NMBA MK01: CONSUMER BEHAVIOUR AND CUSTOMER LOYALTY

Minimum Hours: 40
Course Objective: Objective of this course on Consumer Behavior and Customer Loyalty is to
present a comprehensive coverage of the subject with examples from the Indian Scenario. This
course also challenges students to understand the complexities of consumer needs and
perceptions and translate them into effective Marketing Strategies. The course will be focusing
on real life case-studies from Indian environment.
UNIT I (08 Sessions) Overview of Consumer Behaviour
Understanding Consumer Behavior- Meaning and Concept of Consumer and Customer,
Consumer Learning, Different Models in Consumer Behavior, Consumer Decision making
process-Concept of Consumer Decision; Levels of Consumer Decision Making; Consumer
Decision Making Model, Changing Indian Consumer Behavior-Drivers of Change; Changing
Consumer Trends; Rural Consumer Behavior; New Consumption Patterns, Organisational
Buying Behaviour
UNIT II (10 Sessions) Factors Influencing Consumer Buying Decision
Influence of Culture on Consumer Behavior-Concept of Culture; The measurement of Culture;
Indian Core Values; Cultural aspects of emerging markets, Values, Lifestyles, and
Psychographics- Impact of Values, Lifestyles and Psychographics on buying behavior;
Demographics, Lifestyles and Psychographics; Values and Value Systems, Group Influence on
Consumption- Role of reference groups; Effect of reference groups on consumer decision
making; Celebrity endorsements
UNIT III (8 Sessions) Customer Loyalty Comprehension
Meaning and definition of customer loyalty, Significance of Customer Loyalty, Customer
Loyalty Ladder, Loyalty Principles, Benefits of Customer Loyalty, Customer Loyalty and its
relationship with customer satisfaction, Customer customer loyalty formation, Drivers of
Customer Loyalty.
UNIT IV (8 Sessions) Customer Loyalty Outcomes
Characteristic Features of Behavioral Loyalty, Attitudinal Loyalty and Cognitive Loyalty, Role of
Customer Loyalty outcomes in business decisions, Significance of Customer Loyalty for
Marketers, Relationship Influencers of Customer Loyalty including factors mediating customer
loyalty relationship with other relationship influencers, Customer Affinity, Customer
Engagement.
UNIT V (06 Sessions) Customer Loyalty Measurement and Application

Measuring Customer Loyalty, Customer Loyalty measurement models and scales, Influence of
Service Quality on Customer Loyalty, Customer Loyalty in Retail Industry, Customer Loyalty in
Banking and Insurance Industry, Customer Loyalty Application in Aviation Industry
Suggested Readings
1. D. L. Loudon, J. Albert Della Bitta: Consumer Behavior; Concepts and Applications, Tata
McGraw Hill Publishing Company Limited
2. L. G. Schiffman, L. L. Kanuk, & S. R. Kumar: Consumer Behavior, Pearson Education Inc.
3. Rai Alok K., Srivastava M., The Character of Customer Loyalty, TATA MCGraw Hill
4. Kazmi & Batra- Consumer Behaviour (ExcelBooks)
5. Henry A.: Consumer Behavior and Marketing Action, Thomson Asia Pte Ltd.
6. M. Evans, A. Jamal, & G. Foxall : Consumer Behavior, John Wiley & Sons LTD.
7. M. Khan: Consumer Behavior, New Age International Publishers.

Who is a Consumer ?
Any individual who purchases goods and services from the market for his/her end-use is called a
consumer.
In simpler words a consumer is one who consumes goods and services available in the market.
Example - Tom might purchase a tricycle for his son or Mike might buy a shirt for himself. In the
above examples, both Tom and Mike are consumers.
What is consumer Interest ?
Every customer shows inclination towards particular products and services. Consumer interest is
nothing but willingness of consumers to purchase products and services as per their taste, need
and of course pocket.
Let us go through the following example:
Both Maria and Sandra went to the nearby shopping mall to buy dresses for themselves. The
store manager showed them the best dresses available with him. Maria immediately purchased
two dresses but Sandra returned home empty handed. The dresses were little too expensive for
Sandra and she preferred simple and subtle designs as compared to designer wears available at
the store.
In the above example Sandra and Maria had similar requirements but there was a huge difference
in their taste, mind set and ability to spend.
What is Consumer Behaviour ?
Consumer Behaviour is a branch which deals with the various stages a consumer goes
through before purchasing products or services for his end use.
Why do you think an individual buys a product ?

