Module - 1

Introduction to
ADVERTISING MANAGEMENT
BBA VI Semester Advertising Management
Lecture Notes
Module - 1 Introduction to Advertising Management

Table of Contents

1. INTRODUCTION .....................................................................................................................................2
2. Meaning and Definition of ADVERTISING MANAGEMENT ...................................................................3
3. CHARACTERISTICS / FEATURES OF ADVERTISING .................................................................................3
4. IMPORTANCE OR OBJECTIVES OF ADVERTISING ..................................................................................4
5. EVOLUTION OF ADVERTISING IN INDIA ................................................................................................5
6. Role of advertising in the economic development of India ..................................................................9
Economic Benefits of Advertising .............................................................................................................9
1. Advertising Acts as Guide to Prospective Buyers .........................................................................9
2. Advertising creates Demand for a Product ................................................................................ 10
3. Product Differentiation .............................................................................................................. 10
4. Encouraging Innovation ............................................................................................................. 10
5. Propensity to Consume .............................................................................................................. 11
6. Financial Support to Media ........................................................................................................ 11
7. Consumer Protection Act ................................................................................................................... 11
8. Understanding Consumer Buyer Behaviour ...................................................................................... 14
8.1. Factors Influencing Consumer Behaviour .................................................................................. 14
9. THE BUYING DECISION PROCESS ....................................................................................................... 17
10. Types of Purchase Decisions (Types of Buying Decision Behavior) ............................................... 19
11. Models of Consumer Buyer’s Behaviour........................................................................................ 21
11.1. AIDA MODEL .......................................................................................................................... 21
11.2. DAGMAR ................................................................................................................................ 23
11.1. Howard- Sheth Model ............................................................................................................ 25
12. Question Bank ................................................................................................................................ 26

HRD Lecturer Notes | INTRODUCTION 1

Module - 1 Introduction to Advertising Management

1. INTRODUCTION

Advertising is a powerful communication force, highly visible, and one of the most important
tools of marketing communications that helps to sell products, services, ideas and images, etc.
Many believe that advertising reflects the needs of the times. One may like it or not but
advertisements are everywhere. Advertisements are seen in newspapers, magazines, on
television and internet and are heard on radio. The average consumer is exposed to a very
large number of advertisements every day, particularly the urban and semi-urban population.

It seems almost impossible to remain totally neutral and not take any notice of modern day
advertising. The most visible part of the advertising process is the advertisements that we see,
read, or hear and praise or criticize. Many suitable adjectives are used to describe advertising,
depending on how an individual is reaching, such as great, dynamic, alluring, fascinating,
annoying, boring, intrusive, irritating, offensive, etc. Advertising is an indicator of the growth,
betterment and perfection of civilization. It is part of our social, cultural and business
environment. It is not at all surprising that advertising is one of the most closely scrutinized of
all business institutions. In today’s environment, not only are advertisers closely examined by
the target audience for whom that advertisement are meant, but by society in general.

Marketing-Mix and Promotion-Mix

The marketing mix is the combination of elements necessary to the planning and execution of
the total marketing operation. The ‘Four Ps’ concept of the marketing mix, developed by Philip
Kotler, and widely adopted by marketing teachers, creates four division of the mix, namely,
product,, price, promotion and place. Advertising comes under promotion. Under promotion
mix there are several components like advertising, personal selling, sales promotion, publicity,
direct marketing etc. Advertising is one of the components of promotion as shown in fig below.

HRD Lecturer Notes | INTRODUCTION 2

Module - 1 Introduction to Advertising Management

2. Meaning and Definition of ADVERTISING MANAGEMENT

Meaning:
The term advertising is derived from the Latin word, „advertere‟ which means to turn attention
towards a specific thing.1 Advertising simply means a public announcement. But, nowadays,
the functions of advertisements go beyond announcements as they persuade the prospective
buyer, remind the existing buyers, create demand, brand preference and brand loyalty; apart
from neutralising the effects of the advertisements of the competitors.

Advertising is aimed at a group of persons and not an individual. These groups of persons are
not the general public; but the target audience who are also the potential customers. In
advertising, unlike personal selling, immediate feedback cannot be taken. Thus, it is a paid form
of non-personal way of communication with a group of target audience through mass media
like television, newspapers, magazines, radio, internet et al.

Definition
 According to American Marketing Association “Advertising is any paid form of non-
personal presentation and promotion of ideas, goods and services through mass media
such as newspapers, magazines, television or radio by an identified sponsor”.
 Philip Kotler: Advertising is a non-personal form of communication conducted through
paid media under clear sponsorship.
 John J. Myers: Advertising is dissemination of information concerning an idea, service or
product to compel action in accordance with the interest of the advertiser.
 John Kennedy: Advertising is the substitute of human salesman.
 David Ogilvy: Advertising means to develop favourable brand image to enlarge market
share and to increase the profits of the organisation in the long run.

3. CHARACTERISTICS / FEATURES OF ADVERTISING

Previously we have defined "Advertising is any paid form of non-personal presentation and
promotion of ideas, goods and services by an identified sponsor.”
Advertising is non-personal as it is not directed to any single individual. Secondly, the sponsor
i.e. the manufacturer or producer is identified as his name and address is always contained in
an advertisement and he also bears all the cost involved in the process. Thirdly, the producer
can also promote an idea regarding quality, design, packing and pricing, etc. of any product or
service. Thus, we can say, advertising consists of all activities involved in presenting a
sponsored message regarding a product, service or an idea.

By looking into the meaning and definition of advertising we can sum up the following features
of advertising.

