FEDERAL URDU UNIVERSITY OF ARTS, SCIENCE AND TECHNOLOGY

CONSUMER BEHAVIOUR ASSIGNMENT

Submitted by
SYEDA MARIA BI BI MBA 4(SEC:B) ROLL# 39

Submitted to SIR ABDUL SAMMMAD

1-Explain the concept of consumer learning and discuss its marketing applications.

LEARNING: It is a relatively permanent change in behavior caused by experiences CONSUMER LEARNING; ->Process by which individual acquire the purchases and consumption knowledge and experience that they apply to future related behavior ->consumer learning is a process that continuously evolves and changes as a result of newly acquired knowledge (which could be gained from reading, from observation, from thinking) and actual experiences. both newly acquired knowledge and personnel experiences serve as feedback to the individual and provide basis for the future behavior in similar situation. TYPESOF LEARNING THEORIES 1-behavioural theories: Theories based on the premise that learning takes place as the result of observable responses to external stimuli also known as stimuli response theory. 2-cognitive theories: A theory of learning based on mental information processing often in response to problem solving.
BEHAVIORAL LEARNING THEORIES

Classical Conditioning Instrumental Conditioning Modeling or Observational Learning

CLASSICAL CONDITIONING A behavioral learning theory according to which a stimulus is paired with another stimulus that elicits a known response that serves to produce the same response when used alone. MARKETING APPLICATION OF CLASSICAL CONDITIONING: Classical conditioning is useful for explaining how consumers acquire tastes and motives. Advertisers also employ the concept by showing their brands in pleasant, exciting or otherwise emotionally positive surroundings. For example home computers are shown being enjoyed in interesting settings. Lipton ice tea is depicted in refreshing swimming pool settings and fast food products are often shown being consumed in fun filled social gatherings. Here, the concept of classical conditioning applies to the advertisers plan for repeated association of a brand with the positive surroundings, which will lead to consumer developing a preference toward the brand. Figure parallel suggests how this would occur using a happy situation as the unconditioned stimulus. The setting (such as a family gathering) is selected because it already elicits pleasant feelings form consumers the unconditioned response. Repeated association of the brand with this setting, such as picturing its use during a family gathering will enable the brand itself to generate similar pleasant feelings. This should increase consumers preferences for it. The Advil advertisement is an example that is consistent with the previous explanation. Recent consumer research in universities and for advertisers such as Coca-Cola has suggested that this type of advertising strategy has considerable potential or influencing consumers brand preferences. However, additional investigation indicates that the associations fostered by such advertisements are not very strong after the consumer has had only a small number of advertising exposures. Other research suggests that more investigation is needed to fully explore the usefulness of classical conditioning to advertising applications. Certain types of habitual behavior are also explained through classical or respondent conditioning. For example many consumers automatically purchase particular brands such as Scotch tape and Bayer aspirin because they have developed strong associations between the brand name and the generic product. This is often an advantage accruing to marketers who first develop a product that dominates the market. In still other cases consumers habitually purchase

particular brands such as Campbells soups merely because parents did. Here, such a strong association has been made between a particular brand and an activity or a nee that little consideration may be given to its actual suitability. INSTRUMENTAL (OPERANT) CONDITIONING A behavioral theory of learning based on a trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviors. MARKETING APPLICATION OF INSTRUMENTAL CONDITIONING: Instrumental or operant conditioning is useful for understanding consumer learning where conscious choices resulting in positive or negative reinforcement are made. The obvious case is consumers purchase and evaluation of products. Favorable experiences will result in positive reinforcement of the particular choice. Of course, learning to avoid certain products due to negative reinforcement from bad experiences with them is also possible. This is strong justification for the marketers stress on satisfying the customer. Advertisements depicting satisfied buyers can also result in consumers learning a connection between a brand and favorable experiences. Other types of promotional efforts, including cash rebates, free product samples, trial periods or low introductory prices, also make use of instrumental conditioning. The goal in these cases is to structure a situation so that consumers are given rewards as a consequence of having performed an activity that is desired by the marketer.
MODELING OR OBSERVATIONAL LEARNING

