Buyer Behaviour

Marketing Management

Buyer Behaviour
If demographics & forecasting is all about identifying the customer, buyer behaviour is all about understanding the customer Main aim is to understand the buyer, make him a customer of your brand or invention

Buyer Behaviour
What motivates the buyer? What induces him to buy? Why does he buy a specific brand from a specific shop? How does he shift his brand & place of purchase? How does he react to a new product?

Buyer Behaviour
What are the stages he goes through before he makes a decision to buy? These are some of the questions that have to be answered by marketing because the product & promotion strategies revolve around this

Buyer Behaviour
One has to make assumptions on how the customer will behave & respond to marketing programmmes Knowledge of the buyer, his buying motives, & habits is a fundamental necessity for marketing managers

Buyer Behaviour
Buyer behaviour is concerned with decisions that lead to the act of purchase & transaction itself. In an exchange process involving two parties, each of whom an unidentified need & want and something to exchange There may be more than 2 parties involved in the exchange process

Buyer Behaviour
Frequently, there are as many as six parties involved: Initiator: the person who first recognizes the unmet need or want Influencer: the individual who provides information about how the want or need may be satisfied

Buyer Behaviour
Decider: person who finally chooses an alternate that will satisfy that the want or need Buyer: purchase of a product Consumer: user of the product Evaluator: individual who provides feedback on the chosen products ability to satisfy

Buyer Behaviour
The person who makes the buying decisions is most important to marketers Clearly, buyers are decision makers There are many differences on how consumers purchase- some out of habit, others through an involved decision process in making a purchase for the same product

Buyer Behaviour
Buyers can be classified on two types based on the type of decision: Non-programmed decisions Programmed decisions Marketers devote a lot of energy to get target customers to take programmed decisions

Non-programmed decisions
Consumers take decisions based on problem solving rather than routine behaviour Consumers are in an active state of learning & are receptive to information about features, cost, availability Information from advertising, brochures, friends & relatives, test reports may be sought

Non-programmed decisions
Marketers help consumers to make nonprogrammed decisions as part of the marketing efforts

Non-programmed decisions
Stages in non-programmed decisions Awareness of needs Search for information Evaluate the alternatives Decision Commitment Decision Evaluation

Awareness of needs
Customer buyer behaviour results from an awareness of a deficit in the products owned This may be a vague dissatisfaction to a clear desire for a product Constantly try to prioritize needs & wants

Awareness of needs
Needs keep changing due to exposure of new products, more money, changes in moods or goals

Search for information

When they dont have a pre-determined solution Example: he might go to an old retailer, or check with family , friends More expensive the product, more information is sought

Evaluation of information
They classify information based on price, durability, safety Also classification based on source: a friends advise may be more valuable than a salesmans

Decision Commitment
Searching for & evaluating information requires time, energy & money At some point he has to commit to his decision He decides to buy, not to buy or postpone his decision

Decision Commitment
A buying alternative will include: product itself, package, store & method of purchase

Decision Evaluation
The result of the evaluation is stored for future reference Reinforce good or bad experience

Cognitive dissonance
It is not uncommon for consumers to experience post-purchase doubt Did I take the right decision? We have a natural tendency to reassure ourselves that our decision was the best one We need this reassurance because by choosing one alternative

Cognitive dissonance
We have given up the others This uncomfortable state of psychological tension is called cognitive dissonance

How do consumers reduce dissonance?

Deny or distort information Seek confirming options from others Discredit the information source Minimize the issues importance Change the overall evaluation of the chosen alternatives

How do marketers reduce dissonance?

Providing information to consumers to use it Ensuring poor product performance to correct it

How do marketers reduce dissonance?

Dissonance that is not corrected leads to future non- programmed decisions More times he is satisfied with the product, more chances of taking a programmed decision

Programmed Decisions
Complex decision making process Programmed decisions are the end result of the learning process consumers engage in when making non-programmed decisions The difference is that:

Programmed Decisions
They are not difficult to make Usually do not lead to post-purchase dissonance Not very important in the economic or psychological sense They are made frequently

Decision Sequence
Presence of external stimulus- normally purchased brand Awareness of need Cursory check of prices & other brands present Awareness of need

Shift
Non programmed can become programmed if: New products become available Tired of existing brand People whose opinions you respect suggest new brands Living situation changes Outstanding advertising attracts your interest

Factors influencing Consumer Behaviour

Culture Social: Reference Group, Family, Role & Status Personal: Age& FLC, Occupation, Economic circumstances, Life Style, Personality Psychological: Motivation, Perception, Learning, Beliefs & Attitudes

Defining Culture
Culture is the collective programming of human mind that distinguishes the members of the human group from those of another Culture in this sense is collectively held values

5 Main Characteristics
Exists to serve the needs of society Cultureinteracting is socially acquired not born with any culture knowledge Learned by with other members of the cultural group Cultureadapted is transferred from one generation to another- with new influences added to it Culture is - changes in response to the needs of society

Elements of Culture
These include heroes, language & symbols, customs, rituals, values,

Heroes
Real or imaginary heroes Sachin Tendulkar, is full of energy & advertises Boost Many records Imaginary Characters- Shaktimaan, Spiderman, Superman

