Module-1

Consumer Behaviour: Consumer Behavior is the Process Involved When

Individuals or Groups Select, Use, or Dispose of Products, Services, Ideas or Experiences (Exchange) to Satisfy Needs and Desires. Issues During Stages in the Consumption Process

Consumers Impact on Marketing Strategy Understanding consumer behavior is good business. Firms exist to satisfy consumers needs, so Firms must understand consumers needs to satisfy them. Identifies Groups of Consumers Who are Similar to One Another in One or More Ways, and

The Process of Marketing Segmentation:

Devises Marketing Strategies that Appeal to One or More of These Groups.

Segmenting Consumers by Demographic Dimensions: Demographics are Statistics That Measure Observable Aspects of a Population Such As:

Consumers Impact on Marketing Strategy: Building Bonds with Consumers Relationship Marketing occurs when a company makes an effort to interact with customers on a regular basis, and gives them reasons to maintain a bond with the company over time. Database Marketing involves tracking consumers buying habits very closely, and crafting products and messages tailored precisely to peoples wants and needs based on this information. Marketings Impact on Consumers: The Meaning of Consumption

Marketings Impact on Consumers: Consumption Typology Consumption Typology Explores the Different Ways That Product and Experiences Can Provide Meaning to People. There Are 4 Distinct Types of Consumption Activities:

Marketings Impact on Consumers Marketing and Culture Popular Culture Intangible and Tangible Objects The Global Consumer Global Consumer Culture Business to Consumer Selling (B2C Commerce) Virtual Consumption

Consumer to Consumer Selling (B2B Commerce) Virtual Brand Communities

Blurred Boundaries: Marketing and Reality

Concept and Need for studying CB Who buys products or services? How do they buy products or services? Where do they buy them? How often do they buy them? When do they buy them? Why do they buy them? How often do they use them?

Consumer decision making Decision making (information search, consider brand alternatives) Habit ( little or no information search , considers only one brand) Consumers behavior includes post purchase satisfaction or dissatisfaction behavior Two types of customers- personal and organizational consumer

Factors influencing purchase decision

Who is interested in the study of CB All firms The new customer-Customer driven rewards-Customer driven goals-Customer driven strategy- Customer driven vision, mission and values

Development of CB as a field of study Psychology-study of individuals Sociology study of groups Socio-psychology study of hoe people are influenced by groups Cultural anthropology- the influence of culture and society on the individual Economics-study of demand and supply

The Dark Side of Consumer Behavior

Interdisciplinary Influences

Two Perspective on Consumer Research

The Wheel of Consumer Behavior

Marketing Ethics Business Ethics are Rules of Conduct That Guide Actions in the Marketplace - the Standards Against Which Most People in a Culture Judge What is Right and What is Wrong, Good or Bad. Other Marketing Ethics Issues Do Marketers Create Artificial Needs? Response: Marketing attempts to create awareness that these needs do exist, rather than to create them. Are Advertising and Marketing Necessary? Response: Yes, if approached from an information dissemination perspective. Do Marketers Promise Miracles? Not if they are honest; they do not have the ability to create miracles.

History of Consumer Research Extension of marketing research with more emphasis on consumer behavior aspects

Two reasons for studying CB-why consumers made the purchase decisions and how consumers would react to promotional messages Modernist era positivists researchers conducted research studies adopting methods of experimenting, observation and survey techniques-quantitative data so statistical analysis carried out

Research technique- Motivational research ( use of projective techniques and in-depth interviews)came to be used widely marketers and advertising agencies

The effectiveness of Motivational research method depends on highly trained personnel Use of a combination of Qualitative and Quantitative research techniques Another group of researchers academicians interested in the consumer experiences Ethnography related to cultural anthropology, where in the researchers put themselves in the society under study so as to absorb all the implications of the cultural practices

Semiotics the study of symbols and their interpretations In- depth Interviews- method where the questions are asked to obtain a gainful insight into the understanding of CB

Positivism vs. Intrepretivism Positivism Helps predict CB Uses Quantitative research methods -experiments, survey techniques and observations Assumptions made-Consumers are rational decision makers, problem solvers, engaged in information processing- can extend research finding to large population Intrepretivism Understanding consumption practices of consumers Use of qualitative methods of research ethnography, Semiotics, in-depth interviews The cause and effect behavior, cannot be extended to larger population

Value of Consumer Research Provides information on how the consumers are behaving at the market place Identify future consumer needs or marketing opportunities Gives answers to what is the current consumer trend in the market, the potential customers and what is consumer satisfaction level in products and services CONSUMER BEHAVOUR PROCESS(Consumer Research Process)

Secondary data Internal source External source Books & Periodicals

Primary data

Depth interviews Focus groups Projective techniques- to understand a persons hidden attitudes, motivation and feelings

