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UNIT 1: LESSON 1
CONSUMER BEHAVIOR
1. Introduction
2. What is Consumer Behavior?
3. Consumer behavior rooted in Marketing concept
4. Scope of consumer behavior
5. Consumer behavior is interdisciplinary
6. Why study consumer behavior?
7. How to study consumer behavior?
8. Importance of consumer behavior
9. Types of consumers
10. Role theory
11. Changing profile of Indian consumer
12. Review questions
13. Further readings
1. Introduction
Diversity and multiculturalism accounts for large differences in consumption behavior.
Consumers differ not only demographically but in their activities and interests too. With all this
diversity around, the marketer has to understand the consumer buying behavior through
systematic consumer research. This activity helps the marketer understand the nature of
differences between consumers and how he can segment the market.

2. What is consumer behavior?
Consumer behavior refers to the actions and decision processes of people who purchase
goods and services for personal consumption. Engel, Blackwell and Miniard.
It is the behavior that consumers display in searching for, purchasing, using, evaluating
and disposing of products and services that they expect will satisfy their needs.-
Schiffman and Kanuk.
Consumer behavior is defined as activities people undertake when obtaining, consuming
and disposing of products and services. As seen from the definition, the activities
involved are:
Obtaining- it refers to the activities leading up to and including the purchase or
receipt of a product. Thus it involves activities such as information search for
alternative product options, evaluating those alternatives and actual purchase of
products of particular brands. Example- we have a need for storing data
electronically. We have options of a personal computer or a personal notebook.
We need to evaluate these alternatives on certain parameters such as
dependability, mobility etc. After selecting an option we decide on the particular
brand of the data storage device.
Consuming- refers to how, where, when and under what circumstances
consumers use products.
Disposing- how consumers get rid off the product. This helps marketers design
their product replacement strategies.
Thus, consumer behavior is a rapidly growing discipline that represents a complex and multi-
dimensional process which reflects the totality of consumers decisions with respect to
acquisition, consumption and disposal activities given the various constraints of time, effort and
money. There are two sides of consumer behavior. The final purchase stage which is visible and
the intermediate decision stages that are invisible. Recently, marketers have started considering
Consumption analysis which gives a holistic picture of consumers consumption behavior
wherein the whys and hows of consumption are also studied along with whys and hows of
purchase.
3. Consumer behavior rooted in Marketing concept
Consumer behavior is rooted in the Marketing concept of 1950s wherein marketers realized the
importance of studying consumer needs and delivering products conforming to them for
consumer satisfaction. Consumer needs and wants became the primary focus of Marketing and
hence the importance of studying their behavior emerged. This was in sharp contrast to the
Selling concept that focused on the needs of the seller alone.
4. Scope of consumer behavior
Consumer behavior as a study focuses on understanding various aspects of consumer buying
decision process given their resources (time, effort and money) to be spent on consumption
related items. It includes:
What they buy?
Why they buy?
When they buy?
Where they buy it from?
How often they buy it?
How often they use it?
How they dispose their products?
Example- On studying the consumption behavior of Mr. Sikka with respect to a Close up
toothpaste it is found: what they buy? (Close up toothpaste gel based); why they buy?
(Freshness is the motive); when they buy? (Beginning of every month); where they buy it
from? (Big bazaar retail store); how often they buy it? (5 Family size packets in the beginning
of the month); how often they use it? (Thrice a day) and how they dispose their products?
(After consumption throw it away).
5. Consumer behavior is interdisciplinary
Consumer behavior has interdisciplinary roots. In that it draws heavily from other disciplines.
Those other disciplines are:
Psychology- it is concerned with the study of the individual. It includes studying various
aspects of an individual namely- Motivation, Perception, Attitudes, Personality and
Learning. All these factors are critical to the study of consumption behavior and product
choices.
Sociology- it is concerned with the study of groups. It studies the influence of Group
memberships, Family and Social class on consumer decision making process. It is
important to study the group behavior and the extent of influence that it has on the
consumption behavior of the consumer because at times the acts of consumer as an
individual and as a member of a group may differ.
Social psychology- it as a combination of Sociology and Psychology, studies how an
individual operates in the group. It studies the relevance and importance of reference
groups and opinion leaders.
Anthropology- it studies the influence of society on an individual. It is concerned with
the development of attitudes, values and belief system.
Economics- which is the basis for this marketing discipline and provides rationality to
purchase decisions.
6. Why study consumer behavior?
It helps in determining consumers increasing influence- consumer is said to be the king.
Knowing what this king wants is the primary focus of marketing and delivering it so as to
provide the best perceived value to the consumer is the prime job of any marketer.
It helps in educating consumers about why they buy. It gives them knowledge of their
buying process and makes them more aware and conscious. It also helps consumers
understand policies relating to consumer protection and their rights and duties as a
consumer.
Consumer behavior as a discipline has evolved from the era of Manufacturing, to
Selling and finally to Marketing which focuses primarily on consumer needs.
Understanding and adapting to consumer needs and behavior is an absolute necessity.
Todays consumer is global. He is different yet the marketer has to find similarities
between these differences so as to segment the consumers and position their product
offerings well.
7. How to study consumer behavior?
Consumer behavior is an applied science. To understand consumer behavior, one needs to know
what is going on in the mind of the consumer. There are certain methods of studying consumer
behavior. These are:
Observational methods it consists primarily of observing consumer behaviors
in different situations. Example- the marketer can study the actual purchase
behavior with respect to FMCG goods in a retail setting.
Interviews and surveys- surveys can be by mail, telephone and internet or in
person. Example- the marketer can study the purchase behavior of the consumer
by way of administering a questionnaire to him.

Experimentation- it attempts to understand cause and affect relationships by
carefully manipulating independent variables to determine the effect of changes
on dependent variables. Example- the marketer can study the consumption
behavior of the consumer by monitoring the effect of changing prices
(independent variable) on the quantity demanded (dependent variable) of the
product in an artificial setting.
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8. Importance of consumer behavior
There is a need to study consumer behavior because of the complex business
environment. The business environment is experiencing intense competition with more
aggressive competitors setting their base.
With increasing competition and innovation, there is a need to differentiate. This
requires an in depth understanding the consumer needs and decision making process.
Also, there is a need of continuously studying consumer behavior because it is dynamic;
involves interactions of thinking, feelings and actions; and involves exchanges between
human beings.
9. Types of consumers. There are two types of consumers. These are:
Personal consumer- is the one who buys goods and services for his own use (E.g. a
personal electronic notebook), for the use of the household (E.g. a VCD player), or as a
gift for a friend (E.g. Music CDs). In all these cases, the products are bought for final
use by individuals who are end users.
Organizational consumer- it includes profit and non-profit businesses, Government
agencies and Institutions that buy products, equipments and services in order to run their
organizations. Example- construction equipments bought by Government for
infrastructural development.
10. Role theory - A person belongs to many groupsfamily, clubs, and organizations. The
persons position in each group can be defined in terms of both role and status.
A Role consists of the activities people are expected to perform according to the
persons around them.
Each role carries a Status reflecting the general esteem given to it by society.
People usually choose products appropriate to their roles and status.
In all cases buyers are not necessarily the users of the product or service. Whenever consumer
behavior occurs in the context of a multi-person household, several different tasks or roles may be
performed in acquiring and consuming the product or service. Roles people play in the decision-
making process:
Initiator: The person who first determines that some need or want is
unfulfilled and suggests or thinks of the idea of buying a particular product or
service to satisfy the same.
Gatekeeper: he is the one who influences the familys processing of
information. He is an expert at acquiring and evaluating information.
Influencer: A person by using intentional or unintentional words or action
influences the buying decision of the product.
Decider: The individual with the power and/or financial authority to make
the ultimate choice regarding which product or service to buy
Buyer: The person who concludes/ actually makes the purchase transaction
User: The person (or persons) who actually uses the product or service and
thus is the one most directly involved in the consumption activity

Example- in purchasing a toy for the child, the child is the user; mother can be the initiator; father
can be the gatekeeper and buyer; whereas the child can influence the choice and the decider too.
Different members can perform each of these roles either singly or collectively. The criteria they
use to evaluate products or services in one of the roles may be quite different from those used in
another role.
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11. Changing profile of Indian consumer
Indian market is abundant with consumer business opportunity. India is a market of over one
billion consumers who are growing at 2% per annum. It is home to 1.8 billion households with a
family size of average 5.7 persons per family. Just at around 60 years of post independence, India
is a rich country with growing opportunity. The Indian consumers profile is undergoing a change
because of following reasons:
Increasingly affluent, with bulging middle class: NCAERs study on The great Indian
middle class shows that the top of the pyramid is growing at the much faster rate, even
as the growth at the bottom of the pyramid is slowing down. Post the liberalization of
Indian economy, the income profiles of Indians are going rapid shift. More and more
households are shifting to Middle and Higher Income Groups, thereby increasing the
affordability and affluence levels.
Income Group Range (Rs.) 1994 2001 2006

Low Upto Rs. 22,500 86 59 40
Lower Middle 22,501 45,000 45 72 79
Middle 45,001 70,000 18 24 37
Upper Middle 70,001 96,000 7 14 21
High Above 96,000 5 12 23
Total 161 181 200
Source: Statistical Outline of India 2001 -2002
The youngest population in the world: India has the distinctive advantage of having
youngest age profile. More than half of Indians are below the age of 25 years. There are
lot of young people in different income segments and locations. The young India is
redefining value perceptions almost concurrently upgrading its aspirations and spending
levels on product categories such as consumer durables, telecommunications, home,
education, personal transportation, and leisure while downgrading (in terms of spending
levels) on food and grocery, clothing, and jewellery. The young India is redefining its
relationship with brands -- adopting new ones while discarding traditional ones.
Increasing literacy levels: India is witnessing sharp improvement in literacy levels. In
1981, approximately 44% of Indians were literate while in 2001, the literacy ratio
improved significantly to 65%. The focus is also shifting on enhancing womens literacy
which has improved to 54 % in 2001 as against 30% in 1981.
Higher adaptability to technology: Among durable goods, high-tech luxury items are
increasingly in demand. The number of Indians who own or use mobile phones, for
example, has grown 1,600%not surprising in a country that is adding more than 3
million subscribers a month. The number of people who own or use computers or laptops
is up 100%, albeit from a very small base. Ownership of music systems and televisions is
also on the rise.
Urbanization is a continuing trend: More than a quarter of Indian population resides in
urban areas. The growth rate of urban population is 3.2 % per annum.
Increased awareness levels: Indian media and entertainment industry is undergoing
unprecedented times. The media reach is rapidly growing, with around 80% media
penetration in urban centers and 40% penetration in rural centers.
Increasing "consumption" mindset in India: Indians are often stereotyped as deeply
spiritual people who reject materialistic values. But, now Indians are more motivated than
ever by personal ambition and a desire for material success, and they put in the hours it
takes to achieve those goals. Indians have developed a mindset towards consumption
rather than saving. Although long-term plans remain a high priority, lifes pleasures in
the here and now have gained importance over the past decade. Indians desire to set
money aside for electronics and durables has grown so dramatically that it has nearly
caught up with their desire to save for their childrens education. Travel and
entertainment have also gained ground.
Consumers everywhere- for any business to succeed, it requires a minimum number of
consumers to cater to. In this context, India has an abundance of consumers everywhere,
rich or poor. There is market to sell luxury goods as well as goods that are value for
money.
Changing family profiles: Indians are becoming more mobile with respect to work
places. Consequently, more and more Indians are shifting places to newer locations. This
is facilitating the growth of nuclear families as opposed to traditional family structure of
joint family staying together. Children are getting more say in consumer decision making
process.
Retail revolution: The young India is redefining the shopping high street, giving
resounding acceptance to new generation formats such as malls having integrated
shopping/entertainment/eating, as and where such options make their presence. With over
600 new shopping malls likely to make their debut in the next five to six years, the entire
consumer shopping behavior across the country would undergo a very dramatic change.
___________________________________________________________________________
Explain Consumer behavior and its scope.
Why do we need to study Consumer behavior and how can we do so?
Explain the Role theory with the help of an example.
In what ways is the Indian consumer changing? What should the marketers do in
order to take an advantage of such a changing profile of an Indian consumer?
______________________________________________________________________________
Schiffman, L.G. and L. L. Kanuk, Consumer Behavior, Prentice-Hall International, Inc.,
Seventh edition, 2000
Engel, J. F., Roser D. Blackwell and Paul W. Miniard, Consumer Behavior, Dryden
Press, Chicago, 1990
Assael, H., Consumer Behavior and Marketing Action; South Western Publishing Co.,
Ohio, 1995.
Peter, J.Paul ,and jerry C.Olsen, Consumer Behavior and Marketing Strategy , Richard
D.Irwin, lllinois, 1993.
Hawkins Del l.,Roger J.Best, Kenneth A. Coney, Consumer Behavior Implication for
Marketing Strategy, Irwin, Chicago;1985.

Engel James F.David T. Kolat and Roger D.Blackwell, Consumer Behavior ,Holt,
Rinehart and Winston, New York
Kotler Philip, Marketing Management, Eleventh edition, Prenhall Inc., 2003
___________________________________________________________________________
UNIT 1: LESSON 2
CONSUMER BUYING PROCESS AND ITS DETERMINANTS
1. Four views of Consumer decision making
2. Consumer Buying Process
3. Use of consumer decision rules in product/ brand evaluations
4. Types based on involvement
5. Influences on buying behavior
6. Review questions
7. Further readings
1. Four views of Consumer decision making-the views as to why (how) individuals behave as
they do are:
Economic view-the consumer is considered to be a rational being who is aware
of all the available product alternatives, is capable of properly evaluating each
one of them and identifying the one best alternative given time, cost and efforts
constraints. It does not appear to be a practical view because in reality people are
limited by their skills, values and knowledge.
Passive view-it depicts the consumer as basically submissive to the self-serving
interests and promotional efforts of marketers. But in reality, consumers play an
equal role in many buying situations sometimes by seeking information about
product alternatives and then making a selection on the basis of evaluating them.
Cognitive view-it depicts consumers as a thinking problem solver. They are
viewed as either receptive to or actively searching for products and services that
fulfill their needs. The focus is on the processes by which the consumers seek
and evaluate information about selected brands and retail outlets.
Emotional view- it explains the consumer purchase decision making process to
be deeply rooted in emotions and possessions. When a consumer makes an
emotional purchase decision, less emphasis is placed on the search for pre
purchase information. Instead, more emphasis is placed on mood and feelings.
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2. Consumer Buying Process
Consumer decision process is a road map of consumer's minds that marketers and managers can
use to help guide product mix, communication and sales strategies (Engel, Kollat & Blackwell):
Buyer behavior is the decision making process and acts of individuals or organizations involved
in buying and using products or services. Consumer decision making comes about as an attempt
to solve consumer problems. A problem refers to "a discrepancy between a desired state and an
ideal state which is sufficient to arouse and activate a decision process." Thus, problems can be
major (e.g., a consumer has been fired and is without a job) or minor (e.g., the consumer lacks an
eraser necessary to take an exam the next day), and the broader and more ambiguous a problem
is, the more potential solutions are generally available. The actions a person takes in purchasing
and using products and services includes the mental and social processes that precede and follow
these actions. A firm needs to analyze buying behavior for:
Buyers reactions to a firms marketing strategy has a great impact on the firms success.
The marketing concept stresses that a firm should create a Marketing Mix (MM) that
satisfies (gives utility to) customers, therefore need to analyze the what, where, when and
how consumers buy.
Marketers can better predict how consumers will respond to marketing strategies
Behind the visible act of making a purchase lays a decision process that must be investigated. The
Buying Decision is process rather than a single act. The purchase decision process is the stages a
buyer passes through in making choices about which products and services to buy. Consumers
complete a step-by-step process when making purchase decisions. There are certain stages of this
decision process. These are:
1. Problem recognition-Consumers often note problems by comparing their current, or
actual, situation, explicitly or implicitly, to some desired situation. In terms of the "big
picture," what is compared may be the totality of ones lifestyle. Once a discrepancy is
found, a determination is found as to whether this is large enough to warrant action, in
which case a search for solutions is initiated. Once the problem is recognized, the
remainder of the consumer decision-making process is invoked to determine exactly how
the consumer will go about satisfying the need. However, the presence of need
recognition does not automatically activate some action. This will depend on two factors.
First, the recognized need must be of sufficient importance. Second, consumers must
believe that a solution to the need is within their means. If need satisfaction is beyond a
consumer's economic or temporal resources, for instance, then action is unlikely.
Problems come in several different types. A problem may be an active one (e.g., you
have a headache and would like as quick a solution as possible) or inactive-- you are not
aware that your situation is a problem (e.g., a consumer is not aware that he or she could
have more energy with a new vitamin). Problems may be acknowledged (e.g., a
consumer is aware that his or her car does not accelerate well enough) or
unacknowledged (e.g., a consumer will not acknowledge that he or she consumes too
much alcohol). Finally, needs can be relatively specific (generic), as in the need for
enjoyment (which can be satisfied many different ways), or specific, as in the need for
professional attire to wear at a new job. Need recognition can be triggered by internal or
external stimuli. In the former case, one of the consumer's personal needs - hunger, thirst,
rises to a threshold level and becomes a drive. In the latter case, a need is aroused by an
external stimulus such as advertising. Additionally, changes in one's actual or desired

state are likely to create new needs. The types of consumer needs which are to be fulfilled
can be:
a. Functional needs- directly related to product performance (e.g., replenishment,
replacement, utilitarian use, etc.)
b. Psychological needs- personal gratification obtained from shopping or from
buying or owning a product. As disposable income rises, psychological needs
motivates more shopping.
c. Multiple needs- Make trade-offs as cross-shopping is a major trend consumer
mixes premium and low-priced stores/merchandise.
The need recognition can be stimulated by:
Advertising (TV, newspaper, direct mail, e-mail, etc.)
Special events and sales
Store location, frontage, signage, window displays
Visual merchandising in store
Store layout, location of merchandise within store
Merchandise displays and signage
Suggestions by sales associates
2. Information search-after recognizing a problem, consumer gathers information related to
their attainment of the desired state of affairs. It is concerned with seeking value. The
information search stage clarifies the options open to the consumer and may involve:
a. Internal search: Buyers search their memories for information about products that
might solve their problem. So, these are based on what consumers already know.
Example- when Mr. X faces a headache and body pain, he remembers Crocin
pain reliever pills as a solution. This is a part of his memory as a result of a prior
experience with the product.

b. External search: get people to either speak to others (getting information by word
of mouth) or use other sources (such as advertisements now sought out or yellow
page listings) or marketer-dominated sources, such as advertising, company
websites, and salespeople. Amount of information search would depend on:
The value customers feel they will gain from searching versus the cost
of searching.
The product and its complexity, cost and perceived risk.
The consumer enjoyment from shopping, prior experience,
confidence, time pressure.
The cost of searching e.g., Internet versus shopping trip, consulting
friends/family versus commercial sources.
The market the number of competing alternatives
The role of marketers during the information search step of the consumer decision-making
process is to make the information consumers want and need about their product easily
accessible.
3. Evaluation of alternatives-it is concerned with Assessing value. When deciding among
available alternatives to purchase, consumers come up with a set of evaluative criteria.
a. Consideration set- it involves a group of brands that the buyer views as
alternatives for possible purchase. Example- for buying a color TV, the
consideration set may involve brands like- Videocon, Akai, Sony and Phillips.
b. Evaluative criteria- Objective and subjective characteristics that are important to
a buyer. Example- Picture quality, sound effects, looks, price, warranty and
service conditions.
c. Framing the alternatives- Describing the alternatives and their attributes in a
certain manner to make a particular characteristic appear more important
especially to the inexperienced buyer.
The Product features (also called ATTRIBUTES) that you are looking for can be of
two types:
d. Objective attributes: real features of the product (color, brand, size, model #,
price)
e. Subjective features: emotional or psychological benefits of the product (ex:
prestige, popularity, self-esteem). These criteria establish a consumer's evoked
set.
One can use a Multi attribute model to evaluate the alternatives. It involves following
steps:
Come up with a set of evaluative criteria
Rate each product/brand on each attribute
Rate how important each attribute is to you
Multiply each products score on each attribute by the importance of that
attribute
Add up the products scores across all attributes
The product with the highest total score should be chosen
4. Purchase-it is concerned with Buying value. As long as the consumer's circumstances or
the circumstances in the marketplace remain stable, the decision to purchase will lead to
an actual purchase. However, the attitudes of others and unanticipated situational factors
can intervene between the purchase intention and the purchase decision: The others are
often the members of the family or good friends. Unexpected situational factors are for
example illness, loss of the job etc. A consumer who decides to execute a purchase
intention will be making up to five purchase sub-decisions including brand decision
(what), vender decision (where), quantity decision (how many), timing decision (when)
and payment decisions (how to pay). Once youve examined the alternatives, you still
have two more decisions to make. Some of these are:
a. From whom to buy- Salesperson, store, internet, etc. it depends on such
considerations
Terms of sale
Past experience buying from the seller
Return policy.
b. Choosing the product or brand to be bought based on the outcome of the
evaluation stage
c. When to buy-which can be influenced by:
store atmosphere
time pressure
a sale
Pleasantness of the shopping experience.
5. Post purchase- it is concerned with Value in consumption or use. After buying a product,
the consumer compares it with expectations and is either satisfied or dissatisfied. Satisfaction
depends on the expectations prior to purchase and the performance of the item. It is:
If Performance is LESS than expectations = DISSATISFACTION
If Performance is EQUAL TO expectations = SATISFACTION
If Performance is GREATER than expectations = DELIGHT or HIGH
SATISFACTION
Shortly after the purchase of an expensive product, the post-purchase evaluation may result in
cognitive dissonance. This, in very simple terms, can be understood as doubts that occur because
the consumer questions whether the right decision was made in purchasing the product. Since
such psychological discomfort is not pleasant, the consumer will be motivated to act to reduce the
amount of dissonance he/she is experiencing. Thus, a consumer may attempt to return the product
or may seek positive information about it to justify the choice. An important role of marketing,
therefore, is reminding the consumers that they have made the correct decision.
Figure: Consumer buying decision process with its determinants
Marketing mix influences

Product
Price
Promotion
Place
Consumer purchase
decision process
Psychological Socio cultural
influences Problem recognition influences
Motivation Personal
Perception Information search Reference groups
Personality Family
Learning Alternative evaluation Social class
Lifestyle Culture
Values, beliefs and Purchase decision Sub culture
attitudes
Post-purchase behavior
Situational influences
Purchase task
Social surroundings
Physical surroundings
Temporal effects
Antecedent states
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2. Use of consumer decision rules in product/ brand evaluations- consumer decision rules
are procedures used by consumers to facilitate brand (or other consumption related)
choices. These are of following types:
a. Compensatory decision rule- a consumer evaluates brand options in terms of
each relevant attribute and computes a weighted or summated score for each
brand. The computed score reflects the brand's relative merit as a potential
purchase choice. The assumption is that the consumer will select the brand that
scores highest among the alternatives evaluated. It allows a positive evaluation of
a brand on one attribute to balance out a negative evaluation on some other
attribute. For example, a positive assessment of the energy savings made possible
by a particular brand or type of light bulb may offset an unacceptable assessment
in terms of the bulb's diminished light output.
b. Non compensatory decision rule- these rules do not allow consumers to balance
positive evaluations of a brand on one attribute against a negative evaluation on
some other attribute. For instance, in the case of an energy-saving light bulb, the
product's negative (unacceptable) rating on its light output would not be offset by
a positive evaluation of its energy savings. Instead, this particular light bulb
would be disqualified from further consideration. Some of the non compensatory
rules are:
i. The conjunctive rule- In a conjunctive decision rule, the consumer
establishes a separate minimally acceptable level as a cutoff point for
each attribute. If any particular brand falls below the cutoff point on any
one attribute, the brand is eliminated from further consideration. It is
particularly useful in quickly reducing the number of alternatives to be
considered.
ii. The disjunctive rule- The disjunctive rule is the "mirror image" of the
conjunctive rule. In applying this decision rule, the consumer establishes
a separate minimum acceptable cutoff level for each attribute (which
may be higher than the one normally established for a conjunctive rule).
In this case, if a brand alternative meets or exceeds the cutoff established
for any one attribute, it is accepted.
iii. The lexicographic rule- the consumer first ranks the attributes in terms of
perceived relevance or importance. The consumer then compares the
various brand alternatives in terms of the single attribute that is
considered most important. If one brand scores sufficiently high on this
top-ranked attribute (regardless of the score on any of the other
attributes), it is selected and the process ends. When there are two or
more surviving brand alternatives, the process is repeated with the
second highest-ranked attribute (and so on), until reaching the point that
one of the brands is selected because it exceeds the others on a particular
attribute.
c. Affect referral decision rule- It is likely that for many purchase decisions,
consumers maintain in long-term memory overall evaluations of the brands in
their evoked sets. This would make assessment by individual attributes
unnecessary. Instead, the consumer would simply select the brand with the
highest perceived overall rating. It is the simplest of all rules.
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4. Types based on involvement level
Involvement represents the level of importance or interest generated by a product or a decision. It
also represents an individuals intensity of interest in a product and the importance of the product
for that person. There can be two levels of involvement. These are:
High involvement- it is characterized by purchases of high importance, with high
information processing and substantial product differences. Example- in purchasing a
color TV, a person is highly involved.
Low involvement- it is characterized by little personal interest, with little information
processing and few product differences. Example- in purchasing a pack of Salt, a
person generally is not highly involved and purchases it as a part of a routine purchase.
Based on above level of involvement, consumer purchase decisions can be of following
types:
Extensive problem solving- it involves considerable time spent on the decision
making process in the case of high involvement purchases. The process employed
when purchasing unfamiliar, expensive, or infrequently bought products. Example-
for buying a new house. The marketing implications for this are:
o Existing products companies spend a lot on advertising and promotions
designed to retain loyal customers
o Companies want to make it difficult for customers to switch (frequent
user programs)
o New entrants use comparative advertising to show how new product
compares to existing ones.
Limited problem solving-it involves moderate efforts spent in search and evaluation.
The process that buyers use when purchasing products occasionally or when they
need information about an unfamiliar brand in a familiar product category. Example-
person buying shoes or clothing look for options and new brands.
Routine problem solving-it involves very little search or evaluation as in the case of
low involvement products. An unplanned buying behavior resulting from a powerful

urge to buy something immediately. Example- routine purchase of FMCG goods. It
may lead to development of loyalty. The marketing implications for this are:
o New entrants into the market must try to get into consumers evoked set
o Can attract new buyers with sales & promotions
High Involvement Low Involvement
Significant differences Complex buying behavior Variety seeking behavior

between brands
Few differences between Dissonance reducing Habitual buying behavior
brands buying behavior
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5. Influences on buyer behavior
Buyers purchase decisions are influenced by his cultural, social, personal and psychological
factors.
Cultural
Culture Social
Reference Personal
Groups
Subculture Age and lifecycle Psychological
stage
Family Occupation Motivation
Economic Perception Buyer
circumstances
Social class Life style Learning
Roles and status Personality and Beliefs and
self concept attitudes
There are certain factors that influence buying behavior. These are:
Situational influences-these are:
The purchase task- it is the reason for engaging in the purchase decision
Social surroundings- it is concerned with the presence of others when the
purchase decision is being made
Physical surroundings- it is concerned with the ambience of the outlet
Consumer resources- time, money and efforts
Antecedent states- it is concerned with the mood of the consumer
Psychological influences-
Motivation- is the force that causes action towards satisfaction of the needs. It is
based on the premise that the needs are hierarchical. These needs are broadly:
o Physiological needs- these are the very basis of survival
o Safety needs- these are concerned with self preservation and physical
well being
o Social needs- these are concerned with love, respect, achievement and
status
o Self actualization needs- these are concerned with personal fulfillment
Personality- it is the person's consistent behavior or responses to recurring
situations. Personality characteristics are often revealed in a persons self-
concept, which is the way people see themselves and the way they believe others
see them.
Perception- it is the way a person see things. An individual uses information to
create a meaningful picture of the world. It involves:
o Selective perception- it is concerned with the way human brain attempt
to organize and interpret information by filtering the information.
o Selective exposure- Consumers can pay attention to only those messages
that are consistent with their own attitudes and beliefs
o Selective comprehension- Involves interpreting information so that it is
consistent with a person's attitudes and beliefs.

o Selective retention- consumers retain only a part of the information they
hear, see or read
o Subliminal perception- sometimes consumers see or hear messages
without being aware of them
Learning- it is concerned with behaviors that are the result of repeated experience
and thinking. Types of learning can be:
o Behavioral learning- The process of developing automatic responses to a
situation built up through repeated exposure to it.
o Cognitive learning- Involves making connections between two or more
ideas or simply observing the outcomes of others behaviors and
adjusting one's accordingly.
Attitudes- it is a learned predisposition to respond to an object or class of objects
in a consistently favorable or unfavorable way, shaped by our values and beliefs,
which are learned over the period of time.
Lifestyle- it is the mode of living that is identified by:
o Activities-How a person spends time and resources
o Interests-What a person considers important in the environment
o Opinions-what a person thinks of self and the world
Socio-cultural influences-these evolve from a formal and informal relationships with
other people. It includes:
d. Personal influence-it includes:
o Opinion leaders-are the individuals who exert direct or indirect social
influence over others
o Word of mouth- it is concerned with face-to-face communications
e. Reference groups-these represent people to whom an individual looks as a basis
for self-appraisal or as a source of personal standards. It can be following types:

Membership group-it represents the one to which a person actually
belongs
Aspiration group- it represents the one with which a person wishes to
be identified with
Dissociative group-it represents the one from which a person wants to
maintain a distance because of differences in values or behaviors
f. Family-Family influences on consumer behavior result from three sources:
consumer socialization-Consumer socialization is the process by which
people acquire the skills, knowledge, and attitudes necessary to
function as consumers
Family life cycle- The distinct phases that a family progresses through
from formation to retirement
Decision making within the family-concerned with the styles and the
role behavior within the family.
g. Social class-The relatively permanent, homogeneous divisions in a society into
which people sharing similar values, interests, and behavior are grouped. Its
determinants are;
occupation,
source of income (not level of income)
Education.
h. Culture-Culture refers to the set of values, ideas and attitudes that are accepted by
a homogeneous group of people and transmitted to the next generation.
i. Sub culture-groups within the larger, or national, culture with unique values,
ideas, and attitudes.
______________________________________________________________________________
6. Review questions
Explain the Consumer buying process with the help of a diagram.
What are Decision rules? How do these help in the evaluation of the product
alternatives?
Explain the various types of consumer decision making based on the level of
involvement.
What are the factors that influence the consumer buying decision process and in what
ways?
______________________________________________________________________________
7. Further readings
Ohio, 1995.
___________________________________________________________________________
UNIT 1: LESSON 3
MARKET SEGMENTATION
1. Introduction
2. Steps in Target marketing
3. Levels of Market segmentation
4. Basis of Market Segmentation
5. Characteristics of effective segments
6. Implementing segmentation strategies
7. Benefits of Market Segmentation
8. Review questions
9. Further readings
1. Introduction
Companies today recognize that they cannot appeal to all buyers in the market place or at
least not to all buyers in the same way. Buyers are too numerous, too widely scattered, and
too varied in their needs and buying practices. Moreover, the companies themselves vary
widely in their abilities to serve different segments of the market. Rather than trying to
compete in an entire market, sometimes against superior competitors, each company must
identify the parts of the market that it can serve best and most profitably. Thus, most
companies are more selective about the customers with whom they wish to connect. As a
solution, comes the concept of Market Segmentation. It involves breaking the market down
into distinct groups of buyers. Markets consist of buyers, and buyers differ in one or more
ways. They may differ in their wants, resources, locations, buying attitudes, and buying
practices. Through market segmentation, companies divide large, heterogeneous markets into
smaller segments that can be reached more efficiently and effectively with products and
services that match their unique needs. There is a movement from Mass marketing to
Target marketing.
2. Steps in Target marketing
a. Market segmentation- dividing a market into smaller groups of buyers with
distinct needs, characteristics, or behaviors who might require separate products
or marketing mixes. The company identifies different ways to segment the
market and develops profiles of the resulting market segments.
b. Market targeting- evaluating each market segment's attractiveness and selecting
one or more of the market segments to enter.
c. Market positioning- setting the competitive positioning for the product and
creating a detailed marketing mix.
3. Levels of Market segmentation- Because buyers have unique needs and wants, each
buyer is potentially a separate market. However, although some companies attempt to
serve buyers individually, many others face larger numbers of smaller buyers and do not
find complete segmentation worthwhile. Instead, they look for broader classes of buyers
who differ in their product needs or buying responses. Thus, market segmentation can be
carried out at several different levels. These are:
a. Mass marketing- it involves mass producing, mass distributing, and mass
promoting about the same product in about the same way to all consumers. It was
felt that it creates the largest potential market, which leads to the lowest costs,
which in turn can translate into either lower prices or higher margins. However,
many factors now make mass marketing more difficult.
b. Segment marketing- A Market segment consists of a large identifiable group
within a market with similar wants, purchasing power, geographical location,
buying attitudes, or buying habits. A company that practices Segment
Marketing isolates broad segments that make up a market and adapts its offers to
more closely match the needs of one or more segments. The purpose of
segmenting the market is to find the best customers for a particular company and
to help that company tailor its operations to those particular customers.
Therefore, marketers are not interested in simply identifying groups of people
who have something in common. They are interested in identifying groups of
people who have something in common that make them a good target market for
a particular company. Segment marketing offers several benefits over mass
marketing. The company can market more efficiently, targeting its products or
services, channels, and communications programs toward only consumers that it
can serve best and most profitably. The company can also market more
effectively by fine-tuning its products, prices, and programs to the needs of
carefully defined segments. The company may face fewer competitors if fewer
competitors are focusing on this market segment.
c. Niche marketing- A niche market is a more narrowly defined group than a
segment, typically a small market whose needs are not well served. Niche
marketing focuses on subgroups within segments. A niche is a more narrowly
defined group, usually identified by dividing a segment into sub segments or by
defining a group with a distinctive set of traits who may seek a special
combination of benefits. Whereas segments are fairly large and normally attract
several competitors, niches are smaller and normally attract only one or a few
competitors. Niche marketers target a very specific group of customers. They try
to provide the maximum amount of value to customers that are the best possible
fit for their product or service. Such companies are betting that the advantages
they offer to that group will offset the higher prices niche marketers generally
have to charge. Niche marketers presumably understand their niches' needs so
well that their customers willingly pay a price premium. Both large and small
companies can engage in niche marketing. A large company can create separate
product lines and retail outlets for specific niche markets. A small company can
tailor its entire operation to the needs a select group of highly profitable
customers.
d. Local marketing- Some companies think the best way to focus their energies is to
target local markets. By this way, the high cost of national distribution and
promotion can be avoided while specializing in the specific needs and wants of a
particular region. A local market is actually a kind of market segment; a segment
defined by the fact that all its members live in the same geographical area.
e. Micro marketing- Segment and niche marketers tailor their offers and marketing
programs to meet the needs of various market segments. At the same time,
however, they do not customize their offers to each individual customer. Thus,
segment marketing and niche marketing fall between the extremes of mass
marketing and micro marketing. Micro marketing is the practice of tailoring
products and marketing programs to suit the tastes of specific individuals and
locations.
4. Basis of Market Segmentation- There are two types of segmentation variables: Needs and
Profilers. The basic criteria for segmenting a market are customer needs. To find the
needs of customers in a market, it is necessary to undertake market research. Profilers are

the descriptive, measurable customer characteristics (such as location, age, nationality,
gender, income) that can be used to inform a segmentation exercise. The major variables
and basis that a marketer can use to segment markets are:
a. Geographic segmentation- it involves dividing the market into different
geographical units such as nations, regions, states, counties, cities, or
neighborhoods. A company may decide to operate in one or a few geographical
areas, or to operate in all areas but pay attention to geographical differences in
needs and wants. It is common to localize products, advertising, promotions, and
sales efforts to fit the needs of geographical areas (regions, cities, and even
neighborhoods). Geographic segmentation is an important process particularly
for multi-national and global businesses and brands. Many such companies have
regional and national marketing programs, which alter their products, advertising
and promotion to meet the individual needs of geographic units. These segments
can be created on the basis of:
i. Regions- in India one can think of major regions- North, South, East and
West, Southeast, Northeast etc.
ii. Countries- may be characterized on the basis of size and development
level.
iii. Cities/ towns- on the basis of population levels.
iv. Climate- geographic areas which remain hot or cold or have moderate
climatic conditions.
b. Demographic segmentation- it involves dividing the market into groups based on
variables such as age, gender, family size, family life cycle, income, occupation,
education, religion, race, and nationality. Demographic factors are the most
popular bases for segmenting customer groups. One reason is that consumer
needs, wants, and usage rates often vary closely with demographic variables.
Another is that demographic variables are easier to measure than most other
types of variables. Even when market segments are first defined using other
bases, such as benefits sought or behavior, their demographic characteristics must
be known in order to assess the size of the target market and to reach it
efficiently. Demographic variables are easier to measure than most other types of
variables. It involves segmentation on the basis of:
i. Age and Life cycle- Age and life cycle segmentation consists of offering
different products or using different marketing approaches for different
age and life-cycle groups. Marketers must guard against stereotypes
when using this form of segmentation. While certain age and life cycle
groups do behave similarly, age is often a poor predictor of a persons
life cycle, health, work or family status, needs, and buying power.
Consumer needs and wants change with age. Some companies use age
and life cycle segmentation, offering different products or using different
marketing approaches for different age and life-cycle groups
ii. Gender- calls for dividing a market into different groups based on sex.
This segmentation form has long been used for clothing, cosmetics,
toiletries, and magazines. New opportunities in this area are emerging
such as automobiles, deodorants, and financial services.
iii. Income- It consists of dividing a market into different income groups.
Marketers for automobiles, boats, clothing, cosmetics, financial services,
and travel have long used this form of segmentation. Many companies
target affluent consumers with luxury goods and convenience services.
Using this form, marketers must remember that they do not always have
to target the affluent. Other income groups are also viable and profitable
market segments.
c. Psychographic segmentation- It calls for dividing a market into different groups
based on social class, lifestyle, or personality characteristics. People in the same
demographic class can exhibit very different psychographics characteristics. As
previously seen in, lifestyle also affects peoples interest in various goods, and
the goods they buy express those lifestyles. This method of segmentation is
gaining in popularity. Personality variables can also be used to segment markets.
Marketers will give their products personalities that correspond to consumer
personalities. Some of the psychographic variables are:
i. Social class- Many marketers believe that consumers perceived social
class influences their preferences for cars, clothes, home furnishings,
leisure activities and other products & services.
ii. Lifestyle- marketers are interested to know the effect of Lifestyles on
consumer demand patterns. Lifestyles are the ways in which people live
and spend time and money. When we talk of Lifestyles, we can talk
about AIO (Activities, Interests and Opinions). A- Activities include
work, hobbies and shopping style. I- Interests include interests in food,
fashion and recreation. O- Opinions includes opinions about themselves,
others and social issues.
d. Behavioral segmentation- Behavioral segmentation divides customers into
groups based on the way they respond to, use or know of a product. It involves
dividing a market into groups based on consumer knowledge, attitudes, uses, or
responses to a product. It involves:
i. Occasion segmentation- it is based on when a product is consumed or
purchased. It consists of dividing the market into groups according to
occasions when buyers get the idea to buy, actually make their purchase,
or use the purchased item.