Language & Symbols

These are means by which members of a particular culture This communication may be verbal or nonverbal, using images that convey ideas directly or indirectly Marketers involved in multi-lingual regions must be aware of he implications of selling their products to customers whose native languages are different

Language & Symbols

Besides, language & objects can have meanings & associations other than those in the dictionary Symbols can be used by marketers to associate certain qualities with ones product or convey more complex meanings quickly Owl is considered wise in the west, but stupid in India- symbols should be used carefully

Customs
Customs are established rules within society They define what is acceptable Giving & receiving gifts is customary on certain occasions

Rituals
Rituals are complex patterns of behaviour shared by a group Rituals are marketing opportunities like taking annual holidays If it is possible to associate an object/event, known as artefact, with a ritual, then the persistence of ritual will ensure continuing use of artefact

Rituals
For example, body worshipping ensures sales of sports gear & membership to gyms Valentines day means roses, gifts & cards

Value
Represent deepest level of culture Broad feelings not open to discussion Values area mental images that affect beliefs, and many attitudes, which in turn affect how a person is likely to respond to a specific situation

Value
Example: Indian youth look for parental approval even while seeking a marriage partner Western youth like freedom and independence Used in ads

Macro & Micro Culture

At any time an a person is influenced by many cultures For example- an Indian is affected by Indian culture & also regional cultures The customs & rituals are shared by him & many others Such wide spread cultures are referred to as macro cultures

Macro & Micro Culture

Exists a cultural onion Smaller groups cultural groups- the dividing lines are not well formed A single individual may be a member of many sub cultures These subcultures are based on :

Subcultures
Regionalism Age Religion Gender Social class & occupation

Cultural Identities in India

Based on religion, region, ethnicity Regional cultures with local variants stand out distinctly The significant influences of regional culture are: Westernization Emerging national culture of styles Popular culture

Westernization
Before independence British culture was adapted by civil servants This has now spread to upper middle class & even rural areas

Emerging national culture of styles

During the freedom struggle swadeshi movement started, simple living, boycott of foreign goods

Popular culture
Mass media, films, music TV has reshaped images & attitudes

Objects- symbolic value

Even food has symbolic value in India- aesthetic, functional and spiritual In contrast, western has only 2 dimensions Religion plays a part in daily beliefs, rituals, practices, & symbolic patterns

Modernization
In India, modernization is a combination of westernization, industrialization, & secularization Modernization is supported by Indians as long as traditional value system is not affected negatively

Modernization
So Mc Donalds is accepted, but course meal is not Maggie is a success because it did not try to change the meal habits of Indians

Modernization
Wants to be free yet have family traditions

Cultural Transition in India

Culture can be perceived a as dynamic overlapping ideologies rather than a static unity

Cultural Transition in India

Culture is a flow: Residual- those born in the 1930s represent this Dominant- age group 40-50 represents this- Rajiv Gandhi generation Emergent Teen culture

Sub cultures
While culture greatly influences CB, not all segments of a society are governed by the same set of norms, values etc Several subcultures exist- on the basis of gender, education, age, income, region, economic grouping etc

Sub cultures
Basis Nationality Region 1 Region 2 Religion Gender Age Socio-economic Example Indian, Chinese, Amercan North, South, East, West Rural, Urban Hindu, Sikh M, F Preteens, Teens, Youth SEC A, B, C

SEC
A common classification that is used by marketers to describe the Indian population is the Socio Economic Classification ( SEC). SEC is the classification of Indian consumers on the basis of two parameters : Occupation and Education of the chief wage earner (Head) of the households.The SEC classification,created in 1988 ,was ratified by Market Research Society of India (MRSI) ,is used by most media researchers and brand managers to understand the Indian consuming class.

SEC
http://marketingpractice.blogspot.com/200 7/02/marketing-funda-socio-economic.html http://www.naukrihub.com/india/fmcg/cons umer-class/socio-economic/

SEC
Sections A & B refer to High-class- constitutes over a quarter of urban population Sec C refers to Middle-class-- constitutes 21% of the urban population Sections D & E refer to Low-class-- constitutes over half the urban population To understand the table, consider an example: A trader whose monthly household income (MHI) is more than that of a person in section A cannot be included in this SEC because his educational qualification or occupation do not qualify him for inclusion. Sec C constitutes households whose Chief Wage Earners are employed as : Skilled workers 33% Petty traders 12% Clerk/Supervisor 37% Shop owners 18%

SEC
SECA1,A2,B1,B2,C,D,E1,E2 In urban households, SEC A1 include those with graduation/post graduate holding senior positions like CEOs and Middle level managers and also those entrepreneurs having some college education and employs more than 10 staffs

SEC
While the Rural Indian Households are classified into SEC R1,R2,R3,R4. In the rural classification, the parameters are Education of the Chief wage earner and the type of the house.

SEC
This is based on the assumption that higher education leads to higher income thus higher consuming potential. But we know that this may not be true always. A trader or a retailer with no qualification can earn more income than a Post graduate executive, but SEC will categorize the traders/retailers not as SEC A1or A2.

