INTRODUCTION TO CONSUMER BEHAVIOUR

As a consumer we are all unique and this uniqueness is reflected in the consumption pattern
and process of purchase. The study of consumer behaviour provides us with reasons why
consumers differ from one another in buying using products and services. We receive stimuli
from the environment and the specifics of the marketing strategies of different products and
services, and responds to these stimuli in terms of either buying or not buying product. In
between the stage of receiving the stimuli and responding to it, the consumer goes through
the process of making his decision.
Marketing and Customer Orientation
What is marketing?  
Marketing on the one hand is a business philosophy and on the other an action-oriented
process. The philosophy ‐ also termed as marketing concept ‐ has its roots in market
economy. There are four critical ideas that form the foundation of such an economy:  
• Individuals pursue their self‐interest to seek rewarding experience  
• Their choices determine as to what would constitute such experience, the choices
themselves being shaped by personal (taste) and external (cultural) influences.  
• Consumers enjoy the freedom to choose; they are sovereign.  
• This freedom ensures free and competitive exchange between “buyers and sellers”.
Marketing in turn is based on these four principles. Thus, Marketing can be defined as a
Process that aims at satisfying individual and organizational needs by creating,
offering and exchanging competitively made products that provide value to the buyers.
Today our focus is on customer. Objectives like revenue, profit, market share, etc. are
important, but they will flow only by acquiring customer competence. In our country particularly
the customer, even as late as in 1980s, was bereft of alternatives; he would uncomplainingly
buy whatever the seller dished out. Not anymore. Today’s choice empowered customer,
supported by a competitive environment, global quality, and new economic realities, decides
the fate of the marketer.  
So, let’s define Marketing once more: “It is a total business philosophy aimed at identifying the
needs of each customer group, then designing and producing product / service package so as
to serve the groups more effectively than the competitors”.
This definition reveals three key dimensions of marketing:   
a. It seeks to identify customer needs: Many manufacturers would know all there is to know
about relevant production technology, but nothing about their customers’ wants. They may
design products with fancy features without considering the perceived value of such features
to their buyers. Then they wonder why their sales staff fails to push the product in the
market.  
b. Marketing attempts to select customer groups for which it can develop a competitive
edge: Companies taking a shotgun approach ‐ meaning all things to all people ‐ inevitably end
up with sacksful of unsold product inventories. Those companies which concentrate their
limited resources on meeting specific needs of the customer have better chances of
succeeding.  
c. It designs and produces the right product packages: is a gap between your current
state (hunger) and desirable state when a company attempts to sell a Mercedes while the
customer is demanding a Zen sized car, failure will greet it with open arms.

Major Concepts in Marketing

A course in Consumer Behaviour uses certain terms repeatedly. It would be desirable
therefore that you learn their meaning from the beginning itself.  
Needs and Wants
The satisfaction of buyers’ needs is at the heart of a market economy, and is the core theme
of Marketing. To put it more simply, a need is a feeling of being deprived of something
desirable.  
You may be in a state in which you are not feeling satisfied (say you are feeling hungry). So
you visualize a more desirable (but unattained, yet) state, that of having a full stomach. Hence
there is a gap between your current state (hunger) and desirable state (satiated palate). This
gap leads to a need being felt. To take another example, if you had been happy with your
already attained qualifications, you would not have enrolled for this course!
Wants are somewhat different. While needs are basic to human beings, (since nobody ever
needs to tell us that we need to feel hungry, thirsty, etc.) wants are not. Later in our life when
we become part of various informal and formal groups (family, friends, school, club,
workplace, etc) we develop the concepts of friendship social approval, beauty, and so on.
These are our acquired needs. The product concept that adequately satisfies our biogenic or
acquired needs becomes successful. In fact the job of the marketer is to identify unfulfilled /
inadequately fulfilled / partially fulfilled need. But then today a need can be met in a number of
alternative ways. A variety of products can satisfy the same need. Wants exist for those
objects that can potentially satisfy a need. A visually impaired person can either wear
spectacles, contact lenses, or now he can go in for corrective surgery.
At this point we must also note that a consumer’s behaviour is conditioned by the perception
about a marketer’s offering. This perception may or may not match reality. For example, in
India a common perception is that ready to eat food items lack that home touch; they are cold
and clinical. Home made foods in contrast are warm and live unless this perception is
changed, acceptance of such products is likely to be limited.
Product/Service
If we use marketing parlance a product is anything that can satisfy our needs and wants. That
is, it could be a physical object, or a service, or an idea which can be offered to a potential
user for adoption / practice / consumption. By studying consumer buying behaviour
companies can identify needs that can be met by offering a suitable product. Incidentally, a
customized product is one, which is made according to individual customer’s specifications.
Exchange
A marketer makes an offer because he hopes that the buyer will accept it. And in turn the
buyer will give something of value to the marketer. Whether or not an exchange will take place
would therefore depend on a match/ mismatch between the gain (the satisfaction receivable)
and the sacrifice (the price payable) in customer perception.
Customer Focus
In India marketing as a discipline has evolved at a leisurely place, dictated of course by
circumstantial factors. Most markets being seller’s markets (i.e. where seller dominates over
the customer) until recently, marketing philosophy was an alien concept for an Indian seller. In
a broad sense all the markets can be divided into two categories: seller’s market and buyer’s
market. A buyer’s market is one where due to prevailing intense competition among the
sellers, and consequent excess of supply over existing demand, the buyer rules over the
seller. On the other hand, in a seller’s market competition is restricted for any number of
reasons. So the buyer is at the mercy of the seller.
Pause For Thought #
Can you say why people brush their teeth? Answer seems simple. But now check against the
following: Those who are hypochondriacs are concerned about germs and are swayed by a
‘decay prevention’ appeal. Another group, mostly extroverts, brushes teeth to give them
brightness and shine. But a majority just want a tingling, fresh sensation as a part of their ritual
of starting a day fresh. Such research makes the marketers better prepared to meet the needs
of various categories of customers.

Consumer Focused Marketing

Once a marketer identifies an unfulfilled need, or partially fulfilled one, he has an opportunity
to exploit. To this end he has to determine the appropriate marketing mix. According to
Stanton: “Marketing Mix is the term used to describe the combination of the four inputs that
constitute the core of a company’s marketing system: the product, the price structure the
promotional activities, and the placement system”. The marketer has to track the consumer
behaviour constantly and adjudge an optimal combination of these marketing mix factors so
that best sales are generated. Any mistake or delay can cost a marketer.
We as customers view a product as a ‘bundle of satisfaction’ and not merely the physical
object. We gives importance to both the tangible and intangible attributes of a product.
Intangibles provide psychological and social benefits for the buyer. If product attributes don’t
benefit a customer, they have no significance for him. That is why during 2000‐2001 midsize
cars had a better sales growth rate than smaller cars; Maruti‐800 sales actually declined.
Branding: A firm brands its product to provide it a distinct identity. A brand carries brand
equity, i.e., reputation. Losing brand equity means losing sales. For example, this happened to
Limca at the time of the BVO controversy.
Packaging: For the customer packaging is both a protective and a promo‐tional device:
Package is the message, as it is called. Packaging facilitates brand identification and may
even motivate a person to buy a product (like perfume). It serves as a critical reminder at that
critical moment when the customer is choosing from among several competing brands. Infact
whenever a customer visualizes about a product, its packaging is the first thing that he sees in
his mental eyes.
Product Life Cycle: Like us human beings, products also take birth through introduction,
develop (grow), age (mature), and eventually decline (die). In the first phase, a newly
developed product is introduced in the market, which finds relatively few customers. If it is an
innovative product (say a perfumed fabric) then the marketer stimulates primary demand by
educating the customer. In the growth stage, more and more customers start buying. But new
brands also enter the market. Hence the marketer has to talk about differentiating features of
his brand. In maturity the brand competes with other successful brands for selling in a
stagnant market. So price cuts, exchange offers or add‐ons are used to woo the customers.
Communication is image based attempting to perfect and reinforce the brand loyalty. Finally,
many products face a phase of obsolescence. Some products may of course have a cyclical
demand pattern. They bounce back after a gap. For example, in 2001 larger frame sunglasses
have comeback. The marketer may even reformulate/reposition a product to begin a new life
like Dabur Honey or Milkmaid. On the other hand some products have a ‘stillborn’ fate or may
die an infantile death, like Real Value Vacuumizer.
Pricing:  Price has to be fixed in such a manner as on one hand it is lower or equal to the
value delivered by the product, and on the other hand it should cover at least all
manufacturing and post manufacturing (transportation, warehousing, promotional) costs plus
the targeted level of profit margin. Actual price fixing of course depends on the functional
features of the product and the image of the brand. Then there is the degree of competition
that dictates the price of a brand vis‐à‐vis its competing brands‐. That is why you would find
Pepsi and Coke priced at same level. Price can also act as a communication tool. For
example price package may give the message of affordability, exclusiveness, etc. Cartier
watches, for example.
Placement: Physical distribution is the third dimension of marketing activity. Place
convenience is needed to make purchase. A marketer has to decide about two things:
Keeping in mind customer’s requirements, first, what will be the channel of distribution; and,
second, how will the goods be actually distributed. Physical distribution activities are related to
the movement of products from the production site to purchase point. While the buyer must
get it in right shape and at right time, the sender should be able to ensure availability at
minimum cost to him. The marketer can either sell directly to the customers or through
middlemen. A typical distribution chain could include movement of product from manufacturer
to wholesaler to retailer to customer.
Promotion: Promotion is also called marketing communication. It aims at informing and
persuading the customer to buy whatever the marketer is offering. Since a customer can be
reached through a number of channels, companies undertake integrated communication,
which is a combination of personal selling, advertising, public relations, and sales promotion.
Diversity in Market Place
We as consumers differ in age, gender, education, occupation, marital status, activities &
interests, preferences, opinions, foods they eat and products we buy. There is diversity among
marketers; not only among producers but also sellers. Traditional retailers, mass
merchandisers, discount stores, and off‐ price stores. But there has been a shift from mass
marketing to niche marketing to direct marketing, from custom catalogs to television shopping
to cyber shopping. There is a great diversity in advertising media. In addition to the traditional
broadcast and print media, we have ethnic media within a great variety of alternative media.
Recognizing the high degree of diversity among us, consumer research seeks to identify the
constants that exist among the people of the world.
If we look at consumer Behaviour as a discipline, we can say that:
a. We as consumers did not always act or react as marketing theory suggested they would.   
b. Accelerated rate of new product development  
c. The consumer movement
d. Public policy concerns  
e. Environmental concerns  
f. The opening of national markets throughout the world.  
Let us now look at the scope of Consumer Behavior. The scope covers:
a. What they buy  
b. Why they buy  
c. When they buy
d. Where they buy 
e. 5
Factors Influencing Buyer Behaviour
Whenever we buy anything our final decision, as a consumer will definitely be affected by
certain factors. Some of these major factors are as given below:
• Cultural  
• Social  
• Personal  
• Psychological  
The first stage of understanding buyer behaviour is to focus on the factors that determine the
“buyer characteristics” in the “black box”. These can be summarised as follows:

CULTURAL FACTORS
Culture is the most fundamental determinant of a person’s want and behaviour. The growing
child acquires a set of values; perceptions, preferences and behaviour through a process of
socialization involving the family and other key institutions. Cultural factors have a significant
impact on customer behaviour. Marketing are always trying to spot “cultural shifts” which
might point to new products that might be wanted by customers or to increased demand. For
example, today there seems to be a cultural shift towards greater concern about health and
fitness and that has created opportunities, now even industries, servicing customers who wish
to buy products like:  
a. Health foods  
b. Fitness club memberships  
c. Exercise equipment  
d. Activity or health‐related holidays etc.  
Similarly our increased desire for “leisure time” has resulted in increased demand for
convenience products and services such as microwave ovens, washing machines, ready‐to‐
eat meals and direct marketing service businesses such as telephone banking and insurance.
Each culture contains “sub‐ cultures” – groups of people, which share values. Sub‐cultures
can include nationalities, religions, racial groups, or groups of people sharing the same
geographical location. Sometimes a sub‐culture will create a substantial and distinctive market
segment of its own. For example, the “youth culture” or “club culture” has quite distinct values
and buying characteristics from the much older “grey generation”  
Similarly, differences in social class can create customer groups. In fact, the social classes
are widely used to profile and predict different customer behaviour. Social class is not just
determined by income. It is measured as a combination of occupation, income, education,
wealth and other variables. Social Classes are relatively homogeneous and enduring divisions
in a society which are hierarchically ordered and whose members have similar values,
interests and behaviour.

Social Class Characteristics

Upper- Upper Upper-Uppers are the social elite who live on inherited wealth and
have well-known families. They maintain more than one home and
send their children to the best schools. They are in the market for
jewellery, antiques, homes, and foreign vacations. While small as
group they serve as a reference group to others to the extent that
other social classes imitate their consumption decisions.

Lower-Uppers Lower Uppers are persons who have earned high income or wealth
through exceptional ability in their profession or business. They
usually come from the middle-class. They tend to be active in social
and civic affairs and seek to buy the symbols of social status for
themselves and their children, such as expensive cars, homes and
schooling. Their ambition is to be accepted n the upper-upper
status, a status that is more likely to be achieved by their children
than themselves.
 Social Class Characteristics

Upper -Middles Upper Middles possess neither family status nor unusual wealth. The
primarily concerned with “career”. They have attained positions as
professionals, independent businesspersons, and corporate
managers. They believe in education and want their children to
develop professional or administrative skills so that they will not drop
into the lower stratum. They are civic minded and are a quality
market for good clothes, homes, furniture and appliances.

Middle Class The middle class is average paid white and blue-collar workers who
try to do the proper things. Often they will buy products to “keep up
with the trends”. The middle class believes in spending more money
on “worth-while experiences” for their children and aiming them
towards professional colleges.

Working Class Working class consists of “average pay blue collar workers and those
who lead a “working class life-style”, whatever income, school or job
they have. The working class depends heavily on relatives for
economic and emotional support, for tips on job opportunities, advice
on purchase, and for assistance in times of trouble. The working
class maintains a sharp sex-role division and stereotyping. They are
found to have larger families than the higher classes.

Upper Lowers Upper Lowers are working, though their living standard is just above
the poverty line. They perform unskilled work and are poorly paid.
Often they are educationally deficient. Although they fall near the
poverty line, they manage to maintain some level of cleanliness.

Lower Lowers Lower Lowers are visibly poverty-stricken and usually out of work.
Some are not interested in finding permanent jobs and most are
dependent in charity for income. Their homes and possessions are
“dirty, ragged, and broken-down”.