ii. Benefit segmentation- Benefit segmentation involves dividing the market
into groups according to the different benefits the consumers seek from
the product.
iii. Loyalty- marketers can segment customers into those who buy one brand
all or most of the time and are considered to be valuable. Many
companies try to segment their markets into those where loyal customers
can be found and retained compared with segments where customers
rarely display any product loyalty.
iv. User status- it involves segmenting by forming segments of nonusers, ex-
users, potential users, first-time users, and regular users of a product are
potential ways to segment.
v. Usage rates- The categories involved might be light, medium, and heavy
user groups.
e. Hybrid segmentation- it is viewed as a combination of two or more basis of
segmentation. Type of hybrid segmentation are:
i. Geo-demographic segmentation- it is based on based on both geographic
and demographic variables.
ii. Psychographic- demographic profiles- it is based on the combination of
the psychographic and demographic variables.
iii. SRI Consultings Values and Lifestyle System (VALS) - Market
segments should be described in demographic and lifestyle terms. A
more valuable analysis takes place when a variety of factors are
reviewed. It segments consumers based on self-orientation and resources
into following categories:

1. Actualizers- successful, sophisticated, active, Take charge
people whose purchases often reflect cultivated tastes for
relatively upscale, niche oriented products.
2. Fulfilleds- mature, satisfied, comfortable, reflective. Favor
durability, functionality and value in products.
3. Believers- conservative, conventional and traditional. Favor
familiar products and established brands.
4. Achievers- successful, career oriented. Favor established prestige
products that demonstrate success to its peers.
5. Strivers- uncertain, insecure, approval seeking, resource
constrained. Favor stylish products that emulate the purchases of
those with greater material wealth.
6. Experiencers- young, vital, enthusiastic, impulsive. Spend a
comparatively high proportion of income on clothing, fast food,
music etc.
7. Makers- practical, self sufficient, traditional, family oriented.
Favor only products with a practical or functional purpose such
as tools, utility vehicles.
8. Strugglers- elderly, resigned, passive, concerned, resource
constrained. Cautious consumers who are loyal to favorite
brands.
______________________________________________________________________________
5. Characteristics of effective segments- an effective segment has the following
characteristics:
a. Measurability- is the degree to which the size, purchasing power, and profiles of
a market segment can be measured.
b. The segments should be Homogeneous intra and Heterogeneous inter. That is to
say, that the segment must be homogeneous withinthe customers in a market
segment should be as similar as possible with respect to their likely responses to
marketing mix variables and their segmenting dimensions. The segment must be
Heterogeneous between- the customers in different segments should be as

different as possible with respect to their likely responses to marketing mix
variables and their segmenting dimensions.
c. Accessibility-it refers to the degree to which a market segment can be reached
and served
d. Substantiality- it refers to the degree to which a market segment is sufficiently
large or profitable.
e. Differentiation-it refers to the degree to which a market segment can
conceptually be distinguished and has the ability to respond differently to
different marketing mix elements and programs.
f. Action ability- is the degree to which effective programs can be designed for
attracting and serving a given market segment.
6. Implementing segmentation strategies- In evaluating different market segments, a firm
must look at three factors: segment size and growth, segment structural attractiveness,
and company objectives and resources. Based on evaluation the company can decide to
implement following types of segmentation strategies:
a. Undifferentiated marketing- Using an undifferentiated marketing (or mass-
marketing) strategy, a firm might decide to ignore market segment differences
and go to the whole market with one offer. This mass-marketing strategy focuses
on what is common in the needs of consumers rather than on what is different.
The company designs a product and a marketing program that will appeal to the
largest number of buyers. It relies on mass distribution and mass advertising, and
it aims to give the product a superior image in people's minds.
b. Differentiated marketing- Using a differentiated marketing strategy, a firm
decides to target several market segments or niches and designs separate offers
for each. By offering product and marketing variations, these companies hope for
higher sales and a stronger position within each market segment. Developing a
stronger position within several segments creates more total sales than
undifferentiated marketing across all segments. But differentiated marketing also
increases the costs of doing business. Developing separate marketing plans for
the separate segments requires extra marketing research, forecasting, sales
analysis, promotion planning, and channel management. Trying to reach different
market segments with different advertising increases promotion costs. Thus, the
company must weigh increased sales against increased costs when deciding on a
differentiated marketing strategy.
c. Concentrated marketing- Instead of going after a small share of a large market,
the firm goes after a large share of one or a few segments or niches. Concentrated
marketing provides an excellent way for small new businesses to get a foothold
against larger, more resourceful competitors. Through concentrated marketing,
firms achieve strong market positions in the segments or niches they serve
because of their greater knowledge of the segments' needs and the special
reputations they acquire. They also enjoy many operating economies because of
specialization in production, distribution, and promotion. If the segment is well
chosen, firms can earn a high rate of return on their investments. At the same
time, concentrated marketing involves higher-than-normal risks. The particular
market segment can turn sour. Or larger competitors may decide to enter the
same segment.
d. Counter segmentation- it is a strategy used when companies find that they must
reconsider the extent to which they are segmenting their markets may be because
some segments have contracted over time. The company seeks to discover a
more generic need or consumer characteristic that would apply to the members of
two or more segments and recombine those segments into a larger single segment
that could be targeted with an individually tailored product or promotional
campaign.
7. Benefits of Market Segmentation- the following are the major benefits of market
segmentation:
a. Cater to different customer needs- Customer needs differ. Creating separate
offers for each segment makes sense and provides customers with a better
solution.
b. Sensitivity to price differs- customers have different disposable incomes. Also,
their sensitivity to price changes is not same. By segmenting customers,
businesses can raise average prices and subsequently enhance profits.
c. Customer retention- by identifying the different needs of customers at different
points on the life cycle, a firm can design its offerings to cater to their changing
needs and hence increase rate of customer retention.
d. For better marketing communications- Businesses need to deliver their marketing
message to a relevant customer audience. If the target market is too broad, there
is a strong risk that (1) the key customers are missed and (2) the cost of
communicating to customers becomes too high / unprofitable. By segmenting
markets, the target customer can be reached more often and at lower cost.
8. Review questions
a. What is market segmentation? How is it related to the marketing concept? Why
is there a need to segment markets?
b. Explain the various levels of market segmentation with examples.
c. What are the various basis of segmenting consumer markets?

d. What characteristics are indicative of an effective market segment?
e. Explain the various strategies of market segmentation.
______________________________________________________________________________
9. Further readings
Ohio, 1995.
_______________________________________________________________________
UNIT 2: LESSON 4
MOTIVATION AND THEORIES OF MOTIVATION
1. What is motivation?
2. What are Needs?
3. What are Goals?
4. What are various classifications of Motives?
5. Nature of Motivation
6. Arousal (awakening) of Motives
7. Freuds Theory of Motivation
8. Maslows Need Hierarchy Theory
9. McGregor Theory of Motivation
10. Herzberg Theory
1. What is motivation?
Motivation is an internal state that drives us to satisfy needs. Once the need is activated, a
state of tension exists that drives the consumer toward some goal that will reduce this
tension by eliminating the need.
Motivation can be described as the driving force within individuals that impels them to
action. This driving force is produced by a state of tension, which exists as the result of
unfulfilled need. Individuals strive both consciously and subconsciously to reduce this
tension through behavior that they anticipate will fulfill their needs and thus relieve them
of the stress they feel. The specific goals they select and the patterns of action they
undertake to achieve their goals are the results of individual thinking and learning.
The following figure presents a model of the motivational process. It portrays motivation as a
state of need induced tension that drives the individual to engage in behavior that he or she
believes will satisfy the need and thus reduce the tension. Whether satisfaction is actually
achieved depends on the course of action being pursued.
Learning
Needs Tension Drive Behavior Goal or

wants, need
and fulfill-
desires ment
Cognitive
processes
Tension
reduction
For instance, if a high school girl expects to become a great tennis player by wearing the same
brand of sinkers that Martina Hingis wears, she is likely to be disappointed: if she takes tennis
lesson and practices diligently, she may succeed. Because without practice only wearing the same
thing wont bring success for her or wont satisfy her need.
The specific goals that consumers wish to achieve, and the courses of action they take in order to
attain these goals are selected on the basis of their thinking processes (cognition) and previous
learning.
2. What are Needs?
Every human activity performed is based on some motive or Need. A Need can be visualized as
a feeling or a desire to have something that is lacking. The activity thus undertaken helps in
removal of that lacking thing and thus provides satisfaction to the person concerned. For
example- the person is thirsty. He feels an immediate lack of water. So, water becomes his Need
whose fulfillment would give him satisfaction.
A need is an unsatisfactory condition of the customer that motivates him to take some action so as
to fulfill the need and make the condition better. A Want is a desire to obtain more satisfaction
than is absolutely needed to improve an unsatisfactory condition. For example, a person who is
thirsty requires something to drink so as to quench the thirst. This is a need. Now, instead of
water, if he desires to have a soft drink, then this soft drink becomes his Want.
The term Motivation that we shall study, is concerned with such Needs, Drives and Goals
and would operate at subconscious level. Needs are of following two types:
Innate needs: Innate needs are physiological (that is biogenic); they include the needs for
food, water, air, clothing and shelter. The biological needs are considered primary needs
or motives.
Acquired needs: These may include needs for self-esteem, prestige, affection, power and
learning. Because the acquired needs are generally psychological they are considered
secondary needs or motives. They result from the individuals subjective psychological
state and from relationships with others.
3. What are Goals?
Goals are of following types:
Generic goals: The general classes or categories of goals that consumers see as a way to
fulfill their needs. If a person tells his parents that he wants to get a graduate degree, he
has stated a generic goal.
Product specific goals: The specifically branded products and services that consumers
select as their goals are called product specific goals. For example if that person says he
wants to get a graduate degree in engineering from MIT/BUET, his goal has become
product specific.
Means-end analysis is another way to view the needs-goal paradigm. Individuals set desired ends
(goals) on the basis of their personal values and they select means (or behaviors) that they believe
will help them achieve their desired ends. Take the personal value good health. An individual
may see certain behaviors (e.g. exercise, proper nutrition, cleanliness) as the means to achieving
good health (the goal or desired end) a marketer of specific products within the means product
category (e.g. home exercise equipment, low-fat foods, or anti bacterial soaps) would want to
influence people who are concerned with the goal of good health to use its specific product to
achieve that goal.
Goals too can be positive or negative:
A positive goal is one toward which behavior is directed; thus it is often referred to as an
approach object.
A negative goal is one from which behavior is directed away, and is referred to as an
avoidance object.
For example: a middle-aged woman may have a positive goal of fitness and joins a health club to
work out regularly. Her husband may view getting fat as a negative goal, so he joins a jogging
club. The wifes actions are designed to achieve the positive goal of health and fitness in the latter
case her husbands actions are designed to avoid a negative goal.
4. What are various classifications of Motives?
Positive and Negative Motivation: We may feel a driving force toward some object or condition,
or a driving force away from some object or condition. For example: a person may be impelled
toward a restaurant to fulfill a hunger need and away from motorcycle transportation to fulfill a
safety need. However, although positive and negative motivational forces seem to differ
dramatically in terms of physical (and sometimes emotional activity) they are basically similar, in
that both serve to initiate and sustain human behavior.
Rational versus Emotional Motives: Rational motives imply that consumers select goals based on
totally objective criteria, such as size, weight, price or miles per gallon. Emotional motives imply
the selection of goals according to personal or subjective criteria for example; pride, fear,
affection, and status etc. Subjective or emotional criteria do not maximize utility or satisfaction.
But the assessment of satisfaction is a very personal process, based on individuals own need
structure, as well as past behavior and social experiences.
For example a product purchased to enhance self-image (such as a fragrance) is a perfectly
rational form of consumer behavior if the consumer will feel better about herself for wearing it. If
the behavior does not seem rational to the person at the time it is undertaken, obviously he or she
would not do it.
5. Nature of Motivation
Needs and goals are constantly growing and changing in response to an individuals physical
condition, environment, interaction with others and experiences. As individuals attain their goals
they develop new ones. If they do not attain their goals, they continue to strive for old goals, or
they develop substitute goals. Some of the reasons why need-driven human activity never ceases
include the following:
Many needs are never fully satisfied: they continually impel actions designed to attain or
maintain satisfaction. Most human needs are never fully or permanently satisfied. For
example, person may partially or temporarily satisfy a power need by working as
assistant to the CEO of Liver Brothers, but this small taste of power may not sufficiently
satisfy her need; thus she may strive for her own decision-making position in the
organization. In this instance temporary goal achievement does not adequately satisfy the
need of power, and the individual strives harder in an effort to satisfy the need more fully.
As needs become satisfied, new and higher order needs emerge that cause tension and
induce activity. For example, a man who has largely satisfied his basic physiological
needs my turn his efforts to achieving acceptance among his new neighbors by joining
their political clubs and supporting their candidates. Once he is confident that he has
achieved acceptance, he then seeks recognition by giving lavish parties or building a
larger house. Marketers must be familiar to changing needs. Car manufacturers who
continually promote the prestige values of their automobiles may fail to recognize that
consumers often look beyond material wealth to satisfy their needs for prestige-for
example, to charitable gift giving or to public service. For this reason, manufacturers of
luxury cars stress different need satisfaction (such as family enjoyment or safety) as
reasons for buying a new model.
People who achieve their goals set new and higher goals for themselves. Individuals
who normally achieve their goals usually set new and higher goals; that is they raise their
levels of aspiration. This may be due to the fact that their success in reaching lower goals
makes them more confident of their ability to reach higher goals.
The substitute (alternative) goal may not be as satisfactory as the primary goal; it may sufficient
to drive out uncomfortable tension. Continued deprivation of a primary goal may result in the
substitute goal assuming primary goal status. A woman who cannot afford a Mercedes may
convince herself that a Maruti Suzuki has an image she clearly prefers. For example a man who
has stopped drinking whole milk because he is dieting may actually begin to prefer skim milk.
Everyone has experienced the frustration that comes from the inability to attain a goal. The
barrier that prevents attainment of a goal may be personal to the individual (e.g. limited physical
or financial resources), or it can be an obstacle in the physical or social environment. Individuals
react differently in frustrating situations. Some people manage to cope by finding their way
around the obstacle. Those who are less adaptive may regard their inability to achieve a goal as a
personal failure.
In the event of frustration, such people are likely to adopt a Defense Mechanism to protect their
egos from feeling of inadequacy: For example: A young woman may desire for a European
vacation she cannot afford. The coping individual may select a less expensive vacation trip to
Disneyland or to a national park. The person who may not cope may react with anger toward her
boss for not paying her enough money to afford the vacation she prefers or she may convince
herself that Europe is unreasonably expensive this year. These last two possibilities are examples,
receptively of aggression and rationalization, defense mechanism. Other defense mechanisms
include regression, withdrawal, projection, autism, identification and repression.
The eight different types of Defense Mechanisms are discussed bellow:
Aggression (anger/violence): Individuals who experience frustration may resort to
aggressive behavior in attempting to protect their self-esteem. Frustrated consumers have
boycotted manufacturers in an effort to improve product quality.
Rationalization: Sometimes individuals redefine a frustrating situation by inventing
possible reasons for being unable to attain their goals. For example, if a person decided to
purchase Lexus but when he went to the showroom he found that the price exceeds his
budget then he might convince himself to purchase another car that is affordable for him
this time and next time he will buy Lexus when he gets promotion.
Regression (failure): Sometimes people react to frustrating situations with childish or
immature behavior. A shopper attending a bargain sale, for example may fight over
merchandise and even tear a garment that another shopper will not surrender rather than
allow the other person to have it.
Withdrawal: Frustration is often resolved by simply withdrawing from the situation. For
instance who have difficulty achieving officer status in an organization may simply quit
that organization.
Projection (outcrop): An individual may redefine a frustrating situation by projecting
blame of his or her own failures or inabilities on other objects or persons. For example,
the driver who has an automobile accident may blame the other driver or the condition of
the road.
Autism: This refers to thinking that is almost completely dominated by needs and
emotions, with little effort made to relate to reality. Such day dreaming or fantasizing
enables the individual to attain imaginary satisfaction of unfulfilled needs.
Identification: The slice-of-life commercials and advertisements are so popular. Such
advertisements often portray a stereotypical situation in which an individual experiences
a frustration and then overcomes the problem by using the advertised product. If the
viewer can identify within the frustrating situation, he or she may very likely adopt the
proposed solution and buy the product advertised. For example, the people who are
frustrated with the aging appearance to identify with people who have had cosmetic
surgery. Or those people who are suffering from excessive hair fall might like to have
hair grafting.
Repression (oppression): Individuals may forget a need; that is they force the need out of
their conscious awareness. For example, a couple who cannot have children may
surround themselves with plants and pets. The wife may teach school or work in a
library; the husband may do volunteer work or involved with any social welfare
organization.
6. Arousal (awakening) of Motives
Most of the individuals specific needs are dormant much of the time. The arousal or stimulation
of particular set of needs may be caused from physiological, emotional, cognitive or by stimuli in
the outside environment.
The four different types of Arousal are discussed below:
Physiological Arousal: Bodily needs at any one specific moment in time are based on the
individuals physiological condition at that moment. Example stomach contraction will
trigger awareness of a hunger need. A decrease of body temperature will induce
shivering.
Emotional Arousal: Sometimes daydreaming results in the arousal or stimulation of latent
needs. People who are bored or frustrated are trying to achieve their goals often engage in
daydreaming. These thoughts tend to arouse dormant needs, which may produce
uncomfortable tensions that drive them into goal-oriented behavior woman who
daydreams of being a captain of industry may enroll in graduate business school.

Cognitive Arousal: Sometimes random thoughts can lead to a cognitive awareness of
needs. An advertisement that provides reminders of home might trigger instant desire to
speak with ones parents. This is the basis for many long distance telephone companies
like, Grameen Phone campaigns that stress the low cost of international long distance
rates.
Environmental Arousal: A set of needs an individual experience at a particular time are
often activated by specific cues in the environment. Without these cues, the needs might
remain hidden. For example, he 6 oclock news, the sight or smell of bakery goods, fast
food commercials on television, the end of the school day all of these may arouse the
need for food. In such cases, modification of the environment may be necessary to
reduce the arousal of hunger.
7. Freuds Theory of Motivation
An early thinker insofar as motivation is concerned was the psychologist, Sigmund Freud who
lived between 1856 and 1939. His theories have been criticized since, but as a theorist, his
theories are of fundamental value. He was responsible for identifying three levels of
consciousness:
The conscious which includes all sensations and experiences of which we are aware;
The pre-conscious which includes the memories and thoughts which we have stored from
our experiences and we can bring to mind when we wish;

The unconscious that is the major driving force behind our behavior and this includes our
wishes and desires of which we are not always aware.
Within these levels of consciousness there are mental forces at work attempting to reconcile our
instincts with the social world in which we live and these are not always in accord so we
experience emotional difficulties. Freuds terms for these are:
The Id which is the reservoir for all our physiological and sensual instincts. It is selfish
and seeks instant gratification regardless of social consequences;
The superego which develops as we grow and learn from family, friends, teachers and
other influences. It functions as our internal representation of the values and morals of the society
in which we have grown up. It is a potent force and comes into conflict with the demands made
by our id for the gratification of what might be anti-social desires;
The ego which attempts to resolve the conflict between the id and the superego and tries
to redirect our id impulses into socially and morally acceptable modes of expression.
Marketers are interested in motivation when it relates to purchasing behavior. This behavior
relates to the motive for wishing to possess the goods or services in question, and it has been
termed goal-related behavior. For a motive to exist there must be a corresponding need.
Motives like hunger, thirst, warmth and shelter are physiological. Others, like approval, success
and prestige are psychological. Motives like staying alive are instinctive whilst motives like
cleanliness, tidiness and proficiency are motives that are learned during life. We can also discern
between rational and emotional motives. Most purchasing decisions are a composite of such
motives, quite often a deciding factor might be price which is of course more of an economic
restriction than a motive. It can, therefore, be seen that a number of motives might be at play
when making a purchasing decision - some motives stronger than others - and the final decision
might be a compromise solution.
8. Maslows Need Hierarchy Theory
In 1954 the psychologist Abraham Maslow put forward his classic hierarchy of needs which is
shown in the figure below. This hierarchy is now central to much thinking in buyer behavior.
Hierarchy of needs (from A.H.Maslow)
Levels of Needs Nature of needs Products or services

Self-actualization Need to reach ones full Music or art lessons, athletic goods
potential
Esteem or ego Prestige, status, self respect Expensive cars, jewelry, personal care
products, expensive clothing
Social needs Affection, friendship, Sports bars, fraternities/ sororities, travel
belonging clubs, concerts
Safety needs Security protection Medical or health services, locks, smokes
and theft alarms
Physiological Food, water, air, shelter Homeless shelters, community soup
needs kitchens, salvation army
Physiological needs are concerned with self preservation and these are the basic needs of life
involving those elements required to sustain and advance the human race. Safety needs relate to
protection against danger and deprivation. Once the more basic needs have been satisfied
behavior is influenced by the need for belonging, association and acceptance by others. In many
texts the next two needs are put together, but here we have separated respect and self esteem in
terms of confidence, competence and knowledge and have then placed achievement in terms of
qualifications and recognition above this. The final need is what Maslow termed self
actualization which means self-fulfillment in terms of becoming all that one is capable of being
and one has reached the pinnacle of personal potential.

It is argued that when more basic needs like hunger ant thirst have been satisfied, then individuals
will move towards satisfying higher order needs towards the apex of the pyramid and look
increasingly for satisfactions that will increase status and social acceptability. When the apex of
the pyramid has been reached and other satisfactions have been achieved the prime motivation is
then one of acquiring products and accomplishing activities that allow self expression. This can
be in the form of hobbies, particularly collecting, which may have been desired for a long time,
but have been neglected until the lower order needs have been satisfied. It is of course not
possible to formulate marketing strategies on the hierarchy theory on its own. Its real value is
that it suggests that marketers should understand and direct their effort at the specific needs of
their customers, wherever the goods one is attempting to promote is in the hierarchy.
9. McGregor Theory of Motivation
Maslow was not the only theorist to focus upon human needs as the motivating force behind
human behavior. McGregor argued that two sets of theories motivate people and these he labeled
Theory X and Theory Y. Such motivations apply principally to the place of work, but the
workplace is where attitudes and opinions are accumulated, so its relevance to marketing is in an
indirect sense.
Under Theory X certain assumptions are made:
People have an inherent dislike for work and will avoid it if possible;
because of this, they must be coerced, controlled, directed and threatened with
punishment in order to complete their work satisfactorily;

people like to be directed and dont crave responsibility. They have little ambition and
want security.
Under Theory Y he makes an alternative set of assumptions:
People are not naturally passive or resistant to organizational needs. They have become
so as the result of experience in organizations;
Motivation and the capacity to develop and assume responsibility are all present and it is
managements responsibility to develop these characteristics;
It is managements responsibility to organize production towards economic ends, but it is
their task to arrange conditions and methods of operation so that people can achieve their own
goals best by directing their own efforts towards organizational objectives;
If the right conditions prevail, individuals will not only accept responsibility. They will
actively seek it;
Most of the population is capable of imagination, ingenuity and creativity in problem
solving within an organization;
Industrialization has meant that such capabilities are under-utilized.
There are thus two ways in which human behavior can be interpreted, depending upon whether
the observer assumes Theory X or Theory Y. What McGregor argued was that management by
control (Theory X) was based on an inaccurate set of negative assumptions and that organizations
would work more effectively if management by objectives (MBO) or Theory Y was applied.
10. Herzberg Theory

Frederick Herzberg also contributed to motivation theory through his Motivation-hygiene
theory. He believed that performance is at its pinnacle when people are satisfied with their jobs
as long as the necessary resources are provided to carry out this work effectively. Satisfaction
with work and personal happiness do not necessarily work in harmony, but when they are and
when the person is stretched to the limits of his or her ability then there may be a feeling of self
actualization. Whilst this feeling might be more evident in recreational or home situations, it is
less common in the workplace because of the conditions and deadlines imposed in an
occupational situation. According to Herzberg, self actualization depends on what he terms
motivators and these he distinguishes from another set of factors termed hygiene factors.
Motivators can positively contribute to satisfaction at work, whereas hygiene factors cannot
promote satisfaction, but they can prevent dissatisfaction. He uses the medical analogy to
describe hygiene factors and cited the case of unhygienic conditions as being a source of infection
that may make a person unhealthy. In an organization, hygiene factors include financial reward;
supervision; working conditions; company policy; status and relationships with colleagues.
Similarly, in an organization motivators are: recognition for achievement; opportunities for
advancement; responsibility; the job itself. It can be seen that motivating factors are those that are
part of the job whereas hygiene factors are more concerned with the job environment
______________________________________________________________________________
Explain the model of motivation process with the help of a diagram.
What role does Needs and Goals have in motivation process?
Explain briefly the various theories of motivation.
How can the understanding of the motivation process be of use to the marketer.
______________________________________________________________________________
Ohio, 1995.
________________________________________________________________________
UNIT 2: LESSON 5
PERCEPTION
1. What is perception?
2. Elements of perception
3. Dynamics of perception
4. Images important to consumers
5. Review questions
6. Further readings
1. What is perception?
Reality is different for each individual. What is reality for each one of them is the result of their
Perception. Understanding perception is important because the acts of the individuals are the
result of what and how they perceive things. In the field of consumer behavior, perception plays a
significant role in the buying process and this necessitates studying it.
Perception is the process of selecting, organizing and interpreting information inputs to produce
meaning out of it. These information inputs are called Stimulus. A stimulus is any unit of input
to a sensory receptor. Perception describes how an individual sees the world around him.
Perception is developed as a result of each individuals attitudes, values and expectations. Since
each individual is unique in terms of these inner values, no two individuals would react to the
same thing in the same manner always.

2. Elements of Perception
Following are some of the elements that underlie the perception process:
SENSATION
Sensation is the immediate and direct response of the sensory organs to the stimuli. As
already mentioned, a stimulus is any unit of input to a sensory receptor. In terms of
marketing, stimulus can be a product, a brand, an advertisement etc. a Sensory receptor
is the human organ ( eye to see, nose to smell, ear to hear, mouth to taste or skin to feel )
that receive the sensory input. Whenever a consumer comes across a product offering
these sensory receptors play a role in evaluating the offering. Human sensitivity is the
experience of sensation. It varies according to the strength of sensory receptor and
amount or intensity of stimulus. Sensation is a function of change in energy or
differentiation of input. In a completely unchanging environment, howsoever strong the
stimulus may be it provides little or no sensation. For example, if we are used to a
consistently noisy environment, a little more noise from somewhere would hardly have
any impact on the sensation.
THE ABSOLUTE THRESHOLD
The point at which a person can detect a difference between something and nothing
is that persons absolute threshold (entrance/access) for that stimulus. Driving through a
corridor of billboards (For example: Mumbai-Pune highway), the absolute threshold
increases (that is, the senses tend to become increasingly dulled). After an hour of driving
through billboards, it is doubtful that any one billboard will make an impression.
Sensory adaptation (adjustment) is a problem that concerns many national advertisers,
which is why they try to change their advertising campaigns regularly. They are
concerned that consumers will get used to their current print ads and TV commercials
that they will no longer see them; that is, the ads will no longer provide sufficient
sensory input to be noted.
Some marketers seek unusual media which to place their advertisements in an effort to
gain attention. Some advertise their products on bus shelters; others on parking meters
and shopping carts. Package designers try to determine consumers absolute thresholds to
make sure that their new product designs will be noticeable from competitors package
on retailers shelves.
THE DIFFERENTIAL THRESHOLD
The minimal difference that can be detected between two similar stimuli (here we will
consider price as stimuli) called the differential threshold or the J.N.D. (for just
noticeable difference). For example if the price of an apartment were increased by $200,
it would probably not be noticed (i.e. the increment would fall below the J.N.D.). If the
price increases $400 or more than the previous differential price would be noticed.
However consumers would notice a $1 increase in the price of rice/wheat very quickly,
because it is a significant percentage of the initial (base) cost of the rice/wheat.
Webers law has important applications in marketing. Manufacturers & marketers make
an effort to determine the relevant j.n.d. for their products for two very different reasons:
o So that negative changes (e.g. reduction in the product size) are not readily
visible to the pubic (they remain below the j.n.d.) and

o So that product improvements (such as improved or updated packaging) are very
apparent to consumers without being wastefully extravagant (they are above the
j.n.d.).
Marketers often want to update their existing package designs without losing -the ready
recognition of consumers who have been exposed to years of cumulative advertising
impact. In such cases they usually make a number of small changes, each carefully
designed to fall below the j.n.d. so that consumers will recognize minimal difference.
Pepsi redesigned its packaging in 1997 to update its look. Its new cola cans are bright
royal blue, with the word Pepsi in white lettering rising vertically up the side of the can.
In order to provide continuity in perceived look, the company initially introduced the new
packaging (and ads) in a lighter blue, which it gradually strengthen, making it globe logo
more famous. Coca-cola also redesigned its signature red cans and labels in order to keep
the brand looking fresh and new. At the same time, it was concerned that consumer
loyalists, who had rebelled at the introduction of the new coke in 1885- not erroneously
perceive the newly designed can as a new taste formulation.
SUBLIMINAL PERCEPTION
Attention paid to a message without conscious awareness of the message. Although this
has never been proven to exist, the theory is that the recipient of a subliminal message
cannot erect mental barriers against the message and is thus more susceptible to the
message's influence.
3. Dynamics of Perception
Perception is the result of two different kinds of inputs that interact to form the personal pictures,
the perceptions that each individual experiences. One type of input is physical stimuli from the
outside environment; the other type of input provided by individuals themselves in the form of
certain tendency (expectations, motives and learning) based on previous experiences. These two
very different kinds of inputs produce for each of us a very private, very personal picture of the
world. Because each person is a unique individual and their perceptions are also unique. This
explains why no two people see the world in precisely the same way.
Individuals are very selective as to which stimuli they recognize; they unintentionally organize
the stimuli they do recognize according to widely held psychological principals and they interpret
such stimuli subjectively in accordance with their needs, expectations, and experiences.
Three aspects of perception are (a) the selection, (b) organization, and (c) interpretation of
stimuli.
A) Perceptual Selection
For example: a woman in a super market (Like Agora), she may be showing to over 25,000
products of different color, sizes, and shapes; to perhaps 100 people (looking, working, searching,
talking); to smells (from fruit, meat); to sounds within the store (cash registers ringing, shopping
carts rolling); and to sounds from outside the store (planes passing, car honking). Yet she
manages on regular basis to visit her local super market, select the items she needs, pay for them
and leaves, all within a relatively brief period of time, without losing her judgment or personal
orientation to the world around her. This is because she exercises selectively in perception.
Which stimuli get selected depends on two major factors in addition to the nature of the stimulus
itself; consumers previous experience as it affects their expectations (what they are prepared, or
set, to see) and their motives at the time (their needs, desires, interests and so on).
The following points are also needed to be considered in perceptual selection:
Nature of the stimulus: In an effort to achieve contrast, advertisers are also using splashes
of color in black and white print ads to highlight the advertised product. With respect to
packaging, smart marketers usually try to differentiate their packages to ensure rapid
consumer perception. Since the average package on the super market shelf has about
1/10th of a second to make an impression on the consumer, it is important that every
aspect of the package- the name, the color, the label and copy provide sufficient
sensory inspiration to be noted and remembered.
Expectations: People usually see what they expect to see is usually based on familiarity,
previous experience, or pre conditioned set (expectations). In a marketing context, people
tend to perceive products and product attributes according to their own expectations.
Motives: People tend to perceive the things they need or want; the stronger the need or
want; the stronger the need the greater the tendency to ignore unrelated stimuli in the
environment. For example, a woman interested in a portable computer is more likely to
notice and read carefully ads for computer laptops than her neighbor, who uses a desktop
computer.
The marketer can segment the market on the basis of those needs and vary the product advertising
so that consumers in each segment will perceive the product as meeting their own special needs,
wants, and interests.
Important concepts concerning selective perception:
Selective Exposure: Consumers actively seek out messages that they find pleasant or with
which they are sympathetic, and they actively avoid painful or threatening ones.
Selective Attention: People vary in terms of the kinds of information in which they are
interested and the form of message and type of medium they prefer. Some people are
more interested in price, some in appearance, and some in social acceptability, some
people like complex, sophisticated messages; others like simple graphics.
Perceptual Defense: Consumers unintentionally screen out stimuli that they find
psychologically threatening, event though exposure has already taken place.
Perceptual blocking: Consumers protect themselves from being attacked with stimuli by
simply turning out- blocking such stimuli from conscious awareness. The perceptual
blocking is comparable to the zapping of TV commercial with remote controls.
B) Perceptual Organization
People tend to organize the numerous stimuli from the environment into groups and perceive
them as unified wholes. Three of the most basic principals of perceptual organization are
discussed below:
Figure and Ground: Advertisers have to plan their advertisements carefully to make sure
that the stimulus they want noted is seen as figure and not as a ground. The musical
background must not overwhelm the jingle; print advertisers often line their products
against a White or Black background to make sure that the features they want noted are
clearly perceived. Marketers sometimes run advertisements that confuse the consumer
because there is no clear indication of which is figure and which is ground.
Grouping: For example, when AT&T introduced the idea of all digit telephone numbers,
consumers objected actively on the grounds that they would not be able to recall or repeat
a long string of numbers. However because we automatically group telephone numbers
into two chunks or three, with the area code, the anticipated problems never occurred.
Closure: A classic study found that incomplete tasks are better remembered that complete
tasks. A state of tension is created that manifests itself in improved memory for the
incomplete task that has been called the Zeigernik effect,
The need for closure has some interesting implications for marketers. Advertisers have
discovered that they can achieve excellent results by using the soundtrack of a frequently shown
television commercial on radio.
C) Perceptual Interprtation
When stimuli are highly confusing, an individual will usually interpret them in such a way that
they serve to fulfill personal needs, wishes, and interests and so on. How close a persons
interpretations are to reality, then, depends on the clarity of the stimulus, the past experiences of
the perceiver, and his or her motives and interests at the time of perception.
Distorting Influences
There are a number of influences that tend to Distort (misrepresent) their perceptions; some of
them are discussed below:
Physical appearances: Studies on physical appearance have found that attractive models
are more influential and have a more positive influence on consumer attitudes and
behavior than average looking models; attractive men are perceived as more successful
businessman than average looking-men.
Stereotypes: These stereotypes serve as expectations of what specific situations, people or
events will be like, and they are important determinants of how such stimuli are
subsequently perceived.
Irrelevant cues: For example, many high priced automobiles are purchased because of
their color, style or luxury options, rather than on the basis of mechanical or technical
superiority.
First impressions: First impressions are often lasting in introducing any new product.
Information about the products advantages, even if true will often be negated by the
memory of its early performance.
Jumping conclusions: For example the customer may hear just the beginning of a
commercial message and draw conclusions regarding the product or service being
advertised.
Halo effect: Using this broader definition marketers take advantage of the halo effect
when they extend a brand name associated with one line of products to another.
4. Images important to consumers
Products and brands have symbolic value for individual who evaluate them on the basis of their
consistency with their personal pictures of themselves. Such enduring perceptions or images are
particularly relevant to the study of consumer behavior.
Perceptual Mapping
The technique of perceptual mapping helps marketers to determine just how their products or
services appear to consumers in relation to competitive brands on one or more relevant
characteristics. It enables them to see gaps in the positioning of all brands in the product or
service class and to identify areas in which consumer needs are not being adequately let. For
example if a magazine publisher wants to introduce a new magazine to generation Xers, he may
use perceptual mapping to uncover a niche of consumers with a special set of interests that are not
being adequate or equally addressed by other magazines targeted to the same demographic
segment. This insight allows him to position the new magazine as specifically focus on these
interests.
Positioning of Services
Many service marketers have developed strategies to provide consumers with visual images and
tangible reminders of their service offerings. A number of image consultants have tried to
persuade united parcel service to change the color of its delivery trucks from dark brown to a
more cheerful color, but management has resisted because of the ready identification the brown
trucks have achieved with fast and reliable service.
Perceived Price
There is some evidence that consumers do pay attention to the prices paid by other consumers.
No one is happy knowing he or she paid twice as much for an airline ticket or a theatre ticket as
the person in the next seat. Strategies that reduce perceived price unfairness ultimately enhance
perceived product value.
A reference price is any price that a consumer uses as basis for comparison in judging another
price. Reference prices can be external or internal. An advertiser generally uses a higher external
reference price (sold elsewhere at....) in an ad, which a lower sales price is being offered to
persuade the consumer that the product advertised is a really good buy. Internal reference prices
are those prices (or price ranges) retrieved by the consumer from memory.
Tensile price claims (for example save 10 to 40%, save up to 60%, save 20% or more are
used to promote a range of price discounts for a product line, an entire department or sometimes
entire store. In contrast with tensile cues, objective price claims provide a single discount level
(such as save 25 %).
Perceived Quality
Perceived quality can be classified into following two variants:

Perceived quality of products: In some cases consumers use physical characteristics (i.e.
the flavor of ice cream or cake) to judge product quality. Consumers often cannot
differentiate among various cola beverages and base their preferences on such extrinsic
cues as pricing, packaging, advertising and even peer pressure. In the absence of actual
experience with a product, consumers often evaluate quality on the basis of cues that
are external to the product itself, such as price, brand image, retail store image, or even
the country of origin. Many consumers use country-of-origin stereotypes to evaluate
products (i.e. German Engineering is excellent or Japanese cars are reliable).
Perceived quality of services: In evaluating a doctors services for example the consumer
note the quality of the office and examining room furnishing, the number (and source) of
framed degrees on the wall, the pleasantness of the receptionist and the professionalism
of the nurse. All contribute to the customers overall evaluation of service quality. During
peak demand hours the interactive quality of services often declines, because both the
customer and the service provider are hurried and under stress.
Researchers believe that service quality perceptions are a function of the gap between perceived
performance and a combination of expectations and desires. The SERVQUAL was designed to
measure the gap between consumers expectations of services and their perceptions of the actual
service delivered, based upon the following five dimensions:
Tangibles: appearance of physical facilities, equipment,
Reliability: ability to perform the promised service.
Responsiveness: willingness to help customers.
Assurance: knowledge and courtesy of employees

Empathy: caring, individualized attention the firm provides its customers.
Service quality are divided into two groups: the outcome dimension (which focuses on the
reliable delivery of the core service) and the process dimension (which focuses on how the core
service is delivered. For example: while federal express provides the same core service as other
couriers (the outcome dimension), it provides a superior process dimension through its advance
tracking system.
The above conceptual model, that proposes that the customers overall satisfaction with the
transaction is based on an evaluation of service quality, product quality and price. A study of the
relationship between service quality, consumer satisfaction, and purchase intentions found that
perceptions of high service quality and high service satisfaction result in a very high level of
purchase intentions. Some consumer theorist believes that service quality is a determinant of
whether the consumer ultimately remains with the company or defects to a competitor.
Price /Quality Relationship
An important question for marketers is whether consumers perceive a price quality association.
Generally when consumers do not have sufficient information about product quality, they use
price as an indication of quality. Since these consumers know little about the product, they are
less likely to be involved. Consumers with information about product characteristics are less
likely to make price-quality inferences. These consumers are more likely to be involved with the
product category. Price is more likely to be a reflection of quality if consumers have confidence
in the source of the price information. Price is also more likely to be a surrogate for quality when
consumers believe that quality and price difference exists between product alternatives. Such
variations allow for price-quality inferences. Consumers are unlikely to attribute higher quality to
products that are standardized or that differ by a few rupees. Price range permits quality
inferences. In support of these views overrule, found that price-quality association are more likely
for product lines than they are for single brands because product lines are more likely to have a
wide range in prices. On the basis, if the consumer shopping for 21-inch color TV set believes
there are significant price and quality differences among brands and has little knowledge about
TV sets, to use high price as an indicator of quality.
Retail store image
The type of product the consumer wishes to buy influences his or her selection of a retail outlet.
A consumer wishing to buy an elegant dress for a special occasion may go to a store with an
elegant, high fashion image, such as Kelvin cline. Thus when a low priced store carries a brand
with a high priced image, the image of the store will improve while the image of the brand will be
negatively affected.
Manufacturers image
Manufacturers who enjoy a favorable image generally find that their new products are accepted
more radically than the manufacturers who have a less favorable or even a neutral image.
Researchers have found that consumers generally have favorable perceptions of pioneer brands
(the first in a product category) even after follower brands become available.
Perceived Risk
Perceived risk is defined as the uncertainty that consumers face when they cannot foresee the
consequences of their purchase decisions. Various types of perceived risk include:
Functional risk: is the risk that the product will not perform as expected.
Physical risk: is the risk to self and others that the products may pose.
Financial risk: is the risk that the product will not be worth its cost.
Social risk: is the risk that a poor product choice may result in social embarrassment.
Psychological risk: is the risk that a poor product choice will bruise the consumers ego.
Time risk: is the risk that the time spent in product search may be wasted if the product
does not perform as expected.
When consumers see potential risk in purchase, they may be about the outcome of the division or
they may commend about the consequences of the division. Thus the two components of
perceived risk are uncertainty about the outcome of the decision and concern about the
consequences of the division. Several factors are likely to increases the risk consumers see in
purchasing. Perceived risk is likely to be greater when:
There is little information about the product category.
The product is new.
The product is technologically complex.
Consumers have little self-confidence in evaluating brands.
There are variations in quality among brands.
The price is high.
The purchase is important to consumers.
For example, perceived risk in purchasing a laptop is high because most of the listed will be met.
As the product category is relatively new for many consumers, they have little experience with
alternatives. Moreover the product is technology complex, making evaluation more difficult. As a
result, consumers confidence in selecting brand over another is low. Furthermore, substantial
variations among brands and incompatible systems heighten risk. A high price will also
contribute to perceived risk. Finally such a purchase is probably important to consumers.
Consumers use various strategies to reduce risk.
By acquiring additional information that will allow consumers to better assess risk.
Engaging more extensive information processing to better evaluate alternatives.
o Buying most popular and well-known brands.
Reducing the consequences of failure can be done by:
Buying the lowest priced item or the smallest size.
Obtaining a warranty or guarantee on the product also reduces the consequences of
failure.
Reducing the level of expectations before making the purchase. For example, a consumer
who decides that cars are a necessary evil and produce mechanical failures and repair
bills. This purchase is going to be terribly disappointed if his or her car does not perform
well, he or she expects it.
___________________________________________________________________________
5. Review questions
Discuss the differences between the absolute threshold and the differential threshold
What is Perception? What are the elements of Perception?
How can the marketer use the Perceptual organization techniques effectively in a print
advertisement?
Explain the concept of Consumer imagery in perception.

