Consumer Behavior And Marketing Communication Assignment

Consumer Behavior And Marketing Communication Assignment Words: 8807

Consumer Behavior Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use. The decision framework for studying consumer behavior includes: external environmental variables influencing behavior; individual determinants of behavior; and the consumer decision process. External Environment Individual Determinants Problem recognition Information search and evaluation Purchase Post purchase behavior Decision Process

These notes are prepared by Dr. R. K. Tyagi for the class room discussion. CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Figure 1: A simplified decision framework for studying consumer behavior (Question: Who is a Consumer? ) Any individual who purchases goods and services from the market for his/her end-use is called a consumer. In simpler words a consumer is one who consumes goods and services available in the market. For Example – Ram might purchase a tricycle for his son or Mukesh might buy a shirt for himself. In the above examples, both Ram and Mukesh are consumers. (What is consumer Interest ? )

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Every customer shows inclination towards particular products and services. Consumer interest is nothing but willingness of consumers to purchase products and services as per their taste, need and of course pocket (purchasing power). For example: Both Mira and Sita went to the nearby shopping mall to buy dresses for themselves. The store manager showed them the best dresses available with him. Mira immediately purchased two dresses but Sita returned home empty handed. The dresses were little too expensive for Sita and she preferred simple and subtle designs as compared to designer wears available at the store.

In this example Sita and Mira had similar requirements but there was a huge difference in their taste, mind set and ability to spend. Consumer behaviour deals with the buying behaviour of individuals. It is a function of individual’s thoughts, feelings and attitudes. The patterns of behavior determine what we buy, when 2 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II we buy it, and how we use it. There are in fact several factors which influence buying decision of a consumer ranging from psychological, social, economic and so on. For example: During festive season the buying tendencies of consumers increase as compared to other months.

In the same way during Valentines week, individuals are often seen purchasing gifts for their partners. Fluctuations in the financial markets and recession decrease the buying capacity of individuals. (Questions : Why do you think an individual buys a product? ? ? ? Need Social Status Gifting Purpose Why do you think an individual does not buy a product? ? ? ? No requirement Income/Budget/Financial constraints Taste When do you think consumers purchase products? ? ? ? ? Festive season Birthday Anniversary Marriage or other special occasions ) 3 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II

UNDERSTANDING CONSUMERS: EXTERNAL FACTORS Feed back COGNITIVE INPUTS INCLUDING ? ? ? ? ? Motivation Information Processing Attitudes Personality and self concept Learning and memory Feed back Consumption Behavior Decision Making SOCIAL INPUTS INCLUDING ? ? ? ? ? ? Group Family Social class Sub culture Culture Other influences Feed back Figure 2 : Individual Determinants of Consumer Behavior 1. CONSUMER MOTIVATION: A marketer’s job is to figure out what needs and wants the consumer has, and what motivates the consumer to purchase. 4 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II

Motivation is the drive that initiates all our consumption behaviors, and consumers have multiple motives, or goals. Some of these are overt, like a physiological thirst that motivates a consumer to purchase a soft drink or the need to purchase a new suit for an interview. Other motives are more obscure, like a student’s need to take a Reebok book bag or wear Blackberry shirt to gain social approval or put Ray Ban/ Police sunglasses. Most consumption activities are the result of several motives operating at the same time. Researchers specially trained in uncovering motives often use qualitative research echniques in which consumers are encouraged to reveal their thoughts (cognitions) and feelings (affect) through probing dialogue (Remember ABC –Model/Tri-Component model of Attitude). Behavior (Conation) Affect (Feeling) Cognition (belief/opinion) Figure 3 : Tri component Model of Attitude or ABC Model (Affect, Behaviour, and Cognition): It is generally 5 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II accepted that attitudes are composed of three components. 1. AFFECTIVE- response is an emotional response that expresses an individual’s degree of preference for an entity.

For example: from heart, I love my job. – ‘A’ / Affective: – Refers to the emotional or feeling segment. 2. BEHAVIOURAL – intention is a verbal indication or typical behavioural tendency of an individual. For example: Intention to act I am going to get to work early with a smile on my face. -‘B’ / Behaviour/ Connotative/: – Refers to the behavioral aspect of attitude. It is an intention to behave in certain way towards someone or something. 3. COGNITIVE response is a cognitive evaluation of the entity that constitutes an individual’s beliefs about the object.

For example: From brain- my job is interesting. -‘C’ /Cognitive: – Refers to the opinion or belief part of attitude. Example: “Digital Club Network: an on-line live music Internet site” 1. A: “I like the Digital Club Network site” 6 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II 2. B: “I will become a registered user of digitalclubnetwork. com” (Reflects a behavioral tendency toward the object i. e Digital Club Network) 3. C: Club Network is an online live internet site. Conclusions: Consumers can hold positive attitudes toward multiple brands but intend to purchase only one.