Need

Social Status

Gifting Purpose

Why do you think an individual does not buy a product ?

No requirement

Income/Budget/Financial constraints

Taste

When do you think consumers purchase products ?

Festive season

Birthday

Anniversary

Marriage or other special occasions

There are infact several factors which influence buying decision of a consumer ranging from
psychological, social, economic and so on.
The study of consumer behaviour explains as to:

Why and why not a consumer buys a product ?

When a consumer buys a product ?

How a consumer buys a product ?

During Christmas, the buying tendencies of consumers increase as compared to other months. In
the same way during Valentines week, individuals are often seen purchasing gifts for their
partners. Fluctuations in the financial markets and recession decrease the buying capacity of
individuals.
In a laymans language consumer behaviour deals with the buying behaviour of individuals.
The main catalyst which triggers the buying decision of an individual is need for a particular
product/service. Consumers purchase products and services as and when need arises.
According to Belch and Belch, whenever need arises; a consumer searches for several
information which would help him in his purchase.
Following are the sources of information:

Personal Sources

Commercial Sources

Public Sources

Personal Experience

Perception also plays an important role in influencing the buying decision of consumers.
Buying decisions of consumers also depend on the following factors:

Messages, advertisements, promotional materials, a consumer goes through also

called selective exposure.

Not all promotional materials and advertisements excite a consumer. A consumer does
not pay attention to everything he sees. He is interested in only what he wants to see.
Such behaviour is called selective attention.

Consumer interpretation refers to how an individual perceives a particular message.

A consumer would certainly buy something which appeals him the most. He would
remember the most relevant and meaningful message also called as selective retention.
He would obviously not remember something which has nothing to do with his need.

Consumer Learning
Consumer learning is the process by which individuals acquire the purchase and
consumption knowledge and experience they apply to future related behavior. Some
learning is intentional; much learning is incidental. Basic elements that contribute to
an understanding of learning are motivation, cues, response, and reinforcement.

There are two schools of thought as to how individuals learnbehavioral theories

and cognitive theories. Behavioral theorists view learning as observable responses
to stimuli; whereas cognitive theorists believe that learning is a function of mental
processing.

Three types of behavioral learning theories are: classical conditioning, instrumental

conditioning, and observational (vicarious) learning. The principles of classical
conditioning that provide theoretical underpinnings for many marketing applications
include: repetition, stimulus generalization, and stimulus discrimination. NeoPavlovian theories view traditional classical conditioning as cognitive associative
learning rather than as reflexive action.

Instrumental learning theorists believe that learning occurs through a trial-and-error

process in which positive outcomes (i.e., rewards) result in repeat behavior. Both
positive and negative reinforcement can be used to encourage the desired behavior.
Reinforcement schedules can be total (consistent) or partial (fixed ratio or random).
The timing of repetitions influences how long the learned material is retained.
Massed repetitions produce more initial learning than distributed repetitions;
however, learning usually persists longer with distributed (i.e., spread out)
reinforcement schedules.

Cognitive learning theory holds that the kind of learning most characteristic of
humans is problem solving. Cognitive theorists are concerned with how information
is processed by the human mind: how is it stored, retained, and retrieved. A simple
model of the structure and operation of memory suggests the existence of three
separate storage units: the sensory store, short-term store (or working memory),
and long-term store. The processes of memory include rehearsal, encoding, storage,
and retrieval.

Involvement theory proposes that people engage in limited information processing

in situations of low importance or relevance to them, and in extensive information
processing in situations of high relevance. Hemispheral lateralization theory gave
rise to the theory that television is a low-involvement medium that results in
passive learning and that print and interactive media encourage more cognitive
information processing.

