UG B.sc. Psycology 119 63 Consumer Behaviour BSC Psy 6sem CRC 6529

ALAGAPPA UNIVERSITY
[Accredited with ‘A+’ Grade by NAAC (CGPA:3.64) in the Third Cycle

and Graded as Category–I University by MHRD-UGC]
(A State University Established by the Government of Tamil Nadu)
KARAIKUDI – 630 003
Directorate of Distance Education
B.Sc. (Psychology)
VI - Semester
119 63
CONSUMER BEHAVIOUR
Reviewer
Dr AR. Saravanakumar Assistant Professor, Department of
Education, DDE,
Alagappa University,
Karaikudi
Authors:
Arun Kumar, Professor, New Delhi Institute of Management
N Meenakshi, Associate Professor, NIILM Centre for Management Studies
Units (1.2-1.4, 1.6, 2, 3, 4.2, 4.4, 5, 6.2.1-6.2.2, 8.3-8.5, 9, 10, 11.3, 12.2.1, 13.2, 13.3, 14.2.3, 14.4)
S Sumathi, Marketing Consultant
P Saravanavel, Management Consultant
Units (1.5, 6.2, 12.2.2, 14.2- 14.2.2, 14.3)
Piyali Mukherjee (Banerjee), Civil & Criminal Lawyer, Jangipur Court, West Bengal
Units (6.2.3, 6.3, 13.4)
Vikas Publishing House, Units (1.0-1.1, 1.7-1.11, 4.0-4.1, 4.3, 4.5-4.9, 6.0-6.1, 6.4-6.8, 7.0-7.1, 7.2, 7.3, 7.4-7.8, 8.0-8.1, 8.2,
8.6-8.10, 11.0-11.1, 11.2, 11.4-11.8, 12.0-12.1, 12.2, 12.3-12.7, 13.0-13.1, 13.5-13.9, 14.0-14.1, 14.5-14.9)
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SYLLABI-BOOK MAPPING TABLE
Consumer Behaviour
BLOCK I: CONCEPT OF CONSUMERS

UNIT I: Introduction Unit 1: Introduction to
Definition, scope, consumer roles, history of consumer behaviour and Consumer Behaviour
the marketing concept, contributing disciplines and application of (Pages 1-18);
consumer behaviour. Unit 2: Market Segmentation
UNIT 2: Market Segmentation (Pages 19-36);
Market segmentation: need, types – geographic, demographic, Unit 3: Consumer
psychographic and life style. Product positioning: need and strategy. Motivation
UNIT 3: Consumer Motivation (Pages 37-48)
Consumer motivation: needs, goals, motive arousal, reactions to Unit 4: Consumer Personality
frustration. (Pages 49-70);
UNIT 4: Consumer Personality
Consumer Personality: nature, influences on consumer behaviour.
Consumer Emotions Consumer emotions: nature, uses in advertising.
Consumer Perception and its implications.
BLOCK II: CONSUMERS ATTITUDE

UNIT 5: Consumer Learning Unit 5: Consumer Learning
Consumer Learning: Classical and Instrumental theories in the context (Pages 71-80);
of consumer behaviour. Unit 6: Consumer Attitude
UNIT 6: Consumer Attitude (Pages 81-91);
Attitude: functions, Tri-component attitude model and Katz’s models of Unit 7: Post Purchase Attitude
attitude and attitude change. Change (Pages 92-100);
UNIT 7: Attitude Change Unit 8: Marketing
Post purchase attitude change: cognitive dissonance theory and attribution Communication
theory. (Pages 101-130)
UNIT 8: Marketing Communication
Marketing communication: process, barriers, types of communication
systems, Source, Message and Medium of Communication.
BLOCK III: SOCIAL CLASS OF CONSUMERS

UNIT 9: Consumers In Their Social And Cultural Settings Unit 9: Consumers in their
Reference group: Nature, types and influences on consumers. Family Social and Cultural Settings
life cycle stages, (Pages 131-144);
UNIT-10: Decision Making Unit 10: Decision Making
Nature of household and purchases and family decision making and (Pages 145-153);
resolving conflict. Unit 11: Social Class
UNIT-11: Social Class (Pages 154-166)
Social class: Nature of social class, symbols of status, concept of money
and social class, social class categories and consumer behaviour.
BLOCK IV: DECISION OF CONSUMERS Unit 12: Consumer
UNIT- 12: Consumer Decision Making Decision Making
Consumer decision: Stages in consumer decision process – (Pages 167-180);
situational influence, problem recognition, Unit 13: Purchase and Action
UNIT-13: Purchase and Action (Pages 181-190);
Information search, evaluation of alternatives and selection, outlet Unit 14: Organizational buyer
selection and purchase and post purchase action. (Pages 191-206)
UNIT-14: Organizational Buyer
Organizational Buyer: nature, market structure and pattern of demand,
characteristics, decision approach, purchase pattern and organizational
buyer decision process.
CONTENTS
INTRODUCTION
BLOCK I: CONCEPT OF CONSUMERS
UNIT 1 INTRODUCTION TO CONSUMER BEHAVIOUR 1-18
1.0 Introduction
1.1 Objectives
1.2 Definition of Consumer Behaviour
1.3 Consumer Roles
1.4 History of Consumer Behaviour and the Marketing Concept
1.5 Contributing Disciplines
1.6 Scope and Application of Consumer Behaviour
1.7 Answers to Check Your Progress Questions
1.8 Summary
1.9 Key Words
1.10 Self Assessment Questions and Exercises
1.11 Further Readings
UNIT 2 MARKET SEGMENTATION 19-36

2.0 Introduction
2.1 Objectives
2.2 Market Segmentation: Need
2.3 Types of Segmentation – Geographic, Demographic, Psychographic and Lifestyle
2.4 Product Positioning: Need and Strategy
2.6 Summary
2.7 Key Words
UNIT 3 CONSUMER MOTIVATION 37-48

3.0 Introduction
3.1 Objectives
3.2 Needs, Goals and Motivation
3.2.1 Dynamic Nature of Motivation
3.2.2 Defence Mechanisms or Reactions to Frustration
3.2.3 Arousal of Motives
3.2.4 Theories of Needs and Motivation
3.3 Measurement of Motives and Motivational Research
3.5 Summary
3.6 Key Words
UNIT 4 CONSUMER PERSONALITY 49-70

4.0 Introduction
4.1 Objectives
4.2 Consumer Personality: Nature and Influences on Consumer Behaviour
4.3 Consumer Emotions: Nature and Uses in Advertising
4.4 Consumer Perception and its Implications
4.6 Summary
4.7 Key Words
BLOCK II: CONSUMERS ATTITUDE

UNIT 5 CONSUMER LEARNING 71-80
5.0 Introduction
5.1 Objectives
5.2 Meaning of Consumer Learning
5.3 Classical and Instrumental Theories in the Context of Consumer Behaviour
5.5 Summary
5.6 Key Words
UNIT 6 CONSUMER ATTITUDE 81-91

6.0 Introduction
6.1 Objectives
6.2 Meaning of Attitude
6.2.1 Attitude: Functions
6.2.2 Tri-Component Attitude Model
6.2.3 Katz’s Model of Attitude
6.3 Attitude Change
6.5 Summary
6.6 Key Words
UNIT 7 POST PURCHASE ATTITUDE CHANGE 92-100
7.0 Introduction
7.1 Objectives
7.2 Cognitive Dissonance Theory
7.3 Attribution Theory
7.5 Summary
7.6 Key Words
UNIT 8 MARKETING COMMUNICATION 101-130

8.0 Introduction
8.1 Objectives
8.2 The Process of Communication
8.2.1 Noises or Barriers to Communication Process
8.3 Introduction to Marketing Communication
8.3.1 Types of Marketing Communication
8.3.2 Principles of Communication
8.3.3 Source, Message and Medium Factors
8.3.4 Consumer Behaviour: Perspective and Advertising Response Process
8.4 Information Processing: Attention, Comprehension and Recall
8.5 Two-Step Flow of Communication: Opinion Leaders
8.7 Summary
8.8 Key Words
BLOCK III: SOCIAL CLASS OF CONSUMERS

UNIT 9 CONSUMERS IN THEIR SOCIAL AND CULTURAL SETTINGS 131-144
9.0 Introduction
9.1 Objectives
9.2 Reference Group: Nature, Types and Influences on Consumers
9.3 Family Life Cycle Stages
9.5 Summary
9.6 Key Words
UNIT 10 DECISION MAKING 145-153
10.0 Introduction
10.1 Objectives
10.2 Nature of Household and Purchases and Family Decision Making and Resolving Conflict
10.4 Summary
10.5 Key Words
UNIT 11 SOCIAL CLASS 154-166

11.0 Introduction
11.1 Objectives
11.2 Social Class: Nature
11.2.1 Money and Social Class
11.2.2 Symbols of Status
11.3 Social Class Categories and Consumer Behaviour
11.5 Summary
11.6 Key Words
BLOCK IV: DECISION OF CONSUMERS

UNIT 12 CONSUMER DECISION MAKING 167-180
12.0 Introduction
12.1 Objectives
12.2 Stages in Consumer Decision Process – Situational Influence, Problem Recognition
12.2.1 Factors Influencing Buying Decision: Situational Influence, Personal and Social Influence, etc.
12.2.2 Problem Recognition
12.4 Summary
12.5 Key Words
UNIT 13 PURCHASE AND ACTION 181-190

13.0 Introduction
13.1 Objectives
13.2 Information Search and Evaluation of Alternatives and Selection
13.3 Purchase and Post-Purchase Evaluation of Decision
13.4 Outlet Selection
13.6 Summary
13.7 Key Words
UNIT 14 ORGANIZATIONAL BUYER 191-206

14.0 Introduction
14.1 Objectives
14.2 Meaning and Nature of Organizational Buyer
14.2.1 Market Structure and Pattern of Demand
14.2.2 Organizational Buyer vs Final Consumers
14.2.3 Characteristics of Organizational Buyers
14.3 Decision Approach and Purchase Pattern
14.4 Organizational Buyer Decision Process
14.6 Summary
14.7 Key Words
Introduction
INTRODUCTION
Consumers have needs and wants, and a marketer's objective is to identify the
NOTES need and fulfill it. A marketer's ultimate goal is to influence consumer behaviour
and convert this into profits for the manufacturer. Businesses that can predict
consumer behaviour will have the edge over their competitors. To predict consumer
behaviour requires knowledge of their values, goals and lifestyle. Companies with
this asset use it to develop better strategies and are better able to win over
consumers.
Consumer behaviour is strongly linked to many factors in a consumer's life
and to phase they are in, in the lifecycle. Patterns of spending are dictated by what
is happening at a given time in a consumer's life generally. For instance, younger
couples with no children have different needs than those who have started a family,
while teenagers and elderly people have more discretionary income and can spend
more freely. Knowing this and other aspects of a target consumer's lifestyle will
help the marketer to identify the core customer. There is no sense in stocking a
business with things that only teenagers can afford to consume when customers
may also include young mothers. By using this information to influence buying
decisions; the retailer or manufacturer can increase sales. There are many more
different aspects of consumer behaviour besides these, and a student must be
aware of all these.
This book, Consumer Behaviour, has been designed keeping in mind the
self-instruction mode (SIM) format and follows a simple pattern, wherein each
unit of the book begins with the Introduction followed by the Objectives for the
topic. The content is then presented in a simple and easy-to-understand manner
and is interspersed with Check Your Progress questions to reinforce the student's
understanding of the topic. A list of Self-Assessment Questions and Exercises is
also provided at the end of each unit. The Summary and Key Words further act as
useful tools for students and are meant for effective recapitulation of the text.
Self-Instructional
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Introduction to
BLOCK - I Consumer Behaviour
CONCEPT OF CONSUMERS
NOTES
UNIT 1 INTRODUCTION TO
CONSUMER BEHAVIOUR
Structure
1.0 Introduction
1.1 Objectives
1.2 Definition of Consumer Behaviour
1.3 Consumer Roles
1.4 History of Consumer Behaviour and the Marketing Concept
1.5 Contributing Disciplines
1.6 Scope and Application of Consumer Behaviour
1.8 Summary
1.9 Key Words
1.0 INTRODUCTION
All consumers are both unique in themselves and similar to each other. They have
needs and wants which are varied and diverse from one another; and they have
different consumption patterns and consumption behaviour. The marketer helps
satisfy these needs and wants through product and service offerings. For a firm to
survive, compete and grow, it is essential that the marketer identifies these needs
and wants, and provides product offerings more effectively and efficiently than
other competitors. A comprehensive yet meticulous knowledge of consumers and
their consumption behaviour is essential for a firm to succeed. Herein, lies the
essence of Consumer Behaviour, an interdisciplinary subject that emerged as a
separate field of study in the 1960s. Consumer behaviour is the interplay of forces
that takes place during a consumption process, within a consumers’ self and his
environment. Let us study in detail about the concept of consumer behaviour, its
significance, scope and various disciplines which affect it.
1.1 OBJECTIVES
After going through this unit, you will be able to:

 Describe the meaning of consumer behaviour and its significance in market
 Discuss the history of consumer behaviour and marketing concept
Self-Instructional
Material 1
Introduction to  Explain the relevance of market-driven businesses
Consumer Behaviour
 State the disciplines which influence the consumer behaviour
 Describe the scope and application of consumer behaviour
NOTES
1.2 DEFINITION OF CONSUMER BEHAVIOUR
Consumer behaviour is defined as the behaviour that consumers display while

searching for, purchasing, using, evaluating, and disposing of products and services
that they expect will satisfy their needs.
Consumer behaviour focuses on how individuals make decisions to spend
their available resources on consumption-related items. To succeed, businesses
need to know everything they can about consumers. They need to understand the
personal and group influences that affect consumer decisions and how these
decisions are made.
The term ‘consumer behaviour’ relates to the two kinds of consumers: the
individual consumer and the organizational consumer. Individuals buy goods and
services for their own use. Such customers are also known as end users or ultimate
consumers. Organizational consumers such as profit and not-for-profit businesses,
government agencies, and institutions, all buy products, equipment, and services
in order to run their organizations.
Segmentation is the process of dividing the market of a product or service
into smaller groups of customers. All the customers in one group should (i) buy the
product for the same purpose, or (ii) use the product in the same way, or (iii) buy
the product in the same way. But the customers in one segment should be different
from the customers of any other segment in one or more of the above parameters.
Segmentation of a market makes sense only when the company has to design a
separate value proposition for each segment.
Sportspersons buy Nike shoes to enhance their performance, whereas the
same shoes are used as casual shoes by some other people. People drive their
cars in different ways. Some are ‘rough’ drivers, while others take it easy on the
road. The same grocery items are bought both, at neighbourhood stores and at
upscale stores.
You will find that there is enormous variability in the way customers buy and
use products. They may buy the same product but put it to different uses. Some
customers will buy a product after a lot of consultation, while others will make the
purchase decision of the same product on their own. Some customers will buy a
product from upscale stores while others will buy the same product from a modest
store close to where they live. Some customers may buy a product that is a reflection
of their social standing while others will buy the product for purely functional
reasons.
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2 Material
The types of behaviour that different customers demonstrate in buying and Introduction to
Consumer Behaviour
using the same product and the different types of behaviour that the same customer
demonstrates in buying different products elevate marketing to a discipline much
more intricate than product management. A customer may not behave in the same
fashion while buying the same product under different circumstances. By studying NOTES
the behaviour of customers it becomes possible to segment the market in new
ways and serve them with different marketing mixes even if the product of the
various marketing mixes may be the same. Alternately, differential offerings for
various segments can be developed with different marketing mixes.
Therefore, an in-depth analysis and knowledge of customers is a prerequisite
for marketing. Consumer behaviour influences the choice of target markets and
the nature of marketing mix developed to serve it. Important questions to be asked
about customers are:
 What are the consumers buying?
 Who is important in the buying decision?
 How do they buy?
 What is their choice criteria?
 Where do they buy from?
 When do they buy?
The study of consumer behaviour enables marketers to understand and
predict consumer behaviour in the marketplace; it is concerned not only with what
consumers buy but also with why, when, where, and how they buy it. Consumer
research is the methodology used to study consumer behaviour; it takes place at
every phase of the consumption process: before the purchase, during the purchase
and after the purchase.
Consumer behaviour is interdisciplinary; that is, it is based on concepts and
theories about people that have been developed by scientists in diverse disciplines.
These disciplines include:
 Psychology - The study of the individual: individual determinants in buying
behaviour
 Sociology - The study of groups: group dynamics in buying behaviour
 Social psychology - The study of how an individual operates in group/groups
and its effects on buying behaviour
 Cultural Anthropology - The influence of society on the individual: cultural
and cross-cultural issues in buying behaviour
 Economics - Income and purchasing power
Consumer behaviour has become an integral part of strategic market planning.
The belief that ethics and social responsibility should also be integral components
of every marketing decision is embodied in a revised marketing concept—the
societal marketing concept—that calls on marketers to fulfill the needs of their
target markets in ways that improve society as a whole.
Self-Instructional
Material 3
Introduction to
Consumer Behaviour
Check Your Progress
1. Define consumer behaviour.
NOTES 2. What is segmentation?
1.3 CONSUMER ROLES
When an individual consumer makes a purchase, he unilaterally decides what he

would purchase and how. But, groups like households also make purchases, and
in such buying processes, members of the group influence the purchase decision in
many ways, and at different stages in the buying process. Members assume specific
roles as the buying process proceeds and they interact actively to make the purchase
decision.
1. Initiator
The person who starts the process of considering a purchase is the initiator, since
he feels the need for the product. He may also initiate the search for information
about the purchase decision on his own, or by involving others.
For instance, a teenager may act as an initiator for a motorcycle that he
wants for commuting, a housewife may feel the need for a higher capacity
refrigerator, or a busy executive may feel the need for apparel that is comfortable
and stylish.
2. Influencer
The influencers attempt to persuade others in the decision-making process to
influence the outcome of the decision-making process. Influencers gather information
and attempt to impose their choice criteria on the decision. These influencers may
be sought out by the initiator, or may supply relevant information on their own.
Influencers may be a part of the reference group of the initiator, experts in the
particular categories, retailers, or other such individuals from whom information is
sought.
For the teenager, his friends, family members and retailers could act as
influencers. For the housewife, influencers could be her husband, children, friends
or retailers; and for the executive, influencers can be other colleagues in his
organization, his contemporaries in other organizations, his friends in other firms,
etc. Influencers vary in the extent to which they can change or persuade players in
the decision-making process. The teenager may consider his friends to be more
important in suggesting what brands to buy or what features to evaluate before
buying, more than his parents.
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3. Payer Introduction to
Consumer Behaviour
The payer is the individual with the power or/and financial authority to purchase
the product. The payer is usually presumed to have a large influencing power on
the product purchase as the spending power lies with him. NOTES
For the teenager's decision-making process, he could be the payer if he has
sufficient money; else some elder in the family can be the payer. In case the payer
is his father or an older sibling, he may be more obligated to listen to their suggestions
than his friends. In the case of the refrigerator buying decision, the husband could
be the payer. In case of the executive, he himself shells out the payment.
4. Decider
The decider is the person who makes the ultimate choice regarding which product
to buy. This may be the initiator or the payer or the user, depending on the dynamics
of the decision-making process. The teenager himself may be the decider, or the
ultimate decision could be taken by the payer (and the teenager may have to
compromise). In case of the housewife, she could be the decider or the husband
can be dominant. In both these decisions, much depends on the interplay of the
various players involved in the decision-making process. The husband and wife
can jointly negotiate which refrigerator to buy if both have an equal say in the
buying process. In case of the executive, he plays multiple roles of being an initiator,
payer, decider, buyer and user.
5. Buyer
The buyer conducts the transaction. He visits stores, makes payments and effects
delivery. Usually, the buyer is the only player whom the marketer can see being
involved in the decision-making process.
Merely interviewing him about the purchase does not serve the purpose of
the marketer who wants to explore the consumer decision-making process, as at
the time of purchase all other evaluations have been completed, which have involved
several other players as well. The importance of these players is crucial in deciding
the relevant marketing mixes.
The teenager may purchase the bike alone, with friends or with family
members. The housewife is likely to purchase the refrigerator from the retailer
with her family, while the busy executive may shop alone or with friends or family.
6. User
He is the actual user/consumer of the product. The user may or may not be the
initiator. The product can be used by an individual, or it may be used by a group.
The teenager and the housewife are the dominant users of the products that
they have bought, but the products can be used by other members of the family as
well.
Self-Instructional
Material 5
Introduction to
Consumer Behaviour
Check Your Progress
3. What is consumer research?
NOTES 4. Why is it said that consumer behaviour is interdisciplinary in nature?
1.4 HISTORY OF CONSUMER BEHAVIOUR AND

THE MARKETING CONCEPT
The field of consumer behaviour is rooted in the marketing concept, a business

orientation that evolved in the 1950s through several alternative approaches towards
doing business, referred to as the production concept, the product concept, and
the selling concept.
The essence of marketing is providing desired value to customers. A
company cannot possibly satisfy all the customers in a market, because their needs
vary. Most organizations do not have the capability to serve widely varying needs.
An organization has to select customers whose needs can be matched with its
capability to serve them. If it tries to serve all customers, it is bound to dissatisfy at
least some of them. But if an organization has selected its customers carefully, it is
possible to satisfy all of them completely.
Successful companies rely on their satisfied customers to return to repurchase
and recommend the company’s offerings to others. Therefore, the goal of marketing
is attracting and retaining customers through long-term satisfaction of their needs.
It is a far more expensive proposition to attract new customers than to
retain existing ones. Building long-term relationships with existing customers by
providing satisfaction to them should be the goal of companies. They attract new
customers by building expectations and promising to provide value. New customers
find the company’s promise credible, as the company’s existing and erstwhile
customers vouch for it.
Marketing should be considered a central business function as it establishes,
develops, and commercializes long-term customer relationships so that objectives
of both the parties are met. Customer needs are served and the company earns
profits.
A company exists primarily to serve its customers. Therefore, customers
are the most powerful stakeholders of any company. It is the job of the marketer
to keep the company’s people, processes, and systems tuned to serving the most
important stakeholder of the company. Customer interests must be paramount
and should be protected in every decision that a company takes.
Customer needs are discovered and the organization’s processes are
orchestrated to serve those needs truthfully. A company practising the marketing
concept achieves corporate goals by meeting its customer needs better than its
Self-Instructional
6 Material
competitors. In a marketing-oriented company, all activities are focused on Introduction to
Consumer Behaviour
providing customer satisfaction. The company understands that the achievement
of customer satisfaction is dependent on integrating company-wide efforts.
Customer needs should be the focus of the company in all its departments. Decisions
are taken in these departments keeping in mind the impact that the decisions will NOTES
have on the customers. The role of marketing is to champion the cause of the
customer and to orient the whole organization towards serving customer needs.
The management must believe that corporate goals can be achieved only through
satisfied customers.
Marketing is not the sole prerogative and responsibility of the marketing
department in an organization. Each department, in fact every employee of an
organization, primarily performs the function of a marketer. His main job is to
convey a consistent image of his organization, whether it is to the internal
stakeholders (employees, shareholders), or to the external stakeholders (customers,
public). The company should realize that every interaction of any of these
stakeholders with any employee of an organization is decisive for the ultimate fate
of the organization.
Marketers need to communicate formally and informally with people in other
departments in their organization more often.
For most companies, the marketing department is the first and the main
source of knowledge about the customer. But when marketers try to share their
insights with other departments, the information often ends up being ignored or
misunderstood. The problem lies with how often and in what manner the marketing
department communicates with other departments in the organization. Marketers
who interact with their non-marketing colleagues fewer than ten times a week tend
to have their work undervalued by people in other departments. The reason is that
contacts fewer than ten times a week–whether formal or informal, spoken or written–
means that the marketer has not been in touch enough to learn what information is
needed by others in the company, or how and when it should be presented.
Marketing managers who have infrequent contacts with their non-marketing
colleagues do not develop the kind of understanding they need in order to provide
the right information at the right time and in the right format.
However, the increased value associated with boosting the frequency of
communication begins to level off at about twenty-five times a week. Therefore,
marketing managers should strive to communicate between ten and twenty-five
times. In fact, marketing managers who communicate with their non-marketing
colleagues more than forty times a week also run the risk of having their work
undervalued by other departments. Non-marketing managers often receive a flood
of information like daily sales reports by products and markets. They cannot review
all this data or think about it. A deluge of communication confuses and eventually
alienates the receiver.
Self-Instructional
Material 7
Introduction to All types of communications like individual and group meetings, phone calls,
Consumer Behaviour
faxes, mails, voice mails, memos and even a chat in the cafeteria are counted. But
the mix of formal and informal communication matters. A 50-50 mix of formal and
informal communication is optimal for getting the marketers’ message across. Formal
NOTES communication is useful because it is verifiable, and in situations where two
departments have different styles, a formal procedure for communication can reduce
conflict. Informal communication allows people to exchange critical information
unlikely to be found in a real report, such as the ‘real’ reason why a customer
defected. They can also help clarify and give meaning to what is said in more
formal communications. They also give the opportunity to people to ask ‘dumb’
questions which they otherwise would not. The spontaneous nature of informal
communication also does not give participants the time to develop politically-
motivated opinions.
Most successful companies today are market-driven and attribute their
success to the importance of meeting the needs of the customer. In more traditional
companies, new goods are only produced if it is convenient to do so.
Market-driven companies realize the importance of recognizing that
customers continuously compare their products with others available. Internally-
driven companies presume that price and performance of the existing product are
the only things that matter to customers. They refuse to believe that different
customers can have different concerns. When customer requirements change, they
are jolted because they never understood customer requirements in the first place.
Market-driven businesses recognize that expenditure on marketing research
is an investment that can yield rich rewards through better customer understanding.
They base their strategies on the knowledge of customers which is gleaned through
market research activities. Market research drives the strategies and operations
of market-driven companies. Internally-driven businesses see marketing research
as a non-productive activity and prefer to rely on anecdotes and received wisdom.
Market-driven businesses welcome organizational changes that are bound to occur
as an organization moves to maintain strategic fit between varying customer
requirements and its strategies. Internally-oriented companies cherish status quo
and resist change.
Market-driven businesses try to understand competitors’ objectives and
strategies, and anticipate competitive actions. They make strategies to counter
moves of competitors and when they initiate actions they always feature
competitors’ probable reactions to them. Internally-driven companies are content
to underplay the competition. They live with the illusion that competitors cannot
harm them ever.
Marketing expenditure is regarded as an investment that has long-term
consequences in market-driven businesses. Such companies invest in understanding
their customers. They invest in building brands based on their understanding of the
customers. Internally-driven companies view marketing expenditure as superfluous
Self-Instructional
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that never appears to produce benefits, but the company has to incur it to be on Introduction to
Consumer Behaviour
par with competitors. They believe that customers will buy their products because
they are superior solutions to their needs. They will not check if their assumptions
about customers having particular needs are actually felt by the customers
themselves, and whether their products and services are actually useful to them. NOTES
Reality dawns on them only when their business starts faltering.
In market-oriented companies, those employees who take risks and are
innovative in serving customers in more effective ways are rewarded. Such
companies understand that most new products fail, and that there is a reluctance
to punish those people who risk their careers championing a new product idea.
Internally-oriented businesses reward timely service, and ability to not make
mistakes. They reward people who help in quelling disturbing news from the market
about customers and competitors. This results in risk avoidance and continuance
of status quo.
Market-driven companies search for latent markets–markets that no other
company has exploited. Their people, systems, and processes are flexible enough
to sense such markets and design appropriate products and services for them.
Internally-driven businesses are happy to stick to their existing products and
markets. They are not close enough to customers to be able to identify their latent
needs, and their people, systems, and processes are designed to serve only crudely
expressed needs.
Intensive competition means that companies need to be alert to the dynamics
of customer needs and competitor moves. Market-driven companies are sensitive,
fast and flexible so that they are able to respond to changes in the market. Marketing-
oriented companies strive for competitive advantage. They seek to serve customers
better than their competition. Internally-oriented companies are happy to produce
‘me-too’ copies of offerings already in the market.
Commitments by marketers impact both the company and the customer.
For the company they indicate the promise of delivery of its offering, while for the
customer, they shape expectations. Commitments must consider the short-term
and long-term impact on both the concerned stakeholders and the company.
Despite differences in their personal attributes, behaviours and styles,
successful marketers excel in making, honouring and remaking commitments to
customers. Marketing commitments can take many forms which include installing
special machines, serving customer requirements, delivering an item at a particular
time, positioning the product, and public statements. These commitments exert
both an immediate and enduring influence on the company. A commitment to deliver
an item sooner than it is normally done exerts pressure on the production system
of the company. When a company positions its offering, it implicitly chooses one
market over another. When a company selects a target market, it is willing to
forego important segments that may emerge in the future.
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Introduction to As mentioned above, when a marketer makes a commitment, it affects two
Consumer Behaviour
distinct constituents: customers and the company of the marketer. The marketer
has to anticipate the consequences of his commitments for both the constituents,
both in the short term and long term. In a market where buying criteria is still being
NOTES established, it may be fatal to position the company’s offering very narrowly.
Selecting a celebrity to spearhead the marketing campaign of the company has
consequences both for the short-term and long-term.
The idea is that commitments made by marketers bind the company in a
particular way for some time in the future. Marketers should be able to think
through these consequences. But when marketers find that their commitments are
holding the company back, they should replace the old commitments with fresh
ones. Customers understand that commitments implicitly have some conditions
attached to them and when conditions change dramatically, an old commitment
should be replaced by a more rejuvenating one. Commitments should not bind the
company in a manner that compromises its very survival. It is not as if the company
is going back on its commitment, it is just that an antiquated commitment is being
replaced by a fresh one, which is reflecting current realities.
Check Your Progress

5. What is the goal of marketing?
6. What does an intensive competition mean to the companies?
1.5 CONTRIBUTING DISCIPLINES
Consumers vary tremendously in their ages, income, education level, mobility

pattern and tastes and preferences. Around two decades ago it was argued that
Economics was marketing’s “Mother” discipline. This was because it was seen
that consumer purchase decision is governed by their economic and mental forces.
Mental forces like fear, pride, fashion possessions, sex or romance, vanity etc.,
create desires and wants in the minds of the consumers, but economic forces such
as purchasing power may come in the way of satisfying those wants hence the
consumer has to choose between those wants and select the products according
to the priority of consumption. However, the rapid changes taking place in the
external environment, has also had a bearing on the consumer behaviour and is
seen in the complex manner in which a consumer behaves. Researches in this field
have shown that the light that has been shed on the human behaviour can in general,
by the behavioural science, be extended to the study of the behaviour exhibited by
individuals in their roles as buyers / consumers. So consumer behaviour can be
said to be the melding of all those bodies of knowledge concerning with human
behaviour – behavioural science.
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To facilitate better understanding of the interdisciplinary dimension of Introduction to
Consumer Behaviour
consumer behaviour, concepts have been borrowed from the other scientific
disciplines and these have a bearing on the consumer behaviour as given here
under:
NOTES
Table 1.1 Various disciplines having influence
on the consumer behaviour
Sr. Discipline Comprising of or governed By
No.
1. Economics Demand, Supply, Income, Purchasing Power.
2. Psychology Needs & Motivation, Personality Perception, Learning,
Attitudes.
3. Sociology Society, Social Class, Power, Esteem, Status.
4. Socio Psychology Group Behaviour, Conformity to group norms, Group
influences, Role leader.
5. Cultural Anthropology Values, Belief, Caste systems, Attitude
towards wealth, Joint family system.
Economics and commerce: The study of consumers is an important part of the

study of economics and commerce. How the consumers spend their funds, how
they evaluate alternatives, how they make decisions to optimise satisfaction. Early
theories relating to consumer behaviour were based on theory of economics.
Consumer is an economic man. It means, consumer is one who makes a rational
decision. The theory of economic man contributes rationally to maximise benefits
in the purchase of goods and services. However, the social scientists opined that
consumers operate in an imperfect world they do not reap their decisions in terms
of such economic considerations such as price, quality, relationship, marginal utility.
Indeed, they are often unwilling to engage in extensive decision–making activities;
instead settle for a satisfactory decision.
Sociology: The study of human group is referred sociology. Group behaviour
(i.e., actions on individuals in group) often differs from the actions of individuals
alone. The influence of group, family structures, social class on consumers behaviour
are essentially relevant to the study of consumer behaviour in the marketplace.
Psychology: The study of psychology covers motivation, perception, attitudes,
personality, learning patterns of individuals which are primary issues to understand
consumer behaviour as well as to understand the various consumption needs of
them. Further, their actions and reactions in response to different products and
product messages are well within psychology subject.
Social Psychology (How an individual operates in a group): The buyer
living in a social environment, is influenced by it and in turn influences its course of
development. On account of this he is a member of several groups / organisations
at the same time. He is a member of a family, he works with a certain organisation,
he may be a member of a professional body, he may an active member of a
cultural body. There is constant interaction between the individual and all the
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Introduction to organisations of which he is member. And all these interactions leave some imprint
Consumer Behaviour
on his mind, influencing him in his day to day life and consequently, his buying
behaviour.
Thus people who are aware of each other, their needs & goals values,
NOTES
belief and norms will dynamically interact with each other and perceive others as
members of the group. David Krech, Richmond S. Crutch Field, and Egetton L.
Ballachey have defined group as (1) persons who are interdependent upon each
other such that each member’s behaviour potentially influences the behaviour of
each of the others and (2) The sharing of an ideology a set of beliefs values and
norms which regulates their mutual conduct. A group may fulfill different needs for
various individuals. Each group exerts on the individual a variety of influences,
pressures to conform and act as forces that guide his behaviour.
Cultural anthropology: The study of human beings in the society refers to cultural
anthropology. It traces beliefs, values, customs which passed down to individuals
from their parents and influence their consumption behaviour. It also refers to sub-
cultures and tends to a comparison of consumers of different nationalities with
diverse cultures as well as customs.
Thus, the nature of consumer behaviour is inter-disciplinary. Perhaps, this
behaviour is the greatest strength, serves to integrate existing knowledge into a
comprehensive body of information about individuals in their consumption roles.
Though, the study of consumer behaviour is of recent origin, it has emerged long
back of research by scientists specialising in the study of human behaviour. Beginning
with borrowed concept, the consumer behaviour has grown vertically as well as
horizontally. The field of consumer behaviour has now become a full–fledged
discipline on its own, buttressed by a growing meaningful research.
The interdisciplinary nature of consumer behaviour serves to integrate existing
knowledge from other fields into a comprehensive body of information about
individuals in their consumption roles. Since its beginning as a “borrowed” science,
the field of consumer behaviour has grown enormously and has become the
backbone of most marketing study progrmmes. Consumer research to each variable
in the marketing mix: (a) Product. Consumer research enables the marketer to
build consumer “meaning” into the product by discovering which attributes are
more important to the target consumers and integrating them into the design of the
product. (b) Price. Consumer research assists the marketer in establishing
psychological pricing levels that consumers would be willing to pat. (c) Place or
distribution. Consumer research identifies where consumers shop and how they
perceive various distribution outlets, and provides the basis for an effective
distribution strategy. (d) Promotions. Consumer research is used to determine
persuasive advertising appeals and to identify appropriate media choices to reach
the selected target markets.
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Introduction to
Consumer Behaviour
Check Your Progress
7. Mention the issues covered under the study of psychology cover.
8. What is cultural anthropology? NOTES
1.6 SCOPE AND APPLICATION OF CONSUMER

BEHAVIOUR
The scope of consumer behaviour is based on how individuals make decisions.

