CONSUMER BEHAVIOR AND IMC

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 REVIEW OF PREVIOUS SESSION
MARKETING COMMUNICATION ECOSYSTEM

➢ Role of advertising agencies and the services they perform

➢ Types of agencies and media specialist organizations

➢ Methods for agency compensation

➢ Role and functions of specialized marketing communications organizations

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PARTICIPANTS IN THE IMC PROCESS
 LEARNING OBJECTIVES
➢ Role consumer behavior plays in the development and implementation of
advertising and promotional programs

➢ Understand the consumer decision-making process

➢ Understand various internal psychological processes, their influence on consumer

decision making, and implications for advertising and promotion

➢ Understand external factors such as culture, social class, group influences, and
situational determinants and how they affect consumer behavior
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 CONSUMER BEHAVIOR

The process and activities people engage

in when searching for, selecting, purchasing,
using, evaluating, and disposing of
products and services
 CONSUMER DECISION MAKING
Decision Stage Psychological Process
Problem recognition Motivation

Information search Perception

Alternative evaluation Attitude formation

Purchase decision Integration

Post-purchase evaluation Learning

 CONSUMER DECISION MAKING
Decision Stage Psychological Process
Problem recognition Motivation

Information search Perception

Alternative evaluation Attitude formation

Purchase decision Integration

Post-purchase evaluation Learning

SOURCES OF PROBLEM RECOGNITION

Related Products,
Out of Stock Purchases

Market-Induced
Dissatisfaction
Recognition

New Needs New

or Wants Products
 SOURCES OF PROBLEM RECOGNITION

Out of stock

• When an existing supply of a product must be replenished

• Resolved by choosing a familiar brand or one to which the customer

feels loyal
AD HIGHLIGHTING CONSUMER DISSATISFACTION

Ad targets consumers who are

dissatisfied with the current
state of affairs (their smoking
habit) and want to quit.
 SOURCES OF PROBLEM RECOGNITION
New Needs
or Wants
• Changes in consumers’ lives
• Changes in one’s financial situation, employment status, lifestyle

Example: Graduate from college and begin professional career, change in wardrobe.
 SOURCES OF PROBLEM RECOGNITION

Related Products,
Purchases

• Stimulated by the purchase of another product

• Example: Purchase of Computer

Accessories and upgrades

 MARKETER-INDUCED PROBLEM RECOGNITION
How marketer’s actions can encourage consumers to be unhappy with their
current state or situation
• Example: Ads for personal
hygiene products, such as
mouthwash and deodorant.
 MARKETER-INDUCED PROBLEM RECOGNITION
Try new product: consumers’ tendency toward novelty-seeking behavior

Example: Old spice ad - https://www.youtube.com/watch?v=owGykVbfgUE

SOURCES OF PROBLEM RECOGNITION

Related Products,
Out of Stock Purchases

Market-Induced
Dissatisfaction
Recognition

New Needs New

or Wants Products

Innovative products are introduced

 CONSUMER DECISION MAKING
Decision Stage Psychological Process
Problem recognition Motivation

Information search Perception

Alternative evaluation Attitude formation

Purchase decision Integration

Post-purchase evaluation Learning

 MASLOW’S HIERARCHY OF NEEDS

Ex: Adventure trips

Ex: Sportscar

Ex: Facebook

Ex: Insurance, Home security system

Ex: FMCG products

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MARKETING APPLICATIONS OF MASLOW’S THEORY

• Adaptable to market segmentation

• Development of advertising

• Marketing communications appeal

• Different appeals for the same product can be based on

different needs
FREUDIAN PSYCHOANALYTIC APPROACH

Strong Symbolic
inhibitions meanings

Subconscious
Mind

Complex and unclear Surrogate

motives behaviors
PROBING THE MINDS OF CONSUMERS

In-depth Association
interviews tests

Projective Focus
techniques groups
 CONSUMER DECISION MAKING
Decision Stage Psychological Process
Problem recognition Motivation

Information search Perception

Alternative evaluation Attitude formation

Purchase decision Integration

Post-purchase evaluation Learning

INFORMATION SEARCH

Internal Search

External Search
INFORMATION SEARCH – EXTERNAL SOURCES

Personal sources

Market sources

Public sources

Personal experience
 INFORMATION SEARCH – EXTERNAL

Example: Watching a movie v/s Buying a new car

• Importance of purchase decision

• Effort needed to acquire information

• Amount of past experience

• Degree of perceived risk associated with the purchase

• Time available
 PERCEPTIONS

Marketers want to know

• How consumers sense external information
• How they select and use sources of information
• How information is interpreted and given meaning
 THE PERCEPTION PROCESS

Receive

Select Create a
meaningful picture
Organize of the world

Interpret
 PERCEPTIONS

• Individual process

• Internal factors

• Also influenced by stimulus

 TYPES OF PERCEPTIONS PROCESS

Sensation Selective perception

Selecting information Subliminal perception

Interpretation
 WHAT IS A SENSATION?