Measures of consumer learning include recall and recognition tests, cognitive

responses to advertising, and attitudinal and behavioral measures of brand loyalty
in terms of the consumers behavior or the consumers attitude toward the brand.
Brand equity refers to the inherent value a brand name has in the marketplace.

Brand loyalty consists of both attitudes and actual behaviors toward a brand, as
both must be measured. For marketers, the major reasons for understanding how
consumers learn are to teach them that their brand is best and to develop brand
loyalty.

The ethical issues regarding consumer learning are centered on potential misuses of
behavioral, cognitive and observational learning. Most importantly, these issues
involve targeting children and young adults and, most unintentionally, teaching
them to engage in socially-undesirable behaviors.

THE ELEMENTS OF CONSUMER LEARNING

1. Consumer learning can be thought of as the process by which individuals

acquire the purchase and consumption knowledge and experience that they
apply to future related behavior.
2. Several points in this definition are worth noting.
a) First, consumer learning is a process; that is, it continually evolves and
changes as a result of newly acquired knowledge or from actual experience.
b) Both newly acquired knowledge and personal experience serve as feedback
to the individual and provide the basis for future behavior in similar
situations.
3. The role of experience in learning does not mean that all learning is deliberately
sought. A great deal of learning is also incidental, acquired by accident or
without much effort.
4. The term learning encompasses the total range of learning, from simple, almost
reflexive responses to the learning of abstract concepts and complex problem
solving.
a) Most learning theorists recognize the existence of different types of learning
and explain the differences through the use of distinctive models of learning.
5. Despite their different viewpoints, learning theorists in general agree that in
order for learning to occur, certain basic elements must be presentmotivation,
cues, response, and reinforcement.

Theories of Learning
Classical Conditioning

1. Early classical conditioning theorists regarded all organisms as passive

recipients.
a) Conditioning involved building automatic responses to stimuli.
2. Ivan Pavlov was the first to describe conditioning and to propose it as a general
model of how learning occurs.
a) For Pavlov, conditioned learning results when a stimulus that is paired
with another stimulus elicits a known response and serves to produce the
same response when used alone.
b) He used dogs to demonstrate his theories.
c) The dogs were hungry and highly motivated to eat.

d) Pavlov sounded a bell and then immediately applied a meat paste to the
dogs tongues, which caused them to salivate.
e) After a sufficient number of repetitions of the bell sound, followed almost
immediately by the food, the bell alone caused the dogs to salivate.
3. In a consumer behavior context, an unconditioned stimulus might consist of a
well-known brand symbol (e.g., the Microsoft windows icon) that implies
technological superiority and trouble-free operation (the unconditioned
response).
4. Conditioned stimuli might consist of new products bearing well-known
symbols.
Applications of Classical Conditioning
1. Three basic concepts derive from classical conditioning: repetition, stimulus
generalization, and stimulus discrimination.
2. Repetition works by increasing the strength of the association and by slowing
the process of forgetting.
a) After a certain number of repetitions, retention declines.
b) This effect is known as advertising wearout and can be decreased by
varying the advertising messages.
c) Wearout may be avoided by varying the message through cosmetic
variation or substantive variation.
3. Some disagree about how much repetition is needed.
a) The three-hit theory states that the optimum number of exposures to an ad
is three.
i) One to make the consumer aware of the product.
ii) A second to show consumers the relevance of the product.
iii) A third to remind them of its benefits.
4. The effectiveness of repetition is somewhat dependent upon the amount of
competitive advertising to which the consumer is exposed.
a) As exposure increases, the potential for interference increases.
5. According to classical conditioning theorists, learning depends not only on
repetition, but also on the ability of individuals to generalize.
6. Stimulus generalization explains why imitative me too products succeed in
the marketplace: consumers confuse them with the original product they have
seen advertised.
a) It also explains why manufacturers of private label brands try to make their
packaging closely resemble the national brand leaders.
7. The principle of stimulus generalization is applied by marketers to product line,
form, and category extensions.
a) In product line extensions, the marketer adds related products to an
already established brand, knowing that the new product is more likely to be
adopted when it is associated with a known and trusted brand name.
i) Conversely, it is much more difficult to develop a totally new brand.
b) Marketers offer product form extensions that include different sizes,
different colors, and even different flavors.
c) Product category extensions generally target new market segments.
i) The success of this strategy depends on a number of factors.