External economic, social, or personal factors often alter behavioral plans. Question: 1. The attitudes you once held with confidence may no longer exist. Comment. Attitudes are dynamic, which means they are constantly changing. As an individual learns new information, as fads change, as time goes on, the attitudes you once held with confidence may no longer exist. Did you ever look at old photos of yourself and wonder “What was I thinking wearing clothes like that? And look at my hairstyle! ” 7 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Focus groups and in-depth interviews give consumers an pportunity to discuss products and express opinions about consumption activities. Trained moderators or interviewers are often able to tap into preconscious motives that might otherwise go undetected. Sentence completion tasks (e. g. , Men who wear Old Spice are . . . ; ) or variants of the Thematic Apperception Tests (TAT), in which respondents are shown a picture and asked to tell a story surrounding it, are additional techniques that provide insight into underlying motives. Consumer motives or goals can be represented by the values they hold. Values are people’s broad life goals that symbolize a referred mode of behaving (e. g. , independent, compassionate, honest) or a preferred end-state of being (e. g. , sense of accomplishment, love and affection, social recognition). Consumers buy products that will help them achieve desired values; they see product attributes as a means to an end. Understanding the means-end perspective can help marketer’s better position the product and create more effective advertising and promotion campaigns. 2. CONSUMER INFORMATION PROCESSING: The consumer information-processing approach helps in understanding consumptive behavior by focusing on the CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II sequence of mental activities that people use in interpreting and integrating their environment. The sequence begins with human perception of external stimuli. Perception is the process of sensing, selecting, and interpreting stimuli in one’s environment. We begin to perceive an external stimulus as it comes into contact with one of our sensory receptor’s eyes, ears, nose, mouth, or skin. Perception of external stimuli influences our behavior even without our conscious knowledge that it is doing so. Marketers nd retailers understand this, and they create products and stores specifically designed to influence our behavior. Example: Fast-food chains paint their walls in “hot” colors, like red, to speed up customer turnover like KFC. Supermarkets steer entering customers directly into the produce section, where they can smell and touch the food, stimulating hunger. A hungry shopper spends more money. Restaurants services are bit delayed to stimulate hunger. ‘Close your eyes and think for a moment about the hundreds of objects, noises, and smells surrounding you at this very moment.

In order to function in this crowded environment, we choose to 9 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II perceive certain stimuli while ignoring others. This process is called selectivity. Example : Selectivity lets us focus our attention on the things that provide meaning for interpreting our environment or on the things that are relevant to us, while not wasting our limited informationprocessing resources on irrelevant items. Did you even notice that after you decide on, say, Goa, for your vacation destination, there seems to be an abundance of ads for Goa resorts, airline romotions for Goa, and articles about Goa restaurants and attractions everywhere? Coincidence? Not really. There are just as many now as there were before, only now you are selectively attending to them, whereas you previously filtered them out. Marketers continuously struggle to break through the clutter and grab consumers’ attention. Advertising and packaging is designed to grab our attention through a host of techniques, like the use of contrast in colors and sound, repetition, and contextual placement. Did you watch TV last night? You may have paid attention to any of the ads you saw during the commercial breaks; you may even have laughed out loud at a few of them. But how many can you recall today? Consumers’ ability to store, retain, and retrieve product information is critical to a brand’s success. When information is processed, it is held for a very brief time (less than one minute) in working, or short-term, 10 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II memory. If this information is rehearsed (mentally repeated), it is transferred to long-term memory; if not, the information is lost and forgotten (Remember the social learning theory).

Learning : DEFINITION:- According to S. P. Robbins :Learning is any relatively permanent change in behaviour that occurs as a result of experience. According to Rao : Learning is any relatively permanent change in knowledge or observable behaviour that results from practice or experience. CONCEPT: One can see changes taking place but not the learning itself. The concept is theoretical and not directly observable. Thus we can say that learning has taken place if an individual behaves, reacts, and responds as a result of experience in a manner different from the way he formerly behaved.

SOCIAL LEARNING THEORY:- it stresses on the ability of an individual to learn by observing models like parents, teaches, peers, cinema etc. It includes four Processes:1. Attention Process:- We pay attention to those things which are important for us. 11 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II 2. Retention Process: How well the individual remembers the model’s action after the model is no longer available. 3. Motor reproduction Process:- This is conversion of retention into doing. 4. Reinforcement Process: An individual is motivated to repeat the desired action.

Once transferred to long-term memory, information is encoded or arranged in a way that provides meaning to the individual. Information in long-term memory is constantly reorganized, updated, and rearranged as new information comes in, or learning takes place. Information-processing theorists represent the storage of information in long-term memory as a network consisting of nodes (word, idea, or concept) and links (relationships among them). Nodes are connected to each other depending on whether there is an association between concepts, with the length of the linkages representing the degree of the association.

Example: When Edwin Land invented the first Polaroid instant camera, knowledge structures for cameras changed to reflect the association between photography and instant output. Now, knowledge structures are changing to reflect the new I-Zone camera. 12 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II The complete network brought to mind when a product is activated is called the product schema. Knowing the set of associations that consumers retrieve from long-term memory about a particular product or category is critical to a successful marketing strategy.

For new products or services, marketers must first select the set of associations they want consumers to have. This is called positioning the product, or selecting the brand image. Example : Lays Baked Wafers paying back wafer unique positioning as a was accomplished by establishing a link between the concept “baked-low fat” and “wafer” The brand position is then translated into clever ads, reinforced on product packaging, and integrated into all promotion and communication strategies. Over time, a brand’s image can fade or become diluted. Sometimes consumers associate concepts that are not favorable to a brand.