Consumer behaviour is rooted deep in the marketing concept, which is also known
as production concept, product concept and selling concept.
The term consumer behaviour, generally, describes two diverse kinds of
consuming entities: the personal consumer and the organizational consumer. The
personal consumers are those who use goods and services for their own use or for
the household requirements or as gifts. The end users or ultimate consumers are
the ones who buy products for final use. The organizational consumer, however,
includes profit-making and non-profit businesses, government agencies and
institutions and all those who buy products, equipment and services to run their
organizations.
Consumer behaviour is interdisciplinary; that is, it is based on concepts and
theories in diverse disciplines as psychology, sociology, social psychology, cultural
anthropology and economics.
A need is a lack within a person that must be filled. A motive is known as an
internal push that causes a person to act. Motives are based on needs. Businesses
prefer to transform consumer needs and wants into buying motives. This is because
a buying motive pushes a consumer to look for a product.
Consumer behaviour has become an integral part of strategic market planning.
The belief that ethics and social responsibility should also be integral components
of every marketing decision is embodied in a revised marketing concept, which is
the societal marketing concept. This concept calls on marketers to fulfil the needs
of their target markets in ways that improve society as a whole.
Consumer research
For adopting marketing orientation, the knowledge of customers and other aspects
of the marketing environment that affect the company’s operations is a prerequisite.
The emphasis while marketing is on identification and satisfaction of consumer
needs. In order to determine customer needs and to implement marketing strategies
and programmes aimed at satisfying those needs, marketing managers need
information. Questions like what kind of people buy the company’s products,
how much value they give to the products and where they buy the products from
are important and should be answered.
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Introduction to The field of consumer research has been developed as an extension to the
Consumer Behaviour
field of marketing research. The findings of consumer research enable a company
to understand the behaviour of consumers in the marketplace. Marketers are able
to understand various aspects of consumer behaviour, such as motivations behind
NOTES consumer purchases, cultural nuances of consumers, brand awareness, brand image
perceptions, decision-making process for a product, exposure and reactions to
promotions, new product introductions. These enable the marketer to design more
suitable marketing strategies for its target consumers.
In recent times, many factors have contributed to increasing the need for
more and improved information. As firms have become national and international
in scope, the need for information of larger and more distant markets has increased.
As consumers have become more affluent and sophisticated, marketing managers
need better information on how they will react to products and other marketing
offerings. As competition becomes more intense, managers need information
regarding effectiveness of the marketing tools they use. As the environment is
changing more rapidly, marketing managers also need timely information.
It can be dangerous for a firm to rely only on a manager’s interval views.
The company needs to find out the real views of the customer and then only
should it design its marketing initiatives. This information is obtained by formal and
informal means. As the customer base grows, informal means like casual discussions
with customers, reports of salespeople, observation of competitor activities are
insufficient for providing the needed in-depth market knowledge. A more formal
approach like collection of data through questionnaires must be applied for a
systematic supply of information to managers.
But it is becoming increasingly difficult to collect data about customer needs,
behaviour and satisfaction through structured methods like questionnaires.
Companies have enhanced the performance and quality of their products to the
extent that most customers are ostensibly happy with the products they are using.
And they say so in their interviews with researchers. In any case, if anything useful
is reported in questionnaires and interviews, such data is of no use as companies
already have it because of the easy availability of such matter. Sustainable
differentiation has to be built based on customer information which is not easy to
obtain and so every company cannot have such data. Such customer information
is revealed by the frustrations and joys that a customer experiences when he/she is
using the product. These emotions are too subtle to be captured in words. Customers
have to be observed in their natural settings to know their emotions. These emotions
can form the basis for differentiation. Thus, marketing research has to move beyond
its current methods.
Strategic planning
Strategic planning entails setting up an approach that a company decides to follow
over a defined period of time. It can be for a specific part or department of the
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business, like planning a marketing strategy, or for the business as a whole. Usually Introduction to
Consumer Behaviour
an overall strategy for the business is worked upon by the senior employees of the
company and then the distinct departments plan their strategy in alignment with the
overall strategy. Differing businesses use various time periods for their strategic
planning. The time period is usually dependent on how fast that particular industry NOTES
is moving. For example, in a fast-changing environment like the Internet, a five-
year plan would not work. In industries that change more slowly, longer range
planning is possible and desirable.
Without a strategy, there will be no direction. Strategy tells you where you
want to go. Without any strategy, the final results may not be what you desire. In
fact, without a strategy, your chance of achieving your goals is diminished.
Though strategic planning shouldn’t be all that you do in your business, it
should be an integral part of it. Every action should be in alignment with your
strategy. Also, each employee should know the strategy so that he can contribute
his best in making it happen. However, no strategy should be set in stone. It should
be revisited and revised at regular intervals.
Check Your Progress

9. Define need in relation to consumer behaviour.
10. What is strategic planning?
1.7 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS
1. Consumer behaviour is defined as the behaviour that consumers display

while searching for, purchasing, using, evaluating, and disposing of products
and services that they expect will satisfy their needs.
2. Segmentation is the process of dividing the market of a product or service
into smaller groups of customers.
3. Consumer research is the methodology used to study consumer behaviour;
it takes place at every phase of the consumption process: before the purchase,
during the purchase and after the purchase.
4. Consumer behaviour is interdisciplinary; that is, it is based on concepts and
theories about people that have been developed by scientists in diverse
disciplines.
5. The goal of marketing is attracting and retaining customers through long-
term satisfaction of their needs.
6. Intensive competition means that companies need to be alert to the dynamics
of customer needs and competitor moves.
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Introduction to 7. The study of psychology covers motivation, perception, attitudes, personality
Consumer Behaviour
and learning patterns of individuals.
8. Cultural anthropology is the study of human beings in the society.
NOTES 9. A need is a lack within a person that must be filled.
10. Strategic planning entails setting up an approach that a company decides to
follow over a defined period of time.
1.8 SUMMARY
 The term ‘consumer behaviour’ relates to the two kinds of consumers: the
individual consumer and the organizational consumer. Individuals buy goods
and services for their own use. Such customers are also known as end
users or ultimate consumers. Organizational consumers such as profit and
not-for-profit businesses, government agencies, and institutions, all buy
products, equipment, and services in order to run their organizations.
 By studying the behaviour of customers it becomes possible to segment the
market in new ways and serve them with different marketing mixes even if
the product of the various marketing mixes may be the same.
 The types of behaviour that different customers demonstrate in buying and
using the same product and the different types of behaviour that the same
customer demonstrates in buying different products elevate marketing to a
discipline much more intricate than product management.
 The study of consumer behaviour enables marketers to understand and
predict consumer behaviour in the marketplace. Consumer research is the
methodology used to study consumer behaviour; it takes place at every
phase of the consumption process: before the purchase, during the purchase
and after the purchase.
 Consumer behaviour is interdisciplinary; that is, it is based on concepts and
theories about people that have been developed by scientists in diverse
disciplines. These disciplines include: psychology, sociology, social
psychology, cultural anthropology, and economics.
 The essence of marketing is providing desired value to customers.
 The role of marketing is to champion the cause of the customer and to
orient the whole organization towards serving customer needs. The
management must believe that corporate goals can be achieved only through
satisfied customers.
 Internally-driven businesses see marketing research as a non-productive
activity and prefer to rely on anecdotes and received wisdom. Market-
driven businesses welcome organizational changes that are bound to occur
as an organization moves to maintain strategic fit between varying customer
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requirements and its strategies. Internally-oriented companies cherish status Introduction to
Consumer Behaviour
quo and resist change.
 The study of psychology covers motivation, perception, attitudes, personality,
learning patterns of individuals which are primary issues to understand
NOTES
consumer behaviour as well as to understand the various consumption needs
of them.
 David Krech, Richmond S. Crutch Field, and Egetton L. Ballachey have
defined group as (1) persons who are interdependent upon each other such
that each member’s behaviour potentially influences the behaviour of each
of the others and (2) The sharing of an ideology a set of beliefs values and
norms which regulates their mutual conduct.
 The interdisciplinary nature of consumer behaviour serves to integrate existing
knowledge from other fields into a comprehensive body of information about
individuals in their consumption roles.
 Consumer behaviour has become an integral part of strategic market
planning. The belief that ethics and social responsibility should also be integral
components of every marketing decision is embodied in a revised marketing
concept, which is the societal marketing concept. This concept calls on
marketers to fulfil the needs of their target markets in ways that improve
society as a whole.
 The field of consumer research has been developed as an extension to the
field of marketing research. The findings of consumer research enable a
company to understand the behaviour of consumers in the marketplace.
 It can be dangerous for a firm to rely only on a manager’s interval views.
The company needs to find out the real views of the customer and then only
should it design its marketing initiatives.
 A more formal approach like collection of data through questionnaires must
be applied for a systematic supply of information to managers.
1.9 KEY WORDS
 Consumer behaviour: It is the study of individuals, groups, or organizations

and all the activities associated with the purchase, use and disposal of goods
and services, and how the consumer’s emotions, attitudes and preferences
affect buying behaviour.
 Marketer: It is a person or company that advertises or promotes something.
 Market-driven business: It is the business which is influenced by market
knowledge and customer needs.
 Strategic planning: It is an organization’s process of defining its strategy,
or direction, and making decisions on allocating its resources to pursue this
strategy. Self-Instructional
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Introduction to
Consumer Behaviour 1.10 SELF ASSESSMENT QUESTIONS AND
EXERCISES
NOTES Short-Answer Questions

1. List some important questions to be asked about consumers.
2. Which disciplines are included in the study of consumer behaviour?
3. Write a short note on the impact of commitments by marketers.
Long-Answer Questions
1. Discuss the contributing disciplines when it comes to consumer behaviour.
2. Describe the role of a marketer in consumer behaviour study and in devising
marketing concept.
1.11 FURTHER READINGS
Saravanavel, P and S Sumathi. 2004. Marketing Research and Consumer

Behaviour. New Delhi: Vikas Publishing House.
Kumar, Arun and N Meenakshi. 2016. Marketing Management. New Delhi:
Vikas Publishing House.
Kumar, A, K Singh. 2013. Consumer Behaviour and Marketing
Communication: An Indian Perspective, 1st Edition. New Delhi:
Dreamtech Press.
Schiffman LG, LL Kanuk. 2007. Consumer Behaviour, 9th Edition. New Delhi:
Prentice-Hall of India Pvt Ltd.
Batra Satish K, S.H.H. Kazmi. 2004. Consumer Behaviour – Text and Cases.
New Delhi: Excel Books.
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Market Segmentation
UNIT 2 MARKET SEGMENTATION

Structure
2.0 Introduction NOTES
2.1 Objectives
2.2 Market Segmentation: Need
2.3 Types of Segmentation – Geographic, Demographic, Psychographic and
Lifestyle
2.4 Product Positioning: Need and Strategy
2.6 Summary
2.7 Key Words
2.0 INTRODUCTION
Market segmentation is based on the assumption that customers are unique. They
have different needs, wants and preferences. There do exist diverse customer
groups homogenous on certain bases within, but heterogeneous among each other.
So, instead of a single standardized product offering, the product and service
offerings need to be designed according to the needs and wants of the segment so
as to satisfy them better. The marketer’s assumption is that because of the
homogeneity that exists within the members of the group, they would react similarly
towards a product and service offering and behave likewise to a corresponding
marketing program. It involves identifying distinct groups of buyers who are
homogenous within but heterogeneous between each other. Targeting involves
evaluating the viability of each segment, and then selecting one or few market
segments to serve better and in a superior way. Positioning involves creating an
image in the minds of the target market about the product and service offering; this
image should relate to the need/want as well as portray uniqueness and/or
superiority than other competitive offerings. This unit deals with the concept of
segmentation and its types and the product repositioning. Let us study these in
detail.
2.1 OBJECTIVES

 Describe the meaning of segmentation and its need in consumer research
 Explain the types of segmentation
 Discuss the concept, need and strategies of product positioning
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Market Segmentation
2.2 MARKET SEGMENTATION: NEED
Different product and service offerings must be made to the diverse groups that
NOTES typically comprise a market. Segmentation involves identification of groups of
individuals or organizations that have significant implications for the determination
of a marketing strategy. Segmentation refers to the division of a diverse market
into a number of smaller, more similar sub-markets. The objective is to identify
groups of customers with similar requirements so that they can be served effectively
while being of a sufficient size for the product to be supplied efficiently. It is the
basis by which marketers understand their markets and develop strategies for
serving their chosen customers better than competition.
Target market selection
Segmentation provides the basis for the selection of target markets. A target market
is a chosen segment of market which a company decides to serve. Customers in
the target market have similar characteristics and a single marketing mix can be
used to serve them. Creative segmentation may result in the identification of new
segments that are not being served presently and may form attractive targets.
Tailored marketing mix
Segmentation allows the grouping of customers based on similarities (similar
benefits). Marketers are able to understand in depth the requirements of segments
and tailor a marketing mix that meets their needs. Segmentation promotes the idea
of customer satisfaction by viewing markets as diverse sets of needs which must
be understood and met by the suppliers.
Differentiation
By breaking a market into its constituent segments, a company may differentiate
its offerings between segments, and within each segment it can differentiate its
offering from its competitor. By creating a differential advantage over the
competition, the company gives the customer a reason to buy from it rather than
from its competitors.
Opportunities and threats
Markets are rarely static. As customers become more affluent, they seek new
experiences and develop new values, and new segments emerge. The company
may spot a new underserved market segment and meet its needs better than
competition. Similarly, the neglect of a market segment can pose a threat if
competition uses it as a gateway to market entry. Market segments may need to
be protected by existing competitors even though it may not be profitable to serve
them. They do this because they fear that the market segments they vacate might
be used by new entrants to establish a foothold in the market.
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Market Segmentation
Check Your Progress

1. Define segmentation.
2. What is a target market? NOTES
2.3 TYPES OF SEGMENTATION – GEOGRAPHIC,

DEMOGRAPHIC, PSYCHOGRAPHIC AND
LIFESTYLE
Markets can be segmented in many ways. Segmentation variables are the criteria
that are used for dividing a market into segments. The chosen criteria should be a
good predictor of differences in buyer behaviour. There are three broad groups of
consumer segmentation criteria: Behavioural, psychographic and profile variables.
 Behavioural variables such as benefits sought from the product, and buying
patterns such as frequency and volume of purchase, may be considered the
fundamental basis.
 Psychographic variables are used when the purchasing behaviour is
correlated with the personality or lifestyle of consumers. Consumers with
different personalities or lifestyles have varying product preferences and
may respond differently to marketing mix offerings.
 Profiling is not essentially a criterion for segmentation. After finding these
differences, marketers need to describe the people who exhibit them. Profile
variables such as socio-economic group or geographic locations are valuable
in describing the customers of the identified segment. For instance, a marketer
may want to find out whether there are groups of people who value low
calories in soft drinks. After tracing such people, the marketer attempts to
profile them in terms of their age and socio-economic groupings. The
objective of profiling is to identify and locate the customers so that they can
be approached by the marketers.
But in practice, segmentation may not follow this logical sequence. Often,
profile variables will be identified first and then the segments so described will be
examined to see if they show different behavioural responses. For instance, different
age or income groups may be examined to see if they show different attitudes and
requirements. Also, note many authors classify the types of segmentation differently
too.
(i) Behavioural segmentation
People may seek different benefits from a product. Benefits sought in the fruit
drink market are extra energy, vitamins, being natural, low calories and low price.
There are brands targeting each segment. Benefit segmentation provides an
understanding on why people buy in a market and aids in the identification of
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Market Segmentation opportunities, as some of the benefits that customers seek may not be provided
by the existing companies.
Benefit segmentation is fundamental because the objective of marketing is
to provide customers with benefits which they value. Profile analysis can then be
NOTES
performed to identify the types of people (age, gender) in each benefit segment so
that targeting becomes easier.
Purchase occasion
Products like tyres may be purchased as a result of an emergency or as a routine
buy. Price sensitivity is likely to be lower when products are bought in emergency
situations. Some products may be bought as gifts or self purchases. Gift markets
are concentrated during festivals, while the advertising budget for these will be
concentrated in the pre- festival period. Package designs may differ during this
period, and special offers may also be made.
Purchase behaviour
Differences in purchase behaviour can be based on the time of purchase relative
to the launch of the product or on the patterns of purchase. When a new product
is launched, a key task is to identify the innovator segment of the market. These
people allow communication to be specifically targeted at them. Innovators are
more likely to be willing to buy products soon after the launch. Other segments of
the market may need more time to assess the benefits and delay purchase until
after the innovators have taken the early risks of purchase.
Brand loyalty
The degree of brand loyalty can be the basis for segmenting customers. Some
buyers are totally brand loyal, buying only one brand in a product group. Most
buyers switch brands. Some may buy one particular brand on most occasions but
may also buy two or three other brands. Others might show no loyalty to any
individual brand but switch brands on the basis of special offers to buy. This is
because they are variety seekers who look to buy a different brand each time. By
profiling the characteristics of each group a company can target each segment
accordingly. By knowing the type of person (for instance, by age, socio-economic
group) who is brand loyal, a company can channel persuasive appeals to defend
this segment. By knowing the characteristics and shopping habits of offer seekers,
sales promotions can be correctly targeted. In the consumer durables market,
customers can be divided into first-time buyers, replacement buyers and switchers
from other brands.
Usage
Consumers can be segmented on the basis of heavy users, light users and non-
users of a product category. Profiling of heavy users allows this group to receive
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the most marketing attention because creating brand loyalty among these people Market Segmentation
will pay heavy dividends. Attacking the heavy user segment (20 per cent customers
consuming 80 per cent of the product) can have drawbacks if all competitors
follow this strategy. Analysing the light and non-user category provides insights
that permit the development of appeals that are not mimicked by competitors as NOTES
they will concentrate on the heavy users.
Perceptions and beliefs
Perceptions and beliefs are strongly linked to behaviour. Consumers are grouped
by identifying those people who view the products in a market in a similar way
(perceptual segmentation) and have similar beliefs (belief segmentation). For
instance, when it was launched, a product such as an iPod byApple made more
sense to consumers who were passionate about music and also held
extremelypositive perceptions about the use of the technology.
In the early 1990s, several Indian consumers held negative perceptions
about microwaves. It was believed that Indian food rich in oil and spices could not
be cooked in microwaves, and the waves emanating inside were harmful to
health.Another segment that was more open to adopting microwaves consisted of
those consumers who were well aware of the functioning of the microwave, and
were health conscious. They also sought the convenience of faster cooking, and
cooking other types of cuisines. For these purposes, a microwave was found to
be suitable by them. Therefore, marketers initially focused on the second segment.
(ii) Psychographic segmentation: Lifestyle and Personality
Lifestyle
A company groups people according to their way of living as reflected in their
activities, interests and opinions. The company identifies groups of people with
similar patterns of living. The question that arises in this type of segmentation is
whether general lifestyle patterns are predictive of purchasing behaviour in specific
markets. The company will relate a brand to a particular lifestyle.
Personality
In some product categories, there is a relationship between the brand personality
and the personality of the buyer. Buyer and brand personalities are likely to match
where the brand choice is a direct manifestation of personal values, but for most
FMCG goods, people buy a repertoire of goods. Personality and lifestyle
segmentation will work best when brand choice is a reflection of self-expression,
i.e., the brand becomes a badge which makes public an aspect of personality.
Successful personality-based segmentation is found in categories such as cosmetics,
alcoholic drinks and cigarettes.
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Market Segmentation (iii) Profile segmentation: Demographic, Socio-Economic and
Geographic Variables
Even if behaviour and/or psychographic segmentation distinguishes between buyer
NOTES preferences, there is need to analyse the resulting segments in terms of profile
variables such as age and socio-economic groups. The segments emerging from
behavioural and psychographic segmentation will have to be profiled in terms of
age, occupation, socio- economic status, place of residence, gender, etc. Profiling
will help companies in identifying the segments and focusing their attention on them.
Demographic variables
Age—Age is used to segment many consumer markets, like food and clothing.
Gender—Differing tastes and customs between men and women are reflected in
specialist products aimed at these market segments.
Life cycle—Disposable income and purchase requirements vary according to
the life cycle stage (young singles versus married). Young couples without children
may be a prime target for consumer durables. The use of life cycle analysis gives
a better precision in segmenting markets than age, because family responsibilities
and the presence of children have a greater bearing on what people buy.
Socioeconomic variables
Social class as a predictor of buyer behaviour has been open to question. Many
people who have similar occupations have dissimilar lifestyles and purchasing
patterns.
Educational qualification and income are also used as variables for
segmentation.
Geographic variables
A marketer can use pure geographic segmentation or a hybrid of geographic and
demographic variables to segment the market.
Geographic segmentation is useful when there are geographic differences in
consumption patterns and preferences. Variations in food preferences may form
the basis of geographic segmentation.
Both the geographic and demographic variables help a marketer to point to
their segments more precisely.
Combining segmentation variables
Often, a combination of variables will be used to identify groups of consumers
responding in the same way to marketing mix strategies. For instance, life cycle,
occupation and income can be combined. Flexibility and creativity are hallmarks
of effective segmentation analysis.
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Life Style Market Segmentation
Demographic variables help marketers locate their target market and psychographic
variables provide the marketer with more insight about the segment. Psychographics
is, in common parlance, lifestyle analysis or AIO research. In its most widely NOTES
practised form, a psychographic study consists of a long list of statements designed
to capture relevant aspects of a consumer, like personality, hinting motives, interests,
attitudes, beliefs and values. When the study becomes oriented towards a particular
product, the consumers have to respond to statements which are selected for the
purpose i.e. on products, brands, services, competitive situations etc.
The demographic and psychographic lifestyle approaches are highly
complementary and work best together. People hailing from the same sub-culture,
social class and even occupation follow quite different lifestyles. If we can create
a fictitious Mrs. Mathur to look at possibly it may be like this: She may choose to
live a "belonging" lifestyle which will be reflected in her wearing conservative clothes,
spending considerable time with her family and participating in social activities. Or
she can be an "achiever" marked by an active personal life and playing hard when
it comes to travel and sports. It can be seen that lifestyle depicts the "whole person"
in active interaction with his environment.
The lifestyle analysis adds a great amount of understanding to a typical
demographic description. A person buying a new designer shirt may be 34 years
old, married and living in a three bedroom house and having 2 children. The lifestyle
analysis would help marketers to paint a more human portrait to their target market.
For instance, the "young, upwardly mobile" lifestyle group cutting across
sub-cultures, social class, occupation etc. is now being increasingly used by Indian
marketers as their market group. This finds its expression in advertising appeals
"He loves the feel of the city... The skyscrapers... The crowds... The pretty faces...
And the heedy feeling of being successful... Above all the freedom of being himself."
So says the advertisement for Pantaloon cotton trousers from Manz Wear. Another
advertisement for men's underwear from Bhilwara loudly announces "for the man
who plays many roles-here comes the very best in wearunders via the grand fashion
avenues of Paris...Champs Elise". The behavioural differences between prospects
that do not show up in demographic figures come alive in lifestyle patterns. Lifestyle,
analysis leads to more comprehensive and penetrating profiles of how consumers
think and act than may be available from other approaches.
Characteristics of Lifestyle
Feldman and Theilbar describe lifestyle by the following characteristics:
1. Lifestyle is a group phenomenon
A person's lifestyle bears the influence of his/her participation in social groups and
of his/her relationships with others. Two clerks in the same office may exhibit
different lifestyles.
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Market Segmentation 2. Lifestyle pervades various aspects of life
An individual's lifestyle may result in certain consistency of behaviour. Knowing a
person's conduct in one aspect of life may enable us to predict how he/she may
NOTES behave in other areas.
3. Lifestyle implies a central life interest
For every individual there are many central life interests like family, work, leisure,
sexual exploits, religion, politics etc. that may fashion his interaction with the
environment.
4. Lifestyles vary according to sociologically relevant variables
The rate of social change in a society has a great deal to do with variations in
lifestyles. So do age, sex, religion, ethnicity and social class. The increase in the
number of double income families and that of working women have resulted in
completely different lifestyles in the 1980's in India.
Influences on Lifestyle
Cultural and societal variables establish the outer boundaries of lifestyle specific to
our culture. The interaction of group and individual expectations and values creates
a systematic pattern of behaviour. This is the lifestyle pattern that determines
purchase decisions. When goods and services available in the market are in tune
with lifestyle patterns and values, consumer market reactions are favourable. And
purchases that reinforce these patterns further illuminate these lifestyles. Lazer's
lifestyle hierarchy brings out these interactions.
Self-Instructional Fig. 2.1 Hierarchy of Influences on Lifestyles

26 Material
Market Segmentation
Check Your Progress

3. What are three broad groups of consumer segmentation?
4. What is psychographics? NOTES
5. When are consumer market reactions favourable?
2.4 PRODUCT POSITIONING: NEED AND

STRATEGIES
A company’s offer has to be distinct from those of its competitors and should fulfil
the requirements of the customers of its target markets. A company’s positioning is
the result of whatever the company does. Marketing mix is the most tangible and
the most flexible tool to create the desired positioning. Companies use their
marketing mix to create something specific and special for their customers.
1. Product differentiation
Product differentiation results from added features which give customers benefits
that rivals cannot match. Before adding features, a company should thoroughly
research the need for the particular feature among customers in the intended target
market. Companies keep on adding new features just because their competitors
are offering them. Sometimes deletion of features and benefits from a product may
be a very effective differentiation because customers never really wanted these
benefits.
Adding the same features as competitors may make the products of a
company more acceptable among customers, though it may end up introducing
similar products that does not result in any differential advantage. Such a strategy
of matching features and benefits will result in product parity, with no company
providing any compelling reasons to the customer for buying its product. In such
industries, customers will buy on the basis of price, and competitors will be forced
to cut prices to grab customers from each other. The profit of every company will
go down. Companies will not have the ability to differentiate their product as they
will not have enough resources due to their dwindling profit margins. The only way
out of this mess is that companies should pick up courage, arrange resources and
start differentiating their products from each other. Price based competition should
be avoided.
Most of the time, in most categories of goods, consumers get products with
features that they could do without and are needlessly paying for them. Most
products can be made more suitable for their target markets by deletion of certain
features. Nokia has introduced a stripped down version of the cellular phone for
the entry level customer in India. The phone is a contrast to the ones that offer
Internet usage, m-commerce, camera, etc. It serves the basic purpose of mobile
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Market Segmentation connectivity. Many customers are realizing that they do not need what they have
bought and are switching over to these simpler phones. This phenomenon is likely
to be repeated in many categories of goods once simpler options are available at
lesser prices.
NOTES
2. Promotional differentiation
Promotional differentiation arises from unique, valued images created by advertising
or superior services provided by salespeople. People in different target markets
are likely to react differently to certain stimuli like emotions, images, storylines,
celebrities, etc. It is important to identify the stimuli which will evoke the desired
response in members of the target market. It may be an extremely intricate task
but it is imperative to find out whether the members prefer emotional or rational
messages, whether they like humourous or sedate messages, whether they like
narratives or musicals, etc. Unless the company has determined the choice of the
consumers on all the variables that affect an advertisement, it cannot create an
advertisement which is suitable for members of the target market but is unsuitable
for any other target market. Sadly most advertisements look and sound similar
and are not suitable for any particular target market and do not elicit the desired
response.
Similarly different target markets will require different types of sales
presentations, persuasions and relationships with the seller.
3. Distribution differentiation
Distribution differentiation arises by making the buy situation more convenient for
customers. Different target markets will require different activities to make the
buying situation more convenient for them. Customers hard pressed for time have
welcomed introduction of automated teller machines. But some customers would
still prefer to visit the bank to conduct transactions which can easily be carried out
through the ATMs. Cans of carbonated soft drinks from vending machines are
finding favour with youngsters from the upper strata in India who believe that this
is the original Coke or Pepsi.
Different distribution channels like telemarketing, direct mails, Internet
marketing and personal selling are being used to lure customers of the same target
market resulting in irritability among customers, duplication of efforts and high
costs. This is particularly true of credit card markets, internet service providers,
etc. The adequate strategy would be to identify the most suitable distribution channel
for each target market and pursue it.
The Indian cosmetic major, Lakme, maintains three types of distinct
distribution channels for its three target markets. The small neighborhood shops
store commonly used skin care products such as moisturizers and sunscreen lotions.
The bigger shops in central marketplaces and specialty stores stock the complete
range of personal care products. The exclusive salons started by Hindustan Lever
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(the company that owns the Lakme brand) targets the elite group and stocks the Market Segmentation
exclusive range of premium cosmetics, besides providing grooming services.

Sometimes customers would like to compare different brands before deciding
on one. This is particularly true for high priced items like cars which are mostly
NOTES
sold from one-brand stores. The company has to make it convenient for customers
to compare brands. It would be a good idea to locate stores of different brands
near each other or permit their brands to be sold in multiple-brand stores.
Customers will inevitably compare, and so a company might as well make it
convenient for them and let it happen in its proximity so that it can exert some
influence over the choice.
For products that are bought on impulse, it is important to make it available
widely as the consumer will buy the next preferred brand if his desired brand is not
available. It is imperative for the company to understand that in the same product
category, members of different target markets will buy differently.
Therefore, it is important to tailor the distribution arrangements according
to the way the target market shops.
4. Price differentiation
Price differentiation involves estimating the price sensitivity of the target market
and offering relevant values on the basis of such an estimation. A target market can
be totally price insensitive and may desire value of the highest order. These values
can be exclusivity, sheer luxury, symbol of status or royalty. They essentially signify
belongingness to an exclusive club and are often accompanied with the owner’s
passionate attachment to the product.
A target market can be highly price sensitive and will go for mere functionality
of the product if it finds the price of available products high. Customers of this
target market yearn for better products, but will not be willing to pay a price for it.
If a company offers a better product at the existing price level, such customers
would buy it.
A third type of target market is emerging. This market’s price sensitivity is
moderate and is willing to pay higher price for more features and benefits. This
would be a big market in the future because income and aspiration levels of
customers are rising throughout the world.
Most segments desire the same values. What differentiates them is the
manifestation of these values. For instance, luxury is a desirable value for all the
above segments. But the way luxury is manifested, say, for the purchase of a
product category such as automobiles, presents vast contrasts. The super luxury
segment would be interested in the ultimate luxury statement, maybe a BMW 7i
series, the highly price sensitive segment may buy its first small car for the family,
whereas the market with moderate price sensitivity may purchase a mass luxury
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Market Segmentation car. Therefore, it becomes essential to define the target market in terms of its price
sensitivity and its corresponding desire for high order values like royalty, mere
functionality/benefits and more features / benefits.
NOTES Criteria For Successful Positioning

Clarity
The positioning idea must be clear in terms of both target market and differential
advantage. The target market should be clearly demarcated and identifiable in
terms of demographic or geographic parameters, or a combination of both. Each
target market of the company should be different from the other. The target market
should be clearly defined in terms of being served by a distinct value proposition.
The value proposition should be clearly communicated.
Most companies do not clearly communicate the corresponding value
propositions because they want their offerings to be acceptable to customers other
than those in their target market. They feel that defining value propositions will
narrowly restrict their market.
Sometimes, companies may not have researched their target markets well
enough to know their requirements. So the value proposition that they communicate
and deliver may not be suitable for the intended market.
The value proposition is communicated mostly through advertising.
Advertising agencies are responsible for communicating the value proposition.
Though the company briefs the agency, a third party can never completely
understand the subtle elements embedded in the value proposition. Therefore,
advertising may do a poor job of communicating the value proposition. Advertising,
in an effort to be more creative, tries to create images, stories, jingles and these
cannot truly convey or represent the value proposition. In fact, the more ‘creative’
the advertising, the more likely it is to deviate from its intended goals of effective
communication of conveying the value proposition to the intended target market.
Consistency
Confusion will arise if changes in positioning planks occur frequently. For instance,
if a company focuses on quality of service in one year, and then next year it changes
its positioning to superior product performance, the consumer would not know
what to expect from the offering of the company. Customers who were attracted
to the previous positioning of the company may now desert it. New customers
may not find the new positioning of the company credible, as their image of the
company is something other than what it is claiming to become.
A company which changes its positioning planks frequently will leave
customers confused about its real identity. Customers will not know what the
company stands for. A company has to stick to a positioning plank for a reasonable
length of time so that the new image sinks in. A company feels that all that a new
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positioning requires is an ad campaign presenting the new status. But positioning is Market Segmentation
just an external manifestation of what the company really is. So if a company

changes its positioning plank it has to transform itself to become true to its new
positioning. No company can transform itself completely so frequently. And if the
company has not been able to align with its new positioning, the customers will not NOTES
get what they have been promised in the new positioning plank.
But consistency does not mean permanence. A company may change its
initial positioning either because customers demand different value propositions,
or because the company may have acquired new resources enabling it to be
something else.
Credibility
The differential advantage must be credible to customers. Credibility means
believability and trustworthiness. Positioning is a promise made to the customer.
The customer must believe that the company will deliver what it promises, and is
capable of delivering the promise. Through advertisements and its public relation
efforts, the company should be able to demonstrate its capability to deliver the
promised utility. Everytime a customer buys the company’s product he should
have got what the company promised in its positioning strategy. Through word of
mouth the company develops a reputation for delivering its promised value.
Credibility built through personal use of the product and word of mouth is stronger
than credibility built through advertising and public relations.
Competitiveness
The differential advantage should offer something of value to the customer which
the competition has failed to supply. The company should be able to develop or
acquire distinct set of resources and processes. This unique set of resources and
processes is used to deliver a distinctive value which no other company can possibly
deliver, since the latter lack the set of resources and processes used to create it.
Therefore, the key to be able to provide differential value to customers is to possess
a distinctive set of resources and processes which the competition does not possess.
Sine qua non of positioning
Positioning is not an abstract art. It is important for firms to understand and implement
a few fundamental dos and don’ts to attain successful positioning.
 The positioning of a corporate or a brand should be clear and precise. The
unique proposition made to the customer should be brief and catchy. Instead
of overloading customers with a maze of complicated information, companies
should be precise and concise.
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Market Segmentation  A company cannot hope to reach out to the entire market with one positioning
appeal. The target audience should be determined, and the positioning appeal
and message should be tailored to it.
 The product or service should be set apart from what competitors are
NOTES
offering. If the product or service being offered by the company is not
better than or different from that of competition, why should customers buy
it? It is extremely important to state that one compelling reason why the
company’s product is the best for the target customers.
 The positioning statement should clearly reflect what the organization stands
for, and what it is about. Its values, intent and offering should be clear from
its positioning statement.
 Positioning should address the felt needs of the customer. Customers should
be told as to how the company’s product will fulfil these needs. Such benefits
should be stressed in the positioning statement. These needs should be
specific, measurable and something that customers really want. Instead of
being vague that the company offers a lot of variety or selection, a company
should say that it has twenty-five different models, and five colours in each
model.
 Positioning appeals should be specific. One unique value proposition that
customers desire the most must be present in the product.
 The company should also be able to deliver what it promises to the customer
as its success depends on its credibility.
Repositioning
Repositioning involves changing target markets or the differential advantage or
both. There are four generic repositioning strategies.
Change in the image of the product
The product may be acceptable in functional terms but fails because it lacks the
required image. The communication emanating from the company is overhauled.
The advertising message is changed. The contexts and the structure of the contexts
in which the customers come into contact with the company are changed to reflect
the new image.
It is not easy to affect such a repositioning. Because the company and its
products do not change in any substantive way, it is very difficult for the company
to believe that it is different from what it was earlier. And unless the company does
not truly believe in its new image, it cannot communicate the new image effectively
to its customers. A company should engage in intensive internal communication to
make its people feel differently about themselves before they start projecting the
new image to the customers.
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Often, a company may make superficial external changes, such as in Market Segmentation
packaging, to convey this type of repositioning to its internal and external customers.
They do not work.
Product repositioning NOTES
The product is modified to make it more acceptable to its present target market.
Customer requirements may have changed and the product has to be modified to
be able to serve the new needs effectively. The company may have acquired new
resources and competencies enabling it to modify the product so that it serves the
target market better.
Intangible repositioning
The company targets different market segments with the same product. The
company is able to locate a segment which has requirements similar to those of the
segments it is serving. The company retains its value proposition and offers it to
new segments.
Tangible repositioning
Both product and target market are changed. A company may decide to move up
or down a market by introducing a new range of products to meet the needs of the
new target customers.
Check Your Progress

6. Define promotional differentiation. How does it differ from product
differentiation?
7. What are the criteria for successful positioning of a product?
8. What are the four generic repositioning strategies?

QUESTIONS
1. Segmentation refers to the division of a diverse market into a number of

smaller, more similar sub-markets.
2. A target market is a chosen segment of market which a company decides to
serve.
3. The three broad groups of consumer segmentation criteria are: behavioural,
psychographic and profile variables.
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Market Segmentation 4. Psychographics is, in common parlance, lifestyle analysis or AIO research.
It consists of a long list of statements designed to capture relevant aspects
of a consumer, like personality, hinting motives, interests, attitudes, beliefs
and values.
NOTES
5. When goods and services available in the market are in tune with lifestyle
patterns and values, consumer market reactions are favourable.
6. Promotional Differentiation arises from unique, valued images created by
advertising or superior services provided by salespeople. Product
differentiation on the other hand, results from added features which give
customers benefits that rivals cannot match.
7. The four C’s for successful positioning of a product are:
a) Clarity
b) Consistency
c) Credibility
d) Competitiveness
8. The generic repositioning strategies are:
a) Change in the image of the product
b) Product repositioning
c) Intangible repositioning
d) Tangible repositioning
2.6 SUMMARY
 Segmentation involves identification of groups of individuals or organizations

that have significant implications for the determination of a marketing strategy.
Segmentation refers to the division of a diverse market into a number of
smaller, more similar sub-markets.
 By breaking a market into its constituent segments, a company may
differentiate its offerings between segments, and within each segment it can
differentiate its offering from its competitor. By creating a differential
advantage over the competition, the company gives the customer a reason
to buy from it rather than from its competitors.
 Markets are rarely static. As customers become more affluent, they seek
new experiences and develop new values, and new segments emerge. The
company may spot a new underserved market segment and meet its needs
better than competition.
 Behavioural variables such as benefits sought from the product, and buying
patterns such as frequency and volume of purchase, may be considered the
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fundamental basis. Psychographic variables are used when the purchasing Market Segmentation
behaviour is correlated with the personality or lifestyle of consumers. Profile

variables such as socio-economic group or geographic locations are valuable
in describing the customers of the identified segment.
NOTES
 Differences in purchase behaviour can be based on the time of purchase
relative to the launch of the product or on the patterns of purchase. When a
new product is launched, a key task is to identify the innovator segment of
the market. Other segments of the market may need more time to assess
the benefits and delay purchase until after the innovators have taken the
early risks of purchase.
 Geographic segmentation is useful when there are geographic differences in
consumption patterns and preferences. Variations in food preferences may
form the basis of geographic segmentation.
 Positioning strategy (product positioning) is the essence of the marketing
mix. The way a product is positioned explains the purpose of that product.
It articulates how it will satisfy the customer needs.
 Target market selection is a part of positioning, whose objective is to create
and maintain a distinctive place in the market for the company’s products.
This is done by a marketing mix, by which the company creates a product
that is specific and special for the customer.
 However, the company must ensure that each element of the marketing mix
conforms to its positioning.
 Clarity, consistency, credibility and competitiveness are the criteria for
successful positioning.
 Companies may also reposition themselves if the need arises.
2.7 KEY WORDS
 Segmentation: It is the division into separate parts or sections.

 Consumer: It refers to a person who purchases goods and services for
personal use.
 Psychographics: It is the study and classification of people according to
their attitudes, aspirations, and other psychological criteria, especially in
market research.
 Lifestyle: It is the way in which a person lives.
 Positioning: It refers to the place that a brand occupies in the minds of the
customers and how it is distinguished from the products of the competitors
and different from the concept of brand awareness.
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Market Segmentation
2.8 SELF ASSESSMENT QUESTIONS AND
EXERCISES

1. What are profile variables?
2. What indicates successful positioning?
3. Which factors are included in major positioning strategies?
1. Describe the behavioural segmentation.
2. What are demographic and geographical variables? Explain.
3. Illustrate the characteristics of lifestyle.
4. Discuss the major strategies of positioning.