HRD Lecturer Notes | Meaning and Definition of ADVERTISING MANAGEMENT 3

Module - 1 Introduction to Advertising Management

Features of Advertising:
1. Paid form: Advertising is never free of cost. The company issuing an advertisement has to
pay the media. The scale of payment depends on media-circulation, type of media and
media popularity. Advertisements appear in newspapers, radio and television because the
advertisers have purchased the space or time to communicate information to the target
audience or, in other words, prospective customers.

2. Non-personal: The communication process is non personal, as nobody has personally

conveyed the message i.e there is no personal contact between the sender and the receiver
of the message. When a retail salesman speaks to us at the sales counter, we can call it
personal selling, as there is direct interaction between the receiver (buyer) and the sender
(the salesman). Marketers use mass media also called non-personal media like newspaper,
magazine, television channels and radio stations for promoting products and services.

1. Promotion of ideas, Product and service: The presentation of the message is for promoting
ideas, places, concepts, people, parties, goods, services, organizations to create awareness
and assist in the process of consumer decision making. The awareness may lead to
persuasion and hence the consumer may be triggered to take a decision about buying the
product or service being advertised.

2. Identified sponsor: The sponsor is identified in the advertisement either in the form of the
brand name or in the form of the company which produces it. This is relevant as the
ownership of message communicated rests with the sender. If the sponsor is not identified
then the objective of the message will be lost as the potential buyer is not sure where to
search for further information in the form of enquiry or to go for a consumption choice.

3. Communicated through some media: Advertisements are always communicated through

use of certain media. It is not necessary that there will be just one medium. All the media
may also be used.

4. IMPORTANCE OR OBJECTIVES OF ADVERTISING

Advertising is a method of communication with a specified objective. The objectives of

advertising as explained before are grouped as sales objectives (measured in terms of
increase in sales, increase in market share and return on investment) and communication
objectives. The communication objectives of advertising can be grouped into the following
 Building awareness (informing): The first task of any advertising is to make the
audience aware of the product or service exists and to explain exactly what it is
Example: Can you remember the advertisement of Tata Namak on television? In this
advertisement it is said that Tata Namak is good for health as it contains Iodine. This
message educates you that iodine is good for health and Tata Namak contains iodine.

HRD Lecturer Notes | IMPORTANCE OR OBJECTIVES OF ADVERTISING 4

Module - 1 Introduction to Advertising Management

 Creating favourable attitude (persuasion): The advertising message should create a

favourable attitude towards the brand, eventually leading the consumers to buy the
brand or bring a change to their past purchasing pattern.
Example: You read in newspaper that a new type of pen called ‘Gel pen’ is introduced in
the market, which is very economical and convenient in writing. This motivates you to
buy the said pen. Similarly, many students like you shall also buy gel pen after coming to
know about it through advertisement.
 Maintenance of loyalty (reinforcement): One of the key tasks of modern day marketing
to make the customers loyal and reinforce their purchase behaviour. This is because the
competitor will always attempt to break the loyalty. In the game of taking away each
other’s market share, the marker should repeat his marketing communication to
strengthen the loyalty of existing customers and motivate them to build referrals for
future sales.
Example: You might remember that Nirma washing powder was a very popular
detergent. But, after Wheel powder came to the market the sale of Nirma suddenly
decreased. Then the manufacturers of Nirma improved the product and advertised
about the same in different media. After knowing this the persons who were earlier
using Nirma did not switch over to Wheel and continued using Nirma. In this manner
Nirma sustained its existing demand. Thus, advertising helps the manufacturers not only
to create a demand for a new product but also to retain the existing customers.

5. EVOLUTION OF ADVERTISING IN INDIA

Advertising is a modern world terminology for an ancient concept. Advertising existed before
the advent of smartphones, the Internet, billboards and other digital gadgets. The first instance
of Advertising in colonial India was maybe the street hawkers calling out their wares when
cities and towns were still developing. Modern Advertising in the 21st century has become
competitive and consumer-centric. Companies apportion a large chunk of their budget on
marketing and advertising. Mass media is used extensively for online advertising management
& public relations.

Newspapers
India’s first newspaper ‘Bengal Gazette’ displayed Ads for the first time starting with classified
advertising by James Augustus Hicky on January 29, 1780. Advertisements in the 18th century
were meant to inform the public. Periodicals announced deaths, births, sale of household
furniture and arrival of ships from England for trade purposes. Pre-Independence journals
printed information with the intent to persuade the public to buy, trade and inform about
government activities and propaganda.

HRD Lecturer Notes | EVOLUTION OF ADVERTISING IN INDIA 5

Module - 1 Introduction to Advertising Management

The Advent of the Industrial Revolution

The industrial revolution resulted in a massive export of goods to colonial India.
Consequentially, British business houses drastically increased the number of advertisements
through print media. Prominent newspapers like ‘The Statement’ and ‘The Times of India’ used
their advertising departments to offer facilities to ‘agents’ who functioned as space
contractors, getting advertisements on a commission basis.

HRD Lecturer Notes | EVOLUTION OF ADVERTISING IN INDIA 6

Module - 1 Introduction to Advertising Management

Advertising at the beginning of the 20th century

Swadeshi Movement (1907-11) and the installation of the printing machine in Calcutta (1907)
were the two main events that were responsible for the ascendancy of the Indian advertising
agencies. In few years, other papers too installed the new machine, which made it possible to
produce a cheap newspaper with a large national circulation.
The first Indian ad agency, the Indian Advertising Agency, was launched in the very early years
of the 20th century. On the other hand, B Dattaram & Co, located in Girgaum in Mumbai and
launched in 1905, also claims to be the oldest existing Indian agency! This was followed by the
launch of the Calcutta Advertising Agency in 1909. By the 1920s a number of Indian agencies
were working from the major Indian cities, the most important being the Modern Publicity
Company in Madras, Central Publicity Service in Bombay and Calcutta and the Oriental
Advertising Agency in Tiruchirapalli. In 1931, the first full-fledged Indian ad agency, the National
Advertising Service, was established.