When this occurs, marketers reposition the brand, using advertising and other marketing tools to help consumers create new links to positive association and discard links to the unfavorable ones. In the mid-1990s, Bata shoes made a comeback after decades of low sales. Introducing exciting, vibrant colors, Bata repositioned their basic comfort shoe as fashionable, youth-oriented, and 13 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II “cool. ” Strategies for successful brand extensions also depend on the brand schema. Generally speaking, a brand extension is more likely to be successful if the et of associations for the extension matches the set of associations of the core product. Would Amul brand toothpaste sell? Probably not, because the associations for Amul (sweet, candy, srikhand, Icecream,Pizza) are not the same as those for toothpaste (mint, clean, noncandy). On the other hand, a Amul brand sugared children’s cereal with colorful, fruity rings has a much better match of associations. UNDERSTANDING CONSUMERS: EXTERNAL FACTORS In addition to the internal factors, consumer behavior is also shaped to a large extent by social factors, such as culture, family relationships, and other aspects of the external environment. Question: How does awareness to external influences help marketers? ) Awareness of these influences can help marketers to identify groups of consumers who tend to think, feel, or act similarly and separate them into unique market segments. Aspects of the marketing program such as product design, advertising, and 14 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II pricing can then be tailored to meet the unique needs, values, and goals of these distinct groups. GROUP INFLUENCES ON INDIVIDUAL CONSUMER BEHAVIOR: Group influences on consumer behavior can mpact motivation, values, and individual information processing; they can come from groups to which consumers already belong or from groups to which they aspire to belong (inspirational groups). Groups can exert a variety of influences on individuals, including: (1) informational influences where the group acts as a source for expert opinions; (2) comparative influences such that the group provides opportunities to manage the individual’s self-concept with respect to the group’s identity; and, (3) normative influences, whereby the group specifies guidelines and sanctions for ppropriate or inappropriate individual behaviors. The influence of groups on consumer behavior tends to vary with a variety of group and product-related factors. For example, the more the group is perceived to be a credible, valued source of approval or disapproval to the consumer, the more likely that consumer is to conform to group values. In addition, the more frequently group members interact, and the more outwardly visible use of the product is to group and non-group members, the greater the group’s influence on individual consumption behavior. Family influences on consumer behavior.

Families have a particularly significant influence on consumer behavior. 15 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Consumption behavior often changes substantially as family status changes over time. For example, young unmarried adults, who are often focused on individual self-definition, tend to purchase products that enhance or define their self-concepts. In contrast, couples with children may be more interested in purchasing items or experiences that can be shared by all family members and, as a result, may spend less on individually oriented products.

Family membership also leads to a greater need for joint rather than individual decision making, further complicating consumer behavior at the household level. For example, the person who buys a product may not be the ultimate consumer of the product. Or perhaps the husband and wife have differing levels of involvement with certain product decisions, leading to different types of separate decision processes that must be integrated before a choice is ultimately made. (Question: what is the influences family has on purchase decision? )

Understanding the dynamics involved in joint decision making and which family members influence which types of decisions has important implications for marketers interested in directing marketing efforts to the right person. Importantly, these family dynamics and lifestyle transitions are complicated by the decline in traditional households and the accompanying rise in 16 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II nontraditional family structures, such as cohabitating couples or couples integrating families from previous marriages etc. CULTURAL AND SUB-CULTURAL INFLUENCES ON CONSUMER BEHAVIOR: Culture comprises the common eanings and socially constructed values accepted by the majority of members of a society or social group. It includes such things as shared values, beliefs, norms, and attitudes, as well as affective reactions, cognitive beliefs, and patterns of behavior. Typically, when we think of culture, we tend to think of differences among individuals from different countries or regions of the world. With the increasing globalization of the world economy, understanding differences and similarities in consumer behavior across cultures becomes increasingly meaningful, with important implications about the degree to which marketing trategies can be standardized across countries and cultures, or localized to reflect country or region-specific cultural distinctions. One important cultural difference is the degree to which the self is defined as independent from others versus interdependent with important others. Individualistic cultures, such as the United States, tend to foster an independent sense of self, with the self believed to be a set of internal attributes unique to each person. Collectivist cultures, however, such as China/India, foster an interdependent sense of self, with the self believed to be nseparable from others and the social context; person-specific attributes are less important in self-definition than are 17 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II interpersonal relations. These differences in self-definition affect a variety of consumer behaviors, including emotional reactions to advertisements, the degree to which information from others is valued when making consumption decisions, and gift-giving behavior. Questions: • How do you know when to shop? What are the triggers that initiate an awareness & search? • What are the internal & external sources of these riggers? • The idea of the information processing model seems reasonable. But, we know that we as individuals are not living in a vacuum. That is, when we are making a purchase decision, we are constantly influenced by other factors than just information, such as family, friends, cultural values, social class, or subculture. Also the physiological needs (hunger, safety etc. ) Might these also affect which brand we choose and buy? How and where do these factors play roles in the information processing model? CONSUMER DECISION MAKING PROCESSES 18 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II

Traditionally, consumer researchers have approached decision making process from a rational perspective. This dominant school of thought views consumers as being cognitive (i. e. , problemsolving) and, to some but a lesser degree, emotional (Schiffman and Kanuk 1997: Consumer Behavior; Solomon, Michael R. 1996: Consumer Behavior- Buying, Having, and Being). Such a view is reflected in the stage model of a typical buying process (often called the consumer information processing model) depicted in Figure 1. 19 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Problem Recognition Information Search Evaluation and Selection of Alternatives

Decision Implementation Post-purchase Evaluation Figure 1 The Consumer Information Processing Model Source: Adopted from Kotler (1997), Schiffman and Kanuk (1997), and Solomon (1996) In this model, the consumer passes through five stages: problem recognition, information search, evaluation and selection of alternatives, decision implementation, and post-purchase evaluation. PROBLEM RECOGNITION In this information processing model, the consumer buying process begins when the buyer recognizes a problem or need. For example, Mr. Parag may realize that his best suit doesn’t look contemporary anymore; or, Ms.

Sonia may recognize that her personal computer is not performing as well as she thought it should. These are the kinds of problem that we as consumers encounter all the time. When we found out a difference between the actual state and a desired state, a problem is recognized. 20 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II When we find a problem, we usually try to solve the problem. We, in other words, recognize the need to solve the problem. Question: HOW to solve the problem Collecting information regarding concerned problem can be the first step to it followed by choosing the best alternative.

