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Master of Business Administration MBA Semester 3 MK0011 Consumer Behaviour Assignment Set 1 SUBMITTED BY : CHAITALI ANIRUDDHA NANDI - 511030388

388 ----------------------------------------------------------------------------------------------------------Q.1 Explain the consumer decision process stages. A.1. The following are the various stages in consumer decision process. 1) Problem Recognition Purchase decision-making process begins when a buyer becomes aware of an unsatisfied need or a problem. Problem recognition is a critical stage in consumer decision-making process because without it, there is no deliberate search for information. If the consumer does not perceive any discrepancy between his current state and the desired state, the current state for the concerned consumer is apparently quite satisfactory and does not need decision-making. It is important to appreciate, that it is actually the consumers perception of the actual state that stimulates problem recognition and not some objective reality. Also, the relative importance is a critical concept in several purchase decisions because almost all consumers have budgetary or time constraints. 2) Information Search After problem or need recognition, consumers generally, take steps to gather adequate information to select the appropriate solution. Information search refers to what consumer surveys in her/his environment for suitable information to make a satisfying purchase decision. In case of high involvement purchases, the relative importance of external information search tends to increase. In general, it seems the type of information sought by a consumer depends on what she/he already knows. If the consumer possesses little knowledge about available alternatives, the tendency is to learn about the existence of alternatives and after acquiring sufficient information, to redirect efforts towards learning more about the attributes of available alternatives to develop suitable evaluative criteria and evaluate them. 3) Evaluation of Alternatives Consumers evaluative criteria refer to various dimensions; features, characteristics and benefits that a consumer desires to solve a certain problem. To evaluate different alternatives in the evoked set, the consumer examines products or brands against the desired set of criteria, and also those that are not desired. Consumers use either attitude-based choice that involves the use of general attitudes, impressions, beliefs, intuition, or heuristics and form overall preferences about brands, or attributebased choice that requires the knowledge of specific attributes at the time of choosing a brand by comparing each brand alternative on specific attributes. This attribute-based choice process is cumbersome and time consuming. Generally, the importance of an optimal decision is related to the value of the product under consideration and the consequence associated with a non-optimal decision. 4) Outlet Selection and Purchase Consumers selection is important to managers of retail establishments also to consumer goods marketers.A consumer can follow three basic sequences when making a purchase decision 1)Brand first ,outlet second 2)Outlet first ,brand second 3)Brand and outlet at the same time

5) Purchase Once the consumer has chosen a brand and selcted a retail outet ,he takes the final step of completing the transaction.Traditionally this would involve the offering of cash to acquire the rights to the product.In developed and many developing countries credit often plays an important role in completing the purchase transaction.Many retail outlets overlook the fact that the purchase action I generally the termination of last contact that the customer that the customer will have with the store on that shopping trip.This presents the business an opportunity to create lasting impressions on the customer. 6) Post Purchase Behaviour Many businesses have begun focusing on customer relationship and loyalty programmes.The purpose is to increase customer satisfaction ,commitment and retention of important customers.Consumers engage in a constant process of evaluating the things that they buy as these products are integrated into their daily consumption activities.In case of certain purchases, consumers experience post-purchase dissonance. This occurs as a result of the consumer doubting his wisdom of a purchase.After purchase most products are put to use by consumers, even when they experience dissonance.Other purchases may be followed by non-use because the consumer may return or keep the product without using it. ----------------------------------------------------------------------------------------------------------Q.2 In the context of consumer perception, explain briefly the following terms: Differential threshold, subliminal threshold, absolute threshold, adaptation, perceptual blocking, perceptual vigilance and defense. A.2. Differential threshold Differential threshold is the smallest detectable difference between two values of the same stimulus. This is also referred to as J.N.D (Just Noticeable Difference). A German scientist of nineteenth-century, Ernst Weber discovered that the just noticeable difference between two stimuli was an amount relative to the intensity of the initial stimulus. To measure the differential threshold for a stimulus, one commonly changes its intensity in very small amounts. Subliminal perception People can also perceive stimuli, which are below their level of conscious awareness. In this situation, the stimuli which are otherwise too weak or brief to be consciously seen or heard prove strong enough to be perceived. When the stimulus is below the threshold of awareness and is perceived, the process is called subliminal perception. This shows that the threshold of conscious awareness is higher than the absolute threshold for effective perception. Absolute threshold Absolute threshold refers to the lowest level at which an individual can experience a sensation. At this point, an individual can detect a difference between something and nothing and this point would be that individuals absolute threshold for that stimulus. Adaptation Adaptation refers to gradual adjustment to stimuli to which consumers are exposed for prolonged periods. Because of adaptation, consumers do not notice the stimuli to which they have become adjusted. For instance, an air-conditioned picture theatre feels quite cool in the beginning but a short time later we adapt to temperature and become less

