CONSUMER BEHAVIOR

MODULE NO. 2

A.
Topic LEARNING OBJECTIVES
 Discuss the four types of influences that
affect the consumer’s motivation to process
information, make a decision, or take an
Motivation, Ability, action.
and Opportunity  Identify the three main types of influences
on the consumer’s opportunity to process
information and acquire, consume, or
dispose of products.

B. DISCUSSION

Consumer Motivation and Its Effects

Motivation comes from the Latin word “movere,” which means “to move.” Motivation is what
moves people. It is defined as “an inner state of arousal,” with the aroused energy directed to
achieving goal. The motivated consumer is energized, ready, and willing to engage in a goal-relevant
activity. For example, if you learn that a much-anticipated electronic game will be released next
Tuesday, you may be motivated to be ready to buy and download early that morning. Consumers can
be motivated to engage in behaviors, make decisions, or process information, and this motivation can
be seen in the context of acquiring, using, or disposing of an offering.

High-Effort Behavior
One outcome of motivation is behavior that takes considerable effort. For example, if you are
motivated to buy a good car, you will research vehicles online, look at ads, visit dealerships, and so
on. Likewise, if you are motivated to lose weight, you will buy low-fat foods, eat smaller portions,
and exercise. Motivation not only drives behaviors consistent with a goal but also creates a
willingness to expend time and energy engaging in these behaviors. Thus, someone motivated to buy
a smartphone may earn extra money for it, drive through a storm to reach the store, and then wait in
line to buy it. Note, however, that consumers try to match anticipated and actual effort. If they believe
their anticipated effort will be too much if it is too much trouble to wait on line, for instance they will
simplify the decision (by ordering online or waiting until the next day). Conversely, if consumers
think an important decision will be too simple, they will complicate it with extra effort.

However, when consumers have low motivation, they devote little effort to processing information
and making decisions. For example, your motivation to purchase the best paper clips on the market is
likely to be low. You would devote little attention to learning about the characteristics of paperclips,
and you would not stop to think about what it would be like to use various types of paperclips
(colored or uncolored, aluminum or steel, small or large). You may use decision-making shortcuts,
such as deciding to buy the cheapest brand or the same brand you bought the last time. This is, in fact,
how consumers tend to buy common grocery products.

Most research on consumer behavior has focused on consumers’ motivation to process information
accurately, as just described. Recent research has focused on a different type of motivation
involved in information processing that is called motivated reasoning. When consumers engage in
motivated reasoning, they process information in a biased way so that they can obtain the particular

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conclusion they want to reach. For example, if your goal is to lose weight, and you see an ad for a diet
product, you might process the ad in a biased way to convince yourself that the product will work for
you. If you want to believe that you are not vulnerable to the ill effects of smoking, you may be more
likely to smoke if you are aware of smoking cessation products that are touted as “remedies.” Because
remedies exist to help stop smoking, you can use motivated reasoning to convince yourselves that
smoking is not so bad after all.

Felt Involvement
A final outcome of motivation is that it evokes a psychological state in consumers called involvement.
Researchers use the term felt involvement to refer to the psychological experience of the
motivated consumer.

Types of Involvement
Felt involvement can be (1) enduring, (2) situational, (3) cognitive, or (4) affective.

Enduring involvement exists when you show interest in an offering or activity over a long period of
time. Car enthusiasts are intrinsically interested in cars and exhibit enduring involvement
in them. Enthusiasts engage in activities that reveal this interest (e.g., going to car shows, visiting car
websites, and going to dealerships). In most instances, consumers experience situational
(temporary) involvement with an offering or activity. For example, consumers who exhibit no
enduring involvement with cars may be involved in the car-buying process when they are in the
market for a new car. After they buy the car, their involvement with new cars declines dramatically.
Researchers also distinguish between cognitive and affective involvement. Cognitive involvement
means that the consumer is interested in thinking about and processing information related to his or
her goal. The goal therefore includes learning about the offering. Affective involvement means that the
consumer is willing to expend emotional energy in or has heightened feelings about an offering or
activity. The consumer who listens to music to experience intense emotions or to relive a particular
event in life is exhibiting strong affective involvement.

What Affects Motivation?