Information Search When a consumer discovers a problem, he/she is likely to search for more information. Sonia may simply pay more attention to product information of a personal computer. She becomes more attentive to computer ads, computers purchased by her friends, and peer conversations about computers. Or, she may more actively seek information by visiting stores, talking to friends, or reading computer magazines, among others. Through gathering information, the consumer learns more about some brands that compete in the market and their features and characteristics.

Theoretically, there is a total set of brands available to Sonia, but she will become aware of only a subset of the brands (awareness set) in the market. Some of these brands may satisfy her initial buying criteria, (consideration set). such as price and processing speed As Sonia proceeds to more information search, only a few will remain as strong choice set. Question: How does the consumer process competitive brand information and evaluate the value of the brands? 21 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II There is no ‘one size fit all’ i. single, simple evaluation process applied by all consumers or by one consumer in all buying situations. EVALUATION AND SELECTION OF ALTERNATIVES One dominant view, however, is to see the evaluation process as being cognitively driven and rational. Under this view, a consumer is trying to solve the problem and ultimately satisfying his/her need. In other words, he/she will look for problem-solving benefits from the product. The consumer, then, looks for products with a certain set of attributes that deliver the benefits. Thus, the consumer sees each product as a bundle of attributes with ifferent levels of ability of delivering the problem solving benefits to satisfy his/her need. The distinctions among the need, benefits, and attributes are very important. One useful way to organize the relationships among the three is a hierarchical one . Although simplified, Figure 2 is an example of how a bundle of attributes (i. e. , a product or, in Sonia’s case personal computer) relates to the benefits and underlying needs of Sonia. 22 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Help Me Survive PGDM Pogram Underlying Needs Portability Benefits Doesn’t Break Down Economy Computation Warranty Attributes

Size Brand Reputation Price CPU Speed Software Bundle Size of Hard Drive Globe Net Ready Figure 2 Hierarchical View: Needs, Benefits, and Attributes (Example: personal computer) Thus we can say that the product attributes are relevant and important only to the extent that they lead to a certain set of benefits. Likewise, benefits are meaningful only if they can address the problem and be instrumental to satisfy the underlying need. The underlying need is often personal thus consumers differ as to their beliefs about what product benefits and attributes are more (or less) important and relevant in satisfying their needs.

Based on their personal judgment on importance of benefits and attributes, consumers develop a set of attitudes (or preferences) 23 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II toward the various brands. One may express his/her preferences of the brands in terms of ranking, probability of choice, and so forth. Question: How to select a specific item (brand) and specific outlet (where)? DECISION IMPLEMENTATION To actually implement the purchase decision, however, a consumer needs to select both specific items (brands) and specific outlets (where to buy) to resolve the problem.

There are, in fact, three ways these decisions can be made: 1) simultaneously; 2) item first, outlet second; or 3) outlet first, item second (Hawkins, Best, and Coney 1983, Implications for Marketing Strategy) Consumer Behavior: In many situations, consumers engage in a simultaneous selection process of store (Consumers may also consider non-store shopping like internet web pages, catalogues etc. ) and brands. For example, in Sonia’s personal computer case, she may select a set of brands based on both the product’s technical features (attributes) and availability of brands in the computer stores and mail-order catalogues she knows well.

It is also possible, that she decides where to buy (e. g. , electronic store in her neighborhood) and then chooses one or two brands the store carries. Once the brand and outlet have 24 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II been decided, the consumer moves on to the transaction (“buying”). POST-PURCHASE EVALUATION Post-purchase evaluation is directly relevant to the level of purchase involvement of the consumer. Purchase involvement is often referred to as “the level of concern for or interest in the purchase” Hawkins, Best, and Coney 1983, Consumer Behavior: Implications for Marketing Strategy) situation, and it determines how extensively the consumer searches information in making a purchase decision (Another type of involvement that influences the extent to which the information is processed is called product involvement. The product involvement is referred to as the importance the consumer attaches to a particular product, as opposed to the purchase situation (purchase involvement). For example, one may have a low product involvement (e. g. mustard) but have a high purchase involvement because he/she has invited important friends for a cook-out this weekend and he/she wants to make sure that he/she can impress them with a gourmet mustard (extra fine French Gourmet Mustard), not with the usual “yellow kind. ” ii) one may have a low product involvement (e. g. , toileteries) but have a high purchase involvement because he/she has invited important friends for a cook-out this weekend and he/she wants to make sure that he/she can impress them with a high standards of hygiene ( Care Mate products). 25 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II

A high level of product involvement also increases the extent to which the consumer is engaged in information search, evaluation, and post-purchase evaluation. Although purchase involvement is viewed as a continuum (from low to high), it is useful to consider two extreme cases here. Suppose one buys a certain brand of product (e. g. , Diet Pepsi) as a matter of habit (habitual purchase). For him/her, buying a cola drink is a very low purchase involvement situation, and he/she is not likely to search and evaluate product information extensively. In such a case, the consumer would simply purchase, consume and/or ispose of the product with very limited post-purchase evaluation, and generally maintain a high level of repeat purchase motivation (Figure 3). Purchase Product Use Figure 3 Disposition Simple Evaluation Repeat Purchase Motivation Low Involvement Purchase Source: Hawkins, Best, and Coney (1983) However, if the purchase involvement is high and the consumer is involved in extensive purchase decision making (e. g. , personal computer), he/she is more likely to be involved in more elaborate post-purchase evaluation – often by questioning the rightness of the decision: “Did I make the right choice?