Post-Independence Advertising
After 1957, the British owned agencies were acquired by Indian businesses. This period saw a
massive boom in the expansion and growth of the advertisements in newspapers and other
public dissemination forms. The introduction of multi-colour printing, improved printing
machines (like offset and web offset), and the development of commercial art gave the Ad
business a further leap. Agencies began to offer, besides space selling, many more services,
such as artwork, organization of fairs and exhibitions, market research, public relations
consultancies.

HRD Lecturer Notes | EVOLUTION OF ADVERTISING IN INDIA 7

Module - 1 Introduction to Advertising Management

Advertising in the Technological Era

The remarkable growth of the television and cable media has elevated the Indian advertising
trajectory. Market research and readership surveys led to further professionalization of the
advertising industry. Now with the advent of digital media, Television Rating Points, popularly
known as TRP measurements, provided ad agencies with statistical data on consumer/ viewer
likes and dislikes and helped them create effective media plans and ad campaigns.
Business organizations are prioritizing the skill development of their advertising and marketing
professionals through Advertising online certification courses and enabling them to acquire
knowledge on cutting edge concepts like personalized Ad targeting in search engines and
enabling product visibility through content marketing.

HRD Lecturer Notes | EVOLUTION OF ADVERTISING IN INDIA 8

Module - 1 Introduction to Advertising Management

6. Role of advertising in the economic development of India

Increases National Income: Advertising promotes demand, increases productive and industrial
activities, promotes growth in agriculture, etc. All this results in increase in national income.
Creates Market Demand: In case of new products, advertising creates primary demand by
educating the audience regarding uses of product. Even in case of existing product, the
audiences are made to realise the need of product through rational and emotional appeals.
Creates Employment: Advertising has created both direct and indirect employment to various
person in the society. It provides direct employment to person involved in jobs like-
copywriters, artists, graphic designers, painters, singers, etc. Indirectly, it creates employment
avenues as it creates demand, stimulates production and thus promotes industrial activities.
Mass Production & Distribution
Boost Export

Standard of Living: Advertising has reduced the cost of production and distribution, promoted
competition and thus resulted in price reduction. It has promoted demand.
New Industries
New Product
Business Cycle Problem
Value of Product

Economic Benefits of Advertising

An assessment of the role of advertising in the economic system offers the following benefits:
1. Advertising Acts as Guide to Prospective Buyers

Information utility Advertising provides information. It provides information about

products, their specifications, features, functions and prices to prospective buyers.
The consumer becomes knowledgeable of the various attributes of a product or service due
to advertisements. Further, he is assumed to be aware of the product — price alternatives
available to him and has well defined tastes and preferences and can determine his
marginal rate of substitution for each product from among the possible alternative
products involved in a particular purchase decision.
In real life, however, consumers are not so well informed. They have to rely on whatever
information they can gather from various sources including advertisements. There can be
little doubt about the genuine need for certain amount of information for making decisions
about the purchase of products and exercise of choice between products and their
substitutes among several brands.

HRD Lecturer Notes | Role of advertising in the economic development of India 9

Module - 1 Introduction to Advertising Management

2. Advertising creates Demand for a Product

The demand for a class of product as a whole may be termed primary demand and the
demand for a particular company’s products as the selective demand.
Advertising may shift the demand for a class of products when the demand for that product
is expansible, i.e., subject to increase through appeals to consumers’ buying motives. In
influencing the shape of the demand curve for any type or class of products, advertising
may make the demand either more or less elastic.
If a company is able to shift its demand curve with the help of advertising, it will attain a
larger share of the industry’s total sales unless the primary demand expands in equal ratio.
If the product does not present a good advertising opportunity, it does not bring a change
in a company’s demand schedule.
Advertising has not only increases the demand for some products but has also changed the
shape of the demand curve by the introduction of new products. In the early stages, there
may be a relatively small and inelastic demand. Later, with aggressive advertising, public
acceptance is built and other firms start imitating the product. Then the shape of the
demand curve is altered.
Advertising tends, in some instances, to make the demand for specific brands of some
products relatively price inelastic for varying lengths of time. If the brands have won the
loyalty of consumers, they (consumers) may be expected to regularly use them, even when
their price relationship with existing brands is disturbed.
3. Product Differentiation

Another factor affecting the firm’s capacity to influence demand is product differentiation.
In product differentiation rests the opportunity to influence consumers to develop brand
preferences. Products in which differentiation is not possible will not be affected by
advertising.
Advertising playing a role in expanding the range of merchandise through the stimulation of
product differentiation among brands has been much more direct than their influence in
widening the range through new inventions of major nature. The desire on the part of
producers to offer a variety of products under their brand names has led them to continue
experimenting with different combinations of desirable product qualities.
Technology has contributed towards developing new products which might gain consumer
acceptance. It must be noted that artificial product differentiation based solely on
advertising is fruitless. Rational economic considerations are probably more important
elements of buying decisions than widely assumed.
4. Encouraging Innovation

Advertising encourages product development by informing potential buyers about the

launch of new products or of improvements made in some products. In many situations,
new product introductions require extensive research, development expenditure and

