY - Its the permanent store house for information that has undergone sufficient processing.

Information gets stored for few minutes as well as for years and unlimited information can be stored here. Throughelaborative rehearsal the individual uses his existing knowledge to interpret incoming information and code it in way that isconsistent with his existing cognitive structure.

REHEARSAL AND ENCODING - the amount of information available for delivery from short-term storage to long-termstorage depends upon the amount of rehearsal it is given.

ENCODING- Its the process by which we select a word or visual image to represent a perceived object. For eg KELLOGSuses the tiger on its frosted flakes, SUNFEAST uses the image of a sun on its products.

RETRIEVAL- Its the process by which we recover information from long-term storage. When we are unable to remember something with which we are familiar, its due to the failure of our retrieval system. So, the marketers maintain that theconsumers tend to remember the products benefits rather than its attributes.

MEASURES OF CONSUMER LEARNING

The various measures are:

RECOGNITION AND RECALL TEST - These are conducted to determine whether consumers remember an ad, the extentto which they have seen and can recall it, their attitudes towards the product and their purchase decision.Recognition tests are based on aided recall i.e, the consumer is shown an ad and askedwhether he or she remembers seeingit or any other salient feature of the same ad.



SENSORYMEMORY

SHORT-TERM

MEMORY

LONG-TERM

MEMORY

FORGOTTEN MATERIAL

Sensory input

rehearsal Encoding

retrieval

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Consumer behaviour Recall tests are based on unaided recall i.e, the consumer is asked whether he or she has read a specific magazine or watched a specific TV show and if so, can recall any ads seen, the product advertised, the brand or any salient feature aboutit.

COGNITIVE RESPONSES TO ADVERTISING - Its to measure the degree to which the consumers accuratelycomprehend the intended advertising message. Comprehension is the function of the message characteristics, the consumersopportunity and the ability to process the information and show a considerable level of involvement. For this, COPYTESTING is done.

ATTITUDINAL AND BEHAVIORAL MEASURES OF BRAND LOYALTY - Attitudinal measures are concerned withconsumers overall feelings about the product and the brand and their purchase intentions.Behavioral measures are concerned with observable responses to promotional stimuli- repeat purchase behavior rather thanattitude towards a product.

CONSUMER ATTITUDE

According to ALLPORT, An attitude is a learned disposition to behave in a consistently favorable or unfavorable way withrespect to a given object.Its basically how positive or negative, favorable or unfavorable, a person feels towards an object.



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Consumer behaviour CHARACTERISTICS OF ATTITUDE

They have an object -The object can be a physical thing such as a product, can be an action such as buying a car, an item such as a personor a collection of items.

They have direction,degree and intensity - It expresses direction- favorable or unfavorable, degree- how much the person likes/dislikesthe object, and intensity- how strongly a person feels about the object or his conviction.

They havestructure - They do not exist in isolation and are associated with each other to form a complex whole. They arestable because they are closely related to each other with an amount of fit, which otherwise would result inconflict.

They are learned-They develop from our personal experiences with reality as well as from information from friends, sales people andnews media.

FUNCTIONS OF ATTITUDES Adjustmentfunction/utilitarian function

It directs people rewarding objects and away from undesirable ones. It works on the principle of maximizing reward andminimizing punishment.

Ego-defensivefunction

Many outward expressions of attitudes reflect the opposite of what a person perceives him to be. E.g., a consumer who hasmade a poor investment might defend him as being the result of poor advice from some friend.

Value-expressivefunctionIt expresses the persons centrally held values. Thus, an orthodox family might regard girl education as inappropriate. So,marketers must understand the consumer values and accordingly design their offerings.

SOURCES OF ATTITUDE DEVELOPMENT

Personal experiences Group associations

ATTITUDE THEORIES

These theories are primarily concerned with how attitudes develop and change. Its based on the general principle that thehuman mind strives to maintain harmony or consistency among currently perceived attitudes.

1. CONGRUITY THEORY

Assume that a consumer initially holds a positive attitude towards a particular brand of clothes X (positive scale value of +2),while a negative attitude towards a particular celebrity Y (negative value of -2). Then the consumer sees an advertisementwhere the same celebrity was promoting the brand X. So, the attitude of the consumer becomes inconsistent and a state of



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Consumer behaviour incongruity develops, Y, whom I dislike spoke positive about a brand which I like. In order to reduce his tension, theconsumer would increase his favorable attitude towards the celebrity and will become quite unfavorable towards the brand X.If the consumer perceives the two assumptions equally but in opposite strength then the attitude will reach a zero neutral

point or it can be any non-equilibrium point.