Dreamtech Press.
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Consumer Motivation
UNIT 3 CONSUMER MOTIVATION

Structure
3.1 Objectives
3.2 Needs, Goals and Motivation
3.3 Measurement of Motives and Motivational Research
3.5 Summary
3.6 Key Words
3.0 INTRODUCTION
While making decisions related to purchase activity, consumers vary amongst each
other. They also differ within themselves across buying situations. This is because
the dynamics that operate while consumer decision making are significantly different.
The consumer decision making process is impacted by individual determinants
that are specific to an individual, i.e., psychological influences, and his self and
group influences that are general across a class of customers and take the form of
sociological influences. Such psychological influences include the forces that impact
consumer decision making. One of such psychological influences is consumer needs
and motivation. Consumer motivation is the urge or drive to satisfy needs through
product purchase and its consumption. This unit deals with the concept of consumer
motivation which influences consumer decision making.
3.1 OBJECTIVES

 Understand the meaning of motivation
 Discuss the types of goals and needs
 Explain the types of arousal of motives
 Describe the motivational research
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Consumer Motivation
3.2 NEEDS, GOALS AND MOTIVATION
All types of behaviour are goal oriented. The outcome of a motivated behaviour is
NOTES the achievement of a goal. Previous knowledge and thinking processes decide the
direction or the form that behaviour will take. In other words, they decide the
resultant goal. Goals are of two categories: Product-specific and generic goals. A
generic goal can be said to be a general category of goal which could result in the
fulfilment of a particular need; while a product-specific goal can be described as a
specifically branded or labelled product which a person considers as a method to
fulfil a need. Product-specific needs are many a times referred to as wants.
Innate needs: These are the needs which are present in an individual from the
time he is born and remain throughout his lifetime. Such needs are physiological
(biogenic) in nature. Those factors that are necessary for sustaining life, shelter,
food, clothing and water are called innate needs.
Acquired needs: These are the needs which develop after birth and are usually
psychological. They are also referred to as psychogenic, i.e., generated in one’s
psyche. Love, acceptance, esteem and self-fulfilment are examples of acquired
needs. For every need, there are numerous different goals. Goals are selected by
individuals on the basis of values, experiences, cultural norms and physical abilities.
Individuals also select their goals keeping in mind how accessible the goal may be
in the prevailing social and physical environment.
Depending on certain factors, needs and goals change; thus they are said to be
interdependent. The following are the factors which influence a person’s needs
and goals:
(i) The individual’s physical ability
(ii) Environment
(iii) Interaction with other people
(iv) Previous experience or knowledge
Decisions regarding a product, whether one would or would not like to own
something, are perceived in terms of the articulation of an individual’s self-image.
A product that best matches a consumer’s self-image has a greater probability of
being chosen than one that does not.
Fulfilling needs is a never-ending process. As soon as an individual fulfils
one need, other new, higher-order needs arise which must be satisfied.
Unfulfilment of goals usually results in feelings of frustration and helplessness.
The two most popular methods of reacting to frustration are: ‘fight’ or ‘flight’.
People usually find a way around the hindrance to goal fulfilment or replace the
goal with a suitable substitute. This is referred to as the method of ‘fight’. In ‘flight’,
the priority of the individual will be to defend or safeguard their self-esteem rather
than fulfilling the need. Aggression, repression, projection, regression, rationalization,
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withdrawal, autism and identification are examples of defence mechanisms adopted Consumer Motivation
by individuals when they are in the ‘flight’ mode.
It is difficult to come to a conclusion about a motive from consumer behaviour
studies. This is because different individuals having varied needs may select the
same goals for fulfilment; in other cases, individuals with similar needs select different NOTES
goals for achieving their goals. Psychologists differ in their opinion regarding the
needs priorities of different individuals; while most of them are of the opinion that
different persons have different need priorities, others consider that most individuals
experience the same basic needs, to which they allow a similar priority ranking.
Motivation can be described as the driving force within individuals that impels
them to action. This driving force is produced by a state of tension, which exists as
the result of an unfulfilled need. The specific courses of action that consumers
pursue and their specific goals are selected on the basis of their thinking process
and previous learning.
Relationship between needs and goals
 Needs and goals are interdependent—neither exists without the other.
 People are often not as aware of their needs as they are of their goals.
 Individuals are usually more aware of their physiological needs than they
are of their psychological needs.
Positive and Negative Motivation
Motivation can be negative and positive. People can feel a driving force either
towards an object or away from it.
Some psychologists refer to positive motivation as needs, wants or drives.
They may refer to negative motivation as negative drives, fears and aversions.
Some distinguish between needs and wants by calling wants product-specific needs.
Negative and positive motivational forces seem to differ considerably,
particularly in terms of physical activity. Nonetheless, they are basically similar.
They both initiate and maintain human behaviour.
There is no distinct demarcation between needs, wants and desires.
Goals can be either positive or negative. Since a positive goal is one towards
which behaviour is directed, it is usually called an approach object. Likewise,
since a negative goal is one from which behaviour is directed away, it is known as
an avoidance object. Individuals get motivationally aroused by a threat to, or the
removal of, behavioural freedom. This motivational state is called psychological
reactance and is usually manifested by a negative consumer response.
Rational vs Emotional Motives
According to consumer behaviourists, the motives for choosing goals fall into two
categories, rational and emotional. For them, rationality means that when choosing
a product, consumers keep all alternatives in mind and choose the one that will
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Consumer Motivation provide them maximum utility. In the context of marketing it means that the customer
will make a choice based on objective criteria. Examples of these criteria include
price, size, weight, and so on. Emotional motives indicate choosing goals as per
such subjective or personal criteria as status, pride, affection and fear. This
NOTES assumption is based on the belief that emotional or subjective criterion does not
derive maximum satisfaction or utility. At the same time, it is not unreasonable to
consider that usually consumers choose those alternatives that according to them,
serve to maximize their satisfaction.
Consumer researchers who advocate the positivist research perspective
try to consider all types of consumer behaviour as rationally motivated. Hence,
they try to separate the factors resulting in such behaviour, so as to enable them in
predicting, and thereby influencing, future behaviour. Experientialists are often
interested in studying the hedonistic pleasures that are provided by some types of
consumption behaviour as sensuality, fun and fantasy. They study consumers for
gaining knowledge and understanding how they behave in different and unique
situations.
Needs and goals are constantly growing and changing. They do not cease because
goals and needs that exist are not completely satisfied. If needs have at all been
fulfilled, they are replaced by newer ones that are higher in level.
1. Needs are never completely satisfied. Most human needs are not fully or
permanently satisfied.
2. Temporary goal achievement does not lead to adequate satisfaction of the
need. As needs are satisfied they are replaced by new ones. Some
motivational theorists are of the opinion that a hierarchy of needs exists,
which imply that fulfilment of lower-order needs leads to new, higher-order
needs. Marketers should be attuned to changing needs. Success and failures
influence goals.
3. Researchers consider that the behaviour of an individual will be directed to
a substitute goal when he fails in attaining a certain goal which he considers
will fulfil a specific need. The goal that substitutes the main one may not be
as satisfactory as the latter, but it will help in relieving the need-induced
tension to some extent, thereby reducing the feeling of frustration. As
discussed earlier, each individual’s reaction to a frustrating situation is
different. Adaptive people try to derive fulfilment by countering an obstacle
or by choosing an alternate goal. Those who are not very adaptive feel that
the fact that they are unable to derive personal fulfilment is a personal failure
and hence, they face anxiety.
4. Specific goals are often selected because they satisfy several needs. A
proponent need is a triggering mechanism for need fulfilment.
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5. Needs and goals vary among individuals. It is difficult to infer motives from Consumer Motivation
behaviour. People with different needs may seek fulfilment through selection
of the same goals, although people with the same needs may seek fulfilment
through different goals.
NOTES
 People who cannot cope with frustration often mentally redefine the
frustrating situation in order to protect their self-image and defend their self-
esteem. These reactions are known as defence mechanisms.
 Reaction to the frustration of not being able to reach goal attainment can
take many forms, such as aggression, rationalization, regression, withdrawal,
projection, autism, identification and repression.
 Marketers often consider the protection of self-esteem by consumers when
selecting advertising appeals. The ads (appeals) often portray a person
resolving a particular frustration through the use of the advertised product.
The specific needs of an individual remain dormant most of the time. At any point
of time, the internal stimuli due to the individual’s physiological condition, emotional
or cognitive processes or external stimulus may cause arousal of a specific set of
needs.
(a) Physiological arousal
 This type of arousal occurs due to bodily needs, and is based on a person’s
physiological condition at a particular moment.
 Almost all physiological cues are involuntary, regulated by the brain and
nervous system; but it should be kept in mind that they arouse related needs
which result in tensions that lead to restlessness until the needs are fulfilled.
(b) Emotional arousal
Sometimes, thinking or daydreaming leads to arousal of latent or dormant needs.
This may result in uncomfortable tensions and restlessness which ‘thrust’ them
towards a type of behaviour which is goal-oriented.
(c) Cognitive arousal
Sometimes, random thoughts or personal achievement result in cognitive awareness
of needs.
(d) Environmental arousal
The set of needs which is activated at a specific point of time is usually determined
by specific signals arising from the environment. Individuals who exist in an
environment that is highly varied and complex usually experience many favourable
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Consumer Motivation circumstances which result in the arousal of needs. However, when people live in
a poor or deprived environment, fewer needs are activated. According to the
behaviourist school, motivation is considered as a mechanical process, and
behaviour is considered to be the response to a stimulus, while ignoring the elements
NOTES of conscious thought.
According to the cognitive school, all types of behaviour are directed towards
fulfilment of goals. Past experiences and needs are analysed, classified and changed
into attitudes and beliefs which function as predispositions to behaviour.
Let’s look at some of the major theories.
Types and Systems of Needs
Most human needs differ from each other in their content and length. Although
there are very few or no disagreements regarding particular types of physiological
needs, significant amount of disagreement exists regarding particular types of
psychological or psychogenic needs. According to Henry Murray, there are twenty-
eight different types of psychogenic needs, which in turn serve as fundamental
constructs for a whole lot of popular personality tests. Basic needs according to
Murray are constituted of numerous motives which are considered to play an
important role in consumer behaviour. Some of these motives are acquisition,
achievement, recognition and exhibition.
Maslow’s theory of motivation
Dr Abraham Maslow primarily theorized about human motivation. His theory has
been widely accepted by practitioners of management. According to Maslow’s
theory human needs can be divided into five fundamental levels. These can also be
ranked as per the order of their importance from the low-level biogenic needs to
the high-level psychogenic needs.
According to Maslow’s theory, an individual could have the following motivations:
 Physiological needs like hunger and thirst
 Safety needs like accidents and ill health
 Belongingness and love
 Self-esteem and status
 Self-actualization
The motives determine the choice criteria. For instance, a customer who is driven
by esteem and status motive may use self-image as a key choice criterion when
buying a car.
Different consumers have varying motivations while buying the same product.
Therefore, the choice criteria of various consumer segments differ, and the marketers
must choose the most relevant motivating factor while positioning their product.
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For instance, some consumers may buy food for satisfying hunger, while some Consumer Motivation
may frequent a fast food joint to hang out with friends or family; others may enjoy
gourmet food service provided by a leading luxury hotel. Each segment considers
different motives while buying the same product. Therefore, while the segment
that only wants to satisfy hunger may look for convenience or price, these factors NOTES
may be inconsequential for the segment that wants gourmet food.
1. Physiological needs: These are those items that are required to sustain
biological life and include; food, water, air, shelter, clothing and sex. These
are dominant when chronically unsatisfied.
2. Safety needs: These needs are concerned with much more than physical
safety. They include order, stability, routine, familiarity, control over one’s
life and environment, and certainty. Health is also a safety concern.
3. Social needs: These needs relate to such things as love, affection, belonging
and acceptance.
4. Egoistic needs: These needs can be inward oriented or outward oriented.
Inward-oriented ego needs portray a person’s needs for success, self-esteem,
self-acceptance, independence and personal satisfaction when a job is
performed well. Outward-oriented ego needs are constituted by the need
for recognition, prestige, status and reputation.
5. Need for self-actualization: These refer to a person’s desire to be that
what his or her potential permits.
An Evaluation of the need hierarchy and marketing applications
 The main disadvantage of Maslow’s theory is that it cannot pass empirical
tests; it is not possible to evaluate the precision of fulfilment of one need,
before the subsequent higher need takes precedence.
 Maslow’s hierarchy offers a useful, comprehensive framework for marketers
trying to develop appropriate advertising appeals for their products.
 The hierarchy enables marketers to focus their advertising appeals on a
need level that is likely to be shared by a large segment of the prospective
audience.
 The hierarchy facilitates product positioning or repositioning.
Examples of needs that can be integrated into advertisements are the needs for
achievement, power and affiliation.
Trio of Needs Theory
Many psychologists insist that there are three types of fundamental needs, namely
the need for power, affiliation and achievement.
1. Power: The need for power is a person’s desire to control his environment.
There are many people whose self-esteem improves by virtue of having
exercised power over others.
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Consumer Motivation 2. Affiliation: This need suggests that feeling of belonging influences individual
behaviour. This also includes the desire for acceptance and friendship. Those
who have a high need for affiliation are socially dependent on other people.
3. Achievement: Persons who have a strong urge for fulfilment usually consider
NOTES
personal achievement as their ultimate goal. This need is intimately related
to the self-actualization and egoistic need. Such people exhibit tremendous
self-confidence. They also willingly take risks and welcome feedback.
Monetary rewards form a mode of feedback for them as it indicates how
well they have performed. Such people are usually more self-confident,
enjoy taking calculated risks, actively analyse their surroundings, and value
feedback. Monetary rewards enable an important type of feedback as to
how they are performing. People with high achievement needs prefer
situations in which they can take personal responsibility for finding solutions.
Individuals with specific psychological needs tend to be receptive to
advertising appeals directed at those needs. They also tend to be receptive
to certain kinds of products. Knowledge of motivational theory provides
marketers with additional bases on which to segment their markets.
Often, market segmentation is based on needs hierarchy. Different advertisements
are meant to appeal to different need-segments. Successful positioning relies on
finding a niche which has not been noticed by a competing brand or product.
3.3 MEASUREMENT OF MOTIVES AND

MOTIVATIONAL RESEARCH
The measurement of motives is concerned with finding answers to the following

questions: How are motives identified? What is the method of motive measurement?
How do researchers understand which motives result in specific types of behaviour?
It is difficult to find answers to such questions. For, as a construct, a motive is
purely hypothetical. Being intangible, it cannot be observed, felt or smelled. This
implies that no system of measurement can serve as a reliable index. Therefore,
researchers tend to rely on a combination of qualitative research methods for
establishing the presence and/or the strength of different motives.
The results of qualitative research techniques are largely dependent on the
researcher. The researcher focuses not only on the data, but also on what the data
can imply. Therefore, many consumer behaviourists are reluctant to rely on one
technique alone.
By using, however, a combination of assessments (called triangulation)
based on behavioural data (observation), subjective data (self reports) and
qualitative data (projective tests, collage research, etc.), consumer researchers
feel more confident. The following three methods are frequently applied for
identifying and evaluating people’s motives: observation and inference, subjective
reports and qualitative research (including projective techniques). The outcome of
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none of the methods can be considered separately. Researchers usually combine Consumer Motivation
two or all the three methods together and then evaluate the presence of strength of
consumer motives.
Motivational research is qualitative research developed to understand the
NOTES
level of awareness of a customer. Despite a few disadvantages, motivational research
has been beneficial to marketers concerned with developing new ideas and new
copy appeals.
Though some marketers are of the opinion that qualitative research does
not result in solid figures which objectively ‘prove’ the point under consideration,
others are convinced that qualitative techniques are more revealing than quantitative
methods.
Motivational research
Motivational research is a term generally used for referring to qualitative method
developed for uncovering the end-user’s subconscious or hidden motivation.
The basis for the development of motivational research was provided by
the psychoanalytic theory of personality, developed by Freud. The theory is
developed on the consideration that unconscious urge, especially biological and
sexual drives, form the basis of human motivation and personality.
Dr Dichter adapted Freud’s psychoanalytic techniques to the study of
consumer buying habits. Before Dr Dichter, marketing research focused on what
consumers did rather than why they did it. By the early 1960s, drawbacks to
motivational research were noted. Because the qualitative research techniques are
intense in nature, small samples are considered; thus, there was concern about
making the results public. Moreover, marketers also realized that the evaluation of
projective tests and in-depth interviews were highly subjective.
Three different research analysts who are provided with the same data might
end up generating three different reports.
Other consumer theorists noted other contrarieties in applying Freudian
theory to the study of consumer behaviour. There are a number of research
techniques that can be used to delve into the consumer’s unconscious or hidden
motivations.
Evaluation of motivational research
 Despite these criticisms, motivational research is still regarded as an important
tool by marketers who want to gain deeper insights into the whys of
consumer behaviour than conventional marketing research techniques can
yield.
 Motivational research’s principal use today is in the development of new
ideas for promotional campaigns, ideas that can penetrate the consumer’s
conscious awareness by appealing to unrecognized needs.
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Consumer Motivation  Motivational research also provides marketers with a basic orientation for
new product categories, and enables them to explore consumer reactions
to ideas and the advertising copy at an early stage to avoid costly errors.
 Despite the drawbacks of motivational research, there is new and compelling
NOTES
evidence that the unconscious is the site of a far larger portion of mental life
than even Freud envisioned. Research studies show that the unconscious
mind may understand and respond to non-verbal symbols, form emotional
responses and guide actions largely independent of conscious awareness.
Check Your Progress

1. What are generic and product-specific goals?
2. What are innate needs?
3. List the factors which influence a person’s needs and goals.
4. What is motivation?
5. What is motivational research?

QUESTIONS
1. A generic goal can be said to be a general category of goal which could

result in the fulfilment of a particular need; while a product-specific goal can
be described as a specifically branded or labelled product which a person
considers as a method to fulfil a need.
2. The factors that are necessary for sustaining life, shelter, food, clothing and
water are called innate needs.
3. The following are the factors which influence a person’s needs and goals:
(ii) Environment
4. Motivation can be described as the driving force within individuals that
impels them to action.
5. Motivational research is a term generally used for referring to qualitative
method developed for uncovering the end-user’s subconscious or hidden
motivation.
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Consumer Motivation
3.5 SUMMARY
 Goals are of two categories: Product-specific and generic goals. A generic

goal can be said to be a general category of goal which could result in the NOTES
fulfilment of a particular need; while a product-specific goal can be described
as a specifically branded or labelled product which a person considers as a
method to fulfil a need.
 The following are the factors which influence a person’s needs and goals:
(ii) Environment
 The two most popular methods of reacting to frustration are: ‘fight’ or ‘flight’.
People usually find a way around the hindrance to goal fulfilment or replace
the goal with a suitable substitute. This is referred to as the method of ‘fight’.
In ‘flight’, the priority of the individual will be to defend or safeguard their
self-esteem rather than fulfilling the need.
 Motivation can be described as the driving force within individuals that impels
them to action. This driving force is produced by a state of tension, which
exists as the result of an unfulfilled need. The specific courses of action that
consumers pursue and their specific goals are selected on the basis of their
thinking process and previous learning.
 According to consumer behaviourists, the motives for choosing goals fall
into two categories, rational and emotional.
 Specific goals are often selected because they satisfy several needs. A
proponent need is a triggering mechanism for need fulfilment.
 According to Maslow’s theory human needs can be divided into five
fundamental levels. These can also be ranked as per the order of their
importance from the low-level biogenic needs to the high-level psychogenic
needs.
 The measurement of motives is concerned with finding answers to the
following questions: How are motives identified? What is the method of
motive measurement? How do researchers understand which motives result
in specific types of behaviour?
 Motivational research is qualitative research developed to understand the
level of awareness of a customer. Despite a few disadvantages, motivational
research has been beneficial to marketers concerned with developing new
ideas and new copy appeals.
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Consumer Motivation
3.6 KEY WORDS
 Goal: It is the object of a person’s ambition or effort; an aim or desired

NOTES result.
 Needs: It refers to a thing that is wanted or required.
 Motivation: It is the desire or willingness to do something.
 Motivational research: It is the psychological or sociological study of
motives, especially those influencing the decisions of consumers, voters,
etc.

EXERCISES
Short-Answer Questions
1. What are the two most popular methods of reacting to frustration?
2. State the relationship between needs and goals.
3. How is consumer motivation measured?
1. Differentiate between positive and negative motivation and rational and
emotional motives.
2. What do you mean by the dynamic nature of motivation? Explain.
3. Illustrate the Maslow’s theory of motivation and Trio of Needs theory.
4. Evaluate motivational research.

Dreamtech Press.
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Consumer Personality
UNIT 4 CONSUMER PERSONALITY

Structure
4.1 Objectives
4.2 Consumer Personality: Nature and Influences on Consumer Behaviour
4.3 Consumer Emotions: Nature and Uses in Advertising
4.4 Consumer Perception and its Implications
4.6 Summary
4.7 Key Words
4.0 INTRODUCTION
Marketers and advertisers have long tried to appeal to consumers in terms of their
personality traits. They feel that consumers purchase, and when and how they
consume, are likely to be influenced by their personality factor. For this reason
marketers have frequently depicted specific personality characteristics in their
making and advertising messages. Personality may be defined as the inner
characteristics that examine and reflects how an individual responds to his
environment. Personality is likely to influence the individual’s product choices.
They affect the way consumers respond to marketers’ promotional efforts, and
when, where and how they consume particular products or services. Therefore,
the identification of specific personality characteristics associated with consumer
behaviour has proven to be highly useful in the development of a firm’s market.
Let us discuss in detail about the significance of consumer personality for marketers
and advertisers in the following unit.
4.1 OBJECTIVES

 Understand the nature of consumer personality and its effect on consumer
behaviour
 Describe the concept of consumer emotion
 Explain the meaning and implications of consumer perception
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Consumer Personality
4.2 CONSUMER PERSONALITY: NATURE AND
INFLUENCES ON CONSUMER BEHAVIOUR
NOTES The characteristics that decide how an individual will respond to his/her environment
constitute his personality. This definition emphasizes inner characteristics. These
are those traits, factors, attributes and qualities that distinguish individuals from
one another. The identification of specific personality characteristics associated
with consumer behaviour has proven to be highly useful in the development of a
firm’s market segmentation strategies.
The Nature of Personality
In the study of personality, three distinct properties are of major importance:
 Personality reflects individual differences.
 Personality is consistent and enduring.
 Personality can change.
Personality reflects individual differences: An individual’s personality is a unique
combination of factors; no two individuals are exactly alike. Personality is a useful
concept because it enables us to categorize consumers into different groups on
the basis of a single trait or a few traits.
Personality is consistent and enduring: Marketers learn which personality
characteristics influence specific consumer responses and attempt to appeal to
relevant traits inherent in their target group. Even though an individual’s personality
may be consistent, the consumption behaviour often varies considerably because
of psychological, sociocultural and environmental factors that affect behaviour.
Personality can change: An individual’s personality may be altered by major life
events, such as the birth of a child, the death of a loved one, a divorce, or a major
career change. An individual’s personality also changes as part of a gradual maturing
process. Personality stereotypes may also change over time. There is a prediction,
for example, that a personality convergence is occurring between men and women.
Theories of Personality
Three theories of personality are prominent in the study of consumer behaviour:
 Freud’s Psychoanalytic Theory
 Neo-Freudian Theory
 Trait Theory
1. Freud’s Psychoanalytic Theory
The foundation for the study of motivational research has been provided by Freud’s
theory of psychoanalysis. The basic premise of this theory is that human drives are
unconscious in nature but they do serve to influence consumer behaviour.
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Sigmund Freud’s psychoanalytic theory of personality is the cornerstone of Consumer Personality
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.
NOTES
Id, superego and ego
 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. The superego’s role is to see that the individual satisfies
the needs in a socially acceptable fashion. 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.
Freudian theory and product personality
 Those stressing Freud’s theory see that human drives are largely unconscious,
and that consumers are primarily unaware of their true reasons for purchasing
what they buy.
 These researchers focus on consumer purchases and/or consumption
situations, treating them as an extension of the consumer’s personality.
2. Neo-Freudian Theory
Several of Freud’s colleagues disagreed with his contention that personality is
primarily instinctual and sexual in nature. They argued that social relations
are fundamental to personality development. According to the Neo-Freudian theory,
social relationships play an essential role not only in the formation of a personality,
but also in its development.
In Alfred Adler’s opinion, human beings wish to surmount feelings of
inferiority. He viewed human beings as seeking to attain various rational goals,
which he called the style of life, placing emphasis on the individual’s efforts to
overcome the feelings of inferiority.
Harry Stack Sullivan emphasized the desire to establish relationships that
are rewarding. They therefore focus on reducing tensions.
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Consumer Personality Karen Horney is of the opinion that individuals attempt to overcome feelings
that cause anxiety. She focused on the impact of child – parent relationships,
especially the individual’s desire to conquer feelings of anxiety. She further proposed
three personality groups: compliant, aggressive and detached. Compliant individuals
NOTES are those who move toward others—they desire to be loved, wanted and
appreciated. Aggressive individuals move against others—they desire to excel
and win admiration. Detached individuals move away from others—they desire
independence, self-sufficiency and freedom from obligations.
A personality test based on the above (the CAD) has been developed and
tested. It reveals a number of tentative relationships between scores and product
and brand usage patterns. It is likely that many marketers have used some of these
neo-Freudian theories intuitively.
3. Trait Theory
As a theory it departs from other approaches to personality measurement in a
major way. Its basic postulate is that each person possesses inherent psychological
traits. These traits include materialism, desire for novelty, innovativeness and the
need for recognition. Specially-designed scales and personality inventories can
measure these traits. Many researchers prefer to use personality inventories because
these are easy to use and can be self-administered. Brands too have personalities.
These include gender and ‘human-like’ traits. They help generate loyalty, response
and preferences in the consumer.
Each individual perceives himself/herself in terms of a certain image. Often,
consumers purchase products so as to extend or enhance their self-image. They
even shop at stores that in their opinion conform to their perceived self-image.
The Internet has enabled the creation of virtual personalities. Experiences in the
chat rooms often cause consumers to explore alternative personalities.
Types of traits measured include:
 Consumer innovativeness—The degree to which a person is receptive to
experiences that are new
 Consumer materialism—The extent of a person’s attachment to possessions
that are considered ‘worldly’
 Consumer ethnocentrism—The possibility that a consumer will reject
products that are foreign made
Research has revealed that consumers make their choices based on their
personalities.
Personality and Influences on Consumer Behaviour
Marketers are interested in understanding how personality influences the
consumption behaviour 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.
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Consumer Innovativeness Consumer Personality
It is very important that market innovators learn as much as they can about
prospective consumers. These innovators are often crucial to the success of new
products. One can differentiate between consumer innovators and consumer non- NOTES
innovators on the basis of their personality traits.
Other personality traits include:
 Dogmatism
 Social character
 Need for uniqueness
 Optimum stimulation level
 Variety-novelty seeking
 Dogmatism: This is a personality trait whereby people displaying it
exhibit considerable rigidity towards traits which are contrary to their
beliefs. People who are not dogmatic are more open to new products.
Consumers high in dogmatism are more accepting of authority-based
advertisements for new products.
 Social character: Personality trait that ranges from the inner-directed
to the other-directed is called social character. Those consumers who
are inner-directed evaluate new product based on their inner values.
Similarly, those consumers who are other-directed are not innovators
and therefore, look for direction. They prefer advertisements that feature
social environment and social acceptance.
 Need for uniqueness: Some consumers always seek to be unique.
These people avoid conformity.
 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, try new
products, be innovative, seek purchase-related information and accept
new retail facilities. The correspondence between an individual’s OSL
and his actual circumstances has a direct relationship to the amount of
stimulation that he desires. 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. The most common
type of consumers are variety or novelty seeking. There appears to be
many different types of variety-seeking behaviour, such as exploratory
purchase behaviour (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
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Consumer Personality 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
products.
NOTES
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 varieties. Ultimately, marketers must walk the fine line between
offering consumers too little and too much choice.
Cognitive Personality Factors
Market researchers want to understand how cognitive personality influences
consumer behaviour. Two cognitive personality traits have been useful in
understanding various selected aspects of consumer behaviour. They are: need
for cognition; and visualizers versus verbalizers.
 Need for cognition: This is the measurement of a person’s craving for or
enjoyment of thinking. Products that provide a lot of product-related
information attract those consumers who have a tremendous need for
cognition. They are also more responsive to cool colours.
The consumers who do not have a tremendous need for cognition are more
attracted to an advertisements background. They spend more time on the
print content and have much stronger brand recall. The need for cognition
seems to play a role in an individual’s use of the Internet.
 Visualizers versus verbalizers: Those consumers who favour visual
information are known as visualizers. Verbalizers are consumers who prefer
written or verbal information and products that stress the verbal. This
distinction helps marketers know whether to stress visual or written elements
in their ads.
Consumer Materialism
Materialism is a trait of people who feel their possessions are essential to their
identity. Such people are self-centred. They love to acquire and show off
possessions.
Consumer Ethnocentrism: Responses to Foreign-made Products
To identify consumer segments receptive to foreign-made products, researchers
have developed and tested the consumer ethnocentrism scale—CETSCALE.
CETSCALE results identify the consumers with a predisposition to reject or accept
foreign-made products. Consumers who are highly ethnocentric feel that it is wrong
to purchase foreign-made products because it would hurt the domestic economy.
Non-ethnocentric consumers are those who objectively evaluate products that
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are foreign made. Marketers can appeal to ethnocentric consumers by stressing Consumer Personality
nationalistic themes in their promotional efforts.
Check Your Progress

NOTES
1. List the three distinct properties in the study of personality.
2. What is dogmatism?
4.3 CONSUMER EMOTIONS: NATURE AND USES

IN ADVERTISING
The term ‘customer’ implies an individual who buys merchandise and ventures for
individual use and the term ‘emotion’ implies a solid inclination towards one’s
conditions, temperament, or associations with others. In brain science, emotion is
characterized as a mind-blowing condition in physical and mental changes that
impact human idea and conduct. Emotion can be connected with a wide scope of
mental issue that incorporates disposition, character, and temperament.
It was naturalist Charles Darwin who suggested that emotions advanced on
the grounds that they were versatile and permitted people and creatures to endure
and recreate. Sensations of adoration and fondness lead individuals to look for
mates and duplicate. Sensations of dread constrain individuals to battle.
Consumer Emotion is a measure of how a customer feels about his
involvement in an organization. The elements behind consumer emotion are
astounding. The increasing significance of consumer emotion can be summarized
by appropriating an old statement: “clients may not recall what the nature of your
item was, yet they will consistently recollect how their client experience caused
them to feel.” Those emotions can be contrast among great and extraordinary
results for a business as consumer emotions can rouse choices. Consumer emotion
is the best markers of individual buys.
Nature of Consumer Emotion
Consumer emotion is a solid helper of human conduct since purchasers are likely
to relate their qualities, wants or yearnings to a brand or item class.
a. Emotion is compelling in nature: Emotion might be lovely or disagreeable
yet it influences the person. Positive emotions like grin or satisfaction, joy,
please, fondness, joy and negative emotions like distress, pity, outrage,
disturb, stun, sorrow and stress influence a consumer’s behaviour in making
a purchase.
b. Emotion shift in power: Emotion differs from individual to individual.
Youngsters can go to the extraordinary finish of emotionality than grown-
ups. A few people respond less on emotions and their enthusiastic power is
low.
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Consumer Personality c. Emotion includes mental changes: When an individual genuinely hurt or
furious he can’t learn, handle, and recollect things appropriately. They feel
eager and discouraged in such circumstances. Accordingly, emotions assume
a significant part in mental capacities.
NOTES
d. Emotion is connected with energy: Every emotion has its own degree of
energy, for example it either increments or diminishes. In a blissful or lovely
state of mind parcel of energy is created though in a dismal or discouraged
disposition the energy level reductions.
e. Emotion assists with altering social connection: In verbal or non-verbal
correspondence our conduct is seen by various individuals in the general
public. Their responses go about as a sign to us so we can change our
social connection with individuals.
Emotions act as a cognizant and abstract mental response on specific
occasion and are typically joined by changes in the physiological and social parts
of a consumer. From this definition, we can find that an emotion has four parts, to
be specific: intellectual responses, physiological responses, social responses and
influence. Psychological responses allude to an individual’s memory, thinking and
view of an occasion. Physiological responses are principally brought about by
changes in the hormonal levels in the body. Then again, conduct responses contain
the dynamic articulation of the emotion. Finally, influence incorporates the positive
or negative condition of the emotion and is the thing that makes a emotion a cognizant
and emotional experience.
Effect of Consumer Emotion
Emotion impacts other mental cycles. There is an immediate connection between
the manner in which we think and the manner in which we feel.
 Emotions and contemplations impact one another: In a cheerful mindset
happy musings come into our psyche and when we are pitiful, negative
recollections and pictures come into our brain.
 Attitude: Attitude of an individual is impermanent. When one is cheated by
somebody, one chooses not to confide in anybody. Subsequently, the trust
is lost. This influences our demeanour.
 Creativity: When one has happy emotion, the innovativeness level in him
increases in light of the fact that in such a state of mind a wide scope of
thoughts or affiliations come into the brain.
The compelling part of emotion in buyer conduct is as per the following:
 Functional attractive reverberation imaging (FMRI) shows that when
assessing brands, customers principally use emotions (individual emotions
and encounters), instead of data (brand credits, highlights, and realities).
 Advertising research uncovers that the customers’ enthusiastic reaction to a
promotion affects their detailed purpose to purchase an item than does the
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advertisement’s substance by a factor of 3-to-1 for TV plugs and 2-to-1 Consumer Personality
for print advertisements.

 Research directed by the Advertising Research Foundation presumed that
“affability” is the measure generally prescient of whether a commercial will
NOTES
expand a brand’s deals.
 Studies show that positive emotions toward a brand affect purchaser
faithfulness than trust and different decisions, which depend on a brand’s
ascribes.
As per Kennedy, Moore and Watson, emotions assume three significant
functions in the lives of people. To begin with, emotions are required for variation
and endurance. Bliss and trust persuade an individual to perform at his best, while
dread and disturb make an individual careful to threat. Second, emotions impact
an individual on how he sees the world. In this way, emotions have an administrative
capacity. Third, emotions assist individuals with conveying their requirements, needs
and feelings to other people.
Emotion Used in advertisement
Emotions assume a significant part in fruitful advertising efforts. We as a whole
know, for instance, that sweet titbits and beverages are terrible for us, however
advertisements for Pepsi and Coca-Cola don’t discuss fat, calories, and diabetes.
Or maybe the attention is on youth, imperativeness, and great occasions. Chocolate
is related with extravagance, guilty pleasure, and sexiness. Furthermore, other
positive emotions are utilized to sell everything from clothing cleanser to video
games, mayonnaise, and disaster protection.
Advertising is to get customers to purchase something. Emotion is a solid
method to get customers to focus. Individuals depend on their emotions when
they make buys and create brand steadfastness. They frequently genuinely associate
with the substance of a promotion and those emotions come up when they see the
item face to face or on the web.
At the point when you watch the advertisements that become web sensations
they regularly depend intensely on passionate substance, for example, kinship and
satisfaction. These sensations wind up urging individuals to settle on specific choices
with regards to buys. Enthusiastic advertising identifies with what it is that individuals
need to see and how they need to feel. Passionate promoting is utilized to drive
association and mindfulness. Individuals have a few centre emotions and enthusiastic
advertising tries to draw on these emotions.
 Happiness: Brands that show individuals who are grinning and chuckling
alongside their loved ones are attempting to trigger a glad enthusiastic
response in clients. This inspiration builds interest in an item and in the
advertisement itself. At the point when you research huge numbers of the
most mutual advertisements or promotions with the most commitment you
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Consumer Personality will find that satisfaction and inspiration are the principle subjects. You can
see this with different hardware plugs where individuals get another telephone.
They are depicted as glad and excited about their telephones and the
perspectives. Passionate promoting that produces delight brings individuals
NOTES into a brand.
 Sadness: Advertising is not generally about interfacing with energy. In the
event that you have seen numerous advertisements you will realize that there
is a pattern of passionate substance that moves individuals to tears. These
advertisements are not really attempting to make a shopper dismal. All things
considered, they are centred on making motivation and demonstrating
individuals what they are prepared to do. These promotions will in general
incorporate unfortunate storylines that show individuals beating obstructions
and perceives the battles that individuals face.
 Surprise: Advertisers who use shock or dread are attempting to help buyers
settle on educated choices about genuine impediments. A few ads that utilize
dread show the impacts of certain natural issues. The panic strategies utilized
in that sort of enthusiastic promotion are intended to get individuals to
genuinely consider what is happening on the planet today and how their
decisions have any kind of effect. Some unexpected utilized in advertising,
however, isn’t dread based. It is about sure astonishments, for example,
individuals getting back home in the wake of being conveyed or families
meeting up. You additionally observe this in vehicle ads, where vehicles are
skilled to individuals. The amazement and satisfaction on their countenances
will pull in others and help them to remember that brand or item.
 Anger: Anger is utilized sparingly in enthusiastic advertising. However, it is
certainly an approach to stand out enough to be noticed. By sharing practical
circumstances that are disturbing or inadmissible, promoters can come to a
meaningful conclusion. Negative pictures and stories that are then
transformed vigorously things can get shoppers to settle on decisions about
their purchasing propensities.
Check Your Progress

3. What are the four parts of an emotion?
4. What does functional attractive reverberation imaging (FMRI) show?
4.4 CONSUMER PERCEPTION AND ITS

IMPLICATIONS
Perception is the process by which an individual selects, organizes and interprets

stimuli into a meaningful and coherent picture of the world.
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Sensation Consumer Personality
Sensation is the immediate and direct response of the sensory organs to stimuli (an
advertisement, a package and a brand name). A stimulus can be defined as a unit
of input to any of the senses. Skin, eyes, mouth, ears and nose, those that receive NOTES
sensory inputs are the sensory receptors. The sensory inputs may be in the form of
sight, sound, smell, taste or touch.
The experience of sensation by an individual is known as sensitivity. It is
dependent on the quality of the person’s sensory receptors as well as the intensity
of the stimuli to which he 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 and
the consistent level of stimulation. The capacity of a person to detect changes
improves as the intensity and quantity of sensory input decreases. This ability of
human beings to adapt themselves to different intensities of sensitivity as external
conditions alter, not only shields him from destructive consequences, but also has
important connotations for the marketers.
The stimuli that a consumer receives from branding and marketing exercises
are through a number of channels. The five senses of a human being act as the
channels—sight, sound, smell, taste and touch. The inputs received from each of
these five senses then collectively shape the perceptual process. Some forms of
input received through marketing effort are: jingles, new flavours, softness of a
material and so on.
Once the customer gathers any or all of these inputs, the brain forms
associations between the perception and emotions and past experiences. Based
on these associations, a customer selects a particular product or service. For
example, the small pug used in the previously named Vodafone advertisements
represented to many people the loyalty and credibility that a dog represents.
Vision
Think of when you go to a mall. There are so many sights and sounds that bombard
you from all directions. However, it is scientific fact that vision is the sense that has
the most impact and is retained the longest. So, all the posters of attractive models
wearing a certain brand of clothing, the cricketer recommending a certain brand of
car, the film star using a specific brand of beauty cream and the intellectual looking
male sporting a watch—all images will register in your mind and stay there in the
form of associations your brain will form or even as it is. When it is time for you to
take a decision about buying a product, even if it is something as routine as a tube
of toothpaste, your brain will throw up the image of Bollywood actor Shah Rukh
Khan recommending Pepsodent. A percentage of customers at least will take their
decision based on this image, while some may not.
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Consumer Personality Smell
A number of advertisements on TV show people being affected deeply by smells—
both good and bad. Some examples include the aroma of good food, the fragrance
NOTES of a perfume, the malodour that comes from a bathroom and so on. All these
actors will remind you of similar situations you may have been in and try to affect
your buying decision for when you find yourself in such a situation again. For
instance, the aroma of home-cooked food made by mom may appeal particularly
strongly to young people who live alone and eat regularly from restaurants. Similarly,
a well-made perfume ad may appeal to a section of the audience who are in a new
relationship or still single.
Sound
The sound stimulus has a deep impact on the human mind. For instance, an unusually
loud sound disturbs the equilibrium of the mind, a soothing sound can act as a
sedative, and a melancholy song may force the listener into introspection and so
on. You may remember hearing specific sounds at many different places. For
example, a fine dining place will likely play a low, instrumental music to create an
effect of sophistication, calm and decorum. Similarly, a shopping mall may play
either a peppy number on the sound system to keep the customers’ mood upbeat
or play their own brand’s song to reinforce it in the customer’s mind.
Touch
This is one sense of the humans that advertisers have not been able to exploit fully
as yet because of the limitations of the various advertising mediums used. However,
door to door advertising and personal selling can make use of this sense of touch
to sell products like pillows, blankets, bed sheets, sweaters, jackets and so on.
However, there are many advertisements, like that of Dove soap which play on
this sensory channel. Models with extraordinarily smooth skin are shown in ads
selling beauty creams, moisturisers, soaps, shampoos and so on. The smooth
touch of a blanket or mattress helping a person to fall asleep instantly is also an
image used very commonly in print and television media.
Taste
As far as this sensory channel goes, it has also not been fully exploited by the
advertisers. However, all of us are able to form taste-related preferences on which
ultimately the buying decisions are based. A very well-known example of this is
the flavour of Maggi noodles that has been appreciated by at least 3 generations
now. The flavour is so well-liked that other brands of instant noodles like Top
Ramen and Wai Wai could not make much of a mark in the market share.
The absolute threshold
Absolute threshold refers to the minimum level at which a person can sense or feel
a stimulus. This can also be referred to as the point at which an individual can
differentiate between the state of ‘something’ and the state of ‘nothing’. Under
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conditions of constant stimulation, such as driving through a ‘corridor’ of billboards, Consumer Personality
the absolute threshold increases (that is, the senses tend to become increasingly
dulled).
Adaptation NOTES
The process of getting used to an idea or situation is commonly referred to as
adaptation. Here, it might refer to particular sensations and becoming accustomed
to a certain level of stimulation. One reason which makes many advertisers change
their advertising campaigns regularly is sensory adaptation. Marketers try to
increase the sensory input in order to cut through the daily clutter consumers
experience in the consumption of advertising. Other advertisers try to attract
attention by decreasing the sensory input. Some advertisers use silence (the absence
of music or other audio effects) to generate attention. Some marketers seek unusual
media in which they 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 the consumers’ absolute thresholds to make sure that
their new product designs will stand out from the competitors’ packages on the
retailers’ shelves.
The differential threshold
Differential threshold refers to the least variation which can be observed between
any two stimuli. Differential threshold is also known as the just noticeable difference
(JND). Ernst Heinrich Weber, the 19th century German physiologist, observed
that the differential threshold between two different stimuli is not an infinite amount,
but an amount whose intensity is influenced by that 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 JND, 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 this principle in reducing prices. Markdowns must amount to
at least 20 per cent to be noticed by shoppers.
Marketing applications of JND
1. Manufacturers and marketers strive to find out the suitable JND for their
products so that:
 Negative changes, reductions or increases in the size or volume of product,
or reduced quality, are not easily recognizable for the consumers.
 Product improvements are readily discernible by the consumer without
being wastefully extravagant.
2. Marketers use the JND to determine the amount of change or updating
required in their products to avoid losing the readily recognized aspects of
their products.
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Consumer Personality 3. 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 elements that convey
NOTES motion—streaking, slashing and orbiting.
4. Although some companies make minor changes (below the JND) to promote
continuity, others have deliberately changed their traditional block lettering
and dark colours in favour of script typefaces, bright colours, and hints of
animation—taking cues from pop icons like MTV.
5. In order to emphasize or highlight the changes or improvements made to an
original product, the marketers strive to satisfy or exceed the differential
threshold value of the customers.
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.
Messages were supposedly meant for persuading people to buy goods and
services without their being aware of it. The effectiveness of the concept was
tested at a drive-in theatre 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, the popcorn sales increased 58 per cent and the Coke sales 18
per cent. No scientific controls were used, and the results were never replicated.
Subliminal Techniques
 Embedding: An embedded message is one that is not immediately obvious;
however, it is present and makes an impact on the mind of the consumer.
An example of this is the use of ice in a photograph. Embeds are small
shapes that are included in print media ads through use of high-speed
photography or airbrushing. These hidden shapes are generally sexual in
nature and have been found to have a strong but unconscious impact on
unknowing readers.
 Auditory message: Another technique through which subliminal messages
are passed on to a target audience is use of auditory messages that are
played quietly (undetectable by the ears) in the background of recognized
music. Auditory messages have been marketed to help improve one’s
memory, self-esteem, and generally modify one’s behaviour for the better.
Research has found that consumers spend more than $50 million every
year on such products. An example is that of an audio clip that is left on
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while the target sleeps. The audio will repeat a message like ‘You are confident Consumer Personality
and independent and you can take care of yourself.’ Such a message is
believed to reach the mind subliminally even though the person is not
conscious of it.
NOTES
 Consumer folklore: Another technique is that of marketing rumours, also
known as consumer folklore, of ungodly messages recorded backwards
into songs. Some backward messages have indeed been found to be present
on some albums, including Led Zeppelin’s number ‘Stairway to Heaven,’
which contains the lyric ‘...there’s still time to change.’ When played in
reverse, this phrase sounds like ‘so here’s to my sweet Satan.’
 Low-level auditory simulation: Another technique is low-level auditory
simulation, also known as ‘psycho-acoustic persuasion’, which seems to
be quite effective. Subtle acousti-cal messages such as ‘I am honest. I won’t
steal. Stealing is dishonest’ have been played on the public sound systems
in more than 1000 stores in America to prevent instances of shoplifting.
However, these messages are played at a just about audible level, using a
technique known as threshold messaging. This technique was tested for
nine months and registered a considerably lowered level of shoplifting cases.
However, scientists feel that this technique is unlikely to work on
kleptomaniacs or professional thieves.
Evaluating the effectiveness of subliminal persuasion
There is no evidence that subliminal advertising works. The 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
behaviour by calling for generalized behaviour change. Subliminal perception refers
to the state of mind of consumers, where they are stimulated not to their level of
conscious awareness but to a level lower than it. Even though subliminal techniques
do not have any persuasive effect on consumers’ decision-making, continuous
exposure for a long period of time can influence their purchasing behaviour.
Dynamics of Perception
 Human beings receive different types of stimuli at every waking moment of
their life. Perception is not a function of sensory input alone, rather, perception
is the result of two various types of inputs that interact to form the personal
pictures—the perceptions-which every person experiences.
 Physical stimuli from the outside environment, and internal stimuli based on
expectations, motives, and learning are based on previous experiences.
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Consumer Personality  As any person is different from all others in his needs, wants, desires and
expectations, it should be understood that his perceptions of stimuli will
also be different. The process of perception is characterized by the following
three factors: selection, organization and interpretation of stimuli.
NOTES
o Selection: People are very choosy about the stimuli they recognize.
o Organization: The recognized stimuli are then subconsciously arranged
or organized on the basis of widely held psychological principles.
o Interpretation: Individuals give meaning to the recognized and
organized stimuli subjectively on the basis of their needs, expectations
and previous experiences.
Besides the nature of the stimuli, two other key factors play a role in deciding the
selection of stimuli. These factors include the consumer’s earlier awareness of the
stimulus. They also include the specific motives of the consumers at the time of
selection. These two factors can either enhance or reduce the probability of selection
of a particular stimulus.
The Nature of the Stimulus
Marketing stimulus contains many variables. Examples include:
1. Nature of the product
2. Its physical attributes
3. The package design
4. The brand name
5. The advertisements and commercials
6. The position of a print ad or commercial
7. The editorial environment
8. Contrast—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 colour contrasts, size, etc., to create stopping power
and gain attention.
9. 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 television commercials is to position the commercial so
close to the storyline of a programme that viewers are unaware they are watching
an advertisement until they are well into it. Advertisers also run print ads (called
advertorials) which are similar to editorial contents. Advertisers also come up with
thirty-minute commercials, otherwise called infomercials, which resemble
documentaries.
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Expectations Consumer Personality
People like to view what they expect to see. What they expect to see is usually
based on familiarity, previous experience, or preconditioned set expectations. The
stimuli that conflict sharply with expectations often receive more attention than NOTES
those that conform to expectations. One easy method which advertisers usually
resort to for gaining high attention involves using sex in advertisements. In most of
these cases, what remains in the viewer’s mind is the irrelevant sex part, rather
than the product features or its brand name.
Motives
Human beings have the tendency to perceive stimuli which are important for them,
in the process, ignoring the unrelated stimuli to a greater extent as the need becomes
stronger. Thus, marketing managers give due consideration to consumers’ needs
while positioning their products.
Selective perception: The consumers select different stimuli from their
surroundings on the basis of interaction of motives and needs.
Selective exposure: The end-users select those stimuli which send out pleasant
messages or messages with which they are sympathetic. They try to consciously
avoid messages which are painful.
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. Consumers differ in terms of the type of information which influence
them as well as the form of message and type of medium.
Perceptual defence: 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
It has been observed that those stimuli which are in contrast with their surroundings
are easily taken note of by the consumers.
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
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Consumer Personality 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 usually plan their product advertisements with care so as to ensure
that the required stimulus is seen as figure by the consumers and not as ground.
NOTES Quite frequently, we find advertisements which have no clear-cut demarcation
between the figure and 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. Most of us remember things
like a telephone number because it can be broken into three ‘chunks’.
Closure
Individuals have a need for closure. As a result, people form a perception so that
they see a complete picture. If the consumers are exposed to a pattern which is
incomplete, they try to perceive it as complete by filling in the missing pieces.
Perceptual interpretation
Earlier knowledge or experience of a stimulus plays an important role in the
interpretation of stimuli by an individual. Thus, perceptual interpretation of stimuli
is uniquely individual. Stimuli are often highly ambiguous. When the stimuli are
highly ambiguous, individuals usually take into account whether such stimuli satisfy
their personal needs.
Perceptual distortion
With respect to perceptual distortion, people are influenced by a number of stimuli
which are likely to change their perceptions.
1. Physical appearances: Individuals have the tendency to assign qualities
of well-known people, i.e., people who are very familiar to them, to others
who may resemble them. We usually find that attractive models are good at
being persuasive at a much higher level than their less-attractive counterparts.
Thus, good-looking models are more adept at influencing consumers’
purchasing behaviour.
2. Stereotypes: People have the tendency to carry preset notion of different
types of stimuli.
3. First impressions: These tend to be lasting but formed while the perceiver
does not know which stimuli are relevant, important or predictive.
4. Jumping to conclusions: Most individuals have the tendency to draw a
conclusion even before all the evidences and facts are scrutinized. Thus, as
soon as they hear the beginning of an advertisement, they come to a
conclusion which is usually wrong.
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5. Halo effect: Describes situations where the evaluation of an object or Consumer Personality
individual on numerous dimensions is dependent on scrutinizing just a couple
of dimensions. Consumers often evaluate an entire product line on the basis
of one product within the product line. Licensing also is based on the halo
effect—associating products with a well-known celebrity or designer name. NOTES
Check Your Progress