Project Techniques Word Association respondents are presented with a series of words or phrases ask what comes first to their mind-Toothpaste---Coffee----,Soft drink----, Ice cream----, Watch----- whether desirable or undesirable word Sentence completion-The beginning of the sentence is read out to the respondent and asked to complete it (People who dont drink arieted drinks are------) Third person technique- Respondents are asked to describe a third person about whom they have little information- to check attitudes about the respondent Role Playing Thematic Apperception Test (TAT)-Under this technique the respondents are shown an ambiguous picture or drawing or fill in a blank speech buble associated with a particular character or a ambiguous situation and then ask to interpret it Repertory Grid ( Rep Grid)Respondents are presented with a grid and asked to title the columns with brand names types of a particular product( tastes of soft drink,types of two wheeler) select any of three think of a phrase in which two are different from the third) Consumer Behavior Models Economic Model Learning Model Psychoanalytic Model Sociological Model Howard Sheth Model

Psychoanalytic Model

Personality is an outcome of Id- the source of all psychic energy which drives us as action Super ego-the internal representation of what is approved by the society Ego- the conscious directing id directing id impulses to find gratification in a socially accepted manner Sociological Model Individual buyer is part of the institution called society Formal / Informal associations- family members, employee, member of a informal cultural organisation Howard Sheth model Objective It reflects how complex the whole question of CB is To provide the framework for including various concepts like learning, perception, attitudes which play a role in influencing CB Input Stimulus display Significant and Symbolic( Quality, Price, Distinctiveness in service, Availability) , Social( Family, Reference, Social class) Perceptual constructs- Overt search, Stimulus Ambiguity, Attention ,Perceptual Bias) Learning constructs-Confidence, Attitude, Motives, Intention, Choice criteria, Brand comprehension, Satisfaction Output-Social/ Organizational setting, Social class, Culture, Purchasing power/ financial status

MODULE-2 Segmentation

 It is the Process of dividing a heterogeneous market into homogeneous sub units. The company can either launch a products , appreciating the fact that the market is a heterogeneous one. Need for Segmentation Michael Porter The competitive advantage of a firm lies in being everything to a select few To be everything to everyone is a sure recipe for a strategic failure Helps the firm compete in a highly competitive market Segmenting Consumers by Demographic Dimensions Demographics are Statistics That Measure Observable Aspects of a Population Such As:

MARKET SEGMENTATION Individual Preference ( Motivation, Knowledge, Attitude, Beliefs, Values) Family &Peer pressure Social acceptance

 Education Early experiences Other environmental influences Advantages of Market Segmentation Tap the market effectively Preference of place of purchase for customers Identify and find out additional benefit desired by the people The Willingness to pay for the additional benefit desired by the people Source or place from where consumers would like to buy Give consumer value Develop a distribution strategy Develop a suitable pricing strategy Usage of database marketing Planning marketing activities around the customer Marketing efforts are more efficient and economical Increases productivity Criticisms of segmentation Markets are not made up of segments with different wants because buyers of one brand buy other brands as well Buyers often choose from a list of acceptable brands Brands may differ in product form yet differ widely in market share Criteria for selecting a market segment Identification Measurability Accessibility Substantiality Stability

Bases for segmenting consumer markets Geographic Segmentation-Region, Density( Urban, Rural) and climate Demographic Segmentation- Age, Gender, Religion, Income level, Education, Occupation Psychographic Segmentation- Social class, Life style, Personality Use-related Segmentation- Usage rate, user status, Brand loyalty, Occasion or usage situation Benefit Segmentation Benefit Sought- Quality, Price, Economy, service Behaviouristic Segmentation Buyer readiness stage- unaware, aware, informed, interested, desirous, positive intention to buy Geographic Location of Customers Demographic Characteristics Age Infant, child market 1-12yrs, teens market, adolescent market, youth market , middleaged ,seniormarket Income Low income , low middle income, middle income, upper middle income, higher income Gender Female /Male Occupation Professional, Business, self employed ,student , Housewives Education Marital Status Family size and structure

Psychographic Variables Personality & Life styles Brand personality is a direct outcome of the usage of psychographic variables in formulating marketing strategies How to segment 3 stages

 Survey stage- 2 parts -1) Focus group discussions & in-depth interviews to get consumer motivation, attitudes, & behavior 2) Based on the focus group a questionnaire is administered to the sample group Objective of Questionnaire Attributes sought in a product & their priority ratings Brand awareness & rating of different of different brands Product usage patterns Customer attitudes towards the generic product or product category itself Demographics, psychographics & media habits of sample respondents Analysis Stage- factor analysis is used to identify factors that differentiate customer groups, Cluster analysis is now used to cluster customer into different groups Profiling Stage- Each cluster is profiled in terms of demographics , psychographics, media habits, attitudes, behavior and consumption habits . The marketer can give each segment a name based on a dominant distinguishing characteristic Requirements for Effective Segmentation: Accessibility Measurability Viable Intensity in Competition Motivation Needs, Drives, Goals Emotional Versus Rational Motives Positive Motivation-If an individual experiences a driving force towards an object /person or situation