aware of it. Consumers become adapted to advertising messages over time due to boredom or familiarity. Perceptual vigilance and defense Even when consumers are exposed to stimuli they do not want to see or hear, they unconsciously ignore such undesirable stimuli. Perceptual defense is more likely in anxiety-producing situations. Because of this reason, unpleasant, damaging or threatening stimuli have less of a chance to be perceived compared to neutral stimuli at the same level of exposure. Consumers are also likely to modify or distort any information that is not consistent with their needs, wants, values or beliefs. Perceptual blocking Consumers are exposed to innumerable stimuli in a typical day. They protect themselves from being overwhelmed and overburdened by blocking such numerous stimuli from their conscious awareness. For instance, consumers screen out enormous amounts of TV advertising by tuning out. ----------------------------------------------------------------------------------------------------------Q.3 What is attitude? What are the various attitudinal models? A.3. Consumer attitude is another important aspect of individuals that the marketer is interested in. Attitudes are learned predispositions to respond to an object or class of objects in a consistently favourable or unfavourable way. Attitude Models Psychologists have devoted considerable efforts to understand how attitudes are formed and the relationship between attitudes and behaviour. A number of models have been developed to understand underlying dimensions of an attitude (Richard J. Lutz). 1 Tri-component attitude model According to this model, attitudes are consist of three main components: 1. Cognitive component (knowledge, beliefs) Consumers beliefs about an object are the attributes they ascribe to it. These beliefs are based on a combination of the knowledge, experience and perceptions about the attitude object. For most attitude objects consumers have a number of beliefs and that a specific behaviour will result in specific outcomes. 2. Affective component (emotions, feelings) Consumers feelings and emotional reactions to an object represent the affective component of an attitude. This relates to consumers overall evaluation of the attitude object. Consumer beliefs about a brands attributes are multidimensional, but the feeling component is only one-dimensional. The consumer who says, I like ThumsUp or ThumsUp is no good,is expressing the results of an affective evaluation. The valuation can either be good or bad, favourable or unfavourable. Emotionally charged evaluations can also be expressed as happiness, elation, sadness, shame or anger etc. 3. Conative component (behavioural aspect) Behavioural (conative) component is the likelihood or tendency of an individual to respond in a certain manner towards an attitude object. For example, a series of decisions to purchase or not to purchase a Canon inkjet printer or recommend it to friends, would reflect the behavioural component of an attitude. In the context of consumer research and marketing, conative component is treated as intention to buy. P A Dabholkar has noted that all the three attitude components tend to be consistent. As a result of this, change in one attitude component tends to trigger related changes in the other components. Multi-attribute models