HRD Lecturer Notes | Role of advertising in the economic development of India 10

Module - 1 Introduction to Advertising Management

substantial investment in production facilities. Advertising can help in recovering such

expenses.
5. Propensity to Consume

Advertising affects the long-run propensity to consume by influencing tests, though it is

doubtful that the effect could occur so rapidly as to affect spending over a business cycle.
On the other hand, advertising might affect the short-run propensity to consume by
informing consumers of bargains. A study shows that a 1% increase in advertising
expenditure results in an average short term increase of 0.1% either in sales or market
share.
In the long term, it was observed that a 1% increase in advertising was correlated with an
average of 0.25% increase in the sales or market share. While advertising apparently
created a preference for the advertised goods, the sales response to advertising did not rise
in proportion to the increase in advertising expenditure.
6. Financial Support to Media

The major functions of the mass media are to provide education, entertainment and
information to the audience. For example, the revenue from subscriptions of readers alone
is quite inadequate to support the publication of newspapers and magazines. It is the
advertisements that they carry bring them more revenue which enable newspapers and
magazines to reduce their cover price.
Selling of space or time by the media to advertisers is essential for the financial viability of
the media. Availability of advertising revenue is a per-requisite for the growth of media
through introduction of new media vehicles and for continuation of existing ones.

7. Consumer Protection Act

We buy a variety of goods and services in our day-to-day life. Whatever we buy we pay for it
and derive satisfaction from its consumption and use. But sometimes we do not feel satisfied
with the product we buy. This may be on account of poor quality of the product, overcharging
by the shopkeeper, lower quantity of contents, misleading advertisement, and so on. Should
we allow these practices to continue? Obviously not; then is there any remedy for such
malpractices? The answer lies in the concept and practice of consumer protection, the rights
and responsibilities of consumers, legal provisions and mechanism for settlement of consumer
grievances.

WHO IS A CONSUMER?
• A consumer is defined as someone who acquires goods or services for direct use or
ownership rather than for resale or use in production and manufacturing

HRD Lecturer Notes | Consumer Protection Act 11

Module - 1 Introduction to Advertising Management

CONCEPT OF CONSUMER PROTECTION

Consumer protection means safeguarding the interest and rights of consumers. In other words,
it refers to the measures adopted for the protection of consumers from unscrupulous and
unethical malpractices by the business and to provide them speedy redressal of their
grievances. The most common business malpractices leading to consumer exploitation are
given below.
a. Sale of adulterated goods i.e., adding something inferior to the product being sold.
b. Sale of spurious goods i.e., selling something of little value instead of the real product.
c. Sale of sub-standard goods i.e., sale of goods which do not confirm to prescribed quality
standards.
d. Sale of duplicate goods.
e. Use of false weights and measures leading to underweight.
f. Charging more than the Maximum Retail Price (MRP) fixed for the product.
g. Supply of defective goods.
h. Misleading advertisements i.e., advertisements falsely claiming a product or service to
be of superior quality, grade or standard.
The above instances show the exploitation of consumers in the context of goods and services.
In a democratic nation like India, should we allow this to happen? So the measures adopted by
the government or non-government organisations (NGOs) for safeguarding the interests of the
consumers constitute consumer protection.

CONSUMER PROTECTION ACT 1986

The Consumer Protection Act was passed in 1986 and it came into force from 1 July 1987. The
main objectives of the Act are to provide better and all-round protection to consumers and
effective safeguards against different types of exploitation such as defective goods, deficient
services and unfair trade practices. It also makes provisions for simple, speedy and inexpensive
machinery for redressal of consumers’ grievances.

Salient Features of Consumer Protection Act 1986

The salient features of Consumer Protection Act (CPA) 1986 are as follows:
a. It applies to all goods, services and unfair trade practices unless specifically exempted
by the Central Government.
b. It covers all sectors whether private, public or co-operative.
c. It provides for establishment of consumer protection councils at the central, state and
district levels to promote and protect the rights of consumers and three tier quasi
judicial machinery to deal with consumer grievances and disputes.
d. It provides a statutory recognition to the six rights of consumers.

The Six Rights of the Consumer

HRD Lecturer Notes | Consumer Protection Act 12

Module - 1 Introduction to Advertising Management

1. Right to Safety
 According to this right the consumers has to be protected against goods and
services which are hazardous to health or life.
 For example the manufacturing defects in medicines and other electronic appliances
may cause damage to life of consumers.
 This right to safety protects the consumer from sale of such hazardous goods or
services

2. Right to be Informed
 According to this right the consumer must be provided with adequate and accurate
information about quality, quantity, purity, standard and the price of the goods and
services.
 Now-a-days the manufacturers provide detailed information about the contents of
the product, its quantity, date of manufacturing, date of expiry, maximum retail
price, precautions to be taken, etc. on the label and package of the product.
 Such information helps the consumers in their buying decision and use of the
product.

3. Right to Choose
 According to this right every consumer has the right to choose their desired goods
and services.
 The producer or supplier or retailer should not force the customer to buy a
particular brand only

4. Right to be Heard
 According to this right the consumer has the right to represent him (or) right to
advocate his interest.
 In other words, consumers have a right to complain when there are problems or
concerns.

5. Right to Seek Redressal(compensation)

 According to this right the consumer has the right to get compensation or seek
redressal against unfair trade practices or any other exploitation.
 The right to redressal includes compensation in the form of money or replacement
of goods or repair of defect in the goods as per the satisfaction of consumer.

6. Right to Consumer Education

 According to this right it is the right of consumer to acquire the knowledge and skills
to be informed to customers.
 The government of India has included consumer education in the school curriculum
and in various university courses. Government is also making use of media to make
the consumers aware of their rights.
HRD Lecturer Notes | Consumer Protection Act 13
Module - 1 Introduction to Advertising Management

 Effective consumer education leads to an increased level of consumer awareness

and help them to enforce their rights more effectively, and protect themselves
against fraudulent, deceitful and grossly misleading advertisement, labelling, etc.