SEC
Hence Market research users council ( MRUC) has devised another classification called New Consumer Classification System( NCCS) which calculates a Household Premiumness Index ( HPI) which takes parameters like ownership and consumption of media services and products with other demographics

Urban-Rural divide
India & Bharat co-exist In 2001 pop 1004 million Rural- 733 million 12% of total population

Bharat

Rural
Rural market potential- Rs 31, 000 crore Lifestyle, inter-relationships, Flow of communication Why & how they bought Meaning of brand in rural perspective TV viewing is considered lazy No fridge, washing machine

Regional variations
Total purchasing power in India- Rs 8 trillion North- 29.1% South-22.4%

East- 19% West-29.5%

Regional variations
Preferenses vary North cosmetics sell more Fashion in north more westernized

Gender divide
Indian women require balance in family & work Concepts are changing Social conditioning is changing- western culture

Age as a sub culture

Kids, teens, youngsters, Gen Next Guiding philosophy Gen next- Youth Gen now- Rajiv Gandhi gen Gen past- Independence geneartion

Social Class
Unskilled & skilled labour Garbage collector, Doctor- both deal with public health but different social platforms Status, lifestyle, interests, behaviour patterns Roles & relative evaluation are valued differently Distinctly defined media habits

Reference Group & Family Influences

Group (An Introduction)

Two or more individuals who share a set of norms, values or beliefs and have certain implicitly defined relationships to one another such that their behaviors are interdependent. A Reference Group whose presumed perspectives or values are being used by an individual as the basis for his/her current behavior. Most of us belong to different groups & perhaps would like to belong to several others. We may belong to several groups, but we generally use only one group as our primary point of reference in any given situation.

Types of Reference Group

Three types of reference Group to which a consumer may belong:

Aspirational

Associative

Disassociative

Aspirational Reference Groups are groups that we admire & wish to be the member of this. Associative Groups are the groups that we belong to. Disassociative Group are the group whose attitudes, values & behaviors we disapprove of & we dont wish to emulate.

How can Reference Group be described?

There are several characteristics that describe Reference Group. They include degree of contact, formality, density, degree of identification & strength. Reference
Co Workers at job Hometown Friends Immediate Family School Cricket Team Reference Group that influence after exam party Group that influence Christmas day Dinner celebration

Individual

Friends from Apartment

MBA Classmates

Degree Of Contact: Reference Group may vary in their degree of contact. We may have direct extensive contact with some reference group like our immediate family . We always call the group with which we have close physical interaction primary reference Group. Secondary Reference Group are those with whom we dont have direct contact but whose behavior may still influence us. Formality: Certain groups have criteria for membership & rules for behavior of members. Eg. Rotary Clubs Homophily: refers to the Degree of similarity among group members. When groups are similar the reference group influence tends to be strong.

Density: Groups can also vary as per their intensity. Dense groups are those in which members know each other. Eg. An extended family group that gets together on Sundays tends to know each other. Degree of Identification: Simply because one belongs to a group does not meant that they use it as a reference group. The more we identify with a group, the more we are likely to be influenced by its actions & the information it provides. Tie Strength: A final characteristics is tie strength. A strong tie means they are strong, close relationship connecting people. Typically strong tie comes because of frequent interpersonal contact. Weak ties are represented by a more distant, nonintimate relationship among people with limited interpersonal contact.

Nature Of Reference Group influence

Informational Influence: Occurs when an individual uses the behavior & opinions of reference group members as potentially useful information. The influence is based on the similarity of the group members or on the expertise of the influencing group member. Normative Influence: It occurs when an individual fulfills group expectations to gain direct reward. You may buy a particular brand of jeans to win your friends approval. Identification Influence: This occurs when individual have internalized the groups value & norms. These then guide the individual without any thought of reference group sanction or rewards. The individual has accepted the groups values at his own. He then behaves in the same manner as the group as his values.

Situation
At several friends home Nescafe Sunrise Coffee is served An ad stresses that even your friend wont tell if you have bad breath- they will just ignore you

Behavioral Response Type of Influence

Georges's

decides to give Nescafe Sunrise a try

Georges's

Informational

buys the recommend ed mouthwash

Georges's decides health foods are good & begins to consume them

Normative

Many of Georges friends regularly consume health foods

Identification

Degree of Reference Group Influence

1. Reference Group Influence is strongest when the use of a product is visible to the group. Eg. Shoes & watches are visible products & is subject to reference group influence. Reference Group Influence is higher the less of necessity an item is. Thus, reference group do not influence purchase of salt & sugar. The more the commitment an individual feels to a group, the more the individual confirm to group norms. The more relevant a particular activity to a groups functioning, the stronger the presume to confirm to the group norms concerning the activity. The final factor is the individuals confidence in the purchase situation. Lack of knowledge may lead to lesser confidence in one's decision making & leads to increase in group influence in choice made.

2.

3. 4.

5.