ii)

For example, if the image of the parent brand is one of quality,

consumers are more likely to bring positive associations to the new
category extensions.
8. Family brandingthe practice of marketing a whole line of company products
under the same brand nameis another strategy that capitalizes on the
consumers ability to generalize favorable brand associations from one product
to the next.
9. Retail private branding often achieves the same effect as family branding.
a) For example, Wal-Mart used to advertise that its stores carried only brands
you trust. Now, the name Wal-Mart itself has become a brand that
consumers have confidence in, and the name confers brand value on WalMarts store brands.
10.Licensingallowing a well-known brand name to be affixed to products of
another manufactureris a marketing strategy that operates on the principle of
stimulus generalization.
11.Corporations also license their names and trademarks, usually for some form of
brand extension, where the name of the corporation is licensed to the maker of a
related product and thereby enters a new product category.
12.Municipal and state governments have begun licensing their names to achieve
new sources of revenue. The Vatican Library licenses its name for a variety of
products from luggage to bed linens.
13.The increase in licensing has made counterfeiting a booming business, as
counterfeiters add well-known licensor names to a variety, of products without
benefit of control or quality control.
14.Stimulus discrimination is the opposite of stimulus generalization and results
in the selection of specific stimulus from among similar stimuli.
a) The consumers ability to discriminate among similar stimuli is the basis of
positioning strategy, which seeks to establish a unique image for a brand in
the consumers mind.
15.The key to stimulus discrimination is effective positioning, a major competitive
advantage.
a) The image, or position, that a product or service has in the mind of the
consumer is critical to its success.
b) Unlike the imitator who hopes consumers will generalize their perceptions
and attribute special characteristics of the market leaders products to their
own products, market leaders want the consumer to discriminate among
similar stimuli.
16.Most product differentiation strategies are designed to distinguish a product or
brand from that of competitors on the basis of an attribute that is relevant,
meaningful, and valuable to consumers.
17.It often is quite difficult to unseat a brand leader once stimulus discrimination
has occurred.
a) In general, the longer the period of learningof associating a brand name
with a specific productthe more likely the consumer is to discriminate, and
the less likely to generalize the stimulus.
18.The principles of classical conditioning provide the theoretical underpinnings for
many marketing applications.
a) Repetition, stimulus generalization, and stimulus discrimination are all major
applied concepts that help explain consumer behavior.
Instrumental Conditioning

1. Like classical conditioning, instrumental conditioning requires a link between

a stimulus and a response.
a) However, in instrumental conditioning, the stimulus that results in the most
satisfactory response is the one that is learned.
2. Instrumental learning theorists believe that learning occurs through a trial-anderror process, with habits formed as a result of rewards received for certain
responses or behaviors.
a) Although classical conditioning is useful in explaining how consumers learn
very simple kinds of behaviors, instrumental conditioning is more helpful in
explaining complex, goal-directed activities.
3. According to American psychologist B. F. Skinner, most individual learning occurs
in a controlled environment in which individuals are rewarded for choosing an
appropriate behavior.
a) In consumer behavior terms, instrumental conditioning suggests that
consumers learn by means of a trial-and-error process in which some
purchase behaviors result in more favorable outcomes (i.e., rewards) than
other purchase behaviors.
b) A favorable experience is instrumental in teaching the individual to repeat a
specific behavior.
4. Like Pavlov, Skinner developed his model of learning by working with animals.
a) In a marketing context, the consumer who tries several brands and styles of
jeans before finding a style that fits her figure (positive reinforcement) has
engaged in instrumental learning.
Reinforcement of Behavior
1. Skinner distinguished two types of reinforcement (or reward) influence, which
provided that the likelihood for a response would be repeated.
a) The first type, positive reinforcement, consists of events that strengthen
the likelihood of a specific response.
b) Negative reinforcement is an unpleasant or negative outcome that also
serves to encourage a specific behavior.
i) Fear appeals in ad messages are examples of negative reinforcement.
c) Either positive or negative reinforcement can be used to elicit a desired
response.
d) Negative reinforcement should not be confused with punishment, which is
designed to discourage behavior.
Applications of Instrumental Conditioning
1. The objective of all marketing efforts should be to maximize customer
satisfaction.
2. Aside from the experience of using the product itself, consumers can receive
reinforcement from other elements in the purchase situation, such as the
environment in which the transaction or service takes place, the attention and
service provided by employees, and the amenities provided.