8. Understanding Consumer Buyer Behaviour

• Consumer behaviour is the actions and the decision processes of people who purchase
goods and services for personal consumption.
• Consumer buying behaviour refers to the study of customers and how they behave
while deciding to buy a product that satisfies their needs. It is a study of the actions of
the consumers that drive them to buy and use certain products.
• Consumer behaviour or buyer behaviour is defined as the behaviour that consumes
display in searching for, purchasing, using, evaluating and disposing of products and
services that they expect will satisfy their needs. Consumer behaviour focuses on the
how individuals make decisions to spend their available resources on consumption
related items. That includes what they buy, why they buy, when they buy, where they
buy from, how often they buy, how often they use it, how they evaluate it after the
purchase and the impact of such evaluations on future purchases and how they dispose
of it.

• In order to succeed in any business in today’s competitive world, advertiser has to know
everything they can know about their consumers. They must know what the buyers
want, what they think, how they work, how they spend their leisure time, and so on.
They need to understand the personal and the group influences that affect consumer
decisions and how these decisions are affected by the other people.

• Marketers need to understand the buying behaviour of consumers while designing their
advertisements for the desired impact. Advertisements play an essential role in creating
an image of a product in the minds of consumers. Advertisements must be catchy and
communicate relevant information to consumers.

• Understanding the needs of the consumer is really important when it comes to

creating the right advertisement for the right audience. Remember it is only through
advertisements; individuals are able to connect with your brand.

8.1. Factors Influencing Consumer Behaviour

Behaviour of an individual consumer is not only influenced by his internal factors, but also
by factors external to him and beyond his control. There are various internal and external
factors that have influences on consumer behaviour. These factors are also called
determinants of consumer behaviour.

Following are the main factors that influences consumer behaviour, categorised as internal
influences and external influences.

HRD Lecturer Notes | Understanding Consumer Buyer Behaviour 14

Module - 1 Introduction to Advertising Management

Personal Characteristics
Personal factors can also affect the consumer behavior. Some of the important personal factors
that influence the buying behavior are: lifestyle, economic situation, occupation, age,
personality and self concept.

• Age: Age and life-cycle have potential impact on the consumer buying behavior. Consumers
change the purchase of goods and services with the passage of time. Family life-cycle
consists of different stages such as childhood, bachelorhood, newly married couple,
parenthood etc. which help marketers to develop appropriate products for each stage.

• Occupation: The occupation of a person has significant impact on his buying behavior. For
example a marketing manager of an organization will try to purchase business suits,
whereas a low level worker in the same organization will purchase rugged work clothes.

• Economic Situation: Consumer’s economic situation has great influence on his buying
behavior. If the income and savings of a customer is high then he will purchase more
expensive products. On the other hand, a person with low income and savings will purchase
inexpensive products.

• Lifestyle: Lifestyle of customers is another import factor affecting the consumer buying
behavior. Lifestyle refers to the way a person lives in a society and is expressed by the
things in his/her surroundings. It is determined by customer interests, opinions, activities
etc and shapes his whole pattern of acting and interacting in the world.

• Personality: Personality changes from person to person, time to time and place to place.
Therefore it can greatly influence the buying behavior of customers. Actually, Personality is
not what one wears; rather it is the totality of behavior of a man in different circumstances.
HRD Lecturer Notes | Understanding Consumer Buyer Behaviour 15
Module - 1 Introduction to Advertising Management

It has different characteristics such as: dominance, aggressiveness, self-confidence etc

which can be useful to determine the consumer behavior for particular product or service
Psychological Characteristics
There are four important psychological factors affecting the consumer buying behavior. These
are: perception, motivation, learning, beliefs and attitudes.

• Motivation: The level of motivation also affects the buying behavior of customers. Every
person has different needs such as physiological needs, biological needs, social needs etc.
The nature of the needs is that, some of them are most pressing while others are least
pressing. Therefore a need becomes a motive when it is more pressing to direct the person
to seek satisfaction.
Maslow’s Theory of Motivation explains why people are driven by particular needs at
particular times. Maslow arranged human needs in a hierarchy according to their
importance. They are physiological needs, safety needs, social needs, esteem needs and
self-actualization needs. A person tries to satisfy the most important need first. When that
need is satisfied, it will stop being a motivator and the person will then try to satisfy the
next important need.

• Perception: Selecting, organizing and interpreting information in a way to produce a

meaningful experience of the world is called perception. What an individual thinks about a
particular product or service is his/her perception towards the same. Individuals with the
same needs might not purchase similar products due to difference in perception. There are
three different perceptual processes which are selective attention, selective distortion and
selective retention. In case of selective attention, individuals pay attention to information
that is of use to them or their immediate family members. Whereas, in case of selective
distortion, consumers tend to perceive information in a way which would be in line to their
existing thoughts and beliefs. Similarly, in case of selective retention, consumers remember
information which would be useful to them, rest all they forget in due course of time.

• Beliefs and Attitudes: Customer possesses specific beliefs and attitudes towards various
products. Since such beliefs and attitudes make up brand image and affect consumer
buying behavior, therefore, marketers are interested in them. Marketers can change the
beliefs and attitudes of customers by launching special campaigns in this regard

Cultural Characteristics

• Culture: Culture is the set of basic values, perceptions, wants and behaviours learned by a
member of society from family and other important institutions. Basically, culture is the
part of every society and is the important cause of individual wants and behavior. The
influence of culture on buying behavior varies from country to country therefore marketers
have to be very careful in analyzing the culture of different groups, regions or even
countries.