Taste Hearing
Immediate,
direct response
of the senses
Smell Touch

Sight
 SENSATION
• Immediate and direct response of the senses to a stimulus

• Stimulus: advertisement, package, brand name or point-of-

purchase display

• Use senses to create a representation of the stimulus

• Application to IMC
 APPEALING TO THE SENSES
Example:
Perfume on sidewalks
Various stimuli used by marketers

Scented cards

Product Samples
 GAINING ATTENTION WITH COLOR

Tropicana uses the stimulus color to

focus attention on orange juice

WE CAN SUM IT UP IN TWO WORDS:

EXCEPTIONAL, EXTRAORDINARY, FANTASTIC, FRESH TASTE.

ADMITTEDLY, WE’RE BAD AT SUMMATION.

There just aren’t enough adjectives to describe the

straight-from-the-orange taste of Tropicana Pure Premium.®
 TYPES OF PERCEPTIONS PROCESS

Sensation Selective perception

Selecting information Subliminal perception

Interpretation
 SELECTING INFORMATION
• Selecting information
- Determining whether incoming information will be attended to
- How much attention it will be given

• Dependent on internal psychological factors

• Why people focus on some things and ignore others?
- Tune out irrelevant stimuli
- Focus on relevant stimuli

• Two people may perceive the same stimuli in very different ways
 INTERPRETING THE INFORMATION
Interpretation

• Process - incoming information is interpreted and assigned meaning

• Process is individualized

• Influenced by internal psychological factors

 SELECTIVE PERCEPTION
• Selectivity occurs throughout the various stages of the consumer’s
perceptual process

• Filtering process
• Influence of internal and external factors
- What is received
- How it is processed and interpreted
SELECTIVE PERCEPTION PROCESS
Selective Exposure

Selective Attention

Selective Comprehension

Selective Retention
SELECTIVE ATTENTION TO ADVERTISING
 SELECTIVE PERCEPTION PROCESS
• Selective exposure - Consumers choose whether or not to make
themselves available to information. Ex: Changing television channels.
• Selective attention - Consumer chooses to focus on certain stimuli while
excluding others.
• Selective comprehension - Interpreting information on the basis of
attitudes, beliefs, motives, and experiences.
• Selective retention - Consumers do not remember all the information they
see, hear, or read, even after paying attention and comprehending it.
 TYPES OF PERCEPTIONS PROCESS

Subliminal perception

Ability of an individual to perceive a stimulus that is below the

level of conscious awareness
 SUBLIMINAL PERCEPTION

Perceiving Stimuli Below the Conscious Threshold of Perception

 CONSUMER DECISION MAKING
Decision Stage Psychological Process
Problem recognition Motivation

Information search Perception

Alternative evaluation Attitude formation

Purchase decision Integration

Post-purchase evaluation Learning

 ALTERNATIVE EVALUATION

• Consumer compares the various brands and services

- Capable of solving the consumption problem

- Satisfying the needs or motives

• Evoked set - subset of all the brands which the consumer is aware and
actively considering in the decision process
 EVALUATION OF ALTERNATIVES
All Available Brands
Brand A Brand B Brand C Brand D Brand E

Brand F Brand G Brand H Brand I Brand J

Brand K Brand L Brand M Brand N Brand O

Evoked Set of Brands

Brand B Brand E

Brand F Brand I

Brand M
 PROCESSES DURING ALTERNATIVE EVALUATION
1. Evaluative criteria and consequences

- Functional consequences

- Psychosocial consequences

2. Attitudes

- Multiattribute attitude models

- Attitude change strategies

ALTERNATIVE EVALUATION – EVALUATION CRITERIA
Evaluative criteria and consequences

Evaluative criteria are the dimensions or attributes of a product or service

that are used to compare different alternatives.