 Personal Relevance
Something will be motivating to the extent it has personal relevance that is, the extent to which it has
a direct bearing on and significant implications for your life. For example, if you learn that your
laptop computer’s battery is being recalled because it can overheat and cause a fire, you will probably
find this issue to be personally relevant. Careers, romantic relationships, a car, an apartment or house,
clothes, and hobbies are likely to be personally relevant because their consequences are significant for
you. This relevance fuels your motivation to process information, make decisions, and take actions.
 Consistency with Self-Concept
Any kind of offering (a good, a service, a person, a place) may be personally relevant to the extent
that it bears on your self-concept, or your view of yourself and the way you think others view you.
Self-concept helps us define who we are, and it frequently motivates our behavior. Note that different
parts of a self-concept can be salient at different times. When we buy clothing, we are often making a
statement about some aspect of who we are such as a professional, a student, or a sports fan.
Identifying with a brand and making an emotional connection with it strengthens brand loyalty and
makes those consumers less price sensitive toward that brand.
 Values
Consumers are more motivated to attend to and process information when they find it relevant to
their values abstract beliefs that guide what people regard as important or good. Thus, if you see
intellectual development as very important, you are likely to be motivated to engage in behaviors
that are consistent with this value, such as pursuing a college degree. Other values may include
family security, protecting the environment, and feeling fit.

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  Needs
Consumers also find things personally relevant when they have a bearing on activated needs. A need
is an internal state of tension caused by disequilibrium from an ideal or desired state. For example, at
certain times of the day, your stomach begins to feel uncomfortable. You realize it is time to get
something to eat, and you are motivated to direct your behavior toward certain outcomes (such as
opening the refrigerator). Eating satisfies your need and removes the tension—in this case, hunger.
Once you are motivated to satisfy a particular need, objects unrelated to that need seem less attractive.
Thus, if you are motivated to fix your hair because you’re having a bad hair day, a product such as
styling gel will seem more attractive and important than, say, popcorn. Needs can also lead us away
from a product or service: You might stay away from the dentist because you want to avoid pain.

Types of Needs
Another way to categorize needs is as (1) social and nonsocial needs or as (2) functional, symbolic,
and hedonic needs.
 Social needs are externally directed and relate to other individuals. Fulfilling these needs thus
requires the presence or actions of other people. For example, the need for status drives our desire to
have others hold us in high regard; the need for support drives us to have others relieve us of our
burdens; the need for models reflects a wish to have others show us how to behave. You may be
motivated to buy products like Hallmark cards or use social media such as Facebook because they
help us achieve a need for affiliation.
 Nonsocial needs are those for which achievement is not based on other people. Our needs
for sleep, novelty, control, uniqueness, and understanding, which involve only ourselves, can affect
the usage of certain goods and services. You might purchase the same brand repeatedly to maintain
consistency in our world or you might buy something different to
fulfill a need for variety.
 Functional needs may be social or nonsocial. Functional needs motivate the search for
products that solve consumption-related problems. For example, you might consider buying a product
like a car with side air bags because it appeals to your safety needs (a functional, nonsocial need). For
mothers with young children, hiring a nanny would solve the need for support (a functional, social
need).
 Symbolic needs affect how we perceive ourselves and how others perceive us.
Achievement, independence, and selfcontrol are symbolic needs because they are connected with our
sense of self. Similarly, our need for uniqueness is symbolic because it drives consumption decisions
about how we express our identity. The need to avoid rejection and the need for achievement, status,
affiliation, and belonging are symbolic because they reflect our social position or role. For example,
some consumers wear stylish Christian Louboutin shoes to express their social standing.

Hedonic needs include needs for sensory stimulation, cognitive stimulation, and novelty
(nonsocial hedonic needs) and needs for reinforcement, sex, and play (social hedonic needs). These
hedonic needs reflect our inherent desires for sensory pleasure. In fact, consumers exposed to sexual
marketing cues tend to buy sense-rewarding products, like snacks, more quickly than when such cues
are not present. If the desire to satisfy hedonic needs is intense enough, it can inspire fantasizing about
specific goods, simultaneously pleasurable and discomforting. Consumers in India may go to luxury
shopping areas like Mumbai’s Palladium Mall for the eye-catching ambiance.

Characteristics of Needs
 Needs are dynamic. Needs are never fully satisfied; satisfaction is only temporary. Clearly,
eating once will not satisfy our hunger forever. Also, as soon as one need is satisfied, new needs
emerge. After we have eaten a meal, we might feel the need to be with others (the need for
affiliation). Thus, needs are dynamic because daily life is a constant process of need fulfillment.
 Needs exist in a hierarchy. Although several needs may be activated at any one time, some