It is a process by which individual observe the behavior, and consequences of such behavior it is also called Modeling and vicarious learning MARKETING APPLICATION OF OBSERVATIONAL LEARNING Learning theorists have noted that a considerable amount of learning takes place in the absence of direct reinforcement, either positive or negative, through a process psychologists call modeling or observational learning (also called

vicarious learning). They observe how others behave in response to certain situations (stimuli), the ensuing results (reinforcement) that occur, and they imitate (model) the positively-reinforced behavior when faced with similar situations. Modeling is the process through which individuals learn behavior by observing the behavior of others and the consequences of such behavior. Their role models are usually people they admire because of such traits as appearance, accomplishment, skill, and even social class. Children learn much of their social behavior and consumer behavior by observing their older siblings or their parents. Advertisers recognize the importance of observational learning in their selection of models, whether celebrities or unknowns. Sometimes ads depict negative consequences for certain types of behavior. This is particularly true of public policy ads, which may show the negative consequences of smoking, of driving too fast or taking drugs

COGNITIVE LEARNING THEORY

Not all learning is the result of repeated trials. Learning also takes place as the result of consumer thinking and problem solving. Cognitive learning is based on mental activity. 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. MARKETING APPLICATIONS OF COGNITIVE LEARNING: Cognitive learning theory revolves around the idea that people learn through the observation of events affecting other people and associating these observations to their own experiences. In application to advertising, theorists contend that it is not sufficient to inform people about the product and its benefits repeatedly in order to get them to accept and purchase the product. Advertisements should be able to develop in consumers a mental pattern constituting of associations for customers to make the connection between the product and the need or want to purchase the product. The strength of the association between the product and

the need or want to purchase the product depends upon the effectiveness of the advertisement in motivating people to make the association.

2-Find one print ad for a product that addresses each of Maslows five level of need .dont make the mistake of presenting one ad and telling me how the product meets all five needs.

MASLOW'S HIERARCHY OF NEEDS

Each of us is motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of years. Abraham Maslow's Hierarchy of Needs helps to explain how these needs motivate us all. Maslows Hierarchy of Needs states that we must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself. Only when the lower order needs of physical and emotional well-being are satisfied are we concerned with the higher order needs of influence and personal development. Conversely, if the things that satisfy our lower order needs are swept away, we are no longer concerned about the maintenance of our higher order needs. Maslow's original Hierarchy of Needs model was developed between 1943-1954, and first widely published in Motivation and Personality in 1954. At this time the Hierarchy of Needs model comprised five needs. This original version remains for most people the definitive Hierarchy of Needs.

MASLOW'S HIERARCHY OF NEEDS

1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc. 2. Safety needs - protection from elements, security, order, law, limits, stability, etc.

3. Belongingness and Love needs - work group, family, affection, relationships, etc. 4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc. 5. Self-Actualization needs - realizing personal potential, self-fulfillment, seeking personal growth and peak experiences.

STAGE 1-PHYSIOLOGICAL NEEDS People that are in Stage One probably do not have a lot of money. Food, shelter and transportation should be their main priorities. So they will buy cheaper things even if the quality is not very good because they cant afford better quality items. These people are attracted to anything that will save them money

STAGE TWOSAFETY NEEDS Consumers in Stage Two need to feel that they will be safe in the present times and in the future. They will purchase items to help them feel secure like retirement funds, self defense classes, and self defense videos and books. They will also buy things like nanny cameras, guns, and alarm systems to help protect their families

STAGE THREELOVE AND BELONGING NEEDS Acceptance is also a big part of this phase. Everyone likes to fit in with other people, and nobody wants to be labeled as strange, unusual or weird. People in this stage of life will follow the current trends so that theyll be accepted by their peers. Stage three is also the stage where people desire to be with other people. This can mean friends, family, significant others, or all of the above. Most people do not like to be alone all of the time and are attracted to items that will make them more pleasant to other people, specifically the opposite sex .People in stage three will usually purchase the following items for the following reasons: magazines and anything else that will keep them updated with the latest trends name brand items, and trendy clothes to help them fit in and be accepted by their peers perfumes, colognes, makeup, satin sheets, and sexy clothes to attract the opposite sex and gain love self improvement books to avoid criticism and be accepted