According to these models, consumers attitudes about an attitude object is a function of consumers perception and assessment of important attributes or beliefs held about a certain attitude object. The attitude object may be a product, service, or issue etc. In other words, many beliefs about attributes are evaluative in nature. Attitude-toward-object model This is the simplest model and is particularly appropriate for measuring attitudes towards product/service category, or specific brands. A product has many attributes (size, features, style and so on) and an individual will process information and develop beliefs about many of these attributes. Consumers generally have favourable attitudes towards those products or brands that they believe have an acceptable level of positive attributes. Conversely, they have unfavourable attitudes towards those brands that they believe do not have an acceptable level of desired attributes or have too many negative attributes. The model is usually shown by the following equation:

where Attitude 0 = the persons overall attitude toward the object b i = the strength of persons belief that the object contains attribute i e i = persons evaluation or intensity of feeling towards attribute i (importance of attribute) n = the number of relevant beliefs for that person. Ideal-point multi-attribute model According to the attitude toward object model, more (or less) is liked only up to a point for some attributes. Any further increase (or decrease) beyond this point in these attributes becomes bad. For example, if the cook forgot to add salt to a vegetable curry, adding salt will improve its taste and our attitude towards the curry. Beyond this point, any additional amounts of salt will spoil its taste and our attitude will decrease. In such situations, the need is to incorporate an ideal point in the above-mentioned model. ideal point in the above-mentioned model.

Where Attitude 0 = persons attitude towards the attitude object bi = the strength of persons belief that the brand contains attribute i Ii = the consumers ideal point of performance on attribute I ei = persons evaluation of feeling towards attribute i (importance of attribute) n = the number of relevant beliefs for that person. Fishbeins attitude toward behaviour model The revised Fishbein and Ajzen model focuses on an individuals attitude towards her/his behaving or acting with respect to an object and not the attitude towards the object itself. According to this model, working backwards from behaviour such as buying a certain product, brand, or service, the best predictor of behaviour is the intention to act. In the sequence shown, beliefs precede attitude towards the behaviour and normative beliefs precede subjective norms about the behaviour; attitudes and subjective norms precede behavioural intentions and behavioural intention precede actual behaviour. To predict an individuals behaviour, one is required to determine her/his attitude towards the specific

behaviour in question and subjective norms regarding the behaviour. Each of these would influence the behavioural intention. The Behavioural Intentions Model is expressed as:

Where Attitude(beh) = the individuals overall attitude towards performing the specific behaviour b1 = the persons belief that performing that behaviour results in consequence 1 e1 = the persons evaluation of consequence of 1 n = the number of relevant behavioural beliefs. ----------------------------------------------------------------------------------------------------------Q.4 What similarities and differences do you find in classical conditioning and instrumental conditioning? A.4. Two important behavioural theories, classical conditioning (also called respondent conditioning) and instrumental conditioning (also called operant conditioning) are of great relevance to marketing. Differences 1)Classical conditioning just involves the pairing of stimuli and the association that results between the two. A behavior that would normally be the result of one stimulus becomes the result of the other also due to the association created. Pavlov's dogs salivating at the sound of the bell they'd come to associate with being fed is an example. Operant conditioning requires that the subject perform some action (and that the action is either rewarded or punished to either encourage or dicourage the behavior.) It's usually used for behavior modification. 2) The learner is automatically reinforced for classic conditioning ( a behaviour wanted ) whereas the learner needs a correct response in order to receive reinforcement for operant conditioning ( can be learned or got rid of ) Similarities. 1)They are both forms of learning 2) Both operant and classical conditioning produce basic phenomena and as said earlier, both involve changes in behaviour. 3)Both have a stage known as acquisition-- the intial process of learning ----------------------------------------------------------------------------------------------------------Q.5 Discuss social judgment theory and cognitive response model. A.5. Social Judgement Theory According to this theory (Sherif and Hovland), an individuals level of involvement in an issue is an important factor in information processing. Highly involved individuals in an issue, or those who take strong position, are said to have narrow latitude of acceptance and will accept very few other positions and reject a large number of positions. They