___________________________________________________________________________
6. Further readings
Ohio, 1995.
___________________________________________________________________________
UNIT 2: LESSON 6
ATTITUDE
1. Introduction
2. Concepts related to Attitude
3. Properties of Attitude
4. Sources of Attitude
5. Components of Attitude
6. Attitude Behavior consistency
7. Models of Attitude (General)
8. Tri Component Attitude Model
9. Multi Attribute Attitude Models
10. Attitude towards Object Model
11. Behavior Intention Model
12. Theory of Reasoned Action
13. Trying to Consume Model
14. Attitude towards the Ad model
1. Introduction
Given three TV brands- Sony, Akai, Videocon; what do you think of all of them and why? What
is the first word that comes to your mind when I say- Mcdonalds, Lakme, Nokia, John players?
What do you think of Batas Rs. 99.99 pricing? Your response to all the above questions is the
topic of discussion today- Attitude.

Attitude is the whole gamut of understanding how people feel about (like/dislike) Something.
This Something is a very broad term and includes product, brand, service; Advertisement etc.
research into studying the Attitude towards something is called as Attitude research. Various
taste tests, test studies, surveys are all part of this Attitude research. It is central to Consumer
Behavior. This is done to understand what consumers want and to increase consumer satisfaction
by delivering the same efficiently. It is to understand the pulse of the market. Attitudes shows
what consumers want reflected by what they think.
2. Concepts related to Attitude
Definition- Attitude is a learned predisposition to respond in a consistently favorable or
unfavorable manner with respect to a given stimulus. Schiffman and Kanuk (1996).
Attitude is an expression of inner feeling that reflects whether a person is favorably or
unfavorably disposed to some object. It is a persons relatively consistent evaluation,
feeling or a tendency towards an object.
Explanation with examples:
o Learned predisposition- attitude is there because consciously or unconsciously
we have learnt certain things about the Attitude Object, which is coming out as
a response towards it. Attitudes are learnt from- direct experience, information
acquired from others and from exposure to mass media. Example- we have
learned it over the years that Maggi is a two minutes snacks.
o Consistency- we know from experience, media and otherwise that Thumps up
is a strong drink and this is a consistent thinking.
o Favorable/Unfavorable- attitude can be favorable or unfavorable given the
stimulus.
o Stimulus- an object towards which the Attitude is measured. In all the above
examples; Maggi, Thumps up are the stimuli.
Attitude objects (AO) it refers to the concept against which the Attitude is seen, tested
and analyzed. It can be anything ranging product, brand, service, retailer, events,
personalities, 4Ps, and concepts (reality TV shows). So, attitude is object specific.
Example- we are interested in knowing Attitude towards electrical goods industry.
Then AIWA, AKAI, VIDEOCON, SONY, HAIER, PHILIPS, SANSUI etc. would be
the Attitude object. But, if we are interested in studying attitudes regarding Sony TV.
Sony TV is our Attitude Object.
Beliefs- it is the psychological association between a product, brand, outlet, action etc.
and an attribute or feature (and associated belief) of such. Beliefs are cognitive (based
on knowledge, experience, faith, opinion, perception etc.). Stronger the association of
features or attributes (and associated benefits) with the product, brand, outlet or action;
the stronger the consumers belief. Therefore, a belief is a descriptive thought that a
person holds about something. This belief can be favorable or unfavorable. Attitudes
are made up of the beliefs that a person accumulates over his lifetime. But, only few of
the beliefs actually work to influence attitudes. Beliefs which work are called Salient
beliefs. Now we can say- Attitude is a persons salient belief about whether the
outcome of his action will be positive or negative.
Belief strength- beliefs are rated for the probability that engaging in the behavior will
produce the believed outcome. Evaluation is the perception of whether this outcome is
positive or negative. It is done using scales such as Likert scale. Attitude is a function
of Belief strength and Evaluation.
3. Properties of Attitude
It is a psychological process- Attitudes are not visible. They are reflected by actions,
responses, surveys of consumers.
Attitudes towards objects are inferred by
a. Asking questions
b. Surveys
c. Hidden cameras
d. Observing customers in stores
e. Consistency of purchases
Attitude is based on perception one carries towards the stimulus because of experience,
information, publicity, others and peer pressure. Two persons may have different
attitudes about the same object.
Attitude is not same as Behavior. At the most we can infer from attitude, the likely
behavior or measure the probability of an intention to buy. Example- my attitude towards
the Golden Watch collection is favorable, but I bought a Fastrack designer watch.
Attitudes as learned predispositions have a motivational quality. It can propel a consumer
towards a particular object or repel him away from it.
Attitudes put people in a frame of mind towards liking/disliking things. Example- if
attitude is that eating healthy food is important. The perception would be that vegetables
are healthy alternatives to snacks and fast food.
Attitudes are difficult to change. Attitudes developed as children often influence
purchases as adults.
Attitudes are a final outcome of information processing
Attitude and attitude change is a function of consumer personality and lifestyle.
4. Sources of Attitude formation

Personal experiences- it is a primary basis to collect information for processing so as to
develop an Attitude. The marketers role is to get the consumers to try a product and
hopefully develop a positive attitude towards it.
Influence of family and friends- we carry over to adulthood many of the attitudes we
developed as children.
Direct marketing and mass media- many solicitations are highly personalized and have
the capacity to create favorable/unfavorable attitude towards their product. Attitudes have
a high prediction and diagnostic value for marketers.
An experience leads to learning. This learning helps in building beliefs about it. This
belief helps giving shape to an Attitude, which determines buyer behavior.
5. Components of Attitude
We as individuals generally have attitudes that focus on objects, people or institutions. Attitudes
are also attached to mental categories. Mental orientations towards concepts are generally
referred to as Values. Attitude consists of four components. These are:
Cognitive- cognitions are beliefs, theories, expectancies, cause and effect beliefs and
perceptions relative to the focal object. It is concerned with the thinking part.
Affective- it reflects our feelings such as anger, fear, happiness etc. with respect to an
Attitude Object. It is concerned with the emotions associated.
Behavioral intentions- these are the goals, aspirations and our expected response towards
an Attitude Object.
Evaluations- it is the central component. It consists of imputations of some degree of
goodness or badness towards Attitude Object. When we speak of positive or negative
attitude, we are referring to this component. Most often, Evaluations are stored in
memory. It is a function of cognitive, affective and behavioral intentions of an object.

6. Attitude Behavior consistency
Attitude and Behavior are said to be consistent if they move in same direction. It refers to the
extent to which attitude leads to purchase. This is to say that, if there is a positive attitude towards
an object and one purchases it; it is said that Attitude and behavior are consistent. Example-
Statement 1- Taj Mahal is a good tea and it is costly. (Attitude). I do not buy it
(Behavior). In this case Attitude and Behavior are consistent and go together.
Statement 2- Taj Mahal is a good tea and it is costly. (Attitude). It is offered at a discount
and I buy it. (Behavior). In this case, Attitude and Behavior are not consistent.
Attitude behavior consistency is influenced by following factors:
Consumer factors- it includes factors such as access to resources, past experiences
with the brand and orientation.
Situational factors- it includes time factor, message repetition and social influence
Measurement factors- it includes specifity and time of measurement.
Situations influence attitudes- how attitude affects behavior depends on the situation in which the
behavior occurs. A specific situation may cause consumers to behave in ways that are
inconsistent with their attitudes. For a marketer it is important to consider the situation in which
the behavior takes place.
Example- a lady buys different brands of cosmetics each time she buys because they are at EDLP
(Every Day Low Pricing). This brand switching behavior may seem to reflect a negative attitude
towards different brands that she tries. But, in reality this behavior is influenced by the situation
to economize on each purchase.
PRODUCT/ SERVICE SITUATION ATTITUDE

Avon Oil Free Sunscreen Active sports in the sun It sounds like a good idea to use an oil free
sunscreen when involved in summer sports
activities.
Cannon Color Printers Old PC Printer ceases Now that they have gone down in price so much,
to work its time for me to buy a color printer.
Taj Resorts Exhausted, time or a I worked hard; I earned a couple of days away to
weekend get-a-way relax.
Maxima Watches Watch fell into water There is nothing to worry since it is an economical
water proof watch.
Monaco Biscuits Party going on and I need to serve an instant substitute for snacks.
ordered snacks havent
arrived.
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7. Models of Attitude
The objective of developing Attitude Models is to understand the relationship between Attitude
and Behavior. Psychologists try to develop models that capture underlying dimensions of
Attitude. All the models present different perspectives on the number of component parts of an
Attitude and how these parts are arranged or interrelated.
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8. Tri Component Attitude Model
This model sees Attitude as interplay of three components. These are:

COGNITION
AFFECTIVE
CONATION
6. Cognition- it represents the thinking component which is based on knowledge and
perception. It helps to make a belief about attributes of an Attitude object. A purely
cognitive decision maker rank order the preferred product or service on the basis of some
chosen criteria and assess each candidates attributes against the criteria set. Utility
function representing the weighted product of attributes and criteria would be used to
develop final ranking and choice. The knowledge and perception required to develop an
attitude comes from direct experience or various information sources.
7. Affective- it represents the Emotions component which is based on feelings about the
Attitude object. It is generally a reaction to the cognitive aspect. Our emotional state may
amplify positive or negative experiences, which then have an affect on our attitude. It
consists of both our knowledge of stimulus and our evaluations of them. Emotions or
feelings towards an object are a result of evaluations. Evaluations capture an individuals
direct or global assessment of Attitude object, which can be positive, negative or mixed
reactions. Buying of any product/ service is accomplished on the basis of how each
product/service makes the decision maker feel. The product with the greatest positive
affective response would be ranked first. While using the product, the consumers can
experience certain affective states such as happiness, joy, dissonance etc. such
experiences (positive or negative) creates an impact on attitudes and actions. A persons
own state of mind also affects attitude.
8. Conation- it represents the actual buying behavior based on the probability of purchasing.
It helps to assess the buying intentions. It is the likelihood/ tendency of certain behavior
with respect to an Attitude object. It is the predictor of actual buying behavior based on
Buyer intention scales.
This model is more clearly tied to high involvement brand, outlet, product, situations than low
involvement ones. Marketers use this model to create/ change attitudes. They provide information
for the consumers Cognition level; emotionally toned messages to cater to their Affective states
and incentives to deal with Conation.
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9. Multi Attribute Attitude Models
It consists of Attitude models that examine the composition of consumer attitudes in terms of
selected product attributes or beliefs. It portrays consumers attitude with respect to an Attitude
object. Multi Attributes Model specifies three elements. These are:
Attributes
Beliefs
Importance weights
Main contribution is by Martin Fishbein. He has given three following models:
Attitude towards object model
Attitude towards behavior model
Theory of reasoned action
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10. Attitude towards object Model by Fishbein (1972)

A model that proposes that a consumers attitude towards a specific behavior is a function of how
strongly he or she believes that action will lead to a specific outcome (favorable or unfavorable).
It is suitable for measuring attitude towards product/ service/ brands. Consumers attitude towards
an object is a function of presence (absence) of evaluations of certain product/ object specific
beliefs or attributes. Consumers generally have favorable attitudes towards those brands that they
believe have an adequate level of attributes that they evaluate as positive and unfavorable attitude
towards those brands they feel do not have an adequate level of desired attributes or have many
undesirable attributes. It measure three components of attitude:
Salient beliefs
Object attribute linkages
Evaluation
Assumptions of this model are the consumers ability to specify all relevant choice attributes and
identification, weight and summing of attributes.
Fishbein equation for this model:
n
A = i=1Biai
Where:
i = particular attribute to study; what I want in a product
a = Evaluative dimension associated with attribute i i.e. weight age applied by consumer to
attribute i. it represents the importance of attribute to the person
B = Strength of the belief that the attitude object contains attribute i. It shows whether the
product has the attribute
A = Attitude towards object
= There are n salient attributes over which Bi and ai are summated.
Affective responses to brand consist of:
The strength or weakness of consumers beliefs about the brand and its attributes
Consumers evaluations of or feelings towards those attributes
Steps towards Attitude measurement:
Get relevant attributes for the product i.e. i
Design questionnaires to measure Bi and ai
Analyze data to see attitude towards object
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11. Behavior Intention Model
A model that proposes that a consumers attitude toward a specific behavior is a function of how
strongly he or she believes that the action will lead to a specific outcome (either favorable or
unfavorable). It is not uncommon for consumers to have a positive attitude towards an object,
but a negative attitude towards purchasing/action.
Example: Attitude towards object-I like BMW. Attitude towards action-but I m not ready to
buy one.
Focus is on actual behavior i.e. individuals attitude towards behaving or acting with respect to an
object, rather than the attitude towards object itself. Model predicts the intention to behave and
not the actual behavior of consumer.
Example- my attitude towards purchasing a Fastrack watch (i.e. Attitude towards behavior/
action) reveals more about the potential of purchasing/ actual behavior of buying or not, then my
attitude towards Fastrack watch (i.e. attitude towards an object) because I might have a positive
attitude towards the watch, but a negative attitude towards purchasing it.
Fishbein Model equation:
n
A(behavior) = i=1Biai
Where:
i = outcome
a = Evaluative dimension associated with outcome i i.e. weightage applied by consumer to
oucome i
B = Strength of the belief that an action will lead to specific outcome.
A (Beh) = Separately assessed overall measure of affect for or against carrying out a specific
action or behavior
= There are n salient outcomes over which Bi and ai are summated
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12. Theory of reasoned action (TRA) based on Conation
A comprehensive theory of the integration of attitude components into a structure that is designed
to lead to both better explanations and predictions of behavior. It is based on social psychology.
Origin:
1872: Charles Darwin Attitude as physical expression of emotion
1930: Emotions or thought with behavioral component
1935: Gordan Allport, Attitude behavior concept is multi-dimensional
1980: Ajzen and Fishbein, Persons behavior is determined by his intention to perform and this
intention is a function of his attitude towards the behavior and by the opinion of his social
environment. He proposed that a persons behavior is determined by his intention to perform the
behavior and this intention is in turn a function of his attitude towards the behavior and subjective
norm.
Applications of this theory:

o It helps in identifying most important attributes towards purchasing the product,
by way of forming positive attitudes
o It helps to identify and adjust sources of social pressure and their role in intention
formation
Limitations- it is based on self reporting by consumers. No direct observation is used.
Self reported data is subjective and is not necessarily accurate.
Theory of reasoned action is based on:
o Behavior is a direct result of intention. Intentions are the probability as rated by
the subject, that he will perform the behavior. This intention is made up of
Attitudes and Social pressure which determines Social norm. .
o Social pressure is measured by Subjective norm. Subjective norm (SN) is the
perception of what other people think we should do with respect to certain
behavior and what the response to this pressure will be. These are the perceptions
about how family and friends will perceive the outcome of the behavior
(Normative beliefs) and the degree to which this influences whether the behavior
is carried out (Motivation to comply). Subjective norm is determined by:
Normative belief (NB)- it is perceived expectations that others believe an
action should or should not be taken
Motivation to comply (MC) - it is the degree to which consumers
consider the possible opinions of significant others when performing an
intent to purchase.
Subjective norm = normative beliefs * motivation to comply
o Attitude towards buying it measures attitude towards the act of buying (A act).
It determines how someone feels about buying due to the perceived
consequences of a purchase.
Theory of reasoned action believes that behavior leads to formation of beliefs. Behavior is a result
of intentions, intentions is a result of attitudes, attitudes is a result of beliefs (salient beliefs).
Equations involved in this theory:
1. equation of theory of reasoned action:
B=f ((BI) = f (Attitude towards behavior)* w1+ f (SN)*w2)
B= Overt behavior, brand purchase

BI= Behavior intention/purchase intention
SN=subjective norms
w1 w2= empirically determined evaluation weights
2. Attitude towards behavior equation:
n
A(behavior) = i=1Biai
Where:
i = outcome
a = Evaluative dimension associated with outcome i i.e. weightage applied by consumer
to oucome i
B = Strength of the belief that an action will lead to specific outcome.
A (Beh) = Separately assessed overall measure of affect for or against carrying out a
specific action or behavior
= There are n salient outcomes over which Bi and ai are summated
3. Subjective norm equation:
n
SN = J=1NBJMCJ
SN
Where:
SN= Subjective Norm
NB= Normative Beliefs
MC= Motivation to Comply
J= Significant others 1-10
It is a comprehensive theory of the interrelationship between Attitudes, Intentions and Behavior.

It is an interrelated Attitude component theory. Intentions are more closely linked to actual
behavior rather than Attitudes which help determine intentions.
Beliefs that Evaluation Beliefs that Motivation
the behavior of the specific to comply
leads to outcomes referents with the
certain think I specific
outcomes should or referents
should not
perform the
behavior
Attitude toward Subjective

the behavior norm
Intention
Behavior
Source: Adapted from Ajzen Martin Fishbein
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13. Trying to consume Model (TTC)
Model which is based on intentions to buy i.e. the conative component is an Attitude theory
designed to account for the many cases where the action or outcome is not certain but instead
reflects the consumers attempt to consume (or purchase). There are often in such cases,
personal/environmental impediments that might prevent desired action or outcome from
occurring. The focus is on trying rather than the outcome (purchase or consumption).
Example- I am calories conscious so, this personal impediment comes in the way of consuming
soft drink, as I try to consume. A diet coke overcomes my impediment and bridges the gap
between trying to consume and Actual consumption. It highlights the constraining factors that
prohibit the consumer from converting Attitudes into actual buying pattern. It explores
consumption behavior rather than buying behavior.
Applications-
o Understanding consumption behavior is necessary to establish long term
relationships with customers

o Marketers must encourage, support and reward the consumption act.
o It helps marketer understand:
How people consume products and services
Why they consume them or not
What will make them consume products in future
If they will consume the product in future
What they need to stimulate long term consumption.
Potential impediments that might impact trying:
Personal Impediments
I want to join gym but it is too time
consuming and costly.
I want to try to lose fifteen kgs by
next summer.
Im going to try to get tickets for a
PVR show for your birthday.
Im going to attempt to give up
smoking by my anniversary.
Tonight, Im not going to have
dessert at the restaurant.
Environmental Impediments
The first ten people to call in will
receive a free T-shirt.
Hurry 50% off till stocks last.
You can avail discount till
tomorrow.
I am sorry. We cannot serve you. We
are closing the restaurant because of a
problem with the oven.
Closed on Gazetted holidays.
it shows how Consequence likelihood and Consequence evaluations leads to individuals
attitude towards success and expectations of success, attitude towards failure and expectation of
failure and the attitude towards the process itself. All this leads to attitude toward trying which
along with Social norms determines an Intention to try. This Intention to try results in
trying. Also, as can be seen frequency of past trying and recency of past trying affects the act
of Trying.
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14. Attitude towards Ad Model
A model that proposes that a consumer forms various feelings (affects) and judgments
(cognitions) as the result of exposure to an advertisement, which, in turn, affect the consumers
attitude toward the ad and attitude toward the brand. The gist of the model is:
Normally, if you like an ad, you are more likely to purchase the advertised brand.
For a new product/brand, an ad has a stronger impact on brand attitude and purchase
intention.
Model helps to understand the impact of advertising or some other promotional vehicle
such as catalog on consumer attitude towards particular product/brand.
This Model measures the impact of Advertisement or some other promotional vehicle on
consumer attitude.
Exposure to an
Ad
Judgments about Feelings from the

the Ad Ad (Affect)
(Cognition)
Beliefs about the Attitude toward

Brand the Ad
Attitude toward
the Brand
Explanation:
Consumer is exposed to an Advertisement
Consumer gets affected by it
Consumer starts reacting to the advertisement by feeling (affect) and applying mind
(cognition).
It leads to formation of an Attitude towards the advertisement
It leads to formation of beliefs about the brand
Therefore, consumers form an attitude towards the advertisement
Advertising can be for brand building or directional. Also assumed is that there is limited time
and mental resources which makes it difficult for audience to dedicate sufficient attention to most
of the advertisements. An advertisement is a combination of advertisements content, medium/
channel within which the advertisement is carried. Attitude towards an advertisement depends on
advertising value and perceived level of entertainment. This in turn depends on various factors
that consumers use in evaluation. All this determines an attitude towards the advertisement. For
this Model it is assumed that audience members are active gratification seekers and not just
passive recipients of media. Their media use is considered to be a conscious effort to fulfill their
cognitive or affective needs. Attitude is a dependent variable on consumers perceptions of
advertisement. Motive affects the perceived values on six factors. These factors which expect to
affect advertisement attitude within both the traditional and internet environment are:
ENTERTAINMENT
MOTIVE INFORMATIVENESS ATTITUDE
IRRITATION
CREDIBILITY
INTERACTIVITY
DEMOGRAPHIC
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Explain the concept of Attitude and its properties.
Is Attitude always consistent with the Behavior?
Explain the Tri component Attitude model.
What are the assumptions in the Multi- attribute Attitude Models?
How can the marketer use the Attitude towards Ad Model to the advantage of the firm?
______________________________________________________________________________
Ohio, 1995.
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UNIT 2: LESSON 7
ATTITUDE FORMATION AND CHANGE
______________________________________________________________________________
1. Attitude measurement techniques
2. Attitude formation
3. Attitude change
4. Behavior and Attitude formation
5. Review questions
6. Further readings
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1. Attitude measurement techniques
One of the appeals of attitudes is that they can be measured and that as it can be measured we can
assess how it might affect behavior and how things like time and social pressure change them.
There are several ways of measuring attitudes, as listed below:
Thurstone scale: This scale also known as Thurstone and Clave scale is one of the best
techniques of measuring attitude with the help of equal appearing intervals. It is a technique in
which a large number of statements are collected regarding a subject. The statements should
range from one extreme of favorable responses to the other extreme of highly unfavorable
response. There is no definite number of statements to be collected but they should be sufficiently
large. Care should be taken that statements are brief, they truly indicate the attitude of respondent
leading to acceptance or rejection of the statement, and should not be double meaning statements.
All techniques used today for attitude measurement are based on Thurstone attitudinal scales.
Summated Rating Scale: According to this technique, researcher collects a large number of
statements and eliminates those, which are ambiguous, irrelevant or deficient. The remaining
statements are administered to one or more respondents for their reaction using a five point rating
system i.e. strongly approve, approve undecided, disapprove and strongly disapprove. These
categories are assigned value 5,4,3,2 and 1 respectively. In case of negatively worded statements,
this scoring is reversed. The correlation between statement scores and total scores is ascertained.
Statements with a high correlation with total score are selected for final scale.
Scalogram Analysis: Guttman proposed this attitudinal scale. This method is based on the
assumption that if an individual replies positively to a difficult question then he will also respond
positively to all questions, which are simpler than the earlier question.
Semantic Differential: This technique involves three dominant factors i.e. evaluation, potency
and activity factor. It is a bipolar scale conforming to the basic concept of motivation, attraction
or repulsion from an object. Here respondents are asked to give their opinion on a seven-point
scale. The average of all the responses helps to determine the attitude of respondents towards a
particular object.
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2. Attitude formation
Introduction- The study of attitude formation and change helps explaining and predicting
behavior to some extent. Learning theories are applied to the learning of attitudes because
learned is one of the key words in the definition. One can also see the impact of
experience, personal influence and exposure to media on attitude formation. Attitude
formation is a continuous process, as knowledge and experience interact with existing
attitudes and modified attitudes emerge. A marketer must be aware of attitude formation,
how attitudes translate into behavior (and possibly the reverse), and how marketing
strategies can affect attitude formation and behavior. Attitudes are learned through direct
and indirect knowledge and experience. If attitudes were not learned but rather innate or
inborn, they could not be changed. A basic model of attitude formation is:
o Information collected from internal and external sources- Information about a
specific product class or brand is gathered from a variety of sources. Some
information is already stored in our memory as a result of past cognitions or
experiences. Other information we gather ourselves, either through conscious
information gathering, for example, reading consumer magazines, attending trade
shows, talking to industry or government experts; or by more passive means,
such as watching television. We also receive information from those around us
and by observing their actions, especially our families in their daily consumption
routines. Marketers, through advertising, packaging and point of purchase
displays, are constantly providing consumers with information about their own
and their competitors products.
o Form Beliefs- all the information helps in forming a belief base for the consumer,
called Cognitions.
o Identify salient beliefs- Only a small number of beliefs are significant enough to
an individual consumer to be used in forming the attitude. These are referred to
as Salient beliefs. These change over time and are person specific.
o Formation of Attitude- Salient beliefs are evaluated as either positive or negative,
and then bundled together to form the Attitude. It involves some weighting.
Even though you may be evaluating five salient beliefs, perhaps you consider one
of them to be more important, and therefore, your evaluation of that salient belief
will carry more weight in the ultimate attitude.
o Set placement- Overall attitude determines set placement within the awareness
set. Products we have a favorable attitude towards form the Evoked set, from
which purchase decisions are made. Products we neither like nor dislike that
is we are ambivalent towards but are still aware of them fall into the Inert
set. Products towards which we have a negative attitude fall into the Inept set.
Negative attitudes are usually, but not always, based on actual product usage.
Products in the inept set are not considered for purchase. Not only do we not
consider the product for purchase, but we may actively discourage others from
trying or continuing to purchase the product.
o Post purchase evaluation- Once products are purchased and used, post-purchase
evaluation is conducted by the consumer. The results of the post-purchase
evaluation act as feedback to all components of the attitude formation model.
How attitudes are learned?
o Marketers use the information gained from psychologists and educators, and
apply the learning theories to the learning of attitudes. A consumer moves from
having no attitude possibly because they have no knowledge of or experience
with the product to having an attitude, regardless of whether it is positive,
negative or ambivalent. However, learning is not a finite process, it is
continuous. The same learning theories that are applied to the learning of an
attitude can be applied to attitude change. The three learning theories that can be
used for learning attitudes are:
Classical conditioning- Marketers use this learning theory when they
associate their product with a Stimulus which elicits a favorable
response with their target market. They hope for a positive attitude
towards the product, increasing the chance of purchase. This stimulus
can be anything; it can be the brand name or companys existing
products or a celebrity associated with the product. In this case, the brand
name is an Unconditioned stimulus that through past positive
reinforcement has resulted in a favorable brand attitude; and the new

product that is linked with this is called a Conditioned stimulus. This
process is called Stimulus generalization from the brand name to the
new product.
Instrumental conditioning-people may learn positive attitudes by
receiving positive reinforcement from use or consumption of the product.
Consumers may purchase a product towards which they have a neutral
attitude. Perhaps it was the only product available; they were enticed by
a price reduction or premium offer; or they were curious about a new
product. In this case, the reinforcement received through using the
product determines their attitude. If the reinforcement is positive they
liked the product their attitude will probably move from neutral to
positive.
Cognitive learning theory- the concept of involvement shows the
importance of the product to the consumer. For high involvement
products, knowledge and beliefs are extremely important in the
formation of attitudes. Cognitive learning theory suggests that the more
information a consumer has about a product, the more likely they are to
form an opinion, either positive or negative. Marketers must provide
consumers with information about product features and benefits.
Remember though that consumers can, and do, suffer from information
overload; marketers must ensure that they provide information about
salient beliefs. The three most important salient beliefs tend to dominate
in formation of attitude.
Influences on attitude formation- If marketers can determine the main sources of
information that consumers use in the formation of attitudes, they can adjust their
strategies accordingly, especially the dissemination of product information. Depending

on the individual, the product, and the situation, one or more of the principal sources of
information may be used in formation of the consumers attitude. Consumers get the
information they need to form attitude from:
o Direct and past experience- Attitudes are learned through knowledge and
experience gained either directly or indirectly. As a result, marketers attempt to
stimulate trial of new products by offering discounts.
o Personal influence- as we come in contact with others, our family and friends, we
form attitudes that influence our lives.
o Exposure to mass media- the mass media communications such as newspapers,
advertisements are an important source of information for forming an attitude.
o Direct marketing programs- marketer uses highly focused direct marketing
programs to target small consumer niches with products and services of their
interest.
o Personality factors- personality plays an important role in attitude formation.
Persons with higher need are likely to form positive attitudes in response to
product related information as against those with lower need of cognition.
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3. Attitude change
Introduction-just like attitude formation, attitude changes are also learned. They are
influenced by personal experience, other sources of information and personality
factors. All marketers are concerned with maintaining positive attitudes in their
current consumers; changing the neutral attitudes of ambivalent consumers to
positive attitudes, hoping to increase market share; and, if necessary, changing
negative attitudes to at least neutral ones. It is not impossible though difficult to
change attitudes. Marketers have found that weakly held attitudes are easier to
change than strongly held attitudes. Consumers tend to develop strongly held
attitudes in areas they considered to be of great personal importance, that is, of high
involvement. Strongly held attitudes can be either positive or negative, with the
product falling in the evoked or the inept set. In areas of limited or questionable
importance, consumers tend to be ambivalent or neutral, or have weakly held
attitudes that are susceptible to change. These products would fall in the inert set.
Attitude change strategies- the following are the attitude change strategies:
o Changing the basic motivational function- an effective strategy for attitude
change is to make particular needs prominent. These strategies are based on
the theory that attitudes serve four basic functions: utilitarian, ego-defensive,
and value-expressive and knowledge. By changing the basic motivational
function, the attitude towards the product can be changed.
The utilitarian function- certain brand attitudes are the result of the
utility from that brand. If the product has been useful and good in the
past, it carries a favorable attitude. One way of changing attitude in
favor of a product is by demonstrating to people that it can serve a
utilitarian purpose that they may not have considered earlier.
The ego defensive function- people want to protect their self images
from inner feelings of doubt by replacing their uncertainty with
security and confidence. Advertisements of cosmetics, by
acknowledging this need increase both their relevance to the
consumer and the likelihood of favorable attitude change by offering
reassurance to the consumers self concept.
The value expressive function- attitudes are an expression or
reflection of the consumers general values, lifestyle and outlook.
They may be favorably disposed towards the concept of fashion for

example. Marketers by knowing the target markets attitudes as a
result of their values and lifestyle can cater to them likewise.
The knowledge function- some consumers have a need to know
things. This is called a Cognitive need. It is vital to product
positioning. The need to know can be satisfied by providing enough
product related information to the prospective consumers.
Combining several functions- as different consumers may like or
dislike the same product or service for different reasons, a functional
framework for examining attitudes can be very useful.
o Associating the product with a special group, event or cause- Attitudes can
be altered by indicating to consumers the products relationship to particular
groups, events or causes. Concern for the environment has been one cause
used recently.
o Resolving two conflicting attitudes- Consumers like harmony they do not
like conflict. If they can be shown that their attitude towards a product is in
conflict with another attitude, they may be induced to change one of the
attitudes.
o Altering components of the Multi attribute Model- In these strategies,
marketers attempt to change the evaluation of attributes by upgrading or
downgrading significant attributes; change brand beliefs by introducing new
information; and by adding an attribute, or by changing the overall brand
rating.
Changing the relative evaluation of attributes- the overall market for
many product categories is set in a way that different consumer
segments are offered different brands with different features and
benefits. In such a case, marketers usually have an opportunity to

persuade consumers to cross over, that is to persuade consumers
preferring one version of the product to shift their favorable attitudes
towards another version of the product.
Changing brand beliefs or perceptions of the product- this is most
commonly used as an advertising appeal. They keep on reminding us
that their products are the best in the industry.
Adding an attribute- it is done by adding an attribute that previously
has been ignored or one that represents an improvement or
technological innovation.
Changing the overall brand rating- it is done without attempting to
improve or change their evaluation of any single brand attribute. It
frequently relies on some form of global statement such as- this is
the largest selling brand.
o Changing beliefs about competitors brands- In this strategy, we directly
compare our product with the competition in an attempt to change consumer
beliefs about both products. But, this strategy must be used with caution.
Comparative advertising can boomerang by giving visibility to competing
brands and claims.
o Elaboration likelihood Model (ELM) - consumer attitudes can be changed in
two ways. These are:
The central route to persuasion- attitude change occurs because the
consumer seeks and evaluates additional information about the
product. In this case, motivation levels are high and the consumer is
willing to invest the time and effort to gather and evaluate the
information, indicating a high level of involvement. Multi-attribute
models are based on the central route to persuasion as attitudes are

believed to be formed on the basis of important product
attributes/features and brand beliefs.
The peripheral route to persuasion- consumers is either unwilling or
unable to seek additional product information. Involvement is low,
so marketers must offer secondary inducements such as price
reductions or premiums in an attempt to induce attitude change.
More attention is paid in advertisement design to the credibility of
the message source (spokesperson or endorser) and his or her
attractiveness.
All of these strategies take the traditional view that attitude precedes behavior and use the
relationship between attitude and behavior to effect attitude change.
When faced with negative market research numbers, stagnant or slipping market share, or
active competitors, marketers develop strategies that attempt to change or intensify
attitudes. Marketers must realize that attitudes change not only in response to their
efforts but also in response to the introduction of new or improved products by
themselves or the competition; the addition of new consumer experiences, either direct or
indirect; the marketing efforts of the competition; and how the product performs after
purchase
______________________________________________________________________________
4. Behavior and attitude formation
Traditionally the models of attitude formation and attitude change strategies view that attitude
precedes behavior: we develop attitudes towards the products from a variety of sources (past and
direct experience, personal influence and exposure to mass media), and that this attitude
determines behavior or purchase. In this section, we review theories which suggest that behavior
can precede attitude formation and actually cause the formation of new attitudes or change in
existing attitudes. Theories that suggest that sometimes behavior precedes attitude are:
Cognitive dissonance theory-Cognitive dissonance theory suggests that consumers
experience discomfort, called dissonance, when they are confronted with new
information about a belief or attitude that is in conflict with the original information.
This often happens after a purchase, when it is called post-purchase dissonance. The
product was purchased with a set of expectations (beliefs). Following the actual use of
the product, the consumer may find that the initial set of expectations was not met, or the
consumer may question whether they made the right choice given the features and
benefits of the products not chosen. In either case, the consumer is faced with new
information that is in conflict with the original beliefs. In an effort to reduce the
discomfort or dissonance, the original attitude may be changed. If that happens, then
behavior purchase, use and evaluation has led to a change in attitude.
Attribution theory - Attribution theory suggests that attitudes are formed and changed
based on the consumers interpretation of their own behavior and experiences.
Consumers make inferences about their own behavior and that of others in an attempt to
determine why they behaved the way they did. One of the meanings of the word
attribute is caused by. Attribution theory suggests that attitudes are caused by
behavior. It includes:
o Self perception theory- suggests that consumers develop attitudes as they review
and make judgments about their own behavior. I always choose chocolate for
dessert, so I must really like chocolate. There are three such types of
attributions. These are:
Internal attributions- giving yourself credit for the outcomes your
ability, your skill, or your effort. That is, whether the target market
attributes success to internal factors (the consumer, their skill,
competence and hard work).
External attributions-the purchase was good because of factors beyond
your controlluck, etc. whether the target market attributes success to
external factors (the ingredients, environment and luck).
Defensive attributions- consumers are likely to accept credit personally
for success, and to credit failure to others or to outside events. For this
reason, it is crucial that marketers offer uniformly high- quality products
that allow consumers to perceive themselves as the reason for the
success; that is, I am competent.
Foot in the door technique- is based on the premise that individuals look
at their prior behavior (e.g., compliance with a minor request) and
conclude that they are the kind of person who says Yes to such
requests (i.e., an internal attribution).
o Attribution towards others- suggests that we also review and make judgments
about the behavior of others, called attributions towards others. This has
particular significance to the role of salespeople in the purchase decision. If a
consumer attributes sincerity to the salespersons comments, their attitude
towards the product will be positive.
o Attribute towards product- It is in the area of judging product performance that
consumers are most likely to form product attributions toward things.
Specifically, they want to find out why a product meets or do not meet their
expectations. In this regard, they could attribute the products successful
performance (or failure) to the product itself, to themselves, to other people or
situations, or to some combination of these factors. This information provides
direction for marketing strategies.

o Consumers often gather additional information in an attempt to confirm attributes
they have made about products or people. They might use the criteria of
distinctiveness, consistency over time, consistency over modality, and consensus
in determining whether their attributes are correct.
______________________________________________________________________________
5. Review questions
How can the Attitudes be measured?
Explain the basic model of Attitude formation.
Can Attitudes be learned? If so, how?
Explain the various Attitude change strategies.
In what circumstances Behavior can precede Attitude formation.
______________________________________________________________________________
6. Further readings
Ohio, 1995.