 Negative Motivation- Driving force compelling the person to move away from someone or something Hulls drive reduction theory attempts to explain both motivation and learning is a popular theory which links needs, drives and goals Needs & Goals: Physiological needs(primary needs) Learned (Secondary or Cultural )Needs Needs Arousal Types of Stimulus (Physiological , Cognitive, Emotional, Exterior or Environmental) Goals and selection of Goals Selection by an individual will depend on a number of factors such as personal experience, social and cultural norms and values , personal norms and values, physical and intellectual capacity, accessibility of goal and self image An individuals behavior towards reaching out to goals is very often influenced by his expectation of success and failure as well as his past experience Frustration is the feeling experienced by an individual when he/she fails to achieve a goal Frustration mechanism-Aggression, Rationalization or compromise, Regression, Withdrawal, Projection blame( putting blame ) Theories of Needs: Maslows Hierarchy of Needs Henry Murrays List of Psychogenic Needs Mc Clelland's Theory of Need Achievement- Needs for Power, Needs for Affiliation, Needs for Achievement Maslows Hierarchy of Needs:

Henry Murray Pshycogenic Needs American psychologist Henry Murray (1893-1988) developed a theory of personality that was organized in terms of motives, presses, and needs. Murray described a needs as a, "potentiality or readiness to respond in a certain way under certain given circumstances" (1938). Theories of personality based upon needs and motives suggest that our personalities are a reflection of behaviors controlled by needs. While some needs are temporary and changing, other needs are more deeply seated in our nature. According to Murray, these psychogenic needs function mostly on the unconscious level, but play a major role in our personality. Murray's Types of Needs Murray identified needs as one of two types: 1. Primary Needs Primary needs are based upon biological demands, such as the need for oxygen, food, and water. 2. Secondary Needs Secondary needs are generally psychological, such as the need for nurturing, independence, and achievement. List of Psychogenic Needs The following is a partial list of 24 needs identified by Murray and his colleagues. According to Murray, all people have these needs, but each individual tends to have a certain level of each need. 1. Ambition Needs

Achievement: Success, accomplishment, and overcoming obstacles.

Exhibition: Shocking or thrilling other people. Recognition: Displaying achievements and gaining social status.

2. Materialistic Needs

Acquisition: Obtaining things. Construction: Creating things. Order: Making things neat and organized. Retention: Keeping things.

3. Power Needs

Abasement: Confessing and apologizing. Autonomy: Independence and resistance. Aggression: Attacking or ridiculing others. Blame Avoidance: Following the rules and avoiding blame. Deference: Obeying and cooperating with others. Dominance: Controlling others.

4. Affection Needs

Affiliation: Spending time with other people. Nurturance: Taking care of another person. Play: Having fun with others. Rejection: Rejecting other people. Succorance: Being helped or protected by others.

5. Information Needs

Cognizance: Seeking knowledge and asking questions. Exposition: Education others.

Influences on Psychogenic Needs Each need is important in and of itself, but Murray also believed that needs can be interrelated, can support other needs, and can conflict with other needs. For example, the need for dominance may conflict with the need for affiliation when overly controlling behavior drives away friends, family, and romantic partners. Murray also believed that environmental factors play a role in how these psychogenic needs are displayed in behavior. Murray called these environmental forces "presses." Research on Psychogenic Needs Other psychologists have subjected Murray's psychogenic needs to considerable research. For example, research on the need for achievement has revealed that people with a high need for achievement tend to select more challenging tasks. Studies on the need for affiliation have found that people who rate high on

affiliation needs tend to have larger social groups, spend more time in social interaction, and more likely to suffer loneliness when faced with little social contact. David C Mcclelland's Motivational Needs Theory American David Clarence McClelland (1917-98) achieved his doctorate in psychology at Yale in 1941 and became professor at Wesleyan University. He then taught and lectured, including a spell at Harvard from 1956, where with colleagues for twenty years he studied particularly motivation and the achievement need. He began his McBer consultancy in 1963, helping industry assess and train staff, and later taught at Boston University, from 1987 until his death. McClelland is chiefly known for his work on achievement motivation, but his research interests extended to personality and consciousness. David McClelland pioneered workplace motivational thinking, developing achievement-based motivational theory and models, and promoted improvements in employee assessment methods, advocating competency-based assessments and tests, arguing them to be better than traditional IQ and personality-based tests. His ideas have since been widely adopted in many organisations, and relate closely to the theory ofFrederick Herzberg. David McClelland is most noted for describing three types of motivational need, which he identified in his 1961 book, The Achieving Society:

achievement motivation (n-ach) authority/power motivation (n-pow) affiliation motivation (n-affil)

david mcclelland's needs-based motivational model These needs are found to varying degrees in all workers and managers, and this mix of motivational needs characterises a person's or manager's style and behaviour, both in terms of being motivated, and in the management and motivation others. the need for achievement (n-ach) The n-ach person is 'achievement motivated' and therefore seeks achievement, attainment of realistic but challenging goals, and advancement in the job. There is a strong need for feedback as to achievement and progress, and a need for a sense of accomplishment. the need for authority and power (n-pow) The n-pow person is 'authority motivated'. This driver produces a need to be influential, effective and to make an impact. There is a strong need to lead and for their ideas to prevail. There is also motivation and need towards increasing personal status and prestige.

the need for affiliation (n-affil) The n-affil person is 'affiliation motivated', and has a need for friendly relationships and is motivated towards interaction with other people. The affiliation driver produces motivation and need to be liked and held in popular regard. These people are team players.