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assume more importance than others. You may experience a need to eat during an exam, but your
need for achievement may assume a higher priority so you stay to finish the test. Despite this
hierarchy, many needs may be activated simultaneously and influence your acquisition, usage, and
disposition behaviors. Thus, your decision to plan your next holiday with friends over dinner may be
driven by a combination of needs for stimulation, companionship, and food.
 Needs can be internally or externally aroused. Although many needs are internally activated,
some needs can be externally cued. Smelling pizza cooking in the apartment next door may, for
example, affect your perceived need for food.
 Needs can conflict. There are various types of need conflicts.
 An approach-avoidance conflict occurs when the consumer wants both to engage
in the behavior and to avoid it. Teenagers may experience an approach-avoidance
conflict in deciding whether to smoke cigarettes. Although they may believe that
others will think they are cool for smoking (consistent with the need to belong and
affiliate), they also know that smoking is bad for them (incompatible with the need
for safety).
 An approach-approach conflict occurs when the consumer must choose between
two or more equally desirable options that fulfill different needs. A consumer who
is invited to a career-night function (consistent with achievement needs) might
experience an approach-approach conflict if he is invited to see a basketball game
with friends (consistent with affiliation and stimulation needs) on the same
evening. This person will experience conflict if he views both options as equally
desirable.
 An avoidance-avoidance conflict occurs when the consumer must choose between
two equally undesirable options, such as going home alone right after a late
meeting (not satisfying a need for safety) or waiting another hour until a friend can
drive her home (not satisfying a need for convenience). Conflict occurs when
neither option is desirable.
Perceived Risk
The another factor of consumers’ motivation to process information about a product or brand is
perceived risk, the extent to which the consumer is uncertain about the personal consequences of
buying, using, or disposing of an offering. If negative outcomes are likely or positive outcomes are
unlikely, perceived risk is high. Consumers are more likely to pay attention to and carefully process
marketing communications when perceived risk is high. As perceived risk increases, consumers tend
to collect more information and evaluate it carefully. Perceived risk can be associated with any
product or service, but it tends to be higher (1) when little information is available about the offering;
(2) when the offering is new; (3) when the offering has a high price; (4) when the offering is
technologically complex; (5) when brands differ fairly substantially in quality and might cause the
consumer to make an inferior choice; (6) when the consumer has little confidence or experience in
evaluating the offering; or (7) when the opinions of others are important, and the consumer is likely to
be judged on the basis of the acquisition, usage, or disposition decision.

Perceptions of risk vary across cultural groups. In particular, high levels of risk tend to be associated
with many more products in less-developed countries, perhaps because the products in these
countries are generally of poorer quality. Also, perceived risk is typically higher when travelers
purchase goods in a foreign country. In addition, risk perceptions vary within a culture.83 For
example, men in Western cultures take more risks in stock market investments than women take, and
younger consumers take more risks than older ones take.

Types of Perceived Risk

It is useful to distinguish six types of risk that consumers can perceive:
 Performance risk reflects uncertainty about whether the product or service will perform as

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expected. Northland Volkswagen in Calgary, Canada, reassures used car buyers by offering “Certified
Pure” VW vehicles that have been thoroughly conditioned and are sold with a two year limited
warranty plus two years’ of roadside assistance service.
 Financial risk is higher if an offering is expensive, such as the cost of buying a home. When
consumers perceive high product-category risk due to high price levels, research suggests that their
buying decisions can be improved if they research offerings using websites such as epinions.com.
 Physical (or safety) risk refers to the potential harm a product or service might pose to one’s
safety. Many consumer decisions are driven by a motivation to avoid physical risk. For example,
consumers often shy away from buying perishable groceries that have passed the stated expiration
date because they are afraid of getting sick from eating spoiled food.
 Social risk is the potential harm to one’s social standing that may arise from buying, using, or
disposing of an offering. According to research, antismoking ad messages that conveyed the severe
social disapproval risk of smoking cigarettes were more effective in influencing teens’ intentions not
to smoke than ad messages stressing the health consequences of smoking, such as disease.
 Psychological risk reflects consumers’ concern about the extent to which a product or service
fits with the way they perceive themselves. To illustrate, if you see yourself as an environmentalist,
buying disposable diapers may be psychologically risky.
 Time risk reflects uncertainties about the length of time that must be invested in buying,using,
or disposing of the product or service. Time risk may be high if the offering involves considerable
time commitment, if learning to use it is a lengthy process, or if it entails a long commitment period
(such as a subscription to cable television services that requires a two year contract).

Risk and Involvement

As noted earlier, products can be described as either high- or low-involvement products. Some
researchers have classified high- versus low-involvement products in terms of the amount of risk
they pose to consumers. Consumers are likely to be more involved in purchasing products such
as homes and computers than in purchasing picture frames or coffee because the former generate
higher levels of performance, financial, safety, social, psychological, or time risk and can therefore
have more extreme personal consequences.