5. What is perception?
6. What is absolute threshold?
7. What is JND?

QUESTIONS
1. In the study of personality, three distinct properties are of major importance:

 Personality reflects individual differences.
 Personality is consistent and enduring.
 Personality can change.
2. Dogmatism is a personality trait whereby people displaying it exhibit
considerable rigidity towards traits which are contrary to their beliefs.
3. An emotion has four parts, to be specific: intellectual responses, physiological
responses, and social responses and influence.
4. Functional attractive reverberation imaging (FMRI) shows that when
assessing brands, customers principally use emotions (individual emotions
and encounters), instead of data (brand credits, highlights, and realities).
5. Perception is the process by which an individual selects, organizes and
interprets stimuli into a meaningful and coherent picture of the world.
6. Absolute threshold refers to the minimum level at which a person can sense
or feel a stimulus. This can also be referred to as the point at which an
individual can differentiate between the state of ‘something’ and the state of
‘nothing’.
7. JND is just noticeable difference. It refers to the least variation which can
be observed between any two stimuli.
4.6 SUMMARY
 An individual’s personality is a unique combination of factors; no two

individuals are exactly alike. Personality is a useful concept because it enables
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Consumer Personality us to categorize consumers into different groups on the basis of a single trait
or a few traits.
 Marketers learn which personality characteristics influence specific consumer
responses and attempt to appeal to relevant traits inherent in their target
NOTES
group.
 The basic premise of Freud’s psychoanalytic theory is that human drives
are unconscious in nature but they do serve to influence consumer behaviour.
 Market researchers want to understand how cognitive personality influences
consumer behaviour. Two cognitive personality traits have been useful in
understanding various selected aspects of consumer behaviour. They are:
need for cognition; and visualizers versus verbalizers.
 Materialism is a trait of people who feel their possessions are essential to
their identity. Such people are self-centred.
 The term ‘customer’ implies an individual who buys merchandise and
ventures for individual use and the term ‘emotion’ implies a solid inclination
towards one’s conditions, temperament, or associations with others.
 Consumer Emotion is a measure of how a customer feels about his
involvement in an organization.
 The capacity of a person to detect changes improves as the intensity and
quantity of sensory input decreases. This ability of human beings to adapt
themselves to different intensities of sensitivity as external conditions alter,
not only shields him from destructive consequences, but also has important
connotations for the marketers.
 The stimuli that a consumer receives from branding and marketing exercises
are through a number of channels. The five senses of a human being act as
the channels—sight, sound, smell, taste and touch. The inputs received from
each of these five senses then collectively shape the perceptual process.
 Absolute threshold refers to the minimum level at which a person can sense
or feel a stimulus. This can also be referred to as the point at which an
individual can differentiate between the state of ‘something’ and the state of
‘nothing’.
 The process of getting used to an idea or situation is commonly referred to
as adaptation.
 Package designers try to determine the consumers’ absolute thresholds to
make sure that their new product designs will stand out from the competitors’
packages on the retailers’ shelves.
 Differential threshold refers to the least variation which can be observed
between any two stimuli. Differential threshold is also known as the just
noticeable difference (JND).
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 To better compete in a global marketplace that has been radically altered Consumer Personality
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.
NOTES
 In order to emphasize or highlight the changes or improvements made to an
original product, the marketers strive to satisfy or exceed the differential
threshold value of the customers.
 An embedded message is one that is not immediately obvious; however, it
is present and makes an impact on the mind of the consumer.
 Subliminal perception refers to the state of mind of consumers, where they
are stimulated not to their level of conscious awareness but to a level lower
than it. Even though subliminal techniques do not have any persuasive effect
on consumers’ decision-making, continuous exposure for a long period of
time can influence their purchasing behaviour.
 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.
4.7 KEY WORDS
 Personality: It is the combination of characteristics or qualities that form

an individual’s distinctive character.
 Stimuli: It refers to a thing or event that evokes a specific functional reaction
in an organ or tissue.
 Threshold: It is the magnitude or intensity that must be exceeded for a
certain reaction, phenomenon, result, or condition to occur or be manifested.

EXERCISES
1. Which three personality groups were proposed by Karen Horney?
2. What are the types of traits measured in personality according to Trait
Theory?
3. Which stimuli influences the people with respect to distortion?
4. What are the effects of consumer emotion?
1. Explain the two cognitive personality traits that have been useful in
understanding various selected aspects of consumer behaviour. Self-Instructional
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Consumer Personality 2. What is subliminal perception? Describe its techniques.
3. What are the dynamics of perception? Explain.
4. Describe the nature of consumer emotion.
NOTES

Dreamtech Press.
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Consumer Learning
BLOCK - II
CONSUMERS ATTITUDE
NOTES
UNIT 5 CONSUMER LEARNING
Structure
5.0 Introduction
5.1 Objectives
5.2 Meaning of Consumer Learning
5.3 Classical and Instrumental Theories in the Context of Consumer
Behaviour
5.5 Summary
5.6 Key Words
5.0 INTRODUCTION
Learning is defined as a relatively permanent change in the behaviour that occurs

as a result of experience of self or others. There occurs an enhancement of
knowledge, skills and expertise which are relatively permanent. Consumer learning
is defined as a process by which people gather and interpret information about
products and services and use this information/knowledge in buying patterns and
consumption behaviour. As Schiffman has put it “consumer learning can be thought
of as the process by which individuals acquire the pur-chase and consumption
knowledge and experience that they apply to future related behaviour”. Consumer
learning may be intentional, where learning is an outcome of a careful search for
information; learning can also be incidental, where learning occurs as a matter of
chance, by accident or without much effort. Let us study in detail about the
consumer learning and various theories in the context of consumer behaviour in
the following unit.
5.1 OBJECTIVES

 Understand the concept of consumer learning
 Explain classical and instrumental theories with respect to consumer behaviour
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Consumer Learning
5.2 MEANING OF CONSUMER LEARNING
The process which teaches consumption and purchase knowledge to consumers

NOTES thereby enabling them to apply it in future consumption-related activities is called
consumer learning. Although popularly it is believed that learning is intentional,
most learning is incidental. Reinforcement, cues, motivation and response are
elements that are basic to form an understanding of the learning process.
Several points in this definition are worth noting.
 First, consumer learning is a process; that is, it continually evolves and
changes as a result of newly acquired knowledge or from actual experience.
Both newly acquired knowledge and personal experience serve as feedback
to the individual and provide the basis for future behaviour 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.
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, the learning theorists, in general, agree that in order for
learning to occur, certain basic elements must be present—motivation, cues,
response and reinforcement.
 Motivation
Motivation is based on needs and goals. The degree of relevance, or involvement
with the goal is critical to how motivated the consumer is to search for information
about a product. Uncovering consumer motives is one of the prime tasks of
marketers who try to teach the consumer segments why their product will best
fulfil their needs.
 Cues
If motives serve to stimulate learning, cues are the stimuli that give direction to the
motives. In the marketplace, price, styling, packaging, advertising and store displays
all serve as cues to help consumers fulfil their needs. Cues serve to direct consumer
drives when they are consistent with their expectations.
 Response
How individuals react to a cue—how they behave—constitutes their response. A
response is not tied to a need in a one-to-one fashion. A need or motive may
evoke a whole variety of responses. The response a consumer makes depends
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heavily on his previous learning; that, in turn, depends on how related responses Consumer Learning
were reinforced previously.

 Reinforcement
Reinforcement increases the likelihood that a specific response will occur in the NOTES
future as the result of particular cues or stimuli.
Check Your Progress

1. Define consumer learning.
2. Name the basic elements that must be present in order for learning to
occur.
5.3 CLASSICAL AND INSTRUMENTAL THEORIES

IN THE CONTEXT OF CONSUMER
BEHAVIOUR
The behavioural learning theories are sometimes called stimulus–response theories.

A person is said to have ‘learned’ when his/her response to a recognized stimulus
is predictable. Behavioural 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.
(i) Classical Conditioning
All organisms were regarded by the early theorists of classical conditioning as
passive recipients. 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. According to Pavlov, if a stimulus when paired with
another one elicits a response that is known and serves to reproduce it when used
on its own, it becomes a case of conditioned learning. To demonstrate his theories,
Pavlov used hungry dogs that were eager for food. At the sound of a bell Pavlov
presented the dogs with the sight of meat causing them to salivate. The process
was repeated a number of times. It reached a point when the dogs began to
salivate at the sound of the bell itself, i.e., even in the absence of meat.
In the 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.
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Consumer Learning Strategic applications of classical conditioning
Classical conditioning gives rise to three basic concepts: stimulus generalization,
repetition and stimulus discrimination.
NOTES (a) Repetition works by increasing the strength of association and by slowing
the process of forgetting. After a certain number of repetitions, retention
declines. This effect is known as advertising wearout and can be decreased
by varying the advertising messages. Wearouts may be avoided by varying
the message through cosmetic variation or substantive variation. Some do
not agree about how much repetition is needed. The three-hit theory states
that the optimum number of exposures to an advertisement is three—one,
to make the consumer aware of the product; two, to show the consumers
the relevance of the product; three, to remind them of its benefits.
The scale of competitive advertising that a consumer is exposed to decides
the extent to which repetition will prove to be repetitive. As exposure
increases, the potential for interference increases.
(b) According to classical conditioning theorists, learning depends both on the
ability of individuals to generalize and on repetition. Success of imitations in
the marketplace can be explained with the help of stimulus generation. It
works by exposing how consumers confuse imitations with the original
products. To take advantage of such erroneous recognitions, private
manufacturers package their products in such a way that it resembles those
of the national brands. This principle can be applied by marketers to category
extensions, product forms and product lines. As mentioned earlier, product
extension involves the addition of a new product to a trusted and known
brand. This reassures its approval by the consumers.
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. Conversely, it
is much more difficult to develop a totally new brand. Marketers offer
product form extensions that include different sizes, different colours, and
even different flavours. Product category extensions generally target new
market segments.
The success of this strategy depends on a number of factors. For example,
if the image of the parent brand is one of quality, the consumers are more
likely to bring positive associations to the new category extensions.
 Family branding: This is the practice whereby a company’s entire
line of products is marketed under the same brand. It capitalizes on
the consumer’s ability to generalize favourable brand associations from
one product to the next. Retail private branding often achieves the
same effect as family branding. For example, Wal-Mart used to
advertise that its stores carried only ‘brands you trust’. Now, the name
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Wal-Mart itself has become a ‘brand’ that consumers have confidence Consumer Learning
in, and the name confers brand value on Wal-Mart’s store brands.
 Licensing: Often, a well-known brand name is affixed to products
that are manufactured by someone else. As a marketing strategy this
NOTES
works 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. Producing
counterfeits has become a big business with the increase in licensing.
Regardless of control and quality, licensors add well-known names to
all types of products.
(c) Stimulus discrimination is the opposite of stimulus generalization. Here, a
specific stimulus is selected from a number of stimuli that are similar.
Positioning strategy is based on the ability of the consumer to discriminate
one stimulus from another. This 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. The image, or position, that a
product or service has in the mind of the consumer is critical to its success.
Unlike the imitator who hopes that consumers will generalize their perceptions
and attribute special characteristics of the market leader’s products to their
own products, the market leaders wish that the consumer is able to see the
difference in each stimuli. Product differentiation strategies are therefore
dedicated to designing valuable, relevant and meaningful attributes for then
so that their product would be distinguished from those of their competitor.
It is often quite difficult to unseat a brand leader once stimulus discrimination has
occurred. 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. Stimulus discrimination, repetition and
stimulus generalization are the three principles of classical conditioning which help
explain consumer behaviour. They form the theoretical underpinnings of various
marketing applications.
(ii) Instrumental Conditioning
Like classical conditioning, instrumental conditioning requires a link between a
stimulus and a response. However, in instrumental learning, the stimulus that has
been learned is the one which results in the most suitable response. Instrumental
learning theorists view learning as a trial and error process with habits shaped
because of rewards received for certain responses or behaviour.
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Consumer Learning Although classical conditioning is useful in explaining how consumers learn
very simple types of behaviour, 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
NOTES individuals are ‘rewarded’ for choosing an appropriate type of behaviour.
In consumer behaviour terms, instrumental conditioning suggests that
consumers learn by means of a trial-and-error process in which some types of
purchase behaviour results in more favourable outcomes (i.e., rewards) than other
types of purchase behaviour. A favourable experience is instrumental in teaching
the individual to repeat a specific type of behaviour. Like Pavlov, Skinner developed
his model of learning by working with animals.
Viewed in the context of marketing, consumers who try several brands
(say, for example, of skirts) before settling on the one that fits them the best (positive
reinforcement) are engaging in instrumental learning.
Reinforcement of behaviour
Skinner distinguished two types of reinforcement (or reward) influence which
provided that the likelihood for a response would be repeated. The first type,
positive reinforcement, consists of experiences that fortify the likelihood of a specific
response. Negative reinforcement is an unpleasant or negative result. It encourages
a specific kind of behaviour at all times. Appeals to fear in advertisement messages
are examples of negative reinforcement. Both reinforcements, positive and negative,
can elicit the response that is desired. Negative reinforcement should not be confused
with punishment, which is designed to discourage behaviour.
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. Forgetting is often related to
the passage of time; this is known as the process of decay. Marketers can overcome
forgetting through repetition and can combat extinction through the deliberate
enhancement of consumer satisfaction.
Strategic applications of instrumental conditioning
The objective of all marketing efforts should be to maximize customer satisfaction.
Apart 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. Some hotels provide reinforcement to
guests in the form of small amenities. Most frequent shopper programmes are
based on enhancing positive reinforcement and encouraging continued patronage.
 Relationship marketing: Developing a close personalized relationship
with customers is another form of non-product reinforcement.
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 Reinforcement schedules: Marketers have found that the product quality Consumer Learning
must be consistently high and provide customer satisfaction with each use
for the desired consumer behaviour to continue. They have identified three
types of reinforcement schedules: total (or continuous) reinforcement,
NOTES
systematic (fixed ratio) reinforcement, and random (variable ratio)
reinforcement.
Shaping refers to the reinforcement of behaviour that must be performed
by consumers before the desired behaviour can be performed. Shaping increases
the probability that a certain desired consumer behaviour will occur.
Massed versus distributed learning: Timing has an important influence on
consumer learning. Should a learning schedule be spread over a period of time
(distributed learning), or should it be ‘bunched up’ all at once (amassed learning)?
The question is an important one for advertisers planning a media schedule because
massed advertising produces more initial learning, although a distributed schedule
usually results in learning that persists longer. When advertiser’s want an immediate
impact (e.g., to introduce a new product or to counter a competitors blitz campaign),
they generally use a massed schedule to hasten consumer learning. When the goal
is long-term repeat buying on a regular basis, however, a distributed schedule is
preferable. A distributed scheduler with advertisements repeated on a regular basis,
usually results in a more long-term learning and is relatively immune to extinction.
Modelling or Observational Learning
Learning theorists have noted that a considerable amount of learning takes place
in the absence of direct reinforcement, either positive or negative, through a process
psychologists call modelling or observational learning (also called vicarious learning).
They observe how others behave in response to certain situations (stimuli), the
ensuing results (reinforcement) that occur, and they imitate (model) the positively-
reinforced behaviour when faced with similar situations.
When individuals pick up behavioural patterns by observing others they are
undergoing a process called modelling. In such cases role models are usually people
they think highly of for traits such as skill, appearance and accomplishment. Children
learn much of their social behaviour and consumer behaviour by observing their
older siblings or their parents. Advertisers recognize the importance of observational
learning in their selection of models, whether celebrities or unknowns. Sometimes
advertisements depict negative consequences for certain types of behaviour. This
is particularly true of public policy advertisements, which may show the negative
consequences of smoking, fast driving, or taking drugs.
Check Your Progress

3. What are the three basic concepts in classical conditioning?
4. What is shaping?
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Consumer Learning
QUESTIONS
NOTES 1. The process which teaches consumption and purchase knowledge to

consumers thereby enabling them to apply it in future consumption-related
activities is called consumer learning.
2. In order for learning to occur, certain basic elements must be present—
motivation, cues, response and reinforcement.
3. Classical conditioning gives rise to three basic concepts: stimulus
generalization, repetition and stimulus discrimination.
4. Shaping refers to the reinforcement of behaviour that must be performed
by consumers before the desired behaviour can be performed. It increases
the probability that a certain desired consumer behaviour will occur.
5.5 SUMMARY
 Consumer learning is a process; that is, it continually evolves and changes

as a result of newly acquired knowledge or from actual experience. Both
newly acquired knowledge and personal experience serve as feedback to
the individual and provide the basis for future behaviour in similar situations.
 If motives serve to stimulate learning, cues are the stimuli that give direction
to the motives. In the marketplace, price, styling, packaging, advertising
and store displays all serve as cues to help consumers fulfil their needs.
Cues serve to direct consumer drives when they are consistent with their
expectations.
 A person is said to have ‘learned’ when his/her response to a recognized
stimulus is predictable. Behavioural 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.
 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.
 Stimulus discrimination is the opposite of stimulus generalization. Here, a
specific stimulus is selected from a number of stimuli that are similar.
Positioning strategy is based on the ability of the consumer to discriminate
one stimulus from another. This seeks to establish a unique image for a
brand in the consumer’s mind.
 Skinner distinguished two types of reinforcement (or reward) influence which
provided that the likelihood for a response would be repeated. The first
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type, positive reinforcement, consists of experiences that fortify the likelihood Consumer Learning
of a specific response. Negative reinforcement is an unpleasant or negative

result. It encourages a specific kind of behaviour at all times.
 The objective of all marketing efforts should be to maximize customer
NOTES
satisfaction. Apart 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.
 Shaping refers to the reinforcement of behaviour that must be performed
by consumers before the desired behaviour can be performed. Shaping
increases the probability that a certain desired consumer behaviour will occur.
 When individuals pick up behavioural patterns by observing others they are
undergoing a process called modelling. In such cases role models are usually
people they think highly of for traits such as skill, appearance and
accomplishment.
5.6 KEY WORDS
 Consumer learning: It is the process by which individuals acquire the

purchase and consumption knowledge and experience they apply to future
related behaviour.
 Conditioning: It is the process of training or accustoming a person or animal
to behave in a certain way or to accept certain circumstances.
 Reinforcement: It refers to the process of encouraging or establishing a
belief or pattern of behaviour.

EXERCISES
1. What is the role of experience in learning?
2. What is classical conditioning? Explain with the help of example.
3. What is family branding?
4. Differentiate between massed learning and distributed learning.
5. What is modelling learning?
1. Discuss the strategic applications of classical conditioning.
2. Describe instrumental conditioning in the context of consumer behaviour.
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Consumer Learning

NOTES Behaviour. New Delhi: Vikas Publishing House.
Dreamtech Press.
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Consumer Attitude
UNIT 6 CONSUMER ATTITUDE

Structure
6.1 Objectives
6.2 Meaning of Attitude
6.3 Attitude Change
6.5 Summary
6.6 Key Words
6.0 INTRODUCTION
Attitudes can be inferred from the manner in which an individual behaves. They
can not be seen and nevertheless it is crucial that attitudes are measured. This is
because an individual with a positive attitude towards a goods or service is more
likely to make a purchase. Attitudes can be determined by observation, qualitative
studies and quantitative techniques (or rating scales). Attitudes are formed after a
learning process. The formation of attitudes can be described through behavioural
theories (classical conditioning, operant conditioning), cognitive learning and social
learning. While attitudes are formed as a result of learning, they are affected by
various sources such as self-experiences, as well as direct and indirect influences.
Direct influences are influences from family and friends, salespersons (direct
marketers) as well as dealers and indirect influences include influences via mass
media, either print or audio-visual. This unit also deals with the Katz’s model of
attitude and attitude change. Let us study the concept of consumer attitude and its
relevance in a purchase decision making in the following unit.
6.1 OBJECTIVES

 Understand the meaning of functions of consumer attitude
 Explain the cognition, affect and conation components of attitudes
 Describe the Katz’s model of attitude
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Consumer Attitude
6.2 MEANING OF ATTITUDE
It is one of the most frequently involved behavioural science concepts in marketing.

NOTES Krech, Crutchfield and Ballachey describe an attitude as a person’s enduring
favourable or unfavourable cognitive evaluations, emotional feelings, and action
tendencies toward some object or idea. People have attitudes toward almost
everything: religion, politics, clothes, music, food, and so on. Attitudes put them in
a frame of mind of linking or disliking an object, moving toward or away from it.
While its relationship to behaviour is not entirely clear, attitude and likely
future action has resulted in extensive use of attitude surveys in the area of new
product development and in the design and execution of many promotional
campaigns. Similarly, public opinion (belief or attitudes) is playing an increasing
role in shaping and modifying corporate policy in areas such as consumer protection.
It follows that a basic understanding of the current state of knowledge of attitude
theory is vital to the student of marketing in general and particularly consumer
behaviour.
There is no single agreed definitions of attitude. In broad terms most of the
defination of attitude fall into one of two categories which reflect affective-conative
(CAC) and expectancy-value (EV) models. The CAC model has been traced
back to Plato’s elements of the human soul—reasonable, spirited, appetitive-which
in more modern terms may be defined as the realms of thought, emotions, and
motives, or knowing, feeling, and acting. Marketers have developed a number of
variants of their own of the CAC model and some of the better known examples
are contained in Table 6.1 under the general heading of hierarchy-of-effects models.
Table 6.1 Hierarchy-of-effects models
Strong AIDA Lavidge and Rogers Engel, Kollat
Steiner and Blackwell
Conative Action Purchase Adoption Purchase
Motive conviction trial processes
Affective Desire Preference Evaluation Evaluation &
(emotion) interest linking interest Search
Cognitive Awareness Knowledge Awareness Problem
(thought) awareness recognition
Unawareness
In all the marketing versions, starting with Stronger’s AIDA (1924) and
progressing through Lavidge and Steiner (1961). Rogers (1962) to Engel, Kollat
and Blackwell (1968), it is assumed that one proceeds from awareness (cognitive)
to preference (affective) to action (conative) – an assumption of the direction of
cause and effect for which there is little empirical support. In fact it is widely
recognised that frequently one or more stages occur simultaneously, e.g., awareness
and evaluation, while impulse purchases suggest that the cognitive and affective
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may occur together and that the conative may, or may not, follow. Despite these Consumer Attitude
deficiencies the CAC model enjoys wide support, and the effectiveness of marketing
strategy is often measured in terms of its ability to move consumers up the hierarchy
of effects, i.e., from unawareness to awareness, to act. The EV model views
attitude as comprising two components – beliefs and values-which are broadly NOTES
equivalent to the cognitive and affective dimensions of the CAC model. It follows
that the EV model is lacking a behavioural or action element and so is much more
limited in its application.
The EV model is particularly associated with the work of Martin Fishbein,
who built upon the work of Rosenberg, when in turn was developed from Fritz
Heider’s consistency model. In essence Fishbein argues that an attitude comprises
two components – beliefs about the attributes of an object and the values ascribed
to these beliefs.
In order to maintain consistency (or balance, or congruity), as it is sometimes
called) consumers need to act in accordance with their beliefs and the values
associated with them. Thus, while EV models do not seek to establish a link between
attitude and behaviour the association between expressed beliefs and action is
strong where action occurs, i.e., beliefs experienced about different brands have
been found to be good predictors of actual brand preference, where the person
expressing a belief about a product and a willingness to buy. Because of this, the
EV model is theoretically more acceptable than the CAC model, which extends
the link between an attitude as a predisposition to act into behaviour without
specifying the catalyst which makes action necessary. From a practical point of
view this missing link is of crucial importance in converting the results of attitude
surveys into realistic sales forecasts.
Attitude clusters The tripartite (C-A-C) model of attitude maintains that
attitudes are unlikely to exist in complete isolation. Robertson, Zielinski, and Ward
propose the view that ‘an individual’s cognitions about music, for example, may
tend to relate to cognitions about entertainment or relaxation. Therefore, attitudes
as a whole are thought to form clusters with consonant attitudes within the
individual’s attitudinal system.
Attitude measurement Attitude research is undertaken to analyse the
behaviour and motivations of people as consumers. Most research of this type is
undertaken using quantitative methods as a result of the great complexity of human
behaviour.
Attitude measurement is the assignment to each individual of a numerical
score indicating where he falls on the particular attitude dimension (any factor,
positive or negative, on which an attitude is based) on the basis of inferences
drawn from the responses of the individual to statements directly related to that
object or idiom that is the focus of the study (i.e., the attitude object). Measurement
‘therefore’ is an open and direct reaction to the statements included within the
attitude scale (desire for measuring attitudes, consisting of a set of statements or
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Consumer Attitude items to which the individuals responds) giving a numerical score of the strength of
beliefs, feeling, and inclination to take action in a given situation such as towards a
product range, a brand name, a marketing practice, etc.
It is evident that a person’s purchase choice is the result of the complex
NOTES
interplay of cultural, social, personal, and psychological factors. Many of these
factors cannot be influenced by the marketer. They are useful, however, in
indentifying the buyers who might have the more interest in the product. Other
factors are subject to marketer influence and give clues to the marketer on how to
develop product, price, place, and promotion to attract strong consumer response.
Attitudes can be classified into four functions:
 Utilitarian Function
 Ego-defensive Function
 Value-expressive Function
 Knowledge Function
 Utilitarian Function: Consumers usually view a commodity favourably if
it has been valuable earlier. Marketers should emphasize its useful features
and suggest such uses of the commodity which should not be too apparent.
 Ego-defensive Function: These are products that are purchased by the
consumers in order to boost their confidence and guard their self-image.
 Value-expressive Function: Quite often, a consumer’s personal values
are articulated with the help of brands bought by them. Marketers try to
relate their products with this significance.
 Knowledge Function: It is very natural for a consumer to want to know
the people they come in contact with and the products they buy. Often,
strategies to position a product or brand are developed around this ‘need
to know.’
Tricomponent Attitude Model accords that attitudes have three major components:
cognition, affect and conation.
Cognitive component: Cognitions refers to previous knowledge or experiences
with or about an object. This previous knowledge/experience allows the consumer
to form perceptions or beliefs about the product. This component comprises
rational judgements, beliefs, and perceptions related to various aspects of the
object. For instance, Amul butter has good taste, it is easily available, it is reasonably
priced, etc.
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Affective component: This component is based on buyer's emotion or approach. Consumer Attitude
Explorer continuously consider these sentiments and thoughts as evaluative in nature.

Emotionally-charged states, such as sadness and happiness, articulate affect-laden
experiences. These states may enhance positive or negative experiences for the
consumer. Consumer researchers try to measure this element using global evaluative NOTES
measures. An emotional component relates to the object. For instance, Amul butter
being an integral part of breakfast while growing up, or remembering good times
that were enjoyed while eating it, etc.
Behavioural component: The possibility of a consumer behaving in a different
way or act in a typical manner is considered by conation. The conative component
might as well as think the real behaviour. Marketing and consumer research treats
it as an articulation of the consumers’ purchase intentions. The likelihood that a
consumer will buy a particular product or that he will act in a certain way is assessed
using the intention-to-buy scale. It refers to the intention or likelihood of acquiring
the object when required. For instance, when buying butter next time, how likely
is the customer to buy Amul butter?
 It is important to remember that any of the beliefs may or may not be
factually accurate. But, these are beliefs held by the customer that he
thinks are true.
 Also, cognitive and affective components of the attitude can be held for
various parts of the object, though the affective component must be
held for the entire object. This follows from the fact that the intention to
buy must be for the entire object, not for parts of it.
 The more positive the cognitive and affective components of the attitude,
the more likely is the customer to purchase or use the object. Therefore,
attitudes are consistent with the types of behaviour.
As per psychologist Daniel Katz and his Functional Theory of Attitudes, attitudes
encourage social conduct; they are utilitarian for the individual and are controlled
by an individual’s thought processes. Practical attitude hypothesis (FAT) proposes
that convictions and mentalities are powerful to different mental capacities.
Mentalities can be persuasive on numerous cycles, for example, being utilitarian
(helpful), social, identifying with values, or a decrease of intellectual discord. They
can be useful and assist individuals with communicating the world. In the last part
of the 1950s when therapy and behaviourism ruled as the foci of mental
examinations, Smith, Bruner, and White (1956) and Katz (1960) independently
and autonomously created typologies of human attitudes comparable to the
capacities to which they accepted the attitudes served. This hypothesis recommends
that attitudes are held by people since they are significant and fundamental to
mental working. The capacity of a mentality is a higher priority than whether the
attitude is exact or right. As per Katz, Consumers can have various purposes
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Consumer Attitude behind having a similar attitude. A business-like methodology that centres on how
attitudes encourage social conduct; mentalities exist since they serve some capacity
for the individual: utilitarian, esteem expressive, personality cautious, information
capacity and social changed attitude.
NOTES
 Utilitarian attitudes: Many attitude serve a utilitarian capacity by serving
to enhance remunerates and limit the disciplines accomplished from objects
in the climate. The models of utilitarian attitude are consequentialist
hypotheses: that which makes right acts is their results. It alludes to
speculations of right activity though the correct demonstration to pick in
any circumstance is the one that will accomplish the most elevated equilibrium
of delight over agony for every influenced being. At the point when no
demonstration is accessible to which will create net delight, the demonstration
which is correct will deliver the most un-net agony. A person with a utilitarian
mentality is worried about how an item will help with improving their personal
satisfaction.
 Social-adjustive attitudes: Social-adjustive capacities are those which
manage connections and empower people to ascend the social stepping
stool through outward shows of status which are guessed to make the
individual more appealing or famous according to esteemed gatherings. A
person with a social-adjustive disposition is worried about status, notoriety,
and how they are seen by others and will look for objects that help with
building up their ideal social picture. Attitude serving a social-adjustive
capacity elevate the ability to interface with proper social gathering individuals
or to dazzle appealing others. Attitude may frequently serve differentiating
capacities for individuals who contrast in self-checking. High self-checking
people ordinarily endeavour to tailor their conduct to the social or relational
necessity of the circumstances they experience, to find a place with others,
along these lines inferring that they may regularly hold attitudes that serve a
social-adjustive capacity.
 Value expressive attitudes: The most hard to conceptualize and influence,
esteem expressive capacities aid the outward articulation of inborn qualities.
A few attitudes are significant to an individual since they articulate convictions
that are characteristic for that individual’s self-idea. The disposition is,
therefore, “essential for what their identity is” and the outflow of that mentality
conveys significant things about that individual to other people. Worth
pertinence as a sign of the apparent utility of a disposition to accomplish an
ideal end-state. It is an immediate proportion of the connection between a
worth and a disposition, as opposed to a proportion of the declaration of
attitude that are connected to individual qualities. Focusing on worth
expressive correspondence of a disposition instead of worth importance
permits correspondence conduct to become the dominant focal point in
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thinking about the connection between qualities, attitude, and practices. Consumer Attitude
Worth expressive attitudes fill no direct outward need, and can be best
perceived as existing to fulfil a person’s need to feel special and consistent
with self. People with esteem expressive attitude are not worried about a
lot other than being consistent with themselves. NOTES
 Ego-defensive attitudes: Ego-defensive capacities serve to shield the
person from both interior and outer repulsiveness. It permits individuals to
try not to acknowledge unpalatable or shocking parts of self or of the outside
world. It can advocate rationing one’s own confidence. An ego-defensive
attitude, in which one’s disposition is held to shield oneself from undermining
or unfortunate facts.
 Knowledge attitudes: The fifth capacity, i.e., information, helps people in
understanding their general surroundings. People with an information attitude
look to comprehend events out of the longing to know, not on the grounds
that it is quickly pertinent to their requirements, but since they basically
need to comprehend. Attitudes that serve an information work help
individuals pick up more noteworthy comprehension of the structure and
activity of their reality. The world that individuals possess is amazingly intricate,
and that attitude may encourage sorting out that world without serving needs
other than comprehension.
6.3 ATTITUDE CHANGE
Attitudes are general assessments of articles, thoughts, and individuals one

experiences for the duration of one’s life. Attitudes are significant in light of the fact
that they can manage thought, conduct, and emotions. Mentality change happens
whenever an attitude is altered. Hence, change happens when an individual goes
from being positive to negative, from marginally sure to positive, or from having no
attitude to having one. Due to the useful estimation of attitudes, the cycles that
transform them have been a significant concentration since the commencement of
social brain science.
Attitude Change
As indicated by double cycle models of mentality, changes are as per the following:
(1) Those that happen when one invests moderately minimal psychological
energy,
(2) Those that happen with generally high psychological exertion. The measure
of thought and exertion utilized in some random circumstances is dictated
by numerous factors, all of which influence one’s inspiration or capacity to
think.
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Consumer Attitude Attitude changes can occur by following techniques:
 Self-observation: This hypothesis contends that when we have no (or an
exceptionally feeble) earlier existing attitude on a specific issue we can gather
our attitudes from noticing our own practices. In the event that we return a
NOTES
lost wallet, we construe that we are straightforward. Regularly, our conduct
is moulded by unpretentious weights around us, however we neglect to
perceive those weights. Thus, we erroneously accept that our conduct exuded
from some internal manner. Maybe we aren’t especially dependable and
rather restored the wallet to dazzle the individuals around us. However,
neglecting to understand that, we derive that we are spotless legit. By having
confidence in our conduct, we gather that we are straightforward and that
truly rolls out an improvement in our past un-trust-commendable attitude.
Self-observation hypothesis gives the most acknowledged clarification of
the Foot-in-the-Door impact. Consistence to the underlying solicitation is
set to lead us to induce that we like to be ‘useful’. That rolls out a genuine
improvement to be ‘useful’ in our attitude. This method is usually utilized by
the salesmen, and it is likewise utilized to build consistence with demands
made by altruistic associations, similar to Red Cross.
 Cognitive discord: This hypothesis contends that acting in a way that
negates existing attitudes makes a sensation of distress. For instance, a
creature sweetheart may feel upset in the event that he incidentally runs
over a feline. So that, individuals will be propelled to attempt to determine
this discord. Individuals will search for approaches to attempt to clarify it
and, if none are clear, they will turn to determine the error: they will change
their attitude so it coordinates the conduct they have performed.
 Persuasion: While intellectual disharmony takes place due to attitude change
through an inner inconsistency. This hypothesis of influence proposes that
individuals can adjust their mentalities. To begin with, they can be roused to
tune in and consider the message, along these lines prompting an attitude
move. Or on the other hand, they may be affected by qualities of the speaker,
prompting an impermanent or surface move in mentality. Messages that are
provocative and that appeal to rationale are bound to prompt lasting changes
in mentalities.
Central Route: Message understanding is portrayed by smart thought of the
substance of the message.
Peripheral Route: Message understanding is portrayed by thought of source
and related general data instead of the message itself.
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Consumer Attitude
NOTES
Fig. 6.1 Attitude Change
Learning Theory: Classical moulding, operant moulding, and observational

learning can be accustomed to achieve disposition change. Old style moulding can
be utilized to make good enthusiastic responses to an item, individual, or occasion
by partner good sentiments with the objective article. Operant moulding can be
utilized to reinforce attractive attitudes and debilitate unfortunate ones. Individuals
can likewise change their attitudes in the wake of noticing the conduct of others.
Check Your Progress

1. What are three major components of attitudes according to Tricomponent
Attitude Model?
2. Which factors does the cognitive component comprise?
3. What is a person with a social-adjustive disposition worried about?
4. What purpose do ego-defensive capacities serve to an individual?