Motivational Research
1)Depth Interviews 2)Project Techniques Word Association respondents are presented with a series of words or phrases ask what comes first to their mind-Toothpaste---Coffee----,Soft drink----, Ice cream----, Watch----- whether desirable or undesirable word Sentence completion-The beginning of the sentence is read out to the respondent and asked to complete it (People who dont drink arieted drinks are------) Third person technique- Respondents are asked to describe a third person about whom they have little information- to check attitudes about the respondent Role Playing Positive and Negative Motivation Motivation is concerned with inspiring the man to work to get the best result. Motivation may be of two types: Positive Negative

Positive motivation In real sense, motivation means positive motivation. Positive motivation induces people to do work in the best possible manner and to improve their performance. Under this better facilities and rewards are provided for their better performance. Such rewards and facilities may be financial and non-financial. Negative motivation

Negative motivation aims at controlling the negative efforts of the work and seeks to create a sense of fear for the worker, which he has to suffer for lack of good performance. It is based on the concept that if a worker fails in achieving the desired results, he should be punished. Both positive and negative motivation aim at inspiring the will of the people to work but they differ in their approaches. Whereas one approaches the people to work in the best possible manner providing better monetary and non-monetary incentives, the other tries to induce the man by cutting their wages and other facilities and amenities on the belief that man works out of fear.

Once a person begins to fulfill psychological needs, you can influence buying decisions by targeting your pitch toward particular buying motives. Rational And Emotional Buying Motives Buying motives can be looked at as the way to approach prospects or a way to present the product to the prospect. There are two approaches that buying motives can make toward the customer. These are emotional and rational motives. Emotional motives prompt a prospect to act because of an appeal to some sentiment or passion. Emotional reasons for buying products often involve little logic and usually stem more from the heart than the head. Rational buying motives usually appeal to the consumer's reason or better judgment. Some emotional motives include: * A romantic desire to attract the opposite sex
Rational buying motives Economy of purchase Economy of use Efficient profits Increased profits Durability Accurate performance Labour-saving Time-saving Simple construction Simple operation Ease of repair Ease of installation Space-saving Increased production Availability

Complete servicing Good workmanship Low maintenance Thorough research Desire to be unique Curiosity Emotional buying motives Pride of appearance Pride of ownership Desire for prestige Desire for recognition Desire to imitate Desire for variety Safety Fear Desire to create Desire for security Convenience Desire to be unique Curiosity

Dynamic Nature of Motivation: Needs & their fulfillment are the basis of motivation needs change, so also motivation. Both internal & external factors are responsible for change. The fact is that not all needs are satisfied fully. When some are satisfied, some others arise. Sometimes because of personal, financial, social & cultural limitations, people cant fulfill some of their needs, wants & goals. Failure of need fulfillment may give rise to the following states: 1.Rationalisation trying to justify the situation & excusing oneself, 2.Aggression getting angry & frustrated, and resorting to unsocial actions, 3.Regression trying to settle without that particular need & try something else, 4.Withdrawal trying to disassociate oneself from the very thought of it. The Measurement of motives The measurement of the motives is done on 3 ways

Self-Enhancement
The self-enhancement motive states that people engage in self-evaluation in view of, not only improving the positivity of their self-conceptions, but also protecting the self from negative information (they search for positivity and avoid negativity) In order to do this, people process information important to the self in a selective manner (for instance, by focusing on information that has favourable implications to the self and discarding information with unfavourable implications to the self). People also choose to compare themselves socially to others so as to be placed in a favourable position. By doing this, people seek to boost the positivityof the self or decrease its negativity, aiming to make others see them as socially desirable, hence increasing their levels of self-esteem.

Self-Assessment
The self-assessment motive is based on the assumption that people want to have an accurate and objective evaluation of the self. To achieve this goal, they work so as to reduce any uncertainty about their abilities or personality traits. Feedback is sought to increase the accuracy and objectivity of previously formed self-conceptions. This is regardless of whether the new information confirms or challenges the previously existing self-conceptions

Self-Verification
The self-verification motive asserts that what motivates people to engage in the self-evaluation process is the desire to verify their pre-existing self-conceptions, maintaining consistency between their previously formed self-conceptions and any new information that could be important to the self (feedback).By doing this, people get the sense of control and predictability in the social world.