Adapted from Richard P. Coleman “The Significance of Social class to Marketing”. Journal of
Consumer Research, December 1983, pp 265-80
SOCIAL FACTORS
A customer’s buying behaviour is also influenced by social factors, such as the groups to
which the customer belongs and social status. In a group, several individuals may interact to
influence the purchase decision. The typical roles in such a group decision can be
summarised as follows:  
Initiator: The person who first suggests or thinks of the idea of buying a particular product or
service  
Influencer: A person whose view or advice influences the buying decision  
Decider: The individual with the power and/or financial authority to make the ultimate choice
regarding which product to buy  
Buyer: The person who concludes the transaction  
User: The one who actually uses the product or service. The family unit is usually considered
to be the most important “buying” organisation in society. It has been researched extensively.
Marketers are particularly interested in the roles and relative influence of the husband, wife
and children on the purchase of a large variety of products and services. There is evidence
that the traditional husband‐wife buying roles are changing. Almost everywhere in the world,
the wife is traditionally the main buyer for the family, especially in the areas of food, household
products and clothing. However, with increasing numbers of women in full‐time work and
many men becoming “home workers” (or “telecommuting”) the traditional roles are reversing.
The challenge for a marketer is to understand how this might affect demand for products and
services and how the promotional mix needs to be changed to attract male rather than female
buyers. Consumer wants, learning, motives etc. are influenced by opinion leaders, person’s
family, reference groups, social class and culture.
Personal
Personal factors are those factors, which are unique to a particular person including
demographic factors, Sex, Race, and Age etc. Personal factors also include who in the family
is responsible for the decision‐making.
PSYCHOLOGICAL FACTORS
Psychological factors include:  
Motives—A motive is an internal energizing force that orients a person’s activities toward
satisfying a need or achieving a goal. Actions are effected by a set of motives, not just one. If
marketers can identify motives then they can better develop a marketing mix. MASLOW
hierarchy of needs is the theory, which explains concept of motivation through unfulfilled
needs which could be any of the following:  
• Physiological  
• Safety  
• Love and Belonging  
• Esteem  
• Self Actualization  
Need to determine what level of the hierarchy the consumers are at to determine what
motivates their purchases.
Perception  
We all know that a motivated person is ready to act. How that person acts is influenced by his
or her perception of the situation. In the same situation, two people with the same motivation
may act quite differently based on how they perceive conditions. You may perceive the
waiters at MacDonald’s as casual and unsophisticated, while your friend may view them as
spontaneous with cheerful personalities. MacDonald’s is targeting those in the second group.
Why do people have different perceptions of the same situation? All of us experience a
stimulus by the flow of information through our five senses: sight, hearing, smell, touch, and
taste. However, each of us receives, organizes and interprets this sensory information in an
individual way.  
Objectives
After studying this lesson, you should be able to:  
• Define perception and its key elements.  
• Identify the various elements in perception  
• Explain the perceptual process  
• Understand and explain subliminal perception  
• Differentiate between absolute threshold and differential threshold.  
• Explain the marketing applications of just noticeable difference (j.n.d.).   • Review the
concept of subliminal perception and the reality of its use.  
What do you see??
Perception is the process of selecting, organizing and interpreting information inputs
to produce meaning.
This means we chose what info we pay attention to, organize it and interpret it. Information
inputs are the sensations received through sight, taste, hearing, smell and touch.  
Thus, we can say that the above definition of perception of perception lays emphasis on
certain features:  
• Perception is a mental process, whereby an individual selects data or information from the
environment, organizes it and then draws significance or meaning from it.  
• Perception is basically a cognitive or thinking process and individual activities; emotions,
feelings etc. are based on his or her perceptions of their surroundings or environment.  
• Perception being an intellectual and cognitive process will be subjective in nature.   The key
word in the definition of perception is individual.  
We can say that it is the process by which an individual selects, organises and interprets
information received from the environment  
• Sensation–Attending to an object/event with one of five senses  
• Organisation– Categorising by matching sensed stimulus with similar object in memory, e.g.
colour  
•   Interpretation–Attaching meaning to stimulus, making judgements as to value and liking,
e.g. bitter taste  
One person might perceive a fast‐talking salesperson as aggressive and insincere; another,
as intelligent and helpful. People can emerge with different perceptions of the same object
because of three perceptual processes: selective attention, selective distortion and selective
retention.  
• Selective Attention. People are exposed to a tremendous amount of daily stimuli: the
average person may be exposed to over 1500 ads a day. A person cannot possibly attend to
all of these; most stimuli will be screened out. Selective attention means that marketers have
to work hard to attract consumers’ notice. Select inputs to be exposed to our awareness. More
likely if it is linked to an event, satisfies current needs, intensity of input changes (sharp price
drop).  
• Selective Distortion. Even notice stimuli do not always come across in the way the senders
intended. Selective distortion is the tendency to twist information into personal meanings and
interpret information in a way that will fit our preconceptions. Unfortunately, there is not much
that marketers can do about selective distortion. Advertisers that use comparative
advertisements (pitching one product against another), have to be very careful that consumers
do not distort the facts and perceive that the advertisement was for the competitor. A current
example...  
• Selective retention. People will forget much that they learn but will tend to retain information
that supports their attitudes and beliefs. Because of selective retention, we are likely to
remember good points mentioned about competing products. Selective retention explains why
marketers use drama and repetition in sending messages to their target market. Remember
inputs that support beliefs, forgets those that don’t. Average supermarket shopper is exposed
to 17,000 products in a shopping visit lasting 30 minutes‐60% of purchases are unplanned.
Exposed to 1,500 advertisements per day. Can’t be expected to be aware of all these inputs,
and certainly will not retain many.
Elements of Perception  
We can describe perception as also “how we see the world around us”. Say for instance, you
and your friend Smita may be exposed to the same stimuli under the apparent conditions, but
how both of you recognize, select, organize and interpret them is a highly individualized
process based on each of your needs, values, and expectations. The influence that each of
these variables have on the perceptual process and its relevance to marketing, will be
explored in some detail. First, however, we will examoine some of the basic concepts that
underlie the perception process.  
Sensation  
Sensation is the immediate and direct response of the sensory organs to stimuli (an
advertisement, a package, and a brand name).  
A stimulus is any unit of input to any of the senses.  
Sensory receptors are the human organs (i.e., the eyes, ears, nose, mouth, and skin) that
receive sensory inputs, sight, sound, smell, taste, or touch.  
Human sensitivity refers to the experience of sensation.  
Sensitivity to stimuli varies with the quality of an individual’s sensory receptors and the amount
or intensity of the stimuli to which he/she is exposed. Sensation itself depends on energy
change, the difference of input. Thus, a constant environment, whether very busy and noisy or
relatively quiet, would provide little sensation because of the lack of change, the consistent
level of stimulation. As sensory input decreases, the ability to detect changes increases.  
This ability of the human organism to accommodate itself to varying levels of sensitivity as
external conditions vary not only protects us from damaging, disruptive, or irrelevant bombard‐
ment when the input level is high but has important implications for marketers.  
The Absolute Threshold  
The lowest level at which an individual can experience a sensation is called the absolute
threshold. The point at which a person can detect the difference between “something” and
“nothing” is that person’s absolute threshold for the stimulus.  
For example, you are going with your friend Ravi on a long drive and you are hungry. When
both of you first spot a restaurant, it is said to be your absolute threshold. If both of you spot
the restaurant at different times, you are said to have different absolute thresholds.  
Under conditions of constant stimulation, such as driving through a “corridor” of hoardings
absolute threshold increases (that is, the senses tend to become increasingly dulled).
Adaptation refers specifically to “getting used to” certain sensations, becoming accustomed to
a certain level of stimulation.  
Sensory adaptation is a problem that causes many advertisers to change their advertising
campaigns regularly. Marketers try to increase sensory input in order to cut through the daily
clutter consumers experience in the consumption of advertising. Some increase sensory input
in an effort to cut through the advertising “clutter.” Other advertisers try to attract attention by
decreasing sensory input. Some advertisers use    silence (the absence of music or other
audio effects) to generate attention. Some marketers seek unusual media in which to place
their advertisements in an effort to gain attention. Some use scent researchers to enhance
their products with a unique smell.
Package designers try to determine consumers’ absolute thresholds to make sure that their
new product designs will stand out from competitors’ packages on retailers’ shelves.  
Under conditions of constant stimulation. i.e., when an individual is getting continuous
exposure to certain objects or events, then in spite of the absolute threshold increasing, due to
the adoption process, the stimuli will cease to make a positive impression.  
It is due to this sensory adoption problem that many television advertisers change their
advertising campaigns after some time.  
For example, the advertisement showing the evil crackle of the horned spokesperson Satan
(Devil) of Onida T.V has been changed to a more humorous and synthetic announcement by
an airhostess, by Ogilvy & Mather (O&M), the advertising agency handling this account.
  
The Differential Threshold  
The minimal difference that can be detected between two stimuli is called the difference
threshold or the j.n.d. (just noticeable difference).  
A 19th century German scientist named Ernst Weber discovered that the j.n.d. between two
stimuli was not an absolute amount, but an amount relative to the intensity of the first
stimulus.  
Weber’s law states that the stronger the initial stimulus, the greater the additional intensity
needed for the second stimulus to be perceived as different.  
Also, an additional level of stimulus, equivalent to the j.n.d., must be added for the majority of
people to perceive a difference between the resulting stimulus and the initial stimulus.  
Weber’s law holds for all senses and almost all levels of intensity.
Retailers use the principle in reducing prices. Markdowns must amount to at least twenty
percent to be noticed by shoppers.

Why would we future marketers need to study the concept of JND?  

Marketing Applications of the J.N.D.  
Let us look at the important applications of JND for marketers:  
Manufacturers and marketers endeavor to determine the relevant j.n.d. for their products so
that:  
Negative changes—reductions or increases in product size, or reduced quality—are not
readily discernible to the public. So that product improvements are readily discernible to the
consumer without being wastefully extravagant.  
Marketers use the j.n.d. to determine the amount of change or updating they should make in
their products to avoid losing the readily recognized aspects of their products. To better
compete in a global marketplace that has been radically altered by computer technology,
many companies are updating their corporate logos to convey the notion that they are timely
and fast‐paced and at the top of their respective product class.  
Many feature some element that conveys motion— streaking, slashing, and orbiting.  
Although some companies make minor changes (below the j.n.d.) to promote continuity,
others have deliberately changed their traditional block lettering and dark colors in favor of
script typefaces, bright colors, and hints of animation—taking their cues from pop icons like
MTV.  
Marketers want to meet or exceed the consumers’ differential threshold so that they readily
perceive the improvements made in the original product.

Subliminal Perception  
People are also stimulated below their level of conscious awareness—they can perceive
stimuli without being consciously aware of it.  
The threshold for conscious awareness appears to be higher than the absolute threshold for
effective perception.  Stimuli below the “limen” of conscious awareness, too weak or brief to
be consciously seen or heard, may be strong enough to be perceived by one or more receptor
cells. This is subliminal perception.  
In the late 1950s there was a stir when consumers were being exposed to subliminal
advertising messages they were not aware of receiving.  
Messages were supposedly persuading people to buy goods and services without their being
aware of it.  
The effectiveness of the concept was tested at a drive‐in theater by flashing the words “eat
popcorn” and “drink coke” on the screen during the movie, so quickly that the audience was
not aware of it.  
In a six‐week test, popcorn sales increased 58 percent and coke sales 18 percent.   No
scientific controls were used, and results were never replicated.
Evaluating the Effectiveness of Subliminal Persuasion  
To study the effectiveness of subliminal perception, the following key issues are important:
There is no evidence that subliminal advertising works! Current research is based on two
approaches. The first theory is that constant repetition of very weak stimuli will have
incremental effects.  
A second approach is based on sexual stimulation through sexual embeds. There is some
indication that subliminal advertising may help modify antisocial behavior by calling for
generalized behavior change. In summary, we can say that some evidence that subliminal
stimuli may influence affective reactions, there is no evidence that  subliminal stimulation can
influence consumption motives or actions. A recent review of the evidence on subliminal
persuasion indicates that the only way for subliminal techniques to have a significant
persuasive effect would be through long‐term repeated exposure under a limited set of
circumstances, which would not be economically feasible or practical within an advertising
context.
Process of Perception
As we see in figure below, there are four major stages in this information‐processing model,
viz., exposure, attention, interpretation and memory. It is the first three, which constitute the
perception process.  
Exposure occurs when a stimulus such as an advertisement comes within range of a person’s
sensory receptor nerves‐vision for example. Target customer is in proximity of message when
delivered •e.g. watching Friends when ad aired.  
Attention occurs when the receptor nerves pass the sensation on to the brain for processing.
Target customer allocates cognitive processing capacity •i.e. pays attention to ad.  
Interpretation is the assignment of meaning to the received sensations. Target customer
interprets the message •i.e. ‘message sent = message received’  
Memory is the short‐term use of the meaning for the immediate decision‐making and the
longer‐term retention of the meaning. –Target customer stores the advertisement and
message in memory so can be accessed when needed.