a) Some hotels provide reinforcement to guests in the form of small amenities.

b) Most frequent shopper programs are based on enhancing positive
reinforcement and encouraging continued patronage.
3. Relationship marketingdeveloping a close personalized relationship with
customersis another form of non-product reinforcement.
4. Reinforcement schedulesmarketers have found that product quality must
be consistently high and provide customer satisfaction with each use for desired
consumer behavior to continue.
5. Marketers have identified three types of reinforcement schedules: total (or
continuous) reinforcement, systematic (fixed ratio) reinforcement, and random
(variable ratio) reinforcement.
6. Variable ratios tend to engender high rates of desired behavior and are
somewhat resistant to extinctionperhaps because, for many consumers, hope
springs eternal.
7. Shapingthe reinforcement of behaviors that must be performed by consumers
before the desired behavior can be performed is called shaping.
a) Shaping increases the probabilities that certain desired consumer behavior
will occur.
8. Massed versus distributed learningtiming has an important influence on
consumer learning.
a) Questionshould a learning schedule be spread out over a period of time
(distributed learning), or should it be bunched up all at once (massed
learning)?
b) The question is an important one for advertisers planning a media schedule
because massed advertising produces more initial learning, although a
distributed schedule usually results in learning that persists longer.
c) When advertisers want an immediate impact (e.g., to introduce a new
product or to counter a competitors blitz campaign), they generally use a
massed schedule to hasten consumer learning.
d) When the goal is long-term repeat buying on a regular basis, however, a
distributed schedule is preferable.
e) A distributed scheduler with ads repeated on a regular basis usually results
in more long-term learning and is relatively immune to extinction.
COGNITIVE LEARNING THEORY

1. Not all learning is the result of repeated trials.

a) Learning also takes place as the result of consumer thinking and problem
solving.
2. Cognitive learning is based on mental activity.
3. Cognitive learning theory holds that the kind of learning most characteristic of
human beings is problem solving, and it gives some control over their
environment.
Information Processing

1. The human mind processes the information it receives as input much as a

computer does.
a) Information processing is related to both the consumers cognitive ability
and the complexity of the information to be processed.
2. Individuals differ in terms of imagery, that is, their ability to form mental images
and their ability to recall information.
3. The more experience a consumer has with a product category, the greater his or
her ability to make use of product information.
How Consumers Store, Retain, and Retrieve Information
1. The structure of memory: because information processing occurs in stages, it is
believed that content is stored in the memory in separate storehouses for further
processing; a sensory store, a short-term store, and a long-term store.
2. Sensory storeall data comes to us through our senses, however, our senses
do not transmit information as whole images.
a) The separate pieces of information are synchronized as a single image.
b) This sensory store holds the image of a sensory input for just a second or
two.
c) This suggests that its easy for marketers to get information into the
consumers sensory store, but hard to make a lasting impression.
3. Short-term storeif the data survives the sensory store, it is moved to the
short-term store.
a) This is our working memory.
b) If rehearsalthe silent, mental repetition of materialtakes place, then the
data is transferred to the long-term store.
c) If data is not rehearsed and transferred, it is lost in a few seconds.
4. Long-term storeonce data is transferred to the long-term store it can last for
days, weeks, or even years.
5. Rehearsal and encodingthe amount of information available for delivery
from the short-term store to the long-term store depends on the amount of
rehearsal an individual gives to it.
a) Encoding is the process by which we select and assign a word or visual
image to represent a perceived object.
b) Learning visually takes less time than learning verbal information.
c) How much consumers encode depends on their cognitive commitment to
the intake of the information and their gender.
6. Information overload takes place when the consumer is presented with too
much information.
The result of overload is confusion, resulting in poor purchase decisions.
7. Retentioninformation is constantly organized and reorganized as new links
between chunks of information are forged.
a) In fact, many information-processing theorists view the long-term store as a
network consisting of nodes (i.e., concepts) with links among them.
b) As individuals gain more knowledge they expand their network of
relationships, and sometimes their search for additional information.
c) This process is known as activation, which involves relating new data to old
to make the material more meaningful.