HRD Lecturer Notes | Understanding Consumer Buyer Behaviour 16

Module - 1 Introduction to Advertising Management

• Subculture: Each culture contains different subcultures such as religions, nationalities,

geographic regions, racial groups etc. Marketers can use these groups by segmenting the
market into various small portions. Marketers can design products according to the needs
of a particular geographic group.

• Social class: Social class refers to the hierarchical arrangement of the society into various
divisions, each of which signifies social status or standing. Social class is an important
determinant of consumer behavior as it affects consumption patterns, lifestyle, media
patterns, activities and interests of consumers
2. Social Characteristics
Social factors also impact the buying behavior of consumers. The important social factors are:
Reference groups, family, role and status.

• Reference Groups: Person’s reference group are those groups that have a direct or indirect
influence on the person’s attitudes or behavior. Individuals use these groups as reference
points for learning attitudes, beliefs and behavior, and adapt these in their life. Family and
close friends are considered to be primary reference groups in an individual’s life due to
their frequency of interaction with the individual and primacy of these significant others in
an individual’s life. Schoolmates, neighbourhood, colleagues, other acquaintances are a
part of the secondary reference groups of an individual.
• Family: Buyer behavior is strongly influenced by the member of a family. Therefore
marketers are trying to find the roles and influence of the husband, wife and children. If the
buying decision of a particular product is influenced by wife then the marketers will try to
target the women in their advertisement. Here we should note that buying roles change
with change in consumer lifestyles.
• Roles and Status: Each person possesses different roles and status in the society depending
upon the groups, clubs, family, organization etc. to which he belongs. The social role and
status profoundly influences the consumer behavior and his purchasing decisions.

9. THE BUYING DECISION PROCESS

Consumer decision-making process, also called as buying process, explains how consumer takes
purchase decisions. It consists of five steps i.e. (i) Recognition of need (ii) Search for
information (iii) Evaluation of alternatives (iv) Purchase decision and (v) Post-purchase
evaluation.

HRD Lecturer Notes | THE BUYING DECISION PROCESS 17

Module - 1 Introduction to Advertising Management

1. Recognition of need
Consumer decision making process begins with an unsatisfied need or problem. Everyday
we face multiple problems which individuals resolve by consuming products or services.
Consumer problem can be routine or unplanned. For example – run out of milk or cooking
oil, car indicating low level of fuel, are some of the routine problems that individuals face.
Such problems are quickly recognised, defined, and resolved. Recognition of unplanned
problem may take much longer time as it may evolve slowly over time. For example - need
of a new refrigerator as existing one is not working properly.

An individual recognise problem through information processing arising as a result of

internal and external stimuli. After problem recognition the action to solve the problem
depends on the magnitude of discrepancy between the current state and desired state and
the importance of the problem for the concerned consumer. If the problem is highly
important for an individual and there is high discrepancy between current state and desired
state of the individual, he will start the purchase process.

2. Search for information

Information search is done to know about product or service, price, place and so on. In the
process of decision making, the consumer engages in both internal and external
information search. Internal information search involves the buyer identifying alternatives
from his memory. Internal information search is sufficient for low involvement products or
services. For high involvement product or service, buyers are more likely to do external
information search. The amount of efforts a buyer put in information search depends on
various factors like market, competition, difference in brands, product characteristics,
product importance, and so on.

3. Evaluation of alternatives
At this step the buyer identifies and evaluates different alternatives to choose from. It is not
possible to examine all the available alternatives. So, buyer develops evaluative criteria to
narrow down the choices. Evaluative criteria are certain characteristics that are important
to buyer such as price of the product, size, colour, features, durability, etc. Some of these
HRD Lecturer Notes | THE BUYING DECISION PROCESS 18
Module - 1 Introduction to Advertising Management

characteristics are more important than others. To narrow down the choices the buyer
considers only the most important characteristics.

4. Purchase Decision
The earlier mentioned evaluation step helps the consumer in arriving at a purchase
intention. In the decision evaluation stage, the consumer forms preferences among the
brands in the choice set. The consumer may also form a purchase intention and lean
towards buying the most preferred brand. However factors can intervene between the
purchase intention and the purchase decision. A buyer who decides to execute a purchase
intention will be making up to five purchase decisions brand decision, vendor decision,
quantity decision, timing decision and payment-method decision.

5. Post-purchase Evaluation
Once the buyer makes a decision to purchase a product or service there can be several
types of additional behaviour associated with that decision such as decisions on product
uses and decision on services related to the product purchased. The level of satisfaction
experienced by the buyer after his purchase will depend on the relationship between his
expectations about the product and performance of the product. If the buyer is satisfied
then he will exhibit a higher probability of repeat purchase of the product or service. The
satisfied buyer will also tend to say good words about the product or service. Whereas a
highly dissatisfied buyer will not buy the product or service again and spread negative
words about service and company.

10. Types of Purchase Decisions (Types of Buying Decision Behavior)

We have often seen that there are some purchases which require a lot of time and information
to make. On the other hand there are also buying decisions which can be made without taking
time and consulting others. In this way, consumer buying behavior is broadly divided into four
parts on the basis of the extent of buyer involvement and the extent of differences among
brands. The explanation of four types is given and explained below.

HRD Lecturer Notes | Types of Purchase Decisions (Types of Buying Decision Behavior) 19
Module - 1 Introduction to Advertising Management

I. Complex buying Behavior

• When the consumers are highly involved in a purchase and observe significant
differences between the brands then the consumers undertake complex buying
behavior.
• Such type of behavior occurs when the customer is trying to buy a product which is
risky, expensive, and is purchased infrequently such as cars, computers, house etc.
• Therefore in order to make final decision, the customer tries to learn more about
the product such as product features, attributes, quality, durability, reliability etc.
For this purpose, the customer seeks information from various sources such as print
media and electronic media and develops a particular belief and attitude towards
the product. He only makes the final purchase decision when he is fully satisfied.
• Marketers should help the customers to easily gather information about the
products of company and they should also differentiate their products from the
competitors.