Dynamics of Perception  
We are constantly bombarded with stimuli during every minute and every hour of our life.  
Perception is not a function of sensory input alone, rather, perception is the result of two
different kinds of inputs that interact to form the personal pictures—the perceptions—that each
individual experiences.  
a.   Physical stimuli from the outside environment, and internal stimuli based on expectations,
motives, and learning are based on previous experiences.  
Because each person is a unique individual, with unique experiences, needs, wants, desires,
and expectations, it follows that each individual’s perceptions are also unique.  
There are three aspects to perception—selection, organization, and interpretation of stimuli.   •
Individuals are very selective as to which stimuli they “recognize.”  
• They subconsciously organize the stimuli they do recognize according to widely held
psychological principles.  
• And they interpret such stimuli (i.e., they give meaning to them) subjectively in accordance
with their needs, expectations, and experiences.
Perceptual Selection  
We as consumers subconsciously exercise selectivity as to the stimuli they perceive. 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. Their motives at the time
(their needs, desires, interests, and so on).
Each of these factors can serve to increase or decrease the probability that a stimulus will be
perceived.      

The Nature of the Stimulus  

Marketing stimulus contains an enormous number of variables. Examples include:  
• Nature of the product.  
• Its physical attributes.  
• The package design.  
• The brand name.  
• The advertisements and commercials.  
• The position of a print ad or commercial.  
• The editorial environment.  
Contrast is one of the most attention‐compelling attributes of a stimulus. Advertisers use
extreme attention‐getting devices to get maximum contrast and penetrate the consumer’s
perceptual screen.  
Advertisers use color contrasts, size, etc., to create stopping power and gain attention.
Packaging is also differentiated sufficiently to ensure rapid consumer perception.  
Sometimes advertisers capitalize on the lack of contrast. A technique that has been used
effectively in TV commercials is to position the commercial so close to the storyline of a
program that viewers are unaware they are watching an ad until they are well into it.
Advertisers are also running print ads (called a dvertorials) that closely resemble editorial
material, making it increasingly difficult for readers to tell them apart. Advertisers are
producing 30‐minute commercials (called infomercials) that appear to the average viewer as
documentaries.  
Expectations  
People see what they expect to see. What they expect to see is usually based on familiarity,
previous experience, or preconditioned set expectations.
Stimuli that conflict sharply with expectations often receive more attention than those that
conform to expectations. For years, certain advertisers have used blatant sexuality in
advertisements for products to which sex was not relevant in the belief that such
advertisements would attract a high degree of attention.  
Ads with irrelevant sexuality often defeat the marketer’s objectives, because readers tend to
remember the sexual aspects of the ad, not the product or brand advertised.  
Motives  
People tend to perceive things they need or want.  
The stronger the need, the greater the tendency to ignore unrelated stimuli in the
environment. An individual’s perceptual process attunes itself more closely to those elements
of the environment that are important to that person.  
Marketing managers recognize the efficiency of targeting their products to the perceived
needs of consumers.  
Selective Perception The consumer’s “selection” of stimuli (selective perception) from the
environment is based on the interaction of expecta‐tions and motives with the stimulus itself.
Selective exposure—consumers actively seek out messages they find pleasant or with which
they are sympathetic. Consumers actively avoid painful or threatening messages.  
Selective attention—consumers have a heightened awareness of the stimuli that meet their
needs or interests. Consumers have a lower awareness of stimuli irrelevant to their needs.  
People vary in terms of the kind of information in which they are interested and the form of
message and type of medium they prefer.
Perceptual defense—threatening or otherwise damaging stimuli are less likely to be
perceived than are neutral stimuli. Individuals unconsciously may distort information that is not
consistent with their needs, values, and beliefs.  
Perceptual blocking—consumers screen out enormous amounts of advertising by simply
“tuning out.”  
Perceptual Organization People do not experience the numerous stimuli they select from the
environment as separate and discrete sensations.  
People tend to organize stimuli into groups and perceive them as unified wholes.  
Gestalt psychology (Gestalt, in German, means pattern or configuration) is the name of the
school of psychology that first developed the basic principles of perceptual organization.  
Three of the most basic principles of perceptual organization are figure and ground, grouping,
and closure.  