______________________________________________________________________________
UNIT 2: LESSON 8
LEARNING AND LEARNING THEORIES- PART 1
1. Introduction
2. Components of Learning
3. Behavior Learning Theories
4. Observational (Social) Learning Theory
5. Review questions
6. Further readings
1. Introduction
Learning is a change in behavior caused by information or experience. Learning can occur
deliberately or when we are not trying. In the context of marketing, learning is a result of
information received through advertising or other publicity or through some reference group or
other. In order to have an effect on motives or attitudes, marketing effort should associate the
product with positive drives and reinforcing messages. Consumers learn from past experience,
and their future behavior is conditioned by such learning. In fact, learning can be defined as a
change in behavior occurring as a result of past experience. As consumers gain experience in
purchasing and consuming products, they learn not only what brands they like, but also features
they like most in particular brands. They then adjust their future behavior based on past
experience. For example after wearing the brand repeatedly, a consumer might determine that a
pair of Reebok running shoes is the most comfortable and provides the best support. Continued
satisfaction with the brand leads the consumer to buy Reeboks every time he needs new athletic
shoes. Thus continued satisfaction reinforces past experience and increases the probability that
the consumer will buy the same brand next time.
2. Components of Learning
Everyday an individual receives a variety of stimulus. When a particular stimulus becomes
associated with a particular response, we conclude that learning has occurred. To understand the
concept of learning, we need to consider its various components. These components are as under:
Drive: Drive is said to be strong stimuli that forces action. The drive arouses in an
individual an urge to respond to the stimuli and thus forms the basis of motivation. For
example, seeing a product like a microwave oven at a friends place and watching
advertisements may create a drive to know more about the oven. This in turn motivates
the individual to visit a retailer and have more information about the oven and thus leads
to learning.
Cues: A cue is any object existing in the environment, as perceived by the individual.
Cues give direction to motives. Cues increase the possibility of getting specific response.
For example, seeing an advertisement of a packaged tour of Europe may act as a cue for
an executive to enjoy a vacation with his family and reduce the tension. Cues should be
consistent with the expectations of the consumers.
Response: A stimulus leads to response. It is the reaction of an individual to a stimulus.
Such response may be in the physical form or may be in terms of phenomena such as
attitudes, perceptions etc. Response does not merely depend on drive, motive or cue. It
also depends on past experience of consumers and their association of the cue with
something different than the target.
Reinforcement: It is a very basic condition of learning. Without it, we cannot observe any
measurable modification of behavior. Reinforcement refers to those environmental events,
which increase the likelihood of specific response occurring in the future as a result of
particular cue or stimuli.
Retention: The stability of learned behavior maintained by the individual over a period of
time is called Retention. Under repeated condition of positive reinforcement, there is a
tendency for the conditioned response to continue for a long period of time. For example,
a consumer who is absolutely delighted by the use of a product will continue to have a
positive feeling about the product for a long time.
The learning theory offers tremendous challenge to a marketer- that of guiding and sometimes
even directing human behavior. This is done by developing stimuli and cues, which will bring to
force the latent need in the customer. Attractive advertising, shelf displays, packaging, how to use
instructions, store layout, availability and sales persons are all examples of cues that marketer
develops to drive customers to the product or service. An excellent customer care program of the
marketer can help a customer have positive feelings about his or her experience. The marketer
may also develop cues to differentiate his or her product from that of the competitor.
3. Behavior Learning Theories

Behavioral learning theories sometimes referred to as stimulus response theories because they are
based on the premise that observable responses to specific external stimuli signal that learning has
taken place. When a person acts (responds) in a predictable way to a known stimulus, he or she is
said to have learned. Two behavioral theories with great importance to marketing are:
(a) Classical Conditioning Theory
(b) Instrumental (or operant) Conditioning
A. Classical Conditioning Theory
Early classical conditioning theorists observed all organisms as relatively passive (reflexive/
reactive) entities that could be taught certain behaviors through repetition (or "conditioning").
The meaning of conditioning is a kind of knee jerk (or automatic) response to a situation
builds up through repeated exposure. If you get a headache every time you think of visiting your
aunt Jimmy, your reaction may be conditioned from years of boring visits with her.
According to Pavlovian theory, conditioned learning results when a stimulus that is paired with
another stimulus that obtains a known response serve to produce the same response when used
alone.
Ivan Pavlov demonstrated what he meant by conditioned learning in his studies with dogs. The
dogs were hungry and highly motivated to eat. In his experiment pavlov sounded a bell and then
immediately applied a meat paste to the dogs' toughs, which cause them to salivate (mouth
watered). Learning (conditioning) occurred when, after a significant amount of repetitions of the
bell sound followed almost immediately by the food, the bell sound alone caused the dogs to
salivate. The dogs associated the bell sound (the conditioned stimulus) with the meat paste (the
unconditioned stimulus) and, after a number of pairings, gave the same unconditioned response
(salivation) to the bell alone as they did to the meat paste.

An analogous situation would be one in which the smells of dinner cooking would cause your
mouth to water. If you usually listen to the 6 o'clock news while waiting for dinner to be served,
you would tend to associate the 6 o'clock news with dinner, so that eventually the sounds of 6
o'clock news alone might cause your mouth to water, even if dinner was not being prepared and
even if you were not hungry.
Cognitive Associative Learning
Classical conditioning rather than being a reflexive action is seen as cognitive associative
learning; not the gaining of new reflexes (response), but the involvement of new knowledge about
the world. Studies have found that conditioning encourages attention to the advertised brand in
subsequent promotions. Some companies are building -into their products slight reminders that it
is time to replace. Soft drink cans and bottles are stamped with expiration (ending) dates; Gillette
high tech razors include a color strip that fades over time, indicating replacement is due-, Oral B
tooth brushes incorporate an "early warning system" that indicates (when the brush bristles fade)
that it's time to replace. These companies are using stimuli in the products themselves to trigger
replacement behavior.
Application of Classical Conditioning Theory
Following three basic concepts are derived from Classical Conditioning Theory:
Repetition: Although the principle of repetition is well established among advertisers, not
everyone agrees on how much repetition is enough. Some marketing scholars believe that
just 3 exposures to an advertisement are needed: one to make consumers aware of the
product, and a third to remind them of its benefits. Others think it may take 11-12
repetitions to increase the likelihood that consumers will actually receive the three
exposures basic to the so-called three-hit theory. The effectiveness of repetition is
somewhat dependent upon the amount of competitive advertising to which the consumer
is exposed. The higher the level of competitive ads, the greater the likelihood that
interference will occur and consumers will easily forget previous learning that resulted
from repetition.
Stimulus Generalization: That is making the same response to slightly different stimuli-
not much learning would take place. Stimulus generalization explains why imitative "me
too" products succeed in the market place; consumers confuse them with the original
product they have seen advertised. It also explains why manufacturers of private label
brands try to make their packaging closely resemble the national brand leaders. They are
hoping that consumers will confuse their packages with the leading brand and buy their
product rather than the leading brand.
The principle of stimulus generalization is applied by marketers to product line, form and
category extensions. In extending its product line, the marketer adds related products to
an already established brand, knowing that the new product is more likely to be adopted
when it is connected with a known and trusted brand name. Researchers report that the
number of different products affiliated with a brand may actually strengthen the brand
name, as long as the company maintains a quality image across all brand extensions.
Stimulus Discrimination: Stimulus discrimination (inequity) is opposite of stimulus
generalization. And results in the selection of a specific stimulus from among similar
stimulus. To create a unique image in the mind of customers marketers need to
discriminate among similar stimuli through its positioning.

When a marketers target customers with a strong communications program that stresses
the unique ways in which its product will satisfy the customers needs. It wants the
consumer to differentiate its product from among competitive products on the shelf.
Market leaders want the consumer to discriminate (differentiate) among similar stimuli.
Stimulus discrimination is usually retained/hold long enough to influence future purchase
behavior.
Most product differentiation strategies are designed to distinguish a product or brand
from that of competitors on the basis of an attribute that is relevant meaningful and
valuable to customers. It is quite difficult to remove a brand leader once stimulus
discrimination has occurred. One explanation is that leader is usually first in the market
and has had a longer period to teach consumers to relate the brand name with the
product.
B. Instrumental Conditioning Theory
Instrumental conditioning, the stimulus that results in the most satisfactory response is the one
that is learned. Instrumental learning theorists believe that learning occurs through a trial- and -
error process. In a marketing context, the consumer who tries several brands and styles of jeans
before finding a style that fits her figure (positive reinforcement) has engaged in instrumental
learning. Most likely, the brand that fits best is the one she will continue to buy.
B. F. Skinner (1904 - 1990) is credited with the development of the instrumental-conditioning
paradigm. Similar to instrumental conditioning, operant conditioning requires that an organism
operate on the environment to achieve a goal. A behavior is learned as a function of the
consequences of the behavior, according to a schedule of reinforcement or punishment. Unlike

Thorndike, who used the concept of reward and satisfying states, Skinner emphasized the
influence of re-inforcers. Reinforcers are events that follow a response and increase the likelihood
that the response will be repeated, but they do not suggest the operation of a cognitive component
such as reward (or pleasure). Learning is influenced according to the schedules of reinforcement
in the operant paradigm. Skinner tested the instrumental (operant) theory by carefully controlling
the environment to study behavior and the effects of reinforcement.
According to Skinner, instrumental (operant) conditioning has two laws. The first is the law of
conditioning, which states that reinforcement strengthens the behavior that precedes it, which
makes it more likely that the behavior will be repeated. The second is the law of extinction, which
states that lack of reinforcement for a behavior, will make that behavior less likely to reoccur.
Reinforcement consists of two types of events, those that are positive, which means that when
they are presented (e.g., present tasty food) the probability of a behavior occurring is increased
(e.g., press a lever to get the tasty food), and those that are negative, which means that when they
are removed (e.g., stop a loud sound or painful shock) the probability of a behavior occurring is
increased (e.g., press a lever to stop a loud sound or painful shock). Punishment is defined as an
event that weakens the tendency to make a response. Punishment could involve presenting an
aversive stimulus (e.g., presenting a loud sound or painful shock), or it could involve removing
access to a positive stimulus (e.g., removing a tasty food when a lever is pressed).
Skinner also experimented with different reinforcement schedules, and he found that different
schedules produced different patterns of responding. Continuous schedules of reinforcement
deliver a reinforcer every time the target behavior is exhibited. These schedules are effective in
establishing the target behavior, but the behavior disappears quickly if the contingency is not met.
Intermittent schedules of reinforcement deliver the reinforcer on a ratio schedule. For example, an
experimenter may decide to reinforce every fourth response that an animal makes, or a reinforcer
may be presented after a fixed or random time interval. The two types of intermittent schedules
that maintain a high rate of responding and are very resistant to extinction are variable ratio and
variable interval schedules.
Strict adherence to the behaviorist tradition excluded analysis of mental or internal events.
However, Skinner acknowledged the role of thought. He maintained that thought was caused by
events in the environment, and therefore a theory of learning that was concerned with the
influence of the environment was appropriate. Like Pavlov and Thorndike, Skinner's work was
primarily conducted with nonhuman animals, but the principles of instrumental (operant)
conditioning can be applied to humans as well, and they are widely used in behavior therapy and
education.
General Principles of Instrumental (Operant) Conditioning
There are four major techniques or methods used in operant conditioning. They result from
combining the two major purposes of operant conditioning (increasing or decreasing the
probability that a specific behavior will occur in the future), the types of stimuli used
(positive/pleasant or negative/aversive), and the action taken (adding or removing the stimulus).
Outcome of Conditioning
Increase Behavior Decrease Behavior
Positive Positive Response Cost
Reinforcement
Stimulus (add stimulus) (remove stimulus)
Negative Negative Punishment
Reinforcement
Stimulus (remove stimulus) (add stimulus)
Schedules of consequences
Stimuli are presented in the environment according to a schedule of which there are two basic
categories: continuous and intermittent. Continuous reinforcement simply means that the
behavior is followed by a consequence each time it occurs. Intermittent schedules are based either
on the passage of time (interval schedules) or the number of correct responses emitted (ratio
schedules). The consequence can be delivered based on the same amount of passage of time or
the same number of correct responses (fixed) or it could be based on a slightly different amount
of time or number of correct responses that vary around a particular number (variable). This
results in a four classes of intermittent schedules. [Note: Continuous reinforcement is actually a
specific example of a fixed ratio schedule with only one response emitted before a consequence
occurs.]
Fixed interval -- the first correct response after a set amount of time has passed is
reinforced (i.e., a consequence is delivered). The time period required is always the same.
Notice that in the context of positive reinforcement, this schedule produces a scalloping
effect during learning (a dramatic drop-off of responding immediately after
reinforcement.) Also notice the number of behaviors observed in a 30 minute time period.
Variable interval -- the first correct response after a set amount of time has passed is
reinforced. After the reinforcement, a new time period (shorter or longer) is set with the
average equaling a specific number over a sum total of trials.
Fixed ratio - a reinforce is given after a specified number of correct responses. This
schedule is best for learning a new behavior. Notice that behavior is relatively stable
between reinforcements, with a slight delay after a reinforcement is given. Also notice
the number of behaviors observed during the 30 minute time period is larger than that
seen under either of the interval schedules.

Variable ratio -- a reinforcer is given after a set number of correct responses. After
reinforcement the number of correct responses necessary for reinforcement changes. This
schedule is best for maintaining behavior. Notice that the number of responses per time
period increases as the schedule of reinforcement is changed from fixed interval to
variable interval and from fixed ratio to variable ratio.
In summary, the schedules of consequences are often called schedules of reinforcements because
there is only one schedule that is appropriate for administering response cost and punishment:
continuous or fixed ratio of one. In fact, certainty of the application of a consequence is the most
important aspect of using response cost and punishment. Learners must know, without a doubt,
that an undesired or inappropriate target behavior will be followed by removal of a
positive/pleasant stimulus or the addition of a negative/aversive stimulus. Using an intermittent
schedule when one is attempting to reduce a behavior may actually lead to a strengthening of the
behavior, certainly an unwanted end result.
Analyzing Examples of Operant Conditioning
There are five basic processes in operant conditioning: positive and negative reinforcement
strengthen behavior; punishment, response cost, and extinction weaken behavior.
Positive Reinforcement--the term reinforcement always indicates a process that
strengthens a behavior; the word positive has two cues associated with it. First, a positive
or pleasant stimulus is used in the process, and second, the reinforcer is added (i.e.,
"positive" as in + sign for addition). In positive reinforcement, a positive reinforcer is
added after a response and increases the frequency of the response.

Negative Reinforcement-- the term reinforcement always indicates a process that
strengthens a behavior; the word negative has two cues associated with it. First, a
negative or aversive stimulus is used in the process, and second, the reinforcer is
subtracted (i.e., "negative" as in a "-" sign for subtraction). In negative reinforcement,
after the response the negative reinforcer is removed which increases the frequency of the
response. (Note: There are two types of negative reinforcement: escape and avoidance. In
general, the learner must first learn to escape before he or she learns to avoid.)
Response Cost--if positive reinforcement strengthens a response by adding a positive
stimulus, then response cost has to weaken a behavior by subtracting a positive stimulus.
After the response the positive reinforcer is removed which weakens the frequency of the
response.
Punishment--if negative reinforcement strengthens a behavior by subtracting a negative
stimulus, than punishment has to weaken a behavior by adding a negative stimulus. After
a response a negative or aversive stimulus is added which weakens the frequency of the
response.
Extinction--No longer reinforcing a previously reinforced response (using either positive
or negative reinforcement) results in the weakening of the frequency of the response.
Applications of Operant Conditioning to Education
Our knowledge about operant conditioning has greatly influenced educational practices. Children
at all ages exhibit behavior. Teachers and parents are, by definition, behavior modifiers (if a child
is behaviorally the same at the end of the academic year, you will not have done your job as a
teacher; children are supposed to learn (i.e., produce relatively permanent change in behavior or
behavior potential) as a result of the experiences they have in the school / classroom setting.
Behavioral studies in classroom settings have established principles that help teachers organize
and arrange classroom experiences to facilitate both academic and social behavior. Instruction
itself has also been the focus of numerous studies, and has resulted in a variety of teaching
models for educators at all levels. Programmed instruction is only one such model. Programmed
instruction requires that learning be done in small steps, with the learner being an active
participant (rather than passive), and that immediate corrective feedback is provided at each step.
4. Observational (Social) Learning Theory
Observational or social learning is based primarily on the work of Albert Bandura. He and his
colleagues were able to demonstrate through a variety of experiments that the application of
consequences was not necessary for learning to take place. Rather learning could occur through
the simple processes of observing someone else's activity. This work provided the foundation for
Bandura's later work in social cognition.
The observational or social learning theory of Bandura emphasizes the importance of observing
and modeling the behaviors, attitudes, and emotional reactions of others. Bandura (1977) states:
"Learning would be exceedingly laborious, not to mention hazardous, if people had to rely solely
on the effects of their own actions to inform them what to do. Fortunately, most human behavior
is learned observationally through modeling: from observing others one forms an idea of how
new behaviors are performed, and on later occasions this coded information serves as a guide for
action. Social learning theory explains human behavior in terms of continuous reciprocal
interaction between cognitive, behavioral, an environmental influences. The component processes
underlying observational learning are: (1) Attention, including modeled events (distinctiveness,
affective valence, complexity, prevalence, functional value) and observer characteristics (sensory
capacities, arousal level, perceptual set, past reinforcement), (2) Retention, including symbolic
coding, cognitive organization, symbolic rehearsal, motor rehearsal), (3) Motor Reproduction,
including physical capabilities, self-observation of reproduction, accuracy of feedback, and (4)
Motivation, including external, vicarious and self reinforcement.
Because it encompasses attention, memory and motivation, social learning theory spans both
cognitive and behavioral frameworks. Bandura's theory improves upon the strictly behavioral
interpretation of modeling provided by Miller & Dollard (1941). Banduras work is related to the
theories of Vygotsky and Lave which also emphasize the central role of social learning.
Principles of Observational (Social) Learning:
The highest level of observational learning is achieved by first organizing and rehearsing
the modeled behavior symbolically and then enacting it overtly. Coding modeled
behavior into words, labels or images results in better retention than simply observing.
Individuals are more likely to adopt a modeled behavior if it results in outcomes they
value.
Individuals are more likely to adopt a modeled behavior if the model is similar to the
observer and has admired status and the behavior has functional value.
Social learning theory has been applied extensively to the understanding of aggression (Bandura,
1973) and psychological disorders, particularly in the context of behavior modification (Bandura,
1969). It is also the theoretical foundation for the technique of behavior modeling which is widely
used in training programs. In recent years, Bandura has focused his work on the concept of self-
efficacy in a variety of contexts (e.g., Bandura, 1997).
The most common (and pervasive) examples of social learning situations are television
commercials. Commercials suggest that drinking a certain beverage or using a particular hair
shampoo will make us popular and win the admiration of attractive people. Depending upon the
component processes involved (such as attention or motivation), we may model the behavior
shown in the commercial and buy the product being advertised.
5. Review questions
Explain the various components of Learning.
Explain briefly the two Behavioral theories of Learning.
How can the Classical Conditioning theory be applied in marketing?
What are principles of Social learning?
______________________________________________________________________________
6. Further readings
Engel, J. F., Roser D. Blackwell and Paul W. Miniard, Consumer Behavior, Dryden Press,
Chicago, 1990
Ohio, 1995.
______________________________________________________________________________
UNIT 2: LESSON 9
LEARNING AND LEARNING THEORIES PART 2
_________________________________________
1. Cognitive Learning Theory
2. Consumer Involvement Theory
3. Measures of Consumer Learning
4. Review questions
5. Further readings
_________________________________________________
1. Cognitive Learning Theory
Cognitivism focuses on an unobservable change in mental knowledge. Cognitivism came about
as a rejection of the behaviorist views. Psychologists believed that mental events, or cognitivism,
could no longer be ignored.
General Assumptions of Cognitive Theories
Some learning processes may be unique to human beings.
Cognitive processes are the focus of study.
Objective, systematic observations of people's behavior should be the focus of scientific
inquiry; however, inferences about unobservable mental processes can often be drawn
from such behavior.
Individuals are actively involved in the learning process.
Learning involves the formation of mental associations that are not necessarily reflected
in overt behavior changes.
Knowledge is organized.
Learning is a process of relating new information to previously learned information.
General Educational Implications of Cognitive Theories:
Cognitive processes influence learning.
As children grow, they become capable of increasingly more sophisticated thought.
People organize the things they learn.
New information is most easily acquired when people can associate it with things they
have already learned.
People control their own learning.
Cognitive development theories first identify the capabilities that represent the highest levels of
human thought. Then they describe the events and conditions necessary to attain these levels of
thinking. Schools may facilitate the process; however the implication is that higher levels of
human thinking cannot be taught directly (Gredler, 1997). Cognitive psychologists share with
behaviorists the belief that the study of learning should be objective and that learning theories
should be developed from the results of empirical research.
However, cognitivists differ from behaviorists in one critical respect. By observing the responses
that individuals make to different stimulus conditions, cognitivists believe that they can draw
inferences about the nature of the internal cognitive processes that produce those responses.
Cognitive theories of learning focus on the mind (the mind is a "black box" according to
behaviorist views), and attempt to model how information is received, assimilated, stored, and
recalled. The implication is that by understanding the mechanics of this process, we can develop
teaching methods more suited to fostering the desired learning outcome, which is a shared desire
with behaviorists.
Cognitivists argue that while things like the environment are important inputs to learning,
learning is more than simply the collection of inputs and the production of outputs. The mind has
the ability to synthesize, analyze, formulate, and extract received information and stimuli in order
to produce things that cannot be directly attributed to the inputs given.
Under cognitive learning theory, it is believed that learning occurs when a learner processes
information. The input, processing, storage, and retrieval of information are the processes that are
at the heart of learning. The instructor remains the manager of the information-input process; but
the learner is more active in planning and carrying out his/her own learning than in the
behaviorist environment. Instruction is not simply something that is done to a learner but rather
involves the learner and empowers their internal mental processes.
According to Gredler (1997), six of seven contemporary theories influential in learning are based
on the cognitivist perspective.
Theory Type Focus

Skinner: operant Learning-process The arrangement of consequences
conditioning theory for learner behavior
Gagn: conditions of Learning-process The relationship of the phases of
learning theory information processing to type of
learning task and instruction
Information Learning-process The processes of acquiring
processing theories theory information, remembering, and
problem solving
Piaget: Cognitive-development The role of the culture in the
developmental theory development of higher mental
epistemology functions
Vygotsky: Cognitive-development The role of the culture in the
sociohistorical theory theory development of higher mental
functions
Bandura: social- Social-context theory The observation of and internal

cognitive theory processing of modeled behavior
Weiner: attribution Social-context theory The influence of learner beliefs
theory about success and failure on
achievement-related behavior
Metacognition
Metacognitionthe awareness and ability to control cognitive processesis a component of the
various cognitive theory applications. This "thinking about thinking" allows one to better manage
his own learning, and take an active, rather than passive role in the assimilation process. This
metacognition would include various techniques for enhancing memory such as the chunking or
grouping of information in some meaningful way to make it more memorable' or the
repetitiveness of repeated rehearsal to hold some key fact in short term memory for immediate
usage.
Early behaviorists chose not to incorporate mental events into their learning theories, arguing that
such events were impossible to observe and measure and so could not be studied objectively.
However, during the 1950s and 1960s, many psychologists became increasingly dissatisfied with
such a "thoughtless" approach to human learning. As a result, major cognitive works began to
emerge. The work of the Gestalt psychologists, Edward Tolman, Jean Piaget, and verbal learning
researchers was laying a foundation for cognitive learning theories. During the 1960s, discontent
with the inadequacies of behaviorism became more widespread. The behaviorist perspective
could not easily explain why people attempt to organize and make sense of the information they
learn or why people often alter the form of information they learn. One example includes
remembering general meanings rather than verbatim information. Among learning psychologists
there emerged a growing realization that mental events or cognition could no longer be ignored.
By the 1970s, most learning theorists had joined the cognitive field of thought. In the 1980s three
cognitive theories gained prominence: Bandura's social-cognitive theory, Weiner's attribution
theory, and Vygotsky's sociohistorical theory.
Tolman
Edward Tolman, developed the concept of cognitive learning in research where he found that
rats used in an experiment appeared to have a mental map of the maze he was using. When he
closed off a certain portion of the maze, the rats did not bother to try a certain path because they
"knew" that it led to the blocked path. Visually, the rats could not see that the path would result in
failure, yet they chose to take a longer route that they knew would be successful. Therefore,
Tolman thought of learning as developing from bits of knowledge and cognitions about the
environment and how the organism relates to it. This was in contrast to the theories of Thorndike
and Hull who thought of learning as a strict stimulus-response connection.
Bruner
Jerome S. Bruner called for a theory of instruction in 1960. Bruner who stressed the element of
social interaction as an integral part of information processing first espoused interact ional
cognitive development theories. Bruner developed the discovery theory of learning, which he
defined as obtaining knowledge for oneself by the use of one's own mind (Bruner, 1961). Bruner
contended that a true act of discovery is not a random event. It involves an expectation of finding
regularities and relationships in the environment. He endorsed problem solving with structured
searching strategies is an integral part of discovery learning. The roots of constructivism are
evident in discovery theory.
Weiner
Bernard Weiner's attribution theory is a theoretical framework for understanding what learner's
believe causes their achievement. The framework focuses on the ways that individuals arrive at
causal explanations. This is important because it has (1) implications for strategies to alter
misperceptions and (2) provides a framework for understanding different classroom goals.
Vygotsky
Lev S. Vygotsky is another prominent cognitivist, namely because of his sociohistorical theory
that stresses cultural processes determine the nature of learning. Vygotsky introduced the idea of
the Zone of Proximal Development (ZPD) in which the learner, teacher, and content interact
with a problem that needs resolution. Vygotsky (1978) maintained the child follows the adult's
example and gradually develops the ability to do certain tasks without help or assistance. He
called the difference between what a child can do with help and what he or she can do without
guidance the "zone of proximal development" (ZPD). In other words, ZPD is the discrepancy
between children's actual mental age and the level they reach in solving problems with assistance.
This ZPD concept also reinforces the importance of the principle of readiness. The readiness
principle reinforces the need for a learner to be at a point of readiness for learning certain
material. Another basic principle introduced by Vygotsky is the general law of genetic
development, which describes the social process of cognitive development. It states that every
complex mental function was first an interaction between people. Bruner also believes the
learner's participation in culture aides their psychological development. Much of Vygotsky's work
influenced the constructivist paradigm.
Piaget
Jean Piaget, a Swiss developmentalist, began a research program during the 1920s that has had
the greatest impact on contemporary theories of cognitive development than that of any other
single researcher. He developed his cognitive theory by actually observing children. After many
years of observation, Piaget concluded that intellectual development is the result of the interaction
of hereditary and environmental factors. As the child develops and constantly interacts with the
world around him, knowledge is invented and reinvented. In Piaget's Theory of Development,
there are two cognitive processes that are crucial for progressing from stage to stage: assimilation,
accommodation.
Information Processing System
The Information Processing System is a model for describing how information is received
(through the sensory registers), transferred into short-term or working memory, and ultimately
placed in long-term memory for later retrieval and further use. Information Processing is related
to both the consumer's cognitive (thinking) ability and the complexity of the information to be
processed. Consumers process product information by attributes, brands, comparisons between
brands or a combination of these factors. Consumers with higher cognitive ability actually get
more product information and are more capable of combining information on several product
attributes than consumers with lesser ability.
How consumers Store, Retain, and Retrieve Information:
A basic research concern of most cognitive scientists is discovering how information gets stored
in memory, how it is retained, and how it is retrieved. Because information processing occurs in
different stages, it is generally believed that there are three separate and sequential "storehouses"
in memory where information is kept temporarily before further processing: a sensory store, a
short-term store and a long-term store.
Sensory store: All data come to us through our senses: however the senses do not
transmit whole images as a camera does. Instead, each sense receives a fragmented piece
of information (such as the smell, color, shape, and feel of a flower) and transmits it to
the brain in parallel and perceived as a single image. The image of a sensory input lasts
for just a second or two in the mind's sensory store. If it is not processed, it is lost
immediately. For marketers this means that although its relatively easy to get
information into the consumer's sensory store, it is difficult to make a lasting impression.
This would explain why first impressions tend to last and why it's hazardous to introduce
a product prematurely into the market place.
Short-Term Store: Anyone who has ever looked up a number in a telephone book, only to
forget it just before dialing, knows how briefly information lasts in short-term storage. If
information in the short-term store to go through the process known as rehearsal (i.e. the
mental repetition of information), it is then transferred to the long-term store.
Long-Term Store: The Long-term store retains information for relatively extended
periods of time. Almost all of us, for example, can remember the name of our First-grade
teacher.
Failure to rehearse an input, either by repeating it or by relating it to other data, can result in
fading and eventual loss of the information. Information can also be lost because of competition
for attention.
Encoding is the process by which we select a word or visual image to represent a perceived
object. Marketers, for example, help consumers encode (translate) brands by using brand
symbols. Kellogg's uses Tony the Tiger on its frosted flakes, the green giant company has its jolly
green Giant, Dell computers turns the e in its logo on its side for quick name recognition;
Microsoft uses a stylized window, presumably on the world. "Learning" a picture takes less time
than learning verbal information, but both types of information are important in forming an
overall mental image. Other research indicates that viewer's who are very involved with a
television show respond more positively to commercials adjacent to that show and have more
positive purchase intentions. Men and women show different encoding patterns for example
although women are more likely than men to recall TV commercials depicting a social
relationship theme, there is no difference in recall among men and women for commercials that
focus on the product itself. Consumers can become cognitively overloaded when they are given a
lot of information in a limited time. The result of this overload is confusion, resulting in poor
purchase decisions.
Information does not just sit in long-term storage waiting to be retrieved/recovered. Many
information-processing theorists view the long-term store as a network consisting of nodes (i.e.
concepts), with links among them.
Information processing theorists view the long-term storage of information about personal
computers showing nodes (e.g. the concepts: models, monitors, manufacturers, software,
operating systems, printers) connected by links (e.g. for software: word-processing, databases,
graphics, games, spreadsheets). As individuals gain more knowledge about computers, they
expand their network of relationships and sometimes their search for additional information. This
process is known as activation, which involves relating new data to old to make the material more
meaningful. Consumer memory for the name of a product may also be activated by relating it to
the spokesperson used in its advertising. The total package of associations brought to mind when
a cue is activated is called a schema.
Research has found that older adults appear to be more reliant on Schema-based information
processing strategies than younger adults. Consumers are confronted with thousands of new
products each year, and their information search is often dependent upon how similar or
dissimilar these products are to product categories already stored in memory Brands have
important advantages in advertising: consumers are more likely to recall the information they
receive on new products bearing a familiar brand name, and their family is less affected by
exposure to competitive ads. For information about a new brand or model of printer to enter our
memory, for example, we would have to relate it to our previous experience with printers in terms
of such qualities as speed, print quality, resolution and memory.
Limited and Extensive Information Processing
Consumer researchers believe that all consumers passed through a complex series of mental and
behavioral stages when they make any purchase decision. These stages ranged from awareness, to
evaluation, to behavior, to final evaluation. Some theorists began to realize that there were some
purchase situations that simply did not call for extensive/wide/broad information processing and
evaluation, that sometimes consumers simply went from awareness of a need to a routine
purchase, without a great deal of information search and mental evaluation. Such purchases were
considered of minimal personal relevance/importance. Purchases of minimal personal importance
were called low involvement purchases, and complex-search oriented purchases were considered
high-involvement purchases.
2. Consumer Involvement Theory
Involvement refers to how much time, thought, energy and other resources people devote to the
purchase process. Involvement theory developed from research into hemispherical lateralization
or split-brain theory. a) The premise is that the right and left hemispheres of the brain specialize
in the kinds of information they process. b) The left hemisphere is responsible for cognitive
activities such as reading, speaking, and attribution information processing. c) The right
hemisphere of the brain is concerned with nonverbal, timeless, pictorial, and holistic information.
Individuals passively process and store right-brain information.
Because it is largely pictorial, TV viewing is considered a right hemisphere activity.
Passive learning was thought to occur through repeated exposures to low-involvement
information. TV commercials were thought to produce change in consumer behavior
before it changed consumer attitudes.
The left hemisphere is associated with high-involvement information. Print media
(newspapers and magazines) are considered left hemisphere or high-involvement activity.
Right-brain theory is consistent with classical conditioning and stresses the importance of
the visual component of advertising.
Recent research suggests that pictorial cues help recall and familiarity, although verbal
cues trigger cognitive functions, encouraging evaluation.
The right-brain processing theory stresses the importance of the visual component of
advertising, including the creative use of symbols.
Pictorial cues are more effective at generating recall and familiarity with the product,
although verbal cues (which trigger left-brain processing) generate cognitive activity that
encourages consumers to evaluate the advantages and disadvantages of the product.
There are limitations to split-brain theory. Research suggests the spheres of the brain do not
always operate independently of each other, but work together to process information. There is
evidence that both sides of the brain are capable of low- and high-involvement. It does seem the
right side is more cognitively oriented and the left side more affectively oriented.
A consumers level of involvement depends on the degree of personal relevance that the product
holds for the consumer. High-involvement purchases are those that are very important to the
consumer in terms of perceived risk. Low-involvement purchases are purchases that are not very
important to the consumer, hold little relevance, and little perceived risk.
Highly involved consumers find fewer brands acceptable (they are called narrow categorizers);
uninvolved consumers are likely to be receptive to a greater number of advertising messages
regarding the purchase and will consider more brands (they are broad categorizers).
Central and Peripheral Routes to Persuasion
Central and peripheral routes to persuasionthe central premise is that consumers are more
likely to weigh information carefully about a product and to devote considerable cognitive effort
to evaluating it when they are highly involved with the product category and vice versa.
Use of the central route to persuasion is more effective in marketing for high-
involvement purchases.
The peripheral route to persuasion is more effective for low-involvement purchases. The
elaboration likelihood model (ELM) suggests that a persons level of involvement during
message processing is the critical factor in determining the most effective route of
persuasion.
Thus, when involvement is high, consumers follow the central route and base their
attitudes or choices on the message arguments.
When involvement is low, they follow the peripheral route and rely more heavily on
other message elements to form attitudes or make product choices. The marketing
implications of the elaboration likelihood model are clear:

For high-involvement purchases, marketers should use arguments stressing the strong,
solid, high-quality attributes of their productsthus using the central (i.e., highly
cognitive) route.
For low-involvement purchases, marketers should use the peripheral route to persuasion,
focusing on the method of presentation rather than on the content of the message (e.g.,
through the use of celebrity spokespersons or highly visual and symbolic advertisements).
Measures of Involvement
Researchers have defined and conceptualized involvement in a variety of ways including ego
involvement, commitment, and communication involvement, and purchase importance, extent of
information search, persons, products situations, and purchase decisions.
Some studies have tried to differentiate between brand involvement and product
involvement.
Others differentiate between situational, enduring, and response involvement. The lack of
a clear definition about the essential components of involvement poses some
measurement problems.
Researchers who regard involvement as a cognitive state are concerned with the
measurement of ego involvement, risk perception, and purchase importance.
Researchers who focus on the behavioral aspects of involvement measure such factors as
the search for and evaluation of product information.
Others argue that involvement should be measured by the degree of importance the
product has to the buyer.

Because of the many different dimensions and conceptualizations of involvement, it makes sense
to develop an involvement profile, rather than to measure a single involvement level.
Marketing Applications of Involvement
Involvement theory has a number of strategic applications for the marketer. The left-brain
(cognitive processing)/right-brain (passive processing) paradigm seems to have strong
implications for the content, length, and presentation of both print and television advertisements.
By understanding the nature of low-involvement information processing, marketers can take steps
to increase consumer involvement with their ads.
3. Measures of Consumer Learning
Market share and the number of brand-loyal consumers are the dual goals of consumer learning.
Brand-loyal customers provide the basis for a stable and growing market share. Brands with
larger market shares have proportionately larger groups of loyal buyers.
Recognition and Recall Measures
Recognition and recall tests are conducted to determine whether consumers remember seeing an
ad, the extent to which they have read it or seen it and can recall its content, their resulting
attitudes toward the product and the brand, and their purchase intentions.
Recognition tests are based on aided recall, although recall tests use unaided recall. In recognition
tests, the consumer is shown an ad and asked whether he or she remembers seeing it and can
remember any of its salient points.

In recall tests, the consumer is asked whether he or she has read a specific magazine or watched a
specific television show, and if so, can recall any ads or commercials seen, the product
advertised, the brand, and any salient points about the product.
Cognitive Responses to Advertising
Comprehension is a function of the message characteristics, the consumers opportunity and
ability to process the information, and the consumers motivation (or level of involvement). To
ensure a high level of comprehension, many marketers conduct copy testing either before the
advertising is actually run in media (called pre-testing) or after it appears (post-testing).
Pre-tests are used to determine which, if any, elements of an advertising message should be
revised before major media expenses are incurred. Post-tests are used to evaluate the
effectiveness of an ad that has already run, and to identify which elements, if any, should be
changed to improve the impact and memorability of future ads.
Attitudinal and Behavioral Measures of Brand Loyalty
Brand loyalty is the ultimate desired outcome of consumer learning. There is no single definition
of this concept. Attitudinal measures are concerned with consumers overall feelings (i.e.,
evaluation) about the product and the brand, and their purchase intentions. Behavioral measures
are based on observable responses to promotional stimulipurchase behavior, rather than attitude
toward the product or brand.
A basic issue among researchers is whether to define brand loyalty in terms of consumer behavior
or consumer attitudes. Behavioral scientists who favor the theory of instrumental conditioning
believe that brand loyalty results from an initial product trial that is reinforced through
satisfaction, leading to repeat purchase. Cognitive researchers, on the other hand, emphasize the
role of mental processes in building brand loyalty. They believe that consumers engage in
extensive problem solving behavior involving brand and attribute comparisons, leading to a
strong brand preference and repeat purchase behavior.
To cognitive learning theorists, behavioral definitions (e.g., frequency of purchase or proportion
of total purchases) lack precision, because they do not distinguish the real brand-loyal buyer.
Often consumers buy from a mix of brands within their acceptable range (i.e., their evoked set).
An integrated conceptual framework views consumer loyalty as the relationship between an
individuals relative attitude toward an entity (brand, service, store, or vendor) and patronage
behavior.
The consumers relative attitude consists of two dimensions:
The strength of the attitude.
The degree of attitudinal differentiation among competing brands.
Some theorists suggest that brand loyalty is correlated with the consumers degree of
involvement. High involvement leads to extensive information search and, ultimately, to brand
loyalty. Low involvement leads to exposure and brand awareness, and then possibly to brand
habits. As a customers satisfaction with a product increases along with repeat purchases, the
search for information about alternative brands decreases.
Brand Equity
Brand equity refers to the value inherent in a well-known brand name. From a consumers
perspective, brand equity is the added value bestowed on the product by the brand name. Brand
equity facilitates the acceptance of new products and the allocation of preferred shelf space, and
enhances perceived value, perceived quality, and premium pricing options.
For many companies, their most valuable assets are their brand names. Well known brand names
are known as megabrands. Because a brand that has been promoted heavily in the past retains a
cumulative level of name recognition, companies buy, sell, and rent (i.e., license) their brand
names, knowing that it is easier to buy than to create a brand name with enduring strength.
Brand equity enables companies to charge a price premiuman additional amount over and
above the price of an identical store brand. A relatively new strategy among some marketers is
co-branding (also called double branding). In co-branding, two brand names are featured on a
single product. It uses another products brand equity to enhance the primary brands equity.
Some experts believe that using a second brands equity may imply that the host brand can no
longer stand on its own. Others question whether a co-branded product causes consumer
confusion as to who actually makes the product, and whether the host brand can survive if the
second brand endorsement is taken away. Brand equity is important to marketers because it leads
to brand loyalty, which in turn leads to increased market share and greater profits. To marketers,
the major function of learning theory is to teach consumers that their product is best, to encourage
repeat purchase, and, to develop loyalty to the brand name.
______________________________________________________________________________
4. Review questions
Explain Cognitive Learning Theory.
What are the marketing applications of the Involvement Theory?
How can consumer learning be measured?