Should I have gone 26 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II with other brand? ” This is a common reaction after making a difficult, complex, relatively permanent decision. This type of doubt and anxiety is referred to as post-purchase cognitive dissonance (Figure 4). Post-purchase Dissonance Purchase Product Use Dissatisfaction Disposition Elaborate Evaluation Figure 4 Elaborate Model of Post-purchase Evaluation Source: Adopted from Hawkins, Best, and Coney (1983) According to the research, the likelihood of experiencing this kind of dissonance and the magnitude of it is a function of: The degree of commitment or irrevocability of the decision, ? The importance of the decision to the consumer, ? The difficulty of choosing among the alternatives, and ? The individual’s tendency to experience anxiety. Because dissonance is uncomfortable, the consumer may use one or more of the following approaches to reduce it: ? Increase the desirability of the brand purchased. ? Decrease the desirability of rejected alternatives. ? Decrease the importance of the purchase decision. ? Reject the negative data on the brand purchased. 27 Repeat Purchase Motivation CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II

If the dissonance about the purchase is not reduced, the anxiety may transform into dissatisfaction (general or specific). Certainly, this negative experience leads to new problem recognition (Figure 1), and the consumer will engage in another problem solving process. The difference, however, is that in the next round of process, memory (learning) of the previous negative experience and dissatisfaction will be used as part of information. Therefore, the probability for the unsatisfactory brand to be re-selected and repurchased will be significantly lower than before. Assignment: What would be some of the practical mplications of the information processing model for a marketing manager who is trying to market, say mountain bikes? If he/she knows about the information processing model, what could he/she do differently in, for example, the new product introduction? 28 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Complete model of consumer behavior Start Need recognition Internal search Search Exposure Stimuli (marketer dominated, other) Attention Comprehension Alternative evaluation Influences • culture • social class • family • situation Memory Acceptance Purchase Retention Outcomes Individual differences • resources • motivation & involvement knowledge • attitudes • personality, values, lifestyle External search Dissatisfaction Satisfaction Models of Consumer Behavior The consumer models refer to varying orientations and perspectives with which consumers approach the marketplace and how/why they behave as they do. They refer to how the varying orientations impact the buying decision process and overall buyer behavior. Models of Consumer Decision Making : 1. Economic model: Economic model of consumer behaviour is one-dimensional. This means that buying decisions of a person are governed by the concept of utility. Being a rational man he will make his purchase decisions ith the intention of maximizing the utility/ benefits. Economic model is based on certain predictions of buying behaviour (a) price effect: lesser the price of the product, more will be the quantity purchased (price effect) 29 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II (b) substitution effect: Lesser the price of the substitute product, lesser will be the quantity of the original product bought (substitution effect) (c) income effect : More the purchasing power, more will be the quantity purchased (income effect). 2. Learning model: Classical psychologists have been interested in the formation and satisfaction of needs and astes. They argued that living beings were influenced by both innate needs such as the primary needs of hunger, thirst, shelter physical and learned needs like fear & guilt. A drive or internal stimulus which when directed towards a drivereducing object becomes a motive. The various products or service will act as a stimulus to satisfy drives. For example, if you are a hungry you will be driven towards food, which after consumption will reduce the drive and provide satisfaction. 3. Psychoanalytical model: This model is based on the work of psychologists who were concerned with personality.

They were of the view that human needs and motives operated at the conscious as well as subconscious levels. Sigmund Freud developed this theory. According to him human behaviour or personality for that matter is the outcome of three components: (a) ‘id’ which is the source of all psychic energy which drives us as action (b)’super ego’ which is the internal representation of what is approved by the society (c) ‘ego’ which is the conscious directing ‘id’ impulses to find gratification in a socially acceptable manner. Thus we can say that human behaviour is directed by a complex set of deep-seated motives.

This means that buyers will be influenced by symbolic factors in buying a product. Motivational research has been involved in investing motives of consumer behaviour so as to develop suitable marketing implications accordingly. Marketers have been using this approach to generate ideas . 30 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Further the models of Consumer Behavior are classified as (a) General models (b) Specific models. General Models includes: · Black Box model Comprehensive /Specific models · Engel, Blackwell and Miniard Model · Engel, Kollat and Blackwell Model · Howard-Sheth Model and Nicosia Model BLACK BOX MODEL Black box models focus solely on inputs and outputs and do not consider internal variables. They suggest that a given stimulus will prompt a particular response, within this processing centre; memory, goals and expectations are considered. Simple black box models are based on identifiable observable and measurable variables, however they are unable to predict or explain behaviour. It was revised environment is added to it further an environment box is drawn recognizing that consumers are a part of the environment, interacting with environmental factors and influencing each other.

This revised model locates the decisionmaking process within the environment box. 31 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Black Box Model : The model recognize individual as part of the model. Limitation: Firstly, the “box-and-arrow” approach is rather descriptive. It tells us the decision-making stages the customer negotiates, but tells us very little about how the marketer can actually influence these stages to make his or her product/service the preferred option. Nicosia’s model of Consumer Decision Process (1966): Introduction : The model proposed by Francesco Nicosia in he 1970s, was one of the first models of consumer behavior to explain the complex decision process that consumers engage in during purchase of new products. Instead of following a traditional approach where the focus lay on the act of purchase, Nicosia tried to explain the dynamics involved in decision making. Presenting his model as a flowchart, he illustrated the decision making steps that the consumers adopt before buying goods or services Focus: consumer decision making was presented as a series of decisions, which follow one another. 32 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II i) The various components of the model are seen as interacting with each other, with none being essentially dependent or independent; they are all connected through direct loops as well as feedback loops. Thus, the model describes a flow of influences where each component acts as an input to the next. iii)The consumer decision process focuses on the relationship between the marketing organization and its consumers; the marketing organization through its marketing program affects its customers; the customers through their response to the marketer’s action, affects the subsequent decisions of the marketer; the cycle continues.