Figure and Ground  

Stimuli that contrast with their environment are more likely to be noticed.  
The simplest example is the contrast between a figure and the ground on which it is placed.
The figure is usually perceived clearly.  
The ground is usually perceived as indefinite, hazy, and continuous. The figure is more clearly
perceived because it appears to be dominant—the ground appears to be subordinate and less
important.  
Advertisers have to plan their advertisements carefully to make sure that the stimulus they
want noted is seen as figure and not as ground.  
Marketers sometimes run advertisements that confuse the consumer because there is no
clear indication of which is figure and which is ground.  
Grouping  
Individuals tend to group stimuli in “chunks” rather than as discrete bits of information.
Grouping can be used advantageously by marketers to imply certain desired meanings in
connection with their products.  
Closure  
Individuals have a need for closure. As a result, people organize a perception so they see a
complete picture. If the pattern of stimuli to which they are exposed is incomplete, they tend to
perceive it as complete—they fill in the missing pieces. The very act of completion serves to
involve the consumer more deeply in the message.
CONSUMER LEARNING  
Need to understand individual’s capacity to learn. Learning, changes in a person’s behaviour
caused by information and experience. Therefore, to change consumers’ behaviour about
your product, need to give them new information re: product...free sample etc.  
When making buying decisions, buyers must process information. Knowledge is the familiarity
with the product and expertise. Inexperience buyers often use prices as an indicator of quality
more than those who have knowledge of a product. Non‐alcoholic Beer example: consumers
chose the most expensive six‐pack, because they assume that the greater price indicates
greater quality.  
Learning is the process through which a relatively permanent change in behaviour results
from the consequences of past behaviour.  
This chapter takes a brief look at the two major categories of learning theories (behaviourism
and constructivism), the major theorists within those categories, and the implications of those
theories for the use of multimedia and communications and information technology for
learning purposes.  
Objectives  
After learning this lesson you should be able to:  
1. Explain consumer learning theory and identify the necessary elements.  
2. Discuss the elements of Classical Conditioning theory.  
3. Identify the three strategic applications of Classical Conditioning.  
4. Review the elements of Instrumental Conditioning.  
5. Discuss the strategic applications of Instrumental Conditioning.  
6. Describe modeling (observational learning).  
7. Explain and apply cognitive learning theory in a marketing situation.  
8. Describe three ways information may be stored in memory.  
9. Relate involvement theory to consumer behavior.  
10. Describe the Elaboration Likelihood Model.  
11. Outline measures of involvement.  
12. Understand how consumer learning can be measured.  
13. Discuss the concepts of brand loyalty and brand equity.  
Consumer learning is the process by which individuals acquire the purchase and consumption
knowledge and experience they apply to future related behavior. Some learning is intentional;
much learning is incidental. Basic elements that contribute to an understanding of learning are
motivation, cues, response, and reinforcement.   There are two schools of thought as to how
individuals learn— behavioral theories and cognitive theories. Behavioral theorists view
learning as observable responses to stimuli; whereas cognitive theorists believe that learning
is a function of mental processing.
Three types of behavioural learning theories are classical conditioning, instrumental
conditioning, and observational (vicarious) learning. The principles of classical conditioning
that provide theoretical underpinnings for many marketing applications include repetition,
stimulus generalization, and stimulus discrimination. Neo‐Pavlovian theories view traditional
classical conditioning as cognitive associative learning rather than as reflexive action.
Instrumental learning theorists believe that learning occurs through a trial‐and‐error process in
which positive outcomes (i.e., rewards) result in repeat behavior. Both positive and negative
reinforcement can be used to encourage the desired behavior. Reinforcement schedules can
be total (consistent) or partial (fixed ratio or random). The timing of repetitions influences how
long the learned material is retained. Massed repetitions produce more initial learning than
distributed repetitions; however, learning usually persists longer with distributed (i.e., spread
out) reinforcement schedules.
Cognitive learning theory holds that the kind of learning most characteristic of humans is
problem solving. Cognitive theorists are concerned with how information is processed by the
human mind: how is it stored, retained, and retrieved. A simple model of the structure and
operation of memory suggests the existence of three separate storage units: the sensory
store, short‐term store (or working memory), and long‐term store. The processes of memory
include rehearsal, encoding, storage, and retrieval.
1. What is Learning?  
Consumer learning is the process by which individuals acquire the purchase and consumption
knowledge and experience they apply to future related behavior. Some learning is intentional;
much learning is incidental. Basic elements that contribute to an understanding of learning are
motivation, cues, response, and reinforcement.  
There are two schools of thought as to how individuals learn— behavioral theories and
cognitive theories. Behavioral theorists view learning as observable responses to stimuli;
whereas cognitive theorists believe that learning is a function of mental processing.  
Three types of behavioral learning theories are classical condi‐tioning, instrumental
conditioning, and observational (vicarious) learning. The principles of classical conditioning
that provide theoretical underpinnings for many marketing applications include repetition,
stimulus generalization, and stimulus discrimination. Neo‐Pavlovian theories view traditional
classical conditioning as cognitive associative learning rather than as reflexive action.  
Instrumental learning theorists believe that learning occurs through a trial‐and‐error process in
which positive outcomes (i.e., rewards) result in repeat behavior. Both positive and negative
reinforcement can be used to encourage the desired behavior. Reinforcement schedules can
be total (consistent) or partial (fixed ratio or random). The timing of repetitions influences how
long the learned material is retained. Massed repetitions produce more initial learning than
distributed repetitions; however, learning usually persists longer with distributed (i.e., spread
out) reinforcement schedules.  
Cognitive learning theory holds that the kind of learning most characteristic of humans is
problem solving. Cognitive theorists are concerned with how information is processed by the
human mind: how is it stored, retained, and retrieved. A simple model of the structure and
operation of memory suggests the existence of three separate storage units: the sensory
store, short‐term store (or working memory), and long‐term store. The processes of memory
include rehearsal, encoding, storage, and retrieval.  
Involvement theory proposes that people engage in limited information processing in
situations of low importance or relevance to them and in extensive information processing in
situations of high relevance. Hemispheral lateralization theory gave rise to the theory that
television is a low‐involvement medium that results in passive learning and that print and
interactive media encourage more cognitive information processing.
Measures of consumer learning include recall and recognition tests, cognitive responses to
advertising, and attitudinal and behavioral measures of brand loyalty in terms of the
consumer’s behavior or the consumer’s attitude toward the brand. Brand equity refers to the
inherent value a brand name has in the marketplace.
Consumer learning can be thought of as the process by which individuals acquire the
purchase and consumption knowledge and experience that they apply to future related
behavior.  
Several points in this definition are worth noting.  
a)   First, consumer learning is a process; that is, it continually evolves and changes as a
result of newly acquired knowledge or from actual experience.  
b)   Both newly acquired knowledge and personal experience serve as feedback to the
individual and provide the basis for future behavior in similar situations.  
The role of experience in learning does not mean that all learning is deliberately sought. A
great deal of learning is also incidental, acquired by accident or without much effort.  
The term learning encompasses the total range of learning, from simple, almost reflexive
responses to the learning of abstract concepts and complex problem solving.  
c)   Most learning theorists recognize the existence of different types of learning and explain
the differences through the use of distinctive models of learning.  
Despite their different viewpoints, learning theorists in general agree that in order for learning
to occur, certain basic elements must be present—motivation, cues, response, and
reinforcement
Behavioral Learning Theories  
Behavioral learning theories are sometimes called stimulus‐response theories.  
a)   When a person responds in a predictable way to a known stimulus, he or she is said to
have “learned.” Behavioral theories are most concerned with the inputs and outcomes of
learning, not the process.  
Two theories relevant to marketing are classical conditioning and instrumental (or operant)
conditioning.  
Classical Conditioning  
Early classical conditioning theorists regarded all organisms as passive recipients.  
a)   Conditioning involved building automatic responses to stimuli.  
Ivan Pavlov was the first to describe conditioning and to propose it as a general model of how
learning occurs.  
b)   For Pavlov, conditioned learning results when a stimulus that is paired with another
stimulus elicits a known response and serves to produce the same response when used
alone.  
c)   He used dogs to demonstrate his theories.  
d)   The dogs were hungry and highly motivated to eat.
Pavlov sounded a bell and then immediately applied a meat paste to the dogs’ tongues, which
caused them to salivate.  
f)   After a sufficient number of repetitions of the bell sound, followed almost immediately by
the food, the bell alone caused the dogs to salivate.  
In a consumer behaviour context, an unconditioned stimulus might consist of a well ‐known
brand symbol (e.g., the Microsoft “windows” icon) that implies technological superiority and
trouble‐free operation (the unconditioned response).  
Conditioned stimuli might consist of new products bearing well‐known symbols.
Strategic Applications of Classical Conditioning  
Three basic concepts derive from classical conditioning: repetition, stimulus generalization,
and stimulus discrimination.  
1.   Repetition works by increasing the strength of the association and by slowing the process
of forgetting. a) After a certain number of repetitions retention declines. b) This effect is known
as advertising wearout and can be decreased by varying the advertising messages. c)
Wearout may be avoided by varying the message through cosmetic variation or substantive
variation.  Some don’t agree about how much repetition is needed. d) The three‐hit theory
states that the optimum number of exposures to an ad is three. i) One to make the consumer
aware of the product. ii) A second to show consumers the relevance of the product. iii) A third
to remind them of its benefits. The effectiveness of repetition is somewhat dependent upon
the amount of competitive advertising to which the consumer is exposed. e) As exposure
increases, the potential for interference increases. According to classical conditioning
theorists, learning depends not only on repetition, but also on the ability of individuals to
generalize.  
2.   Stimulus generalization explains why imitative “me too” products succeed in the
marketplace: consumers confuse them with the original product they have seen advertised.  
a)   It also explains why manufacturers of private label brands try to make their packaging
closely resemble the national brand leaders. The principle of stimulus generalization is applied
by marketers to product line, form, and category extensions.  b)  In product line extensions,
the marketer adds related products to an already established brand, knowing that the new
product is more likely to be adopted when it is associated with a known and trusted brand
name. i) Conversely, it is much more difficult to develop a totally new brand. c) Marketers offer
product form extensions that include different sizes, different colors, and even different flavors.
d) Product category extensions generally target new market segments. i) The success of this
strategy depends on a number of factors.  ii) For example, if the image of the parent brand is
one of quality, consumers are more likely to bring positive associations to the new category
extensions.  
Family branding—the practice of marketing a whole line of company products under the
same brand name—is another strategy that capitalizes on the consumer’s ability to generalize
favorable brand associations from one product to the next.  
Retail private branding often achieves the same effect as family branding.  
e)   For example, Wal‐Mart used to advertise that its stores carried only “brands you trust.”
Now, the name Wal‐Mart itself has become a “brand” that consumers have confidence in, and
the name confers brand value on Walmart’s store brands.  
Licensing—allowing a well‐known brand name to be affixed to products of another
manufacturer—is a marketing strategy that operates on the principle of stimulus
generalization.  
Corporations also license their names and trademarks, usually for some form of brand
extension, where the name of the corporation is licensed to the maker of a related product and
thereby enters a new product category.  
Municipal and state governments have begun licensing their names to achieve new sources of
revenue. The Vatican Library licenses its name for a variety of products from luggage to bed
linens.
The increase in licensing has made counterfeiting a booming business, as counterfeiters add
well‐known licensor names to a variety, of products without benefit of control or quality
control.  
3.   Stimulus discrimination is the opposite of stimulus generalization and results in the
selection of specific stimulus from among similar stimuli.  
a)   The consumer’s ability to discriminate among similar stimuli is the basis of positioning
strategy, which seeks to establish a unique image for a brand in the consumer’s mind.  
The key to stimulus discrimination is effective positioning, a major competitive advantage.  
b)   The image, or position, that a product or service has in the mind of the consumer is critical
to its success.  
c)   Unlike the imitator who hopes consumers will generalize their perceptions and attribute
special characteristics of the market leader’s products to their own products, market leaders
want the consumer to discriminate among similar stimuli.  
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
consumers.  
It often is quite difficult to unseat a brand leader once stimulus discrimination has occurred.  
d)   In general, the longer the period of learning—of associating a brand name with a specific
product—the more likely the consumer is to discriminate, and the less likely to generalize the
stimulus.  
The principles of classical conditioning provide the theoretical underpinnings for many
marketing applications.  
e)   Repetition, stimulus generalization, and stimulus discrimination are all major applied
concepts that help explain consumer behaviour.  
Instrumental Conditioning  
Like classical conditioning, instrumental conditioning requires a link between a stimulus and a
response.  
a) However, in 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, with habits formed as a result of rewards received for
certain responses or behaviors. b) Although classical conditioning is useful in explaining how
consumers learn very simple kinds of behaviors, instrumental conditioning is more helpful in
explaining complex, goal‐directed activities. According to American psychologist B. F. Skinner,
most individual learning occurs in a controlled environment in which individuals are “rewarded”
for choosing an appropriate behavior.  c) In consumer behavior terms, instrumental
conditioning suggests that consumers learn by means of a trial‐and¬error process in which
some purchase behaviors result in more favorable outcomes (i.e., rewards) than other
purchase behaviors. d) A favorable experience is instrumental in teaching the individual to
repeat a specific behavior. Like Pavlov, Skinner developed his model of learning by working
with animals. e) 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.  
Reinforcement of Behavior  
Skinner distinguished two types of reinforcement (or reward) influence , which provided that
the likelihood for a response would be repeated.  
a) The first type, positive reinforcement, consists of events that strengthen the likelihood of a
specific response. b) Negative reinforcement is an unpleasant or negative outcome that also
serves to encourage a specific behavior. i) Fear appeals in ad messages are examples of
negative reinforcement. c) Either positive or negative reinforcement can be used to elicit a
desired response. d) Negative reinforcement should not be confused with punishment, which
is designed to discourage behavior. Forgetting and extinction—when a learned response is no
longer reinforced, it diminishes to the point of extinction; that is, to the point at which the link
between the stimulus and the expected reward is eliminated.  a) Forgetting is often related to
the passage of time; this is known as the process of decay.  
b) Marketers can overcome forgetting through repetition and can combat extinction through
the deliberate enhancement of consumer satisfaction.  
Strategic Applications of Instrumental Conditioning  
1 The objective of all marketing efforts should be to maximize customer satisfaction.  
2 Aside from the experience of using the product itself, consumers can receive reinforcement
from other elements in the purchase situation, such as the environment in which the
transaction or service takes place, the attention and service provided by employees, and the
amenities provided.  
a)   Some hotels provide reinforcement to guests in the form of small amenities.  
b)   Most frequent shopper programs are based on enhancing positive reinforcement and
encouraging continued patronage.  
3.   Relationship marketing—developing a close personalized relationship with customers—is
another form of non‐product reinforcement.