High risk is generally uncomfortable for consumers. As a result, they are usually motivated to
engage in any number of behaviors and information-processing activities to reduce or resolve risk.
To reduce the uncertainty component of risk, consumers can collect additional information by
conducting online research, reading news articles, engaging in comparative shopping, talking to
friends or sales specialists, or consulting an expert. Consumers also reduce uncertainty by being brand
loyal (buying the same brand that they did the last time), ensuring that the product should be at least
as satisfactory as their last purchase.

In addition, consumers attempt to reduce the consequence component of perceived risk through
various strategies. Some consumers may employ a simple decision rule that results in a safer choice.
For example, someone might buy the most expensive offering or choose a heavily advertised brand
in the belief that this brand is of higher quality than other brands. When decision risk is high,
consumers may be willing to consider less conventional alternatives, particularly when they do not
trust traditional products or practices. For example, consumers who believe that conventional medical
treatments are too technological or dehumanizing may be open to other healing alternatives.

REFERENCE: Hoyer, W. D., MacInnis, D. J., & Pieters, R. (2012). Consumer Behavior (6th
ed.). Cengage Learning.

Prepared by: RODEL P. LENON, MBA, LPT.

Instructor

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 Consumer Behavior
EVALUATION. 2

NAME: _____________________________________________
YR/SEC:_____________________________________________
USAA: Million of Customers,One Bank Branch

USAA (United States Automobile Association) maintains only one bank branch to serve more than 8 million
consumers worldwide, yet it boasts a 98 percent customer retention rate and often ranks way ahead of
competitors in surveys of customer service and satisfaction. Hundreds of banks, brokerage firms, and other
financial services firms offer checking and savings accounts, insurance, mortgage loans, and credit cards; some
of these have extensive branch systems and ATM networks. So why do consumers choose USAA—and why do
they remain customers, year after year?
USAA specializes in serving military personnel and their families, including those on active duty and those
who have left the military due to retirement or honorable separation. Although some of its products are
available to the general public, the firm’s marketing a time, but each adult in the household will still need
access to the family’s accounts, insurance, and so on.In response, USAA offers a variety of ways to manage
money matters at any hour from any location via phone or Internet. It was an early adopter of apps for
cell phone banking, including an app for scanning and depositing checks without an in-person branch visit.
Customers receive daily text messages with updated balance details, whether they’re at home or on overseas
assignment. The website is full of details that are available 24/7, and e-mail assistance is just a few clicks
away.
For more personalized attention, customers can make a call and speak with one of USAA’s 12,000
representatives, who will discuss their needs, inquire about their goals, and then offer advice on choosing the
right product. In the past, customers had to determine who to call at USAA when they wanted information
should they contact the banking department or the financial advisory department about retirement accounts?
Now USAA makes it easier to get information by phone or online according to life event (getting married or
divorced, planning for retirement) or product (homeinsurance, car loans). And instead of pushing for an
immediate purchase, USAA’s phone reps are trained to make suggestions that will best serve the customer
in the long run. “The answer may be to not buy that product, if that is the right thing to do for the [customer] in
that situation,” says a top USAA official. efforts are primarily geared toward consumers in uniform and their
spouses and children. Many of these consumers have much in common with nonmilitary consumers: They marry,
start a family, buy cars or trucks, look forward to buying a home, save for their children’s college education, and
as retirement approaches, worry about financial security. However, consumers in this segment also face difficult
challenges unique to the military life, such as being deployed many miles from home, frequent or unexpected
transfers, lengthy separations from family members, and eventual transition to civilian life.
In marketing to this segment, USAA focuses on these consumers’ particular needs, goals, values, and
self-concepts. All members of a military family may not be on the same continent for weeks or months at
Online at the USAA site, customers can get information at their own pace, including watching video seminars,
reading experts’ blog entries, and posting questions or comments on customer-only forums. While researching
complex issues such as retirement options, any customer can arrange an individual consultation with USAA’s
financial advisors via videoconference. USAA’s professionals do more than answer questions and educate
customers about their choices: They also communicate respect for their customers.
As one customer observes: “It’s not every day I get addressed ‘sergeant’ by a customer service agent.”

CASE QUESTIONS
1. How does USAA enhance consumer motivation by making itself and its offerings personally relevant to
customers?
2. What types of needs (functional, symbolic, hedonic, social, nonsocial) are USAA’s customers
likely to experience? How does USAA respond to these needs?
3. Does USAA do anything to reduce perceived risk? Explain your answer.