Write a short note on Brand equity.
______________________________________________________________________________
5. Further readings
Ohio, 1995.
______________________________________________________________________________
UNIT 2: LESSON 10
PERSONALITY AND LIFE STYLE ANALYSIS
1. What is personality?
2. Nature of personality
3. Different approaches to personality
4. Theories of personality
5. Personality and consumer behavior
6. Brand personality
7. Self and self image
8. Lifestyle
9. Classifications of Lifestyle
10. Lifestyle Analysis (Psychographic Analysis)
1. What is personality?
Consumer purchase decision making process is influenced by their personality traits. This factor
motivates marketers to understand Personality traits and its influence on consumer behavior.
Personality is a very subjective concept. It may be the result of heredity factors, social or
environmental factors or some special traits.
Personality is the dynamic organization within the individual of those psychophysical systems
that determine his unique adjustment to his environment. Gordon Allport
Personality can be defined as those inner psychological characteristics that determine and reflect
how a person responds to his environment. Understanding these inner characteristics (qualities,
attitudes, and traits) is essential for the marketers because they have an influence on consumer
buying behavior.
2. Nature of personality
It reflects individual differences- because of the inner characteristics involved which
is a unique combination of certain factors; no two individuals are exactly same. But.
Marketers can segment consumers on the basis of a single personality characteristic.
It can change- though an individuals personality is visualized as consistent, it may
change under some special circumstances. These special circumstances may be good
or bad. A good circumstance may be a major career promotion; whereas a bad one
can be a happening in the family. Also, it may undergo a change as a result of a
gradual maturity process.
It is consistent and enduring- an individuals personality is generally both consistent
and enduring. Generally a person adopts a consistent pattern of response to all the
internal and external factors in the environment. That helps marketers in predicting
their behavior, segmenting the market and modifying the marketing mix to suit the
personality traits of the prospective consumers. But, it should be remembered that
personality is just one of the many factors affecting the consumer purchase decision.
3. Different approaches to personality- there are different approaches to personality. These
are:
Dynamic approach emphasizes on motivation, impulses and psychological
processes
Trait and type approach emphasizes on peoples characteristics

Behavioral approach emphasizes the way habits have been acquired through
conditioning
Humanistic approach emphasizes on self and its subjective view
4. Theories of personality- the theories vary greatly in there approach to personality
measurement.
Sigmund Freuds psychoanalytic theory- it is based on unconscious needs or
drives, especially biological ones. He proposed that much of ones adult
personality stems from a fundamental conflict between a persons desire to
gratify his or her physical needs and the necessity to function as a responsible
member of society. The theory was built on persons childhood experiences and
their physical and mental adjustment problems. According to him, personality
consists of three interacting systems: the id, the superego and the ego. The id
represents the most primitive and physiological needs of hunger, thirst and love.
The individual seeks immediate satisfaction with no concern to the means of
deriving it. It operates according to the pleasure principle, wherein the behavior
is guided by the primary desire to maximize pleasure and avoid pain. The
superego is the individuals internal expression of societys moral and ethical
codes of conduct. This system is essentially the persons conscience. It
internalizes societys rule and works to prevent the id from seeking selfish
gratification. Thus, the individual satisfies needs in a socially acceptable manner.
The impulsive forces of id are controlled by the social considerations involved in
the superego. In between two, there is ego which exercises control and maintain
balance. It creates a balance between the impulsive drives of id and the social
constraints of the superego. It tries to balance the two according to the reality
principle, whereby it finds ways to gratify the id that will be acceptable to the
outside world. Freud has also given stages of development of personality over a
period of time. He says an individual passes through- oral, anal, phallic, latent
and genital stages. The experiences at these stages influence an individuals
personality as an adult. An application of this theory in the field of consumer
behavior describes the importance of unconscious motives underlying purchases.
Marketers consider consumption behaviors as reflections of human personality
traits.
Neo- Freudian theory or socio psychological theory- it recognizes the
interdependence of the individual and the society. The individual strives to meet
the needs of society, whereas society helps the individual attain his goals. It is
based on the premise that social relationships helps in development of
personality. Some of the observations of neo-Freudian theory are: human beings
seek to attain rational goals called style of life (Alfred Adler); people attempt to
establish rewarding relationships with others (Harry Sullivan); impact of child-
parent relationships and individuals desire to conquer anxiety (Karen Horney).
Horney said that individuals can be classified into: Compliant (who move toward
others), Aggressive (who move against others) and Detached (who move away
from others).
Trait theory it is primarily quantitative in nature as it focuses on the
measurement of personality in terms of certain distinct psychological
characteristics called traits. It assumes that traits are common to many individuals
and vary in absolute amounts among individuals and can therefore act as a basis
for segmentation. Also assumed is the fact that these traits are relatively stable
and exert fairly universal influence on behavior regardless of environmental

situation. It involves construction of personality tests that bring out individual
differences. Consumer behavior uses dingle-trait personality tests that measures
just one personality trait. Such a research studies the relationship between
personality and consumer purchase decision process. The greatest application of
this theory is in developing Brand personality.
5. Personality and consumer behavior (By Schiffman and Kanuk )
Better understanding the influence of personality on consumption behavior helps in effectively
segmenting the market. Following traits reflect on consumer behavior;
Consumer innovativeness- consumer innovators are the ones who are the first ones to
adopt the new product, service or offering. They are critical to the success of any new
product launch. Certain characteristics help in identifying the consumer innovators. These
are:
o Consumer innovativeness- measurement instruments are used to know the nature
and boundaries of a consumers willingness to innovate
o Dogmatism- it is the personality trait that measures the degree of rigidity that
individuals display toward the unfamiliar and toward information that is contrary
to their own established beliefs.
o Social character- it is a personality trait that ranges from inner directedness
(people rely on their own inner values in evaluating the product); to other
directedness (people tend to look at others to give them direction of right or
wrong). Marketer has to design the marketing mix accordingly.
o Optimum stimulation level- there is a relationship between personality traits and
level of stimulation desired. Optimum stimulation level reflects a persons
desired level of lifestyle stimulation. If the OSL (optimum stimulation level) is

equivalent to the actual lifestyles, the person is said to be satisfied. If OSL level
is more than the current lifestyle, the person is slightly dissatisfied. If OSL level
is lesser than the current lifestyle of the person, he is said to be at rest or relief.
o Variety- novelty seeking- this measures the degree to which the consumers seek
variety in product offering. Different types of consumer variety seeking are:
Exploratory purchase behavior (switching brands to experience new and better
alternatives); vicarious exploration (securing information about a new product)
and Use innovativeness (using an existing product in a newer way).
Cognitive personality factors-
o Need for cognition- it measures a persons craving for or enjoyment of thinking.
Consumers with higher Need for cognition respond more strongly to the
cognitive part of promotion.
o Visualizers and verbalizers- visualizers are consumers who prefer visual
information; verbalizers are the ones with a strong preference for written or
verbal information.
Consumption and possession traits
o Consumer materialism- it is the personality trait of individuals who regard
possessions as essential to their identity and living. They believe in acquiring and
showing off possessions.
o Compulsive consumption behavior- it depicts an abnormal behavior. Consumers
are addicted towards consumption though that may harm them or others around
them. Examples- consumers are addicted towards goods like alcohol, cigarettes
etc.
o Fixated consumption behavior- it lies somewhere between Materialism and
Compulsive consumption. It is a normal and socially acceptable behavior. The
hobbyists are the best example of this. They do not keep their liking for the
product a secret. Their involvement is openly shared by others having similar
interests. They are dedicated towards collecting that product of interest.
Consumer ethnocentrism- it identifies consumer segments those are receptive to foreign
made products and those that are not. It is done using the CETSCALE (consumer
ethnocentrism scale). Highly ethnocentric consumers tend to see adopting foreign made
goods wrong and inappropriate.
Such classifications of personality traits that have an influence on consumer buying behavior
helps Marketers design and modify their marketing mix to suit the requirement of the particular
personality type.
6. Brand personality
It is concerned with attributing various personality traits to different brands across product types.
Example- Volvo stands for safety. Such ascription of personality traits to brands reflects
consumers vision of the product. Related to this is a concept called Brand personification. It is
concerned with recasting consumers perception of attributes in a particular product into a human
like character. Jennifer Aaker (1997) has given five dimensions of brands personality (sincerity,
excitement, competence, sophistication and ruggedness) along with 15 facets of personality that
flows from such dimensions ( down to earth, honest, wholesome, cheerful, daring, spirited,
imaginative, up to date, reliable, intelligent, successful, upper class, charming, outdoorsy and
tough). A product personality also links a product to a gender. Certain colors also are linked with
particular personality types.
7. Self and self image
Self image is the perception that one has about oneself. It is important to understand it because
consumers patronize products that correspond to his self image. Consumers portray multiple
selves by responding and acting differently to different situations. Self image is the result of the
persons background, experiences and interactions. Consumers represent an aspect of themselves
when they choose a particular brand. This theory holds that individuals have a concept of self-
based on which they think are (the actual self) & a concept of which they think they would like to
be (the ideal self). Self-concept theory is governed by two principles; the desire to attain self-
consistency & the desire to enhance ones self-esteem. Attaining self-consistency means that
individuals will act in accordance with their concept of actual self. For example, a consumer may
see himself as a practical & self-controlled individual. He buys conservative suits drives a large
four door sedan, & spend quiet evenings at home. Deep down, however he would like to be more
carefree & reckless. If he were to act more like his ideal self, he might own a small sports car,
dress in jeans & sports shirts & go to rock clubs. Such actions would enhance his self-esteem by
drawing him closer to his ideal self. These self images can be:
Actual self image- how consumers really see themselves as. Applied to marketing, the
concept of actual self says that consumers purchases are influenced by the image they
have of themselves. They attain self-consistency by buying products they perceive as
similar to their self-concept.
Ideal self image- how consumers would like to see themselves as. The concept of the
ideal self relates to ones self esteem. The greater the difference between the actual self
and ideal self, the lower an individuals self-esteem. In a marketing context,
dissatisfaction with oneself could influence purchases, particularly for products that could
enhance self-esteem.
Social self image- how consumers feel others sees him as
Ideal social self image- how consumers would like others to see him as
Expected self image- how consumers expect to see themselves at some specified time in
future.
Marketers can segment the markets based on these self images and position their products
accordingly. Related to this is the concept of Extended self. The possessions one has are
considered to be extensions of the self. It extends self actually (provides utility), symbolically
(feel better), by conferring status etc. when a person tries to change himself by becoming a
different or improved self, it is called Altering the self.
8. Lifestyle
In sociology a lifestyle is the way a person lives. This includes patterns of social relations,
consumption, entertainment, and dress. A lifestyle typically also reflects an individual's
attitudes, values or worldview.
Having a specific "lifestyle" means engaging in a characteristic bundle of behaviors that
makes sense to both others and the self in different times and places. Therefore, a lifestyle
can be used to forge a sense of self identity and to create cultural symbols for the way a
person is. The behaviors and practices within lifestyles are a mixture of habits, conventional
ways of doing things, and reasoned actions.
In business, "Lifestyles" provide a means of targeting consumers as advertisers and marketers
endeavor to match consumer aspirations with products. Lifestyles refer to patterns in which
people live, spend time and money. These patterns reflect by demographical factors (the
habits, attitudes, tastes, moral standards, economic level and so on that together constitute
the mode of living of an individual or group); that include things such as the individuals
activities in addition to their interests. As a construct that helps consumers interact with their
worlds, lifestyles are a subject to change every time. Consumer behavior research uses
lifestyle data to determine which consumers by products.

In environment, "Lifestyles" are often associated with particular footprint. Green lifestyles
are those lifestyles that consume less of the planets resources then other types of lifestyles. If
everyone on the planet had a lifestyle like the typical North American then we would need
over 40 earths to sustain the global population.
The term "lifestyle" first appeared in 1939. Alvin Toffler predicted an explosion of lifestyles
("subcults") as diversity increases in post-industrial societies. Pre-modern societies did not
require a term approaching sub-culture or "lifestyle", as different ways of living were
expressed as entirely different cultures, religions, ethnicities or by an oppressed minority
racial group. As such the minority culture was always seen as alien or other. "Lifestyles", by
comparison, are accepted or partially accepted differences within the majority culture or
group. This tolerance of differentiation within a majority culture seems to be associated with
modernity and capitalism.
9. Classifications of Lifestyle
A number of lifestyle classifications have been proposed by market researchers, including the
following:
AIO (Activities, Interests, Opinions): The lifestyle involves three dimensions viz.
Activity (in what and how people spend their time in activities), Interest (what is
more important to them in their surroundings) and Opinion (views about themselves
and the world around them). This approach seeks, via long questionnaires, to measure
respondents' positions on a number of dimensions spread across these categories (as

well as the more usual demographic groupings). Based on their responses, they are
then allocated (using sophisticated computer analysis techniques) to the AIO (life-
style) groups.
VALS (Value Life-Styles): Arnold Mitchell (of SRI International) developed similar
groupings. He drew up four main categories subdivided into nine life-styles, again
based on long questionnaires:
o need-driven groups: "survivors" and "sustainers"
o outer-directed groups: "belongers", "emulators" and "achievers"
o inner-directed groups: "I-am-me", "experientials" and "societally conscious"
o combined outer-and inner-directed groups: "integrated"
According to this framework, the outer-directed groups, 'belongers' (conventional,
conservative and so on), 'emulators' (ambitious, upwardly mobile and so on) and
'achievers' (leaders who make things happen and so on) account for a majority of human
beings. Thus, a newspaper might expect to target 'achievers' and possibly to address a
larger total market segment than the 'Guardian', which might be looking to the 'societally
conscious' for its most ardent supporters. Less widely reported is that the VALS typology
also suggests that there is a possible progression within the life-styles - from 'survivors'
through to 'integrated'.
10. Lifestyle Analysis (Psychographic Analysis)
The Psychographic Analysis focuses on lifestyle rather than demographic information as
a basis for describing segments. Under the analysis, questions about activities, interests
and opinions are asked. In some instances, psychographic measures are customized for
the brand of interest. In other situations, data collected by commercial services are used.
The Values and Lifestyles (VALS) Program, established in 1978, is one of the original
consumer segmentation systems based on psychographics. Typical applications of VALS
include product development, product positioning, advertising effectiveness, and
corporate image. The resulting theoretical framework was built on two large-scale, late-
1980s surveys (one to identify psychological scales that predict lifestyles and another to
validate the typology and determine product- and media-use patterns).
Under the analysis, the primary analysis of segments and targets is typically performed
using demographic data. Once a target is selected its demographic character is
supplemented by psychographic data to offer additional insight about the goals and
dispositions of consumers. This information is often useful in developing a brand's
positioning and in the execution of creative strategy.
______________________________________________________________________________
Explain the concept of Personality and its nature.
Explain the various theories of Personality.
Explain the concept of Brand personality.
Explain Lifestyle analysis.

______________________________________________________________________________
Ohio, 1995.
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UNIT 2: LESSON 11
COMMUNICATION AND CONSUMER BEHAVIOR
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1. Introduction
2. Need of understanding communication process
3. Components of communication
4. The communication process
5. Designing persuasive communication
6. Review questions
7. Further readings
______________________________________________________________________________
1. Introduction
Modern marketing calls for more than just developing a good product, pricing it attractively,
and making it available to target customers. Companies must also communicate with current
and prospective customers, and what they communicate should not be left to chance. For
most companies, the question is not whether to communicate, but how much to spend and in
what ways. All of their communications efforts must be blended into a consistent and
coordinated communications program. Communication is the transfer of information from the
sender to the receiver with the information being understood by the receiver. It is a tool in the
hand of the marketers to persuade consumers to act in a desired way. It can be- verbal
(written or spoken), visual (picture, illustration), and symbolic (representative. Higher prices
may reflect better quality) or a combination of all. Communication can evoke emotions that
put consumers in a more receptive frame of mind, and it can encourage purchases that help
consumers solve their problems. It acts as a bridge between a marketer and a consumer.
______________________________________________________________________________
2. Need of understanding communication process- marketers must move towards viewing
communications as managing the customer relationship over time, during pre-selling,
selling, consuming, and post consumption stages. Because customers differ,
communications programs need to be developed for specific segments, niches, and even
individuals. To communicate effectively, marketers need to understand how
communication works.
______________________________________________________________________________
3. Components of communication- these are:
a. The Sender- it is the party sending the message to another party. It represents the
initiator of the communication process and can be from following two sources:
i. Formal communication source- might be the organization
communicating the message.
ii. Informal communication source- might be a parent or a friend who gives
product information or advice. Informal word-of-mouth communication
tends to be highly persuasive.
b. Encoding- it is the process of putting thought into symbolic form.
c. The Receiver- it represents the party receiving the message sent by another party.
The receiver is the targeted prospect or a customer. There are also intermediary
audiences for a message, such as wholesalers, distributors, and retailers who
receive trade. There are also unintended audiences, which include everyone who
is exposed to the message, whether or not they are specifically targeted by the
source.
d. Decoding- it is the process by which the receiver assigns meaning to the symbols
encoded by the sender.
e. The Medium- it represents the communication channels or the ways through
which the message moves from sender to receiver. It can be of two types:
i. Impersonal communications channel- such as a mass medium like a
newspaper or television program.
ii. Interpersonal communications channel- an informal conversation
between two friendsor a formal conversation between a salesperson
and a customer. Mass media are generally classified as print (e.g.,
newspapers, magazines, billboards), broadcast (radio, television), or
electronic (primarily the Internet). New modes of interactive
communication that permit the audiences of mass media to provide direct
feedback are beginning to blur the distinction between interpersonal and
impersonal communication.
f. The Message- it represents the set of symbols that the sender transmits. It can be
two types:
i. Verbal- it is the message that is spoken or written, and usually can
contain more specific product information than a nonverbal message.
ii. Non- verbal- it is in the form of symbolic communication. Nonverbal
communication takes place in interpersonal channels as well as in
impersonal channels.
g. The Feedback- it represents the part of the receiver's response communicated
back to the sender. Feedback is an essential component of both interpersonal and
impersonal communications. Prompt feedback permits the sender to reinforce, to
change, or to modify the message to ensure that it is understood in the intended

way. Generally, it is easier to obtain feedback (both verbal and nonverbal) from
interpersonal communications than impersonal communications.
h. Noise- it represents the unplanned static or distortion during the communication
process, which results in the receiver's getting a different message than the one
the sender sent. For a message to be effective, the sender's encoding process must
mesh with the receiver's decoding process. Thus, the best messages consist of
words and other symbols that are familiar to the receiver. The more the sender's
field of experience overlaps with that of the receiver, the more effective the
message is likely to be. The basic components of communication are shown
below:
______________________________________________________________________________
4. The communication process- a companys marketing communications are designed to
make the consumer aware of the product, induce purchase or commitment, create a
positive attitude toward the product, give the product a symbolic meaning, or show how it
can solve the consumers problem better than a competitive product (or service) can. The
model is given below:

The communication process is given in the form of following steps:
a. The message initiator (Source) - the sender must decide to whom the message
needs to be send and what meaning it should convey. It must encode the message
in such a way that its meaning is interpreted by the targeted audience in precisely
the intended way. Encoding can be done through words, pictures, symbols,
spokespersons, and special channels. Publicity is usually the result of public
relations efforts and tends to be more believable because its commercial origins
and intent are not readily apparent. Source element of communication involves
following issues:
i. Credibility-The credibility of the source affects the decoding of the
message. The perceived honesty and objectivity of the source contributes
to his/her credibility. If the source is well respected and highly thought of
by the intended audience, the message is much more likely to be
believed, and vise-versa. Credibility is built on several factors, foremost
of which are the intentions of the source. If the receiver perceives any
type of personal gain for the message sponsor as a result of the proposed
action or advice, the message itself becomes suspect. It can be of two
types:
1. Credibility of informal sources- Credibility of informal sources
is built on the perception that they have nothing to gain from
their recommendation. An opinion leader is an example of a
credible informal source. Sometimes when we experience post
purchase dissonance we often try to alleviate their uncertainty by
convincing others to make similar purchases.
2. Credibility of formal sources- Credibility of formal sources is
built on intention, reputation, expertise, and knowledge. Such
formal sources as neutral rating services or editorial sources have
greater credibility than commercial sources. Because consumers
recognize that the intentions of commercial sources are clearly
profit oriented, they judge commercial source credibility on
factors such as past performance, the kind and quality of service
they are known to render, the quality and image of other
products they manufacture, the image and attractiveness of the
spokesperson used, the type of retail outlets through which they
sell, and their position in the community. Firms with well
established reputation have easier time selling than do firms with
lesser reputation. A quality image permits a company to
experiment more freely in many more areas of marketing than
would otherwise be considered prudent, such as self-standing
retail outlets, new price levels, and innovative promotional
techniques. Institutional Advertising is designed to promote a

favorable company image rather than to promote specific
products. Many companies sponsor special entertainment and
sports events to enhance their image and credibility with their
target audiences.
3. Credibility of spokesperson and endorsers- the spokesperson
(pitchman) that gives the product message is often perceived as
the source (initiator). It has a major effect on message credibility.
When consumer comprehension is low, receivers rely on the
spokespersons credibility in forming attitudes toward the
product. Also, when comprehension (and thus systematic
information processing) is high, the expertise of the source has
far less impact on a receivers attitudes in interpersonal
communications. The synergy between the endorser and the type
of product or service advertised is an important factor. Endorsers
who have demographic characteristics that are similar to those of
the target audience are viewed as more credible and persuasive
than those that do not. Marketers who use celebrities to give
testimonials or endorse products must be sure that the specific
wording of the endorsement lies within the recognized
competence of the spokesperson. In situations of interpersonal
communications, consumers are likely to be persuaded by
salespersons. The reputation of the retailer has an impact on the
message credibility. The reputation of the medium carrying the
advertisement enhances the credibility of the advertiser.

4. Credibility of message- The consumers previous experience
with the product or the retailer has a major impact on the
credibility of the message.
ii. The sleeper effect- it represents the effects of time on source credibility.
The persuasive effects of high-credibility sources do not carry on over
time. Although a high-credibility source is initially more influential than
a low-credibility source, research suggests that both positive and
negative credibility effects tend to disappear after six weeks or so. This
phenomenon has been termed the sleeper effect consumers simply
forget the source of the message faster than they forget the message
itself. Reintroduction of a similar message by the source, however,
serves to jog the audiences memory, and the original effect re-manifests
itself. Thus, the marketer who uses a high credibility spokesperson must
repeat the same series of advertisements to maintain high level of
persuasion.
b. The target audience (receivers) - the receivers decode the messages they receive
on the basis of their personal experience and personal characteristics. Some of
the considerations involved are:
i. Comprehension- The amount of meaning derived from the message is the
result of the message characteristics, the receivers opportunity and
ability to process the message, and the receivers motivation. Ones
personal characteristics, demographics, socio-cultural memberships,
lifestyle, personality, attitudes and prior learning are key determinants of
message interpretation. They influence the accuracy with which an
individual decodes a message. A persons level of involvement
determines how much attention is paid to the message and how carefully
it is decoded. Thus, these are important considerations in the design and
content of persuasive communication.
ii. Mood- a consumers mood (e.g., cheerfulness, unhappiness) affects the
way in which an advertisement is perceived, recalled, and acted upon.
The consumers mood often is influenced by the context in which the
advertising message appears and the content of the ad itself; these in turn
affect the consumers evaluation and recall of the message.
iii. Barriers to communication- these affect the accuracy with which
consumers interpret messages. These include:
1. Selective perception- Consumers selectively perceive advertising
messages. They tend to ignore advertisements that have no
special interest or relevance to them. TV remote controls offer
viewers the ability to wander among program offerings with
ease (often referred to as grazing). Some marketers try to
overcome channel surfing during commercials by road blocking,
i.e., playing the same commercial simultaneously on competing
channels.
2. Psychological noise- these are the things that impair reception of
a message, such as competing advertising messages or
distracting thoughts. Sender can overcome this by- Repeat
exposure to the message, by use of contrast, by using teasers,
placing advertisements in specialized media etc.
c. Feedback as the receivers response- The ultimate test of marketing
communications is the receivers response. Only through feedback can the sender
determine if and how well the message has been received. An advantage of
interpersonal communication is the ability to obtain immediate feedback. It

permits rapid adjustment of the message. This adaptability is what makes
personal selling so effective. Feedback is also important for impersonal or mass
communication because of its expense. The organization that initiates the
message needs some method for determining whether its mass communication is
being received by the intended audience, understood in the intended way, and
successful in achieving the intended objectives. Unlike interpersonal
communications, mass communications feedback is rarely direct; instead, it is
usually inferred. Receivers buy (or do not buy) the advertised product; they
renew (or do not renew) their magazine subscriptions, etc. Another type of
feedback that companies seek from mass audiences is the degree of customer
satisfaction or dissatisfaction with a product purchase.
i. Advertising effectiveness research- Advertisers often try to gauge the
effectiveness of their messages by conducting audience research to find
out which media are read, which television programs are viewed, and
which advertisements are remembered by the target audiences. When
feedback indicates that the audience does not note or miscomprehends
the ad, an alert sponsor modifies or revises the message. For food
products, UPC (universal product codes) can be used. Advertising
effectiveness research also called copy testing can be done before the
advertising is actually run in the media (pre testing) or after it appears
(post testing).
______________________________________________________________________________
5. Designing persuasive communications- the steps are outlined below:

a. Identifying the target audience- A marketing communicator starts with a clear
target audience in mind. The audience may be potential buyers or current users,
those who make the buying decision or those who influence it. The audience may
be individuals, groups, special publics, or the general public. The target audience
will heavily affect the communicator's decisions on what will be said, how it will
be said, when it will be said, where it will be said, and who will say it. It is
essential that the sponsor segment the audience into groups that are homogeneous
in terms of some relevant characteristic. This enables the marketer to create
specific messages for each target group and run them in specific media that are
seen or heard by each target group. There is a need for an umbrella message for
all audiences from which they spin off specific messages for targeted segments.
b. Determining the Communications objectives- Once the target audience has been
defined, the marketing communicator must decide what response is sought. The
sponsor needs to establish the primary communications objectives, which might
be awareness, promoting sales, encouraging certain practices, etc.
c. Media strategy-it is concerned with the placement of ads in the specific media
read, viewed or heard by target markets. For this, the advertiser must develop a
Consumer profile of their target customers which includes the specific media
they read or watch. Media organizations develop their Audience profiles. There
should be a match between the two. Depending on the product or service to be
advertised, the market segments to be reached and the marketers advertising
objectives; the marketer first select a general media category to enhance the
message they want to convey. Each media category has its own specific effect on
advertising content. On identifying the general media category, the marketer can
choose the specific medium in that category that reaches their intended
audiences. The marketer can use the World Wide Web to reach its audiences.
Also, the media strategy called Precision targeting can be used. It involves
creating a specific niche in the marketplace by catering to the needs and interests
of a highly specific target segment. It includes the media of Direct marketing
and Direct mailing.
d. Message strategies-a Message is the thought, idea, attitude, image, or other
information that the sender wishes to convey to the intended audience. Senders
must recognize what they are trying to say and their audiences characteristics so
they can encode the message appropriately. Nonverbal stimuli, such as
photographs or illustrations, are commonly used to add meaning or to reinforce
message arguments. It includes considering the following:
i. Advertising rhetoric and persuasion-researchers study both the
Semantics (meanings of the words used and resulting inferences) and
the Syntax (sentence structure) of the ad messages. They also need to
focus on the Rhetoric (discover most effective way to express a
message in a given situation) and Resonance (wordplay used in
combination with a relevant picture) of advertising.
ii. Involvement theory-Involvement theory suggests that individuals are
more likely to devote active cognitive effort to evaluating the pros and
cons of a product in a high-involvement purchase situation, and more
likely to focus on peripheral message cues in a low-involvement
situation. This led to the Elaboration Likelihood Model (ELM) that
proposes that, for high-involvement products, marketers should follow
the central route to persuasion; that is, they should present
advertisements with strong, well-documented, issue-relevant arguments
that encourage cognitive processing. When involvement is low,
marketers should follow the peripheral route to persuasion by

emphasizing non content visual or symbolic features material that
provide the consumer with pleasant, indirect associations with the
product and provoke favorable inferences about its merits.
iii. Message presentation-it includes following issues:
1. Message framing-Should a marketer stress the benefits to be
gained by using a specific product (positive message framing), or
the benefits to be lost by not using the product (negative message
framing)? Research suggests that the appropriate message-
framing decision depends on the target audiences level of
involvement with the product category.
2. One sided versus two sided messages-One-sided messages tell
consumers only the good points (benefits). This is most
effectively used when the target audience has previously used
the advertisers products. Two-sided messages tell consumers
both good (benefits) and bad (disadvantages) points of the
product. These are most effectively used when the target
audience uses a competitors products. Two sided advertising is
considered to be more credible because they acknowledge that
the advertised brand has shortcomings.
3. Comparative advertising- the marketer claims product
superiority over one or more explicitly named or identified
competitors, either on overall basis or on selected product
attributes. Comparative advertising is useful in product
positioning, target market selection, and brand positioning
strategies that stress the differential advantage of the underdog
product over leading brands. A disadvantage of using

comparative ads may be that they assist recall of the competitors
brand at the expense of the advertised brand. The major
advantage of using comparative ads is that they are found to
elicit higher levels of processing activity (high-involvement),
had better recall than non comparative ads, and were perceived
as more relevant.
4. Order effects-communications researchers have found that the
order in which a message is presented affects audience
receptivity. On television, the position of a commercial in a
commercial pod can be critical. When just two competing
messages are presented, one after the other, the evidence as to
which position is more effective is somewhat conflicting. Some
researchers have found that the material presented first produces
a greater effect (primacy effect), whereas others say those
presented last are more effective (recency effect). Order is also
important in listing product benefits within an ad. If audience
interest is low, the most important point should be made first to
attract attention. If interest is high, however, it is not necessary to
pique curiosity, and so product benefits can be arranged in
ascending order, with the most important point mentioned last.
When both favorable information and unfavorable information
are to be presented (e.g., in an annual stockholders report),
placing the favorable material first often produces greater
tolerance for the unfavorable news. It also produces greater
acceptance and better understanding of the total message.

5. Repetition- is an important factor in learning. It is not surprising
that repetition, or frequency of the ad, affects persuasion, ad
recall, brand name recall, and brand preferences. It also increases
the likelihood that the brand will be included in the consumers
consideration set. One study found that multiple message
exposures gave consumers more opportunity to internalize
product attributes, to develop more or stronger cue associations,
more positive attitudes, and increased willingness to resist
competitive counter-persuasion efforts.
iv. Advertising appeals-it depends on the kind of audience to be reached and
their degree of involvement in the product category. Generally, Reason-
why appeals are more effective in persuading educated audiences.
Emotional appeals are more effective in persuading less educated
audiences. Some of the appeals that are used are:
1. Fear- some researchers have found a negative relationship
between the intensity of fear appeals and their ability to
persuade, so that strong fear appeals tend to be less effective than
mild fear appeals. Some researchers have found a positive
relationship between fear and persuasiveness. When the audience
focuses on controlling the danger (cognitive response) rather
than the fear (emotional response), there is an acceptance of the
message. There is some indication that the mention of possible
harmful effects of using a product category although proclaiming
the benefits of the advertised product results in negative attitudes
toward the product itself.

2. Humor- a significant portion of ads uses humor because
marketers believe it increases the acceptance and persuasiveness
of their advertising communications. But, it should be used with
care.
3. Abrasive advertising- they work because of the sleeper effect as
only the brand name and the persuasive message are retained
over time. All of us have at one time or another been repelled by
so-called agony commercials, which depict in diagrammatic
detail the internal and intestinal effects of heartburn, indigestion,
clogged sinus cavities, hammer-induced headaches, and the like.
Nevertheless, pharmaceutical companies often run such
commercials with great success because they appeal to a certain
segment of the population that suffers from ailments that are not
visible, and which therefore elicit little sympathy from family
and friends.
4. Sex in advertising- there is more daring sexual imagery,
extending far beyond the traditional product categories of
fashion and fragrance, into such categories as shampoo, beer,
cars, and resorts.
v. Audience participation- the provision of feedback changes the
communications process from one-way to two-way communication. This
is important to senders, because it enables them to determine whether
and how well communication has taken place. It also is important to
receivers, because it enables them to participate, to be involved, to
experience in some way the message itself. .

Therefore, the marketer for an effective communication with the customer must start
with identifying the target audience, the communication objectives followed by a
decision on the appropriate media and message strategies so as to design and
communicate the message effectively.
______________________________________________________________________________
6. Review questions
Why a marketer needs to understand the Communication process.
Explain the Communication process and the various components of Communication.
What are the steps involved in designing persuasive communications?
______________________________________________________________________________
7. Further readings
Ohio, 1995.

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UNIT 3: LESSON 12
FAMILY AND ITS INFLUENCE ON CONSUMER BEHAVIOR
______________________________________________________________________________
1. Introduction and Definition
2. Types of Families
3. Variables affecting Family and Household
4. Role behavior in Family and Household
5. Functions of the Family
6. Family life cycle
7. Review questions
8. Further readings
______________________________________________________________________________
Family is a very transitional subject.
Traditional definition of Family- it is defined as two or more persons related by blood, marriage,
or adoption who reside together. The individuals who constitute the family can be considered
members of the most basic social group who live together and interact to satisfy their personal
and mutual needs.
Households- it is a broader concept and might include individuals not having blood relations,
related by marriage or adoption. Thus, it refers to all persons; both related and unrelated who
occupy a housing unit. For the purposes of consumer behavior though both Family and
Household are treated as same.
______________________________________________________________________________
2. Types of Families- there are four types of Families that can be seen. These are:
Married couple- it consists of husband and wife. It represents either newly married
couples who have not yet started a family or older couples who have already raised their
children.
Nuclear family- it consists of a husband, wife and one or more children.
Extended family- it is composed of a nuclear family together with at least one
grandparent, uncle or cousin living within the household.
Single parent family- it as a result of divorce, separation consists of just one parent and at
least one child.
Family of orientation- it refers to the family to which one is born.
Family of procreation- it refers to the family that is established by marriage
Which type of family is predominant depends on the type of culture the person lives in.
Family size depends on factors such as educational level, fertility rate and culture and
religion.
______________________________________________________________________________
3. Variables affecting Family and Household- the variables that affect Family and
household are:
Structural variables- family and household variables have an affect on consumer
purchasing behavior. Certain structural variables that have an affect on purchasing
behavior are- age of the head of the household or family; marital status; presence of
children and employment status. Children increase demand for various goods in the
family such as clothing, toys, education etc.
Sociological variables- sociological variables that explain how families function are:
o Cohesion- it represents the emotional bonding and closeness between the family
members.
o Adaptability- it measures the ability of a family to change its power structure,
role relationships and relationship rules in response to situational and
developmental stress.
o Communication skills- it facilitates other dimensions. It is of two types:
Positive communication skills- such as empathy enable family members
to share their changing needs as they relate to cohesion and adaptability.
Negative communication skills-such as criticism, minimizes the ability to
share feelings, thereby restricting movements in the dimensions of
cohesion and adaptability.
______________________________________________________________________________
4. Role behavior in Family and Household though family is a basic decision making unit,
still the attitudes and behavior of one of the family member is important. He is considered
to be the major decision maker for the family. Individual members of families often serve
different roles in decisions that ultimately draw on shared family resources. Therefore, it
is necessary to know the various roles and behavior patterns exhibited by the family
members.
According to Talcott Parsons, Family and Households exhibits two kinds of role behaviors. These
are:
Instrumental roles (Functional or economic roles) - it involves financial, performance
and other functions performed by group members.
Expressive roles- involve supporting other family members in the decision making
process and expressing familys emotional needs including upholding family norms.
These have an affect on allocation of income among products and consumption. The roles
behavior in the family purchase decision making can be of two types. These are:
Individual roles in Family purchases- these roles can be assumed by any of the household
members. Both multiple roles and multiple actors are normal. The number and identity of
the family members who fill these roles vary from family to family and for various
product types. A single family member may assume multiple roles while deciding on the
purchases. These roles are:
o Initiator- is the one who initiates a family thinking about buying the products
o Gatekeeper- is the one who controls the flow of information into the family. They
are information gatherers/holders, who seek out information about products of
relevance. These individuals often have a great deal of power because they may
selectively pass on information that favors their chosen alternatives.
o Influencer- is the one whose opinions are sought concerning criteria the family
should use in purchases and which products or brands most likely fit those
evaluative criteria. Influencers do not ultimately have the power decide between
alternatives, but they may make their wishes known by asking for specific
products or causing embarrassing situations if their demands are not met.
o Decider- is the one with the power to determine unilaterally or jointly whether to
shop for, purchase, use, consume or dispose off a specific product or service. The
decision maker(s) have the power to determine issues such as:
whether to buy;
which product to buy;
which brand to buy;
where to buy it; and
When to buy.
o Buyer- is the one who make the actual purchase by visiting the store, calling
suppliers, writing checks, brings the product home etc. Note, however, that the
role of the decision maker is separate from that of the buyer. From the point of
view of the marketer, this introduces some problems since the buyer can be
targeted by point-of-purchase (POP) marketing efforts that cannot be aimed at
the decision maker. Also note that the distinction between the buyer and decision
maker may be somewhat blurred. The decision maker may specify what kind of
product to buy, but not which brand; the buyer may have to make a substitution if
the desired brand is not in stock; the buyer may disregard instructions (by error or
deliberately).
o User- is the one who uses or consumes a particular product or service
o Maintainers- is the one who service or repair the product so that it will provide
continued satisfaction
o Disposers- are the one who initiates or carry out the disposal or discontinuation
of a particular product or service.
Marketers need to communicate with consumers assuming each of these roles. Family marketing
focuses on the relationships between family members based on the roles they assume, including
the relationship between buyer and purchase decision maker.
Spousal roles in buying decisions- marketers want to know the relative amount of
influence that a husband or a wife have while taking purchase decisions. The following
role structure categories are important :
o Autonomic- wherein an equal number of decisions is made by each spouse, but
each decision is individually made by one spouse or the other
o Husband dominant- the husband or male head of the household makes the
majority of the decisions.
o Wife dominant- the wife or the female head of the household makes the majority
of the decisions.
o Joint (syncratic) - wherein most of the decisions are made by both husband and
wife.
The type of spousal role depends on the type of product for purchase, stages in the decision
process, culture and the nature of the situation at hand.
Influences on the decision process-
o Influence by decision stage- spouses exert different degrees of influence when
passing through the different stages of the decision making process. It may be
minimal for low involvement products and more pronounced for high
involvement ones. The information search stage is more autonomic than joint
when compared with final decisions. Marketer needs to understand this influence.
o Influence of employment- the high number of women working outside the home
coupled with changing spousal roles has an affect on division of purchase
decision making.
o Influence of gender- as the gender gap narrows, there are more joint decisions
then autonomic ones.
It should be noted that family decisions are often subject to a great deal of conflict. The
reality is that few families are wealthy enough to avoid a strong tension between demands
on the familys resources. Conflicting pressures are especially likely in families with
children and/or when only one spouse works outside the home. Note that many decisions
inherently come down to values, and that there is frequently no "objective" way to
arbitrate differences. One spouse may believe that it is important to save for the
childrens future; the other may value spending now (on private schools and computer
equipment) to help prepare the children for the future. Who is right? There is no clear
answer here. The situation becomes even more complex when more partiessuch as
children or other relativesare involved. Some family members resort to various
strategies to get the work done in their way. These are:

o Bargaining- where one member will give up something in return for someone
else.
o Reasoning- where one is trying to get the other person(s) to accept ones view
through logical argumentation.
o Impression management- where one tries to make ones side look good
o Authority- it involves asserting ones "right" to make a decision
o Emotion-it involves making an emotional display to get ones way
______________________________________________________________________________
5. Functions of the Family-
Socialization- it is the central function of the family. Socialization could briefly be
described as the process whereby an infant gradually becomes a member of society and
acquires the skills that are required to function in the culture he or she is born into. To
children, the family imparts basic values, moral and religious principles, interpersonal
skills, manners of speech, selection of education and career goals and behavior as per the
culture of the family. Marketers target parents looking for assistance in this task of
socialization. Also, it is a known fact that the attitudes we develop as children, we carry
forward when we are adults. There are the following types of socialization:
o Consumer socialization of children- it is one of the aspects of childhood
socialization wherein children acquire the skills, knowledge and attitudes
necessary to function as consumers. Children are born egocentric. They actually
believe themselves to be the centre of everything that takes place around them
and have to be taught the rules of their society and their place within it. The
process of learning the rules about how to behave is called socialization and it
lasts for all of our lives. Family and observation has a major impact on molding
this behavior. Shared shopping experiences and observing the parents taking the
purchase decision leads to consumer socialization among children. Children are
socialized and at the same time influence other members too. Consumer
socialization has two distinct components: (1)
Socialization directly related to consumption, such as the acquisition of
skills and knowledge concerned with budgeting, pricing, and brand
attitudes; and
Socialization indirectly related to consumption
o Adult consumer socialization- Socialization has no end. Even though it is more
intense in infancy and childhood, learning and adjusting to new situations is a
part of the whole lifecycle. In modern society we even have to go through
periods of re-socialization in some respects. Socialization process that begins in
childhood extends throughout a persons life. Although socialization is a process
everyone has to go through, it is not the same for everyone. Boys are socialized
in different ways than girls. Families from different social classes socialize their
children in different ways. The same differences could be discerned between
ethnic communities, and so on.
o Intergenerational socialization- it is common for product loyalty and brand
preferences to be transferred from one generation to another. This is called
intergenerational brand transfer.
MODEL OF SOCIALIZATION PROCESS