QUESTIONS
1. Tricomponent Attitude Model accords that attitudes have three major

components: cognition, affect and conation.
2. The cognitive component comprises rational judgements, beliefs, and
perceptions related to various aspects of the object.
3. A person with a social-adjustive disposition is worried about status, notoriety,
and how they are seen by others and will look for objects that help with
building up their ideal social picture.
4. Ego-defensive capacities serve to shield the person from both interior and
outer repulsiveness. It permits individuals to try not to acknowledge
unpalatable or shocking parts of self or of the outside world.
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Consumer Attitude
6.5 SUMMARY
 Attitudes can be classified into four functions – utilitarian function, ego-

NOTES defensive function, value-expressive function and knowledge function.
 Tricomponent Attitude Model accords that attitudes have three major
components: cognition, affect and conation.
 Cognition refers to previous knowledge or experiences with or about an
object. This previous knowledge/experience allows the consumer to form
perceptions or beliefs about the product. This component comprises rational
judgements, beliefs, and perceptions related to various aspects of the object.
 Affective component is based on buyer’s emotion or approach. Explorers
continuously consider these sentiments and thoughts as evaluative in nature.
Emotionally-charged states, such as sadness and happiness, articulate affect-
laden experiences. These states may enhance positive or negative
experiences for the consumer. Consumer researchers try to measure this
element using global evaluative measures.
 As indicated by double cycle models of mentality, changes are as per the
following:
(1) Those that happen when one invests moderately minimal psychological
energy,
(2) Those that happen with generally high psychological exertion. The
measure of thought and exertion utilized in some random circumstances
is dictated by numerous factors, all of which influence one’s inspiration
or capacity to think.
 As per psychologist Daniel Katz and his Functional Theory of Attitudes,
attitudes encourage social conduct; they are utilitarian for the individual and
are controlled by an individual’s thought processes. Practical attitude
hypothesis (FAT) proposes that convictions and mentalities are powerful to
different mental capacities. Mentalities can be persuasive on numerous cycles,
for example, being utilitarian (helpful), social, identifying with values, or a
decrease of intellectual discord.
 Social-adjustive capacities are those which manage connections and
empower people to ascend the social stepping stool through outward shows
of status which are guessed to make the individual more appealing or famous
according to esteemed gatherings.
 The fifth capacity, i.e., information, helps people in understanding their general
surroundings. People with an information attitude look to comprehend events
out of the longing to know, not on the grounds that it is quickly pertinent to
their requirements, but since they basically need to comprehend.
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Consumer Attitude
6.6 KEY WORDS
 Consumer attitude: Consumer behaviour is the study of individuals, groups,

or organizations and all the activities associated with the purchase, use and NOTES
disposal of goods and services, and how the consumer’s emotions, attitudes
and preferences affect buying behaviour.
 Cognition: It refers to previous knowledge or experiences with or about
an object.

EXERCISES
1. Give classification of attitudes into its functions.
2. Write a brief note on the techniques which change attitude.
1. Explain the components of attitudes according to the Tricomponent Attitude
Model.
2. Describe the Katz’s model of attitude.

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Post Purchase Attitude
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UNIT 7 POST PURCHASE
ATTITUDE CHANGE
NOTES
Structure
7.0 Introduction
7.1 Objectives
7.2 Cognitive Dissonance Theory
7.3 Attribution Theory
7.5 Summary
7.6 Key Words
7.0 INTRODUCTION
The activities and experiences that a consumer encounter after making a purchase
are included in the post purchase behaviour. At times, after making a purchase,
consumers experience post-purchase dissonance, i.e., they regret their decision
of the purchase made. It mainly occurs due to a large number of alternatives
available, good performance of alternatives or their attractiveness. The marketers
sometimes need to assure the consumer that the choice made by them is the right
one. The seller can mention or even highlight the important features or attributes
and benefits of the product to address and solve their concerns if any. A high level
of post-purchase dissonance is negatively related to the level of satisfaction which
the consumer draws out of product usage. To find out the exact reason of the
consumer’s dissonance, the marketer uses attribution process. This unit deals with
the dissonance theory and the attribution process in context of consumer behaviour.
Let us study in detail about these topics.
7.1 OBJECTIVES

 Understand the meaning of dissonance
 Explain the process of attribution
7.2 COGNITIVE DISSONANCE THEORY
When we are faced with a choice and we opt for one, we still have some regrets
about what we did not choose. There are times we do or say things against our
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own convictions. Both these are examples of conditions that create feelings of Post Purchase Attitude
Change
discomfort caused by conflicts between various beliefs/attitudes that we hold.
Sometimes the conflict arises due to the inconsistency between attitudes and
behaviour; for example, some people love animals, but still are non-vegetarians.
NOTES
Dissonance is the struggle a person experiences when inconsistencies occur
between attitudes that we hold, or between our attitudes and actions. Dissonance
can be seen as a motivational state. Individuals experiencing dissonance are
motivated to reduce it, also, it produces a feeling of discomfort. There are three
ways in which dissonance can be reduced and they are as follows:
(i) Change your attitudes and/or behaviour, to make them consistent; for
example, being married to a person, one does not like. Change the attitude
towards the partner and start believing that she/he is not unlikable or walk
out of the marriage. Both these processes would lead to reduction in the
conflict.
(ii) Obtain or recruit new information that supports one’s attitude or behaviour;
for example, thinking, ‘Compared to my friends’ married life, my partnership
is indeed tolerable,’ or so many of my friends have divorced and ended a
bad marriage. So there is nothing wrong about divorce.’
(iii) Minimize the importance of the conflict. For example, ‘I have lived for twenty-
five years with someone whom I do not like. For the rest of my life, these
conflicts do not matter. I will manage, somehow.’
One of these three ways would reduce the dissonance and bring in a sense
of balance. The theory of cognitive dissonance was proposed by Leon Festinger
in 1957.
Change of one or both attitudes are needed for reducing dissonance. Change
follows the path of least effort, as in other situations. Psychologists, Aronson,
Fried and Stone (1991) carried out a series of studies involving forced compliance.
This involved getting people to do or say something they did not believe in. They
used health related issues for inducing hypocrisy or lying, like safe sex. A group of
participants had to encourage others to practice these responsible sexual behaviour.
Simultaneously, they were reminded that they themselves have not always practiced
what they are now advocating. This would generate dissonance. This can be
reduced by changing their attitudes about safe sex. This was revealed when 85
per cent of these participants bought contraceptive devices the next time they
engaged in sex. This reduced their lying hypocritical attitude besides their actions.
Psychologist, Aronson and Mills gave subjects in two conditions, large and
small rewards for engaging in behaviour that was counter to their held attitudes.
The experiment consisted of two sets of female college students. One group had
to undergo a severe embarrassment test to join the group. The other set of women
were put through a milder test of embarrassment. Finally, the members of both the
groups were told that they cleared the test and were allowed to join. The severely
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Post Purchase Attitude embarrassed group seemed to enjoy the task for which they enrolled with difficulty.
Change
The other group that went through milder difficulties to enter the group did not find
the task that they were ultimately to perform much to their liking. The tasks that
both the groups had to perform were dull and uninteresting.
NOTES
The severely initiated group had a lot of dissonance because of the following
two inconsistent attitudes that they held:
(i) Underwent a severe initiation
(ii) Had to perform a dull task, at the end
The severely embarrassed group changed their attitude towards the task,
and perceived it as not so boring after all. In this way, the dissonance was reduced.
The mildly initiated group had less dissonance because the intensity of the two
attitudes (mentioned earlier) that they held was low.
In this condition, the dissonance was less, so they did not have any motivation
to change their attitude towards the task, they were required to perform. Hence,
they were able to view the task as dull because they put less into the situation. So
people, who suffer more, justify it by thinking that they like what they have. In real
life also one gets to see knowledge rewards lead people to believe that they like
what they are doing. People working in corporate offices, that are demanding and
leave little or no time for personal life, justify their lives (as the incentives are good)
on the ground that they enjoy their work hours, lifestyle, etc. Here, the attitude is
changed, so as to reduce the conflict that could arise by not having time or leisure
for self or family.
Psychologist, Festinger and Carlsmith (1959) carried out a study in which
they gave one group of subjects a small reward ($1) and another group ($20) for
telling other participants—who were to come to participate in the study—that the
tasks to do were interesting. In reality the task was a boring routine one like
putting spools in a tray, taking them out and putting them back. This had to be
done for half an hour.
Later, both sets of participants were asked to indicate their own liking for
the tasks. This involved outright lying. The group that received $1 to lie, reported
liking the task more than the group that was paid $20. This was because the
former group had more dissonance as they had to lie for a small amount, while the
group that was paid more justified their lying in terms of their larger reward. The
less paid group had experienced more dissonance. So they had to change their
attitude towards the dull task and perceive it as not so uninteresting in order overcome
their dissonance.
Less leads to more effect was demonstrated by this study. More attitudinal
change comes when one has received a small reward. The smaller the inducements,
the greater the change in attitude. However, these predictions are valid only when
a free choice condition exists. People, who have to accept smaller salaries because
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of limited opportunities, are not going to change their attitudes towards the work Post Purchase Attitude
Change
they have to engage in.
Does inconsistency really cause dissonance? Cooper and Schier (1992)
are of the opinion that dissonance and the motivation to reduce it, primarily comes
NOTES
from feelings of responsibility for negative outcomes. So when people are told that
their attitude-discrepant behaviour does not lead to harmful effects, lesser attitude
change occurs, like lying helps someone, but does not harm others.
If there is no dissonance, there is no possibility of attitude change. We still
believe that lying is bad, but not when we do it under special circumstances (with
a view to helping someone). When people recognize that their different attitudes
or attitudes and behaviour do not fit together neatly, some discomfort or pressure
to change arises. This is reduced in several ways to obtain a reduction in the
feelings of unpleasantness.
Check Your Progress

1. What is dissonance?
2. Who proposed the theory of cognitive dissonance?
7.3 ATTRIBUTION THEORY
The attribution theory was propounded by psychologist, Fritz Heider and can be
used to observe how people observe their behaviour and of other people. It is
primarily concerned with how people interpret events and their thought process.
However, Weiner and his colleagues developed a theoretical framework which
has become a major paradigm in the field of social psychology. The theory comprises
of three-stage process: (1) an individual must perceive other’s behaviour, (2) he
or she must believe that the way in which they behaved was intentional and (3)
they must then, analyse whether their behaviour was forced or not.
The Process
The attribution process refers to the manner in which people come to understand
the cause of others’ (and their own) behaviour (Harvey and Wells 1988). Attributions
play an important role in the process of perception. Attributions made about the
reasons for someone’s behaviour may affect judgements about that individual’s
fundamental characteristics and traits.
Individuals do not consciously make attributions in all circumstances (although
they may do so unconsciously much of the time). However, under certain
circumstances, people are likely to make causal attribution consciously. Attribution
theory has been proposed to develop an explanation of how we judge people
differently depending on the meaning we attribute to a given behaviour (Kelley
1971). When we observe a person’s behaviour, we ascribe its cause either to
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Post Purchase Attitude internal factors or to external factors. If the behaviour is a result of internal factors,
Change
it is under the control of the person. If the cause is external, it is the result of the
intensity of the situation faced by the person.
Figure 7.1 presents a basic model of the attribution process. People infer
NOTES
‘causes’ to behaviours they observe in others and these interpretations often largely
determine their reactions to these behaviour. The perceived cause of behaviour
reflects several antecedents: (1) the amount of information the perceiver has about
the people and the situation and how that information is organized by the perceiver,
(2) the perceiver’s beliefs (implicit personality theories, what other people might
do in a similar situation), and (3) the motivation of the perceiver (for example, the
importance to the perceiver of making an accurate assessment).
Fig. 7.1 The Attribution Process
Consequences for the Perceiver

The perceiver’s information and beliefs depend on previous experience and are
influenced by the perceiver’s personality.
Based on information, beliefs, and motives, the perceiver often distinguishes
between internal and external causes of behaviour; that is, whether the behaviour
is due to a real desire or the pressure of circumstances. The assigned cause of the
behaviour—whether internal or external—helps the perceiver attach meaning to
the event and is important in understanding the subsequent consequences for the
perceiver. The consequences of this attribution process are the subsequent
behaviour of the perceiver in response to the behaviour of others, the impact on
feelings and emotions (how the perceiver now feels about the events, people, and
circumstances) and the effects on the perceiver’s expectations of future events or
behaviour. This could be discussed with the help of a simple example.
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Suppose an employee reports late to office on a particular day. His or her Post Purchase Attitude
Change
tardiness can be attributed to either internal or external causes. He or she might
have been late as a result of watching a late-night movie and, therefore, not being
able to wake up in the morning on time, which is an internal cause within the
person’s control. Another reason could be being caught up in a traffic jam and, NOTES
therefore, not being able to reach on time, which is an external cause not under the
person’s control.
Internal Versus External Causes of Behaviour
A central question in the attribution process concerns how perceivers determine
whether the behaviour of another person stems from internal causes (such as
personality traits, emotions, motives, or ability) or external causes (other people,
the situation, or chance). A widely accepted model by Harold Kelley attempts to
explain how people determine why others behave as they do (Kelley 1971). This
explanation states that in making attributions, people focus on three major factors.
Consistency
The extent to which the person perceived behaves in the same manner as on other
occasions when faced with the same situation. In the example discussed above, a
lot would depend upon the number of times the person has shown that behaviour.
If this behaviour (of coming late) is repeated on a number of occasions, it is a
reflection of consistency in his behaviour. It could be contrasted with a person
who comes late only on odd occasions. The more consistent the behaviour of the
person, the more likely it is to be ascribed to internal causes.
Distinctiveness
It is the extent to which the person perceived acts differently in different situations,
that is, whether it is usual or unusual. If an employee has an excellent attendance
record and is an effective performer in the organization, his coming late or being
absent from the job could be ascribed to external factors that are not under his
control. However, if the behaviour appears to be usual, that is, he has a habit of
being late or absenting him or her very often, it could be ascribed to internal
causes that are under his personal control.
Biases
The fundamental attribution bias reflects one’s tendencies to attribute another
person’s behaviour to his personal characteristics, as opposed to situational factors.
This bias causes the perceiver to ignore environmental forces that often significantly
affect the behaviour. For example, people have a tendency to believe that an
individual’s criminal behaviour is because of the inherent dishonesty or a personality
flaw rather than due to environmental factors such as unemployment, broken family,
or maltreatment during an early age.
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Post Purchase Attitude Self-serving Bias
Change
The self-serving bias represents one’s tendency to take more personal responsibility
for success rather than for failure. Referring to the earlier discussion, employees
NOTES tend to attribute their success to internal factors (high ability or hard work) and
their failure to uncontrollable external factors.
Errors
The most common attribution error is our tendency to explain an individual’s
behaviour which is based on various internal factors such as personality of the
concerned person. It may also be based on external factors such as situations
which affect the concerned person.
Check Your Progress

3. What does the fundamental attribution bias reflect?
4. What is the most common attribution error?

QUESTIONS
1. Dissonance is the struggle a person experiences when inconsistencies occur

between attitudes that we hold, or between our attitudes and actions.
2. The theory of cognitive dissonance was proposed by Leon Festinger in
1957.
3. The fundamental attribution bias reflects one’s tendencies to attribute another
person’s behaviour to his personal characteristics, as opposed to situational
factors.
4. The most common attribution error is our tendency to explain an individual’s
behaviour which is based on various internal factors such as personality of
the concerned person.
7.5 SUMMARY
 Dissonance is the struggle a person experiences when inconsistencies occur

between attitudes that we hold, or between our attitudes and actions.
Dissonance can be seen as a motivational state. Individuals experiencing
dissonance are motivated to reduce it, also, it produces a feeling of
discomfort.
 If there is no dissonance, there is no possibility of attitude change.
 The attribution process refers to the manner in which people come to
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understand the cause of others’ (and their own) behaviour (Harvey and Post Purchase Attitude
Change
Wells 1988). Attributions play an important role in the process of perception.
Attributions made about the reasons for someone’s behaviour may affect
judgements about that individual’s fundamental characteristics and traits.
NOTES
 People infer ‘causes’ to behaviours they observe in others and these
interpretations often largely determine their reactions to these behaviour.
 The perceiver’s information and beliefs depend on previous experience and
are influenced by the perceiver’s personality. Based on information, beliefs,
and motives, the perceiver often distinguishes between internal and external
causes of behaviour; that is, whether the behaviour is due to a real desire or
the pressure of circumstances.
 The fundamental attribution bias reflects one’s tendencies to attribute another
person’s behaviour to his personal characteristics, as opposed to situational
factors. This bias causes the perceiver to ignore environmental forces that
often significantly affect the behaviour.
7.6 KEY WORDS
 Dissonance: it is the lack of agreement or harmony between people or

things.
 Attribution: it is the action of regarding something as being caused by a
person or thing.
 Bias: It refers to the inclination or prejudice for or against one person or
group, especially in a way considered to be unfair.

EXERCISES
1. What are the methods to reduce dissonance?
2. State the antecedents reflected by the perceived cause of behaviour.
1. Describe the studies carried out by the psychologists, Aronson, Fried and
Stone, that involved forced compliance and also their conclusion.
2. Explain the process of attribution.
3. Illustrate the consequences of the attribution process for the perceiver with
the help of example.
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Post Purchase Attitude
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Marketing
UNIT 8 MARKETING Communication
COMMUNICATION
NOTES
Structure
8.0 Introduction
8.1 Objectives
8.2 The Process of Communication
8.3 Introduction to Marketing Communication
8.3.4 Consumer Behaviour: Perspective and Advertising Response Process
8.4 Information Processing: Attention, Comprehension and Recall
8.5 Two-Step Flow of Communication: Opinion Leaders
8.7 Summary
8.8 Key Words
8.0 INTRODUCTION
Marketing communication is the transmission of information from the marketer to

the consumer through media. The main objective of marketing communication is
to make a consumer aware about the product/service offering, build a favourable
attitude towards the offering and to encourage the purchase. The components of
marketing communication are sender, receiver, message and media. The
communication process is initiated by the sender, who is also referred to as
the source. In the context of marketing management and consumer behaviour, the
sender may be formal or informal. Once the sender has decided what he wants
to communicate, he encodes the information into a message to be transmitted to
the receiver. The sender needs to think of his message strategy, i.e., what to say,
how to say it logically and symbolically, and who is to say. Thus, the message is
illustrative not only of the information content, but also includes a physical format
through words (verbal communication), symbols, pictures and images (visual
communication) and gestures (non-verbal communication). Feedback is an
important component in the communication process. It is the receiver’s response
to the sender, i.e., the consumer’s response to the marketer’s message. Today,
people are easily influenced by the opinions while making a purchase. The people
who influence others are called opinion leaders. Opinion leadership is the leadership
by an active media user who interprets the meaning of media messages or content
for lower-end media users. Typically the opinion leader is held in high esteem by
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Marketing those who accept their opinions. Let us elaborate on the marketing communication
Communication
process and the opinion leader in the following unit.
NOTES
8.1 OBJECTIVES

 Understand the meaning of marketing communication
 Explain the various methods of communication
 Describe the stages of processing of consumer information
 Discuss the consumer processing and hedonic experiential models of
marketing communication
 State the characteristics and the methods of identification of opinion leaders
8.2 THE PROCESS OF COMMUNICATION
‘The process of communication is implicit in the way a society functions. It is, in

fact, integral to the existing and prevailing social norms which guide the everyday
life of the individuals living in that society.’
Communication is a process that involves a series of actions and a number
of factors to transmit a message from one end to another. It would be good for
you if you look for the examples of communication around and then work out
various steps of this process. Let us think of normal conversations we do every
now and then. Think and analyse what happens when one is thirsty and wants a
glass of water to quench the thirst. The person in question in this case is the sender
of a message which is formulated in a language which the receiver of that message
understands. If the language is English the message prepared could be a sentence
like ‘give me a glass of water please!’ This is sent through a medium and the
communication is considered as complete if the receiver of the message gives a
glass of water to the originator of the message. In this case the action of giving the
water would be the feedback.
Sometimes the act of communication becomes difficult as there are many
people talking to each other and in spite of talking loud to the extent of shouting
may not reach the ears of the selected respondent. It is said that the noise in the
channel has not allowed the communication to take place and as a result the receiver
of the message has not reacted in the manner desired by the speaker.
The process of communication possesses certain dynamism and goes through
various phases. Given below is a description of these phases.
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Marketing
Communication
NOTES
Fig. 8.1 The Communication Process

Source: http://www.mbaknol.com/business-communication/process-of-communication/
1. The sender has an idea

It is very hard to think of someone ‘trying to make common’ to communicate, if
that individual has not anything to share. Still, the belief that the sender must possess
an idea to begin the communication process is a misconception because everything
peoples do and everything they are communicates something to others. The
objective of this phase is to begin the process at the moment the sender intentionally
decides to send a message to someone, i.e., the sender possesses an idea.
2. The sender encodes the idea
We do not possess the telepathic skills. We are not in a position to transmit ideas
from our brain to others’ brains. However, human beings have learned the skills to
transmit symbols as the representations of their ideas and thoughts. Such symbols
are varied in nature and content. The people use a variety of symbols to convey
their thoughts and ideas. Such symbols have evolved linguistically (verbal or written)
to develop into sophisticated languages. There are many types of languages: the
Braille language, the Morse code, the American Sign Language, and all the spoken
and dead languages world over. Apart from this, there are other symbols that are
used to communicate: paintings, pictographs, traffic signals, zip codes, mathematical
formulas, hieroglyphs, baseball gestures conveying instructions from managers to
players, etc.
The expression ‘TREE’ written on a blackboard is not a tree in reality, nor
is the picture of a tree a tree in fact. These are but the agreed representations of
some reality. It is obviously the sender’s responsibility to select a code best capable
of carrying the message. While encoding one’s idea, the individual should choose
the code which will suit the message thus allowing the receiver to understand it
completely. So we can say that the sender encodes the message.
3. The sender transmits the message
To suitably transmit the encoded message, the sender is required to select a channel
or a medium to send the message. The information can be sent verbally or
nonverbally by the sender. The messages are sent with the help of the tone of
voice, gestures and the use of space in nonverbal communication. On the other
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Marketing hand, the messages are conveyed through speeches or documents in verbal
Communication
communication. Hence the messages are sent through different media like
telephones, computers, videocassettes, DVDs, CDs, papers, faxes, radios, etc.
However, few channels are more suitable for some messages in comparison to
NOTES others. For instance, a five-page memo is not a good choice for a lunch invitation.
The particular characteristics of all the mediums somewhat decide their capability
to serve a particular objective. Such characteristics explain the richness and
suitability of a particular medium. A rich medium can:
 convey a message using more than one kind of clue (visual, verbal or vocal),
 facilitate feedback, and
 establish personal focus.
The face-to-face conversation is the richest medium. Such conversations
enable the receiver to receive the sender’s message verbally (i.e., the spoken
words), nonverbally (i.e., gestures and the facial expressions) and vocally (i.e.,
voice tone or the pace of the speech). In face-to-face conversations, there is
immediate feedback from the receiver. They also enable the sender to take control
of few of the environmental noises as well. Such conversations can be personalized
by the sender to all the receivers concerned.
Apart from the richness, the chosen medium should be evaluated for other
characteristics as well. The speed of the medium might be a criterion for its selection.
For instance, the quickness of a message prepared on a particular medium (formal
letter versus memo) or delivered (snail mail versus email) can be the criterion to
opt for that medium. One of the criteria for a medium’s choice is its ability to be
permanently kept. The reason to pick a particular medium is also dependent upon
whether the record of a message can be kept on it or not (email versus 3M note).
The medium’s other criteria comprise its:
 feedback capacity (letter versus telephone conversation),
 ability to convey the intensity or the sophistication of a message (formal
written report versus casual conversation),
 level of formality (formal letter versus email), and
 level of confidentiality (fax versus sealed hand-delivered letter).
The sender should also choose the medium capable of efficiently and
effectively conveying the message. While selecting a media, one should opt for the
one capable of conveying the message appropriately to the target audience. Hence
the sender transmits the message.
4. The receiver gets the message
Unless he/she is suffering from a hearing problem or he/she is distracted by noises
distorting the receiving of the message, the receiver gets the signal sent by the
sender.
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5. The receiver decodes the message Marketing
Communication
The receiver decodes the message with the use of his/her knowledge of the code
that has been used to encode the message. If the receiver has a poor knowledge
of the language that is used, he/she is likely to decode the message inappropriately. NOTES
Also, a receiver putting an effort to decode conflicting nonverbal and verbal
messages is likely to incorrectly decode the intended message. The receiver selects
the code he/she is going to use for decoding the message. Selecting the wrong
code is similar to use a wrong key—the message may not open its secret if the
wrong code is used. The receiver will select a code on the basis of his/her
background and environment. The receiver possesses the accountability to choose
the right code for decoding the message. Basically, the receiver also has to listen
to the sender. Hence the receiver decodes the message.
6. The receiver sends feedback to the sender
With the use of the same phases as the sender, the receiver sends a message back
to the sender. It provides information on his/her level of understanding of the
message. This message is called the feedback. Feedback may be classified into
two types - immediate feedback and delayed feedback. Immediate feedback is
the type of feedback where the learners do not have to wait to receive the feedback
as they receive it immediately. However, areas where feedback generation requires
deep assessment may take some time to be produced. This kind of feedback is
termed as delayed feedback. This feedback can be used to improve performance
in the future.
All through the process of communication, unintended interferences take place.
These distort or interrupt the process. Such interferences are known as ‘noises’.
These may be real noises, i.e., auditory stimuli such as people talking, phones
ringing or jack-hammering street workers. Other noises comprise distractions such
as a streaker running across a stage. Noises create distortions as well. We are yet
to come across communication without noises. Hence, finding out the sources of
noise and making an effort to minimize its effect are necessary to improve the
communication efficiency. Noise may be classified into four types - physical,
psychological, physiological and semantic. Physical noise is the noise that is
produced externally while the speaker and listener are trying to communicate. For
example, a song being played in another room or the noise of construction in the
neighbourhood. Psychological noise is the one that interferes with communication
taking place between two people because one of them is not attentive to the
communication, and is mentally absent. Any physiological problem such as a
headache or body pain can make it difficult for a listener to concentrate on the
communication. This is termed as physiological noise. Semantic noise takes place
when there is no shared meaning in a communication. This may happen when the
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Marketing speaker is using a particular jargon or parlance that is not understandable by the
Communication
layman listener.
NOTES
Fig. 8.2 The Elements involved in the Process of Communication

Source: http://www.mbaknol.com/business-communication/elements-of-the-communication-
process/
Check Your Progress

1. What are a marketer’s primary communications tools?
2. What are demonstration centres?
3. What is communication in context of marketing?
4. Name the social attributes possessed by different opinion leaders.
8.3 INTRODUCTION TO MARKETING

COMMUNICATION
Customers go through a complex chain of mental events from the time they see or
hear an advertisement until they decide to make or not make a purchase. For
marketing communication to succeed, two processes must take place in the
customers’ minds. First, what the customers saw, heard, learned, thought, or felt
while exposed to the advertisement must be processed and stored in memory,
and second, this stored information in customer minds must be retrieved at the
crucial moment when a customer faces a purchase decision. For an advertisement
to be successful, a customer must have the motivation, the ability, and the
opportunity to process and store the information in the advertisement and retrieve
the information when the customer is about to make a purchase decision. Therefore,
the customer exposed to an advertisement must be interested in the advertisement,
knowledgeable enough to understand it, and free from distractions of other stimuli.
Also the mental processes must occur with sufficient intensity or effort, and must
be focused towards the advertised brand.
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Because the chain of events that marketing communications must stimulate Marketing
Communication
is so complex, a wide variety of communication methods have to be used. This
means using the whole range of communication methods—advertising, publicity,
sponsorship, and sales promotion. Or it may mean using several advertising media
or different avenues within one media. The idea is to get the message across to the NOTES
customers in a forceful way so that he is able to process the message and store it.
Relying on a single source is dangerous as the customer may just miss the message
unless he is in a state of heightened awareness, because he wants to make a
purchase decision, and is actively scouting for brands in the category that the
advertised brand belongs to.
Companies that rely solely on television advertising face the problem of
customers not being able to connect an advertisement with the brand it promotes.
This particularly happens with advertisements that customers find engrossing. Since
the intensity of customers’ involvement in the advertisement is high, their entire
focus is on processing and storing the interesting set up, message or storyline in the
advertisement, and they miss the name of the advertised brand. Viewers often
associate very popular advertisements with some other competitor brand of the
same category. The company thus ends up promoting a rival brand. Viewers
mistakenly attributed a popular advertisement for Eveready Energizer batteries to
Duracell—Eveready’ main competitor. In such situations, customers process and
store the advertisement with sufficient intensity but in the wrong direction. A second
communication method, if used, will set the direction right. So a packaging which
uses the images of the advertisement, or a radio advertisement which uses the
jingle, music, or the message of the television advertisement will help the customers
retrieve the message and link it to the advertised brand.
Companies frequently use less expensive radio or print advertisement to
reinforce expensive television advertising. The main vehicle is television advertising
and hence the total campaign becomes expensive. But a reverse sequence can
also achieve the same purpose. Television advertisements can be used to supplement
radio or print advertisements. Since the staple promotion vehicles will be the less
expensive radio and print advertisements, the total campaign cost would be lesser
but the effectiveness would be same or even more.
Marketers want the attention of the customers in their target market.
Customers are largely ignoring unsolicited advances from marketers. Customers
are facing pressures from more urgent quarters of life and it would be naïve to
believe that they would be willing recipients of whatever marketers have to tell
them through their promotional efforts. The customer’s attention is at premium
and marketers will have to understand the customer’s psychobiology of attention
to be able to get their messages across to him.
 People are hardwired to fight for survival. If marketers want customers to
act in a certain manner they will have to tell consumers the consequences of
their not acting in that particular manner. If a retailer wants consumers to
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Marketing in price between during sales and after sales period. And this difference
Communication
should be big enough to get the consumer thinking about the amount of
money he will lose if he does not buy now. Marketing communication should
force the consumer to think for himself and take action in self defense. If a
NOTES company is launching a new or an improved product, it should let consumers
know the consequences of not owning that product. Marketing
communication can become scary but if a company is running ‘true’ sales or
it has launched a ‘genuine’ new product, it should want its consumers to
benefit from these. But if the threat does not turn out to be real even once,
consumers will forever stop trusting the company’s communications. No
person will take kindly to being scared for nothing.
 People are naturally competitive. People play games to win the trophy. If
there was a trophy for everyone, most of us would not be interested in a
game. Make your product hard to get. Communicate that not everyone can
have your product even if they want to, because the company has a limited
number of products which it will sell in a limited time frame. Ensure public
competition for your product. Advertise a short sales period and a steep
price decline. Advertise a new product launch with a deadline date for
purchase. A company can devise games for their advertisements and
websites, and tempt customers to play them for the rewards offered on
winning.
 Do not let distractions cloud the main message. A company’s multiple
messages from multiple vehicles will draw less than optimum customer
attention on each one of them. Consumers reserve limited attention for a
company’s message and if this is spread too thin over many messages,
attention on any one of them will not reach the threshold to prompt an
action. A company should be running one core message at any one time. If
a company is running an advertisement campaign for a new product launch,
it cannot be running a sales promotion scheme or publicizing some act of
good corporate citizenship simultaneously. A company should decide the
response it wants to elicit from its customers and design and run an
appropriate dominant message to get the desired response. The conventional
wisdom of inundating customers with multiple messages from multiple vehicles
in the hope that at least some will stick, does not work. Nothing sticks.
 People want to feel engaged. One the most important factors for gaining
and sustaining attention is engaging people’s emotions. Plain advertisement
will never engage customers. The product and messages about it should
have more relevance than the benefits it provides. The messages could be
about issues which are of interest to the consumers. If the company uses a
celebrity to endorse its products, the celebrity should be personally interested
in some cause that the consumers are interested in. Independent of the
themes running in advertisements, companies can promote causes dear to
its customers. The idea should be to form some sort of a joint endeavour
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between the company and its consumers to help the cause.
An unambiguous, single signal to the target customers Marketing
Communication
Some of the independent and separate groups may work for a company in order
to ensure the achievement of the overall objectives of a campaign being initiated
by the company. This is especially true for bigger campaigns such as new product NOTES
launches wherein a company may designate different agencies to play different
roles. For examples, different agencies may work on the different aspects of a
campaign such as direct marketing, trade related activities, consumer promotions,
mass campaigns, Internet marketing, etc. These agencies are completely responsible
for the overall tasks performed by them and they may be able to ensure the
successful conduct of their independent tasks and responsibilities. However, even
while working together on a campaign, they may still not be able to ensure a
successful launch for the company. The efforts can also directly undermine each
other. For instance, a company can run an advertising campaign to build brand
awareness and differentiate its offering, but it may also run a direct mail programme
focused on generating responses and hence sending discount coupons
indiscriminately.
A systems approach should be adopted by the marketing managers in order
to avoid any wastage and in such an approach some element may be compromised
to achieve the overall objectives. Therefore if the company wants to build a brand
by differentiating itself, it will refrain from sending discount coupons. The
performance of the direct mail programme may be compromised but the
performance of the campaign as a whole will improve. But the groups will not
agree to compromise on their individual performances. It is important to appoint a
knowledgeable person who has a thorough knowledge about the different aspects
of a given marketing campaign. This person understands the overall objective of
the campaign, has knowledge of all the marketing disciplines that are involved in
the campaign and has powers to guide and curtail the activities of the individual
groups.
This person constitutes a small marketing team and goes about directing
various groups in a way as to maximize value from the campaign. Each marketing
discipline has a goal in relation to other disciplines and also in relation to the overall
objective of the campaign. The objective of the campaign is more likely to be
achieved if various groups work in coordination, rather than independently, under
the guidance of the marketing team.
Marketers are inundating customers with e-mails, phone calls, and direct mailing
but when customers actually require help from them, they are normally not available.
Companies at many given times may waste their time in brainstorming and
researching on issues like who should be targeted and what should be the
communication message. In the process, they may actually ignore the right timing
for communicating with their customers.
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Marketing The right time of communication with the customers is extremely important.
Communication
The companies cannot simply blindly go ahead with the marketing activities schedule.
Rather the marketers must assess the reaction of the customers to a particular
situation and then they should accordingly decide the timing of the communication.
NOTES This is important as customers must relate with the communication message and
the advertising campaign therein in order to fulfill their needs.
Companies can also indulge into dialogues or two-way communication with
the customers. This is extremely interactive mode of communication. This type of
communication generally takes place over an extended period of time. This involves
a number of multiple channels. For example, after a customer has made a purchase,
thereafter he may be contacted by the company through a direct mailer, a
personalized email or call from the company salesperson and thus a dialogue or a
two-way communication may set in place between the company and the customer.
At times, the customer may not respond to the company’s communication, then
automatically the system will get the message and the adequate steps will be taken
such as the salesperson will be alerted to contact the customer again or a reminder
email will be sent to the customer, etc.
Dialogues are an important means of communication through which the
companies can win back their lost customer, can also anticipate defections and
induce the customers to ensure greater purchases. The customers’ time is valuable
and they do not take kindly to companies wasting their time by feeding them
information that they do not value at that point. It is important for the companies to
reach out to their customers at the right time, this is because customers may reject
something when it is the wrong time to approach them while they may accept the
same thing when the companies approach at the right time.
Non-traditional methods of communication
A marketer’s primary communications tools are media advertising, direct mail
advertising, telephone selling, trade shows, and personal selling. The cost per
message is lowest for advertising and highest for personal selling. Telephone and
personal selling offer flexibility in tailoring the message to the target prospect but at
a substantial cost. Marketers have to be content with mixing and matching these
tools to get a synergistic effect. Emergence of new communication tools has
enhanced the ability of marketers to develop a more integrated, tailored, and
cost-effective communication programme.
 National account management
A few large customers account for a disproportionately large part of any company’s
sale in both consumer and industrial markets. A team headed by a national account
manager is made responsible for understanding and serving the needs of these big
spenders and maintaining profitable relationships with them. The national account
manager is responsible for coordinating people who work in other divisions of the
seller company, or in other functional areas so that the customer needs are served
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well. The national account manager is able to understand the requirements of his Marketing
Communication
customer because of his long and focused association with him and therefore can
offer the most suitable products and services to him.
 Demonstration centres NOTES
These are specially designed showrooms that allow customers to observe and try
out complex products. A variant of the approach is a travelling demonstration
centre in which the equipment for sale is mounted on a trailer truck. They provide
a competition-free environment for selling process.
 Industrial stores
When the sale is too small to justify sales calls, customers are asked to travel to
the company’s stores. The stores also serve as demonstration centres. Stores are
permanent, but the same concept is used by companies that present customer
seminars and demonstrations in hotels, trade shows, and other temporary facilities.
 Telemarketing
It has been in vogue for long but it has recently received new impetus as a
communication method. Companies are using telemarketing to solicit orders from
customers, to listen to customer grievances, to solve customer problems, and to
inform customers of the company’s new offerings. Software gadgets are being
used in conjunction with telemarketing which enables the company to respond
immediately to customers’ requests and queries.
There are primarily three principles of communication:
 Simplicity: There should be simplicity in conveying thoughts. In other words,
simple and easy to understand common words should be chosen for
communication. This enables the listener to get the same message as you
would like to give him because it is easy to understand.
 Clarity: There should be clarity in both - thoughts and expressions. A clear
thought with carefully chosen words conveys the desired meaning to the
listener. It helps him to understand easily.
 Brevity: Communication message should always be brief. It should cover
all vital points. It should be short enough to cover all important points but
long enough in providing benefits. Then it is attractive.
The chief ingredient for enhancing the effectiveness of communication is Empathy.
Empathy is at the core of the communication. Empathy means putting oneself in
the shoes of the other person and to have feeling of the other person. Any
communication with empathy will always bring people closer and will go a long
way in developing a harmonious relationship.
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Marketing The effectiveness of any marketing communication depends upon the
Communication
interpersonal relationship. In other words, effectiveness of relationship depends
upon the relationship between the communicator and the receiver. Thus,
effectiveness of any marketing communication is directly proportional to this
NOTES interpersonal relationship that a marketer is able to develop with his customers.
Communication is nothing but the flow of the information from sender to the
receiver so that a commonality of thought can be achieved between the two parties.
In context of marketing, this refers to the correctness in perception developed by
the customer based on the communication message of the marketer while he is
advertising for his products. Sound waves may be bouncing against the listener’s
eardrums, but he is not actively receiving and thinking about what the salesperson
is saying. An analogy can be drawn between a human receiver and a TV set. A TV
is continuously bombarded by electromagnetic waves from different stations, yet
it will only receive the station to which the channel selector is tuned. Human
receivers are also bombarded with stimuli from many sources and like a TV set,
people are selective in what information they choose to process.
In order for the communication process to flow smoothly, both the sender
and the receiver need to participate actively in the communication process in order
to achieve the desired results. Communication is something one does with another
person, not something one does to another person. The right question is not ‘What
does advertising do to people?’ but rather ‘What do people do with advertising?’
As mentioned earlier, all communication activities involve eight elements:
1. A source
2. Encoding
3. A message
4. A channel (medium)
5. A receiver
6. Decoding
7. Possibility of noise
8. Feedback potential
The source or sender is a person or groups of people (business firm) who have
thoughts, (ideas, sales points) to share with some other person or groups of people.
The source encodes a message to accomplish the communication objective.
Encoding is the process of translating thoughts into symbolic form. The source
selects specific signs from an infinite variety of words, sentence structures, symbols
and non-verbal elements to encode a message that will communicate effectively
with the target audience. The message is a symbolic expression of the sender’s
thoughts. In marketing communication, the message takes the form of an
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advertisement, sales presentation, package design, point of purchase cues and so Marketing
Communication
on. The message channel is the path through which message moves from the source
to the receiver. Companies use broadcast (radio and television) and print
(newspaper, magazines) media to advertise messages to current and potential
customers. Messages are also transmitted to customers directly via sales people, NOTES
by telephone, direct mail, brochures and point of purchase displays.
The receiver is the person or group of people with whom the sender attempts
to share ideas. In marketing communication, receivers are prospective and present
customers of an organization’s product or service.
Decoding involves activities undertaken by receivers to interpret or derive
meaning from marketing messages.
A message moving through a channel is subject to the influence of extraneous
and distracting stimuli. These stimuli interfere with the reception of the message in
its pure and original form. Such interference and distortion is called noise. Noise
may occur at any stage in the communication process. At the point of message
encoding, the sender may be unclear about what the message is intended to
accomplish. A likely result is a poorly focused and perhaps even contradictory
message rather than a marketing that is clear cut and integrated. Noise also occurs
in the message channel—a fuzzy TV signal, a crowded magazine page in which an
advertisement is surrounded by competitive clutter and a personal sales interaction
that is interrupted repeatedly by telephone calls. Noise can also be present at the
receiver/decoding stage of the process. An infant might cry during a TV commercial
and block out critical points in the sales message; passengers in an automobile
might talk and not listen to a radio commercial; or the receiver simply may not
possess the knowledge base needed to fully understand the promotional message.
The feedback affords a source of monitoring how accurately the intended
message is being received. Feedback allows the source to determine whether the
original message hit the target accurately or whether it needs to be altered to
evoke a clearer picture in the receiver’s mind. The feedback mechanism offers the
source some measure of control. Advertisers frequently discover that their target
market does not interpret campaign themes exactly as intended. Using research-
based feedback from their market, the management can re-examine and correct
ineffective or misdirected advertising messages.
8.3.4 Consumer Behaviour: Perspective and Advertising Response
Process
A fundamental understanding of consumer behaviour is essential to fully appreciate
the intricacies of marketing communication. It is important to understand how
consumers respond to marketing communication stimuli and make choices among
brands.
Advertisers are looking for greater accountability from their communication
campaigns. The advertising budget can be one of the biggest expenditures for an
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Marketing organization. So, managers want to see how their budgets are translating into
Communication
results. Also, markets for all products are becoming increasingly fragmented.
Competition is also intensifying in several product categories. These powerful forces
leave less margin of error for marketers. Advertisers must know the best audiences
NOTES for any product, where these audiences obtain information about products, how
they respond to different styles of advertising, where they shop, how they select
products, etc. Therefore, it is absolutely imperative to understand the behaviour of
the target audience.
Behavioural foundations of marketing communication
Marketing communicators direct their efforts towards influencing the consumer’s
brand related beliefs, attitudes and choices. Ultimately the objective is to encourage
consumers to purchase the marketer’s brand rather than those of the competitor’s.
To accomplish this goal, marketing communication designs appropriate
advertising messages, brand names, sales presentations and other communications
activities.
There are two models that describe how consumers browse information and go
about choosing from the many alternatives available:
(i) The consumer processing model (CPM), where behaviour is seen as
rational, highly cognitive, systematic and reasoned.
(ii) The hedonic experiential model (HEM), which views consumer
behaviour as driven by emotions in pursuit of fun and feelings.
It must be recognized that consumer behaviour is much too complex and
diverse to be captured perfectly by two extreme models. These models are bipolar
perspectives that anchor a continuum of possible consumer behaviours. At one
end of the continuum is consumer behaviour that is based on pure reason—cold,
logical, rational (CPM); and at the other end is consumer behaviour that is based
on pure passion—hot, spontaneous and perhaps even irrational (HEM). In
between these extremes rests the bulk of consumer behaviour, most of which is
not based on pure reason or pure passion. Often both perspectives are applicable
to understanding how and why consumers behave as they do.
8.4 INFORMATION PROCESSING: ATTENTION,