Elements of Consumer Behavior

Variables & Processes Inside Black Box

Consumer Buying Process

The Buyer Decision Process

Module-3 Personality

Patterns of Individual behavior which are consistent and enduring An Individuals personality represents a set of characteristics to understand CB Boost,Horlicks( Sporty Personality)

Properties of Personality Personality reflects individual differences Personality is consistent and enduring- does not change Personality can change- specific events can bring change in individual personality-marriage, career, study, promotion Theories of Personality Trait Theory Psychoanalytical Theory (Freudian theory) Neo- Freudian Theory

Trait Theory Quantitative in nature & focuses on the measurement of certain specific characteristics or traits Marketers use personality traits to segment different markets Personality tests to measure consumer traits are

Consumer Traits Consumer innovativeness: To what extent a person is receptive to a new buying experience Consumer susceptibility to interpersonal influence (SUSCEP): To understand how consumers will respond to social influences Consumer materialism : To ascertain the extent to which consumers are attached to worldly material possessions Consumer ethnocentrism: CETSCALE the likelihood of consumer accepting rejecting foreign- made products Personality traits: Attitudes, Interests, Needs, Physiology, Aptitude , Morphology, Temperament,

Psychoanalytical Theory (Freudian theory) In-depth study of individual of personality Personality is an outcome of Id- the source of all psychic energy which drives us as action, basic, instinctive, needs, desires, impulses that demand immediate gratification Super ego-the internal representation of what is approved by the societyInternal expression of societal values and ideals, moral conscience Ego- the conscious directing id directing id impulses to find gratification in a socially-Individual conscious control, internal monitor to balance the impulsive demands of the id and restraints put by the super ego. -Brand Positioning and Brand Personality Brand Positioning and Brand Personality Depth and Focus Group Interviews Projective Techniques- motivational research techniques asking consumers to complete sentences,pictures, personify brands Neo- Freudian Theory Social relationship played a vital role in the formation and development of personality Freuds colleagues who disagreed with Freuds rigid adherence to consider only the basic biological or instinctive traits as determinants of personality Authors felt other reasons Strive for Superiority Inter- relationship with other men Parent child relationship Karen Horney- classified three personality groups- Complaint type, Aggressive type, Detached type Complaint type- desire to be included in activities of group, want appreciation Aggressive- excel, see others as competitors Detached- emotional distance between themselves and others prefer independence, self reliance, self sufficiency Jungs Personality Types

Grouped into 2 fundamental types-Extrovert & Introvert Mental operations into 4 fundamental activities-sensing, feeling, thinking, Intuiting

Few characteristics of Selected Jungian Personality types Sensing- Thinking(ST)

Logical, empirical and rational Risk avoider, will search in depth for decision making information Price sensitive and materialistic in considering motives

Short term consideration in decision making Intuitive - Thinking(IT)

Takes a broader perspective of the situation and world Thinks , uses logic and imagination in taking decisions Considers many options while taking decisions- speculative

Takes long term view while taking decisions Sensing - Feeling(SF)

Considers personal values rather than logic- empirical viewpoint Makes decision after considering others subjective orientation Status conscious and materialism reflects the impact on other persons

Short term consideration in decision making Intuitive- Feeling (IF)

Takes a broader perspective of the situation or world Considers various options for decision making People oriented and subjective oriented in decision making

Least price conscious, are venturesome and novelty seeking The time period is indefinite while taking decisions

BT study Tween Type 1-15.2% brash, spoilt, not academically oriented and prone to tantrums, receive pocket money, freedom of space, big priced purchases Tween Type 2- 11.8%quite, traditionalist at heart, do not care about most things nor do their parents have high expectations of them Tween Type 3 -25.38% highly involved in purchase of high priced products for home , expresses views of their parents,receive least pocket money parents buy them everything Tween Type 4 -47.51% home birds with an active outside life, good at school and with a strong value system ingrained in them Personality Influences and Consumer Behavior Consumer Innovativeness Dogmatism Social character Need for uniqueness Optimum stimulation level Variety- novelty seeking

Consumer Innovativeness Element of risk, easy accepters of new products and services Gary and Starke have identified sixteen source personality traits

Dogmatism Is a personality trait which indicates degree of rigidity individuals display when confronted with something which is unfamiliar to them or towards information which is contrary to their own established beliefs, Those high in Dogmatism will decide on the worthiness of the products / services and those low on Dogmatism consider unfamiliar or opposing beliefs Optimum Stimulation level (OSL)

Display more willingness to take risks , try new products , be innovative OSL reflects a persons desire for the level of lifestyle stimulation

Variety or Novelty Seeking Exploratory purchase behavior- exploring newer brands Vicarious exploration- consumer obtains information about new alternatives and contemplates about the new option with caution and reservation Use innovativeness- already using a product in a new or novel way

Social Character Personality trait depicts character closely related to socio- cultural environment Consumers rely on their own intuition, standards and values Consumers who look for guidance new products

Need for Uniqueness Unique people Do not want to conform to others expectations or standards

Cognitive Personality Traits

Visualizers Vs Verbalizers

Stress on visual information and visual products CD/DVD while Verbalizers prefer verbal information on products membership in books or magazine shops Need for cognition related to the individuals thinking process and measures a persons cravings for something, the need for cognition helps on the creation of advertising messages with the right combination of colour mix,interested in model edorsing product Inter related consumption and possession personality traits