Market Strategies based on Reference Group Influence

Consumption Situation Determinants of Reference Group Influence

Visible Usage
High Relevance of Product to Group Low Individual Purchase Confidence

Strong individual Commitment to Group

High Degree Of Refere nce Group Influen ce

Non Necessary items

Market Strategies based on Reference Group Influence

Personal Sales Strategies;

Salespeople while making presentation, seek the support of people favorable to their proposal & ask them for an opinion in a bid to influence the other member of their group.

Advertising Strategies;
marketers often position product as appropriate for group activities or show group appreciation of use of products or the group itself is using the product to stimulate normative & influential influence.

Opinion Leadership
Information is the primary tool that marketers use to influence consumer behavior. While individual process the information, in many cases, group members provide the information. The person who perform the task of providing information to the individual is known as Opinion Leader.

Opinion leader are the person whose position, expertise & knowledge renders them particularly important source or relevant credible information. Opinion leaders develop first hand experience about products & services in the market & communicate their reactions to consumers.

Characteristics of Opinion Leaders

Opinion Leaders are tend to learn a lot about products. They are heavy users of media like newspaper, magazines, television, radio. They tend to buy product variants as soon as they are introduced in the market. Opinion leaders have been found to be self confident, gregarious 7 willing to share product relevant information.

Likelihood of seeking an Opinion Leader

Product/Purcha se involvement
High Product Knowledge Low

Situation when Opinion Leadership Occurs

High

Moderate

High

Low

Low

Moderate

Reference Group Appeals

Advertisers to communicate with their markets, use appeals by celebrities & other reference groups effectively. 5 type of reference group appeals used by marketers are: Celebrities; particularly movie, sport stars & T.V. personalities provide a very common type of reference group appeal. Advertisers spent enormous amount of money to get celebrities to promote their products. The Expert; A second type of appeal; used by marketer is the expert, a person who because of his/her occupation & experience is in a position to evaluate the product that the advertisement promotes. E.g.: a grand prix driver for tires. The Common Man; An appeal that uses the testimonials of satisfied customer. Customers feels that still someone just like them is using the product & satisfied with it.

Reference Group Appeals

The Executive/Employee Spokesperson; In recent year many marketers use their top executive like; CEO & chairman of the companies to endorse their products. The appearance of these top executives seems to convey the confidence that the company gas in its products & also that they are watching the consumer interests. This seem to build confidence in the consumer. A similar effect is also produced when an employee vouches for the quality of his companys product in ads. Spokes Characters; Companies that uses celebrities found that their brand get hurt when the image of their celebrity endorsers suffer a set back. Many marketers found it safer & successful to create spokes characters to endorse their brands. E.g. Tony the tiger for Kelloggs. The characters provide an idealized image & give information that is important for product services.

Family Influence
A family is a group of individual living together who all are related by marriage, blood or adoption .The most typical unit is the nuclear family. A household is a broader term including a single person living alone or a group of individuals who live together in a common dwelling regardless of whether they are related. Several factors have altered the basic structure & characteristics of households: Delayed Marriage: In many societies many number of individuals are delaying their marriages. This trend is important as single person households indicate different consumption patterns. Cohabitations: Due to loosening social norms , more & more consumers are finding it acceptable to live together outside marriage.

Family Influence
Dual Career Families: It indicates that the 2 incomes of husband & wife will lead to greater spending. They will also need convenience products & products save times. Divorce: Divorce is leading to single parent families in western societies. Again, these separated single people have greater income to be spent on housing, transportation & clothing. If children are involved it creates single- parent families that lead to a demand for several types of services.

Fewer Children: The trend to fewer children implies greater spending on children on toys & recreational items.

What roles do customer play within a family ?

Gatekeeper: members who collect & control information important to the decision; Influencer: Members who try to express their opinions &b express & influence the decision; Decider: The person who actually determines which product or service will be chosen. Buyer: The member who physically acquires the product or services. User: The members of the family who actually consume the product.

Conflict can occur in fulfilling the different roles. Conflict can revolve around the reason for buying, who should make the decision & which option should be chosen. However many households attempts to avoid conflict rather than confront it in their decision making.

The Role of Spouse; Changing Role of females;

Traditionalist & Feminists;

Working Wives; Changing Male Roles;

Family Life Cycle ( FLC )

FLC is a composite variable that characterizes the different stages in family based on marital status, size of family, age of family members 7 employment states of the head of the household.

The traditional FLC stage consist of following stages: The bachelor stage: young single people\ Newly married couples: young, no children Full Nest I: young married couple with youngest child under 6 Full Nest II: young married couple with youngest child 6 or over Full Nest III: Older married couples with dependent children Empty Nest I: Older married couple with no children living with them & household head in labor force Empty Nest II: Older married couple with no children living with them & household head retired Solitary Survivor I: older single people in labor force Solitary Survivor II: older retired single people

Family Life Cycle ( FLC )

FLC is a composite variable that characterizes the different stages in family based on marital status, size of family, age of family members 7 employment states of the head of the household.