d) The total package of associations brought to mind when a cue is activated is

called a schema.
e) One study demonstrated that brand imprintingmessages that merely
establish the brands identityconducted before the presentation of the
brands benefits facilitates consumer learning and retention of information
about the brand.
f) Studies also showed that a brands sound symbolism and the brands
linguistic characteristics impacted the encoding and retention of the brand
name.
g) Consumers information search is often dependent upon how similar or
dissimilar (discrepant) presented products are to product categories already
stored in memory.
i) Consumers recode what they have already encoded to include larger
amounts of information (chunking).
h) The degree of prior knowledge is an important consideration.
i) Knowledgeable consumers can take in more complex chunks of information
than those who are less knowledgeable in the product category.
j) Information is stored in long-term memory in two ways: episodically (i.e.,
by the order in which it is acquired) and semantically (according to
significant concepts).
k) Many learning theorists believe that memories stored semantically are
organized into frameworks by which we integrate new data with previous
experience.
8. Retrieval is the process by which we recover information from long-term
storage.
a) A great deal of research is focused on how individuals retrieve information
from memory.
b) Studies show that consumers tend to remember the products benefits,
rather than its attributes.
c) Motivated consumers are likely to spend time interpreting and elaborating
on information they find relevant to their needs, and are likely to activate
such relevant knowledge from long-term memory.
d) Research findings suggest that incongruent (e.g. unexpected) elements
pierce consumers perceptual screens and improve the memorability of an
ad when these elements are relevant to the advertising message.
e) Incongruent elements that are not relevant to an ad also pierce the
consumers perceptual screen but provide no memorability for the product.
9. Interference effects are caused by confusion with competing ads and result in
a failure to retrieve.
a) Advertisements for competing brands or for other products made by the
same manufacturer can lower the consumers ability to remember
advertised brand information.
b) There are actually two kinds of interference:
i) New learning can interfere with the retrieval of previously stored
material.
ii) Old learning can interfere with the recall of recently learned material.
Involvement Theory

1. Involvement
theory
developed
from
research
into
hemispheral
lateralization or split-brain theory.
a) The premise is that the right and left hemispheres of the brain specialize in
the kinds of information they process.
b) The left hemisphere is responsible for cognitive activities such as reading,
speaking, and attribution information processing.
c) The right hemisphere of the brain is concerned with nonverbal, timeless,
pictorial, and holistic information.
Involvement Theory and Media Strategy
1. Individuals passively process and store right-brain information.
a) Because it is largely pictorial, TV viewing is considered a right hemisphere
activity.
b) Passive learning was thought to occur through repeated exposures to lowinvolvement information.
i) TV commercials were thought to produce change in consumer behavior
before it changed consumer attitudes.
c) The left hemisphere is associated with high-involvement information.
i) Print media (newspapers and magazines) are considered left
hemisphere or high-involvement activity.
2. Right-brain theory is consistent with classical conditioning and stresses the
importance of the visual component of advertising.
a) Recent research suggests that pictorial cues help recall and familiarity,
although verbal cues trigger cognitive functions, encouraging evaluation.
b) The right-brain processing theory stresses the importance of the visual
component of advertising, including the creative use of symbols.
c) Pictorial cues are more effective at generating recall and familiarity with the
product, although verbal cues (which trigger left-brain processing) generate
cognitive activity that encourages consumers to evaluate the advantages
and disadvantages of the product.
3. There are limitations to split-brain theory.
a) Research suggests the spheres of the brain do not always operate
independently of each other, but work together to process information.
b) Some individuals are integrated processors. They have better overall recall
of both the verbal and visual portions of print ads than individuals who
exhibit right or left hemispherical
c) There is evidence that both sides of the brain are capable of low- and highinvolvement.
d) It does seem the right side is more cognitively oriented and the left side
more affectively oriented.
Involvement Theory and Consumer Relevance
1. A consumers level of involvement depends on the degree of personal relevance
that the product holds for the consumer.