Consumer Materialism- People attached to material possessions , characteristic observation

Undue importance to acquiring and displaying their worldly possessions Crave for possessing lots of things Self centered and selfish Like to possess things irrespective of whether they derive greater happiness or satisfaction from possessing the same Fixated Consumption Behaviour- between materialistic and addictive buying is fixated consumption, interested in buying but enjoy displaying them and known for their involvement with others of same interest Very deep interest displayed for a particular object or product Dedicated search Willingness to spend a considerable amount Compulsive Consumption Behaviour- abnormal behaviour,addiction, actions out of control causing harm to them and people around them-liqour, drug addiction Consumer Ethnocentrism Consumers response to foreign products Highly ethnocentric-khadi products Low ethnocentric- affinity for USA made products

Self Image Personality traits, habits, Possessions, behavior Unique-Background, experience, knowledge

Actual self image-How they actually see themselves Ideal self image- How they would like to see themselves Social self image-how they feel the society sees them Ideal social self image-how they would like the society to see them Expected self image-Their expectation of how they see themselves at some specified future time

Ideal self image and expected self image is of more importance to the marketerconsumer may be induced to buy products Extension of self image Motivate the individual to do things otherwise difficult for him- housewife operate a PC Through symbolic representation-bat with sachin signature By conferring status or rank By bestowing upon someone close and handing over a priced possession Firms marketing products /services related to cosmetics, jewellery, hair styles, membership to certain clubs,other personal care products , beauty salons are working out marketing plans to help consumer gain inflated self image Consumer Perception Perception is the process by which individual selects , organizes and and interprets stimuli into a meaningful and coherent picture of the world No two individuals are alike Perception is based on each ones needs , values and expectations

Sensation/ Absolute Threshold Sensation is the immediate direct response of a physical sensory organ Physical senses are vision, hearing, touch, smell and taste

External factors Intensity and size Position Contrast Novelty Repetition Movement

Internal Factors influencing Attention Marketing Mix Brand Personality

Perceptual Process Perceptual Selection

Selective attention Selective exposure Selective perception Perceptual vigilance and perceptual defense Perceptual equilibrium and disequilibrium Perceptual Organization

Grouping Context Perceptual Interpretation

Categorization Inference Perceptual Distortion Personality/physical appearance Stereotypes Halo Effect Irrelevant Cues First Impression Hasty Conclusions

Perceptual Inference

Brands Outlets Association

Consumer Imagery Consumers have a number of enduring perceptions and images which are quite relevant to the study of consumer behavior gauging consumer mind is difficult Learning Make a list of any 5 brands of product or services to which you feel you are loyal. Ask five other classmates to prepare a similar list. Compare all the lists which are the common brands identified? Find out the reasons for the brand choice, does it match your answer 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 Consumers fixated on certain products or categories of products Addicted or out-of-control consumers Fixated consumption behavior Compulsive consumption behavior

Sample Items to Measure Compulsive Buying 1. When I have money, I cannot help but spend part or the whole of it. 2. I am often impulsive in my buying behavior. 3. As soon as I enter a shopping center, I have an irresistible urge to go into a shop to buy something. 4. I am one of those people who often responds to direct mail offers. 5. I have often bought a product that I did not need, while knowing I had very little money left. Consumer Ethnocentrism Ethnocentric consumers feel it is wrong to purchase foreign-made products They can be targeted by stressing nationalistic themes

Items from the CETSCALE 1. Indians should always buy Indian made products instead of imports. 2. Only those products that are unavailable in the India should be imported. 3. Buy Indian made products. Keep Indian working. 4. Purchasing foreign-made products is un-Indian. 5. It is not right to purchase foreign products, because it puts Indians out of jobs. 6. A real Indian should always buy Indian-made products. 7. We should purchase products manufactured in India instead of letting other countries get rich off us. 8. It is always best to purchase Indian products. Brand Personality Personality-like traits associated with brands Examples Purdue 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 Color Color combinations in packaging and products denotes personality Actual locations like Philadelphia cream cheese and Arizona iced tea Fictitious names also used such as Hidden Valley and Bear Creek

Marketers often use a fictitious location to help with 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

The Marketing Concept Issues Related to Self and Self-Image One or multiple selves : A single consumer will act differently in different situations or with different people We have a variety of social roles: Contains traits, skills, habits, possessions, relationships and way of behavior Developed through background, experience,and interaction with others Consumers select products congruent with this image Marketers can target products to a particular self

Makeup of the self-image: Contains traits, skills, habits, possessions, relationships and way of behavior Developed through background, experience,and interaction with others Consumers select products congruent with this image

Extended self : Possessions can extend self in a number of ways:

Actually Symbolically Conferring status or rank Bestowing feelings of immortality Endowing with magical powers

Altering the self- image : Consumers use self-altering products to express individualism by Creating new self Maintaining the existing self Extending the self

Conforming

ELEMENTS OF LEARNING PROCESS Drive Motivation Cues Response Re-inforcement Retention