Model : Four basic components Field 1 : Includes two sub fields –a) Firms Attributes, b) Consumers Attributes. The first field ranges from the marketer (source of message) to the consumer (attitude); Field 2 : The second from the search for to the evaluation of means/end(s) relation(s) which forms the pre-action field; Field 3 : The third field relates to the consumer’s motivated act of purchase; and Field 4 : The fourth discuses consumer’s use or storage of product including his/her feedback. The output from one field acts as the input for the next. These are explained as follows:

Field 1: Includes two sub fields –a) Firms Attributes, b) Consumers Attributes. Marketer’s communication affecting consumers’ attitude i. e. “from the source of a message to the consumers’ attitude”. The consumer is exposed to the firm’s attributes through the marketing communication; this marketing communication could take place impersonally via mass media (TV, newspaper, websites, etc) as well as personally. The information could 33 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II relate to the firm attributes as well as the product, price and distribution.

This message relating to the firm’s attributes affects the consumers’ perception, predisposition and attitude toward the firm and its offering. Of course, the impact on perception and attitude is also dependent upon the consumer’s personal characteristics, values, experiences, culture, social influences etc. Thus, the marketer’s communication affects the consumers’ attitude. Field 2 – Consumer’s search and evaluation: After an attitude is formed, the consumer moves to Field 2 of the model, i. e. the consumer’s search for and evaluation of means/end(s) relation(s) which forms the preaction field.

The consumer searches for information about the product category and the varying alternatives, and thereafter evaluates the various brands on criteria like attributes, benefits, features etc. These criteria could be based on his learning and past experiences as well as the marketer’s inputs. This step creates a motive in the mind of the consumer to purchase the product. Field 3- Purchase action: The motivated state leads to Field 3 of the model, i. e. the decision making on the part of the consumer and the act of purchase. The consumer finally gets into action and buys the product from a chosen retailer.

Field -4: Consumption experience and feedback: The purchase action leads a consumer to Field 4 of the model which is consumption experience and feedback. After purchasing the product, and the resultant consumption, the consumer may have two kinds of experiences. A positive experience in terms of customer satisfaction may reinforce his predisposition with the product/brand and make him loyal 34 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II towards it. A negative experience on the other hand, implying consumer dissatisfaction would affect his attitude negatively, lower down evaluations about the product/brand nd even block his future purchases. This Filed provides feedback to the marketer, who can modify its mix accordingly. In the first field, the marketer communicates with the customer and promotes an unfamiliar product to him; depending upon the existing predispositions and his evaluation, the consumer develops an attitude. In the second field, the consumer searches for information and evaluates it based on his attitudes; thereafter, he develops a motivation to act. In the third field, he makes and purchase and in the fourth field, he would provide feedback and also memorize his experience and learning for future use.

Thus, the firm communicates with consumers through its marketing messages and the consumers react through an act of purchase. Both the firm and the consumer influence each other. 35 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Figure: Nicosia Model of Consumer Decision Proceses Conclusions: The firm communicates with consumers through its marketing messages (advertising) and consumers communicate with the firm by their purchase responses. Therefore the model is interactive in design as the firm tries to influence consumers and the consumers by their action influence the firm.

The model suggests that the positive response of subfield 2 results in positive attitude towards the product. Strength :The flowcharting approach proposed by Nicosia, simplifies and systemizes the variables that affect consumer decision making. ? It contributes to the step by step “funnel approach” which views consumers’ movement from general product knowledge toward specific brand knowledge and from a passive position to an active state which is motivated toward a particular brand. Limitation : the model proposes assumptions, boundaries and constraints that need not be realistic. It has been argued that attitude, motivation and experience may not occur in the same sequence. ? Variables in the model have not been clearly defined. ? Factors internal to the consumer have not been defined and dealt with completely. ? The mathematical testing of the model and its validity are questionable. What is- ID, EGO, SUPEREGO? Human personality consist of three interacting systems – ID Basic psychological needs like thirst, hunger etc. for which an Individual seeks immediate satisfaction. It can be illogical. SUPER EGO It is person’s conscience.

It is individual expression of society’s moral and ethical codes of conduct. EGO Individual conscious control and functions as internal monitor. 36 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Rules, values and norms imposed by society includes moral & social conscience Primary needs or drives Interest of individual ID EGO Unconscious mind Motivation HUMAN BEHAVIOR FIGURE: PERSONALITY-ID, EGO, SUPEREGO AND HUMAN BEHAVIOR 37 SUPEREGO CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II ENGEL-KOLLAT-BLACKWELL MODEL Introduction: They first proposed it in 1968 , revised in 1990 as Engel, Blackwell and Miniard Model.