 TWO FORMS OF EVALUATION CRITERIA
Evaluative Criteria

Objective Subjective

• Concrete attributes • Abstract attributes

• Tangible • Intangible
• Directly judged or • Subjective in nature
experienced by the consumer
• Price, Warranty • Style, Appearance, Image
 FORMS OF EVALUATION CRITERIA

Evaluative Criteria

Marketers view Consumers view

• Bundle of attributes • Consequences or

outcomes
 DIFFERENT PERSPECTIVES: MARKETER’S VIEW
Traction
Too
Enough okay?
expensive
power? ?

Example: How the manufacturer of a lawn mower might view the product in terms of functional attributes.
 DIFFERENT PERSPECTIVES: CONSUMER’S VIEW
• Consumers think of products or services in terms of consequences

• Consequences are the specific events or outcomes that consumers

experience when a product or service is purchased and/or consumed.

Functional consequences

Psychosocial consequences
DIFFERENT PERSPECTIVES: CONSUMER’S VIEW
Will the neighbors
Will it cut be impressed?
the taller grass?

Will it be as
fun to use
later this
summer?
How close
can I get to
shrubs?
Will I have
more time
for golf?

Functional
Psychological
 REVIEW
CONSUMER DECISION MAKING MODEL
Decision Stage Psychological Process
Problem recognition Motivation

Information search Perception

Alternative evaluation Attitude formation

Purchase decision Integration

Post-purchase evaluation Learning

 REVIEW
PROBLEM RECOGNITION
Sources of problem recognition
1. Out of stock
2. Dissatisfaction
3. New needs/wants
4. Related products/purchases
5. Marketer induced problem
recognition
6. New products
MOTIVATION
Approaches to understand
consumer motivations
1. Maslow’s Hierarchy of Needs –
Five levels of human needs
2. Freud’s Psychoanalytic Theory -
Subconscious motivations for purchasing
Methods used: In-depth interview,
Projective techniques, Association tests,
Focus groups
 REVIEW

INFORMATION SEARCH PERCEPTION

1. Internal search - scan of Types of perceptions process
information stored in memory to
recall past experiences
1. Sensation
2. Selecting information
2. External search 3. Interpretation
External sources 4. Selective perception - Filtering process
• Personal sources • Selective exposure
• Market sources • Selective attention
• Selective comprehension
• Public sources • Selective retention
• Personal experience
5. Subliminal perception
 REVIEW

ALTERNATIVE EVALUATION ATTITUDE

1. Evoked set 1. Multiattribute attitude model
2. Types of criteria:
Objective v/s Subjective
3. Evaluation criteria
• Marketers view - bundle of
attributes (functional attributes)
• Consumer’s view –consequences
a) Functional consequences
b) Psychosocial consequences
 ATTITUDE
• Learned dispositions

• Represents an individual’s overall feelings or evaluation of an object

such as a brand, company, another person, retail store, advertisement

• Implication on Advertising and promotion:

1. Create favorable attitudes toward new products/services
2. reinforce or maintain existing favorable attitudes
3. Change negative attitudes
 CONSUMERS HAVE MANY ATTITUDES
Individuals Products

Ads Brands
Attitudes
Toward
Media Companies

Retailers Organizations
 MULTI-ATTRIBUTE ATTITUDE MODELS

Multi-attribute attitude model

• Views an object such as a product or brand as possessing
a number of attributes on which consumers form their
attitudes

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MULTI-ATTRIBUTE ATTITUDE MODEL EXAMPLE
Example: Brands of toothpaste on certain attributes

- Does a brand have the needed attribute?

- What is the importance of that attribute?

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 MEASURING COMPONENTS OF MODEL
• Beliefs
• How likely is it that Nike running shoes provide good
cushioning?
Very likely _ _ _ _ _ _ _ _ _ Very unlikely
• Importance
• Good cushioning in a running shoe is:
Very important _ _ _ _ _ _ Not at all important

• Attitude Toward the Object

• How do you feel about purchasing Nike running shoes?
Very good _ _ _ _ _ _ _ _ _ Very bad
WAYS TO CHANGE ATTITUDES

Change the strength or belief rating

Change perceptions of the

value of an attribute

Add a new attribute to the

attitude formation mix

Change perceptions or beliefs about

a competing brand
CHANGE THE STRENGTH OR BELIEF RATING

Volvo and safety

CHANGING CONSUMERS’ PERCEPTIONS OF THE
IMPORTANCE OF AN ATTRIBUTE

Michelin stresses higher gas

mileage, as well as safety
 DECISION PROCESS

Purchase Decision Post evaluation

Purchase intention Satisfaction

Dis-satisfaction
Brand loyalty

Cognitive dissonance
 DECISION SPECTRUM

➢ Routine Response Behavior

• Purchase decisions
➢ Limited Problem Solving • Information required

➢ Extended Problem Solving • Purchase frequency

Deciding to buy a car is different from deciding to buy a toothpaste.