COMPREHENSION AND RECALL
Information processing situation faced by consumers and the corresponding

communication are imperatives for marketing communicators.
Consumers are constantly being bombarded with information which is
potentially relevant for making choices. Their reaction to that information, how
that information is interpreted, and how it is combined or integrated with other
information have crucial impacts on purchase choice. Hence, the marketing
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to provide and how to provide that information require knowledge of how Marketing
Communication
consumers process, interpret and integrate that information in marketing choices.
Consumer information processing is in terms of eight iterated stages:
1. Exposure to information NOTES
The marketing communication task is to deliver messages to consumers who, it is
expected, will process the messages and be persuaded to undertake the course of
action advocated by the marketer. When consumers come in contact with the
communication message developed by the marketer, it is termed as exposure to
information (see a magazine advertisement, hear a radio commercial) but the mere
fact of exposing consumers to the marketing communicator’s message does not
ensure that the message will have any impact. In order to ensure the success of the
communication process, it is important that the exposure is gained sufficiently.
2. Selective attention
When one focuses on a message that he has been exposed and starts considering
it, then it is termed as attention. Consumers attend to only a small fraction of the
marketing communication stimuli because demands placed on their attention are
great. Attention is highly selective. Since the customers have limited information
processing capabilities, therefore selectivity is important. Customers will always
try to selectively pay attention to limited messages which are important to meet
their current objectives. This is because for processing each message, they will be
utilizing some kind of mental energy. For instance, once their limited curiosity is
satisfied, most non-smokers, when reading a magazine, will pay little attention to
advertisement for cigarettes because the product is less relevant to them than to
smokers.
There are three kinds of attention:
(i) Involuntary,
(ii) Non-voluntary and
(iii) Voluntary.
(i) Involuntary: Involuntary attention requires little or no effort on the part of
the receiver. A stimulus intrudes upon a resisting person’s consciousness.
Attention is gained on the basis of the intensity of the stimulus (loud sound,
bright light).
(ii) Non-voluntary: Non-voluntary attention or spontaneous attention occurs
when a person is attracted to a stimulus and continues to pay attention
because it holds her interests. A person in this situation neither resists nor
wilfully attends to the stimulus initially, but she continues to pay attention
because the stimulus has some benefit or relevance. Advertisers create
messages to gain non-voluntary attention of an audience since consumers
do not wilfully search out advertising messages. Advertisements must attract
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Marketing (iii) Voluntary: Voluntary attention occurs when a person wilfully notices a
Communication
stimulus. A consumer who is considering purchasing a car will direct her
attention to car advertisements. Also people who have recently made
important purchase decisions will voluntarily attend to messages to reassure
NOTES themselves that their decisions were correct.
Attention is highly selective. Attention selectivity is determined both by properties
of marketing stimulus and by factors that rest in the consumer’s background and
psychological makeup.
Appeals to cognitive and hedonic needs: Consumers are congruent with their
informational goals. A student who wants to move out of a dormitory and into an
apartment will be on the lookout for information pertaining to apartments. Classified
advertisements and overhead conversations about apartments will be attended to
even when the apartment seeker is not actively looking for information.
Advertisements for food products are likely to be noticed when people are hungry.
Many restaurants advertise on radio during the after-work rush hour. These
are appeals to cognitive needs.
Hedonic needs are satisfied when consumers attend to messages that make
them feel good. People are likely to attend to those stimuli that have become
associated with rewards and that relate to those aspects of life that they value
highly; for instance, sexually-oriented messages, the use of babies, appetizing food
items, and gala events are commonly used stimuli in advertisements. These appeals
are inherently pleasurable to most people because they are firmly associated in
our memories with past good items, enjoyment and those things we value in life.
Use of moving stimuli: Marketing communicators use unusual, distinctive or
unpredictable devices. Such stimuli tend to produce greater attention than those
that are familiar and routine. This is due to human adaptation. People adapt to the
conditions around them. As stimuli become more familiar, people become
desensitized to it. If you drive past a billboard each day, you notice it less on each
occasion. If the billboard were removed, you would notice it was no longer there.
We notice by exception.
Use of intense stimuli: Intense stimuli, i.e., those that are louder, more colourful,
bigger, brighter, etc., are more likely than less intense stimuli to attract attention.
This is because it is difficult to avoid intense stimuli, thus leading to involuntary or
non-voluntary attention in shopping malls and departmental stores. Various
packages, displays, signs, sounds and smells are used to attract customers’ attention.
Attention involves allocating limited processing capacity in a selective fashion.
Effective marketing communication is designed to activate consumer interests by
appealing to those needs that are most relevant to a market segment. This is not
easy as marketing communication environments (stores, advertising media and
noisy offices during sales presentation) are inherently cluttered with competitive
stimuli and messages that vie for the customer’s attention. Clutter in TV advertising
reduces effectiveness of individual commercials. Commercials appearing in a stream
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of multiple commercials and those involving low involvement products succumb to Marketing
Communication
the clutter effect.
3. Comprehension
To comprehend is to understand and create meanings out of stimuli and symbols. NOTES
Communication is effective when the meaning a marketing communication intends
to convey matches what is extracted by consumers from the message. People
respond to their perceptions of the world and not to the world as it actually is.
Perceptual encoding may be defined as interpretation of different stimuli through a
perceptual process. There are two stages involved in this process:
 The first stage is that of the feature analysis. The receiver tries to classify the
product into a category by simply studying the product features (size, color,
design, etc.). A consumer is able to distinguish a motorcycle from a bicycle
by examining such features as size and presence of an engine. A lemon is
distinguished from an orange by its colour and shape.
 The second stage is active synthesis. The situational factors play an extremely
important role in deciding the actual perception and interpretation of a
stimulus by the receiver. Interpretation results from combining stimulus features
with expectations of what should be present in the context in which a stimulus
is perceived. A synthetic fur coat placed in the window of a discount clothing
store (the context) is likely to be perceived as a cheap imitation. However,
the same coat when attractively put in an expensive boutique (a different
context) might be considered a high quality, stylish garment.
Consumer’s perception/comprehension of marketing stimuli is determined by
stimulus features and by the characteristics of the consumers themselves.
Expectations, needs, personality traits, past experience and attitude towards the
stimulus objects play an important role in determining consumer perceptions. Due
to the subjective nature of the factors that influence our perception, comprehension
is synergetic or peculiar to each individual (each individual’s personal characteristics
and background influences how he perceives someone else).
An individual’s mood also influences his/her perception of stimulus objects.
Research has found that when people are in good mood they are likely to retrieve
positive rather than negative material from their memories, are more likely to perceive
the positive side of things and are more likely to respond positively to a variety of
stimuli. Advertisements and personal selling are capable of placing consumers in
positive moods and may enhance consumer perception and attitudes towards the
marketer’s offerings.
People occasionally misinterpret messages so as to make them consistent
with their existing beliefs, expectations or other cognitive elements. This is done
without conscious awareness. But advertisements are not misinterpreted any more
than the other communication forms, such as programmes (serials) and public
service announcements.
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Marketing 4. Agreement with what is comprehended
Communication
Comprehension by itself does not ensure that the message will change consumers’
attitude or influence their behaviour. The customer’s agreement with what he actually
NOTES comprehends depends upon the fact that whether he finds the message to be
credible or not. Additionally, whether the message is in alignment with his current
values and beliefs or not is of great importance. For instance, a consumer who is
more interested in the social-value implications of consuming a product rather than
in acquiring a functional value is more likely to be persuaded by a message that
associates the brand with a desirable group than one that talks about product
features.
5. Retention and search/retrieval (recall) of stored information
Retention and information search and retrieval involve memory factors related to
consumer choice. Memory factors may be linked to what the customer actually
recalls out of the marketing stimuli, that is what recall and recognition has resulted
because of the communication message. It additionally depends upon how the
customer accesses and retrieves information while making his purchase decision
or while making his choices of buying a product. Memory is inseparable from the
process of learning.
Elements of memory: There are two parts of memory, long-term memory (LTM)
and short-term memory (STM) and a set of sensory stores (SS). Information is
received by one or more sensory receptors (signs, smell, touch and so on) and
passed on to an appropriate SS where it is rapidly lost (within a fraction of a
second) unless attention is allocated to the stimulus. Attended information is then
transferred to STM, which serves as the centre for current processing activity by
integrating information from sense organs and from LTM. STM has limited
processing capacity, i.e., individuals can browse only a limited amount of information
at any one time. An excessive amount of information will result in reduced recognition
and recall. Furthermore, information in STM that is not thought about or rehearsed
will be lost from STM in thirty seconds. Information is then transferred from STM
to LTM, which is a virtual storehouse of unlimited information. Information in
LTM is organized into coherent and associated cognitive units. There are associative
links between/among related information knowledge and beliefs.
A marketer’s job is to provide positively valued information that consumers
will store in LTM, which will increase the chance of choosing the marketer’s offerings
over competitive options. The marketing communicator’s task is to facilitate
consumer learning. Learning represents changes in the content or organization of
information in consumer’s LTM. Marketing communication attempts to alter
consumers’ long-term memories by facilitating learning of information that is
compatible with the marketer’s interests (HP tries to facilitate business consumer’s
learning that HP Scanjet scanners are simple to set up and use).
Types of learning: One type of learning is the strengthening of linkages among
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is to affix in the consumer’s memories a strong linkage between Ford cars and Marketing
Communication
quality. Linkages are strengthened by repeating claims, presenting them in a more
concrete fashion and being creative in conveying product failures.
A second form of learning is by establishing entirely new linkages. Researchers
NOTES
reported that aspirin reduces likelihood of heart attacks. Advertisers began actively
promoting their brands as ‘heart attack’ fighters. Aspirin advertisers wanted
consumers to establish an entirely new linkage, that this product has benefits other
than relieving headaches.
6. Search and retrieval of information
Information that is learned and stored in memory only impacts consumer choice
behaviour when it is searched and retrieved. Retrieval is when a new piece of
information is linked or associated with another concept that is itself well known
and easily accessed.
Use of concretizing and imagery: Concretization is based on the idea that it is
easier for people to search and retrieve tangible rather than abstract information.
Product claims become more concrete when they are made tangible and vivid.
For instance, the makers of Anacin tablets needed a concrete way to present the
brand as ‘strong pain relief for splitting headaches’. The idea of splitting headache
was concretized by showing hard-boiled eggs splitting with accompanying sound
effects.
Imagery is the representation of sensory experience in short-term memory,
including visual, auditory and other sensory experiences. You do not have an image
for satisfaction. Mental imagery plays an important role in comprehension, recall,
retrieval, attitude formation and choice. Pictures and visuals are best able to elicit
imagery because pictures are represented in memory in verbal as well as visual
form whereas words are less likely to have visual representations. Visual imagery
plays an important role in advertising and point of purchase stimuli. Information
about product attributes is better recalled when the information is accompanied
with pictures than when presented only as prose. People remember greater number
of company names when the names are paired with meaningful pictures. Effective
visual imagery in advertising can play the audience member in a number of imagined
or fantasy like situations that are conducive to the sale of the marketer’s product.
The advertisement may play the consumer behind the wheel of a powerful sports
car cruising down a country lane.
Much of what we feel and visualize internally is based on what we see and
70 to 80 per cent of what we learn is visual. Imagery is also elicited by appeals to
other senses—auditory and olfactory (smell and tactile). A TV commercial would
not be good if it contained just conversations without background music. Marketing
communications appeal to our senses and evoke images that activate our emotions,
influence our cognition and enhance the marketing messages.
The special case of olfactory stimuli is when store environments are filled
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Marketing advertisements are encapsulated with scents that are emitted when scratch and
Communication
sniff patches are rubbed. Smells can evoke strong images of products, product
usage and consumption situations. Olfactory stimuli are able to attract attention,
motivate information processing, influence memories, affect product-performance
NOTES evaluations and activate behaviour.
7. Deciding among alternatives
Till now consumers have received, encoded and stored information that is pertinent
to making consumption choices. Stored in consumers’ memories are numerous
information packets for different consumption alternatives. This belief is in the
form of bits and pieces of knowledge (Nike is a brand of tennis shoes), specific
beliefs (Chevrolet Optra is an attractive car) and evaluations of purchase
consequences (The manufacturer’s reputation is more important than price when
buying sophisticated electronic equipment).
The issue is, when contemplating a purchase from a particular product
category, how does a consumer decide which brand to purchase? He will buy the
best brand, but it is not always clear what the best brand is as the consumer has
stored in long-term memory a wide variety of information (facts, beliefs, etc.)
about each brand. Some of the information is negative and some of it is positive,
some may be contradictory or incomplete.
Consumers often resort to simplifying strategies or heuristics to arrive at
decisions that are at least satisfactory if not perfect.
Simplest decision heuristics is affect driven, as the individual simply calls
from memory his attitude or affect towards relevant alternatives and picks that
alternative for which the affect is most positive. This process works for frequently
purchased items where the risk is minimum (low involvement purchase).
Compensatory heuristics: Rarely is a particular alternative completely superior
or dominant over other consumption alternatives. Although a brand may be
preferable with respect to one, two or several benefits, it is unlikely that it is superior
to its alternatives in terms of all benefits or attributes that consumers are seeking.
Under these non-dominant circumstances, consumers must give up something in
order to get something else. In high involvement decision making, trade-offs must
be made. If you want more of a particular benefit, you have to pay a higher price;
if you want to pay less, you give something less in terms of performance.
The chosen alternative is not the best in terms of all criteria. Superiority of
some criteria affects or compensates for its lesser performance on some other
criteria. The consumer cannot have it all unless he is willing to pay a super premium
price.
In conjunctive heuristics the consumer establishes cut-offs or minimal
performance on all pertinent choice criteria. An alternative is retained for further
considerations only if it meets or exceeds all minima.
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In high involvement decisions a combination of heuristics are used in Marketing
Communication
sequence. A conjunctive strategy may be used to eliminate options and then
compensatory heuristics is applied to arrive at a choice from the remaining options
that do satisfy all the minima.
NOTES
8. Purchase
Acting on the basis of the decision, consumer choice behaviour does not operate
in a simple, lockstep fashion. People do not always behave in a manner consistent
with their preference. A major reason is the presence of events or situational factors
that disrupts, inhibit or prevent consumers from following through on their intentions.
Situational factors are especially prevalent in the case of low involvement consumer
behaviour. Stock outs, price offs, in-store promotions lead to purchase of brands
that are not necessarily the most preferred and which would not be the predicted
choice based on some heuristics. All aspects of marketing must be coordinated
and integrated in order to get consumers to act favourably towards the marketer’s
offering.
8.5 TWO-STEP FLOW OF COMMUNICATION:

OPINION LEADERS
According to a study conducted by Paul Lazarsfeld, Bernard Berelson and Hazel

Gaudet in 1948, it was suggested that the influence of mass media was less direct
in nature than it was previously suggested. According to their study, it was suggested
that though mass media has a greater opportunity to reach a larger audience,
actually it is not too direct in nature as it is perceived to be. It is actually first
filtered by the key influencers or the key opinion leaders at the market place and
the filtered perceptions actually trickle down to different target groups. Thus, through
their study it could be established that people are more strongly influenced by their
personal encounters with their own set of key opinion leaders in comparison to
the mass media directly.
An opinion leader is a person who influences others’ attitudes or behaviours
because they are perceived as possessing expertise about the product.
In an era when mass media has become the major source of advertiser-
controlled communication, key opinion leaders play an extremely important role
when one wants to take new product adoption and diffusion decisions. Word-of-
mouth communication is generally more robust and credible to consumers than
advertising messages. Furthermore, it is assumed that personal interaction has the
potential of providing a greater magnitude of reward for a complying consumer
than mass media. Hence, consumers still turn to friends and influential others for
advice on uncertain situations during their decision-making process, making these
others’ influence an important determinant of an individual’s behaviour, as well as
of opinion formation. This is especially true when a marketer is interested in
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Marketing persuading a small audience to form a favourable attitude towards an advocated
Communication
position, rather than simply informing a large audience about that position.
Key opinion leaders not just play a role in personally influencing different
set of people; opinion leadership has also been suggested to be linked to the
NOTES
profile of an innovator. Although opinion leaders and new-product adopters are
not synonymous, they reveal similar traits. Since innovation may be a trait of the
key opinion leaders, therefore early adopters can influence the behaviour of the
late adopters in terms of trying a new product or a new service.
The essence of this interpersonal channel of influence is human interaction,
and the opinion leader is a key factor. A major issue is how best to recognize such
willing opinion givers. Notwithstanding the extensive research devoted to the study
of opinion leadership, it is still difficult to develop a profile of an opinion leader.
One cannot generalize the different traits of key opinion leaders. It primarily depends
upon the type of market, the current situation and the product. It is imperative that
current research continues to further the understanding and validation of opinion-
leader characteristics. After all, these influential persons who can be an asset in the
promotion of new products and ideas can also lead an active opposition.
Characteristics of an opinion leader
Here, we will study about an opinion leader’s demographics, product-related and
personality characteristics.
Demographics
Opinion leaders are generally expected to have similar demographic pattern as
that of their followers. This is generally true in terms of the values, beliefs, educational
status, etc. This is because the followers are better able to relate with their key
opinion leaders due to these similarities that they have. Thus the two parties are
homophilics in nature. However, at times the educational qualifications of the key
opinion leaders may be superior but it has been rarely seen that they come from a
different social class. The demographic characteristics are similar because of the
various similarities that they have. Generally both groups of people have common
values, beliefs and backgrounds. Thus the communication between such groups is
a smoother process and is often horizontal in nature.
It may be very difficult to categorize opinion leaders across different classes
and categories. Very rarely a correlation can be developed between the demographic
characteristics of different key opinion leaders. These demographic variables may
include income, age, qualifications, details of children, etc. Though several studies
have been done to aim at defining opinion leaders in socio-demographic terms but
not much success has been achieved as it may not be really possible appropriately
identify the opinion leaders with demographic variables alone.
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Product-related characteristics Marketing
Communication
Opinion leaders have been found to be more knowledgeable about and enduringly
involved with the relevant product class. Individuals who are highly involved with
a product or product class are more likely to be interested in and accumulate NOTES
knowledge about that product. Enduring product involvement would also be
relatively stable, and would influence the amount of information that the individual
accumulates from various sources over time. Therefore, those who are highly
involved in a particular product class can be expected to be better able to impart
opinions about it.
Product familiarity also plays an important role in establishing opinion
leadership. The label ‘opinion leader’implies qualities that go beyond simple informal
advice-seeking from peers; it strongly suggests influence. Maintaining this leadership
role requires being part of an active public and being generally more attentive to
issues of the day. Most important of all, it requires a willingness to expend a great
amount of cognitive effort to acquire and comprehend the extensive knowledge of
that product or product class. Familiarity founded on an acute interest in or
ownership of items in the product class should make assimilation of related
information easier, thus greatly reducing the cognitive effort required.
Research and findings have revealed that interest, media exposure and competence
are the parameters that can be directly and more positively associated with opinion
leadership. Some of the product related traits may be expressed by opinion leaders.
These include:
 Possessing greater knowledge about the product category
 Exhibit greater involvement in the product category
 Keen to go through available literature, books, magazines, etc. which have
relevance with respect to the product.
 More receptive and active in gaining information about the product from
different sources
Opinion leaders may have greater information with respect to the subject on which
the information is regularly sought from them. This is because they are more exposed
than their counterparts or followers with respect to different sources of information.
They have a greater exposure to media, communication sources, etc. Additionally,
they read and view more about the information related to the subject.
Other factors that need to be considered are the extent of media exposure
in terms of quality and not quantity. Opinion leaders would have more quality time
and hence quality interactions with the media persons when compared to their
followers. Though even the non-leaders may be exposed to similar media sources
with respect to a product but opinion leaders are capable and qualified enough to
assimilate this information with the one that is available with them from the other
sources as well and thus form an opinion. They can indulge into careful
interpretations of the information that is available from various public events.
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Marketing Additionally, the opinion leaders are more confident about discussing their
Communication
experience with the product as they are amongst the first ones to use the product
themselves and thus they ensure that others have lowest risk and uncertainty
involved. Not only this, they are also the first ones to try the new products in a
NOTES given segment and therefore, another name that has been given to the opinion
leaders is that of innovative communicators.
Personality characteristics of the opinion leaders
There are primarily two personality traits that have been observed with opinion
leaders across different product categories. These are the following:
 They are extremely self-confident: This is because of the extensive
knowledge that they have gained about a given product. This results from
the interest that they have in a product, the exposure to different media and
sources of information.
 They are extremely socially active: They have extreme amount of
willingness to communicate about a given product and services offered by
the same. They are extremely interconnected with different groups and
generally set up their offices of operation in a community, club, etc. Thus
opinion leaders are capable of coming in contact with several people in
their profession.
Opinion leaders indulge and participate in various open meetings, social settings,
different social networks and social events, etc. Opinion leaders generally share
the same set of values, beliefs, interests, considerations, etc. with their followers.
The personal influence of an opinion leader varies with the degree of similarity of
interests that the opinion leader has with his followers. The lesser the similarity,
greater are the barriers of the communication flow.
For opinion leadership, public individualization is also extremely important
in addition to the personal involvement and the familiarity and knowledge about a
product.
The social attributes possessed by different opinion leaders include:
 Extrovert and outgoing nature
 Indulgence in social activity
 Focus on social networks
 Openness to society
 Recognition in society
 Trustworthiness and integrity
To sum up, consistent with major findings of past research, it may be expected
that opinion leaders will exhibit greater personal involvement and greater familiarity
with the product class, more favourable attitude toward risk (i.e., risk preference),
greater print media exposure, and will be less dogmatic. This study also posits that
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Methods involved in identification of opinion leaders Marketing
Communication
(i) Method of self-designation

This method was developed by King and Summers in the year 1970. Opinion NOTES
leadership can be measured by this method. This method originally could actually
measure the direction of influence with respect to a specific product between
different friends.
A revised scale was then developed and implemented wherein individuals
were asked that whether they themselves considered or believed that they could
be opinion leaders for a given product. Though the information which can be
found out with the help of this method could be useful but then it should be critically
evaluated as it is expressed by the individuals themselves. This is also important
because individuals at times either may overestimate or underestimate themselves
and therefore the results or information provided is actually the reflection of the same.
The method may not be therefore considered as truly reliable and trustworthy
and a more systematic and logical analysis may be required. This is required as it
is important to verify the expression of the individuals. However, this method also
has the advantage of being applicable to a large group of people.
(ii) Key informant approach
This method involves selecting a set of people in a group of people who may be
considered to be informed about the influence patterns in a given group. Once
these people are selected, these people can be asked questions with respect to
identification of the possible opinion leaders in a group. This method has the
advantages of being cost effective and of being a time saving method. However,
the prime limitation of this method is that the methodology involved in this approach
is that limited sample size is used and therefore only a sample of audience may be
asked questions.
(iii) Sociometric methods
These types of methods generally work by identifying the patterns of communication
among the different members of the group. This then helps in understanding and
studying the member interactions by systematically tracking it. Interview process
helps in gathering the data from the group and learning from them that which group
of people they approach when they wish to gather information with respect to a
product. The advantage of this method is that it is much more precise. However,
it could prove to be more expensive and one may also encounter problems related
to administering it. The best social set ups which particularly support the
implementation of the sociometric methods are army bases, hospitals, prisons,
etc., that are closed social settings.
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Marketing
Communication 8.6 ANSWERS TO CHECK YOUR PROGRESS
QUESTIONS
NOTES 1. A marketer’s primary communications tools are media advertising, direct

mail advertising, telephone selling, trade shows, and personal selling.
2. These are specially designed showrooms that allow customers to observe
and try out complex products. A variant of the approach is a travelling
demonstration centre in which the equipment for sale is mounted on a trailer
truck.
3. In context of marketing, communication refers to the correctness in
perception developed by the customer based on the communication message
of the marketer while he is advertising for his products.
4. The social attributes possessed by different opinion leaders include:
 Extrovert and outgoing nature
 Indulgence in social activity
 Focus on social networks
 Openness to society
 Recognition in society
 Trustworthiness and integrity
8.7 SUMMARY
 Communication is a process that involves a series of actions and a number

of factors to transmit a message from one end to another.
 A rich medium can:
o convey a message using more than one kind of clue (visual, verbal or
vocal),
o facilitate feedback, and
o establish personal focus.
The face-to-face conversation is the richest medium.
 Psychological noise is the one that interferes with communication taking
place between two people because one of them is not attentive to the
communication, and is mentally absent. Any physiological problem such as
a headache or body pain can make it difficult for a listener to concentrate
on the communication. This is termed as physiological noise.
 For marketing communication to succeed, two processes must take place
in the customers’ minds. First, what the customers saw, heard, learned,
thought, or felt while exposed to the advertisement must be processed and
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stored in memory, and second, this stored information in customer minds Marketing
Communication
must be retrieved at the crucial moment when a customer faces a purchase
decision.
 The conventional wisdom of inundating customers with multiple messages
NOTES
from multiple vehicles in the hope that at least some will stick, does not
work. Nothing sticks.
 Each marketing discipline has a goal in relation to other disciplines and also
in relation to the overall objective of the campaign. The objective of the
campaign is more likely to be achieved if various groups work in coordination,
rather than independently, under the guidance of the marketing team.
 Companies can also indulge into dialogues or two-way communication with
the customers. This is extremely interactive mode of communication. This
type of communication generally takes place over an extended period of
time. This involves a number of multiple channels.
 Dialogues are an important means of communication through which the
companies can win back their lost customer, can also anticipate defections
and induce the customers to ensure greater purchases.
 A marketer’s primary communications tools are media advertising, direct
mail advertising, telephone selling, trade shows, and personal selling. The
cost per message is lowest for advertising and highest for personal selling.
Telephone and personal selling offer flexibility in tailoring the message to the
target prospect but at a substantial cost.
 There are primarily three principles of communication: simplicity, clarity and
brevity.
 The chief ingredient for enhancing the effectiveness of communication is
Empathy. Empathy is at the core of the communication. Empathy means
putting oneself in the shoes of the other person and to have feeling of the
other person. Any communication with empathy will always bring people
closer and will go a long way in developing a harmonious relationship.
 The effectiveness of any marketing communication depends upon the
interpersonal relationship. In other words, effectiveness of relationship
depends upon the relationship between the communicator and the receiver.
Thus, effectiveness of any marketing communication is directly proportional
to this interpersonal relationship that a marketer is able to develop with his
customers.
 Communication is nothing but the flow of the information from sender to the
receiver so that a commonality of thought can be achieved between the two
parties. In context of marketing, this refers to the correctness in perception
developed by the customer based on the communication message of the
marketer while he is advertising for his products.
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Marketing  All communication activities involve eight elements:
Communication
1. A source
2. Encoding
NOTES 3. A message
4. A channel (medium)
5. A receiver
6. Decoding
7. Possibility of noise
8. Feedback potential
 When one focuses on a message that he has been exposed and starts
considering it, then it is termed as attention. Consumers attend to only a
small fraction of the marketing communication stimuli because demands
placed on their attention are great. Attention is highly selective. Since the
customers have limited information processing capabilities, therefore
selectivity is important.
 Communication is effective when the meaning a marketing communication
intends to convey matches what is extracted by consumers from the message.
 Consumer’s perception/comprehension of marketing stimuli is determined
by stimulus features and by the characteristics of the consumers themselves.
Expectations, needs, personality traits, past experience and attitude towards
the stimulus objects play an important role in determining consumer
perceptions.
 Visual imagery plays an important role in advertising and point of purchase
stimuli. Information about product attributes is better recalled when the
information is accompanied with pictures than when presented only as prose.
People remember greater number of company names when the names are
paired with meaningful pictures.
 It is imperative to emphasize that rational consumer processing (CPM) and
hedonic experiential (HEM) models are not mutually exclusive. Individuals
apprehend reality by these rational and experiential processes operating
interactively with one another, with their relative influence contingent on the
nature of the situation and amount of emotional involvement.
 HEM probably better explains how consumers process information and
make decisions when they are carefree, happy and confronted with positive
outcomes. Whereas the CPM perspective views consumers as pursuing
such objectives as ‘obtaining the best buy’, ‘getting the most for money’,
and ‘maximizing utility’, the HEM perspective recognizes that people often
consume products for the sheer fun of it or in the pursuit of amusement and
fantasies of sensory stimulation.
 An opinion leader is a person who influences others’ attitudes or behaviours
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because they are perceived as possessing expertise about the product.
128 Material
 Key opinion leaders not just play a role in personally influencing different Marketing
Communication
set of people; opinion leadership has also been suggested to be linked to
the profile of an innovator.
 Opinion leaders are generally expected to have similar demographic pattern
NOTES
as that of their followers. This is generally true in terms of the values, beliefs,
educational status, etc. This is because the followers are better able to
relate with their key opinion leaders due to these similarities that they have.
 The label ‘opinion leader’ implies qualities that go beyond simple informal
advice-seeking from peers; it strongly suggests influence. Maintaining this
leadership role requires being part of an active public and being generally
more attentive to issues of the day. Most important of all, it requires a
willingness to expend a great amount of cognitive effort to acquire and
comprehend the extensive knowledge of that product or product class.
 There are primarily two personality traits that have been observed with
opinion leaders across different product categories. First, they are extremely
self-confident and second, they are extremely socially active.
 For opinion leadership, public individualization is also extremely important
in addition to the personal involvement and the familiarity and knowledge
about a product.
8.8 KEY WORDS

 Marketing Communication: It refers to the means adopted by the
companies to convey messages about the products and the brands they
sell, either directly or indirectly to the customers with the intention to persuade
them to purchase.
 Attention: It is the notice taken of someone or something.
 Consumer processing model (CPM): It is a model which shows marketers
how buyers make decisions in a rational, systematic, and reasoned way.
 Hedonic experiential model (HEM): It is model of looking at consumer
purchasing decisions from an emotional standpoint, appealing to consumers’
feelings.
 Opinion leader: It is a person with expertise or influence in a specific area.
He/she can be used by businesses to build trust with their customers or
grow their sales.

EXERCISES
1. Which two processes must take place in the customers’ minds for marketing
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Marketing 2. Explain two types of communications that companies indulge in to
Communication
communicate with the customers.
3. State the three principles of communication.
NOTES 4. Which are the two models that describe how consumers browse information
and choose a suitable product?
5. What are involuntary, non-voluntary and voluntary attention?
6. What are consumer processing (CPM) and hedonic experiential (HEM)
models?
7. What was the influence of mass media according to a study conducted by
Paul Lazarsfeld, Bernard Berelson and Hazel Gaudet in 1948?
8. Which product related traits are expressed by opinion leaders?
9. What are psychological noise, physiological noise and semantic noise?
1. Summarise the methods used by the marketers to grab the attention of the
customers in their target market.
2. Describe the eight elements of a communication activity.
3. Explain the eight iterated stages of consumer information processing.
4. What role do opinion leaders play in influencing people’s behaviour and
attitudes? Explain.
5. Describe the personality characteristics of an opinion leader.
6. Illustrate the methods involved in identification of opinion leaders.

Dreamtech Press.
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Consumers in their Social
BLOCK - III and Cultural Settings
SOCIAL CLASS OF CONSUMERS
NOTES
UNIT 9 CONSUMERS IN THEIR
SOCIAL AND CULTURAL
SETTINGS
Structure
9.0 Introduction
9.1 Objectives
9.2 Reference Group: Nature, Types and Influences on Consumers
9.3 Family Life Cycle Stages
9.5 Summary
9.6 Key Words
9.0 INTRODUCTION
The term group may be defined as two or more people who interact with each in
order to achieve mutually agreed upon goals. Consumer group refers to individuals
or group of individuals or the family who have a need and desire of purchasing a
good or service in order to fulfil their needs. It is a natural tendency on the part of
an individual to look up to another as with comparison. Each one of us looks
towards another individual or a group as a standard of comparison. This group to
which a person looks up as a point of comparison is known as a reference group.
A reference group may be a person or a group to which an individual looks up as
a frame of reference for his general and specific acts of behaviour, values, opinions
and attitudes. The reference group exercises tremendous influence on an individual.
This is true for consumer behaviour as well.
For a marketer, the family as a social unit possesses a tremendous importance.
Researchers have studied the consumption behaviour across the various stages of
the family life cycle. They have attempted to study the various peculiarities, tried to
relate these to the stages in the FLC, and drawn generalizations. The family life
cycle has been defined as a series of stages through which most families’ progress,
with varying characteristics across various stages; these characteristics relate to
marital status, size of the family, the age profile of the family members, the
employment status of the head of household, the income level and the disposable
income at hand. Let us discuss in detail about the reference groups and the family
life cycle in the following unit. Self-Instructional
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and Cultural Settings 9.1 OBJECTIVES

NOTES  Understand the meaning and nature of reference group
 Explain the types of reference group
 Discuss its influences on consumers
 State the stages of a family life cycle
9.2 REFERENCE GROUP: NATURE, TYPES AND

INFLUENCES ON CONSUMERS
Almost all individuals regularly interact with other people who directly or indirectly
influence their purchase decisions. Thus, the study of groups and their impact on
the individuals is of great importance to marketers concerned with influencing
consumer behaviour.
Consumer reference groups are groups that serve as frames of reference
for individuals in their purchase decisions. Examples of reference groups include
(1) friendship groups, (2) shopping groups, (3) work groups, (4) virtual groups or
communities, and (5) consumer-action groups. Reference groups that influence
general values or behaviour are called normative reference groups; those that
influence specific attitudes are called comparative reference groups. The concept
of consumer reference groups has been broadened to include groups with which
consumers have no direct face-to-face contact, such as celebrities, political figures,
and social classes.
The credibility, attractiveness, and power of the reference group affect the
degree of influence it has. Reference group appeals are used very effectively by
some advertisers in promoting their goods and services because they subtly induce
the prospective consumer to identify with the pictured user of the product.
The five types of reference group appeals most commonly used in marketing
are celebrities, experts, the common man, the executive and employee
spokesperson, and the trade spokesperson. Celebrities are used to giving
testimonials or endorsements as actors or as company spokespersons. Experts
may be recognised experts in the product category or actors playing the part of
experts (such as an automobile mechanic). The common-man approach is designed
to show that individuals who are just like the prospect are satisfied with the
advertised product. Increasingly, firms are using their top executives as
spokespersons because their appearance in company advertisements seems to
imply that someone at the top is watching over the consumer’s interest.
For many consumers their family is the primary reference group for many
attitudes and behaviours. The family is the prime target market for most products
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and product categories. As the most basic membership group, families are defined Consumers in their Social
and Cultural Settings
as two or more persons related by blood, marriage, or adoption that reside together.
There are three types of families: married couples, nuclear families, and extended
families. Socialization is a core function of the family. Other functions of the family
are the provision of economic and emotional support and the pursuit of a suitable NOTES
lifestyle for its members.
The members of a family assume specific roles in their everyday functioning—
such roles or tasks extend to the realm of consumer purchase decisions. Key
consumer-related roles of family members include influencers, gatekeepers,
deciders, buyers, preparers, users, maintainers, and disposers. A family’s decision-
making style often is influenced by its lifestyle, roles, and cultural factors.
The majority of consumer studies classify family consumption decisions as
husband-dominated, wife-dominated, joint, or autonomic decisions. The extent
and nature of husband-wife influence in family decisions depends, in part, on the
specific product or service and selected cultural influences.
What is a Group?
Most individuals interact with other people on a daily basis, especially with members
of their own families. The family commonly provides the opportunity for product
exposure and trial and imparts consumption values to its members.
A group is two or more people who interact to accomplish either individual
or mutual goals. This broad definition covers everything from intimate groups to
formal work groups. Included in this definition, is a kind of ‘one-sided grouping’ in
which an individual consumer observes the appearance or actions of others who
unknowingly serve as consumption-related role models. Sometimes groups are
classified by membership status. A group to which a person either belongs or
would qualify for membership is called a membership group. There are also groups
in which an individual is not likely to receive membership, despite acting like a
member by adopting the group’s values, attitudes, and behaviour—these are
considered to be symbolic groups.
Understanding the Power of Reference Groups
A reference group is any person or group that serves as a point of comparison (or
reference) for an individual in forming either general or specific values, attitudes,
or a specific guide for behaviour. They help us understand the impact of other
people on an individual’s consumption beliefs, attitudes, and behaviour. It helps
marketers choose their methodology to affect desired changes in consumer
behaviour.
From a marketing perspective, reference groups are groups that serve as
frames of reference for individuals in their purchase or consumption decisions.
Reference groups that influence general or broadly defined values or behaviours
are called normative reference groups.
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Consumers in their Social Reference groups that serve as benchmarks for specific or narrowly-defined
attitudes or behaviour are called comparative reference groups. A comparative
reference group might be a neighbouring family whose lifestyle appears to be
admirable and worthy of imitation. Normative reference groups influence the
NOTES development of a basic code of behaviour. Comparative reference groups influence
the expression of specific consumer attitudes and behaviour.
A Broadened Perspective on Reference Groups
The meaning of ‘reference group’ has changed over the years. Originally, reference
groups were narrowly defined to include only those groups with which a person
interacted on a direct basis. The concept has gradually broadened to include direct
and indirect individual or group influences.
Indirect reference groups consist of those individuals or groups with whom
a person does not have direct face-to-face contact, such as movie stars, sports
heroes, political leaders, TV personalities, or even a well-dressed and interesting
looking person on a street corner. References a person might use in evaluating his
or her own general or specific attitudes or behaviour vary.
Factors that Affect Reference Group Influence
The degree of influence that a reference group exerts on an individual’s behaviour
usually depends on the nature of the individual and the product and on specific
social factors.
 An individual who has first-hand experience with a product or service, or
can easily obtain full information about it, is less likely to be influenced by
the advice or example of others. A person who has little or no experience
with a product or service and does not expect to have access to objective
information about it (e.g., a person who believes that relevant advertising
may be misleading or deceptive) is more likely to seek out the advice or
example of others.
 A reference group that is perceived as credible, attractive, or powerful can
induce consumer attitude and behaviour change.
 When primarily concerned with the acceptance or approval of others they
like, with whom they identify, or who offer them status or other benefits,
consumers are likely to adopt their product, brand, or other behavioural
characteristics. When consumers are primarily concerned with the power
that a person or group can exert over them, they might choose products or
services that conform to the norms of that person or group in order to avoid
ridicule or punishment. Unlike other reference groups, however, power
groups are not as likely to cause attitude change. Individuals may conform
to the behaviour of a powerful person or group but are not as likely to
experience a change in their own attitudes.
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 Different reference groups may influence the beliefs, attitudes, and Consumers in their Social
behaviours of an individual at different points in time or under different
circumstances.
 A visually conspicuous product is one that will stand out and be noticed. A
NOTES
verbally conspicuous product may be highly interesting, or it may be easily
described to others. Products that are especially conspicuous and status
revealing (a new automobile, fashion clothing, sleek laptop computer, or
home furniture) are most likely to be purchased with an eye to the reactions
of relevant others.
Marketers may have divergent goals with regard to consumer conformity. The
ability of reference groups to change consumer attitudes and behaviour by
encouraging conformity is subject to the group’s ability to:
 Inform or make the individual aware of a specific product or brand.
 Provide the individual with the opportunity to compare his or her own thinking
with the attitudes and behaviour of the group.
 Influence the individual to adopt attitudes and behaviour that are consistent
with the norms of the group.
 Legitimize the decision to use the same products as the group.
 A nonconformity appeal is also possible but requires a shift in attitudes or
behaviour.
Selected Consumer-Related Reference Groups
Five specific reference groups are considered because they give us a kind of
cross-section of the types of groups that influence consumers’ attitudes and
behaviour. They are:
 Friendship groups
 Shopping groups
 Work groups
 Virtual groups or communities
 Consumer-action groups
Let’s discuss them briefly here.
 Friendship Groups
Friendship groups are classified as informal groups because they are usually
unstructured and lack specific authority levels. Seeking and maintaining friendship
is a basic drive of most people. The opinions and preferences of friends are an
important influence in determining the products or brands a consumer ultimately
selects.
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Consumers in their Social  Shopping Groups
Two or more people who shop together can be called a shopping group. The
motivations range from primarily social to reducing risk. A special form of a
NOTES shopping group is the in-home shopping party. Early purchasers tend to create a
bandwagon effect. Undecided guests often overcome a reluctance to buy when
they see their friends make positive purchase decisions. Furthermore, some of the
guests may feel obliged to buy because they are in the home of the sponsoring
host or hostess.
 Work Groups
Both the formal work group and the informal friendship/work group have potential
for influencing consumer behaviour. The formal work group consists of individuals
who work together as part of a team and, thus, have the opportunity to influence
each other’s consumption-related attitudes and actions. Members of informal
work groups may influence the consumption behaviour of other members during
coffee or lunch breaks or after-hours meetings. Recognising that work groups
influence consumers’ brand choices and that most women now work outside
the home, firms are redirecting their sales efforts to the workplace rather than
the home.
 Virtual Groups or Communities
Thanks to computers and the Internet, virtual groups or communities have been
formed. While fifty years ago the definition of a community stressed the notion of
geographic proximity and face-to-face relationships, today’s communities are much
more broadly defined as sets of ‘social relations among people.’ These communities
provide their members with access to an extensive amount of information and/or
fellowship and social interaction covering a wide range of topics and issues. The
anonymity of the Internet gives its users the freedom to express whatever views
they wish, and to also benefit from savouring the views of others. Because of this
anonymity, Internet users can say things to others that they would not say in face-
to-face interactions. Communicating over the Internet permits people to explore
the boundaries of their personalities. The next step in the evolution of communities
will be brand communities.
 Consumer-Action Groups
A consumer-action group has emerged in response to the consumerist movement.
It can be divided into two broad categories. Those that organize to correct a
specific consumer abuse and then disband. And, those that organize to address
broader, more pervasive problem areas and operate over an extended or indefinite
period of time. The overriding objective of many consumer-action groups is to
bring sufficient pressure to bear on selected members of the business community
to make them correct perceived consumer abuses.
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Major Types of Reference Group Appeals Consumers in their Social
Five major types of reference group appeals in common marketing usage are:
 Celebrity appeals
 Expert appeals NOTES
 Common man appeals