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Consumer behaviour 2. BALANCE THEORY

According to Fritz Heider, a person views himself as being involved in a triangular relationship in which all the threeelements( persons, ideas, things) have either positive /favorable or negative/unfavorable relationships with each other. Thisrelationship is termed as sentiment. If all the multiplicative relationship between the three elements is negative, the model isunbalanced and vice-versa.For eg consider three statements:

1. I like burgers.

2. I dont like high calorie foods3. I believe burgers contain high calories. Now this structure is not balanced because there a positive relationship on two sides of the triad and a negative on the thirdside. Therefore it will produce tension for the consumer and hell try to resolve it either by disliking burgers, believing that

burgers do not really contain so much calories or liking high-calorie foods.

3. COGNITIVE DISSONANCE

According to Leon Festinger, cognitive dissonance is a psychological state which results in when a person perceives that twocognitions(thoughts), both of which he believes to be true, do not fit together. The resulting dissonance produces tension andthen the individual tries to resolve it. For eg: I like smoking and smoking is injurious to health



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Consumer behaviour

Consumer decision process( input-process-output)

SCHIFFMANS AND KANUKS MODEL FOR CONSUMER BUYING PROCESS



Firms marketing efforts

ProductPlacePricePromotion

Socio cultural environmentFamilyInformal sourcesNon commercial sourcesSocial classSubculture and culture

Need recognition

Prepurchasesearch

Evaluation of alternatives

Psychological fieldMotivation

PersonalityPerceptionLearningAttitudes

Experience

PurchaseTrial

Repeat purchase

Post purchase evaluation

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Consumer behaviour It varies considerably in their complexity. So, due to their varying complexity and purchase, consumers make quitecomplicated decisions. The range of problem solving can be classified as follows:

ROUTINE PROBLEM SOLVING - For frequent and general purchases, consumers require little or no information searchand are brand loyals.

LIMITED PROBLEM SOLVING - It requires time in seeking and choosing when a consumer buy a new brand in afamiliar product category.

EXTENSIVE PROBLEM SOLVING - It involves substantial information search when a consumer makes a purchase in anunfamiliar product category.

ROUTINEPROBLEMSOLVING

LIMITEDPROBLEMSOLVING

EXTENSIVEPROBLEMSOLVING

purchase involvementlevel

low medium High

Problem recognition Automatic Semi automatic Complex

Information searchAnd involvement

Minimal Limited Extensive

Purchasing orientation Convenience Mixed Shopping

Post purchase process Brand loyalty Repurchaseor brand switching

Loyalty or complaint

PROBLEM RECOGNITION

It occurs due to difference in sufficient magnitude between the actual and perceived situation. Consumers must becomeaware of the problem arising internally or externally.

TYPES OF PROBLEM RECOGNITIONThey can be basically classified into four types:

Routine problems - Those in which the difference between the actual and desired stares are expected to occur and animmediate solution is required. Convenience goods like grocery purchase comes under this category.

Emergency problems- Those that are unexpected in which immediate solutions are necessary. For instance a consumer whois involved in an automobile accident needs a quick solution to his transportation problem. As a result hell paycomparatively less time in analyzing his purchase.



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Consumer behaviour Planning problems - Those that are expected to occur but an immediate solution is not necessary. A consumer who expectshis inverter battery to end in 2 years may begin to engage in discussions with friends or focusing more on battery ads.

Evolving problems- Those that are unexpected to occur and no immediate solution is required too. The fashion-adoption process ordinarily occurs over a lengthy period of time and although the consumers becomes aware of them, there may not beinitial desire to purchase them immediately.

SITUATIONS LEADING TO PROBLEM RECOGNITION Depleted or inadequate stock of goods Discontentment withthe stock of goods Changingenvironmental circumstances Changing financialcircumstances Marketing activities

INFORMATION SEARCHSearch refers to mental as well as physical information seeking and processing activities which one engages in to facilitatedecision-making. They can be:

Prepurchase searchIts the information search prior to any purchase after the recognition of the problem.

Ongoing searchIt occurs when a consumer is searching with an interest in the product and not due to demand and is independent of specificneeds or decisions.

Internal SearchIt is done by Recalling information, experiences, and feelings concerning products and brands. Now we generally recalls

products or a situation on the basis of:1. Brands2. Attributes3. Experiences

External SearchThe Consumers acquire information from outside sources and gets engaged in pre-purchase and ongoing search.Some of the external can be:1. Retailer search2. Media search3. Interpersonal search4. Internet source



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Detailed Notes for Unit 2 of Cb