The traditional FLC stage consist of following stages: The bachelor stage: young single people\ Newly married couples: young, no children Full Nest I: young married couple with youngest child under 6 Full Nest II: young married couple with youngest child 6 or over Full Nest III: Older married couples with dependent children Empty Nest I: Older married couple with no children living with them & household head in labor force Empty Nest II: Older married couple with no children living with them & household head retired Solitary Survivor I: older single people in labor force Solitary Survivor II: older retired single people

Personality Self Concept Lifestyles & Consumer Behavior

Personality Self Concept Life Styles

Marketers have focused their appeals to consumer in terms of their personality for a very long time. They felt that the personality on consumer guides & directs the behavior chosen to accomplish goals in different situations.

Personality (an introduction)

Personality is an individuals characteristics response tendencies across similar situations. We can easily describes ones personality. E.g. You can say one of your friend is aggressive, opinionated, competitive, outgoing & witty.

All individual personality theories are based upon 3 common assumptions: 1. Personality reflects inner characteristics or traits, which are different across individuals. As No 2 individuals can be exactly alike. 2. An individuals personality tends to be both consistent & enduring. 3. Under certain circumstances personality can change. For instance, Ones personality can alter by major life events like, birth of a child, divorce or a career promotion.

Learning

Consumer Learning
Consumer Learning is an important component of their behavior. Learning occurs intentionally when a problem is recognized & information is acquired about products which might solve the problem. Consumer Learning can also occur unintentionally & can this can influence the behavior of consumers. One benefit is that learning mechanism is that consumers are able to adapt to a changing environment.

Learning (Definition)
A relatively permanent change in behavior occurring as a result of experience. The change is permanent & therefore excludes changes brought about by fatigue or other short lived influences.

Types of Learned Behavior

Physical Behavior: We mimic the behavior of others in responding to ever day's life situations. E.g. We learn to walk & talk with others & learn to respond to purchase situations & learning these activities from others. Symbolic Situation: We learn symbolic meaning that enable efficient communication through the development of languages. Symbols allows marketers to communicate with brand names, slogans & signs. Affective Learning: Humans learn to value certain elements of their environment & dislikes others. This means that consumer learn many of their wants, goals & motives as well as what product satisfy them. Learning also influence customer development of favorable & unfavorable attitudes towards a company & its attitude.

Principal Element of Learning

Consumer learn in many ways. However 4 elements seem to be fundamental to a vast majority of situations motives, cues, response & reinforcement. Motives: Motives arouse individuals & increase their readiness to respond. It is essential, since it activates the energy needed to engage in learning activity. Cues: A cue can be described as a weak stimulus not strong enough to arouse consumers but capable of providing direction to a motivated activity, that is, it influence the manner in which the consumer respond to motives. Response: A response may be viewed as a mental or physical activity the consumer makes in reaction to a stimulus. Responses appropriate to a particular situation are learned over time through experience in facing the situation

Principal Element of Learning

Reinforcement : This is anything that follows the response & increases the tendency of the response to reoccur in a similar situation. Because reinforced behavior tends to be repeated, consumers can learn to develop successful means of responding to their needs & changing conditions. An accomplishment of a learning task is itself a reinforcing experience. Thus consumers may learn about products by merely by evaluating their relevance to solving consumption problems. Window shopping activity & informal discussion with friends or salesperson can be aspects of such learning activity.

Theories of Learning
Behavioral Learning Theories
Behavioral learning theories are refer to as stimulus-response theories. Because they are based on the assumption that observable responses to external stimuli meant that learning has happened. Conditioning refers to a learning based on association of a stimulus (information) & response (behavior of feeling). The word conditioning seems to have a negative connotation & makes us feel it is brainwashing. 2 behavioral theories with great relevance to marketing are: Classical Conditioning; & Instrumental (Operant) Conditioning;

Classical Conditioning
The process of using an established relationship between a stimulus & a response to brind about the learning of the same response to a different stimulus is called classical conditioning Consumer Learning Through Classical Conditioning
UCS (unconditioned stimulus) Popular Music UCR (unconditioned response) Positive Emotion

CS (conditioned stimulus) Soft Drink

CR (conditioned response) Positive Emotion

Classical Conditioning
3 concepts derived from classical conditioning are important for application in consumer behavior are: Repetition: it increases the strength of the association between the unconditioned stimulus & conditioned stimulus & slows the process of forgetting. Stimulus Generalization: this is often referred to as the rub off effect & occurs when a response to one stimulus is elicited by a similar but distinct stimulus. Stimulus Discrimination: It refers to the process of learning to respond but differently to similar but distinct stimuli. At some point stimulus generalization becomes dysfunctional because less & less similar stimuli are still being group together.

Operant Conditioning
Instrumental Learning or operant conditioning differs from classical conditioning primarily in the role & timing of reinforcement. Reinforcement plays a much larger role in operant conditioning than it does in classical conditioning. Consumer Learning by Operant Conditioning Stimulus (Popcorn)
Desired Response Reinforcement (Pleasant Taste)

(Consumption)

Increased probability of response to the stimulus

Operant Conditioning
Operant conditioning often involves actual usage of the product. Thus, a great deal of marketing strategy is aimed at securing an initial trial. Free samples, special discount prices on new products & contests all present rewards offered to consumers to try a particular brand. The Process of Shaping Purchase Behavior
Consume a free sample of biscuits that was given at your home by salesman

Purchase a second package using the discount coupon that was given with the sample

Purchase the product at full price

Operant Conditioning is marketers beyond maintaining consistent quality to ensure reinforcement. The other applications include: Direct mail or personal contact after a sale that congratulates the purchaser for making a wise purchase.