Focus: This model takes the process of purchasing as a problem solving or decision making exercise, here the assumption is made that the consumer has a problem which is solved by the purchase of an appropriate product. Model: for organizing the fast growing body of knowledge concerning consumer behavior a) Stimulus inputs, b) Information processing, c) Decision process, and d) Variables influencing the decision process 38 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Model: The model includes: i)Information processing: this component comprises the consumer’s selective exposure, attention, comprehension nd retention of stimuli relating to a product or brand received from marketing and non-marketing sources. As a marketer, the first step is to ensure that a consumer is exposed to your message or stimuli, pays attention to it, understands what it is all about and also remembers it. ii) Central Control Unit: The stimuli thus received and retained are processed in the central control unit. The stimuli is processed and interpreted with the help of four 39 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II psychological filter: a. Stored information and past experience about the product/brand which serves as a memory for omparing different alternatives; b. Evaluative criteria which the consumer uses in judging the alternatives; c. General and specific attitudes which influence the purchase decision; d. Basic personality traits, which influence how the consumer is likely to respond to various alternatives. iii)Decision Making Process: this model talk of consumer behaviour as a decision making process in the form of 5 steps or activities. The five steps are as under: 1. Problem recognition: the consumer will recognize a difference between his or her actual state and what the ideal state should be. ) Information stored in the memory ii) Individual differences and environmental influences. 2. Information search: Initially the information available with the consumer may be consistent to other beliefs and attitudes held by him or her. i) The external search is dominated by marketing communications usually taken up in high investment purchases. ii) This stage is affected by individual differences and environmental factors. 3. Alternative evaluation: Now the individual will evaluate the alternate brands. The methods used for evaluating the various products will depend on the consumer’s underlying oals, motives and personality. 4. Choice/Purchase: the consumer’s choice will depend on his or her intention , attitude and the extent to which he is influenced by other people like friends, familymembers etc. 5. Outcome: The outcome may either be positive (satisfaction) or negative (dissatisfaction). If the purchase decision is such that it requires extensive problem solving, the consumer would go through all the above five stages. In case of limited problem solving or routinised response behaviour, some of the intervening stages may be skipped and the consumer may directly reach the purchase ecision. iv) Environmental Influences: The environmental factors 40 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II that may influence the consumer’s purchase decision are income, culture, family, social class and physical situations. Depending on the specific product under consideration, these factors may have a favorable or unfavorable influence on the purchase decision. Conclusions :Strength of model Deals with low-involvement situations. It is suggested that in low involvement situation the degree to which the various stages in the model are undertaken decreases Easy to understand

Deals with various theories of consumer behavior like learning, information processing , decision making , motivation ,attitude change etc Model also considers various variables influencing consumer’s behavior. Limitations /Problemscharacteristics how could they be applied or measured in relation to predicting buyer behaviour Plausible way but not specified in any operational detail Similarity with Howard Sheth model – both the model recognizes two different modes of operations by consumer like Extensive Problem Solving and Limited Problem Solving . THE HOWARD SHETH MODEL OF BUYER BEHAVIOR (1969):

Introduction: It is proposed by John Howard and Jagdish Sheth in their work, “The theory of buyer behavior” Focus: effort to develop a unified theory for understanding the variety of behaviors. Logic of Model: They used the term buying behavior and not consumer behavior as the industrial buyers and consumers are similar in most aspects. While the model was proposed in the 1960s, for industrial buying, the term “buyer” is used to connote both industrial consumers and personal consumers. b) Through the model, Howard and Sheth, tried to explain buyer rationality while making purchase decisions even in conditions of 41

CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II incomplete information. c) It explains brand choice behavior over time as learning takes place. d) It explains the buying decision process that a buyer undergoes, and the factors that affect his choice decision towards a brand. 42 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Model : 1. Model differentiated between three levels of decision making or learning – Extensive Problem Solving (EPS), Limited Problem Solving (LPS) and Routinzed Response Behavior (RPS); the model focuses on repeat buying/purchase. Extensive Problem Solving (EPS) : Consumers Knowledge nd belief about brands are very limited or nonexistent thus high level of perceived risk. ii) no specific brand preference. iii) high level of involvement. iv) consumers actively seek information concerning number of alternative brands Limited Problem Solving (LPS) : Consumers Knowledge and belief about brands are partially established. ii) low level of perceived risk. iii) not fully able to assess brand differences in order to arrive at a preference. iv) no real loyality with product. v) consumer operating under low level of involvement. Routinzed Response Behavior (RPS): Consumers

Knowledge and belief about the brands and its alternatives are fully and well established and the consumer is predisposed to the purchase of one particular brand. 1. The model has four major components or sets of variables a) Stimulus inputs (input variables), b) Perceptual & Learning 43 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II constructs / hypothetical constructs, c) response outputs (output variables), and, d) exogenous variables (external variables). a) Stimulus inputs (Input variables): The input variables refer to the stimuli /information sources in the consumer’s environment for example – these information cues could elate to quality, price, distinctiveness, service and availability. The three types of stimuli provide inputs concerning the product/brand to a consumer. 1. Significative Stimuli- it deals essentially with the brand characteristics 2. Symbolic Stimuli – it is figurative (verbal and visual product characteristics) and perceptual . It depends on how the offering has been positioned; it emanates from advertising and promotion efforts. (both these stimuli are commercial and can be controlled by the marketer) 3. Social Environment- non-commercial and uncontrollable by the marketer. This is the information about the product or service ffering that comes from the social environment like family, groups, society and culture at large. b) Perceptual & L earning or Hypothetical constructs: Howard and Sheth classified the hypothetical constructs into two major groups, viz. , 44 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II perceptual constructs and learning constructs. ii) These constitute the central part of the model and deal with the psychological variables which operate when the consumer is undergoing the decision making process. Perceptual constructs: The perceptual constructs deal with how a consumer obtains and processes information eceived from the input variables. Once the buyer is exposed to any information, there is an attention; this attention towards the stimuli depends on the buyers’ sensitivity to information in terms of his urge and receptivity towards such information. Not all information would be processed and the intake of information is subject to perceived uncertainty and lack of meaningfulness of information; this is referred to as stimulus ambiguity. This reflects the degree to which the buyer regulates the stimulus information flow. Stimulus ambiguity occurs when a consumer does not understand the message from the nvironment; it could trigger off a need for a specific and active search for information and thus lead to an overt search for information. The information that is gathered and processed may suffer from perceptual bias if the consumer distorts the information received so as to fit his/her established needs/beliefs/values/experiences etc. Learning constructs: The learning constructs relate to buyer learning, formation of attitudes and opinions, and the final decision. The learning constructs are seven in number, and range from a buyer’s motive for a purchase to the final satisfaction from a purchase; the interplay of hese constructs ultimately leads to a response output or a purchase. The motives 45 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II refer to the goals that a buyer seeks to achieve through a purchase and the corresponding urge towards action or the purchase activity. The brand comprehension is the knowledge and information that the buyer has about the various brands in his evoked set. The buyer forms an order of preference for the various brands; this order of preference is based on the choice criteria (decision mediators). The decision mediators are the evaluative criteria and the application of ecisions rules by the buyer to the various purchase alternatives. Based on the choice criteria, the attitudes are formed for the varying brands. The attitudes reflect the predisposition of the buyer; preference toward alternative brands; and, feelings of like/dislike towards the offerings. The brand potential of the evoked set determines the buyer’s perception and confidence level of the brands that he is considering to purchase. The purchase intention is a cumulative outcome of the interaction of buyer motives, choice criteria, brand comprehension, resultant brand attitude and the confidence associated with he purchase. Satisfaction, another learning construct, involves the post purchase evaluation (whether expectation from an 46 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II offering matches the performance) and resultant impact (positive/n egative) on brand comprehension. c) Response outputs (output variables): The output variables refer to the buyer’s action or response to stimulus inputs. It comprise five constituents- attention, comprehension, attitude, intention and purchase. i) Attention refers to the degree or level of information that a buyer accepts when exposed to a stimulus.