LEARNING THEORIES 1. Classical Conditioning (behaviours as a result of close association between a primary stimulus and a secondary stimulus)

2. Operant or Instrumental Conditioning (consequences of behaviours can result in changes in the probability of it occurrence)

3. Cognitive Theory (emphasis is on the thought process involved in learning)

4. Observational Learning (leaving based on imitating others behaviour) 5. Low involvement theory (also known as the ATR [Awareness, Trial, Re-inforcement / Repeat] Hierarchy]

CONSUMER MEMORY Short term memory

 Long term memory Learning process:

HABIT Define Habit A model of habitual purchasing behaviour

Perception To understand how consumer decision making process can be influenced by his or her perception of the product or brand .

Factors influencing perception

EXTERNAL AND INTERNAL FACTORS

THE PERCEPTUAL PROCESS The perceptual process involves three components: Perceptual Selection (The three processes which define selection Perceptual organization (The three basic principles used are Perceptual interpretation (Two principles are used

are: exposure, attention and selective perception) grouping, closure and context) Categorization and Inference)

Consumer Imagery and marketing implications Consumer have a number of enduring perception or images which are quite relevant to the consumer behaviour study. Brand image Consumer over all perception of the brand, which to a certain extent could be influenced by product positioning) and self image of the consumer (which could include: actual self image, Social self image, Ideal self image and expected self image) Risk: CONCEPT OF PERCEIVED-RISK Risk reduction strategies Adopted by consumer Seek information Continuing the same brand Brand image Store image Buy the most expensive brand Seek reassurance Memory Two sources of product information: External environment: packaging, labels, POS displays, prices, other marketing information Memory: past experiences, word-of-mouth, family preferences Associative network of nodes (concepts) and links (connections) Consumer's perception of quality Consumer's price perceptions Advertising and perceived benefit Sales promotion and perceived value Public relation and perceived value Personal selling and perceived value

 Scripts: information organized in memory around different types of events or episodes (e.g., a restaurant script) How Information is Captured and Stored in Memory Memory processing areas: New information is initially captured in sensory memory. processing is shallow; capacity is limited Information is transmitted from sensory memory to short-term (ST)memory. Analyzing and assigning meaning; limited capacity to a finite number of chunks (units of memory); information may be rehearsed to retain its meaning Information rehearsed in ST memory is transmitted to long-term (LT) memory for storage and retrieval as needed; LT memory capacity is unlimited Information Retention It refers to the amount of material previously learned that is remembered Forgetting the loss in retention of material previously learned Retention affected by: Incoming information The person receiving the information Retention: Characteristics of Incoming Information and Processing Repetition or rehearsal Relevance Competing information (new information competes with old; ad clutter issue) Completeness of information (Zeigarnik Effect if incomplete, info retained for later completion) Time (lapsed time since exposure)

 Mood (positive mood impact) How Retention is Influenced by the Information Recipient Consumer familiarity or experience Being more familiar with a product category increases the chances of remembering information about new or existing brands Affects way information is organized in memory Consumer motivation Higher motivation to process info is positively related to doing so at deeper levels of memory and to retain info longer and more accurately. How Information is Retrieved from Memory Retrieval cues self- or externally- generated (sensory images: sounds, shapes, colors, smells,etc.) Interference from competing cues (make cue to stand out) Consumers state of mind: higher retrieval levels occur when info processing and retrieval mood and/or interest levels match Information Storage in Memory Processing Effects Recall of numerically-coded information is better than verbal information Surface-level processing (sensory) occurs when there is no analysis of meaning. Consumer judgment error rate higher. Meaning-level processing (semantic) implies analysis of meaning. Consumer judgment error rate lower. Learning Probability Theory Learning formation of habits formed and changed through experience with products or services

 Strength of habit depends upon the amount of reinforcement it receives Probability models are used to predict the formation of habits: Brand loyalty Brand acceptance Brand switching New product forecasting Learning Behavior Analysis The relationship between marketers and consumers often resembles a negotiation Several behavior modification principles (BMPs) are used by marketers to induce consumers to buy their products and services. Classical conditioning learning results from a relationship between a stimulus and a response Pavlov and his salivating dogs: a conditioned stimulus (the ringing bell before each feeding) results in a conditioned response (salivation) Marketing applications Higher order conditioning and celebrity advertising Strength of the unconditioned stimulus Number of pairings Forward versus backward versus simultaneous conditioning New versus existing products Operant conditioning a process in which the frequency of occurrence of a bit of behavior is modified by the consequences of the behavior 1. Especially relevant in low involvement purchases 2. Rewards & punishments AND consumer behavior 3. Generalization the tendency to respond in similar ways to similar stimuli. 4. Discrimination the process through which consumers restrict their range of responses and attach themselves to a particular brand. 5. Modeling the process through which an individual learns a behavior by observing the behavior of others and the consequences of this behavior.