 Executive and employee appeals
 Trade or spokes-character appeals
These appeals, as well as less frequently employed appeals, are often
operationalised in the form of testimonials or endorsements. In the case of the
common man, they may be presented as slice-of-life commercials.
(i) Celebrities
Celebrities have a very common type of reference group appeal. They represent
an idealization of life that most people would love to live. Advertisers spend
enormous sums of money to have celebrities promote their products with the
expectation that the reading or viewing audience will react positively to the celebrity’s
association with their products.
A firm has the choice of using the celebrity in different ways:
 Testimonials, if the celebrity has personally used the product.
 Endorsement, when the celebrity adds his/her name to products which he/
she may be an expert with or not.
 Actor or spokesperson, when the celebrity represents the product over
time in a variety of media and in personal appearances.
Celebrity credibility is a powerful influence. It is based on the audience’s perception
of the celebrity’s expertise and trustworthiness. Not all companies use celebrities
because they aren’t convinced they are worth the money.
(ii) The Expert
A type of reference group appeal used by marketers is the expert—a person who,
because of his or her occupation, training, or experience can help the consumer
evaluate the product being promoted.
(iii) The Common Man
A reference group appeal of based on testimonials of satisfied customers is called
the common-man approach. It demonstrates that someone just like the customer
is satisfied with the product or service. These commercials are described as being
slice-of-life commercials. Families are often depicted in ‘real-life’ situations in
commercials.
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Consumers in their Social (iv) The Executive and Employee Spokesperson
This form of advertising has grown more popular over the last few years and is the
result of the success of highly innovative executive spokespersons. Like the
NOTES celebrity, the executive spokesperson is admired by the general population because
of his/her achievements and the status implicitly conferred on business leaders. A
variation of this is the use of a lower level manager or front-line employee who
speaks directly to the consuming public.
(v) Trade or Spokes-Characters
The trade or spokes-character and the cartoon character serve as quasi-celebrity
endorsers. This person represents the idealized image and dispenses important
product information. This category of ‘person’ is largely exclusive to a specific
product or product-line.
Other Reference Group Appeals
There are other forms of reference group appeals, such as the respected retailer
or the editorial content of special-interest magazines. Seals of approval and
objective product ratings can also serve as potential endorsements.
Check Your Progress

1. What are consumer reference groups?
2. Define comparative reference group.
3. Name major types of reference group appeals in common marketing usage.
4. What is common-man approach?
9.3 FAMILY LIFE CYCLE STAGES
Sociologists and consumer researchers have long been attracted to the concept of
the family life cycle (FLC) as a means of depicting what was once a rather steady
and predictable series of stages that most families progressed through.
The current decline in the percentage of families that progress through a
traditional FLC (to be explored shortly) seems to be caused by a host of societal
factors including increasing divorce rate, number of out-of-wedlock births, and
breaking up of joint families.
FLC analysis enables marketers to segment families in terms of a series of
stages spanning the life course of a family unit. The FLC is a composite variable
created by systematically combining such commonly used demographic variables
as marital status, size of family, age of family members (focusing on the age of the
oldest or youngest child), and employment status of the head of household.
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The ages of the parents and the relative amount of disposable income usually Consumers in their Social
are inferred from the stage in the family life cycle.
Traditional Family Life Cycle
Traditional family life cycle models have five basic stages: NOTES
Stage I—Bachelorhood. Young single adult living apart from parents
Stage II—Honeymooners. Young married couple
Stage III—Parenthood. Married couple with at least one child living at home
Stage IV—Post parenthood. An older married couple with no children living at home
Stage V—Dissolution. One surviving spouse
Stage I—Bachelorhood
The first FLC stage consists of young single men and women who have established
households apart from their parents. Most members of this FLC stage are fully
employed; many are college or graduate students who have left their parents’
homes. Young single adults are apt to spend their incomes on rent, basic home
furnishings, the purchase and maintenance of automobiles, travel and entertainment,
and clothing and accessories. It is relatively easy to reach this segment because
many special-interest publications target singles. Marriage marks the transition
from the bachelorhood stage to the honeymooner stage.
Stage II—Honeymooners
The honeymoon stage starts immediately after the marriage vows are taken and
generally continues until the arrival of the couple’s first child. This FLC stage serves
as a period of adjustment to married life. These couples have available a combined
income that often permits a lifestyle that provides them with the opportunities of
more indulgent purchasing of possessions or allows them to save or invest their
extra income. Honeymooners have considerable start-up expenses when
establishing a new home (major and minor appliances, bedroom and living room
furniture, carpeting, drapes, dishes, and a host of utensils and accessory items).
Stage III—Parenthood
When a couple has its first child, the honeymoon is considered over. The parenthood
stage (sometimes called the full-nest stage) usually extends over more than a 20-
year period. Because of its long duration, this stage can be divided into shorter
phases: Preschool phase, Elementary school phase, High school phase, and College
phase.
Throughout these parenthood phases, the interrelationships of family members
and the structure of the family gradually change and the financial resources of the
family change significantly. Many magazines cater to the information and
entertainment needs of parents and children.
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Consumers in their Social Stage IV—Postparenthood
Postparenthood, when all the children have left home, is traumatic for some parents
and liberating for others. This so-called empty-nest stage signifies for many parents
NOTES almost a ‘rebirth,’ a time for doing all the things they could not do while the children
were at home and they had to worry about soaring educational expenses. For the
mother, it is a time to further her education, to enter or re-enter the job market, to
seek new interests. For the father, it is a time to indulge in new hobbies. For both,
it is the time to travel, to entertain, perhaps to refurnish their home, or to sell it in
favour of a new home or condominium.
Married couples tend to be most comfortable financially. Many empty nesters
retire although they are still in good health. Older consumers tend to use television
as an important source of information and entertainment. They favour programmes
that provide the opportunity to ‘keep up with what’s happening,’ especially news
and public affairs programmes.
Stage V—Dissolution
Dissolution of the basic family unit occurs with the death of one spouse. The
surviving spouse (usually the wife) often tends to follow a more economical lifestyle.
It is possible to trace how the FLC concept impacts a single product or
service over time. Throughout the FLC, the priorities of the family members undergo
changes. The type of products bought, and the amount of leisure time, priorities in
life, financial security, etc. change over various stages in the life cycle, thus calling
for differential investments in activities and products and services.
Modifications to the FLC
The traditional FLC model has lost some of its ability to represent the current
stages a family passes through. The underlying sociodemographic forces that drive
this expanded FLC model include divorce and late marriages, with and without
the presence of children. Although, the modified FLC model is more true to reality
it only recognises those families that started in marriage, and tends to ignore such
single-parent households as unwed mothers and single persons who adopt a child.
Non-traditional FLC stages are derived from the dynamic socio-
demographic forces operating during the past 25 or so years. These non-traditional
stages include not only family households but also non-family households: those
consisting of a single individual and those consisting of two or more unrelated
individuals.
When households undergo status changes they become attractive targets
for many marketers. In another sphere, the substantial increase in dual-income
households (i.e., working wives and the subset of working mothers) has also tended
to muddy the lifestyle assumptions implicit in the traditional FLC. The side-by-
side existence of traditional and non-traditional FLC stages is another example of
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the contemporary marketplace which is complex in its diversity, and a challenge to Consumers in their Social
segment and serve.
Check Your Progress

NOTES
5. Name the stages of parenthood phase.
6. Give example of contemporary marketplace.

QUESTIONS
1. Consumer reference groups are groups that serve as frames of reference

for individuals in their purchase decisions.
2. Reference groups that serve as benchmarks for specific or narrowly-defined
attitudes or behaviour are called comparative reference groups.
3. Five major types of reference group appeals in common marketing usage
are:
 Expert appeals
4. A reference group appeal of based on testimonials of satisfied customers is
called the common-man approach.
5. Because of the long duration of parenthood phase, it can be divided into
shorter phases: Preschool phase, Elementary school phase, High school
phase, and College phase.
6. The side-by-side existence of traditional and non-traditional FLC stages is
an example of the contemporary marketplace which is complex in its
diversity, and a challenge to segment and serve.
9.5 SUMMARY
 Consumer reference groups are groups that serve as frames of reference

for individuals in their purchase decisions. Examples of reference groups
include (1) friendship groups, (2) shopping groups, (3) work groups,
(4) virtual groups or communities, and (5) consumer-action groups.
 A group is two or more people who interact to accomplish either individual
or mutual goals. This broad definition covers everything from intimate groups
to formal work groups.
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Consumers in their Social  From a marketing perspective, reference groups are groups that serve as
frames of reference for individuals in their purchase or consumption decisions.
 Indirect reference groups consist of those individuals or groups with whom
a person does not have direct face-to-face contact, such as movie stars,
NOTES
sports heroes, political leaders, TV personalities, or even a well-dressed
and interesting looking person on a street corner.
 The ability of reference groups to change consumer attitudes and behaviour
by encouraging conformity is subject to the group’s ability to:
 Inform or make the individual aware of a specific product or brand.
 Provide the individual with the opportunity to compare his or her own thinking
with the attitudes and behaviour of the group.
 Influence the individual to adopt attitudes and behaviour that are consistent
with the norms of the group.
 Legitimize the decision to use the same products as the group.
 A nonconformity appeal is also possible but requires a shift in attitudes or
behaviour.
 Five specific reference groups are considered because they give us a kind
of cross-section of the types of groups that influence consumers’ attitudes
and behaviour. They are: friendship groups, shopping groups, work groups,
virtual groups or communities and consumer-action groups.
 Two or more people who shop together can be called a shopping group.
The motivations range from primarily social to reducing risk. A special form
of a shopping group is the in-home shopping party.
 A consumer-action group has emerged in response to the consumerist
movement. It can be divided into two broad categories. Those that organize
to correct a specific consumer abuse and then disband. And, those that
organize to address broader, more pervasive problem areas and operate
over an extended or indefinite period of time.
 Five major types of reference group appeals in common marketing usage
are:
 Expert appeals
 Celebrity credibility is a powerful influence. It is based on the audience’s
perception of the celebrity’s expertise and trustworthiness. Not all companies
use celebrities because they aren’t convinced they are worth the money.
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 A reference group appeal of based on testimonials of satisfied customers is Consumers in their Social
called the common-man approach. It demonstrates that someone just like
the customer is satisfied with the product or service. These commercials
are described as being slice-of-life commercials. Families are often depicted
in ‘real-life’ situations in commercials. NOTES
 Traditional family life cycle models have five basic stages:
Stage I—Bachelorhood. Young single adult living apart from parents
Stage II—Honeymooners. Young married couple
Stage III—Parenthood. Married couple with at least one child living
at home
Stage IV—Post parenthood. An older married couple with no children
living at home
Stage V—Dissolution. One surviving spouse
 Postparenthood, when all the children have left home, is traumatic for some
parents and liberating for others. This so-called empty-nest stage signifies
for many parents almost a ‘rebirth,’ a time for doing all the things they could
not do while the children were at home and they had to worry about soaring
educational expenses. For the mother, it is a time to further her education,
to enter or re-enter the job market, to seek new interests. For the father, it
is a time to indulge in new hobbies.
 Dissolution of the basic family unit occurs with the death of one spouse. The
surviving spouse (usually the wife) often tends to follow a more economical
lifestyle.
 Throughout the FLC, the priorities of the family members undergo changes.
The type of products bought, and the amount of leisure time, priorities in
life, financial security, etc. change over various stages in the life cycle, thus
calling for differential investments in activities and products and services.
9.6 KEY WORDS
 Reference group: It is a social group which a person takes as a standard

in forming attitudes and behaviour.
 Slice-of-life commercial: It is a commercial with realistic representation
of everyday experience in a film, play, or book.
 Family life cycle: It is the emotional and intellectual stages one passes
through from childhood to one’s retirement years as a member of a family.
 Parenthood: It is the state of being a parent and the responsibilities involved.
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and Cultural Settings 9.7 SELF ASSESSMENT QUESTIONS AND
EXERCISES

1. What are direct and indirect reference groups?
2. What are the basic stages of traditional family life cycle models?
3. How does postparenthood stage signify a rebirth for many parents?
1. Describe the factors that affect a reference group influence on an individual’s
behaviour.
2. Explain the types of reference groups.
3. Elaborate on the modifications made to the FLC model.

Kumar, A, K Singh. 2013. Consumer Behaviour and Marketing Communication:
An Indian Perspective, 1st Edition. New Delhi: Dreamtech Press.
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Decision Making
UNIT 10 DECISION MAKING

Structure
10.1 Objectives
10.2 Nature of Household and Purchases and Family Decision Making and
Resolving Conflict
10.4 Summary
10.5 Key Words
10.0 INTRODUCTION
To make a purchase, consumers identify their needs, gather information and analyse
all alternatives. These activities are a part of consumer decision making process.
The consumer behaviour may be determined by economic and psychological factors
and are influenced by environmental factors like social and cultural values.
Consumers choose goods and services for consumption within the context of their
own and their household’s preferences and available resources. According to basic
economic theory, households purchase foods and other market goods to maximize
utility, or well-being, based on their preferences and subject to the constraint that
the cost of those goods is less than or equal to the sum of all sources of income.
However, households are subject not only to an income constraint but also a time
constraint. So, it becomes important to exercise a sound decision making. The
consumer decision making behaviour is a complex procedure and involves
everything starting from problem recognition to post-purchase activities. Every
consumer has different needs in their daily lives and these are the needs which
encourage them to make different decisions. Today, research on family roles in
buying decisions is becoming of increasing interest to those engaged in the marketing
of goods and services. Marketing managers request information on family member
involvement in buying decisions to assist them in development of product offerings
and special promotions. Let us study in detail about the role of different family
members’ decision making while making a purchase in the following unit.
10.1 OBJECTIVES

 Understand the meaning of family and nature of household and purchases
 Discuss the concept of family as a reference group
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Decision Making  Explain the consumer socialization
 State the functions of the family
 Describe the key family consumption roles
NOTES  Illustrate the family decision making and consumption related roles
10.2 NATURE OF HOUSEHOLD AND PURCHASES

AND FAMILY DECISION MAKING AND
RESOLVING CONFLICT
The household is one of the most important social groups that exert influence on
individual decision making. The extent of these influences depends on the stage of
the family life cycle as this determines the kind of decisions its members make. The
demographic factors of age, marital status, and the presence of children in the
family play a major role in shaping individual and joint purchase behaviour.
Marketers and advertisers can use the information on the family life cycle to develop
strategies that conform to the unique needs and circumstances of their target
markets. As the demographic structures of society change, the family life cycle
itself may need to be modified as new types of family forms appear. As families
change, marketers get opportunities to develop new products and reposition old
ones.
The family also acts as one of the most important reference groups for
individual consumers. Discussions about products, brands and choice criteria occur
often among family members. Many products also involve joint decision-making
among the members of a household. The desires, attitudes, incomes, cultural
background, and personalities of family members play a crucial role in the overall
outcome of a particular decision.
Children learn various norms of consumption from family members first,
making them the most important primary reference group. The specific culture,
subculture and social class that a family belongs to, influences and shapes an
individual’s behaviour as a consumer for life.
Different members of the family play varying consumer roles depending on
the type of decision-making that is involved. Dynamics of group decision-making
apply in case of a purchase decision by a household unit. The differences in the
influence of members usually stems from the type of product to be purchased. For
instance, for groceries, the wife is the predominant influencer and buyer, while for
financial products, it is the chief male member of the family and for a bike, a
teenage kid in the family who have a predominant say. However, with changes in
the family structure, such stereotypes are undergoing a change. Role reversals or
role sharing is becoming more common. The role of wives in buying cars, or
planning investments, and the role of husbands in buying groceries cannot be
underestimated. And children are becoming more influential even for high
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involvement products such as cars, planning vacations, consumer durables, etc. Decision Making
besides becoming independent in taking decisions for products that are meant for
their self-consumption. Therefore, marketers need to give careful consideration to
the dynamics of the household decision-making process while assessing the role
of each member in this group. NOTES
Family as a Reference Group

For many consumers their family is the primary reference group for many attitudes
and behaviours. The family is the prime target market for most products and product
categories. As the most basic membership group, families are defined as two or
more persons related by blood, marriage, or adoption that reside together. There
are three types of families: married couples, nuclear families, and extended families.
Socialization is a core function of the family. Other functions of the family are the
provision of economic and emotional support and the pursuit of a suitable lifestyle
for its members.
The members of a family assume specific roles in their everyday functioning—
such roles or tasks extend to the realm of consumer purchase decisions. Key
consumer-related roles of family members include influencers, gatekeepers,
deciders, buyers, preparers, users, maintainers, and disposers. A family’s decision-
making style is often influenced by its lifestyle, roles, and cultural factors.
The majority of consumer studies classify family consumption decisions as
husband-dominated, wife-dominated, joint, or autonomous decisions. The extent
and nature of husband-wife influence in family decisions depends, in part, on the
specific product or service and selected cultural influences.
Classification of families by stage in the family life cycle (FLC) provides
valuable insights into family consumption-related behaviour. The traditional FLC
begins with bachelorhood, moves on to marriage, then to an expanding family, to
a contracting family, and ends with the death of a spouse. Dynamic
sociodemographic changes in society have resulted in many non-traditional stages
that a family or non-family household might pass through (such as childless couples,
couples marrying later in life, single parents, unmarried couples, or single-person
households). These non-traditional stages are becoming increasingly important to
marketers in terms of specific market niches.
The Family is a Concept in Flux
The family is a basic concept in society but is not easy to define because family
composition and structure, as well as the roles played by family members, are
almost always in transition. Traditionally, the family is defined as two or more
persons related by blood, marriage, or adoption who reside together.
Although families sometimes are referred to as households, not all households
are families. Within the context of consumer behaviour, households and families
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Decision Making usually are treated as synonymous. In most Western societies, three types of families
dominate: the married couple, the nuclear family, and the extended family.
Types include:
NOTES  The married couple—a husband and wife is the simplest structure.
 The nuclear family—a husband and wife and one or more children. This is
still commonplace.
 The extended family—a husband, wife, one or more children, and at least
one grandparent. At one time this was the norm, but geographic mobility
has reduced its presence.
 A fourth form, the single-parent family—one parent and at least one child—
is growing due to divorce, separation, and out-of-wedlock births.
The predominant form of the family is largely influenced by the culture within which
the families exist.
Socialization of Family Members
The Socialization of family members is a central family function. In the case of
young children, this process includes imparting to children the basic values and
modes of behaviour consistent with the culture. These generally include moral and
religious principles, interpersonal skills, dress and grooming standards, appropriate
manners and speech, and the selection of suitable educational and occupational or
career goals.
Marketers frequently target parents who are looking for assistance in the
task of socialising their children. To this end, marketers are sensitive to the fact
that the Socialization of young children provides an opportunity to establish a
foundation on which later experiences continue to build throughout life.
Consumer Socialization of Children
The aspect of childhood Socialization that is particularly relevant to the study of
consumer behaviour is consumer Socialization, which is defined as the process by
which children acquire the skills, knowledge, and attitudes necessary to function
as consumers. A variety of studies have focused on how children develop
consumption skills.
Many preadolescent children acquire their consumer behaviour norms
through observation of their parents and older siblings who function as role models
and sources of cues for basic consumption learning. In contrast, adolescents and
teenagers are likely to look to their friends for models of acceptable consumption
behaviour. Shared shopping experiences (i.e., co-shopping, when mother and
child shop together) also give children the opportunity to acquire in-store shopping
skills. Co-shopping is a way of spending time with one’s children while at the
same time accomplishing a necessary task.
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Consumer Socialization also serves as a tool by which parents influence Decision Making
other aspects of the Socialization process. For instance, parents frequently use the
promise or reward of material goods as a device to modify or control a child’s
behaviour. According to research, adolescents reported that their parents frequently
used the promise of chocolate candy as a means of controlling their behaviour NOTES
(e.g. getting them to complete homework or to clean their rooms).
Adult Consumer Socialization begins in early childhood and extends
throughout a person’s entire life.
Intergenerational Socialization: It is common for product or brand loyalty
or preference to be passed from one generation to another, sometimes up to three
or four generations.
Other Functions of the Family
Other basic functions of the family include economic well-being, emotional support,
and suitable family lifestyles.
Economic Well-Being
Providing financial means to its dependents is unquestionably a basic family function.
How the family divides its responsibilities for providing economic well-being has
changed considerably during the past twenty-five years. No longer are the traditional
roles of husband as economic provider and wife as homemaker and child-rearer
valid. It is very common for married women with children to be employed outside
the home and for their husbands to share household responsibilities.
The economic role of children also has changed. Today, although many
teenage children work, they rarely assist the family financially. Teenagers are
expected to pay for their own amusements; others contribute to the costs of their
formal education and prepare themselves to be financially independent.
Emotional Support
The provision of emotional nourishment (including love, affection, and intimacy) to
its members is an important core function of the contemporary family. The family
provides support and encouragement and assists its members in coping with decision
making and personal or social problems. If the family cannot provide adequate
assistance when it is needed, it may turn to a counsellor, psychologist or other
helping professional as an alternative.
Suitable Family Lifestyles
Another important family function in terms of consumer behaviour is the
establishment of a suitable lifestyle for the family. Upbringing, experience, and the
personal and jointly held goals of the spouses determine the importance placed on
education or career, on reading, television viewing, the learning of computer skills,
the frequency and quality of dining out, and on the selection of other entertainment
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Decision Making and recreational activities. Family lifestyle commitments, including the allocation
of time is greatly influencing consumption patterns.
Family Decision-Making and Consumption-Related Roles
NOTES Marketers most frequently examine the attitudes and behaviour of the one family
member whom they believe to be the major decision maker. Sometimes they also
examine the attitudes and behaviour of the person most likely to be the primary
user of the product or service.
Key Family Consumption Roles
For a family to function as a cohesive unit, various tasks must be carried out by
one or more family members. In a dynamic society, family-related duties are
constantly changing. We can identify eight distinct roles in the family decision-
making process. The number and identity of the family members who fill these
roles vary from family to family and from product to product.
The eight roles in the family decision-making process include:
 Influencers—family member(s) who provide information to other members
about a product or service.
 Gatekeepers—family member(s) who control the flow of information about
a product or service into the family.
 Deciders—family member(s) with the power to determine unilaterally or
jointly whether to shop for, purchase, use, consume, or dispose of a specific
product or service.
 Buyers—family member(s) who make the actual purchase of a particular
product or service.
 Preparers—family member(s) who transform the product into a form suitable
for consumption by other family members.
 Users—family member(s) who use or consume a particular product or
service.
 Maintainers—family member(s) who service or repair the product so that it
will provide continued satisfaction.
 Disposers—family member(s) who initiate or carry out the disposal or
discontinuation of a particular product or service.
Dynamics of Husband-Wife Decision Making
Marketers are interested in the relative amount of influence that a husband and a
wife have when it comes to family consumption choices. Family consumption
decisions can be classified as:
 Husband dominated
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 Wife dominated Decision Making
 Joint—equal or syncretic
 Autonomic—solitary or unilateral
The relative influence of a husband and wife on a particular consumer decision NOTES
depends in part on the product and service category. It changes over time.
Husband-wife decision-making also appears to be related to cultural influence. In
the People’s Republic of China, there were substantially fewer ‘joint’ decisions
and more ‘husband-dominated’ decisions for many household purchases than
among Chinese in the United States. In another recent cross-cultural study, husband-
wife decision-making was studied among three groups: Asian-Indians living in
India, Asian-Indians living in the United States, and American nationals. Results
show a decrease in husband-dominated decisions and an increase in wife-dominated
decisions, going from Asian-Indians in India, to Asian-Indians in the United States,
to American nationals.
Check Your Progress

1. How can marketers and advertisers use the information on the family life
cycle?
2. Name the key consumer-related roles of family members in their everyday
functioning.
3. Define consumer Socialization of children.

QUESTIONS
1. Marketers and advertisers can use the information on the family life cycle to
develop strategies that conform to the unique needs and circumstances of
their target markets.
2. Key consumer-related roles of family members include influencers,
gatekeepers, deciders, buyers, preparers, users, maintainers, and disposers.
3. Consumer Socialization of children is defined as the process by which children
acquire the skills, knowledge, and attitudes necessary to function as
consumers.
10.4 SUMMARY
 Marketers and advertisers can use the information on the family life cycle to
develop strategies that conform to the unique needs and circumstances of
their target markets. As the demographic structures of society change, the
family life cycle itself may need to be modified as new types of family forms
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Decision Making appear. As families change, marketers get opportunities to develop new
products and reposition old ones.
 Children learn various norms of consumption from family members first,
NOTES
subculture and social class that a family belongs to, influences and shapes
an individual’s behaviour as a consumer for life.
 Different members of the family play varying consumer roles depending on
the type of decision-making that is involved. Dynamics of group decision-
making apply in case of a purchase decision by a household unit.
 The family is the prime target market for most products and product
categories.
 Classification of families by stage in the family life cycle (FLC) provides
valuable insights into family consumption-related behaviour. The traditional
FLC begins with bachelorhood, moves on to marriage, then to an expanding
family, to a contracting family, and ends with the death of a spouse.
 Although families sometimes are referred to as households, not all households
are families. Within the context of consumer behaviour, households and
families usually are treated as synonymous. In most Western societies, three
types of families dominate: the married couple, the nuclear family, and the
extended family.
 The Socialization of family members is a central family function. In the case
of young children, this process includes imparting to children the basic values
and modes of behaviour consistent with the culture. These generally include
moral and religious principles, interpersonal skills, dress and grooming
standards, appropriate manners and speech, and the selection of suitable
educational and occupational or career goals.
 Consumer Socialization also serves as a tool by which parents influence
other aspects of the Socialization process.
 Other basic functions of the family include economic well-being, emotional
support, and suitable family lifestyles.
 The eight roles in the family decision-making process include: influencers,
gatekeepers, deciders, buyers, preparers, users, maintainers and disposers.
 The relative influence of a husband and wife on a particular consumer
decision depends in part on the product and service category. It changes
over time. Husband-wife decision-making also appears to be related to
cultural influence.
10.5 KEY WORDS
 Household: It refers to a house and its occupants regarded as a unit.

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 Socialization: it is the process of learning to behave in a way that is Decision Making
acceptable to society.
 Decision making: It is the action or process of making important decisions.
 Family consumption: It is the purchases made by resident households NOTES
(home or abroad) to meet their everyday needs: food, clothing, housing
services (rents), energy, transport, durable goods (notably cars), spending
on health, on leisure and on miscellaneous services.

EXERCISES
1. How do differences in the influence of members usually stem from the type
of product to be purchased? Give example.
2. State the types of families in Western societies.
3. What is the Socialization of family members?
4. Classify the family consumption decisions.
1. ‘For many consumers their family is the primary reference group for many
attitudes and behaviours.’ Elucidate the statement.
2. Explain the other functions of a family.
3. Describe the eight roles in the family decision-making process.

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Social Class
UNIT 11 SOCIAL CLASS

Structure
NOTES 11.0 Introduction
11.1 Objectives
11.2 Social Class: Nature
11.2.2 Symbols of Status
11.3 Social Class Categories and Consumer Behaviour
11.5 Summary
11.6 Key Words
11.0 INTRODUCTION
Many social scientists agree that society is stratified into a hierarchical arrangement
of social classes that are groupings of individuals in a hierarchy, usually based on
wealth, educational attainment, occupation, income, and membership in a subculture
or social network. Social class is sometimes presented as a description of how
members of society have sorted themselves along a continuum of positions varying
in importance, influence, prestige, and compensation. The amount of money a
person has plays an important role in defining his social class. After the introduction
of new economic policy in 1990-91, the middle income group has gained popularity
among the marketers due to its large share in society. This unit deals with the type
of activities different social classes indulge in, like lower class consumers will prefer
watching television in their leisure whereas an upper class consumer will consider
going to theatre or attend a sports match. Let us study in detail about the nature of
social class and the behaviour of the consumers belonging to different social classes.
11.1 OBJECTIVES

 Understand the meaning of social class and its nature
 Discuss the influence of money on social class and symbol of status in the
context of consumer behaviour
 Explain the differences among lower, middle and upper classes of consumers
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Social Class
11.2 SOCIAL CLASS: NATURE
The term ‘social class’ comprises ‘social’ as an adjective of the noun ‘class’. The
combined use of these two terms may change the connotation. So we discuss NOTES
these as one single ‘construct’.
The origin of the usage of the concept of ‘social class’ may be dated to first
three decades of the 19th century. During the period preceding this period, ‘rank
and order’ were the terms commonly used to describe one’s social status and
economic standing in the society, especially British society. The switching over
from ‘rank and order’ to ‘social class’ was not merely a change of words, but it
also embodied representation of a significant shift in the basis of stratification and
fixation of an individual’s place and importance in society. ‘Rank and order’
embodied feudalistic connotation in so far as they depicted a person’s status that
depended upon ownership of land, which was the main factor or means of
production and exclusively representative of wealth. This makes it clear that ‘rank
and order’ were derived from possession of wealth and the means of production
which were identified with land. But, the ownership of land under feudalism was
hereditary. Besides, the dominant thought prevailing in society at that time was that
qualities of head and heart of a human being depended on hereditary factors.
Naturally, individual attainments and qualities acquired by one’s own efforts were
overshadowed by social class origins. Accident of birth was the main determinant
of social class. When ‘class’ replaced the usage of ‘rank and order,’ it signified an
important shift in social thoughts and values. Maturing of industrialization brought
about a radical transformation in institutions and structure of society and organization
of economy, especially in production and its structure. Land is no more the main
means of production; it has been replaced by capital. Unlike land, capital is not a
gift of nature; it is not only made by humans, its stock at any point in time also
depends on accumulation of the past. This provides us an understanding of the
shift in emphasis. Human beings, rather than nature, governed the economy and its
growth at macro level, while economic condition of a human being was supposed
to be determined by individual industry, patience, enterprise, skills and ability.
All people are supposed to be born equal, yet some are born more equal
than others, as George Orwell said. Even among those born as equals, some
become more equal than others on the basis of their achievements in life.
Humans, rather than nature, governed the economy and its growth at macro
level, while economic condition of a human being was supposed to be determined
by individual industry, patience, enterprise, skills and ability. Differential standing
and position in society leads to classification into different categories or classes.
Differentiation on the basis of standing and respect, that different persons
command, leads to social stratification. Originally, caste came to be associated
with the occupation of a person, though birth became its basis later.
Inequality, in this context, refers to the difference in status. Therefore, this
facet refers to status and standing in society that a person enjoys. Differential
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Social Class standing and position in society leads to classification into different categories or
classes. Differentiation on the basis of standing and respect, that different persons
command, leads to social stratification. Each stratum differs from other strata in
one or more attributes. Different social strata have come to be known by a caste
NOTES which also reflected social status. Each social stratum is also known as social
class; it is associated both with social and economic factors. The process of social
class formation has coincided with caste system in India due to numerous factors,
including economic factors. Originally, caste came to be associated with the
occupation of a person, though birth became its basis later. This brought about (i)
a certain degree of rigidity in social structure and, (ii) mixing of hereditary with
material accomplishments, specially income and wealth, in social classification and
categorization. This, in technical terms, is called stratification. Social stratification
refers to the process and its outcome that ascribe status and position to different
sections of population. Rank and order of different strata and individual members
within each stratum depict differential social and economic positions and power
that is embodied in each rank or position. The majority of persons of a given
social class or stratum occupy almost an equal rank or position, though a few
individuals may have lower or higher ranks within the stratum.
For example, even among large corporate houses, Tata, Birla and Reliance
occupy the top position. This also holds true for other areas of operations. These
ranks are partly earned and may partly be inherited. Social-political and economic
achievements depend upon the availability of opportunity and its exploitation by
individuals. Access to opportunity is as important as its effective utilization. It is
probably for this reason that Tony remarked, ‘the sons of the rich have to wait for
the opportunity to emerge so as to exploit it, whereas the sons of the poor or not
so rich have to create the opportunity and use it effectively.’ Thus, our view runs
counter to Donald and Carn’s postulation that positions in society ‘may be achieved
rather than ascribed, with some opportunity existing for upward or downward
movement to other classes.’ Schiffman-Kanuk also define social class as ‘the
division of members of a society into a hierarchy of distinct status classes, so that
members of each class have relatively the same status and members of all other
classes have either more or less status’. Thus, they also associate differential status
accorded to different groups of individuals as the basis of social class formation.
They describe status in the following words, status is frequently thought of as the
relative rankings of members of each social class in terms of specific status factors.
They associate the following as the criteria of ranking and delineation of status:
Wealth or value of economic assets possessed by an individual, power that is
depicted by influence exercised over others and prestige that is reflected by degree
of recognition and respect commanded from others. These determinants of status
are economic, political, social and professional in nature. But, status is partly, if
not wholly, derived from the accident of birth in a low or high status family and
individual accomplishments, specially education, occupation and income. Our view
differs slightly from that of Schiffman-Kanuk in so far as we consider family
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background to be an important determinant of status in Indian society. Besides, Social Class
ranking or status of individuals depends upon the criteria used for the purpose
which tend to differ from country to country and time to time. In the pre-
Independence period, landlords, advocates, government servants and people born
in affluent and socially upper caste families enjoyed higher status. NOTES
Individuals, rather than the class as a whole, are ranked and rankings are affected
by (i) personal bias and perception of those who judge and, (ii) criteria employed.
It can, therefore, not be an objective method of measurement of social class. J S
Mill emphasized that comparison can be made between comparables.
Comparability requires equality or similarity in all respects but status of two or
more set of conditions or individuals or classes.
This changed after independence. In the first four decades after
independence, government and public enterprises were the largest employers in
the country because people attached a high degree of importance to job security,
seniority based promotion and power and prestige associated with the government
jobs.
Social classes are based on the very differentials which are required to be absent
for the use of method of comparison. Sentiment of following the path/ lead given
by a successful role model operates in positive direction as an incentive and
inspiration to scale the similar heights through personal endeavours. The second
sentiment is that of competitiveness with the rivals, who are often likely to be
equals. The third sentiment is of envy.
After the adoption of new economic policy in 1990–91, more and more
young men and women are opting for jobs in the private sector, where individual
skills and performance are considered relatively more important; higher performing
individuals rise rapidly in occupational hierarchy and earn much more than those in
government jobs. Besides, individuals rather than the class as a whole are ranked,
while rankings are affected by (i) personal bias and perception of those who judge
and, (ii) criteria employed. It can, therefore, not be an objective method of
measurement of social class.
Comparison of two instances, which resemble in all aspects, except that in one
case a certain cause is present, while in the other it is absent; effects of that
cause are, thus, made manifest by the difference that emerges from analysis
based on comparison. In the context of consumer behaviour, difference in social
class becomes manifest in the level and style of living.
All the same, status based on rankings has been used in literature as an
important paradigm. Social class and status are important for the analysis of
consumer behaviour from the viewpoint of social comparison theory. The theory
is quasi psychological and quasi social. Naturally, it uses both social and
psychological factors for comparison. In order to consider social comparison theory,
one has to bear in mind what JS Mill emphasized (1843) that comparison is the
method of difference but comparison requires equality or similarity between all but
one aspect; so, only comparables may be compared. In the context of consumer
behaviour, comparability requires difference in social class or status and no
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Social Class differentials in rest of the facets. Mill’s method of difference involves comparison
of two instances, which resemble one another in all material aspects, except that in
one a certain cause is present, while in another it is absent; effects of that cause are
made manifest by the difference that emerges from analysis based on comparison.
NOTES In case of consumer behaviour, difference pertains to style and the level of living of
different classes that is assumed to have arisen from class difference. But, social
classes are based on the very differentials that are required to be constant for
comparison. It is extremely difficult, if not impossible, to find two different classes
which are similar in all respects but one. Individuals are driven by mutually opposite
directionally operating psychological factors. One factor is the feeling of envy: ‘the
feeling that it does not matter if I do not get some thing but my neighbour should
not receive it either.’ That is what the advertisement of one TV model tries to
exploit by proclaiming ‘owner’s pride and neighbour’s envy’. Thus, the sentiment
of envy is well-recognized by marketers, though the theory does not seem to use
it as its base. Neighbour, in this context, may connote a colleague, an acquaintance,
a friend or a relative. This is a negatively driving sentiment. This sentiment has
been recognized byAndo-Modigliani and Dussenberry in their consumer behaviour
theory. The third sentiment is that of competitiveness with the rivals, who are often
likely to be equals. This sentiment drives individuals to reach and maintain the style
and standard of living of the social class they belong to. This has also been well-
recognized in the role of demonstration effect in shaping and guiding consumption
decisions. But, what the conventional version of social comparison theory
emphasizes is that individuals often compare their material possessions with others
in order to determine their social standing. But, the fact is that people of a given
class tend to compare their standard and style of living with those who belong to
the same social class with a view to match the styles of equals. But, material
possessions pertain not only to standard and style of living but to wealth in its
totality. All wealth is neither income yielding nor is it liquid to be used for
consumption. This is not a practical and pragmatic approach. Many persons receive
an immense amount of wealth and other forms of fortunes by inheritance.
All wealth is neither income yielding nor is it liquid to be used for consumption.
Approach, based on wealth, is not a practical and pragmatic approach. Many
persons receive an immense amount of wealth and other forms of fortunes by
inheritance. The temporal flow of income and hence, purchasing power, is the
most relevant factor of status and social class so far as consumer behaviour is
concerned.
Family business passes from older to younger generation of the family. Every
one cannot be the owner of family business. The temporal flow of income and
hence, purchasing power, is the most relevant factor of status and social class in
so far as consumer behaviour is concerned. Therefore, what needs emphasis in
this context is this economic factor rather than social-psychological factors.
Psychological and social factors will lead nowhere if they are not supported by
purchasing power. The ownership of consumer durables not only serves the purpose
of conferring comforts and conveniences on users, but these also act as indicators
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of status. These are acquired through the use of purchasing power. This is, however, Social Class
true for expensive and not yet commonly used durables. The fact is that a newly
launched product is produced in a limited quantity because of uncertainty about its
receptivity by consumers; its initial limited production operates as an explorer of
the market. The limited scale of production and heavy expenditure incurred in the NOTES
R&D used for its development make its cost and hence, price, high. But, a successful
launch tends to be followed by rising scale of production by the innovating firm,
which in due course is followed by imitations of the successful product of the
innovating firm. Both these factors reduce price and raise supply to lead to the
final positioning of once status symbol to become a common item of ownership
and use. Thus, the status symbols, embodied in durable goods, continuously change.
Income plays an important role in social class formation. Prominence of income
among determinants of social class arises from the fact that social and psychological
factors are often dominated by economic factors and income and wealth are the
major determinants among economic factors. Income depends on the stage of
development of the economy. In the lower stages of growth, incomes of the people
tend to be low. The emergence of middle class in India has been extremely slow
because of slowness of economic growth. In early stages, society comprised only
high and low income classes. It may be an intuitive guess to identify the emergence
of middle income/social class with the period of consolidation of the Mughal Empire
in India. The middle social class/income group is referred to as middle class.
Similarly, the other two income groups are also referred to as upper and lower
social classes. Though the middle class started emerging substantially in the British
period, the process of middle class formation gathered momentum in post
independent India as economic development was accelerated under Five Year
plans of development.
After the adoption of the new economic policy in 1990–91, the Indian middle
class has not only become the centre of global attention as an important segment
of the large Indian market, but it is dominant both in size and economic standing.
Currently, society comprises three social classes. Three-fold classification is
only at a highly broad level. The classification into classes highlights inter-class
differentials and overlooks several intra-class differentials. Intra-class differentials
in practically all three classes may be as important as inter-class differences.
After the adoption of new economic policy in 1990–91, the Indian middle
class has not only become the centre of global attention as an important segment
of the large Indian market, but it has become dominant both in size and economic
standing. Currently, society comprises three social classes. Three-fold classification
is only at a highly broad level. The classification into classes highlights inter-class
differentials and overlooks several intra-class differentials. Intra-class differentials
in practically all three classes may be as important as inter-class differences.
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Social Class We shall later consider intra-class differences to further classify classes into
sub-classes. First, we shall consider the concept of status and important attributes
of social classes at a broad level.
NOTES 11.2.2 Symbols of Status