Attitudes  
We can say that attitudes are knowledge and positive and negative feelings about an object or
activity. It maybe tangible or intangible, and living or non‐  living. Generally it seen that
attitudes drive perceptions  
We learn attitudes through experience and interaction with other people. Consumer attitudes
toward a firm and its products greatly influence the success or failure of the firm’s marketing
strategy.  
For instance, Honda says, “You meet the nicest people on a Honda”, dispelling the unsavory
image of a motorbike rider, in the late 1950s. Changing market of the 1990s, baby boomers
aging, and Hondas market returning to hard core. To change this they have a new slogan
“Come ride with us”.  
Attitudes and attitude change are influenced by consumer’s personality and lifestyle. Again,
we tend to screen information that conflicts with their attitudes and distort information to make
it consistent and selectively retain information that reinforces our attitudes. But, bear in mind
that there is a difference between attitude and intention to buy i.e., ability to buy.
We as individuals learn attitudes through experience and interaction with other people. Our
attitudes toward a firm and its products as consumers greatly influence the success or failure
of the firm’s marketing strategy. Attitudes and attitude change are influenced by consumer’s
personality and lifestyle. Consumers screen information that conflicts with their attitudes. We
distort information to make it consistent and selectively retain information that reinforces our
attitudes, in other words, brand loyalty.  
But there is a difference between attitude and intention to buy (ability to buy).  
For instance, Honda, dispelled the unsavoury image of a motorbike rider, in the late 1950s
with the slogan “You meet the nicest people on a Honda”. But with the changing market of the
1990s, and baby boomers aging, Hondas market was returning to hard core. To change this
they have a new slogan “Come ride with us”.  
Through acting and learning, people acquire beliefs and attitudes, which in turn, influence their
buying behaviour. A BELIEF is a descriptive thought that a person holds about something. A
customer may believe that Taj group of Hotels have the best facilities and most professional
staff of any hotel in the price range. These beliefs may be based on real knowl¬edge, opinion,
or faith. They may or may not carry an emotional charge.  
Marketers are interested in the beliefs that people have about specific products and services.
Beliefs reinforce product and brand images. People act on beliefs. If unfounded customer
beliefs deter purchases marketers will want to do a campaign to change them.  
Unfounded consumer beliefs can severely affect the revenue and even the life of hospitality
and travel companies. Among these beliefs might be the following:  
• A particular hamburger chain served ground kangaroo meat.  
• A particular hotel served as Mafia headquarters.  
• A particular airline has poor maintenance.  
• A particular country has unhealthy food‐handling standards.  
People have attitudes about almost everything: religion, politics, clothes, music and food.
Attitudes  
An attitude describes a person’s relatively consistent evalua‐tions, feelings, and tendencies
toward an object or an idea. Attitudes put people into a frame of mind for liking or disliking
things and moving toward or away from them.  
For example, many people who have developed the attitude that eating healthy food is
important perceive vegetables as a healthy alternative to meat and chicken. As a result, the
per capita consumption of vegetables has increased during recent years, leading the neat and
chicken Producers Council to try to change consumer attitudes that chicken and meat are
unhealthy. Companies can benefit by researching attitudes toward their products.
Understanding attitudes and beliefs is the first step toward changing or reinforcing them.  
Attitudes are very difficult to change. A person’s attitudes fit into a pattern, and changing one
attitude may require making many difficult adjustments. It is easier for a company to create
products that are compatible with existing attitudes than to change the attitudes toward their
products. There are excep‐ tions, of course, where the high cost of trying to change attitudes
may pay off.  
There is a saying among restaurateurs that a restaurant is only as good as the last meal
served. Attitudes explain in part why this is true. A customer who has returned to a restaurant
several times and on one visit receives a bad meal may begin to believe that it is impossible to
count on having a good meal at that restaurant. The customer’s attitudes toward the
restaurant begin to change. If this customer again receives a bad meal, negative attitudes
may be permanently fixed and prevent a future return. Serving a poor meal to first‐time
customers can be disastrous. Customers develop an immediate negative attitude that
prevents them from returning.  
Attitudes developed as children often influence purchases as adults. Children may retain
negative attitudes toward certain vegetables, people, and places. Chances are equally good
that they may retain very positive images toward McDonald’s and Disneyland.  
Disney and McDonald’s both view children as lifelong custom‐ers. They want children to
return as teenagers, parents, and grandparents and treat them in a manner to ensure future
business. Many hospitality and travel companies have still not learned from those two
examples.  
However, once negative attitudes are developed, they are hard to change. New restaurant
owners often want quick cash flow and sometimes start without excellent quality. A new
restaurateur complained that customers are fickle. A few months later after the restaurant was
opened, the owner had plenty of empty seats every night. Obviously, he had not satisfied his
first guests. Even though he may have subsequently corrected his early mistakes, his original
customers who had been disappointed, were not returning.  
We can now appreciate the many individual characteristics and forces influencing consumer
behaviour. Consumer choice is the result of a complex interplay of cultural, social, personal,
and psychological factors. We as marketers cannot influence many of these; however, they
help the marketer to better understand customer’s reactions and behaviour.  
Attitudes are defined as a mental predisposition to act that is expressed by evaluating a
particular entity with some degree of favour or disfavour.  
The value of attitude in marketing can be explained in terms of its importance in prediction,
diagnostic value and also as relatively inexpensive information that is easily obtained.
Tricomponent Attitude Model According to the tricomponent attitude model, attitude
consists of three major components, viz., a cognitive component, an affective component, and
a conative component.  

Product Situation Attitude

Monaco Party going on and ordered snacks “ I need to serve an instant substitute
Biscuits haven’t arrived. for snacks”.

Vicks Action‐ Suffering from blocked nose And “You need to take a double action
500 headache tablet to get immediate relief”.

Maxima Watch slipped from hand and fell into “There is nothing to worry since it’s an
Watches water. economical water proof wrist watch”.

Complan Mothers worried about children not “There is the need for giving children a
taking balanced food. planned food”.