II. Dissonance-Reducing Buying Behavior

• Consumers undertake dissonance-reducing buying behavior when they are highly

involved in a purchase and observe insignificant differences between the brands.
• Such type of buying behavior occurs when the product is expensive, risky and is
purchased infrequently but the differences between the brands are insignificant. It
means that the customer can purchase product from any anywhere without
considering the brand.
• For example the consumer buying furniture will observe dissonance-reducing buying
behavior because on one hand the product is expensive whereas on the hand it is in
the given price range.

III. Habitual Buying Behavior

• If the involvement of consumers is low and they perceive few differences among the
brands, then the consumers undertake habitual buying behavior.
• Such type of behavior occurs when the consumers buy low cost, frequently
purchased products. For example, purchase of milk, bread, salt etc requires low
consumer involvement and does not contain significant differences between brands.
• In such cases, brand loyalty does not occur and consumers only purchase products
of particular brand because of their familiarity. For this purpose, customers do not
gather information for the brand. Therefore marketers have to increase the
familiarity of their products with the help of attractive prices and sales promotion.

HRD Lecturer Notes | Types of Purchase Decisions (Types of Buying Decision Behavior) 20
Module - 1 Introduction to Advertising Management

IV. Variety-Seeking Buying Behavior

• Variety-seeking buying behavior occurs in a situation of low consumer involvement

but significant brand differences.
• For example, purchase of chips, matchbox, soaps, detergents, etc. Customers try to
use different brands of such products because they want to check variety of
products.
• This is the reason that most of the consumers do a lot of brand switching in case of
variety-seeking buying behavior.

11. Models of Consumer Buyer’s Behaviour

An understanding of what models mean will enhance our ability to explain the various types
and ingredients of models in consumer behaviour.
 Sampson (1974) remarks that, a model represents a theoretical construction of
phenomena, which are interrelated and significant in influencing the outcome of a
specific problem; in this particular instance the buying process.
 McNeal (1973) describes a model as a simplified presentation of real phenomena.
 Ekerete (2003) holds the view that, a model is simply a representation of some or all of
the properties of a large system.

In a simple words model is a precise and concise statement of theory. Models of consumer
behaviour focus on assumption on which these are formulated. The model deals with decision
of consumption made by decision making entities. The model of consumer behaviour tells
about what factors govern the choice of purchases and decisions. Thus model includes the
process of planning the purchase, execution of the plan and after-effects of consumption.

Consumer behaviour is a very complex subject as needs, wants and demands of human beings
are innumerable. The buyers are also influenced by various internal and external factors.
Consumer behaviour studies all the major social sciences like economics, psychology, sociology,
anthropology. The influence of these has prompted the experts for the following consumer
behaviour models:

11.1. AIDA MODEL

If you’ve ever been motivated to take action due to an advertisement, you’ve likely been
influenced by a technique called “AIDA.” AIDA stands for “Attention, Interest, Desire, Action”
and it’s a tried-and-true process is used by marketers to entice prospects to make a purchase
or take a desired action. The technique is commonly used in advertising vehicles such as
television commercials, website copy and direct mail pieces.

HRD Lecturer Notes | Models of Consumer Buyer’s Behaviour 21

Module - 1 Introduction to Advertising Management

The AIDA Model identifies cognitive stages an individual goes through during the buying
process for a product or service. It’s a purchasing funnel where buyers go to and fro at each
stage, to support them in making the final purchase.

Attetion

Interest

Desire

Action

1. Attention
The attention portion of the marketing message occurs at the beginning and is designed to
give the prospects a reason to take notice. Presenting a shocking fact or statistic that
identifies a problem which can be solved by the product or service is one common method
of gaining attention. Other methods can include asking a thought-provoking question or
using the element of surprise. Visual elements, like an unexpectedly elegant design, loud
colours or sudden motion, can also be good attention-grabbers. The purpose is to give the
prospects a reason for wanting to learn more.

2. Interest
Initial attention-grabbers work for a moment or two, but your potential customer needs a
reason to stay engaged. Once you’ve gained the prospects’ attention, the next step is to
maintain interest in your product or service. Explain to the recipients how the problem
you’ve identified in the attention step is adversely affecting their lives. A demonstration or
illustration can help the recipients to further identify with the problem and want to actively
seek possible solutions. By personalizing the problem, you’re making it hit closer to home.

3. Desire
In the desire stage, your objective is to show the prospects how your product or service can
solve their problem. Explain the features of the product or service and the related benefits
and demonstrate how the benefits fulfil the need. A common advertising process is the
“before and after” technique, such as when a cleaning product makes a soiled item look
brand new. Advertisers often use the suggestion of a better life (better health, better

HRD Lecturer Notes | Models of Consumer Buyer’s Behaviour 22

Module - 1 Introduction to Advertising Management

wealth, better romance) as a means of keeping would-be clients engaged. If done

effectively, the prospects should now have the desire to make a purchase.

4. Action
Now that you’ve created the desire to make a purchase, the final step is to persuade the
prospects to take immediate action. In a one-on-one sales process, this is the time to ask
for the sale. In the advertising world, techniques involve creating sense of urgency by
extending an offer for a limited time or including a bonus of special gift to those who act
within a specific time frame. Providing a phone number to call, a website to visit, or a digital
button to click on gives prospective customers a clear and easy next step towards making a
purchase. Without a specific call to action, the prospect may simply forget about your offer
and move on.