STAGE FOUR ESTEEM NEEDS Once we reach stage four, we are ready to take better care of ourselves. We do things to for ourselves because we want to do them, not because Vogue Magazine said that its the in thing.Individuality is important to these people because they are happy with themselves, have good self esteem and do not want to be like everyone else. These people will dress nice to attract praise because it makes them feel better about themselves. Consumers in this group want others to respect them, look up to them, and value them. People in stage four will purchase some of the following items for the following reasons: Books to help them become their own boss because they want to have power andcontrol Online financial investments to have complete control over their financial portfolios AntiAging cosmetics so they can look younger and have more control on the aging (or not aging as quickly) process .Expensive clothes, cars, etc. so they will have the power to feel superior to other

STAGE FIVE SELF ACTUALIZATION This is the final stage, and sadly many people will never reach this part of life. However, the people that do reach stage five are happy with themselves, and the lives they have lived. They purchase things that give them enjoyment and things that will give enjoyment to others. People in stage five will purchase some of the following items for the following reasons: Art, flowers, and other beautiful things to nourish their souls (Perhaps this is why we see so many elderly people working in their flower beds so often.) Cruises and other trips so they can enjoy themselves Charity items and spontaneous gifts for others because a self actualized person feels joy when other people are happy

4-What do you understand by absolute threshold and differential threshold? How do marketers apply the concept of differential threshold or just noticeable differences in their marketing strategy? Explain giving suitable examples.
ABSOLUTE THRESHOLD: The lowest point at which a stimulus can be perceived is called absolute threshold. EXAMPLE: the impact of upward price movements on daily household goods. This shows the importance of market segmentation and the associated pricing policies. DIFFERENTIAL THRESHOLD: The lowest limit at which two stimuli can be differentiated or distinguished Difference Threshold: The difference threshold, also known as the just noticeable difference (jnd), is the minimum difference in stimulation that a person can detect 50 percent of the time. We experience the difference threshold as a just noticeable difference. EXAMPLE: Lets say I asked you to put your hand out and in it I placed a pile of sand. Then, I add tiny amounts of sand to your hand and ask you to tell me when you notice any change in the overall weight. As soon as you can detect any change in the weight, that difference between the weight of the sand before I added that last bit of sand and the amount of sand after I added it, is the difference threshold. The concept of differential threshold is applied to almost all aspects of marketing strategies.

1. PRODUCT LINE EXTENSION. This concept is applied to the advertising/ promotion of the product line, in order to exploit the strength of the original brand. 2. DISTRIBUTION CHANNELS The marketers' apply the concept of differential threshold in the selection of the distribution channels, for the various products from the same family product group. 3. PRODUCT PRICING The marketers' apply the concept of differential threshold in the PRICING of the two brands from the same company like two toothpaste brands from one company. 4. PRODUCT PROMOTIONS The marketers' apply the concept of differential threshold in the DEVELOPMENT/ IMPLEMENTATION of the sales promotion programs in two channels to maintain similarity / cost down. 5. PRODUCT PACKAGING The marketers' applies the concept of differential threshold in the PACKAGING of the various models of the company products / to create uniform image

4.From among the purchases made by you or your family in the last few years identify any three purchases that required a large degree of pre purchase search for information. Clearly explain what characteristics of the product or the buying situation made this search behavior necessary.
THREE PURCHASES: a- Cooking oil b- life insurance policies c- LCD A. COOKING OIL 1- Roles and Family Influences -Mother makes the decision. -Supported by the father -buying decisions are a mixture of family interactions and individual decision making 2- Problem Recognition Do the consumers have a need? . 3-Information search Where will the information will be available. 4-Purchase decision Choose buying alternative, includes product, package, store, method of purchase etc. 5-Purchase Product availability. 6-Economic risk Routine Response/Programmed Behavior-Limited Decision Making--

7-Psychological factors include: 1 2 3 4 5 6 7 8 Motives-Perception-Ability and Knowledge-Attitudes-Personality-Lifestyles-Social Factors Roles and Family Influences--

9 Social Class-10 Culture and Sub-culture-limited problem solving

B. LIFE INSURANCE POLICIES

1-roles and family influences. -father makes the decision. -Supported by the mother -family roles and preferences are the model for children's future family (can reject/alter/etc) -family buying decisions are a mixture of family interactions and individual decision making. 2-Problem Recognition Do the consumers have a need? 3-Information search Where will the information will be available. 4-Purchase decision: Choose buying alternative, includes product, method of purchase etc. 5-Purchase: product availability.