Young Person
Other Family Members Friends
Influence More Basic Influence More Expressive

Values/Behavior Attitudes/Behavior
Moral/religious principles Style
Interpersonal skills Fashion
Dress/grooming standards Fads
Manners and speech In/Out
Educational motivation Acceptable consumer behavior
Occupational career goals
Consumer behavior norms
Preadolescent Adolescent Teens Older
0
Economic well being- family provides financial means to its dependant members though
the way family divides its responsibilities for providing economic well being has
undergone a change. Working women has changed this paradigm altogether.
Emotional support- family provides emotional nourishment (love, affection, intimacy) to
its members. The family provides support, encouragement and assistance to its family
members. It helps them in coping up with various changes and problems. They can
survive without, but for most people, their family is their strongest emotional bond.
Suitable family lifestyles family establishes a suitable lifestyle for its members. It
greatly influences the consumption patterns. Upbringing, experience, and the personal
and jointly held goals of the spouses determine the importance placed on education or
career, on reading, on television viewing, on the frequency and quality of dining out, and
on the selection of other entertainment and recreational activities.
______________________________________________________________________________
6. Family Life cycle (FLC)
It depicts that individuals and families tend to go through a "life cycle" as they progress in life.
This analysis helps marketers to segment families in terms of a series of stages spanning the life
course of a family unit. It is a composite variable created by systematically combining such
commonly used demographic variables such as marital status, size of family, age of family
members and employment status of the head of the household. The ages of the parents and the
relative amount of disposable income can be inferred from the stage in the Family Life Cycle.
There are two types of Family life cycles. Generally, there are two main themes in the Family
Life Cycle, subject to significant exceptions:
As a person gets older, he or she tends to advance in his or her career and tends to get greater
income (exceptions: maternity leave, divorce, retirement).
Unfortunately, obligations also tend to increase with time (at least until ones mortgage has
been paid off). Children and paying for ones house are two of the greatest expenses. These
are:
Traditional Family Life Cycle- it is a progression of stages through which many
families pass, starting with Bachelorhood, to Marriage (creation of basic family unit),
to Family growth (birth of children), to Family contraction (grown children leave the
household) and ending with Dissolution of the basic unit (death of one spouse).
These are divided into certain stages. These are:
o Bachelorhood- it represents a stage of a young single adult living apart from
parents. Here, financial commitments and family responsibilities tend to be
low, with disposable income being high. These younger unmarried
consumers tend to be more leisure-orientated and more fashion conscious.
They spend most of their income on rent, basic home furnishings, the
purchase and maintenance of automobiles, travel and entertainment and

clothing and accessories. This segment thus comprises a very important
market for many new and innovative products.
o Honeymooners-it represents a stage of young married couple that starts
immediately after the marriage vows are taken and generally continues until
the arrival of the couples first child. This group focuses its expenditure on
those items considered necessary for setting up home. It serves as a period of
adjustment to married life. If both husband and wife are working, their
combined income often permits a lifestyle that provides them with the
opportunities of more indulgent purchasing of possessions or allows them to
save or invest their extra income.
o Parenthood-it represents a stage of a married couple with at least one child
living at home. It is also called the Full nest stage. It extends for over more
than 20 year time. This stage can be divided into certain small stages, which
are:
The elementary school phase
The high school phase
The college phase
Throughout these parenthood stages, the inter-relationships of family
members and the structure of the family undergo a change. Also, there are
significant changes in the financial resources of the family as parents progress
in career and family obligations too increases. Outlay here is children-
orientated, and there is little surplus cash for luxury items. Although they are
receptive to new product ideas, this group sees economy as being the over-
riding factor when making purchases. Disposable income will probably have
increased, often with both parents working and children being relatively
independent. In some cases children may be working and the parents are able
to engage increasingly in leisure activities often in the form of more than the
standard annual holiday. Consumer durables, including major items of
furniture, are often replaced at this stage. Such purchases are often made with
different motivations to the original motivations of strict functionality and
economy that was necessary at an earlier life cycle stage.
o Post parent hood- it represents an older couple with no children living at
home. It is also called an Empty nest stage. During this stage though there
is a trauma of loneliness, but the couple is most comfortable financially.
However, tastes are likely to be firmly rooted reflected in unchanging
purchasing patterns. Thus marketers will have difficulty when attempting to
change predispositions, so the best policy will be through attempts to refine
and add value rather than to introduce new concepts and ideas. They have
more leisure time. They have time to do things they like and travel a lot.
They have higher disposable incomes because of savings and investments.
For this reason, families in this stage are an important market for luxury
goods, automobiles, expensive furniture and vacations. Many empty nesters
retire while they are still in good health. These people tend to use television
as an important source of information and entertainment.
o Dissolution- it represents one surviving spouse as there is a death of one
spouse. The surviving spouse tends to follow a more economical lifestyle. If
he has adequate savings, friends and is in good health, the adjustment is
easier. At this stage, most consumer durables have been purchased although
occasional replacements will be required. Purchasing is low and patterns of
purchasing are conservative and predictable. This group of consumers is
increasing rapidly. Such people tend to be less reliant solely on the State
pension, many having subscribed to occupational pensions from former

employers, which boosts the State pension. This allows this group to lead
more active lives and the tourist industry now actively targets this particular
market segment.
Non- traditional Family Life Cycle- as the Traditional Family Life Cycle does not
fully represents the progression of the stages, there is an occurrence of a Non
Traditional Life Cycle. It represents diversity of family and lifestyle arrangements.
Factors responsible for such an extended life cycle are- divorces, later marriages etc.
It includes not only family households but also non family households: those
consisting of a single individual and two or more unrelated individuals. When
households undergo status changes (divorce, temporary retirement, birth or death),
they often undergo spontaneous changes in consumption-related preferences, and
thus become attractive targets for many marketers. These Non traditional stages are
becoming increasingly important to marketers in terms of specific market niches.
Some of them are:
o Childless couples- where married couples may elect not to have children
o Couples who marry later in life (in their 30s or later)- because of career
orientation
o Couples having first child later in life- they are likely to have fewer children
and stress quality living.
o Single parents 1- it is because of high divorce rates
o Single parents 2- young man or woman who has one or more children out of
wedlock
o Single parents 3- a single person who adopts one or more children
o Extended family- divorced daughter or grandchildren return home to parents,
or newly weds living with in-laws
o Unmarried couples
o Divorced persons without children
o Single persons- may consist of youngsters who never marry
o Widowed persons
______________________________________________________________________________
7. Review questions
Explain the various types of Families.
Explain briefly the variables that effect Family and Households.
How the Theory of Role behavior can be used by the marketer?
Explain the various types of functions performed by the marketer.
What is the concept of Family life cycle? What strategies should the marketer adopt
at each stage of the life cycle?
______________________________________________________________________________
8. Further readings
Ohio, 1995.

______________________________________________________________________________
UNIT 3: LESSON 13
REFERENCE GROUP
1. What is a Group?
2. What is a Reference Group?
3. Factors that affect reference group influence:
4. Various types of Reference Groups
5. Reference Group Appeals
6. Opinion leadership
7. Review questions
8. Further readings
1. What is a Group?
A Group is a collection of individuals interacting with one another so that each person influences
and is influenced by each other person to some degree. Group members are distinguished from a
mere aggregate of individuals by having a shared purpose, by being aware of each other, and by
interacting and communicating with each other. A team can be regarded as a special type of
group, which has a well-defined structure, organization, and communication patterns. Team
assignments are usually designated before an activity, whereas those of other types of groups are
often assumed in the course of group interaction.
2. What is a Reference Group?

A reference group is a group, class, or category of people to which individuals believe they
belong, whether or not they actually do. Their relationship to their reference group may influence
their buying behavior. For example, if a man buys a more expensive car than he normally would
because his neighbors drive that particular model; his buying behavior is seen to be influenced by
his reference group.
The term reference group can refer to any and all groups that influence the attitudes and behavior
of individuals. The theory is often used to describe two major types of relationships between
individuals and groups. These two major dimensions are known as "normative" reference group
behavior and "comparative" reference group behavior. Because some reference groups teach
individuals how they should behave, "normative" reference group theory is sometimes referred to
as a guide for individuals' behavior. Additionally, some social groups, or "comparative" reference
groups, give individuals a basis for comparing themselves or their group to other individuals or
groups. Comparative reference groups also influence individuals' feelings and behavior.
A normative reference group is described as a group in which individuals are motivated to gain or
maintain acceptance. To promote this acceptance, individuals hold their attitudes in conformity
with what they perceive to be the consensus of opinion (norms) among the group members
(Kelley, 1952). In normative reference group theory, the group sets and enforces standards for
individuals. Such standards are often referred to as group norms; thus we have the "normative
function" of reference groups.
A comparative reference group is used to describe a group which individuals use as a standard or
point of reference in making evaluations or comparisons of themselves and of other individuals or
groups. In comparative reference group theory, an evaluation of the individual by members of the
reference group is largely irrelevant. In regard to comparative reference groups, the group is
merely a standard or checkpoint which individuals or others use to make judgments.
Multiple reference groups are described as the numerous reference groups individuals use in
appraising the many facets of the self. Each of the various reference groups is specialized as a
point of comparison for one particular dimension. In forming the total disposition of an
individual's attitudes, several reference groups may be employed; each may be accorded a limited
jurisdiction over some specialized attitude sphere. Influences from multiple reference groups can
also result in internal or social discord for individuals when the values and or behaviors of one of
the individual's reference groups contrast or conflict with the values and behaviors of another
group that the same individual uses as a reference point. For example, teenagers may experience
inner and social strife because the attitudes, behavior, and norms of their peer group contrasts or
conflicts with the attitudes, behaviors, and norms of their family group. Graduate students may
experience internal and societal discord because the attitudes, behavior, and values of the
academic world may contrast or conflict with the attitudes, behavior, and values of their private-
life world. Library users from various cultures may experience social and informational
perplexities because the attitudes, norms, and information world of their unique groups may
contrast or conflict with the attitudes, norms, and information world of traditional European-
centered American culture.
3. Factors that affect reference group influence:
Information and experience: An individual who has first hand experience with the
product or service, or can easily obtain full information about it, is less likely to be
influenced by the advice of example of others. For instance, when a young corporate
sales representative wants to impress his client he may take her to a restaurant that he
knows from experience to be good or to one that has been highly recommended by the
local newspapers Dining out Guide. If he has neither personal experience nor
information he considers as valid he may seek the advice of a friend or a parent.
Credibility (reliability), Attractiveness, and Power of the Reference Group: A reference
group that is perceived as credible, attractive, or powerful can influence consumer
attitude and behavior change. For example, when consumers are concerned with obtain
accurate information about the performance or quality of a product or service, they are
likely to be influenced by those whom they consider trustworthy and knowledgeable.
That is, they are more likely to be convinced by sources with high reliability.
When consumers are primarily concerned with the acceptance or approval of others they
like, with whom they identify, or who offer them status or other benefits, they are likely
to adopt their product, brand, or other behavioral characteristics. Individuals may
conform to the behavior of a powerful person or group, but are not as likely to experience
a change in their own attitudes.
Different reference groups may influence the beliefs, attitudes, and behavior of an
individual at different points in time or under different circumstances. For example, the
dress habits of a young male executive may vary, depending on his place and role in the
workplace.
Conspicuousness of the product: The potential influence of a reference group on a
purchase decision varies according to how visually or verbally noticeable the product is
to others. A visually conspicuous (noticeable) product is one that will stand out and be
noticed (such as luxury item or novelty product); a verbally conspicuous product may be
highly interesting, or it may be easily described to others. For example a new automobile,
fashion clothing, shiny laptop computer.
4. Various types of Reference Groups
Consumers potentially influenced by a diverse range of people that they come in contact with or
observe. We will consider the following five specific reference groups:
Friendship groups: Friendship groups are typically classified as informal groups because
they are usually unstructured and lack specific authority levels. In terms of relative
influence after an individuals family, his or her friends are most likely to influence the
individuals purchase decisions. Friends fulfill a wide range of needs: they provide
companionship, security and opportunities to discuss problems that an individual may be
reluctant to discuss with family members. Friendships are also a sign maturity and
independence, for they represent a breaking away from the family and the forming of
social ties with the outside world. The opinions and preferences of friends are an
important influence in determining the products or brands a consumer ultimately selects.
Shopping groups: Two or more people who shop together for food, clothing or simply to
pass the time, can be called a shopping group. In instances where none of the members of
the shopping group knows much about the product under consideration (such as an
expensive home entertainment center), a shopping group may form for defensive reasons;
members may feel more confident with a collective decision. The in-hope party approach
provides marketers with an opportunity to show the features of their products
simultaneously to a group of potential consumers. Early purchasers tend to create a
bandwagon effect: undecided guests often overcome an unwillingness to buy when they
see their friends make positive purchase decisions. Some of the guests may feel grateful
to buy because they are in the home of the sponsoring host or hostess.
Workgroups: The formal work group consists of individuals who work together as part of
a team, and thus have a continuous opportunity to influence each others consumption
related attitudes and actions. Informal friendship-work groups consist of people who have
become friends as a result of working for the same firm. Members of informal work
groups may influence the consumption behavior of other members during coffee or lunch
breaks or at after-work meetings. Recognizing that work groups influence consumers
brand choices and that most women now work outside of their homes, firms that in the
past sold their products exclusively through direct calls on women in their homes now are
redirecting their sales efforts to offices and plants during lunch hour breaks.
Internet Communities: People are free to express their thoughts, to be emotional and
close with those they do not know and have never met, and even to escape from those
they normally interact with by spending time on the Internet. The secrecy of the Net gives
it users the freedom to express whatever views they wish, and to also benefit from
enjoying the views of others. Because of this secrecy Internet user can say things to
others that they would not say in face-face interactions. Internet permits people shift from
one person to another (gender swapping).

Consumer- Action Groups: A particular kind of consumer group a consumer action
group has emerged in response to the commercial movement. Today there are a very
large number of such groups, who are dedicated to providing consumers with assistance
in their effort to make the right purchase decision, consume products and services in a
healthy and responsible manner, and to generally add to the overall quality of their lives.
For example, disaster relief, education, smoking, access to telecommunications.
Consumer-action groups can be divided in to two broad categories viz. those that
organize to correct a specific consumer mistreatment and then disband and those that
organize to address broader, more continual problem areas and operate over an extended
or indefinite period of time. A group of parents who attend a meeting of the local school
board to question some of the decisions made by the high school principal are examples
of temporary, cause-specific consumer-action groups.
5. Reference Group Appeals
Advertisers to communicate with their markets use various reference group appeals very
effectively. This identification may be based on admiration (of a cricketer), on aspiration (of a
celebrity or a way of life). In some cases the prospective consumer may think, If she uses it, it
must be good, if I use it, Ill be like her. There are following five major types of reference group
appeals in common marketing usage:
The Expert: For example, an advertisement for a quality frying pan any feature the
endorsement of a chef (Like: Sanjeev Kapoor) or an ad for cricket shoes might feature the
endorsement (support/approval) of a champion cricket team.

Celebrities: Advisers spend huge sums of money to have celebrities to promote their
products, with the expectation that the reading or viewing audience will react positively
to the celebritys association with their products. By celebrity credibility, we mean the
audiences perception of both the celebritys expertise (how much the celebrity knows
about the product area) and trustworthiness (how honest the celebrity is about what he or
she says about the product). To illustrate, when a celebrity supports only one product,
consumers are likely to see the product in a highly favorable light and indicate a greater
intention to purchase it. In contrast when a celebrity approves a variety of products, his or
her perceived trustworthiness is reduced. Not all companies feel that celebrity endorses is
the best way to advertise. Some companies avoid celebrities because they fear if the
celebrity gets involved in some undesirable act or event (e.g. a scandal), the negative
news or press coverage will negatively impact on the sales of the endorsed brand.
Common Man: The advantage of a common-man appeal is that it expresses to
perspective customers that someone just like them uses and is satisfied with the product
or service being advertised. The common man appeal is especially effective in public
health announcements (such as anti smoking or high blood pressure messages), for most
people seem to identify with people like themselves when it comes to such messages.
These commercials are known as slice-of-life commercials because they focus on real
life situations with which the viewer can identify. For example, one commercial focus
on how a laundry detergent (Like: Ariel) can deodorize clothes, another talk about how
certain breakfast cereal (Like: Kelloggs) provides enough energy to get an individual
through a hectic morning. When viewers identify with the situation, they are likely to
adopt the solution that worked in the TV commercial.

The Executive and Employee Spokesperson: Like the celebrity spokesperson, the
executive spokesperson seem to be admired by the general population because of their
achievements and the status completely presented on business leaders in United States
and also nowadays in India. The appearance of a companys chief executive in its
advertising seems to mean that someone at the top is watching over the consumers best
interests, and it encourages consumers to have more confidence in the firms products or
services.
Trade or Spokes Characters: With few exceptions, trade characters serve as an exclusive
spokesperson for a particular product or service. They sometimes provide a kind of
personality for the product or service and make the product appear much friendly (like
Fido, the Seven-Up Character).
Other Reference Group Appeals: The retailer and the magazine are functioning as frames
of reference that influence consumer behavior. Seals of approval and even objective
product ratings can serve as positive endorsements that encourage consumers to act
favorably toward certain products. For instance, many parents of young children look for
the Indian Dental Associations seal of approval before selecting a brand of toothpaste
(like Colgate).
6. Opinion leadership- it depicts the informal influence that others have on consumers behavior.
This influence is called word of mouth communication or Opinion leadership. Those who
influence are called Opinion leaders and those that are influenced are called Opinion receivers.
Opinion leadership (or word-of-mouth communication) is the process by which one person (the
opinion leader) informally influences the actions or attitudes of others, who may be opinion
seekers or merely opinion recipients. The key characteristic of the influence is that it is
interpersonal and informal and takes place between two or more people, none of whom represents
a commercial selling. Word of mouth implies personal or face-to-face communication although it
may also take place in a telephone conversation or can be implied by non verbal observations.
One of the parties in a word-of-mouth encounter usually offers advice or information about a
product or service, such as which of several brands is best, or how a particular product may be
used. Opinion leader may become an opinion receiver when another product or service is brought
up as part of the discussion. Individuals who actively seek information and advice about products
are often called opinion seekers. These are really influential in product related decisions. Example
of opinion leadership- a person seeks the advice of his friend for a brand decision on purchase of
a car. The reasons for the effectiveness of opinion leadership are:
Credibility-opinion leaders are considered to be highly credible source of information
because they are perceived as objective concerning the product information/advice they
give; they receive no compensation for the advice they render.
Positive and negative product information-as against a marketer, opinion leaders based on
their experience with the product provide both favorable and unfavorable information
that adds to their credibility.
Information and advice- Opinion leaders are the source of both information and advice.
They may simply talk about their experience with a product, relate what they know about
a product, or more aggressively, advise others to buy or to avoid specific product.
Opinion leadership is category specific- Opinion leadership tends to be category-specific,
that is, opinion leaders often specialize in certain product categories about which they
offer information and advice. When other product categories are discussed, they are
likely to reverse their roles and become Opinion receivers.

Opinion leadership is a two way street- Consumers who are opinion leaders in one
product-related situation may become opinion receivers in another situation, even for the
same product. An opinion receiver may also influence an Opinion leader as the result of a
product-related conversation.
The motivation behind opinion leadership:
The needs of opinion leaders- People may provide information or advice to others to
satisfy some basic need of their own. This need can be:
o To reduce their own post purchase dissonance by telling others the
advantages of the products so as to ward off uncertainty regarding his
purchase decision.
o For self confirmation- when he can influence a friend to also buy that brand,
he confirms his own good judgment in selecting the product.
o For self involvement
o For product involvement- Opinion leaders who are motivated by product
involvement may find themselves so pleased or so disappointed with a
product that they simply must tell others about it.
o For social involvement- Opinion leaders use their product-related
conversations as expressions of friendship, neighborliness and love.
o For message involvement- Individuals who are bombarded with advertising
messages and slogans tend to discuss them and the products they are
designed to sell. Such word-of-mouth conversation is typified by the popular
use in everyday conversation of slogans.
The needs of opinion receivers-people may seek information from others for the
following reasons:
o For obtaining new product or new usage information

o To reduce their perceived risk by receiving first-hand knowledge from a user
about a specific product or brand.
o To reduce the search time entailed in the identification of a needed product or
service.
o They can be certain of receiving the approval of opinion leaders, if they
follow his advice on the product related information.
Purchase pals- these people as information sources accompany consumers on
shopping trips.
Surrogate buyers versus opinion leaders-sometimes surrogate buyers replace the
opinion leaders in their role. These buyers have a formal relationship which is
occupation related and share advice in the form of formal instructions. They are paid
for their advice and usually specialize in a particular product category. As against the
advice given by opinion leaders, the second opinion is taken on rare occasions only.
Measurement of opinion leaderships impact on the consumption behavior- the following
techniques is widely used:
Self designating method- respondents are asked to evaluate the extent to which
they have provided others with information about a product/brand or have
otherwise influenced the purchase decisions of others. A series of questions are
framed to assess the impact. The self-designating technique is used more often
than other methods for measuring opinion leadership because consumer
researchers find it easy to include in market research questionnaires. Because
this method relies on the respondents self-evaluation, however, it may be open
to bias.
Socio metric method-measures the person-to-person informal communication of
consumers concerning products or product categories. Respondents are asked to

identify: specific individuals (if any) to whom they provided advice/information
about the product or brand under study and the specific individuals (if any) who
provided them with advice/information about the product or brand under study.
In the first case if the respondents identify one or more such individuals, the
respondents are tentatively considered to be opinion leaders, while in the latter
case the individuals identified by the respondents are tentatively considered
opinion leaders. However, validation is done by actually talking to the
individuals so named.
Key informant method-A key informant is a person who is keenly aware or
knowledgeable about the nature of social communications among members of a
specific group. He is asked to identify those individuals in the group who are
most likely to be opinion leaders. The key informant need not be a member of
that group. It is a less expensive method than the above two methods as the
focus is on one or few key informants only. The key informant method, however,
is generally not used by marketers because of the difficulties inherent in
identifying an individual who can objectively identify opinion leaders in a
relevant consumer group under study.
Objective method-The objective method is much like a controlled experiment
which involves placing new products or new product information with selected
individuals and then tracing the resulting Web of interpersonal communication
concerning the relevant product(s). Example- it can be used to spread the
information about the opening of a new book store in the area by inviting few
people of that area.
Profile of opinion leaders for identifying them: the profile of opinion leaders is likely to
be influenced by the context of the specific product category, as opinion leaders are
category specific. It is divided into following two parts;

General defining characteristics-they have keen sense of knowledge, are
interested in the particular product area, generally are consumer innovators, are
willing to talk about the product, are confident and sociable.
Characteristics within a context of specific area-they are information seekers
from non personal sources, are experts in their area of influence, are well read
with respect to their specific product category and have greater exposure to
media specifically relevant to their area of interest.
Frequency and opinion leadership overlap: certain issues related to this are:
Opinion leadership is not a rare phenomenon and shows that people are sufficiently
interested in at least one product category.
Opinion leadership overlap- it suggests that opinion leaders in one product category tend
to be opinion leader in other product categories. Opinion leadership tends to overlap
across certain combinations of interest areas.
Market mavens- these are special category of opinion leaders who posses a wide range of
information about many different types of products, retail outlets and other dimensions of
markets. They are like opinion leaders except the fact that their influence extends beyond
the realm of high involvement products. Also, their influence is a result of not necessarily
experience with the product, but may be because of the knowledge or expertise they
possess.
Opinion leadership is situational- product related discussions occur in a particular situation or
setting. Also, opinion leaders and receivers meet and discuss given a particular situation like a
club lunch or an informal meeting. Internet and World Wide Web is providing an environment for
word-of-mouth communications.
Interpersonal flow of communication- it is of following two types:
Two step flow of communication theory- opinion leaders act as direct receivers of
information from impersonal mass-media sources and transmits (and interprets) this
information to the masses. Thus, opinion leader act as a middleman.
Step 1- information flow from mass media to opinion leader in a single direction.
Step 2- information flow from opinion leader to opinion receiver in a single direction
Multi step flow of communication theory-it depicts the transmission of information from
the media as a Multi step flow. It recognizes the information and influence as two way
processes in which opinion leaders both influence and are influenced by the opinion
receivers.
Step 1a- depicts flow of information from mass media to opinion leader.
Step 1b- depicts flow of information from mass media to opinion receivers and information
receivers (who neither influence nor are influenced by others)
Step 2- depicts flow of information and influence from opinion leader to opinion receiver.
Step 3- depicts flow of information and influence from opinion receiver to opinion leader.
Opinion leadership and firms marketing strategy; marketers know the power of opinion
leadership and its credibility. They therefore encourage word-of-mouth communication
concerning their products. Issues related to this are:
Programs designed to stimulate opinion leadership-advertisements and promotion to
persuade consumers to tell others about the product and its features so as to encourage
consumer discussions. It creates interest in the product.
Advertisements simulating opinion leadership- advertisements can be designed to
simulate product discussions by portraying people in the act of informal communication.
It is assumed that such simulations function as convenient substitutes by reducing the
need for consumers to actually seek product advice from others. Example- two women
can be shown discussing about a new detergent powder.
Word-of-mouth can be uncontrollable- Informal communication sometimes get difficult
to control. Negative comments, frequently in the form of rumors that are untrue, can
sweep through the marketplace to the detriment of a product.
Creation of opinion leaders-promotional efforts can be improved by segmenting the
market into opinion leaders and opinion receivers and then targeting promotional
messages to opinion leaders who are likely to carry the word to the masses. A firm can
also go for creating product specific opinion leaders. This can be done by taking socially
involved or influential people and deliberately increasing their enthusiasm for a product
category.
_____________________________________________________________________
7. Review questions
What is a reference group? State the various types of Reference groups.
Explain the various types of Reference group appeals that a marketer can use.
Explain the concept of Opinion leadership and various reasons behind its
effectiveness.
How can the impact of Opinion leadership on the consumption behavior be
measured?
_____________________________________________________________________
8. Further readings
Chicago, 1990
Ohio, 1995.
_____________________________________________________________________
UNIT 3: LESSON 14
SOCIAL CLASS
1. Introduction- what is a social class?
2. Measurement of Social class
3. Consumer Behavior applications of Social class
4. Nature of social class
5. Social class categories
6. What determines social class?
7. Review questions
8. Further readings
1. Introduction- what is a social class?
Just as Marketers divide society into groups for segmentation, sociologists have developed ways
to describe meaningful divisions of society in terms of peoples relative social and economic
resources. Such division is called Social Classes.
A Social class is the overall rank of people in a society. A Social class is defined as the division
of members of a society into a hierarchy of distinct status classes, so that the members of each
class have relatively the same status and members of all other classes have either more or less
status. Social classes are relatively homogeneous and enduring divisions in a society, which are
hierarchically ordered and whose members share similar values, interests and behavior.
The social class research is generally called Social Stratification which refers to the creation of
artificial divisions in society. Social class is generally measured in terms of Social Status that the
members enjoy. Status groups reflect a communitys expectations for style of life among each
class as well as the positive or negative social estimation of honor given to each class. Whereas,
classes are divided based on their relation to the production and acquisition of goods; status
groups are stratified according to lifestyles and principles of the consumption of goods. But in
consumer behavior these are used interchangeably. Status is the relative ranking of members of
each social class with respect to certain status factors like- Wealth, Power, Prestige etc. In the
study of Consumer Behavior, status is defined in terms of demographics such as- Occupational
status, Family income, and Education level.
Social class is a relative term so it involves a hierarchical structure ranging from high to low.
These social class categories help members to know their position vis--vis others. The members
within the same social class become the reference group for other members. However, there are
instances of Upward and Downward social mobility. People are within the same class work in
similar occupations, have similar income levels, and usually share taste in clothing, decorating
styles, and leisure activities. These people also share many political and religious beliefs as well
as ideas regarding valued activities and goals. Many products and stores are designed to appeal to
people in a specific social class. This aspect is useful to marketers as consumers try to emulate the
purchasing behavior of their social class members or of members of higher social class. Thus, this
social stratification gives a natural base of segmenting the market for the Marketers.
2. Measurement of Social Class

a. Subjective measures- Individuals are asked to estimate their own social class
positions. So the idea of self perception as a reflection of self image is used. This
feeling of association with a social group is called Class consciousnesses.
b. Reputational measures- in this some selected community informants make
judgments about social class membership of others within the same community.
However, this is a temporary judgment, the final one lies with the researcher.
c. Objective measures- it is based on selective demographics or socioeconomic
variables. These may be- Occupation, Education and Family income. The
variables are measured objectively by administering the questionnaires. They are
of two types:
i. Single variable indexes- it is based on just one socioeconomic variable
for evaluating Social class membership. Example- Occupation,
Education and Income.
ii. Composite variable indexes- based on a number of socioeconomic
variables so as to develop one overall measure of social class standing.
Example- Index of status characteristics consisting of occupation, source
of income, house type and dwelling area. Socioeconomic status score
consisting of occupation, family income and education.
iii. There is a new way to measure social class which is called Geo-
demographic clustering. In this, geographic and socioeconomic
variables are linked to identify geo-demographic clusters in the society.
3. Consumer Behavior applications of social class

The social class provides information about the values, attitudes and behavior of its members.
This has great application for the Marketer. He can use this information in various areas.
Some of them are:
Clothing and fashion- members of social classes differ in terms of what they consider
as fashionable.
Leisure- social class membership is closely related to the choice of recreational and
leisure activities people indulge in.
Media usage- social class groupings differ in terms of their media habits and the way
they communicate with others.
4. Nature of social class
a. Social classes are based on many components like Income, Occupation,
Education, Dwelling area etc.
b. Social classes are hierarchical in nature. They range from high to low, based on
the status of the members.
c. Social classes generally restrict behavior and interaction between them. Members
of the same class feel comfortable together and develop other members of the
same class, their Reference group.
d. Social classes are homogeneous divisions of society as they are based on
common demographic or socioeconomic factors. This provides the Marketer with
segmented markets to choose from.

e. Social classes are dynamic. There is mobility in them. However, there are two
types pf social stratification.
i. Closed system- once born in a particular social class, a person cant leave
it. They inherit a particular status. Example- Indian caste system.
ii. Open system- people have the opportunity to move up (upward mobility)
or down (downward mobility) the social class.
Related to social class is a term called Conspicuous consumption. It refers to the tendency of the
affluent class to demonstrate upper class membership through their possessions. These
possessions are called Status symbols.
5. Social class categories
There is a great lot of subjectivity involved while defining the number of social class categories.
There is hardly any consensus. W Lloyd Warner identified six social classes in America. These
were:
Upper upper; lower upper; upper middle; lower middle; upper lower and Lower lower. However,
the most general categorization is:
Upper class- it includes the aristocracy and the upper middle class.
Middle class- it is composed of primarily white collar workers working at managerial
positions. Also included are, professionals like engineers, doctors. It is a very large class
in developing countries. The people in this class are generally very ambitious and career
conscious.
Lower class- it represents poor people who generally live below the poverty line. They
live in bad living conditions and they have to struggle for the basic resources for survival.
6. What determines social class?
For consumer behavior analysis, six variables are important determinants of a social class. These
are:
Occupation- the work consumers perform greatly effect their lifestyles and consumption
patterns. Example- a manager would spend more on lifestyle clothing and leisure vis -a
vis a blue collar worker who spends majorily on food items.
Personal performance- status is also influenced by a persons success relative to that of
others in the same occupation.
Interactions- people feel most comfortable with people having similar values and
behavior. Group membership and interactions are therefore considered to be the primary
determinants of persons class.
Possessions- these are symbols of class membership.
Value orientations- values indicate the social class to which one belongs.
Class consciousness- it is the degree to which people in a social class are aware of
themselves as a distinctive group with shared political and economic interests. A persons
social class to some extent is indicated by how conscious that person is of social class.
______________________________________________________________________________
7. Review questions
Explain the concept of Social class and its Consumer behavior applications.
What are various measures involved in measuring Social class.

Explain the nature of Social class.
What are the various determinants of Social class.
8. Further readings
Ohio, 1995.
______________________________________________________________________________
UNIT 3: LESSON 15
CULTURE AND CONSUMER BEHAVIOR
1. What is Culture?
2. How culture is learned?
3. Culture and consumer behavior
4. What are the characteristics of Culture?
5. What are various parts of Culture?
6. Measurement of Culture
7. What is Subculture?
8. Review questions
9. Further readings
1. What is Culture?
The study of culture generally requires detailed examination of the character of the total society,
including such factors as language, knowledge, laws, religions, food, customs, music, art,
technology, work patterns, products and other objects that give a society its unique flavor. Culture
is a societys personality.
Culture is defined as the sum total of learned beliefs, values and customs that serve to direct the
consumer behavior of members of a particular society. For example, a consumers routine
behavior, such as adding sugar and milk to coffee, putting ketchup on hamburgers and putting
mustard on frankfurters are customs. Beliefs and values are guides for behavior; customs are
usual and acceptable ways of behaving.
Culture is societys personality. It is values, beliefs, customs, and tastes, produced or practiced by
a group of people. A consumers culture influences his buying decisions. Cultures have their own
rituals, such as weddings and funerals that have specific activities and products associated with
them. Cultural values are deeply held beliefs about right and wrong ways to live. Marketers who
understand a cultures values can tailor their product offerings accordingly.
We are exposed to people with different cultural values or customs (as when visiting a different
region or a different country) that we become aware of how culture has shaped our own behavior.
For example, to understand brushing our teeth twice a day with flavored toothpaste is a cultural
experience requires some awareness that members of another society either do not brush their
teeth at all or do so in a specifically different manner than our own society.
Culture offers order, direction and guidance in all stages of human problem solving by providing
for example, culture provides standards and rules about when to eat (not between meals),
what is appropriate to eat for breakfast (juice and cereal), lunch (a sandwich), dinner (something
hot, good and healthy), and snacks (something with quick energy). Culture is also associated
with what a societys members consider to be a necessity and what they view as luxury. For
instance, 55 percent of American adults consider a microwave to be a necessity and 36 percent
consider a remote control for a TV or VCR to be a necessity.
Culture also provides insights as to suitable dress for specific occasions. Dress codes are shifting
dramatically; people are dressing more casually all the time and in most situations. Because most
Americans do not consider soda a suitable breakfast beverage, the real challenge for soft-drink
companies is to overcome culture, not competition.
Cultural beliefs, values and customs continue to be followed as long as they yield satisfaction.
When a specific standard no longer satisfies the members of a society, however, it is modified or
replaced, so that the resulting standard is more in line with current needs and desires.
2. How culture is learned?
For children, the process of playing with their toys emphasizes the learning of these acceptable
cultural values and customs. Cultural learning prepares them for later real life circumstances.
There are three different forms of cultural learning, which are as follows:
Formal learning, in which adults and older member teach a young family member how
to behave.
Informal learning, in which a child learns primarily by imitating the behavior of, selected
others, such as family, friends, or TV heroes.
Technical learning, in which teachers teach the child in an educational environment about
what should be done, how it should be done, and why it should be done.
Product advertisements enhance informal cultural learning by providing the audience with a
model of behavior to imitate.
The repetition of advertising messages creates and reinforces cultural beliefs and values. Ads for
portable cellular telephone service often stress the convenience of scheduling and rescheduling
appointments, as well as the security of having a phone at all times in case of some emergency.
After several years of increasing publicity to advertising appeals, they have been taught by
marketers to desire them. Such advertising also teaches future generations of consumers to
expect the same benefits from the product category.
3. Culture and consumer behavior
Culture is part of the external influences that impact the consumer. That is, culture represents
influences that are imposed on the consumer by other individuals. The definition of culture
offered in the text is "That complex whole which includes knowledge, belief, art, morals, custom,
and any other capabilities and habits acquired by man person as a member of society." From this
definition, we make the following observations:
Culture, as a "complex whole," is a system of interdependent components. Knowledge and
beliefs are important parts. In the U.S., people know and believe that a person who is skilled and
works hard will get ahead. In other countries, it may be believed that differences in outcome
result more from luck. "Chunking," the name for China in Chinese literally means "The Middle
Kingdom." The belief among ancient Chinese that they were in the center of the universe greatly
influenced their thinking.
Other issues are relevant. Art, for example, may be reflected in the rather arbitrary practice of
wearing ties in some countries and wearing turbans in others. Morality may be exhibited in the
view in the United States that one should not be naked in public. In Japan, on the other hand,
groups of men and women may take steam baths together without perceived as improper. On the
other extreme, women in some Arab countries are not even allowed to reveal their faces. Notice,
by the way, that what at least some countries view as moral may in fact be highly immoral by the
standards of another country. For example, the law that once banned interracial marriages in
South Africa was named the "Immorality Act," even though in most civilized countries this law,
and any degree of explicit racial prejudice, would itself be considered highly immoral.
4. What are the characteristics of Culture?
Culture has several important characteristics:
Culture is comprehensive. This means that all parts must fit together in some logical
fashion. For example, bowing and a strong desire to avoid the loss of face are unified in
their manifestation of the importance of respect.
Culture is learned rather than being something we are born with.
Culture is manifested within boundaries of acceptable behavior. Failure to behave within
the prescribed norms may lead to sanctions, ranging from being hauled off by the police
for indecent exposure to being laughed at by others for wearing a suit at the beach.
Conscious awareness of cultural standards is limited.
Cultures fall somewhere on a continuum between static and dynamic depending on how
quickly they accept change. For example, American culture has changed a great deal
since the 1950s, while the culture of Saudi Arabia has changed much less.
Culture is shared- Various social institutions within a society transmit the elements of
culture and make the sharing of culture a reality. Chief among such institutions is the
family, which serves as the primary agent for enculturation (learning own culture) the
passing along of basic cultural beliefs, values and customs to societys newest members.
In addition to the family, two other institutions traditionally share much of the
responsibility for the transfer of selected aspects of culture: educational institutions and
houses of worship. A fourth, frequently overlooked, social institution that plays a major
role in the transfer of culture throughout society is the mass media.
It should be noted that there is a tendency of outsiders to a culture to overstate the similarity of
members of that culture to each other.
5. What are various parts of Culture?
Culture could be influenced by values, norms, beliefs, customs and conventions. Values are often
greatly associated with age groups because people within an age-group have shared experiences.
For example, it is believed that people old enough to have experienced the American Depression
are more frugal because of that experience. Regional influences are also very significant. India
being such a diverse is home to regional differences in cultures on large scale.
Enculturation and Acculturation:
The learning of ones own culture is known as Enculturation.
The learning of a new or foreign culture is known as Acculturation. Acculturation is an
important concept for marketers who plan to sell their products in foreign or
multinational markets
Language and Symbols:
Without a common language, shared meaning could not exist and true communication would
not take place. Verbal symbols may include a television announcement or an advertisement in
a magazine. Nonverbal communication includes the use of such symbols as figures, colors,
shapes and even textures to lend additional meaning to print or broadcast advertisements.
Any word is symbol. Price and channels of distribution also are significant symbols of the
marketer and the marketers product. For example, price often implies quality to potential
buyers. For certain products (such as clothing), the type of store in which the product is sold
also is an important symbol of quality. In fact, all the elements of the marketing mix the
product, its promotion, price and the stores at which it is available are symbols that
communicate ranges of quality to potential buyers.
Ritual:
A ritual is a type of symbolic activity consisting of series of steps occurring in a fixed sequence
and repeated over time (such as singing the national anthem during the assembly in the school or
before the football match). For example, tree ornaments; stockings and various food items are
linked to the ritual of Christmas celebration.
Values are enduring beliefs about things that are important. They are learned through the
processes of socialization and acculturation. Our values exist in an organized value system, with
some values being viewed as more important than others. Some are regarded as terminal values
and reflect desired end states that guide behavior across many different situations. Instrumental
values are those needed to achieve these desired end states. Domain-specific values are those that
are relevant within a given sphere of activity. Western cultures tend to place a relatively high
value on material goods, youth, the home, family and children, work and play, health, hedonism,
and technology.
Norms are the rules that designate forms of acceptable and unacceptable behavior. For instance,
the norm for marriage is above 18 years of age in most of the civilized cultures. Customs are
behaviors that lasted over time and passed down in the family setting. For instance, it is a custom
in Indian culture to greet others while meeting. Conventions are practices tied to the conduct of
everyday life in various settings
6. Measurement of Culture
Since we have realized by now that culture is multifaceted, we also need to measure it. Certain
techniques, which are popularly used to measure culture, are given below.
Projective techniques: These tests as we have studied earlier are helpful in assessing
individual motivation and personality.
Attitude measurement tests: These tests are useful in determining beliefs and attitudes.
Depth interviews and group discussions: These methods can be used to discover the
emerging cultural characteristics.
Observation: Through this method it is possible to gain valuable insights into the more
obscure aspects of culture, which may not be amenable to direct questioning.
Content analysis: Content analysis focuses on the content of verbal, written, and pictorial
communications like the copy or art composition of the ad itself. This technique uses an
analysis of past and present media to know the culture changes. This analysis can be
carried out on a cross-cultural basis also.
7. What is Subculture?
Subculture is a distinct cultural group which exists as an identifiable segment within a larger,
more complex society. Subculture refers to a culture within a culture. Alternatively, a sub-culture
is an identifiable distinct, cultural group, which, while following the dominant cultural values of
the overall society also has its own belief, values and customs that set them apart from other
members of the same society. For example, African Americans are, as indicated in the group
name, Americans; however, a special influence of the African American community is often also
present. For example, although this does not apply to everyone, African Americans tend to
worship in churches that have predominantly African American membership, and church is often
a significant part of family life. An Indian example of Subculture may include South Indian
Christians.
Different perspectives on the diversity in U.S. culture exist. The "melting pot" metaphor suggests
that immigrants gradually assimilate after they arrive. Therefore, in the long run, there will be
few differences between ethnic groups and instead, one mainstream culture that incorporates
elements from each will result. The "salad bowl" metaphor, in contrast, suggests that although
ethnic groups will interact as a whole (through the whole mix of salad) and contains some
elements of the whole (through the dressing); each group will maintain its own significant traits
(each vegetable is different from the others). The "melting pot" view suggests that one should
run integrated promotions aimed at all groups; the "salad bowl" approach suggests that each
group should be approached separately.