Giving extra reinforcement for shopping at a store, such as discount or prizes. Giving extra reinforcement to purchase a brand such as gifts or rebates.
Giving free product sample or coupons to encourage trail. Making store interiors pleasant place to shop by providing entertainment, controlled temperature, exciting displays etc.

Difference Between Conditioning Methods Classical Conditioning

Involves an already established response to another stimulus The outcome is not dependent on learners actions
Influences development & change in opinion tastes & goals

Operant Conditioning
No previous stimulus response connection necessary. The outcome is dependent on learners actions Influences changes in goal-directed behavior

Theories of Learning
Cognitive Learning Theories
Learning theorists have found that considerable learning takes place in the absence of direct reinforcement. Cognitive Learning includes all the mental activities of human as they work to solve their problems or cope with situations. It involves learning ideas, concepts, attitudes & facts that contribute to our ability to reason, solve problems & learn relationships without direct experience or reinforcement. Iconic Rote Learning: This involves learning the association between 2 or more concept in the absence of conditioning. Vicarious Learning/ Modeling: It is not necessary for consumers to directly experience a reward or a punishment to learn. Reasoning/Analogy: The most complex form is Reasoning/analogical reasoning. In this individuals use creative thinking to combine existing & new information to form new association & concepts.

Rate & Degree of Learning (Curve) Y

A M O

U
N T L E A R N E D

Number of Practice Trials

The shape shows that learning is rapid in initial stages. However, in the later stage, as the amount learned accumulates, the rate of additional learning per trial decreases.

Cognitive Learning Theories

Extinction: We can unlearn material or behavior that has been previously learned. This unlearning process is termed extinction & occurs when overtime, a learned response is made to a stimulus, but reinforcement does not occur. The resistance to extinction also becomes stronger when: Impelling motives are strong; The number of previously enforced trial is large; The amount of reward during learning trial is large; Reward is delayed during the learning process; A partial reinforcement schedule occurs during learning.
Forgetting: The loss of retained material due to non-use or interference from some other learning task. Retention is the amount of previously learned material that is remembered.

100 90

Recognition

80
70 60

Percentage of Material Retained

50 40 30 20 10

Recall

0 1

24

48

Hours since Learning

The shape shows that they have to repeat advertisement to prevent people from forgetting their products & brands. However designing effective methods to minimize forgetting requires some understanding of human memory.

Memory
Memory is the total accumulation of prior learning experiences. Memory is important because what we can remember can have a profound impact on our consumption decision. Thus it is critical for marketer to understand the nature of memory processing. What is Memory? Consumer Memory contain a vast storehouse of knowledge about products, services, shopping excursions & consumption experiences. Retrieval is the process of accessing what we have stored in our memory. Both Memory & Retrieval are important because whatever information is we store about a product may be retrieved later & used to influence how we act towards it & the decisions that we make about it.

Types of Memory
Sensory Memory; The ability to store sensory experiences temporarily as they are produced is called sensory memory.

Short term Memory; Represents that portion of memory where incoming information is encoded & interpreted in the light if existing knowledge. It is also called Active & learning Memory.
Long Term memory; Part of memory where information is stored for later use. The information stored may be autobiographical (personal experience) or semantic (information not derived from specific episodes.)

Theories of Personality
Freudian Theory Non-Freudian Theory Trait Theory

Freudian Theory Freud, the father of psychoanalytic theory, proposed that every individuals personality is the product of a struggle among 3 interacting forces the id, the ego & the superego. According to Freud, the id is the source of strong inborn drives & urges such as aggression. The id operates on what is called the pleasure principle, that is, it acts to avoid tension & seeks immediate pleasure. It however operates at very subjective & unconscious level is not fully capable of dealing with objective reality.

The ego comes into being because of the limitations of the id in dealing with the real world. Through learning & experience, the ego develops the individuals capabilities of realistic thinking & ability to deal with the environment. The Superego is the 3rd component of personality. It constitutes the moral part of the individual psychic structure through internalizing the values of society. It represents the ideal by defining what is right & good, and it influence the individual to strive for perfection. According to Freud, the individuals total personality develops & is defined by the relationship between the id, ego & superego. Therefore to fully understand the causes of behavior and the interactions of personality, one must appreciate factors influencing consumers at unconscious & subconscious levels.

Theories of Personality
Neo-Freudian Theory Some theorists rejected Freuds id based theory & respond that people develop their personality through numerous attempts to deal with others in a social setting. These social theorists called the neo-Freudian school, viewed individuals as striving to overcome feeling of inferiority & searching for ways to obtain love, security & brotherhood. Karen Horney proposed the first major theory: She identified 10 needs which were classified into 3 major personality groups : Complaint individuals are those who move to others; Aggressive individual are those who move against others; Detached Individuals are those who move away from others;

Theories of Personality
Trait Theory Trait theory is the major department from the qualitative measure that typify the Freudian & neo-Freudian movements. Trait theory focus on measurement of personality in terms of specific psychological characteristics called Traits. A trait is measured as any distinguishing relative enduring way in which one individual differs from others. Trait theory can help to identify a relationship between a personality & a product category than a particular brand. Marketers are interested in knowing how personality influence consumption behavior because such knowledge enables them to better understand consumers.