6-Personal risk 7-Social risk 8-Economic risk 9-Extensive Decision Making 10-Personal 11-Psychological factors Psychological factors include: 1 Motives-2 Perception-3 Ability and Knowledge-4 Attitudes-5 Personality-6 Lifestyles-7 Social Factors 8 Opinion leaders-9 Roles and Family Influences-10 Reference Groups-11 Social Class-12 Culture and Sub-culture--

C. LCD
1- roles and family influences -father and senior children make the decision. -mother supports their decision. -Family roles and preferences are the model for children's future family (can reject/alter/etc) -family buying decisions are a mixture of family interactions and individual decision making -family acts an interpreter of social and cultural values for the individual. 2-Problem Recognition Do the consumers have a need? 3-Information search Where will the information will be available.

4-Purchase decision Choose buying alternative, includes product, package, store, method of purchase etc. 5-Purchase--product availability. 6-Personal risk 7-Social risk 8-Economic risk 9-Extensive Decision Making 10-Personal 11-Psychological factors Psychological factors include: 1- Motives-2 Perception-3 Ability and Knowledge-4 Attitudes-5 Personality-6 Lifestyles-7 Social Factors 8 Opinion leaders-9 Roles and Family Influences-10 Reference Groups-11 Social Class-12 Culture and Sub-culture--

You are the brand manager of a new line of light weight autofocus, economically priced digital cameras. Describe how an understanding of consumer behavior will help you in your segmentation strategy and promotion strategy. What are the consumer behavior variables that are crucial to your understanding of this market? Segmentation strategy:
Dividing potential customers into discrete groups is vital if you want to increase the success rate of any communications message. If you don't know who you are talking to, it's unlikely you will get much of a response. Who are the potential customers? How many sub-groups should you divide them into? How do these groups differ? Hopefully, most of this information will be readily available from your market research. Once you have an idea of the customer, you should further drill down to explore them in more detail. What are their media consumption habits? What are their expectations and aspirations? What are their priorities? How much disposable income do they have? What are their buying habits? Are they likely to have children? How many holidays to they take a year? How much money do they give to charity? How can you help them? This information can be obtained in a variety of ways, from commissioning a specialist market research agency, to examining sales patterns or social media interactions. Commonly used market research methods include:

Sales analysis and buying patterns Questionnaires Desk research Website statistics, especially social media Focus groups

Face-to-face interviews Specialist market research companies

Once you have built up an accurate picture of your customer, it's time to get their attention 2. Targeting For the purposes of advertising, targeting is the process of communicating with the right segment(s) and ensuring the best possible response rate. The methods you use to target your audience must relate to your marketing plan objectives are you trying to generate awareness of a new product, or attract business away from a competitor? Promotional strategies Advertising is just one element of the marketing communication arsenal, which can be divided into the following areas: Advertising a mass media approach to promotion

Outdoor Business directories Magazines / newspapers TV / cinema Radio Newsagent windows

Sales promotion - price / money related communications

Coupons Discounts Competitions Loyalty incentives

Public relations - using the press to your advantage

Press launches PR events

Press releases

Personal selling one to one communication with a potential buyer

Salesmen Experiential marketing Dealer or showroom sales activities Exhibitions Trade shows

Direct marketing - taking the message directly to the consumer

Mail order catalogues Bulk mail Personalized letters Email Telemarketing Point of sale displays Packaging design

Digital marketing new channels are emerging constantly

Company websites Social media applications such as Face book or Twitter Blogging Mobile phone promotions using technology such as Bluetooth YouTube E-commerce