CULTURE
Subculture Subculture
Subculture
Subcultures can be classified on the basis of ethnic classification (e.g. Blacks, Hispanics, Asian
Americans, Euro Americans, Native Americans, etc), religious classification, disabilities
subcultures and age subcultures Subculture is often categorized on the basis of demographics.
Thus, for example, we have the "teenage" subculture and the "Cuban-American" subculture.
While part of the overall culture, these groups often have distinguishing characteristics. An
important consequence is that a person who is part of two subcultures may experience some
conflict. For example, teenage Native Americans experience a conflict between the mainstream
teenage culture and traditional Indian ways.
Sub-culture categories are:
Nationality: Indian, Nepalese
Religion: Hinduism, Islam, Sikhism
Race: Asian, black, white
Age: young, middle aged, elderly
Sex: Male, Female

Occupation: Farmer, teacher, business
Social class: upper, middle, lower
Geographic regions: South India, North-eastern India
8. Review questions
Explain the concept of Culture and its relation with Consumer behavior.
What are the characteristics of Culture?
Can Culture be measured?
Explain the various parts of culture.
Explain the concept and categories of Subculture.
________________________________________________________________________
9. Further readings
Chicago, 1990
Ohio, 1995.

________________________________________________________________________
UNIT 4: LESSON 16
MODELS OF CONSUMER BEHAVIOR
______________________________________________________________________________
1. Introduction
2. Howard Sheth Model (1969)
3. Nicosia Model (1966)
4. Engel, Blackwell and Miniard Model (1968)
5. Basic Decision Making Model
6. Similarities among the Models
7. Dissimilarities among the Models
8. Limitations of Models
9. Types of Models
______________________________________________________________________________
1. Introduction
A particularly significant development in consumer behavior research has been the emergence of
Models. Buyer Behavior models are useful for marketers because they map out influences that
could effect the purchase behavior of a consumer. Once these influences have been identified,
more accurate marketing strategy programs can be developed based on a consumer approach.
Introduction of models in consumer behavior research is particularly important; since formal,
integrative models hold promise for adequate empirical analysis of consumer behavior problems
usually involving complex, multivariate phenomena. Consumer behavior model is anything used
to represent all or a part of the variables of consumer behavior, and it provides several significant
advantages for the consumer behavior disciplines. These are:

A frame of reference is provided for research
Research findings can be integrated into a meaningful whole.
Models become useful in theory construction.
Explanations are provided for performance of the system
The model can be used as a device for experimentation or a device for a communication, because
a model is a replica of the phenomena. As such, it provides a testable map of reality, and its utility
lies in the extent to which the model makes possible a successful prediction of resulting behavior.
Consumer behavior model exists either for the purposes of:
Identifying hypothesis and developing new consumer behavior theory
Explaining the present status of consumer behavior theory.
Models provide representational, inferential, or interpretational functions for theories.
2. Howard Sheth Model (1969)
The Howard-Sheth Model (1969) is a multi-variable model, which attempts to integrate
knowledge about a consumers purchase and their behavior through a transformation process.
This model serves two purposes:
It indicates how complex the whole question of consumer behavior is.
It provides the framework for including various concepts like learning, perception,
attitudes, etc., which play a role in influencing consumer behavior.

The Howard-Sheth Model comprises four sections, namely the inputs, perceptual constructs
learning constructs and the outputs.
The input section describes the business and environmental factors, including family reference
groups and social class. The most significant stimulus affecting the buying behavior is the
information cues about the characteristics of the product. These cues may be significative if it
comes to the buyer from the product itself when he is involved in a shopping activity. A similar
set of cues, which are symbolic in nature, may also act as information sources. Both these
significative and symbolic information cues represent the firms marketing efforts. The broad or
product characteristics acting as information cues are quality, price, distinctiveness, service and
availability. There are impersonal sources like mass media communications and advertising, over
which the firm has no control. However, the information sources also include sales and service
personnel who can add and help the marketing efforts of the firm. The third source is social
information cues which could affect buying behavior towards the product or brand and these
include family, friends or other members of the group with whom buyer comes into contact or to
which he aspires to be in. The social source is personal and the company marketer has no control
over this source.
The model goes onto explain how the inputs/influences are evaluated and used by the consumer
through Perceptual Constructs and Learning Constructs. Perceptual Constructs refer to all the
complex states or psychological processes (perception) and how the individual deals with the
information cues received from various sources. It can be seen that all information available is not
attended to (attention) and may not always be crystal clear in its meanings (ambiguity). Although
the individual may be engaged in an overt search for information, sometimes he/she may be
bombarded with unwanted information. Learning Constructs are more complex and numerous.
Motives refers to the goals the individual attempts to achieve through his/her buying behavior.
These goals are derived from the various drives (needs), which may be acting as a cue for his/her
motive.
Finally, the eventual outputs and outcomes of the process are identified. The purchase decision is
the output. If after using the product, the consumer is satisfied with it, this will reinforce his
positive attitude and purchase intent about the product and brand. Also, the positive attitude
makes the consumer more attentive to the product/brands stimuli and further increases his brand
comprehension. If the consumer is dissatisfied with experience of using the product/brand, it will
trigger off a reaction of negative attitude, low attention to the product stimuli. Poor brand
comprehension and negative intention to purchase.
The Howard-Sheth Model is appreciated for its contribution to repeat purchase behavior. The
model illustrates that not all product purchase decisions are first time purchases. This factor shall
influence the amount of information search, which will be undertaken by the consumer. Further,
the model also explains various environmental influences, which affect the decision making
process. The Howard-Sheth Model is thus particularly useful in gaining an understanding of how
the consumer processes information.
However, certain limitations in the Howard-Sheth Model do exist.
This model, however, does not predict purchase behavior. It merely maps out the
influences that may affect consumer behavior, which can then be used as a frame of
reference.
No difference is made between low and high involvement decision making.
Further, it is also not clear whether the needs of the consumer will have any effect on the
decision making process.

The model does not differentiate between external and internal information search and
the type of situation in which it will be used.
______________________________________________________________________________
3. Nicosia Model (1966)
Over time more comprehensives models have been proposed. One of the earliest decision making
models is the 1966 Nicosia Model. The aim of the model was to demonstrate how the company
influences the consumer through its promotional and advertising benefits.
In Nicosia Model, consumer behavior is represented as a series of decisions, which follow each
other. The model is a circular process between an organization and the consumer. It analyses
consumer decisions through four fields: message exposure, information search and evaluation,
purchase, and feedback. Accordingly, the model is split into four key fields:
The source of a message to the consumers attitude
The search for and evaluation of alternatives
The act of purchase
Storage and the use of the purchased product.
The model attempted to demonstrate how the company influences the consumer through its
promotional and advertising activities. This model is monadic; therefore, general attitudes may be
concluded, but specific motivations, as analyzed by Freud, will not be identified.
However, criticisms have been raised about this model, include its descriptive content, its brevity,
and the fact that it has never been fully tested and is now considered historical. The model lacks
the inclusion of social and family influences and only takes into consideration the decisions made
solely by the individual. This may prove to be misleading as many consumer purchasing
decisions are probably more accurately seen as collective decisions in that they are influenced by
many others, not just immediate family or peer members, and in many subtle ways. This model
also lacks information about predictability. The model tends to focus on durable products rather
than impulse or routine purchases. Lengthy purchase cycles mentioned in the model will be
appropriate for infrequently bought durable products. Shorter cycles, such as impulse purchases,
grocery products and personal care items will not benefit as much from this model
4. Engel, Blackwell and Miniard Model (1995)
Engel, Blackwell and Miniard Model (1995) argues that consumer decision making process is a
flow of sequential activities, which involve need recognition, search for information, information
processing, pre-purchase alternative evaluation, purchase, consumption, post consumption
alternative evaluation and divestment. These activities will be influenced by three different
groups of factors, namely individual differences, environmental influences and psychological
processes. An overview of the decision making process, as well as of the influencing factors is
presented as below:
Need Recognition: Need recognition is the first step in the consumer decision making
process. A need exists when the consumer experiences his current status to be different
from how he would want it to be. The main concern in this stage is that the difference
between desired and actual state must be large enough for the individual to recognize the
need. Before a consumer will know that he has a need, certain factors must be in place to
trigger the need. Time is the first important factor. Changed circumstances are the second
factor. For instance, a divorced woman may become aware of the need to save for
retirement at a younger age. Product acquisition, the third factor, states that when the
single woman purchases a will, her broker may point out that she needs extra life cover
for tax saving purposes.
Source: Engel et al., 1995
Search for information: After the individual has recognized the need, he will search for
information from memory. If the information from memory is not enough, the individual
will turn to external sources. Individual and environmental influences may affect the
external search.
Information processing: When an individual receives the information, a five step process
is followed to process the information. The process described the model includes the
following:
Exposure The individual receives the communication directed at him
Attention The consumer will pay attention to the message, if he finds the
message useful
Comprehension The message is further analyzed against categories of meaning
stored in memory
Acceptance At this stage, the individual may have changed his opinion about
a product, in favor of a new product
Retention The message will be remembered by the individual in such a
way that it will be available if he needs it in the future
Pre-purchase alternative evaluation: After the information has been processed, the next
step in the consumer decision making process is to evaluate the different alternatives
which were provided. When buying a product, consumers compare what they know about
different products to what they consider important. Consumer will select new and pre-
existing evaluations from memory and will also monitor attributes of the product or
service. The different alternatives available will vary in the way in which they are
compared according to the individuals level of involvement. During high involvement
decision making, alternative evaluation will flow from belief formation to affect
formation to behavioral intentions. With low involvement, alternative evaluations only
concern a few beliefs about the options being evaluated.
Purchase: The process involves the consumer in buying the product. The consumer
finalizes his choice of retailer from the alternatives, which were investigated.
Subsequently, a specific person with whom to deal in the store is selected and other
aspects such as mode of payment are chosen.
Consumption, post-consumption alternative evaluation and divestment: After the
consumer has made his product choice and consumed it, it will be important to determine
whether the consumers standards have been met. If this is the case, satisfaction will be
the outcome. It is important for consumer satisfaction to be the end result, because
satisfaction will lead to repeat purchases of the product. The level of satisfaction
perceived by the consumer shall depend upon (a) his perception about the level of
performance may vary from the actual level of performance (b) his attitude and frame of
mind and (c) diversity in comparison standards. After the product has been consumed and
a satisfied or dissatisfied customer has been produced, the product needs to be divested.
Divestment refers to the re-cycling of the used product.
Influencing factors: The decision making of the individual shall be influenced by three
different groups of variables namely individual differences, environmental influences and
psychological processes. Individual differences include various individual factors
affecting decision making including consumer resources, knowledge, attitudes,
motivation, personality, values and lifestyles. Environmental influences include culture,
social class, family and situation. Lastly, psychological processes involve information
processing, learning and attitude and behavior change.
Engel, Blackwell and Miniard Model is a practical model that can be applied to different research
situations. The model has made following significant contributions:
The model makes provision for repeat purchase situations, by acknowledging that
consumers will make use of internal and external information search.

The model allows all the decision making steps to follow a logical process and interact
with each other.
The model differentiates between low and high involvement decision making.
The model also included emotional processes like need recognition and motivational
component.
The model acknowledges different form of lifestyles, personalities and values and thus
takes into account various situations that may affect consumer behavior.
______________________________________________________________________________
5. Basic Decision Making Model
Philip Kotler describes the Basic Decision Making Model as having following five stages:
Need recognition,
Information search,
Evaluation of alternatives,
Purchase decision, and
Post purchase behavior.
This model is a logical way of evaluating the consumer buying process by looking at the entire
buying process rather than just the purchase in order to understand why a consumer may make a
purchase and why they become (dis)loyal. Although not all steps are relevant, especially to
impulse and routine purchases, the stages show all of the factors a consumer may have to deal
with when purchasing a new product.
______________________________________________________________________________
6. Similarities among the Models
All are centered around the concept of attitude change as a forerunner of
behavioral change
All emphasize the process by which attitudinal change take place, and, as
consequence, stress strongly those propositions that attempt to change behavior
through more effective communication.
All contains, directly or indirectly, the same three variables. These variables are
the individual, the firm, and the environment.
All is similar in its tendency to consider the individual as the central component
of the model and the basic decider of consumer problems.
Environmental variables are generally treated either as constraints or influences
Each model similarly demonstrates that consumer behavior is a highly complex
subject one which we, as yet, have no consensus.
______________________________________________________________________________
7. Dissimilarities among the Models
Dissimilarities between models revolve around the particular manner of treating the major
variables. These differences can be summarized as the emphasis given to each variable in specific
models, the factors included under each major variable, and the relationships that exist between
the major variables and the specific factors.
______________________________________________________________________________
8. Limitations of Models
None of the models does a satisfactory job of dealing with motives or drives.
None of the models appear to take into account the notion that the typical consumer has a
hierarchy of attitudes that serve as intervening variables to the purchase act.
It has not been as popular with marketers, as with economists, to spell out clearly the
assumptions under which the models are constructed.
None of the models has yet stood the test of time and empirical investigation
All the models are primarily experimental tools designed to aid in the identification of
hypothesis and the development of theory. This is their virtue and their principal
problem. Although these integrative models were constructed by centering on the concept
of attitude, it did not satisfactorily deal, nor take into account the multidimensionality of
the concept of attitude.
In conclusion, it is necessary to develop a more complete integrative and comprehensive
model of consumer behavior, which is able to understand, explain, predict and control
consumer behavior more completely. To develop a more complete and integrative consumer
behavior which can integrate the multidimensionality of attitudes, it is suggested that the
model be constructed on the concept of belief-value system that is an integrated system of
belief-attitude system and value-system mediated by the axial concept of attitude.
___________________________________________________________________________
9. Types of Models two types of models (Chisnall 1975) are:
Monadic models- Monadic models are simplified models, which tend to create unrealistic
and uneven views towards buyer behavior. Although they are not complex enough for
the in-depth analysis of buyer behavior, they are helpful in creating a basic and general
foundation for the understanding of consumers. Some examples of monadic models are
the Nicosia Model 1966 (Dubois 2000), Basic Decision-Making Model (Kotler 1999),
and the Kotler & Armstrong Model (1999).
Multi-variable models- Multi-variable models are more complex and include the
relationships between external and internal influences that may affect the purchase
behavior of a consumer. Lunn described these models as following the eclectic approach,
bringing together appropriate knowledge from behavioral sciences (Chisnall 1975).
These models will be more representative of the true characteristics of buyer behavior,
although not as easily analyzed. Such models are the Engel, Kollat Blackwell Model
1978 (Dubois 2000), the Howard-Sheth Model (1969), and the Howard-Ostlund Model
1973 (Chisnall 1975).
______________________________________________________________________________
Explain the use of Models in Consumer behavior.
Explain briefly the models of consumer behavior.
______________________________________________________________________________

Ohio, 1995.
______________________________________________________________________________
UNIT 4: LESSON 17
BUSINESS BUYING BEHAVIOR
1. Introduction
2. Difference between Organizational buying and Individual buying
3. Characteristics of Organizational buyer
4. Purchase patterns
5. Factors affecting Organizational buying
6. Organizational buying situations
7. Role of DMU ( Decision making unit)
8. Models of Organizational buying
9. Review questions
1. Introduction
Webster and Wind define Organizational Buying as the decision making process by which
formal organizations establish the need for purchased products and services and identify,
evaluate and choose among alternative brands and suppliers.
The term organizational buying reflects purchasing in three different buying situations-
Industrial buying, Buying for resale and Institutional buying. Industrial buying and
organization buying tend to be used interchangeably in the literature, but as we can see,
industrial buying is really a subset of organizational buying.
The process of organizational buying behavior differs from consumer buying. The difference
lies in the goals behind purchasing. Organizational goals are concerned with production of
goods or service, or their resale and all purchases are hence made to effectively perform the
organizational activities.
The principal similarity between consumer and organizational purchasing is that they both
represent a need satisfying process. This need reflects itself in buying behavior, and this is
why it is important that marketers understand purchasing motives in order to target their
marketing efforts effectively in a way that satisfies these needs.
It can be seen that organizational purchasers have to work with more stringent purchasing
constraints, because they have the commercial and budgetary interests of their respective
organizations to serve. They also have logistical factors like delivery schedules to maintain.
There is little opportunity for impulse purchasing in which everyday consumers can
indulge. As purchasing professionals they should have a great deal of technical and
commercial knowledge about their prospective purchases.
2. Difference between Organizational buying and Individual buying
The term organizational buyer refers to not only the business firms but also includes the
Government, Retail Institutions, other Service Institutions like Universities, Colleges,
financial firms like banks and social organizations like Red cross, family planning foundation
etc.
Organizational buyers differ from consumer buyers in the following ways:
Concentration of Buyers: Organizational Buyers are generally concentrated in the
same geographical area, as opposed to household buyers spread all over the country.
For example, all leading automobile firms setup there manufacturing plants in the
same locality so as to reap the benefits of concentration. Thus in business to business
marketing, a more focused marketing strategy with an emphasis on personal selling is

used as opposed to consumer marketing, where trade channels and mass
communication become important pillars of marketing strategy.
Size of the Buyers: The organizational buyers are few but are much larger and they
purchase in bulk. The household buyers are relatively much smaller and their
purchases are small. Retail buying is common in the household segment. Generally
even in the case of small organizational buyer, the annual purchase budget will run
into several lakhs of rupees, but in case of large household purchases it will never
exceed a few thousand of rupees.
Risk in Purchases: The risks in organizational purchases are much higher than in
household purchases. The organizational buyer always looks for alternatives that will
help him to reduce these risks. Previous experiences with the supplier, vendor image,
suppliers standing within the industry are some of the factors that help the
organizational buyer reduce the risks in buying decision.
Derived demand: The demand for business goods is ultimately derived from the
demand for consumer goods. For this reason the business marketer must closely
monitor buying patters of ultimate consumers. For instance, in India the entire
industry depends on the rainfall and the crop situation. If the agriculture industry is
down, the entire industry is hit. Since consumers postpone or reduce buying
household items, this directly or indirectly affects the organizational buying.
Inelastic Demand: The total demand for many business goods and services is
inelastic that is not much affected by price changes. Total industry demand for goods
and supplies that they use remains relatively unaffected by changes in the prices in
the short run, unlike consumer demand that is very elastic to price changes. Shoe
manufacturers are not going to buy much more leather if the price of leather falls, nor
will they buy much less leather if the price rises, unless they can find satisfactory
substitutes. Demand is especially inelastic in the short run because producers cannot
make quick changes in production methods.
Organization Purchase decisions are joint: Since the costs and risks involved in
organizational purchases are high, these decisions are taken jointly and involve
several individuals. The reason is to use the expertise of various individuals in their
respective fields. Also, in some cases two products have joint demand in the market
place in the sense that the sale of one is dependent on the sale of the other. So, they
are demanded jointly.
Fluctuating Demand: The demand for business goods and services tends to be more
volatile than the demand for consumer goods and services. Also, the organizational
demand for goods is dependent on the business cycle the industry is experiencing.
Professional Purchasing: Business goods once purchased by trained purchasing
agents, who must follow their organizations purchasing policies, constrains and
requirements. Many of the buying instruments-for example, requests for quotations,
proposals and purchase contracts are not typically found in consumer buying.
3. Characteristics of Organizational buyer
Group based decision making- The organizational purchase decisions are joint
decisions. All individuals who participate in decision making are referred to as
the decision-making unit. They have a common goal and share the risks arising
out of the decision. These individuals may or may not be a part of the buying
organization, but plays a key role in the decision making process. Also these
individuals may directly or indirectly be involved in the decision process. The
group of organizational buyers has five basic levels that include:

i. Actual user: Actual user is the person who actually uses the product.
These people are typically shopfloor individuals. They could be
foremen or workmen in a factory, lab technicians and chemists in a
chemical firm, and programmers in a software firm. These people often
lay down the product specifications.
ii. Influencer: Influencer is a person or persons who may or may not be a
part of customer organization, but whose opinion is valued significantly
by the customer. Within the organization, the actual user plays the
Influencer role. For example in a construction project, the architect plays
an influencing role in determining the grade of cement to be sought.
iii. Decider: Decider is the person who actually takes the decision to buy.
The decider will invariably consider both the technical and economic
factors in decision-making. Thus he will consider commercial terms like
price, payment options, delivery schedules etc.
iv. Buyer: Buyer is the person who actually buys on the behalf of the
organization. He is a part of the purchase or materials department. For
buyers, the most critical factor is on-time delivery as he does not want to
spend sleepless nights on uncertain deliveries.
v. Gatekeeper: This is often a critical role played by an individual. The
purpose of a gatekeeper is to facilitate the flow of information in the
organization.
Technical Knowledge: Organizational buying is characterized by a very high
technical and product knowledge. Professional buyers called Purchasing agents
make purchases in Government departments and big industries and they are very
knowledgeable. This means that sellers need to know their products in depth and
in addition should know the competition products thoroughly. Larger the

organization, greater is the product knowledge. The organizations that do not
have requisite technical knowledge tend to hire technical consultants to evaluate
product and services rather than depending upon the sales people.
Rational Motivation: Organizational Buying is always based on rational buying.
Because of the technical nature of the purchases involved. There are no
emotional sentiments involved. Such buying decisions are based on the concept
of value for money in terms of utilitarian needs. The organizational buyer today
is extremely competitive, offer optimum price-value prepositions, give the best
possible service and remain continuously focused towards the customers. These
buyers look for suppliers who enhance their customer competitiveness.
Therefore, the organizational buying should essentially focus at these
requirements and not at the hedonic appeals.
But it is also true that organizational buyers are humans too. They also are influenced
by emotions. The marketer has to understand the emotional side of organizational
buying along with the rational one.
4. Purchase patterns
The purchase patterns and buying approach of organizational buying is different from that of
individual consumer. It differs in following ways:
Complexity- the organizational purchases are more technical and complex than
the consumer purchases. Because of complexity of decision making, there is
more formality involved in the buying process. The marketer has to formally
approach the buyer or the decision making unit with a formal sales presentation.
At the time of entering into the buying transaction, there are lot of contracts
laying the terms and conditions of the agreement. Also, in case of purchases by
Government departments, there is use of tenders which is again a very systematic
and formal procedure.
No frequent purchases- business buyers are less frequent purchasers than the
consumers. They may buy long term and fixed products which would last for
decades altogether. Also, their purchase decisions are influenced by the
economic and business cycles around. In case of economic slowdown, the buyers
may try to use up existing inventories and postpone purchases.
Services- services accompanied with the offering are often a major part of
purchase decision. Example- in purchase of machinery services like, installation,
training to operate and supplies of spare parts are very useful in selecting the
vendor. Sometimes these are customized to suit the needs of the buyer.
Extensive negotiations- since business buying involves huge amounts of money
and they buy in bulk, there is a lot of negotiation game played between buying
centers and the suppliers.
Reciprocal agreements- sometimes two or more organizations may enter into
reciprocal agreements with each other wherein they can buy products from each
other.
Direct buying- unlike consumer buying from the retailers, the business buyers
directly buy from the manufacture. This is necessitated by large volumes to be
purchased by the organizational buyers.
___________________________________________________________________________
5. Factors affecting Organizational buying
Organizational Variables: members of an organization have an attitude and a
belief structure regarding the organization and its working. Such internal
variables like culture and environment of an enterprise affects buying decision.
For example, most Indian family owned firms have a centralized structure where
purchases decisions often require the familys consent. This can delay purchases
and sometimes even affect the firms capability to compete in the market. As
opposed to this a decentralized structure allows for quicker decision. Also
policies like inventory holding, payment procedure or bidding procedure also
influence buyers decisions.
Environmental Variables: A very important determinant of organizational
purchases is the environmental factor. This includes, besides economy and
government policy, factors like competitive developments in the industry rate of
technology change and the value of money. For example if the buyer perceives
that the government is likely to increase taxation, which will increase the price of
a crucial input, the buyer may not resort to buying more material and holding its
stock.
Cultural Variables: Cultural factors of the societies or countries where
organizations operate also affect the organizational buying behavior. For
instance, Walmarts buying behavior shall be totally different in China as against
the same in Unites States.

Individual: Even though there are several individuals, organizational factors and
environmental variables affecting buyers decisions at the end, it is a human
decision involving the individual that matters. It is important that the marketer
has the complete personal details of all individuals who are involved in the
decision process. For personal factors like age, income, education, job position
etc. are likely to affect individual perception, motivation and preference. For
example, a sales person could not get an order from a buyer who was old simply
because the latter perceived him to be the usual youngster who did not
understand responsibility. The old buyer found it difficult to accept that a young
boy could explain him the technical detail of computers and networks. Since the
buying organization was a very important one, he reported this problem to the
marketing manager, who then called on that buyer along with the young
salesperson. The manager asked the young sales person to do the presentation
and thereafter negotiate the deal with the buyer. They got the order because the
buyer could emotionally relate himself better to the old and reasoned
gentleman than the young, smart. It is therefore important that the marketer be
aware of all these buying influences.
Interpersonal Variables: The buyer center usually involves several individuals
with different formal authority, status and persuasiveness. The marketer needs to
know who exerts the maximum authority and is able to persuade others to agree
with his viewpoint. Knowledge of group dynamics helps the marketer evolve his
strategy on selling to the buying center.
Size of the firm: large organizations have different departments like marketing,
purchase, technical; IT etc. in case of smaller firms there may not be such a
bifurcation. It can also be a case of a sloe proprietorship. So, based on the size of
the firm and the number of persons involved in the buying decision process, the
marketer has to design its promotion mix.
Objectives of the organization: different organizations may have different
objectives with which they are operating. Some are Government departments,
some are private concerns or non- profit organizations. Depending on their
objective of operating the organization, their purchase decision making process
differs. So, the marketer has to understand the nature and act accordingly.
Location of firm: the location of the firm has a great impact on the nature of
purchase decision making. The culture of a particular place affects the
organization and its processes to a great extent. Such a difference can be seen in
the case of buying process too.
Technology: it may influence both what is bought and how it is bought. Some big
organizations use innovative and sophisticated techniques of buying using
computers and quantitative techniques. The marketer must be fully aware about
such processes and its influence before approaching a particular organization.
Organizational values: derived from the organization culture these values have a
major impact on purchase decisions. Some organizations are more formal,
whereas others are not. Such a value system would affect the marketer as he
approaches the professional buyers.
Emotions and motives: though it is a case of organizational buying. Still, as in
any buying situation it involves humans and their perception; their emotions and
their motivations. So, it has considerable influence on the buying decision
process as in case of consumer buying decision process.
6. Organizational buying situations

A purchase situation has a major influence on the buying process. It is like a continuum with
routine least risky simple decisions on one hand to new, complex and risky decisions on the
other. In case of organizations there are three such purchase situations. These are:
Straight re-buy- it is like a normal habitual purchase that involves an automatic
choice once the inventory levels fall below optimum. The organizations have a
vendor lists who acts like regular suppliers for the organization. The terms and
conditions are settled once and thereafter the same gets applied automatically to
each single subsequent purchase unless the conditions are modified. These are
least risky and involve least efforts. This typical routine purchase process
requires no information search, no evaluation of the alternatives and no control as
such is required. It poses a difficult situation for new buyers to enter the market
as the buyer is satisfied with existing suppliers.
Modified re-buy- limited decision making is involved as the level of complexity
is somewhat higher than the straight re-buy situation. The uncertainty is involved
because the buyer wants to repurchase the good but with some modifications. In
this situation the competing suppliers can try to influence the buyer with their
offerings. The decision involves information search which is not very extensive
though, together with evaluating the available alternatives.
New task- the decision making is extensive because of the new nature of the
purchase. Here the item is being purchased for the first time for a new problem at
hand. It is the most complex of buying situations and involves highest risk and
uncertainty. It involves expanded operations such as establishing the product and
vendor specifications; procedures and terms and conditions for future purchases.
It requires lot of information from potential suppliers and careful evaluation of
alternatives. This is a very significant purchase situation for the suppliers as this
may be a chance of a long term association with the firm.

Organizational buyers consider many factors while taking the purchase decisions.
These may be- price, service levels, quality of the product.
7. Role of DMU ( Decision making unit)
These are the buying centers. These are formed of individuals within an organization who
interacts during the purchase decision making process. Its size varies according to the
purchase situation, complexity of the process and structure of the organization. In case the
purchase decision is very complex and involves different departments, the employees from
different departments are involved in a form of a decision making unit for the process.
Different members of the decision making unit is concerned with different functions and
stages of the buying process.
8. Models of organizational buying various stages of such a model can be conceived.
These are:
Identification of needs or Problem recognition- just as in consumer buying
decision process, some individuals in the organization perceives and identifies
the gap between the desired state and the existing one. This identification may be
the result of an external or internal factor. External factor such as modernization
may force the managers to abandon existing old machinery. Internal factor such
as a machine breakdown may necessitate a new machinery acquisition.
Establish Product specification- after the problem is being identified; there is a
need to find its solution. This requires specifying the requirement in terms of
product. The concerned department then prepares a detailed specification of the
product to communicate what is exactly required. The specifications may cover

various aspects such as quality, features, warranty conditions, services required
etc. The advice of the technical experts may also be solicited.
Search of alternatives for Product and vendor- after the specifications are in
place, the search for the vendor having the required product starts. To collect
information of the various alternatives available, the buyers approach many
external and internal sources. The buyer ends up with a list of vendors having
desired products.
Evaluate the alternatives against the criteria- the list of the vendors and the
products is to be screened to know the feasible alternative. There are various
criteria that are used for evaluating the vendor. It may include- prices, service,
delivery conditions and credit facility available. Other important factors include-
the reputation of the vendor, his previous buyers, his experience, training support
offered by the vendor in case of a complex purchase situation like New task.
Selection of product and vendor after due evaluation, the vendor with the
required product offering is selected. This is followed by clearly laying down the
terms and conditions like payment modes, delivery dates etc regarding the
purchase.
Performance evaluation- there is a formal evaluation of both the vendor in terms
of what was promised and what and how it is being delivered; and the product
performance. This acts as a source of feedback for the buyers. The major part of
evaluation is the post sale service that is provided by the vendor.
Model by Yoram Wind(1978)
He contended that it is critical for marketers to locate powerful buyers, because they
tend to have more direct say in purchasing decisions at the negotiation stage. This
does not ultimately mean those who are most important within the organization at
which the marketing approach is being directed. Buyers of relatively low status may
be able to impede a purchase for a variety of reasons. Five power bases have been
identified in this respect:
1. Reward- Ability to provide monetary, social, political, or psychological rewards
to others for compliance.
2. Coercive-Ability to withhold monetary payments or other punishments for non-
compliance.
3. Attraction-Ability to elicit compliance from others because they like you.
4. Expert-Ability to elicit compliance because of actual or reputed technical
expertise
5. Status-Compliance from the ability derived from a legitimate position of power
in a company.
Nowadays, the emerging process of buying is the Just in time with virtually zero stock
holding. In this system, the industrial buyer places an order with the supplier as and when the
demand arises. Thus, reliability of supply is of prime importance and in such situations,
relationships tend to be long term.
___________________________________________________________________________
9. Review questions
What is Organizational buying? How is it different from Individual buying?
What are the characteristics of an Organizational buyer?
Explain the various Organizational buying situations.
Explain the Model of Organizational buying.
______________________________________________________________________________
Ohio, 1995.
___________________________________________________________________________
UNIT 5: LESSON 18
CROSS CULTURAL DIMENSIONS OF CONSUMER BEHAVIOR
1. Introduction
2. Cross cultural consumer analysis
3. Alternative Multinational Strategies
4. Review questions
5. Further readings
1. Introduction
India is such a diverse nation. Various segments of the Indian consuming public differ from each
other significantly. If so much diversity exists among segments of a single society, then even
more diversity is likely to exist among the members of two or more societies. To succeed,
international marketers must understand the nature and extent of differences between the
consumers of different societies cross cultural differences so that they can develop effective
targeted marketing strategies to use in each foreign market of interest.
Cross-cultural marketing is defined as the effort to determine to what extent the consumers of
two or more nations are similar or different. This will facilitate marketers to understand the
psychological, social and cultural aspects of foreign consumers they wish to target, so as to
design effective marketing strategies for each of the specific national markets involved.
A company can enter a foreign market as a domestic exporter, foreign importer or a foreign
government-solicit the firm to sell abroad. Its objectives could be to determine how consumers in
two or more societies are similar / different and devise suitable, appropriate strategies or to devise
individualized marketing strategy if cultural beliefs, values and customs of a specific country are
different.
Basic areas to be understood for cross cultural analysis are as below:
Language and meaning
Difference in market segmentation opportunities
Differences in the criteria for evaluating products and services: Apparel firms in India
believe that that the quality of the fabric determines the quality of the garment whereas,
the Japanese think that every aspect of the garment from sewing to packaging decides
quality.
Differences in consumption pattern and perceived benefits of products and services:
leather exports by India
Differences in the economic and cultural social condition and family structure: Social
class differences have been useful in explaining differences in consumer behavior in
relation to
o preferences for products and brands
o store patronage or shopping behavior
o exposure to promotion media and
o savings and the use of the credit for purchasing products
Problems in Cross Cultural marketing:

Problems related to product selection: The marketer going for cross cultural marketing
has to select the customers/ market not on the basis of the superficial similarities of age or
income, but by using the real motivating factors that prompt them to accept or reject
products. McDonald has to change its global product portfolio after entry into India (e.g.
introduction of aloo tikki burger).
Problems related to promotion/marketing communication: e.g. Ariel in the middle east
and also Pepsi
Problems related to pricing: the marketer has to adjust his pricing policies according to
the local economic conditions and customs.
Problems related to selection of distribution channels
2. Cross cultural consumer analysis
Cross-cultural consumer analysis can be defined as the effort to determine to what extent the
consumers of two or more nations are similar or different. Such analysis can provide marketers
with an understanding of the psychological, social, and cultural characteristics of the foreign
consumers they wish to target, so that they can design effective marketing strategies for the
specific national markets involved. In a broader sense, cross cultural consumer analysis shall also
include a comparison of sub cultural groups within a single country (e.g. South Indians and North
Indians).
A major objective of cross-cultural consumer analysis is to determine how consumers in two or
more societies are similar and how they are different. For example, the following table presents
differences between two predominant cultures of the world (Japanese and American Cultural
Traits)
Japanese Culture Traits American Culture traits
Japanese language English language
Homogenous Diverse
Harmony to be valid and preserved Fight for ones beliefs/positions
Group, not individual, important Individualistic
Ambiguous Clear-cut
General Specific
Unspoken agreement Get the facts straight
Hold back emotions in public Display emotions in public
Process oriented Result oriented
Fun-oriented Humor oriented
Make a long story short Make a short story long
Nonverbal communication important Verbal communication important
Interested in who is speaking Interested in what is spoken
An organizations success in marketing a product or service in a number of foreign countries is
likely to be influenced by how similar the beliefs, values and customs are that govern the use of
the product in the various countries. For example, the worldwide TV commercials of major
international airlines tend to depict the luxury and pampering offered in their business class and
first class international travelers.