11.2. DAGMAR

DAGMAR (defining advertising goals for measured advertising results) was an advertising model
proposed by Russel H. Colley in 1961.
It is used to establish clear objectives for an advertising campaign and measure its success.
According to DAGMAR, each purchase prospect goes through 4 steps:
1. Awareness
2. Comprehension
3. Conviction
4. Action
These steps are also known as ACCA advertising formula. ACCA/DAGMAR is a descendant of
AIDA advertising formula and considered to be more popular and comprehensive than AIDA.
Developed for the measurement of advertising effectiveness it maps the states of mind that a
consumer passes through. Important parts of the DAGMAR model are definitions of target
audience, (people whom the advertising message is addressed to) and objectives (goals of
advertising message).

Communication process in DAGMAR approach is as follows:

1. Awareness
 Awareness of the existence of a product or a service is needful before the purchase
behaviour is expected. The fundamental task of advertising activity is to improve the
consumer awareness of the product.

HRD Lecturer Notes | Models of Consumer Buyer’s Behaviour 23

Module - 1 Introduction to Advertising Management

 Once the consumer awareness has been provided to the target audience, it should not be
forsaken. The target audience tends to get distracted by other competing messages if they
are ignored.
 Awareness has to be created, developed, refined and maintained according to the
characteristics of the market and the scenario of the organization at any given point of
time.
 The objective is to create awareness about the product amongst the target audience.

2. Comprehension
 Awareness on its own is not sufficient to stimulate a purchase. Information and
understanding about the product and the organisation are essential. This can be achieved
by providing information about the brand features.
 Example: In an attempt to persuade people to budge for a new toothpaste brand, it may be
necessary to compare the product with other toothpaste brands, and provide an additional
usage benefit, such as more effective than other toothpaste because it contains salt or that
this particular toothpaste is vegetarian toothpaste, which will, in turn, attract more
customers.
 The objective is to provide all the information about the product.

3. Conviction
 Conviction is the next step where the customer evaluates different products and plans to
buy the product. At this stage, a sense of conviction is established, and by creating interests
and preferences, customers are convinced that a certain product should be tried at the next
purchase.
 At this step, the job of the advertising activity is to mould the audience’s beliefs and
persuade them to buy it. This is often achieved through messages that convey the
superiority of the products over the others by flaunting the rewards or incentives for using
the product.
 Example: Thumbs up featured the incentive of social acceptance as “grown up”. It implied
that those who preferred other soft drinks were kids.
 The objective is to create a positive mental disposition to buy a product.

4. Action
 Communication must finally encourage buyers to engage in purchase activity.
 Advertising can be directive and guide the buyers into certain behavioural outcomes, Use of
toll free numbers, direct mail activities and reply cards and coupons.

HRD Lecturer Notes | Models of Consumer Buyer’s Behaviour 24

Module - 1 Introduction to Advertising Management

11.1. Howard- Sheth Model

 John Howard and Jagadish Sheth introduced the Howard Sheth Model in the year 1969.
 It attempts to explain the rationality of choice of the product by the consumer under
conditions of incomplete information
 The model makes significant contribution to understand consumer behavior by
identifying the variables which influence consumers
 Model explains buyer decision process using four major sets of variables
1. Input Variables
a. Significative
b. Symbolic
c. Social
2. Hypothetical Constructs
a. Perceptual Constructs
b. Learning Constructs
3. Output Variables
4. External Variables

1. Input Variables: The input variables refer to the stimuli in the environment. Significance
stimuli, Symbolic stimuli, and Social stimuli are three important stimuli’s without which
necessary purchase decisions cannot be made. Inputs are given by these three stimuli’s in
Howard Sheth Model. Here, uniqueness, quality, stock availability, price and service
effectiveness are the features of the tangible products which refers to significance stimuli.
On the other hand, the opinion of a person about features of a product is mentioned under
symbolic stimuli whereas, social stimuli by its name only define that it relates to the

HRD Lecturer Notes | Models of Consumer Buyer’s Behaviour 25

Module - 1 Introduction to Advertising Management

elements belonging to the social group of the customer such as family, reference groups
and the financial status of the customer in the society.
2. Output Variables: After purchasing the commodities from the market, the level of their
satisfaction or dissatisfaction, and the factors affecting customers to buy or not to buy
product states the output variables in Howard Sheth Model. The more the customer will be
satisfied, the more brand value will raise, vis-a versa, dissatisfaction leads to a decline in
brand value.
3. Hypothetical Constructs: Attitude, desire, research and perception are the psychological
variables which affect the consumer’s decision-making techniques. Here, hypothetical
constructs have been classified into two groups:
a. Perceptual Constructs: Perceptual constructs manage the way; a person identifies
and acknowledges the information.
b. Learning Constructs: It manages the way, how buyer forms attitudes, opinions and
knowledge influencing his buying decisions and also an evaluation after purchase.
4. External Variables: Indirect effect on the consumer’s decision making such as the financial
status of a consumer, essentiality to buy a product comes under external variables of
Howard Sheth Model.

12. Question Bank

1. Elaborate AIDA
2. Define advertisement?
3. Where do advertising and consumer behaviour intersect? Why does advertising need
grasp of consumer behaviour?
4. What is advertising? Explain the characteristics of advertising.
5. Explain types of advertising used for communicating with audience.
6. Explain Howard- Sheth Model
7. What is DAGMAR?
8. What are factors that Influences consumer buying behaviour?
9. What are six rights of the consumer?
10. Give the meaning of Consumer.
11. What is meant by consumer protection?
12. Describe the right of a consumer as per CPA 1986.

HRD Lecturer Notes | Question Bank 26