a) High-involvement purchases are those that are very important to the

consumer in terms of perceived risk.
b) Low-involvement purchases are purchases that are not very important to
the consumer, hold little relevance, and have little perceived risk.
2. Highly involved consumers find fewer brands acceptable (they are called
narrow categorizers); uninvolved consumers are likely to be receptive to a
greater number of advertising messages regarding the purchase and will
consider more brands (they are broad categorizers).
Measures of Involvement
1. Researchers have defined and conceptualized involvement in a variety of ways,
including ego involvement, commitment, communication involvement, purchase
importance, extent of information search, persons, products situations, and
purchase decisions.
a) Some studies have tried to differentiate between brand involvement and
product involvement.
b) Others differentiate between situational, enduring, and response
involvement.
2. The lack of a clear definition about the essential components of involvement
poses some measurement problems.
a) Researchers who regard involvement as a cognitive state are concerned
with the measurement of ego involvement, risk perception, and purchase
importance.
b) Researchers who focus on the behavioral aspects of involvement measure
such factors as the search for and evaluation of product information.
Marketing Applications of Involvement
1. Involvement theory has a number of strategic applications for the marketer.
a) The left-brain (cognitive processing)/right-brain (passive processing)
paradigm seems to have strong implications for the content, length, and
presentation of both print and television advertisements.
b) By understanding the nature of low-involvement information processing,
marketers can take steps to increase consumer involvement with their ads.
2. The marketing implications of the elaboration likelihood model are clear:
a) For high-involvement purchases, marketers should use arguments stressing
the strong, solid, high-quality attributes of their productsthus using the
central (i.e., highly cognitive) route.
b) For low-involvement purchases, marketers should use the peripheral route
to persuasion, focusing on the method of presentation rather than on the
content of the message (e.g., through the use of celebrity spokespersons or
highly visual and symbolic advertisements).
c) The best strategy for increasing the personal relevance of products to
consumers is the same as the core of modern marketing itself: Provide
benefits that are important and relevant to customers, improve the product

and add benefits as competition intensifies, and focus on forging bonds and
relationships with customers rather than just engaging in transactions.
Models of Consumer Behaviour
i)

The Howard Sheth model (1969):

Howard and Sheth used the term buying behavior and not consumer
behavior as the industrial buyers and consumers are similar in most
aspects. While the model was proposed in the 1960s, for industrial
buying, the term buyer is used to connote both industrial consumers
and personal consumers. Through the model, Howard and Sheth, tried
to explain buyer rationality while making purchase decisions even in
conditions of incomplete information. While they differentiated between
three levels of decision making, EPS, LPS and RPS, the model focuses on
repeat buying/purchase. The model has four major components, viz.,
stimulus inputs (input variables), hypothetical constructs, response
outputs (output variables), and, exogenous variables.
a)
Stimulus inputs (Input variables):
The input variables refer to the stimuli in the environment; they
take the form of informative cues about the product/service
offering; these information cues could relate to quality, price,
distinctiveness, service and availability. The informational cues
could be Significative, Symbolic, (both of which are commercial
and can be controlled by the marketer) and Social (noncommercial and uncontrollable by the marketer; family, reference
groups and social class). All these three types of stimuli provide
inputs concerning the product/brand to a consumer. - Significative
stimuli: The product/brand information that the marketer
provides, comprises the significative component; it deals
essentially with the brand characteristics. - Symbolic stimuli: this
is the psychological form with which a buyer perceives the
product and service offering (brand); it is figurative (verbal and
visual product characteristics) and perceptual and depends on
how the offering has been positioned; it emanates from
advertising and promotion efforts. -Social stimuli: this is the
information about the product or service offering that comes from
the social environment viz. family, groups, society and culture at
large.
b)