Theories of Personality
Consumer Innovativeness Factors
This refers to a personality trait of a consumers willingness to innovate & tries to measure the relationship between the innovativeness trait & purchase of products. Dogmatism: Dogmatism as a personality trait measures the degree of rigidity that individuals shoe towards unfamiliar information that is against their own beliefs. Social Character: Trait ranges from inner-directedness to other directedness. Inner-directedness consumers rely on their own values. Other-directed consumers will rely on others for direction & are less likely to be consumer innovators. Need For uniqueness: Some people seek to be unique. They would not like to look & behave like others. So these people would like to own new products not possessed by others.

Consumer Innovativeness Factors

Optimum Stimulation levels: Some people prefer a calm life, while other wants their life to be full of novels & unusual experience. Research proves that people with high OSL are linked to greater willingness to take risk & try out new products. Sensation Seeking: It is the trait that is close to OSL trait. People high on the SS trait will be seeking varied novels & complex sensations & will be willing to take physical & social risks for such experiences.

Variety Novelty Seeking: this is quite similar to OSL traits. People who are high on this trait will want variety in products especially technological products.

Cognitive Personality Factors

Researches have also tried to find out how cognitive personality factors influence Consumer Behavior: Need for Cognition (NC): This trait measures a persons desire of enjoyment or thinking. Consumer who are high on NC will want more product-related information in ads. Visualizers Vs. Verbalizers: Some people prefer information in writing; some other will understand visual images as a source of information. Verbalizers will want a detailed description. Visualizers are attracted by strong visuals to understand the message communicated by marketers.

Use of Personality in Marketing Practice

Brand Personality

Sincerity

Excitement Competence Sophistication Ruggedness

Down to earth, honest, Wholeso me, Cheerful

Daring, Spirited, imaginati ve, Up to Date

Reliable, Intelligent, Successfu l

Upper Class Charming

Outdoors y, Tough

Self Concept
Self Concept is defines as a totality of the individuals thoughts & feelings having references to him as the object. It is our perception of ourselves & our feelings to ourselves. In other words it is our attitude to ourselves.

Dimension of a consumers Self Concept

Dimension of self concept
Actual Self Concept Ideal Self Concept

Private self

How I can Actually see Myself

How I would like other to see Myself How I would like others to see Me

Social Self

How others Actually see Me

Self Concept
Relation B/w Self Concept & Brand Image Influence
Product
Brand Image

Relation
b/w self concept & brand image

Behavior
seek products & brands that improve/ma intain self concept

Satisfactio n purchase
contribute to desired self concept

Consumer
Self Concept

Life Style
Life Style is basically how we live. It is how we enact our self concept. Whereas personality represents internal states nor characteristics, lifestyle are manifestations or actual patterns of behavior.

Measurement of Life Style

Marketers are now attempting to develop quantitative measure of lifestyle. These were initially called psychographics. Psychographics initially focused on individuals activities, interests & opinions. The initial measurement was an AIO inventory which consisted of a large number of statements to which respondents expressed agreement or disagreement

Lifestyle & the Consumption Process

Life Style Determinants
Demographics

Life Style How We Live

Activities Interest Opinions Likes/Dislikes Attitude Consumption Expectations Feelings

Impact on Behavior Purchase

How

Subculture
Social Class Motives

When
Where What

Personality
Emotions Values Household Life Cycle Culture

With Whom

Consumption
Where

With Whom
How What & When

Measurement of Life Style

Psychographic Or Life Style studies basically includes following:

Attitude: Evaluative statements about people, places, ideas & products; Values: Widely held beliefs about what is acceptable &/or desirable; Activities & Interests: Hobbies that individuals devote their time & effort; Demographics: Age, education, Income, Occupation, family structure, gender; Media Patterns: which specific media consumers utilize; Usage Rates: Measurements of consumption within a specified product category.

Psychographics: Combining Values, Personality & Lifestyles

3 types of orientation (Principle Oriented, Status oriented, Action oriented) determines within a specified product category. Strugglers; who have the lowest income of any of the VALS (Value Attitude Life Style) segments. Believers; Principle-oriented customer with somewhat modest resource. Fulilleds; who are mature, responsible, well informed &older. Strivers; who have blue collars background & strive to emulate people they find more successful than themselves. Achievers; have high resources & are focused on their work& families & tend to be successful at their jobs. Makers; is relatively young & value self-sufficiency.

Psychographics: Combining Values, Personality & Lifestyles

Experiencers; energetic group that spend a great deal of time on physical exercise & social activities. Actualizers; represents the segment with the greatest resource base. They have a great deal of self confidence; high incomes high levels of education.