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EXTENDED PROBLEM SOLVING v/s ROUTINIZE RESPONSE BEHAVIOR
EXTENDED PROBLEM SOLVING ROUTINE RESPONSE BEHAVIOR

• Car • Toothpaste
• Diamonds • Salt

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 CONSUMER INVOLVEMENT
Level of involvement

➢Low involvement - Routine response behavior

➢High involvement - Extensive problem solving

➢Limited involvement - Limited Problem Solving

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 CONSUMER DECISION MAKING
Decision Stage Psychological Process
Problem recognition Motivation

Information search Perception

Alternative evaluation Attitude formation

Purchase decision Integration

Post-purchase evaluation Learning

 CONSUMER LEARNING

Learning is the process by which

consumers acquire consumption-related knowledge

and experience that they apply to future behavior

 HOW CONSUMERS LEARN

Thinking Conditioning Modeling

Based on Based on Based on

intellectual conditioning emulation
evaluation and through (copying) of
problem association or behavior of
solving reinforcement/ others
punishment
 CONSUMER LEARNING THEORIES

BEHAVIORAL LEARNING COGNITIVE LEARNING

• Stimulus- Response learning • Process of problem solving

• Learning leads to BEHAVIORAL • Focus on Changes in Knowledge
CHANGE
• Learning changes long-term
memory

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 CONSUMER LEARNING THEORIES
Learning theories

Behavioral learning Cognitive learning

Classical Operant
conditioning conditioning

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 CLASSICAL CONDITIONING
➢ Learning is associative

➢ Automatic response that builds up through repeated exposure

➢ Relationship between an unconditioned stimulus and conditioned

stimulus develops through repetition

➢ ‘Conditioned Learning’: Pavlov’s experiment with dogs: Meat –

Bell –Salivate (Conditioned stimulus – Unconditioned stimulus)

➢ Application to IMC: BMW brand of car- its several associations

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PAVLOV’s EXPERIMENT- CLASSICAL CONDITIONING

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Coca Cola ad: “Thanda Matlab Coca Cola”

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APPLICATIONS OF CLASSICAL CONDITIONING

• Conditioned Stimulus – Coke

• Unconditioned Stimulus - Heat

Association –
Have a Coke when thirsty,
we feel thirsty when we see a Coke!

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 INSTRUMENTAL CONDITIONING
• Instrumental conditioning (Operant conditioning)

• Learning occurs as a result of the outcomes or consequences associated

with a particular response

• B. F. Skinner – constructed model of instrumental conditioning

• Operant conditioning concepts – Reinforcement

• Application to IMC: Advertisements- benefits or rewards a consumer will

receive from using a product or service
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 COGNITIVE LEARNING

• Emphasize internal processing or thinking

• Problem-solving, information processing

• Reasoning approach to human behavior

• Complex mental processes that underlie consumer behavior

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INSTRUMENTAL CONDITIONING PROCESS
Positive or negative consequences
Behavior (consumer uses product or
occur from use of product, leading
service)
to reward or punishment

Increase or decrease in probability

of repeat behavior (purchase)
EXTERNAL INFLUENCES ON CONSUMER BEHAVIOR

Culture

Subculture

Social Class

Reference Group

Situational
determinants
 REFERENCE GROUPS
• A group whose perspectives or values are being used as the basis for
one’s…
• Judgments
• Opinions
• Actions

• Types of reference groups

• Associative - the groups of people with whom you normally associate.
Example, your classmates, family, and co-workers
• Aspirational - a group to which we would like to belong
• Disassociative - a group to which we do not wish to belong
 SITUATIONAL DETERMINANTS
Usage
Situation
Circumstance in which
the product will be used
(Private versus public use)
Purchase
Situation Communications
Situation
Environment at the
Condition in which an
time of purchase.
Ex: Time constraints, advertising exposure occurs.
Store environment Ex: listening to the radio with
friends; Watching TV alone
 LEARNING OBJECTIVES
➢ Role consumer behavior plays in the development and implementation of
advertising and promotional programs

➢ Understand the consumer decision-making process

➢ Understand various internal psychological processes, their influence on consumer

decision making, and implications for advertising and promotion

➢ Understand external factors such as culture, social class, group influences, and
situational determinants and how they affect consumer behavior
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