Hypothetical constructs: Howard and Sheth classified the

hypothetical constructs into two major groups, viz., perceptual
constructs and learning constructs. These constitute the central
part of the model and deal with the psychological variables which
operate when the consumer is undergoing the decision making
process. - Perceptual constructs: The perceptual constructs deal
with how a consumer obtains and processes information received
from the input variables. Once the buyer is exposed to any
information, there is an attention; this attention towards the
stimuli depends on the buyers sensitivity to information in terms

ii)

of his urge and receptivity towards such information. Not all

information would be processed and the intake of information is
subject to perceived uncertainty and lack of meaningfulness of
information; this is referred to as stimulus ambiguity. This reflects
the degree to which the buyer regulates the stimulus information
flow. Stimulus ambiguity occurs when a consumer does not
understand the message from the environment; it could trigger
off a need for a specific and active search for information and
thus lead to an overt search for information. The information that
is gathered and processed may suffer from perceptual bias if the
consumer distorts the information received so as to fit his/her
established needs/beliefs/values/experiences etc. - Learning
constructs: The learning constructs relate to buyer learning,
formation of attitudes and opinions, and the final decision. The
learning constructs are seven in number, and range from a
buyers motive for a purchase to the final satisfaction from a
purchase; the interplay of these constructs ultimately leads to a
response output or a purchase. The motives refer to the goals
that a buyer seeks to achieve through a purchase and the
corresponding urge towards action or the purchase activity. The
brand comprehension is the knowledge and information that the
buyer has about the various brands in his evoked set. The buyer
forms an order of preference for the various brands; this order of
preference is based on the choice criteria (decision mediators).
The decision mediators are the evaluative criteria and the
application of decisions rules by the buyer to the various
purchase alternatives. Based on the choice criteria, the attitudes
are formed for the varying brands. The attitudes reflect the
predisposition of the buyer; preference toward alternative brands;
and, feelings of like/dislike towards the offerings. The brand
potential of the evoked set determines the buyer's perception and
confidence level of the brands that he is considering to purchase.
The purchase intention is a cumulative outcome of the interaction
of buyer motives, choice criteria, brand comprehension, resultant
brand attitude and the confidence associated with the purchase.
Satisfaction, another learning construct, involves the post
purchase evaluation (whether expectation from an offering
matches
the
performance)
and
resultant
impact
(positive/negative) on brand comprehension.
c) Response outputs (output variables):
The output variables refer to the buyers action or response to stimulus
inputs. According to Howard and Sheth, the response outputs comprise
five constituents, viz., attention, comprehension, attitude, intention and
purchase. These could be arranged in a hierarchy, starting from
attention and ending up with purchase. - Attention refers to the degree
or level of information that a buyer accepts when exposed to a stimulus.
It reflects the magnitude of the buyer's information intake. Comprehension is the amount of information that he actually processes
and stores; here, it refers to brand comprehension which is buyers
knowledge about the product/service category and brand. - The attitude

is the composite of cognition, affect and behavior towards the offering;

the attitude reflects his evaluation of the brand and the like/dislike
based on the brand potential. - Intention refers to the buyers intention
to buy or not to buy a particular offering. - Purchase behavior refers to
the actual act of buying. The purchase behavior is a cumulative result of
the other four constituents. d) Exogenous variables: The Howard and
Sheth model also comprises certain constant exogenous variables that
influence some or all of the constructs explained above, and thereby
impact the final output variables. These are explained as Inhibitors or
environmental forces that restrain the purchase of a favored brand; eg.,
importance of the purchase, price, financial status of the buyer, time at
the disposal of the buyer, personality traits, social pressures etc.