Concerns about VALS includes :

VALS are individual measures but most consumption decision are household decisions; VALS has used may be dominant for most individuals, the degree of dominance will vary, as will the orientation that is second in importance; The types of values & demographics measured by VALS may be inappropriate for particular products or situations.

ACTUALIZERS

High Resources

Principle Oriented Status Oriented Action Oriented

FULFILLEDS

ACHIEVERS EXPERIENCERS

BELIEVERS

STRIVERS

MAKERS

STRUGGLERS

Low Resources

Motivation & Consumer Behaviour

Needs & Motivation

While planning a product a marketer approaches the task in 2 steps One, he understands the needs & wants of the market Two, he evaluates alternative designs, merchandising & advertising mix to gain momentum in the market vis--vis competition

Needs & Motivation

Motivation is the driving force in behaviour Motive leads the customer to action

Introduction
Utility theory of consumption: Each product has certain physical attributes that satisfy physiological needs Utility theory is interested in people's preferences or values and with assumptions about a person's preferences that enable them to be represented in numerically useful ways.

Introduction
Man is a social being so a product also make visible statements about the values Products sustain us &create lines of social relationship Branded products secure a social involvement rather than a functional need A product has to satisfy many conflicting goals or neglected needs

Introduction
A brand provides value addition A consumer uses the product as a means to end & not the end itself Classically, a product satisfied a single goal- as soap is used for cleaning Then, a brand moved to a broader benefit base- functionality plus associated benefits- car was not only transport but also gave protection

Introduction
Post-modern brands enable a buyer to satisfy a broader range of goals Reflection of large number of goals a consumer plays, mothers have active careers, fathers help in cooking Some goals are timeless as a membership to a club, while some change as status symbols

Introduction
Consumers feel satisfied when they meet their goals

Values, Goals, Needs

Values, Goals, & Lifestyle constitute Psychographics, which is the science of describing a consumer on the basis of his psychological The difference between a commodity & brand is value addition- tangible & intangible Emotional involvement of consumer is studied

Values
Values are enduring beliefs that a given behaviour is desirable or good Values guides what is relevant Values act as motivators influencing CB

Goals
Goals reflect objectives that can be achieved in a given situation These are situationally determined & specific in behaviour An overweight person will go the gym, change his diet, walk etc When goals are activated a consumer feels motivated to engage in behaviour relevant to goals

Motivation
This is the driving force in behaviour It is an inner force that stimulates a behavioural response Gives specific direction to response A motive is the reason why an individual behaves the way he does It has 5 stages:

Defining Motivation

Key Elements 1. Intensity: how hard a person tries 2. Direction: toward beneficial goal 3. Persistence: how long a person tries

5 Stages- Motivation
Need- Need reduction Drive- Drive reduction Want- Manifestation of desire Goal Goal attainment Behaviour- Tension reduction

5 stages
Need- Need reduction- Hungry Drive- Drive reduction- Eat pizza Want- Manifestation of desire- Zones on Pizza hut Goal Goal attainment-Goes to From Pizza Hut Behaviour- Tension reduction- Satisfaction & reduces tension

Hierarchy of Needs Theory

Maslows Hierarchy of Needs

Hierarchy of Needs Theory

Maslows Hierarchy of Needs

Theory X and Theory Y (Douglas McGregor)

Two-Factor Theory (Frederick Herzberg)

McGuires Psychological Motivations

McGuires Psychological Motivations is a classification system that organizes theories of motives into 16 categories. The system helps marketers to isolate motives likely to be involved in various consumption situation Some categories are:

Mc Guire categories
Need for consistency Need to assign cause to an event Need to categorize Need for cues Need for independence Need for novelty Need for self expression Need for ego defense Need for assertion

David McClellands Theory of Needs

nPow

nAch

nAff

Consumer Conflict Resolution

A large number of motives & situations are faced by the consumer Motivational conflict can occur In an approach- approach conflict, the consumer faces a choice between 2 attractive alternatives

Consumer Conflict Resolution

In an approach-avoidance approach the consumer faces both positive & negative consequences in the purchase of a particular product In the avoidance-avoidance approach he faces both negative consequences

Consumption Patterns
Consumers are aware of their motives influencing behaviour These are manifest motives Sometimes they are unwilling or unable to admit motives These are latent motives Both are operative in many purchase situations

Evolving Views of Marketings Role

Production Marketing
Customer

The customer as the controlling function and marketing as the integrative function

How to become Customer Oriented

Mission statement Slogans

Traditional Organization Chart

Top Management

Middle Management
Front-line people Customers

Old
Process Driven Slow decision making Customer low priority Low Trust

Customer-Oriented Organization Chart

Customers
Front-line people Middle management

Top management

New
Action & Result driven Encourages Initiative Increases role of staff to customer Builds trust

Ends***

Selling and Marketing Concepts Contrasted

Starting point
Factory

Focus
Existing products

Means
Selling and promotion

Ends
Profits through sales volume

(a) The selling concept

Target market Customer needs Integrated marketing Profits through customer satisfaction

(b) The marketing concept

The Four Ps The Four Cs

Marketing Mix Product

Place
ConvenPromotion ience Communication

Customer Solution

Price

Customer Cost