would be said to have narrow latitude of acceptance and wide latitude of rejection. A highly involved individual, who agrees with a message because it happens to be within her/his latitude of acceptance, will interpret it more positively than it actually is. A message, with which the individual disagrees because it is within her/his latitude of rejection, will be interpreted as more negative than it actually is. Due to these reasons, the highly involved individual is more inclined towards selective perception based on personal biases. Cognitive Response Model A message is likely to be evaluated in the light of past knowledge, experience and attitudes. According to Greenwald and others, these thoughts are called cognitive responses and occur to consumers while viewing and/or listening or reading an advertising message. To measure these thoughts, consumers are asked either to write down or express verbally their reactions to a message during the exposure. It is assumed that these thoughts reflect consumers cognitive processes and reactions that ultimately lead to either acceptance or rejection of the message. ----------------------------------------------------------------------------------------------------------Q.6 Explain the light of perceptual organisation the essential components involved while dealing with consumer behaviour. A.6. Perceptual Organisation All the selected stimuli from the environment are not experienced as separate and discrete sensations. Individuals tend to organise these sensations into a coherent pattern and perceive them as unified wholes. The specific principles underlying perceptual organisation are sometimes referred as Gestalt psychology. Gestalt is a German word and means pattern or configuration. Three most basic principles of perceptual organisation focus on figure and ground relationships, grouping and closure. Figure and ground This is one of the most basic and automatic organisational processes that perceivers use. People have a tendency to organise their perceptions into figure and ground relationship. In order to be noticed, stimuli must contrast with their environment. The application of these findings is important in advertising. The ads must be planned carefully to ensure that the figure and ground are perceived the way the advertiser intended. Grouping Individuals have an inherent tendency to grouping or chunking a variety of information or items close to each other in time or space and form a unified picture. The tendency to group stimuli may result as a consequence of proximity, similarity or continuity. When an object is associated with another because of its closeness to that object it is due to proximity. Marketers use this tendency in individuals with advantage to imply certain desired meaning related to their products or services. Soft drinks are usually shown being enjoyed in active and fun-loving settings. The overall impression and mood implied by the grouping of stimuli helps the consumer to associate the drinking of beverage with comfortable living and romance. Closure Individuals have a need for closure and fulfil it by organising their perceptions in a manner that leads to forming a complete picture. In the event that they are exposed to a pattern of stimuli, which in their view is incomplete, they tend to perceive it as complete by filling in the missing pieces. This phenomenon may be the result of conscious or subconscious efforts. For instance, hearing the beginning of a jingle or message develops

a need to hear the remaining part of it. If the TV commercials of Nirma or Lifebuoy leave the jingle incomplete, familiar listeners complete it in their memory because of the conditioning effect and need for closure.

Master of Business Administration MBA Semester 3 MK0011 Consumer Behaviour Assignment Set 1 SUBMITTED BY : CHAITALI ANIRUDDHA NANDI - 511030388
Q.1 Explain the influences of social class and groups on consumer behaviour. A.1. Social class (also referred to as a social standing) means societal rank, which is ones position relative to others on one or more dimensions valued by society. Groups serve as one of the primary agents of consumer socialisation and can be influential enough to induce not only socially acceptable consumer behaviours but also socially unacceptable and even personally destructive behaviours. Social class can be broadly categorised into three categories as discussed in following subsections: Upper class The upper class of most societies is a varied group of individuals who include the aristocracy, the nouveau riche (the new social elite) and the upper-middle class. These consumers are likely to view themselves as intellectual, conservative/liberal, political and socially conscious. They tend to buy items that are known to be high-priced and can be publicly consumed or displayed such as expensive cars, watches and designer dresses. Upper class consumers are also more likely to engage in careful information search before making a purchase decision, are less inclined to view price as an indicator of quality and rely on actual product attributes. Middle class This class is composed of primarily white-collar workers at managerial levels; moderately successful professionals such as doctors, lawyers, professors; owners of medium sized businesses and graduates who are likely to reach occupational-status levels within a few years. The motivations of this class focus on achieving success in their careers, achieving higher income levels and accomplishing advancement on the social ladder for themselves and their children. They tend to spend much of their disposable income on autos, clothing, household goods and vacations. In India, middle class is the largest consuming class.