It reflects the magnitude of the buyer’s information intake. ii) Comprehension is the amount of information that he actually processes and stores; here, it refers to brand comprehension which is buyers’ knowledge about the product/service category and brand. iii) The attitude is the composite of cognition, affect and behavior towards the offering; the attitude reflects his evaluation of the brand and the like/dislike based on the brand potential. iv) Intention refers to the buyer’s intention to buy or not to buy a particular offering. v) Purchase behavior refers to the actual act of buying. The purchase behavior is a umulative result of the other four constituents. 47 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II d) Exogenous / External / Inhibitors/ Environmental variables: The exogenous variables influence some or all of the constructs explained above, and thereby impact the final output variables. These are explained as Inhibitors or environmental forces that restrain the purchase of a favored brand; eg. , importance of the purchase, price, financial status of the buyer, time at the disposal of the buyer, personality traits, social pressures etc. Working relationships between Constructs and the Model:

The process starts when the buyer is exposed to a stimulus. As a result of the exposure, stimulus ambiguity occurs, which leads to an overt search for information. The information search and the conclusions drawn would be filtered by perceptual bias (that would be a result of attitude, confidence, search and motives). It may alter the existing patterns of motives and choice criteria, thereby leading to a change in the attitude towards the brand, brand comprehension, motives, purchase intention and/or action. The final purchase decision is based on the interaction between brand comprehension, strength of attitudes owards the brand, confidence in the purchase decision and purchase intention. The actual purchase is influenced by the buyer’s intentions and various exogenous variables like the importance of purchase, price, time available to make the purchase, social and cultural influences etc. After the purchase, the buyer experiences satisfaction if the performance matches and exceeds expectation; this satisfaction would strengthen brand comprehension, reinforce the confidence associated with the buying situations, and strengthen the intention to 48 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II epeat purchase of the brand. With a satisfying purchase decision, the buyer learns about buying in similar situations and the behavior tends to get routinized. The purchase feedback thus influences the consumers’ attitudes and intention. Conclusions: It highlights the importance of inputs to the consumer buying process. i) It was one of the first models to divulge as to what constitutes loyalty towards a specific product. ii) It helped gain insights in to the processes as to how consumers’ process information. iii) The model is user friendly Limitation: The various constructs cannot be ealistically tested; some of the constructs are inadequately defined, and thus do not lend to reliable measurements. TEST: Section A True/false: 1. Originally the Howard and Sheth Model was proposed for industrial buying. True 2. The flowcharting approach proposed by Nicosia, complicates the process that affects consumer decision making. False Section B Fill up the blanks: 1. The Howard Sheth model has four major components, viz. , stimulus inputs, __Hypothetical construct__, response outputs and exogenous variables. 2. _____Nicosia__________ presented his model in the form of a flow-chart. 49

CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II Section C Multiple choice questions: 1. According to Howard and Sheth, the response outputs comprise five constituents, which could be arranged in a hierarchy. Which of the following is the right hierarchical sequence? a) attention, comprehension, attitude, intention and purchase. (correct option) b) attention, attitude, comprehension, intention and purchase. c) attention, intention, comprehension, attitude, and purchase. d) attention, intention, comprehension, purchase and attitude. Section D Short answers: 1. Howard and Sheth classified the hypothetical onstructs into two major groups. Mention them. Ans Perceptual constructs & Learning constructs. 2. Mention the various components of Nicosia’s model. Ans. Marketer’s communication affecting consumer’s attitude; Consumer’s search and evaluation, Purchase action, Consumption experience and feedback. CBMC UNIT 2 SUMMARY Individual determinants of consumer behavior ? ? ? ? ? Motivation, Personality and Self Concept, Consumer Perception, Consumer Learning, Consumer Attitude Motivation ? Driving force within individuals that impels them to action. 50 CONSUMER BEHAVIOR AND MARKETING COMMUNICATION UNIT-II

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