Learning Cognitive Theory Emphasis is on thinking rather than the doing aspects of learning. Four stages: Formulation of hypotheses (specific testable assumptions) about products or brands Exposure to evidence (passive or active) Encoding of the evidence Integration of earlier hypotheses with new information into beliefs Familiarity, ambiguity, motivation Cognitive Theory and Marketing Strategies for market leaders (topdogs) Reinforcement Blocking Explaining Strategies for market underdogs Disruption Facilitating trial Perception Perception is the way in which an individual gathers, processes, and interprets information from the environment. Two views of consumer perception Sensory perception Gestalt theory of perception Sensory Perception It is governed by the five senses: sight, smell, sound, touch, and taste It focuses on product specific sense attributes and how these are understood and evaluated by consumers.

Factors Affecting Sensory Perception Stimulus factors (examples) Visual cues: color, shape, and size Aural cues: tempo and pitch Olfactory cues (taste + smell): sweet, bitter, salty, and floral Tactile cues: soft, coarse, and silky Individual Response Factors Sensory acuity: the capacity to recognize and differentiate among certain sensory cues; the limin Sensory preferences: sensory product features are perceived and evaluated based on those liked or disliked Consumer expectation: affects how product features are likely to be perceived/evaluated. When features match expectations this yields more positive preference outcomes Gestalt Theory of Perception Gestalt principle: the whole adds up to more than the sum of its parts People perceive form above all else The form may remain constant even though some specific features of it may change (color, tempo, etc.) variations on the same theme Applications: size, actual/illusion of motion, bordering for ads or displays while really the same Factors Influencing Gestalt Perception Stimulus factors: color and contrast, size, intensity, position, isolation, and unity Individual response factors: cognitive set interest, involvement, needs, values, and

How consumers Interpret Perceptions? Categorization: the psychological process through which a consumer compares the perception of a product with a mental representation of that product in memory. Analytic versus non-analytic (meeting or not meeting required attributes to fit) Marketing implications for new products or innovations Consumer Attributions It refers to the process through which people connect events and behavior with causes. Forms of attribution Product perception (a product problem) Self-perception (questioning oneself) Person perception (questioning others motives) Perceptions of Product/Service Quality Perceived quality a perceptual outcome generated from processing product or service features (benefits delivered) that leads the consumer to make inferences about the quality of that product or service Dimensions of perceived quality for durable goods: ease of use, versatility, durability, serviceability, performance, and prestige Perceived high quality product satisfaction Risk Perception/Risk Reduction It refers to a perceptual process and behavior outcomes generated from the perception of risk in the purchase or a product or service Components of risk: Severity of consequences (how bad will it be)

 Uncertainty related to those consequences (what are the chances the consequence will occur) Risk reduction strategies: behaviors to reduce their perception of risk in purchase situations Price Perception Consumers perceive a price as either high or low on the basis of a comparison with an internal price (or referent price). Price perceptions and the social judgment theory regions Assimilation (acceptable) and contrast (too high or low) Perceived Value The trade-off between product benefits and product costs. Perceived value = perceived benefits / perceived costs

MODULE-5 Basic Communication Model

Elements of the Communications Process The Message Initiator (the Source) The Sender The Receiver

The Medium The Message The Target Audience (the Receivers) Feedback - the Receivers Response

Issues in Credibility Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility

Endorser Credibility Endorser credibility is important when message comprehension is low Match must exist between product attributes and endorser attributes Credibility is higher when endorsers demographic characteristics are similar to those of target audience Endorser credibility is not a substitute for corporate credibility

Barriers to Communication Selective Perception Wandering, Zapping, Zipping, and Channel Surfing Combat with Roadblocking

Psychological Noise

Combat with repeated exposures, contrast in the copy, and teasers

Comprehensive Communication Model

Issues in Designing Persuasive Communications Communications strategy Media strategy Message strategy

Communications Strategy

Perception/ Experience/ Memory Model of Advertising

Media Strategy Consumer profiles Audience profiles

A cost-effective media choice is one that closely matches the advertisers consumer profile with the mediums audience profile. Buyer Personalities and Advertising Strategies

Involvement Theory and Persuasion The Elaboration Likelihood Model (ELM) proposes that marketers use the central route to persuasion for high involvement products and the peripheral route to persuasion for low involvement products Issues in Message Presentation

Resonance-continuing to sound and ring ,causing reinforcement Message Framing One-sided Versus Two-sided Messages Comparative Advertising Order Effects Repetition

Two-Sided Appeal Emotional Advertising Appeals: Fear, Humor, Abrasive advertising, Audience participation IMPACT OF HUMOR ON ADVERTISING Humor attracts attention. Humor does not harm comprehension. Humor is not more effective at increasing persuasion. Humor does not enhance source credibility. Humor enhances liking. Humor that is relevant to the product is superior to humor that is unrelated to the product. Audience demographic factors affect the response to humorous advertising appeals. The nature of the product affects the appropriateness of a humorous treatment. Humor is more effective with existing products than with new products. Humor is more appropriate for low-involvement products and feeling-oriented products than for high-involvement products.