Ariel micro Husband has to wash a pile of dirty “You need to use an easy to use, very
shine clothes, when his wife is away from e powder”.
home

The cognitive component:  The cognitive component consists of a person’s cognitions, i.e.,

knowledge and perceptions (about an object). This knowledge and resulting perceptions
commonly take the form of beliefs, images, and long‐term memories. A utility function
representing the weighted product of attributes and criteria would be used to develop the final
ranking and thus choice. This model represents the process used by individuals with a strong
Thinking Cognitive Style.  
The affective component: The affective component of an attitude comprises of the
consumers emotions or feelings (toward an object). These emotions or feelings are frequently
treated by consumer researchers as primarily evaluative in nature; i.e., they capture an
individual’s direct or global assessment of the attitude‐object, which might be positive,
negative, or mixed reaction consisting of our feelings about an object. Buying of any product
or service would be accomplished on the basis of how each product/ service makes the
decision maker feel. The product that evokes the greatest positive (pleasurable) affective
response would thus be ranked first. The affective response may be derived through
association (i.e, category attributes) or directly attributed to the interaction between the
product or service and the decision maker. It is believed that the manner in which the
product/service affirms or disaffirms the self concept of the decision maker has a strong
impact to the decision maker’s affect response to the candidate. This model represents the
process used by individuals with a strong Feeling Cognitive Style. Ordering of the three job
candidates would be accomplished on the basis of how each candidate makes the decision
maker feel. The candidate that evokes the greatest positive (pleasurable) affective response
would thus be ranked first. The affective response may be derived through association (i.e,
category attributes) or directly attributed to the interaction between the candidate and the
decision maker. It is believed that the manner in which the candidate affirms or disaffirms the
self concept of the decision maker has a strong impact to the decision maker’s affect
response to the candidate.  
The conative component: The conative component is concerned with the likelihood or
tendency of certain behavior with regard to the attitude object. It would also mean the
predisposition or tendency to act in a certain manner toward an object    

Personality  
“Personality is the supreme realization of the innate idiosyncrasy of a living being. It is an act
of high courage flung in the face of life, the absolute affirmation of all that constitutes the
individual, the most successful adaptation to the universal condition of existence coupled with
the greatest possible freedom for self‐determination.”  
‐Carl Gustav Jung, 1934  
We cannot define Personality very easily. Basically, ‘personality’ refers to our attempts to
capture or summarize an individual’s ‘essence’. Personality is person‐ality, the science of
describing and understanding persons. Clearly, personality is a core area of study for
psychology, if not the core.  
No two people are exactly the same ‐ not even identical twins. Some people are anxious,
some are risk‐ taking; some are phlegmatic, some highly‐strung; some are confident, some
shy; and some are quiet and some are loquacious. This issue of differences is fundamental to
the study of personality. Note also that in studying these differences we will also examine
where the differences come from: as with intelligence we will find that there is a mixture of
nature and nurture involved.
What is “personality”?  
We use the term personality frequently but what does it actually mean?  
“She has a wonderful personality.” ”He has no personality.” ”He has personality plus.” ”We
seem to have a personality conflict.” ”It’s just her personality.” ”She has her mother’s
personality.” ”He’s a real personality.”   Personality comes from the Greek word “persona”,
meaning “mask”  
The word ‘personality’ derives from the Latin word ‘persona’ which means ‘mask’. The study of
personality can be under‐stood as the study of ‘masks’ that people wear. These are the
personas that people not only project and display, but also include the inner parts of
psychological experience, which we collectively call our ‘self ’.   “I” is for personality  
According to Adams (1954, cited in Schultz & Schultz, 1994)   personality is “I”. Adams
suggested that we get a good idea of what personality is by listening to what we say when we
use “I”. When you say I, you are, in effect, summing up everything about yourself ‐ your likes
and dislikes, fears and virtues, strengths and weaknesses. The word I is what defined you as
an individual, as a person separate from all others.” (Schultz & Schultz, 1994, p.8)
Theories of Personality  
There are three major theories of personality we need to discuss in this lesson.
They are:  
a)   Freudian theory.  
b)   Neo‐Freudian personality theory.  
c)   Trait theory.  
Freudian Theory  
Sigmund Freud’s psychoanalytic theory of personality is the cornerstone of modern
psychology.  This theory was built on the premise that unconscious needs or drives, especially
biological and sexual drives, are at the heart of human motivation and personality.  
Id, Superego, and Ego  
The Id is the “warehouse” of primitive and impulsive drives, such as: thirst, hunger, and sex,
for which the individual seeks immediate satisfaction without concern for the specific means of
that satisfaction.  
Superego is the individual’s internal expression of society’s moral and ethical codes of
conduct.   a)   The superego’s role is to see that the individual satisfies needs in a socially
acceptable fashion.   b)   The superego is a kind of “brake” that restrains or inhibits the
impulsive forces of the id.  
Ego is the individual’s conscious control which functions as an internal monitor that attempts
to balance the impulsive demands of the id and the sociocultural constraints of the superego.  
Freud emphasized that an individual’s personality is formed as he or she passes through a
number of distinct stages of infant and childhood development.  
These distinct stages of infant and childhood development are: oral, anal, phallic, latent, and
genital stages.  
An adult’s personality is determined by how well he or she deals with the crises that are
experienced while passing through each of these stages.
Personality and Understanding Consumer Diversity  
Marketers are interested in understanding how personality influences consumption behavior
because such knowledge enables them to better understand consumers and to segment and
target those consumers who are likely to respond positively to their product or service
communications.  