Marketers contemplating international expansion make the strategic error of believing that if their
product is being liked by local or domestic consumers, then it will be liked globally as well. Ths
biased viewpoint increases the likelihood of marketing failures abroad. It reflects a lack of
appreciation of the unique psychological, social, cultural and environmental characteristics of
distinctively different cultures. To overcome such narrow and culturally myopic view, marketers
must also go through a kind of acculturation process. They must learn everything that is relevant
about the usage of potential usage of their products and product categories in the foreign
countries in which they plan to operate.
Cross cultural acculturation is a twin process for marketers. Firstly, marketers must thoroughly
orient themselves to the values, beliefs and customs of the new society to appropriately position
and market their products (being sensitive to and consistent with traditional or prevailing attitudes
and values). Secondly, to gain acceptance for a culturally new product in a foreign society, they
must develop a strategy that encourages members of the society to modify or even break with
their traditions (to change their attitudes and possibly alter their behavior). For instance, Colgate
started promoting its toothpaste and toothbrush in rural areas by educating customers about
benefits against traditional neem sticks.
Cross cultural consumer research also plays significant role in cross-cultural consumer analysis.
Research methods may also need to be re-examined. Researchers must familiarize themselves
with the availability of research services in the countries they evaluate as potential markets and
must learn how to design marketing research studies that will yield useful data. Researchers must
also keep in mind that cultural differences may make the standard research methodologies
inappropriate.
3. Alternative Multinational Strategies
Some of us may argue as markets are becoming more and more similar, standardized marketing
strategies are becoming more and more feasible. But, some more would argue back that
differences between consumers of various nations are far too great to permit a standardized
marketing strategy. Thus, practically speaking, we need to work out whether to use shared needs
and values as a segmentation strategy or to use national borders as a segmentation strategy.
Shared needs and values would mean to appeal to consumers in different countries in terms of
their common needs, values, and goals. Using national borders as a segmentation strategy, on the
other hand, would mean to use relatively different local or specific marketing strategies for
members of distinctive cultures or countries.
Favoring a World Brand
A lot of companies have created world brand products that are manufactured, packaged, and
positioned in exactly the same way regardless of the country in which they are sold. For instance,
Sony sells its Walkman in this fashion.
Adaptive Global Marketing
In contrast to the above, some other organizations imbibe a strategy that adapts their advertising
messages to the specific values of particular cultures. A very good example here would be that of
McDonalds, which tries to localize its advertising to consumers in each of the cross-cultural
markets in which it operates.
Frameworks for assessing multinational strategies
Multinational marketers face the challenge of creating marketing and advertising programs
capable of communicating effectively with a diversity of target markets. To do a lot of

frameworks have been developed to which marketing and advertising efforts should be either
globalize or localized. Below is presented a product recognition continuum for multinational
marketing. The continuum prescribes five stages that range from mere awareness of a foreign
brand in a local market area to complete global identification of the brand.
Factors Description
Stage One Local consumers have heard or read of a brand
marketed elsewhere but cannot get it at home.
Stage two Local consumers view a brand made elsewhere
as foreign, made in a particular country but
locally available.
Stage three Local consumers accord imported brand
national status; that is, its national origin is
known but does not affect their choice.
Stage Four Brand owned by a foreign company is made
either wholly or partly domestically and has
come to be perceived by locals as a local brand;
its foreign origins may be remembered but the
brand has been adopted.
Stage Five Brand has lost national identity and consumers
everywhere see it as borderless or global; not
only can people not identify where it comes
from but also they never ask this question.

An organization might decide either to standardize or localize its product and either standardize
or localize its communication program. Thus, following four possibilities may emerge as
alternative global marketing strategies:
Standardized Communication Localized Communication
Standardized Product Global strategy: Uniform Mixed strategy: Uniform
product/ Uniform Message Product/ Customized Message
Localized Product Mixed Strategy: Customized Local Strategy: Customized
Product/ Uniform Message Product/Customized Message
______________________________________________________________________________
4. Review questions
Explain the cross cultural consumer analysis.
Explain the various Alternative Multinational strategies
______________________________________________________________________________
5. Further readings
Chicago, 1990
Ohio, 1995.

______________________________________________________________________________
UNIT 5: LESSON 19
CONSUMER RESEARCH
2. Why to do consumer research
3. Types of Consumer research
4. Consumer research process
5. Review questions
6. Further readings
1. Introduction
Consumer Research is the systematic collection of and analysis of consumer information for the
purpose of important decision making in marketing. Consumer Marketing Research is a form of
applied sociology that concentrates on understanding the behaviors, whims and preferences, of
consumers in a market-based economy. For example: Suppose that a company is planning to
introduce a unique new food processor. Consumer research would be conducted to learn people's
feelings about cooking and the use of food processors, along with their desires for and their
knowledge of the product, including any negative attitudes. Using this information, an advertising
campaign can be tailored to the needs of the prospective purchasers of the product. The research
will also identify the best prospects and the media they use, giving the company an idea of where
to place advertising to best reach their target audience. The field of consumer marketing research
as a statistical science was pioneered by Arthur Nielsen with the founding of the AC Nielsen
Company in 1923.
______________________________________________________________________________
2. Why to do consumer research?
Consumer research is a very useful tool for marketers because of the following reasons:
It is an important tool to study buyer behavior, change in consumer life styles and
consumption patterns, brand loyalty and also forecast market changes.
It is used to study competition and analyze the competitors product positioning and to
gain competitive advantage.
Due to liberalization and globalization the competition has intensified and survival of an
organization is at stake. The aim is now to gain and retain competitive advantage and
consumer research plays an important role over here. Realizing this contribution more
and more companies are turning towards consumer research.
______________________________________________________________________________
3. Types of consumer research- there are two paradigms of consumer research. These are:
Quantitative research- Quantitative research is the systematic scientific investigation of
quantitative properties and phenomena and their relationships. It is descriptive in nature
and enables the marketers to predict consumer behavior based on research methods such
as experiments, survey techniques and observation. The findings from this type of
research are descriptive, empirical and generalizable. It has roots in both the positivist
view of the world, and the modern marketing viewpoint that marketing is an interactive
process in which both the buyer and seller reach a satisfying agreement. Positivism
indicates the research approach that regards consumer behavior discipline as an applied
marketing science which is primarily concerned with predicting consumer behavior. Both
descriptive and inferential statistical techniques can be used to analyze data and draw
conclusions. It involves a quantity of respondents sometimes ranging in number from ten
to ten million, and may include hypotheses, random sampling techniques to enable
inference from the sample to the population. The objective of quantitative research is to
develop and employ mathematical models, theories and hypotheses pertaining to natural
phenomena. The process of measurement is central to quantitative research because it
provides the fundamental connection between empirical observation and mathematical
expression of quantitative relationships.
Qualitative research- it involves an in depth understanding of human behavior and the
reasons that govern human behavior. It investigates the why and how of decision making,
as compared to what, where, and when of quantitative research. Hence, the need is for
smaller but focused samples rather than large random samples, which qualitative research
categorizes data into patterns as the primary basis for organizing and reporting results.
Qualitative research methods are used primarily as a prelude to quantitative research.
They are used to define a problem, generate hypotheses, identify determinants, and
develop quantitative research designs. They are expensive and slow. Because of the low
number of respondents involved, these exploratory research methods cannot be used to
generalize to the whole population. They are however, very valuable for exploring an
issue and are used by almost all researchers. They can be better than quantitative research
at probing below the surface for affective drives and subconscious motivations. Unlike
quantitative research, there is no overarching framework for how qualitative research
should be conducted; rather each type of qualitative research is guided by particular
philosophical stances that are taken in relation by the research to each phenomenon. Main
types of qualitative research methods are- in depth interviews, focus groups and
projective techniques. Related to this is the philosophy of Interpretivism which is a post
modernist approach to the study of consumer behavior that focuses on the act of
consuming rather than the act of buying. Their aim is to understand consumer
experiences based on techniques such as Ethnography, semiotics and depth interviews.
The main difference between Positivism and Interpretivism is that; whereas

Positivism aims at predicting consumer actions, Interpretivism aims to understand
consumption practices.
Combination of Quantitative and Qualitative techniques- for strategic decision making it
is better if both the methodologies are combined so that the weakness of one can be
overcome by the strength of the other.
______________________________________________________________________________
4. Consumer research process- it is a six steps process. The steps are:
Defining the objectives of the research- every research is based on the problem or
information need. At this point, the problem will have been recognized by at least one
level of management, and internal discussions will have taken place. Sometimes, further
definition of the issue or problem is needed, and for that there are several tools you can
use. Once your problem is better defined, you can move onto developing your approach,
which will generally be around a defined set of objectives. Developing your approach
should consist of honestly assessing you and your teams market research skills,
establishing a budget, understanding your environment and its influencing factors,

developing an analysis model, and formulating hypotheses. Once the need for research
information has been clearly defined, the researcher must specify the objectives of the
proposed research and develop a specific list of information needs. Research objectives
answer the question "Why is this project being conducted?" The answer could be broad
or specific. Only when the researcher knows the problem that management wants to solve
can the research project be designed to provide the pertinent information. The difficult
part of establishing research objectives is the conflict that often exists between the value
of information and the research budget. Since each piece of information has some cost
associated with it, whether it is the cost of the account manager's travel expenses or the
cost of having an outside agency performs a telephone survey, each piece must be
evaluated in terms of its value with respect to the needed decision. So, identifying the
objectives of the study is a primary step. Is it to segment the TV market? To know
attitudes of on-line consumers? Etc.
Collecting and evaluating secondary data- Secondary Data is data collected for some
purpose other than solving the current problem at hand. Locating secondary data is called
Secondary research. It may provide direction for designing primary research which is
the original research performed by researchers to meet specific objectives. To determine
the data sources for the research project, an assessment must first be made of the amount
and type of data presently available. There are two types of secondary data:
Internal (data originating within the firm)- it includes data such as sales and cost
data
External (published data originating outside the firm) - it includes data from the
Internet, the Government, trade, business, and professional associations, the
media, trade journals, Universities and Foundations, corporate annual reports,
and commercial data services.

Designing a primary research study-it is based on the purpose of the study. If descriptive
information is needed, a quantitative design is used as against the qualitative one in case
of search for new ideas. These two are:
Quantitative research design- A research design is the framework that specifies
the type of information to be collected, the sources of the data, and the data-
collection procedures. It includes:
i. Data collection methods- there are three basic ways of collecting data.
These are:
1. Observational research- Helps marketers gain an in-depth
understanding of the relationship between people and products
by watching them buying and using products. Helps researchers
gain a better understanding of what the product symbolizes. It is
widely used by interpretivist researchers. So, it involves the
direct observation of phenomena in their natural setting. The
main advantage of observational research is flexibility. The
researchers can change their approach as needed. Also it
measures behavior directly, not reports of behavior or intentions.
The main disadvantage is it is limited to behavioral variables. It
cannot be used to study cognitive or affective variables. Another
disadvantage is that observational data is not usually
generalizable. In the observation method, the primary data result
from observing the respondents doing something. Three types of
observation research are:
a. Covert observation- The researchers do not identify
themselves. Either they mix in with the subjects
undetected, or they observe from a distance.

b. Overt observation- The researchers identify themselves
as researchers and explain the purpose of their
observations.
c. Researcher participation- The researcher participates in
what they are observing so as to get a finer appreciation
of the phenomena.
2. Experimentation- In the scientific method, an experiment (Latin:
ex-+-periri, "of (or from) trying"), is a set of actions concerning
phenomena. An experiment is usually conducted to test a
hypothesis about the role of one variable (the independent
variable) on another (the dependent variable). It involves
establishing a controlled experiment or model that simulates the
real-world marketing situation being investigated.
3. Surveys- it involves collecting the primary data by questioning a
certain number of people. These are the most widely used
methods of obtaining primary data (Hisrich, 1990). Statistical
surveys are used to collect quantitative information about items
in a population. a. A survey may focus on opinions or
factual information depending on its purpose, and many surveys
involve administering questions to individuals. When the
questions are administered by a researcher, the survey is called a
structured interview or a researcher-administered survey. When
the questions are administered by the respondent, the survey is
referred to as a questionnaire or a self-administered survey. The
major advantages of surveys are:

a. It is an efficient way of collecting information from a
large number of respondents.
b. Surveys are flexible in the sense that a wide range of
information can be collected. They can be used to study
attitudes, values, beliefs, and past behaviors.
The disadvantages are:
a. They depend on subjects motivation, honesty, memory,
and ability to respond.
The various types of surveys are:
1). Telephone surveys-it can be a traditional telephone
interview or a computer assisted telephone dialing or computer assisted telephone interviewing.
2). Personal interview surveys-
3). Mail surveys- the questionnaire may be handed to the
respondents or mailed to them, but in all cases they are returned to the researcher via mail. The
problem of low response rate can be taken care of by forming a mail panel, which is a
longitudinal design and members of the panel are willing to participate.
4). On-line surveys- are conducted over the internet in which
respondents are directed to the marketers website by computer advertisements or home pages.
5). Personal in home survey- respondents are interviewed in person,
in their homes (or at the front door)
6). Personal mall intercept survey- shoppers at malls are intercepted -
they are either interviewed on the spot, taken to a room and interviewed, or taken to a room and
given a self-administered questionnaire.
ii. Data collection instruments- Data collection instruments are tools used to
collect data. 1. There are a few general ways to collect data. You can
either observe what happens (using any of your senses to collect data),
you can ask other people, or you can review documents. Getting data
from other people involves either a questionnaire or some kind of an
interview. You are asking people either to write down their responses or
to tell you their responses so you can record them. It includes
questionnaires, personal inventories, attitude scales etc. They are usually
pre-tested to assure the Validity and Reliability of the data. Validity
is the degree to which a measurement instrument accurately reflects what
it is designed to measure. Whereas, Reliability is the degree to which a
measurement instrument is consistent in what it measures. In case the
sample is divided in two parts, with same questionnaire being
administered and the results are also same, it is said to have a Split half
reliability. Some of the data collection instruments are:
Questionnaires- A questionnaire is a research instrument consisting
of a series of questions and other prompts for the purpose of
gathering information from respondents. The questionnaire was
invented by Sir Francis Galton. Questions may be closed-ended
(answerable by checking one of several predetermined answers) or
open-ended (requiring participants to answer in their own words).
The answers to open-ended questionnaires are much more difficult to
tabulate and analyze but provide more information than the surveyor
might otherwise collect. The questionnaire itself can be disguised or
undisguised as to its true purpose. Great care must be exercised when
designing the questionnaire.
Personal inventories-it represents a series of statements to which
respondents are asked to indicate their degree of agreement or
disagreement.
Attitude scales- A method of measuring attitudes based on the
assumption that holding an attitude leads to consistent responses to
particular persons, objects, or ideas. The scale presents statements
about the topic of interest and the respondent states his or her degree
of agreement or disagreement with the statement. The three most
commonly used attitude scales are:
o Likert scale- A Likert scale (pronounced 'lick-urt') is a type
of psychometric response scale often used in questionnaires,
and is the most widely used scale in survey research. A
measure of attitude consisting of a series of attitude
statements, such as 1 Jogging is a good activity for most
people; jogging is boring, each rated on a five-point scale
(strongly agree, agree undecided, disagree, and strongly
disagree). When responding to a Likert questionnaire item,
respondents specify their level of agreement to a statement.
The scale is named after Rensis Likert. Likert scaling is a
bipolar scaling method, measuring either positive or negative
response to a statement.
o Semantic differential scale- Osgood's semantic differential
was designed to measure the connotative meaning of
concepts. The respondent is asked to choose where his or her
position lies, on a scale between two bipolar words, or a
range of words or numbers ranging across a bipolar position
(for example, `Excellent', `Good', Adequate', `Poor',
`Inadequate'; or from 5 (powerful) down to 1 (weak). Most
adjectives can also be used as personality descriptors.

o Rank order scale- a respondent is presented with several
items simultaneously and asked to rank them (example: Rate
the following advertisements from 1 to 10.). This is an
ordinal level technique. Rank Order Scaling Rank order
scaling questions allow a certain set of brands or products to
be ranked based upon a specific attribute or characteristic.
Qualitative research design-it is designed taking into consideration the purpose of
the study and the type of data needed. The components are:
i. Data collection methods- some of the methods used are:
1. Depth interviews- Research technique conducted in person in the
field (rather than in the researcher's office) by a trained
interviewer for the purpose of learning the motivation of
consumers in the purchase decision process. In the unstructured
home environment, the interviewer interacts with respondents
and encourages them (usually in a one-on-one situation) to freely
express their opinions, ideas, feelings, thoughts, and attitudes.
The objective is to go beyond the superficial and to probe into
consumer behavior. Depth interviews, along with focus group
interviews, are helpful in the evaluation of consumer reaction to
a product or service. Primary research data is often obtained by
interviews, either in person or over the telephone. An advantage
of personal interviews is that the interviewer can adapt the
question to the specific situation at hand. A limitation to this
method is that the interviewer can introduce bias into the process
by asking leading questions or by giving some indication of the
preferred answer. A lot of time, supervision, and interviewer

training are needed to implement personal interviews
successfully.
2. Focus groups- A focus group is a marketing research tool in
which a small group of people (typically eight to ten individuals)
engages in a roundtable discussion of selected topics of interest
in an informal setting. The focus group discussion is typically
directed by a moderator who guides the discussion in order to
obtain the group's opinions about or reactions to specific
products or marketing-oriented issues, known as test concepts. 1.
By providing qualitative information from well-defined
target audiences, focus groups can aid businesses in decision
making and in the development of marketing strategies and
promotional campaigns. 1. A key factor in determining the
success of focus groups is the composition of the group in terms
of the participants' age, gender, and product usage. Focus group
participants are generally selected on the basis of their use,
knowledge, attitudes, or feelings about the products, services, or
other test concepts that are the subject of the focus group. In
selecting participants, the objective is to find individuals who
can knowledgeably discuss the topics at hand and provide
quality output that meets the specified research objectives.
Living room and conference room settings both provide good
locations for focus groups, but public placessuch as
restaurants and auditoriumsare generally regarded as too
distracting for gaining optimal results. While focus group
sessions are almost always audio aped and many are videotaped,
client company representatives usually like to observe their focus
groups first-hand. With this in mind, many focus group
discussion areas are equipped with one-way mirrors that allow
company representatives to observe without intruding. 1. One
recent innovation in focus group research has been the
emergence of online focus group sessions, which permit business
owners and managers to directly observe group discussions
without going to the time and expense of traveling to the locale
in which the exercise is taking place. Using the Internet as a
medium to conduct focus groups is a logicaland vastly
superiorsuccessor to videoconferencing. Also some focus
groups take the form of Collage research in which the
participants are given scissors, paste, paper and magazines and
are asked to make a collage representing themselves, as well as
their relationship with the product category under study.
3. Projective techniques- A projective test, in psychology, is a
personality test designed to let a person respond to ambiguous
stimuli, presumably revealing hidden emotions and internal
conflicts. Some of the techniques are:
a. Word association: Respondents are presented with a
series of words or phrases and asked to say the first
word, which comes to your mind. This method is helpful
to check whether the proposed product names have
undesirable associations.
b. Sentence completion: The beginning of a sentence is
read out to the respondent and he/she is asked to

complete it with the first word that comes to the mind.
E.g., I like this product because
c. Third party techniques: Respondents are asked to
describe a third person about whom they have little
information. Useful in determining attitudes of the
respondents.
d. Thematic appreciation test: Respondents are shown an
ambiguous picture or drawing or fill in a blank speech
bubble associated with a particular character in an
ambitious situation and then asked to interpret the same.
Helps in understanding the perception of the respondents
towards the various aspects of the product.
4. Metaphor analysis- most communication is non verbal and
people sometimes think in terms of images. A metaphor has
generally been understood as a figurative expression which
interprets a thing or action through an implied comparison with
something else. Since consumers think in terms of images it is
important for them to use certain non verbal means such as
music, pictures to express what they feel. So, they use metaphors
as the tool of thought and communication. It can use Collage
research (discussed earlier) as a tool for this analysis. Zaltman
Metaphor Elicitation Technique (ZMET) combines collage
research and metaphor analysis to bring to the surface the mental
models and the major themes or constructs that drive consumer
thinking and behavior. It is based on the premise that peoples
spoken and visual metaphors are extremely important in learning

their conscious and unconscious thoughts and feelings about a
topic. Another technique related to studying consumer values is
Laddering which provides insights into how consumers
translate the attributes of products into meaningful associations
tied to personal values. It is based on interviewing method and
probing.
ii. Sampling- Sampling is that part of statistical practice concerned with the
selection of individual observations intended to yield some knowledge
about a population of concern, especially for the purposes of statistical
inference. It broadly answers three questions of: whom to survey
(sampling unit), how many to survey (sample size) and how to select
them (sampling procedure). It consists of seven stages. These are:
1. Definition of Population of concern- Successful statistical
practice is based on focused problem definition. Typically, we
seek to take action on some population which is to be defined.
2. Specification of the sampling frame- it is defined as a set of
items or events that it is possible to measure.
3. Specification of sampling method. There are broadly two types
of methods. These are:
a. Probability methods- it includes:
i. Simple random sample- where Every member of
the population has a known and equal chance of
being selected.
ii. Systematic random sample- where a member of
the population is selected at random and then
every nth person is selected.

iii. Stratified random sample- where the population
is divided into mutually exclusive groups (such
as age groups), and random samples are drawn
from each group.
iv. Cluster sample- where the population is divided
into mutually exclusive groups (such as blocks),
and the researcher draws a sample of the groups
to interview.
b. Non probability methods- it includes:
i. Convenience sample- The researcher selects the
most accessible population members from whom
to obtain information (e.g., students in a
classroom)
ii. Judgment sample- The researcher uses his or her
judgment to select population members who are
good sources for accurate information (e.g.,
experts in the relevant field of study
iii. Quota sample- The researcher interviews a
prescribed number of people in each of several
categories (e.g., 50 men and 5 women).
4. Determine the sample size- it determines how many to survey
and is dependent on both the size of the budget and on the degree
of confidence that the marketer wants to place in the findings.
5. Implement the sampling plan
6. Sampling and data collection- Good data collection involves:
Following the defined sampling process, keeping the data in time

order, noting comments and other contextual events and
recording non-responses.
7. Review of sampling process- After sampling, a review should be
held of the exact process followed in sampling, rather than that
intended, in order to study any effects that any divergences
might have on subsequent analysis.
Data collection- qualitative study requires highly qualified people to collect data. A
quantitative study generally uses field staff to collect data.
Analyzing the data- After the data are collected, the processing begins, which includes
the functions of editing and coding. Editing involves reviewing the data forms to ensure
legibility, consistency, and completeness. Coding involves establishing categories for
responses or groups of responses so that numerals can be used to represent the categories.
Later, all the responses are tabulated and analyzed using sophisticated analytical
programs such as SPSS (Statistical package for social sciences). It is important that the
data analysis be consistent with the requirements of the information needs identified
when the research objectives were defined.
Preparing a report on the findings-After the data have been collected and analyzed, the
final aspect of the research project can be generatedthe development of the appropriate
conclusions and recommendations. This is the most important part of the project. The
research results are typically communicated to the manager through a written report and
oral presentation. The research findings should be presented in a clear, simple format and
be accompanied by appropriate support material.
___________________________________________________________________________
5. Review questions
How important is Consumer research in marketing?

What are the various types of Consumer research?
Explain the Consumer research process.
______________________________________________________________________________
6. Further readings
Ohio, 1995.
______________________________________________________________________________
UNIT 5: LESSON 20
DIFFUSION OF INNOVATIONS
______________________________________________________________________________
1. Introduction
2. The diffusion process
3. The adoption process
4. Profile of the consumer innovator
5. Review questions
6. Further readings
______________________________________________________________________________
1. Introduction - Diffusion of innovations depicts the framework for exploring consumer
acceptance of new products. It includes following two processes:
a. Diffusion process- Diffusion is a Macro process concerned with the spread of a
new product an innovation from its source to the consuming public.
b. Adoption process- Adoption is a Micro process that focuses on the stages
through which an individual consumer passes when deciding to accept or reject a
new product.
______________________________________________________________________________
2. The Diffusion process- Diffusion is the process by which the acceptance of an
innovation (a new product, new service, new idea or new practice) is spread by
communication (mass media, salespeople or informal conversations) to members of a

social system (a target market) over a period of time. Derived from the definition
following are the elements of the diffusion process:
a. Innovation- Various approaches which have been taken to define a new product
or a new service are:
i. Firm oriented definitions- it treats the newness of a product from the
perspective of the company producing or marketing it. When the product
is new to the company, it is considered new. This definition ignores
whether or not the product is actually new to the marketplace.
Modifications of a competitors product would be considered new.
ii. Product oriented definitions- it focuses on the features inherent in the
product itself and on the effects these features are likely to have on
consumers established usage patterns. The types of product innovations
are:
1. Continuous innovation- involves the introduction of a modified
product, rather than a new product and has the least disruptive
influence on established patterns. Example- latest versions of
computer software.
2. Dynamically continuous innovation- it may involve the creation
of a new product or the modification of an existing product. It is
somewhat more disruptive than the continuous innovation but
does not alter established behavior patterns. Example- CD
players.
3. Discontinuous innovation- requires consumers to adopt new
behavior patterns. Example- computer systems, laptops.

iii. Market oriented definitions- it judges the newness of a product in terms
of how much exposure consumers have to the new product. Two market
oriented definitions that are used are:
1. A product is considered new if it has been purchased by
relatively small (fixed) percentage of the potential market.
2. A product is considered new if it has been on the market for a
relatively short (specified) period of time. Both the definitions
are subjective because the researcher establishes the degree of
sales penetration within the market that qualifies the product as
innovation.
iv. Consumer oriented definitions- A new product is any product that a
potential consumer judges to be new. Therefore, newness is based on the
consumers perception of the product, rather than on physical features or
market realities. Also, besides the purchase innovativeness, use
innovativeness exists. A consumer is being use-innovative if he uses a
previously adopted product in a novel or unusual way.
v. Product characteristics that have an influence on diffusion- the
characteristics are:
1. Relative advantage- The degree to which potential customers
perceive a new product as superior to existing substitutes.
Example- laser printers to dot matrix printers. Color TVs to
black and white TVs.
2. Compatibility- The degree to which potential consumers feel
new product is consistent with their present needs, values, and
practices. Example- Mobile phones.

3. Complexity- The degree to which a new product is difficult to
understand or use affects product acceptance. The issue of
complexity is especially important when attempting to gain
market acceptance for high-tech consumer products. Four
predominant types of technological fear that act as barriers to
new product acceptance:
a. Fear of technical complexity
b. Fear of rapid obsolescence
c. Fear of social rejection
d. Fear of physical harm
4. Trialability- Refers to the degree to which a new product is
capable of being tried on a limited basis. The greater the
opportunity to try a new product, the easier it is for the
consumers to evaluate and adopt it. Examples- free trial packs of
detergents, free trial period for SPSS.
5. Observability (Communicability) -is the ease with which
products benefits or attributes can be observed, imagined, or
described to potential consumers. Products that have a high
degree of social visibility, such as fashion items, are more easily
diffused than products that are used in private, such as a new
type of deodorant. Also, a tangible product is promoted more
easily than an intangible one. However, there is resistance to
innovations when perceived advantage, compatibility,
trialability, and observabiltiy are low and complexity is high.
b. Channels of communication- How quickly an innovation spreads through a
market depends to a great extent on:

i. Communications between marketer and consumers
ii. Communication among consumers (word-of-mouth).
The sources of information can be:
1. Impersonal- advertising and editorial matter
2. Interpersonal- salesman and opinion leaders
3. Interactive marketing messages- consumers become an important
part of the communication rather than just a passive recipient.
c. Social system- The diffusion of a new product usually takes place in a social
setting frequently referred to as a social system. In consumer behavior, the terms
market segment and target segment may be more relevant than the term social
system used in diffusion research. A social system is a physical, social, or
cultural environment to which people belong and within which they function. For
a new cosmetic, the social system is the women in that locality. The social
system acts as a boundary within which the diffusion of the new product is
examined. The orientation of a social system, with its special values or norms is
likely to influence the acceptance or rejection of new products. If its orientation
is modern, the acceptance of innovations is likely to be high and vice versa. The
orientation can be national or local.
d. Time- Time pervades the study of diffusion in three distinct but interrelated
ways:
i. Purchase time- Purchase time refers to the amount of time that elapses
between consumers initial
ii. Awareness of a new product or service and the point at which they
purchase or reject it. It is important because the average time a consumer
takes to adopt a new product is a predictor of the overall length of time it
will take for the new product to achieve widespread adoption.

iii. Adopter categories- The concept of adopter categories involves a
classification scheme that indicates where a consumer stands in relation
to other consumers in terms of time or when the consumer adopts a new
product. Five adopter categories that are frequently used are:
1. Innovators- these are the venturesome lot who are very eager to
try new ideas, have more cosmopolite social relations and
frequently communicate with other innovators.
2. Early adopters-these are the persons to check with before
adopting a new product idea. This category has the greatest
number of opinion leaders and role models.
3. Early majority-they are the ones who adopt new ideas just prior
to the average time, they seldom hold leadership positions and
deliberate for some time before adopting.
4. Late majority-they are the ones who adopt the new ideas just
after the average time. Here adoption may be an economic
necessity and a reaction to peer pressure. Innovations are
approached cautiously.
5. Laggards-these are the last ones to adopt an innovation; they are
more conservative and traditional who are suspicious of the new.
Adopter categories are generally depicted as taking on the characteristics of a normal distribution
i.e., a bell-shaped curve that describes the total population that ultimately adopts a product.
iv. Rate of adoption-The rate of adoption is concerned with how long it
takes a new product or service to be adopted by members of a social
system i.e., how quickly it takes a new product to be accepted by those
who will ultimately adopt it. Marketers desire a rapid rate of product
adoption to penetrate the market and quickly establish market leadership.
In addition to how long it takes from introduction to the point of
adoption, it is useful to track the extent of adoption (diffusion rate).
______________________________________________________________________________
3. The adoption process- The focus of this process is the stages through which an individual
consumer passes although arriving at a decision to try or not to try or to continue using or
to discontinue using a new product. It is assumed that consumers engage in an extensive
information search.
Explanation of the important stages is given below:
a. Awareness-it is when the consumer is first exposed to the product innovation.
Example- a person sees an ad about new Samsung mobile phone in a newspaper.
b. Interest-it marks the consumers interest in the product and beginning of the
search for additional information. Example- the person seeks more information
about the mobile phone by visiting the Samsung website.
c. Evaluation-in this stage the consumer decides whether or not to believe that this
product or service will satisfy the need. It is called a Mental trial. Example- on
talking to a friend the person decides that the mobile phone should have a good
quality camera in it. The Samsung model under consideration satisfies his need
and provides FM radio stations too.
d. Trial-the consumer actually uses the product on a limited basis. Example- the
person buys the mobile phone under a 10 days full refund policy.
e. Adoption (rejection)-based on the trial above, the consumer decides to use the
product on a full scale (if trial was favorable) or decides to reject it (if trial is
unfavorable). Example- the person finds the mobile phone very good and keeps
it.
f. Need awareness stage and post adoption or post purchase evaluation stages have
also been included in the modified and enhanced model of The Adoption
Process
The adoption process provides a framework for determining which types of
information sources consumers find most important at specific decision stages.
______________________________________________________________________________
4. The profile of the consumer innovator- Consumer innovators can be defined as the
relatively small group of consumers who are the earliest purchasers of a new product.
The problem with this definition is the concept earliest. Innovators are defined as the
first 2.5 percent of the social system to adopt an innovation. In many marketing diffusion
studies, however, the definition of the consumer innovator has been derived from the
status of the new product under investigation. Other researchers have defined innovators
in terms of their innovativeness, that is, their purchase of some minimum number of new
products from a selected group of new products. Non-innovators would be defined as
those who purchase none or only one of the new fashion products. Characteristics of
Consumer innovators are:
a. Interests in the product category- Consumer innovators are much more interested
than either later adopters or non-adopters in the product categories that they are
among the first to purchase. Consumer innovators are more likely than non-
innovators to seek information concerning their specific interests from a variety
of informal and mass media sources. They are more likely to give greater
deliberation to the purchase of new products or services in their areas of interest
than non-innovators.
b. Consumer innovator is the opinion leader- there is a strong possibility for a
consumer opinion leader to be an innovator. Consumer innovators provide other
consumers with information and advice about new products. Those who receive
such advice frequently follow it. The consumer innovator often influences the
acceptance or rejection of new products. When innovators are enthusiastic about
a new product and encourage others to try it, the product is likely to receive
broader and quicker acceptance. Because motivated consumer innovators can
influence the rate of acceptance or rejection of a new product, they influence its
eventual success or failure.
c. Personality traits-personality of consumer innovator can be studied in following
ways:
i. Personality traits-these are:
1. Consumer innovators generally are less dogmatic than non
innovators. They are likely to approach new products with
openness and less worry.
2. Consistent with open mindedness, it appears that innovative
behavior is an expression of an individuals need for uniqueness.
3. Consumer innovators are likely to differ from non-innovators in
terms of social character.
4. Consumer innovators are likely to be inner directed. They rely
on their own values and standards when making a product
decision. While non innovators are likely to be other-directed as
they rely on others guidance given a product decision. The
initial purchasers of a new mobile phone might be inner-directed,

whereas the later purchasers of the same might be other-directed.
This suggests that as acceptance of a product progresses from
early to later adopters, a gradual shift occurs in the personality
type of adopters from inner-directedness to other-directedness.
5. There also appears to be a link between optimum stimulation
level and consumer innovativeness. Individuals who seek a
lifestyle rich with novel, complex, and unusual experiences (i.e.,
high optimum stimulation levels) are more willing to risk trying
new products, to be innovative, to seek purchase-related
information, and to accept new retail facilities.
6. Variety-seeking consumers tend to be brand switchers and
purchasers of innovative products and services.
ii. Perceived risk-it includes the following:
1. Perceived risk-Perceived risk is the degree of uncertainty or fear
about the consequences of a purchase that a consumer feels when
considering the purchase of a new product. Consumer innovators
are low risk perceivers; that is, they experience little fear of
trying new products or services.
2. Venturesomeness- it is a broad based measure of consumers
willingness to accept the risk of purchasing new products.
Consistent with their greater venturesomeness and lower risk
perceptions, the consumer innovators are likely to learn about
innovations earlier than others.
iii. Purchase and consumption characteristics-Consumer innovators are
fewer brands loyal; they are more apt to switch brands. Consumer
innovators are more likely to be deal-prone, i.e. they are more likely to
take advantage of special promotion efforts such as free samples etc.
Consumer innovators are also likely to be heavy users of the product
category in which they innovate. Specifically, they purchase larger
quantities and consume more of the product than non innovators.
d. Media habits-Comparisons of the media habits of innovators and non innovators
across such widely diverse areas of consumption as fashion clothing and new
automotive services suggest that innovators have somewhat greater total
exposure to magazines than non innovators, particularly to special-interest
magazines devoted to the product category in which they innovate. Consumer
innovators are also less likely to watch television than non innovators. Studies
concerning the relationship between innovative behavior and exposure to other
mass media, such as radio and newspapers, have been too few, and the results
have been too varied to draw any useful conclusions.
e. Social characteristics-Consumer innovators are more socially accepted and
socially involved than non innovators. This greater social acceptance and
involvement of consumer innovators may help explain why they function as
effective opinion leaders.
f. Demographic characteristics- It is reasonable to assume that the age of the
consumer innovator is related to the specific product category in which he or she
innovates. Research suggests that consumer innovators tend to be younger than
either later adopters or non innovators. Probably because many of the products
selected for research attention are particularly attractive to younger consumers.
Consumer innovators have more formal education, higher personal or family
incomes, and are more likely to have higher occupational status (to be
professionals or hold managerial positions) than later adopters or non innovators.

g. Generalized consumer innovator- The overlap of innovativeness across product
categories, like opinion leadership, seems to be limited to product categories that
are closely related to the same basic interest area. There is evidence that suggests
that a new type of more generalized high-tech innovator does exist, that is, the
change leader. Such individuals tend to embrace and popularize many of the
innovations that are ultimately accepted by the mainstream population. They
cane be a younger group characterized as being stimulation-seeking, sociable,
and having high levels of fashion awareness. They can be a middle-aged group
who is highly self-confident and has very high information-seeking needs.
______________________________________________________________________________
5. Review questions
Briefly explain the process of Diffusion of innovation.
What is Adoption? How does it differ from the concept of Diffusion?
Explain the process of adoption using suitable examples.
State the profile of the consumer innovator.
______________________________________________________________________________
6. Further readings

Ohio, 1995.
______________________________________________________________________________

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UNIT 1: LESSON 1

2. What is Consumer Behavior?

3. Consumer behavior rooted in Marketing concept

4. Scope of consumer behavior

5. Consumer behavior is interdisciplinary

6. Why study consumer behavior?

7. How to study consumer behavior?

8. Importance of consumer behavior

10. Role theory

11. Changing profile of Indian consumer

12. Review questions

13. Further readings

Diversity and multiculturalism accounts for large differences in consumption behavior.

differences between consumers and how he can segment the market.

Schiffman and Kanuk.

Consumer behavior is defined as activities people undertake when obtaining, consuming

Obtaining- it refers to the activities leading up to and including the purchase or

receipt of a product. Thus it involves activities such as information search for

alternative product options, evaluating those alternatives and actual purchase of

products of particular brands. Example- we have a need for storing data

electronically. We have options of a personal computer or a personal notebook.

We need to evaluate these alternatives on certain parameters such as

dependability, mobility etc. After selecting an option we decide on the particular

brand of the data storage device.

Consuming- refers to how, where, when and under what circumstances

consumers use products.

their product replacement strategies.

Consumption analysis which gives a holistic picture of consumers consumption behavior

3. Consumer behavior rooted in Marketing concept

Selling concept that focused on the needs of the seller alone.

4. Scope of consumer behavior

Consumer behavior as a study focuses on understanding various aspects of consumer buying

related items. It includes:

What they buy?

Why they buy?

When they buy?

Where they buy it from?

How often they buy it?

How often they use it?

How they dispose their products?

(After consumption throw it away).

5. Consumer behavior is interdisciplinary

Those other disciplines are:

aspects of an individual namely- Motivation, Perception, Attitudes, Personality and

memberships, Family and Social class on consumer decision making process. It is

consumption behavior of the consumer because at times the acts of consumer as an

individual and as a member of a group may differ.

Social psychology- it as a combination of Sociology and Psychology, studies how an

groups and opinion leaders.

Anthropology- it studies the influence of society on an individual. It is concerned with

the development of attitudes, values and belief system.

It helps in determining consumers increasing influence- consumer is said to be the king.

Consumer behavior as a discipline has evolved from the era of Manufacturing, to

Selling and finally to Marketing which focuses primarily on consumer needs.

Understanding and adapting to consumer needs and behavior is an absolute necessity.

7. How to study consumer behavior?

behavior. These are:

Observational methods it consists primarily of observing consumer behaviors

behavior with respect to FMCG goods in a retail setting.

Interviews and surveys- surveys can be by mail, telephone and internet or in

by way of administering a questionnaire to him.

carefully manipulating independent variables to determine the effect of changes

on dependent variables. Example- the marketer can study the consumption

behavior of the consumer by monitoring the effect of changing prices