Consumer Innovativeness and Related Personality Traits  

Marketing practitioners must learn all they can about consumer innovators—those who are
likely to try new products. Those innovators are often crucial to the success of new products.  
Personality traits have proved useful in differentiating between consumer innovators and
noninnovators.  
Personality traits to be discussed include:  
• Consumer innovativeness.  
• Dogmatism.  
• Social character.  
• Need for uniqueness.  
• Optimum stimulation level.  
• Variety‐novelty seeking.  
• Consumer Innovativeness  
How receptive are consumers to new products, new services, or new practices?  
Recent consumer research indicates a positive relationship between innovative use of the
Internet and buying online.  
Dogmatism  
Dogmatism is a personality trait that measures the degree of rigidity an individual displays
toward the unfamiliar and toward information that is contrary to their established beliefs.
Consumers low in dogmatism are more likely to prefer innovative products to established
ones. Consumers high in dogmatism are more accepting of author‐ity‐based ads for new
products.  
Social Character  
Social character is a personality trait that ranges on a continuum from inner‐directed to other‐
directed.  
Inner‐directed consumers tend to rely on their own “inner” values or standards in evaluating
new products and are innova‐tors. They also prefer ads stressing product features and
personal benefits.
Other‐directed consumers tend to look to others for direction and are not innovators. They
prefer ads that feature social environment and social acceptance.  
Need for Uniqueness  
These people avoid conformity are the ones who seek to be unique!  
Optimum Stimulation Level  
Some people prefer a simple, uncluttered, and calm existence, although others seem to prefer
an environment crammed with novel, complex, and unusual experiences.  
Persons with optimum stimulation levels (OSLs) are willing to take risks, to try new products,
to be innovative, to seek purchase‐related information, and to accept new retail facilities.  
The correspondence between an individual’s OSL and their actual circumstances has a direct
relationship to the amount of stimulation individual’s desire.
If the two are equivalent, they tend to be satisfied. If bored, they are understimulated, and vice
versa.   Variety‐Novelty Seeking  
This is similar to OSL. Primary types are va riety or novelty seeking. There appear to be many
different types of variety seeking:  
exploratory purchase behavior (e.g., switching brands to experience new and possibly better
alternatives), vicarious exploration (e.g., where the consumer secures information about a
new or different alternative and then contemplates or even daydreams about the option), and
use innovativeness (e.g., where the consumer uses an already adopted product in a new or
novel way).  
The third form of variety or novelty seeking—use   innovativeness—is particularly relevant to
technological. Consumers with high variety seeking scores might also be attracted to brands
that claim to have novel or multiple uses or applications.Marketers, up to a point, benefit from
thinking in terms of offering additional options to consumers seeking more product variety.  
Ultimately, marketers must walk the fine line between offering consumers too little and too
much choice. The stream of research examined here indicates that the consumer innovator
differs from the non‐innovator in terms of personality orientation.
One way of explaining personality is all those internal traits and behaviors that make a person
unique, keeping in mind the fact that uniqueness arrives from a person’s heredity and
personal experience. Examples include:  
• Workaholism  
• Compulsiveness  
• Self confidence  
• Friendliness  
• Adaptability  
• Ambitiousness  
• Dogmatism  
• Authoritarianism  
• Introversion  
• Extroversion  
• Aggressiveness  
• Competitiveness.  
Traits affect the way people behave. Marketers try to match the store image to the perceived
image of their customers.  
Lifestyles  
You may have observed that recently trends in lifestyles are shifting towards personal
independence and individualism and a preference for a healthy, natural lifestyle.  
Lifestyles are the consistent patterns people follow in their lives. For Example you buy healthy
foods to maintain a healthy lifestyle.
Opinion Leaders  
Opinion leaders basically play the role of spokesperson etc. Marketers try to attract opinion
leaders...they actually use (pay) spokespeople to market their products. Say, for example
Sachin Tendulkar (Pepsi, Visa , Biscuit, Adidas etc.)  
Roles and Family Influences  
Roles are things you should do based on the expectations of you from your position within a
group. People have many roles. Husband, father, employer/ee. Individuals role are continuing
to change therefore marketers must continue to update information.  
Family is the most basic group a person belongs to. Marketers must understand:  
• that many family decisions are made by the family unit  
• consumer behavior starts in the family unit  
• family roles and preferences are the model for children’s future family (can reject/alter/etc)    •
family buying decisions are a mixture of family interactions and individual decision making   •
family acts an interpreter of social and cultural values for the individual.
The Family life cycle: families go through stages, each stage creates different consumer
demands:  
a. bachelor stage  
b. newly married, young, no children...me  
c. full nest I, youngest child under 6  
d. full nest II, youngest child 6 or over  
e. full nest III, older married couples with dependant children  
f. empty nest I, older married couples with no children living with them, head in labor force    g.
empty nest II, older married couples, no children living at home, head retired    h. solitary
survivor, in labor force  
i. solitary survivor, retired  
j. Modernized life cycle includes divorced and no children.
Reference Groups
Individual identifies with the group to the extent that he takes on many of the values, attitudes
or behaviors of the group members. Families, friends, sororities, civic and professional
organiza‐tions. Any group that has a positive or negative influence on a person’s attitude and
behavior.
Membership groups (belong to) Affinity marketing is focused on the desires of consumers that
belong to reference groups. Marketers get the groups to approve the product and
communicate that approval to its members. Credit Cards etc.!!
Aspiration groups (want to belong to) Disassociate groups (do not want to belong to) Honda,
tries to disassociate from the “biker” group.
The degree to which a reference group will affect a purchase decision depends on an
individuals susceptibility to reference group influence and the strength of his/her involvement
with the group.
Social Class  
An open group of individuals who have similar social rank. US is not a classless society. US
criteria; occupation, education, income, wealth, race, ethnic groups and possessions. Social
class determines to some extent, the types, quality, quantity of products that a person buys or
uses.  
Lower class people tend to stay close to home when shopping, do not engage in much
prepurchase information gathering. Stores project definite class images.  
Family, reference groups and social classes are all social influences on consumer behavior.
All operate within a larger culture.
Culture and Sub‐culture  
Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous
group of people and transmitted to the next generation.  
Culture also determines what is acceptable with product advertising. Culture determines what
people wear, eat, reside and travel. Cultural values in India are good health, education,
individualism and freedom. In today’s culture time scarcity is a growing problem. So as a
result there is a change in meals.  
Different society, different levels of needs, different cultural values.  
Culture can be divided into subcultures:  
a. Geographic regions  
b. Human characteristics such as age and ethnic background.  
Culture effects what people buy, how they buy and when they buy.
CONSUMER MOTIVATION CONCEPT
It is important to understand fully why people might want to buy your product or use your
service in order to better design the product and communicate relevant benefits.  
For that matter you can take your own example, and see why you buy what you buy?  
Note that for existing products, different people may seek different benefits from the same
product or though seeking the same benefits may regard them with differing degrees of
importance. For instance, much computer advertising has been criticised as placing excessive
emphasis on statements about hardware specifications rather than telling people what the
computer actually can do for them. For some knowledgeable people a statement of
specifications may be easily interpreted in terms of benefits while for others, perhaps new to
computers, such information may be meaningless.  
Note also that if a new product is far removed from people’s range of experience, it may be
difficult for them to articulate the benefits they perceive such a product providing. Other tech ‐
niques than simply asking them may need to be used in such cases.  
The benefits a consumer may seek from a product may vary depending on the situation in
which the product is to be used. For instance a consumer may approach the purchase of a
bottle of wine in quite a different way when the bottle is for own use rather than to be given as
a gift to a host at a party. In the second instance the benefit sought from the bottle may well
be to act as a symbol of the strength of friendship between host and guest, rather than for its
taste.  
In this lesson we will be looking at the difference between motives and motivation, and the
process of motivation. In the next sections we will be looking at Customer Involvement and
Values and how they affect the motivation status of consumers.
Objectives  
After studying this lesson you should be able to:  
• Explain motivation.  
• Understand positive and negative motivation.  
• Explain the motivation process  
• Discuss consumer involvement  
• Apply consumer values
Motives and Motivation  
Now that we know about needs and wants in details from the last lesson, we need to now
move on the motivation. But before going into an in‐depth discussion on these, we will first
understand the distinct meanings of the three interrelated terms motives, motivating, and
motivation.  
•   Motives: Motives give direction to human behaviour. We can say that a motive is an inner
state that energizes, activates, or moves and directs or channels behaviour towards the goal.  
• Motivating: This implies an activity engaged into by an individual, by which he or she will
channelise the strong motives in a direction that is satisfactory.  
• Motivation: Motivating can be described as the driving force within individuals that impels
them into action. For instance, at the basic level, our body has a need (say hunger), which will
translate into a drive (here the drive will be to obtain food) and the goal will be to satisfy the
need (in this example to fee full in the stomach).
Emotional Versus Rational Motives  
Traditionally, the term rationality is associated with persons who are carefully weigh the pros
and cons of all the alternatives and then choose the one that gives them the greatest utility.
We can say that consumers who are rational generally select the goals after ascertaining the
various objective criteria such as size, weight price etc. As opposed to this, emotional motives
are those goals, which are selected on the basis of emotions involvement. Most of the time,
we select such goals purely on the basis of emotion’s involvement.  
Positive or negative Motivation   -Motivation can be either positive or negative. A positive
motivation happens when an individual experiences a driving force towards an object or
person or situation. This is also called person motivation. On the other hand, a driving force
compelling the person to move away from someone or something will be known as negative
motivation.  
We can explain the difference between positive and negative motivation better if we take an
example. Lets say one of our students Rajesh, joins an organisation as an executive. After
some time he gets promoted, and transferred to a new place. He then join the local club (a
positive goal) so as to gain social recognition and make new friends. His wife may join the kitty
parties held by other executive’s wives to avoid a negative goal (ridiculed by others as an
unsocial person). So we see in the above example how both positive and negative goals can
motivate a person’s behaviour.
Consumer Motivation
The study of consumer motivation essentially addresses the question: “Why do people
shop?” The answer, really, is that people shop for a variety of reasons and it is very difficult to
make generalizations. Shopping for food can, on one level, is seen as satisfying some basic
survival need. The problem with that, however, is that most of us buy far more food than we
would actually need for basic subsistence and many of the items we purchase in a
supermarket are “luxuries” (relatively speaking).  
One of the most influential studies of consumer motivation is that conducted by Tauber
(1972). According to Tauber, there are two main categories of motivation for shopping:  
Personal Motives
Role Playing – some shopping activities are associated with a particular role in society
(housewife, mother, student, etc).  
Diversion – shopping can be a form or recreation, or an escape from daily routine.  
Self‐Gratification – shopping can be mood‐related, for instance where people engage in “retail
therapy” to cheer themselves up or alleviate depression.  
Learning – shopping is an ideal way to learn about new fashions and trends.  
Physical Activity – for some people, a stroll around the mall can be their main form of
exercise.  
Sensory Stimulation – shoppers often report that they enjoy handling merchandise, the
sounds of background music, the scents of perfume counters, etc, and visit stores or malls to
indulge in this.  
Social Motives
Social Interaction – people enjoy the opportunities for social interaction with friends, strangers,
sales staff, etc.  
Peer Affiliation – certain shops allow customers mix with key reference groups; e.g. people
with shared interests, members of a social category they either belong to or aspire to, etc.  
Status & Authority – shopping experiences are sometimes seen as ways of commanding
respect and attention; e.g. during encounters with sales staff.  
Pleasure of Bargaining – some shoppers love to “haggle”, a way of obtaining goods at a better
price or of priding oneself on the ability to make “wise” purchases.  
 How can the principles of classical Conditioning theory with 2 exaples

Learning through classical conditioning plays an important role in marketing. Buyers can be
conditioned to form favorable impressions and images of various brands through the associative
process. Advertisers strive to associate their products and services with perceptions, images, and
emotions known to evoke positive reactions from consumers. Many products are promoted through
image advertising, in which the brand is shown with an unconditioned stimulus that elicits pleasant
feelings. When the brand is presented simultaneously with this unconditioned stimulus, the brand itself
becomes a conditioned stimulus that elicits the same favorable response.

Notice how this ad associates Lancome with the freshness and moisture of grapes. The brand's
positioning plays off this association.

Classical conditioning can also associate a product or service with a favorable emotional state. A study
by Gerald Gorn used this approach to examine how background music in ads influences product choice.
He found that subjects were more likely to choose a product when it was presented against a
background of music they liked rather than music they disliked. These results suggest the emotions
generated by a commercial are important because they may become associated with the advertised
product through classical conditioning. Kellaris and colleagues also showed that music that was
congruent with the message enhanced both ad recall and recognition. Richard Yalch also has
demonstrated that music can be used effectively as a mnemonic device to enhance the recall of
advertising slogans. Advertisers often attempt to pair a neutral product or service stimulus with an event
or situation that arouses positive feelings, such as humor, an exciting sports event.

Classical conditioning views the individual as a passive participant in the learning process who simply
receives stimuli. Conditioning occurs as a result of exposure to a stimulus that occurs before the...