In the context of consumer behaviour, status symbols have an importance of their
own. Purchase of goods and services is guided partly by functionality and partly
by sociality. The role of functionality of purchases depends on the usefulness of
the product or service with respect to the satisfaction of wants that fall in the
domain of necessities or comforts and conveniences. But sociality of the purchases
is derived from the status symbol that is associated with the possession or use of
a particular product or service in the given time–space configuration. Thorstein
Veblen, the founder of institutional economics, was the first economist who
propounded the idea of sociality which is embodied in conspicuous consumption.
He pointed out that some members of each social class tend to engage in
conspicuous consumption, while others spend more conservatively. Sociality of
consumption is encompassed in the institutional and organizational structure of
society. But, what is conspicuous? The literal meaning of conspicuous is ‘striking,’
eye-catching’ and ‘prominent.’All these three words connote ‘something that is
radically different’ from commonly used goods. Conspicuous consumption naturally
is assumed to put a person in an exclusive class/category which is different from
the class/category of commoners. It is not that goods of conspicuous consumption
have no functionality, they do have functionality to the extent to which these goods
also satisfy some want. But, conspicuousness arises from two factors: (i) price
that is not within the affordability of most of the members of society (ii) limited
number of users of such goods at the given time and place. Then, some goods are
purchased for display to others. Decoration or rare pieces of art, etc., fall in this
category.
Some members of each social class tend to engage in conspicuous consumption,
while others spend more conservatively.’ Sociality of consumption is
encompassed in the institutional and organizational structure of society. The
conspicuous attribute arises from two factors: (i) price that is not within the
affordability of most of the members of society, (ii) limited number of users of
such goods at the given time and place. If a product or service becomes an item
of common use, it loses its status symbol. Any product or service will embody
status symbolism so long as it remains affordable to a few elites of society. In
other words, relative scarcity, resulting in high price, defines goods and services
to be a status symbol.
For example, after the Green Revolution in Punjab, rich farmers spent a
substantial proportion of their income conspicuously. They substituted country
liquor with imported or foreign liquor made in India (FLMI) and they also spent
lavishly on social ceremonies like marriages, birthdays, etc. When most Indians
were using bicycles or public transport, the possession of a car embodied status
symbolism. This is no more the case. Similarly, an air journey was undertaken
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mainly for going abroad up to the 1980s, while only a few rich, politicians, high Social Class
profile bureaucrats and businessmen travelled by plane domestically. Air travel

and even travel by AC II was a status symbol then. But, a continuous growth of
income, resulting in continuous addition of numbers to middle and high income
groups, has made the use of such goods earlier considered a status symbol, almost NOTES
common. We may infer that if a product or service becomes an item of common
use, it loses its status symbolism. Any product or service will be considered a
status symbol so long as it remains affordable to a few elites of society. In other
words, relative scarcity, resulting in high price, defines goods and services to be a
status symbol. This point has been emphasized aptly by Marshall (1891) in the
context of education. He says, ‘if most people become literate, then literacy will
no more be a qualification.’ This applies to higher educational qualifications also.
Check Your Progress

1. What leads to social stratification?
2. When does an item lose its status symbolism?
11.3 SOCIAL CLASS CATEGORIES AND

CONSUMER BEHAVIOUR
While social stratification does not explain all consumption behaviours, it is certainly
relevant for some product categories. The first task marketers must perform is to
determine for their product categories, which aspects of the consumption process
are affected by the social class. This will generally require research in which relevant
measures of social class are taken and associated with product/brand usage,
purchase motivation, outlet selection, media usage, etc.
Product/brand utilisation often varies widely across social classes. Income
clearly restricts the purchase of some products such as expensive cars, perfumes,
etc. Education often influences consumption of fine art as well as mass media.
Occupation is closely related to leisure activities.
A product/brand has different meanings for members of different social
classes. Different purchase motivations exist for the same product across various
social classes. Individuals in higher socioeconomic classes use the credit card for
paying off for convenience, while those in the lower socioeconomic classes may
use the credit card to pay in instalments.
Having selected a segment based on usage rate, purchase motivation, or
product/brand meaning, the marketer must position the brand in a manner consistent
with the desired target market.
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Social Class Clothing, Fashion, and Shopping
Most people dress to fit their self-images, which include their perceptions of their
own social class membership. Members of specific social classes differ in terms of
NOTES what they consider fashionable or in good taste.
Lower middle-class consumers have a strong preference for T-shirts, caps,
and other clothing that offer an external point of identification. Upper-class
consumers are likely to buy clothing that is free from such supporting associations.
Upper-class consumers also seek clothing with a more subtle look. Social class is
also an important variable in determining where a consumer shops.
The Pursuit of Leisure
Social class membership is also closely related to the choice of recreational and
leisure-time activities. Upper-class consumers are likely to go to theatre and
concerts, to play bridge, and to attend college football games. Lower-class
consumers tend to be avid television watchers. Over the past decade or so,
however, a number of changes are increasingly being observed that point to a
further blurring of social-class lines with regard to leisure interests.
Saving and Spending
Saving, spending, and credit card usage all seem to be related to social class
standing. Upper-class consumers are more future-oriented and confident of their
financial acumen; they are more willing to invest in insurance, stocks, and real
estate. In comparison, lower-class consumers are generally more concerned with
immediate gratification; when they do save, they are primarily interested in safety
and security.
Social Class and Communication
Social class groupings differ in terms of their media habits and in how they transmit
and receive communications. When it comes to describing their world, lower-
class consumers tend to portray it in rather personal and concrete terms, although
middle-class consumers are able to describe their experiences from a number of
different perspectives. Such variations in response indicate that middle-class
consumers have a broader or more general view of the world, although lower-
class consumers tend to have a narrow or personal view, seeing the world through
their own immediate experiences.
Regional differences in terminology, choice of words and phrases, and
patterns of usage also tend to increase as we move down the social class ladder.
Selective exposure to various types of mass media differs by social class. Higher
social class members tend to prefer current events and drama, although lower-
class individuals tend to prefer soap operas, quiz shows, and situation comedies.
Higher-class consumers tend to have greater exposure to magazines and
newspapers than their lower-class counterparts. Lower-class consumers are likely
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to have greater exposure to publications that dramatize romance and the lifestyles Social Class
of movie and television celebrities.
Check Your Progress

NOTES
3. What is the behaviour of consumers belonging to different social classes in
terms of saving and spending?
4. How do lower-class consumers and middle-class consumers describe their
world?

QUESTIONS
1. Differentiation on the basis of standing and respect, that different persons

command, leads to social stratification.
2. If a product or service becomes an item of common use, it loses its status
symbolism.
3. Upper-class consumers are more future-oriented and confident of their
financial acumen; they are more willing to invest in insurance, stocks, and
real estate. In comparison, lower-class consumers are generally more
concerned with immediate gratification; when they do save, they are primarily
interested in safety and security.
4. When it comes to describing their world, lower-class consumers tend to
portray it in rather personal and concrete terms, although middle-class
consumers are able to describe their experiences from a number of different
perspectives.
11.5 SUMMARY
 Differential standing and position in society leads to classification into different

categories or classes. Differentiation on the basis of standing and respect,
that different persons command, leads to social stratification. Each stratum
differs from other strata in one or more attributes. Different social strata
have come to be known by a caste which also reflected social status. Each
social stratum is also known as social class; it is associated both with social
and economic factors.
 Social stratification refers to the process and its outcome that ascribe status
and position to different sections of population. Rank and order of different
strata and individual members within each stratum depict differential social
and economic positions and power that is embodied in each rank or position.
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Social Class  Social-political and economic achievements depend upon the availability of
opportunity and its exploitation by individuals. Access to opportunity is as
important as its effective utilization.
 After the adoption of new economic policy in 1990–91, more and more
NOTES
young men and women are opting for jobs in the private sector, where
individual skills and performance are considered relatively more important;
higher performing individuals rise rapidly in occupational hierarchy and earn
much more than those in government jobs.
 In the context of consumer behaviour, comparability requires difference in
social class or status and no differentials in rest of the facets. Mill’s method
of difference involves comparison of two instances, which resemble one
another in all material aspects, except that in one a certain cause is present,
while in another it is absent; effects of that cause are made manifest by the
difference that emerges from analysis based on comparison. In case of
consumer behaviour, difference pertains to style and the level of living of
different classes that is assumed to have arisen from class difference.
 The temporal flow of income and hence, purchasing power, is the most
relevant factor of status and social class in so far as consumer behaviour is
concerned. Therefore, what needs emphasis in this context is this economic
factor rather than social-psychological factors. Psychological and social
factors will lead nowhere if they are not supported by purchasing power.
 Income plays an important role in social class formation. Prominence of
income among determinants of social class arises from the fact that social
and psychological factors are often dominated by economic factors and
income and wealth are the major determinants among economic factors.
Income depends on the stage of development of the economy.
 The middle social class/income group is referred to as middle class. Similarly,
the other two income groups are also referred to as upper and lower social
classes.
 After the adoption of new economic policy in 1990–91, the Indian middle
class has not only become the centre of global attention as an important
segment of the large Indian market, but it has become dominant both in size
and economic standing.
 In the context of consumer behaviour, status symbols have an importance
of their own. Purchase of goods and services is guided partly by functionality
and partly by sociality. The role of functionality of purchases depends on
the usefulness of the product or service with respect to the satisfaction of
wants that fall in the domain of necessities or comforts and conveniences.
But sociality of the purchases is derived from the status symbol that is
associated with the possession or use of a particular product or service in
the given time–space configuration.
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 If a product or service becomes an item of common use, it loses its status Social Class
symbol. Any product or service will embody status symbolism so long as it

remains affordable to a few elites of society. In other words, relative scarcity,
resulting in high price, defines goods and services to be a status symbol.
NOTES
 Product/brand utilisation often varies widely across social classes. Education
often influences consumption of fine art as well as mass media. Occupation
is closely related to leisure activities.
 Social class membership is also closely related to the choice of recreational
and leisure-time activities. Upper-class consumers are likely to go to theatre
and concerts, to play bridge, and to attend college football games. Lower-
class consumers tend to be avid television watchers.
 When it comes to describing their world, lower-class consumers tend to
portray it in rather personal and concrete terms, although middle-class
consumers are able to describe their experiences from a number of different
perspectives. Such variations in response indicate that middle-class
consumers have a broader or more general view of the world, although
lower-class consumers tend to have a narrow or personal view, seeing the
world through their own immediate experiences.
11.6 KEY WORDS
 Social class: It is a division of a society based on social and economic

status.
 Comparability: It is the fact or quality of being similar and able to be
compared.
 Functionality: It is the fact or quality of being similar and able to be
compared.
 Sociality: It is the degree to which individuals in an animal population tend
to associate in social groups and form cooperative societies.

EXERCISES
1. How do the marketers exploit the envy factor?
2. How is the purchase of goods and services guided partly by functionality
and partly by sociality?
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Social Class Long-Answer Questions
1. ‘Psychological and social factors will lead nowhere if they are not supported
by purchasing power.’ Explain.
NOTES 2. ‘Relative scarcity, resulting in high price, defines goods and services to be a
status symbol.’ Elucidate the statement with the help of examples.

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Consumer Decision
BLOCK - IV Making
DECISION OF CONSUMERS
NOTES
UNIT 12 CONSUMER DECISION
MAKING
Structure
12.0 Introduction
12.1 Objectives
12.2 Stages in Consumer Decision Process – Situational Influence, Problem
Recognition
12.2.1 Factors Influencing Buying Decision: Situational Influence, Personal and
Social Influence, etc.
12.4 Summary
12.5 Key Words
12.0 INTRODUCTION
For many goods and services, the purchasing behaviour is a routine practice in
which the aroused need is satisfied in a habitual manner by repurchasing the
same brand. In such scenario, good past experience with the utility of the product
comes into play. This is called simple or routine decision making. However, if
something changes appreciably (price, product, availability, services), the
consumer may re-enter the full or extended decision making process and consider
alternative brands. This process by which consumers become aware of and
identify their needs; collect information on how to best solve these needs; evaluate
alternative available options; make a purchasing decision; and evaluate their
purchase is called consumer decision making. Let us study in detail about it in
the following unit.
12.1 OBJECTIVES

 Understand the meaning of consumer decision making
 Explain the ways of analysing consumer buying decisions
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Consumer Decision
Making 12.2 STAGES IN CONSUMER DECISION PROCESS
– SITUATIONAL INFLUENCE, PROBLEM
RECOGNITION
NOTES
Consumers are never completely rational while making purchase decisions. A
completely rational decision would require, before purchase, the analysis of the
features and characteristics of a product as well as other similar competing products.
Moreover, this is not possible due to two reasons. First, consumers have limited
mental resources; second, they have limited free time. Marketers can use these
factors to their benefit.
There are two major kinds of mental processing a consumer can make to
tackle a problem at hand. One is systematic processing, which involves in-depth
analysis and scrutiny of every stimulus in the environment. The other is heuristic
processing, where one takes mental short-cuts to arrive at a decision. One of the
more popular heuristic decisions that human beings seem to take is the ‘like-agree’
heuristic, where consumers tend to make similar decisions to the ones taken by
people they like.
When one makes a decision to solve a problem at hand, it is called problem
solving. Figure 12.1 demonstrates the systematic procedure that buyers undertake
in order to select the appropriate purchase that can solve their problem.
Fig. 12.1 Consumer Decision-Making Process
The decision-making process undertaken by consumers regarding potential market

transaction before, during, and after buying a product or service is called
‘Consumer Decision-Making Process’.
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In general, decision-making is the logical process of picking a course of Consumer Decision
Making
action from several alternatives. For example, shopping, or deciding what food to
eat. Decision-making is deemed to be a psychological construct where there has
to be commitment to action. That is, assuming, based on observation, that people
have made a commitment to effect the action. NOTES
There are three ways of analysing consumer buying decisions:
 Economic models: Largely quantitative, they are based on the predictions
of the consumer’s rationality and his near-perfect knowledge. In this case,
consumers maximize their utility.
 Psychological models: These models are focused on cognitive and
psychological processes. Motivation and need recognition are two examples
of this model. These models are more qualitative and they build on
sociological factors, like cultural and family influences.
 Consumer behaviour models: Majority of the marketers use these models.
They typically are a mix of economic and psychological models.
According to Nobel laureate Herbert Simon, it is impossible for human beings
to be completely rational during economic decision-making. He says that a complete
analysis would make a decision complex. Simon also claims that the ability of
human beings to process information is very limited. Buyers’ decisions are often
affected by emotional and non-rational considerations. Their attempts at being
rational are only partly successful.
12.2.1 Factors Influencing Buying Decision: Situational Influence,
Personal and Social Influence, etc.
There are several factors which influence the buying decision. These can be broadly
categorised as situational, personal, social and other factors. Where situational
factors include decisions related to choice criteria or buying task, and market
offering, personal influences include factor like learning, attitude, perception, etc.
and social influences includes class, interests, lifestyle, consumption pattern, etc.
Choice criteria are the various features and benefits a customer uses when evaluating
products. These factors provide the basis for deciding to purchase one brand or
another. Different members of the buying group may use different choice criteria.
A child may use style as a criterion when choosing shoes whereas a parent may
use price. Choice criteria can change over time due to changes in income through
the family life cycle, change in circumstances or changes in the attitude of an
individual. For instance, as income increases, price may no longer be a choice
criterion but may be replaced by status.
 Technical criteria are related to performance of the product and include
reliability, durability, comfort and convenience.
 Economic criteria concern the cost aspects of purchase and include price
and running costs.
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Consumer Decision  Social criteria concern the impact that the purchase makes on the person’s
Making
perceived relationships with other people and influence of social norms on
the person. For instance, purchase of a Mercedes may be a status
consideration. Social norms such as convention and fashion, or acceptance
NOTES by the peer group can also be important choice criteria.
 Personal criteria concern how the product relates to the individual
psychologically. Self image is a customer’s personal view of himself. Choice
of brands may be influenced by his need to enhance self image. Some brands
are often associated with upwardly mobile people. They act as symbols
and serve as status satisfying products.
 Risk reductions can affect choice decisions since some people are risk
averse and choose safe brands.
 Risk averse consumers will not buy new brands and will buy only established
brands with the image of being a safe choice. Some brands may also be
rejected because they have been manufactured by companies that have
offended a customer’s moral code of conduct.
 Several choice criteria may be of an emotional nature. Customers do not
make decisions only on the basis of rational decision criteria. Emotional
criteria may be driven by emotions or moods of individuals.
A student joins a college because his father is an alumnus of the college. A
customer may like a brand because it is associated with a cause which is
very dear to him. A customer may be willing to buy an expensive holiday
package because he has got the promotion that he desperately wanted. A
customer may form a favourable image of a brand because he likes its
humourous advertisement or is impressed with its courteous salespeople. It
is important that a company ensures that a customer is always treated
respectfully and with warmth. In times of product parity, a customer will
buy from a company who has been nice with them. Nicety can be a huge
differentiator, especially in services, and it does not come easily to most
people.
 Customers evaluate a product on the choice criteria that are important
to them. It is important that a company understands the choice criteria
of its target market. The company’s designers should ensure that the
product has higher level of performance on the choice criteria that are
important to its target market. Similarly, advertising and salespeople
should highlight the features and benefits which are important to the
target market.
 Choice criteria do undergo changes over time even for the same
customer. These changes can be due to competitive activities, or due to
changes in the customer’s internal or external factors. For instance, a
customer may want a luxury car as a replacement for his older model
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either because his income has increased (income is an external factor Consumer Decision
Making
related to the customer)—he seeks reference group conformance by
wanting status due to possession of a product (which is his motivation,
an internal factor related to the customer)—or because competitors have
offered more luxurious cars at lower prices making them more NOTES
affordable.
The Buying Situation
Customers spend different amount of time and effort in different purchase decisions.
The level of involvement of the customer depends on the type of product, the level
of perceived risk, the consumer spend and the purchase consequences.
(a) Extended problem solving
The customer spends a huge amount of time and effort in the decision-making
process. Extended problem solving involves a high degree of information search
and a close examination of alternative solutions using many choice criteria8. It is
important to make the right choice since cognitive dissonance is very high if the
correct decision is not made.
 Three conditions primarily characterize extended problem solving situation.
Alternatives are differentiated and numerous, there is high involvement in
the purchase situation i.e., purchase is personally relevant and important,
and all alternatives may possess desirable features that others do not have9.
If alternatives are perceived as similar, then less time is required in
assessment.
 A customer will evaluate alternatives rigorously if the product’s
possession affects his self image. A customer has a view of himself,
which he regularly reinforces by the choice of products that he buys.
Similarly, other people evaluate him by the products that he possesses.
Therefore, a customer is very vigilant when he is buying a conspicuous
product, because social acceptance and appreciation is dependent on
his buying the right product.
 A customer’s involvement in a purchase is high if the perceived risk of buying
a wrong product is high. Risk is high when the product is expensive and is
bought infrequently. A customer also faces social and psychological risks,
especially when he is buying a conspicuous product.
 When the product provides pleasure, as is the case with a holiday package,
the customer ensures that everything is to his liking, and that nothing should
distract him from the pleasure that he is seeking. This is also true when a
customer is planning a celebration.
In extended problem solving situation, a customer will not make a decision
until he has evaluated all his options. A company should enable customers
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Consumer Decision to evaluate its product by providing them detailed information about its
Making
products and those of its competitors. Advertising and sales force can provide
such information and it must be aimed at appropriate motivations of various
target segments. It can also enable him to try its product as well as those of
NOTES its competitors.
(b) Limited problem solving
The customer has bought and used the product earlier and he recollects his
experience with the product from his memory. He will buy the product if his
experience with the product has been good, but he may also make some external
search and evaluation of any new features and benefits. Since the customer is
likely to buy the product that he has bought earlier, other companies have to
motivate the customer to start the search and evaluation process from the beginning.
Marketers can change the attitudes of consumers towards low involvement
products by adding beliefs or changing their importance. They have to add
unexpected features and benefits to move the customer away from buying the
product that he has been buying. The customer needs to sit up and consider if he
is missing something very important by continuing to buy the same product, for
instance, cooking oil doing good to the heart.
(c) Habitual problem solving
The customer buys the same product without even considering the alternatives.
He is extremely satisfied with the product, or does not consider the product
important enough to warrant his spending time in a new search and evaluation
process. If the incumbent company continues to advertise and be visible, the
customer will continue to believe that he is making the right choice. The outsider
company has to advertise profusely, and be seen and heard everywhere. It also
has to provide lucrative incentives, which may induce the customer to try the new
brand. It is a difficult game, because most of the time, it means beating cult brands.
(d) Household decision-making process
The household is one of the most important social groups that exerts influence on
individual decision making. The extent of these influences depends on the stage of
the family life cycle as this determines the kind of decisions its members make.
The demographic factors of age, marital status and the presence of children in the
family play a major role in shaping individual and joint purchase behaviour.
Marketers and advertisers can use the information on the family life cycle to develop
strategies that conform to the unique needs and circumstances of their target
markets. As the demographic structures of the society change, the family life cycle
itself may need to be modified as new types of family forms appear. As families
change, marketers get opportunities to develop new products and reposition old
ones.
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The family also acts as one of the most important reference groups for Consumer Decision
Making
individual consumers. Discussions about products, brands and choice criteria occur
often among family members. Many products also involve joint decision making
among the members of a household. The desires, attitudes, incomes, cultural
background and personalities of family members play a crucial role in the overall NOTES
outcome of a particular decision.
Children learn various norms of consumption from family members first,
subculture and social class that a family belongs to, influences and shapes an
individual’s behaviour as a consumer for life. Different members of the family
play varying consumer roles depending on the type of decision making that is
involved. The dynamics of group decision making apply in case of a purchase
decision by a household unit. The differences in the influence of members
usually stems from the type of product to be purchased. For instance, for
groceries, the wife is the predominant influencer and buyer, while for financial
products, it is the chief male member of the family and for a bike, a teenage
kid in the family has a predominant say. However, with changes in the family
structure, such stereotypes are undergoing a change. Role reversals or role
sharing is becoming more common. The role of wives in buying cars, or planning
investments, and the role of husbands in buying groceries cannot be
underestimated. And kids are becoming more influential even for high-
involvement products such as cars, planning vacations, consumer durables,
etc., besides becoming independent in taking decisions for products that are
meant for their self-consumption. Therefore, marketers need to give careful
consideration to the dynamics of the household decision-making process while
assessing the role of each member in this group.
Personal Influences
Various factors influence the decision-making process of a consumer. Some of
these are internal factors, or personal influences that are individualistic in nature.
These factors are not visible, though they influence the consumer to a great
extent. Learning, perception, motivation, attitude, self-concept, etc., are some
such factors. The processes by which these factors influence consumers have to
be examined and understood by the marketer by conducting appropriate research.
The effect of these factors cannot be verbalized by the consumer, as he may not
be able to realize their influence on him. For instance, motivation is one such
factor about which traditional surveys reveal little, as the consumer is not able to
tell the exact reasons for opting for a particular choice. Qualitative, exploratory
research using alternative methods such as projective techniques, word
completion tests are used to ascertain consumer motivations. You have already
learnt about these in earlier units.
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Consumer Decision Social Influences
Making
Besides the internal factors, external factors also influence consumer behaviour.
These factors are not individualistic and are external to the individual. These factors
NOTES include culture, subculture, social class, reference group and family influences.
They are associated with the groups that the individual belongs to and interacts
with. You have already learnt about them in earlier units.
The buying process starts when the buyer recognises a problem or need.
Problem recognition results when a consumer recognises a difference of
sufficient magnitude between what is perceived as the desired state of affairs
and what is the actual state of affairs, enough to arouse and activate the decision
process. The ‘actual state’ refers to the way in which a need is already being
met and the ‘desired state’ is the way a person would like for the need to be
satisfied. Consumer information processing and the motivation process are
highly relevant here. Consumers must become aware of the problem or need
through processing of information arising internally or externally. They then
become motivated. Thus, the process of problem recognition means that the
consumer becomes aroused and activated engage in some purposeful purchase-
decision activity.
This motivation to resolve a particular problem, however, depends on two
factors-the magnitude of the discrepancy between the desired and actual states,
and the importance of the problem. A discrepancy may exist between the
consumer’s actual and desired state, but it may not be likely to be large enough to
motivate him to proceed further in the decision process. So also, consumers facing
time and or budget constraints will attempt to solve only the most significant problems
as they perceive them.
Problem recognition must also result in the problem being sufficiently
defined if the consumer is to engage in meaningful behaviour aimed at solving it.
Sufficient problem definition occurs for the consumer to be able to act on it in
many problem recognition situations. Situations may exist, where the consumer
may not have a clear definition of the problem, even though problem recognition
has occurred. These cases of problem recognition and definition may often
complex. Illustrating the potential complex nature of problem recognition and
the consumer’s decision process is the fact that consumers often exhibit delays.
In an exploratory study (Eric Greenleaf and Donald Lehmann) the reasons or
causes why consumer delay making decisions for major purchases, five causes
were found. They are (i) difficulty of selecting the best brand, (ii) time pressure,
(iii) perceived risk of product performance, (iv) uncertainty, and (v) task
avoidance and unpleasantness.
Figure 12.2 presents a view of the problem recognition process and factors
that influence it.
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Consumer Decision
Making
NOTES
Fig. 12.2 Consumer Problem Recognition Process
Research on problem recognition: A recent stream of research on problem

recognition has viewed the process as being a function of the congruity between
the positive or negative valence values of some perceptual stimulus and the
respective positivity, negativity values for some evoked referent. For example,
a consumer may see a friend‘s new car (perceptual; stimulus) and compare it
to his own old model (evoked referent). If the new car is perceived to be
significantly better than his old one, then problem recognition would be expected
to occur.
Another research direction taken has been to view problem recognition
longitudinally. Instead of focusing on one instance of problem reconition, the effect
of repeated occurrence of similar problems is considered. For example, consumers
may have problem recognition triggered in three ways: by the actual state changing,
by the desired state changing, or by a combination of both changing. As the consumer
experiences the problem several more times, a ‘style’ of recognising the need
begins to develop.
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Consumer Decision Types of problem recognition: Rather than viewing problem recognition as
Making
occurring in only one way, it is useful to understand that there may be varying
types of problem-recognition process. One approach has been to develop a
classification system of situations based on the factors of immediacy of required
NOTES solution and whether or not the problem was expected. The resulting matrix of
problem types is shown in Table 12.1 consisting of routine, emergency, planning,
and evolving situations.
Table 12.1 Types of problem recognition
Immediacy of Solution
Expectancy of Problem Immediate solution Immediate solution
required not required
Occurrence of problem expected Routine Planning
Occurrence of problem unexpected mergency Evolving
Immediacy of problem solution is a relevant factor in determining the decision

time horizon, that is, how soon a problem solution is needed will affect the length
of decision process and intensity of decision effort. Expectancy of the problem
can affect such facets as the sources of information used in the decision process,
for example, as well as the number of alternatives considered.
Routine problems are those in which the difference between actual and
desired states is expected to occur and an immediate solution is required.
Emergency problems are those that are unexpected in which immediate solutions
are necessary. Planning problems occur when the problem occurrence is expected
but an immediate solution is not necessary. Evolving situation occur when the
problem is unexpected but no immediate solution is required.
Situations leading to problem recognition: There are a number of situations
which may cause the occurrence of consumer problem recognition. The most
significant reasons are:
(a) Depleted or inadequate stock of goods
(b) Discontentment with the stock of goods
(c) Changing environmental circumstances
(d) Changing financial circumstances
(e) Marketing activities
Results of problem recognition: Once the consumer becomes aware of a
problem, two basic outcomes are possible. One result is for the consumer, in
effect, not to pursue any further problem solving behaviour. This may occur if the
difference between the consumer’s perceived, desired, and actual states is not
great enough to cause him to act to resolve the problem.
The second result that may occur from the problem recognition process is
for the consumer to proceed into further stages of decision making activity by
engaging in information search and evaluation.
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Marketing Implication of Problem Recognition Consumer Decision
Making
The problem recognition stage of consumer decision making is significant to
marketers in the sense that the process can be effectively measured and can be
used to develop and evaluate marketing strategies. NOTES
 Measuring problem recognition: It has been found that the best way to
assess the problem recognition process is through scaling techniques, which
measure purchase intentions. Purchase intentions incorporate the consumers
attitudes towards the product and may be viewed as the mental forerunner
of buying behaviour.
 Activating problem recognition: Promotion is used as an important
vehicle by marketers to cause problem recognition occur among potential
customers. Activities may be focused (i) influencing the consumer’s desired
state, (ii) influencing consumer’s perceptions of the actual state, or (iii)
influencing the timing of problem recognition.
 Utilising problem recognition information: Information on buyer
intentions may be useful to the marketer in (a) analysing purchase intention
categories, and (b) analysing conversion of purchase intentions.
 Analysing purchase intention categories: By measuring the speed,
direction, and size of shifts in buying likelihoods for a product over several
periods in various market segments, the marketer may discover what trends
are taking place as well as the timing and size of their potential impact on
scales.
 Analysing conversion of purchase intentions: Significant implications
may also be found in the marketing strategy by investigating the relationship
between purchasing intentions data allows the marketer to understand the
dynamics of marketplace activity. He can obtain a clearer picture of which
brands are converting predispositions into buying action. This information
can help him to determine the point at which marketing success or failure is
occurring and to isolate the reasons.
 The outcome of problem recognition could be for the consumer to continue
into other stages of decision making or to be restrained by environmental
circumstances from further purchasing behaviour.
Check Your Progress

1. What would a completely rational decision require?
2. Define Consumer Decision-Making Process.
3. What is economic criteria in choice criteria?
4. How can Marketers can change the attitudes of consumers towards low
involvement products?
5. What is actual state and desired state in problem recognition?
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Consumer Decision
Making 12.3 ANSWERS TO CHECK YOUR PROGRESS
QUESTIONS
NOTES 1. A completely rational decision would require, before purchase, the analysis
of the features and characteristics of a product as well as other similar
competing products.
2. The decision-making process undertaken by consumers regarding potential
market transaction before, during, and after buying a product or service is
called ‘Consumer Decision-Making Process’.
3. Economic criteria concern the cost aspects of purchase and include price
and running costs.
4. Marketers can change the attitudes of consumers towards low involvement
products by adding beliefs or changing their importance. They have to add
unexpected features and benefits to move the customer away from buying
the product that he has been buying. The customer needs to sit up and
consider if he is missing something very important by continuing to buy the
same product, for instance, cooking oil doing good to the heart.
5. The ‘actual state’ refers to the way in which a need is already being met and
the 'desired state' is the way a person would like for the need to be satisfied.
12.4 SUMMARY
 A completely rational decision would require, before purchase, the analysis

of the features and characteristics of a product as well as other similar
competing products. Moreover, this is not possible due to two reasons.
First, consumers have limited mental resources; second, they have limited
free time. Marketers can use these factors to their benefit.
 There are two major kinds of mental processing a consumer can make to
tackle a problem at hand. One is systematic processing, which involves in-
depth analysis and scrutiny of every stimulus in the environment. The other
is heuristic processing, where one takes mental short-cuts to arrive at a
decision.
 There are three ways of analysing consumer buying decisions: Economic
models, Psychological models and Consumer behaviour models.
 There are several factors which influence the buying decision. These can be
broadly categorised as situational, personal, social and other factors. Where
situational factors include decisions related to choice criteria or buying task,
and market offering, personal influences include factor like learning, attitude,
perception, etc. and social influences includes class, interests, lifestyle,
consumption pattern, etc.
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 Choice criteria are the various features and benefits a customer uses when Consumer Decision
Making
evaluating products. These factors provide the basis for deciding to purchase
one brand or another. Different members of the buying group may use
different choice criteria.
NOTES
 Customers spend different amount of time and effort in different purchase
decisions. The level of involvement of the customer depends on the type of
product, the level of perceived risk, the consumer spend and the purchase
consequences.
 The buying process starts when the buyer recognises a problem or need.
Problem recognition results when a consumer recognises a difference of
sufficient magnitude between what is perceived as the desired state of affairs
and what is the actual state of affairs, enough to arouse and activate the
decision process.
12.5 KEY WORDS
 Consumer Decision-Making: It is the process by which consumers

become aware of and identify their needs; collect information on how to
best solve these needs; evaluate alternative available options; make a
purchasing decision; and evaluate their purchase.
 Problem-solving: It is the act of defining a problem; determining the cause
of the problem; identifying, prioritizing, and selecting alternatives for a
solution; and implementing a solution.

EXERCISES
1. What are the two major kinds of mental processing a consumer can make
to tackle a problem?
2. Write a short note on the concept of choice criteria.
3. What are the types of problem recognition?
1. Explain the ways of analysing consumer buying decisions.
2. Explain the concept of buying situation in detail.
3. Discuss the results and marketing implication of problem recognition.
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Consumer Decision
Making 12.7 FURTHER READINGS

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Purchase and Action
UNIT 13 PURCHASE AND ACTION

Structure
13.1 Objectives
13.2 Information Search and Evaluation of Alternatives and Selection
13.3 Purchase and Post-Purchase Evaluation of Decision
13.4 Outlet Selection
13.6 Summary
13.7 Key Words
13.0 INTRODUCTION
When people realize the need of something the buying decision process starts.
They acknowledge that they have a problem and the solution must be devised.
At this point, the customer may or may not know what will solve their problem
but they want to change their situation. The next phase of the buying decision
process begins when the customers start looking for information that will help
them solve their problem. At this point, usually the customers turn to online
research and conduct searches to find a viable solution. Once the initial information
search is complete, customers start evaluating what they explored and learned.
They begin to evaluate their options to determine which the best solution for
their problem is. At this point of purchasing decision process, the customers are
ready to make the purchase. They have made their decision about which product,
service, brand, or solution is the best for them, and they are ready to buy. At the
last step of the five-stage consumer decision-making process, the path to buying
is complete. Now is the time when the customer reflects on whether they made
the right decision. In the previous unit, situation influence and problem recognition
steps were discussed. This unit deals with the process of a purchase. Let us
study in detail in the following unit.
13.1 OBJECTIVES

 Understand the process involved while making a purchase
 Explain the analysis of a product’s alternatives available in the market
 Discuss the causes of dissonance in the process of purchase
 State the factors on the basis of which the outlet selection is made
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Purchase and Action
13.2 INFORMATION SEARCH AND EVALUATION
OF ALTERNATIVES AND SELECTION
NOTES The consumer, after recognizing the need for a product, searches for alternatives
that may fulfil his needs, and evaluates these alternatives on the basis of various
choice criteria.
 The consumer first conducts an internal search. Internal search involves
retrieving relevant information from his memory, information about similar
purchase decisions made earlier by the consumer, or information about the
product received from personal or non-personal sources that was stored in
the memory for future usage. Such information includes decisions about
choice criteria, brands included in the consideration set, information received
from reference groups or advertisements related to the product, etc.
 In case the internal search for information is insufficient, the consumer goes
in for external search. External sources involve information collection from
personal sources such as family, friends and non-personal or commercial
sources including advertisements, retailers and other media sources.
 Third party reports may provide unbiased information to consumers about
a company and its offerings. Retailers and media reports by independent
agencies are therefore particularly credible sources of information for
consumers.
 Personal experience with the product is often the most important factor
while evaluating the product. Consumers may seek limited trials of the product
before buying, or may ask for demonstrations.
 Information search aims to create an awareness set, which is an arrangement
of brands that may be able solve the problem.
 An advertisement may not only excite the search for more unbiased
information related to the advertised product but may also induce external
information search about rival brands.
Evaluation of Alternatives and Purchase
The following considerations need to be borne in mind before taking purchase
decisions:
 The awareness set has to be reduced to a smaller set of brands for serious
consideration through screening. This smaller set is called the evolved set
or the consideration set.
 The screening process to narrow down the choice to a few brands might
make use of a different choice criteria from those used when making the
final choice. Consumers use various types of rules while arriving at the set
of possible brands that can be considered for purchase.
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 Involvement can be explained as the degree of perceived relevance and Purchase and Action
personal importance accompanying a particular purchase decision. In high

involvement decisions, the consumer carries out extensive evaluations of
the brands. High involvement purchases typically incur high expenditure or
personal risks. The consumer spends more time and effort in arriving at the NOTES
‘right’ decision. The evaluation of choices is more stringent and the consumer
uses many choice criteria on which to evaluate various brands.
 Low involvement products incur less expenditure and personal risk, and
hence, the consumer spends less time and effort in such decisions. In such
purchases, simple and lesser evaluative criteria are used. Consumers make
use of simple choice tactics for reducing time and effort in buying the product
rather than maximizing the results of the purchase.
 In high involvement products, consumers assess the outcomes of the
purchase and others opinion about it. The attributes that are weighed heavily
will influence the decision more strongly.
 Low involvement products are characterized by awareness, trial and repeat
purchases. The restricted importance of the product does not assure
reasoned evaluation of alternatives. Awareness comes before trial and if the
latter is satisfactory, purchase is repeated. This behaviour tends to turn into
a habit unconsciously or forms certain attitudes that come before purchase
behaviour. Awareness is followed by behaviour that is followed by attitude.
Any of the brands of the evoked set can be taken to be acceptable. Decision
does not involve the consumer, and he is likely to be satisfied with the product
without much conscious deliberation about it.
 In high involvement situations, marketers should give a good amount of
information to the customers because they need such information for
evaluating the brands that they are considering. More repetitions of
communication may not be needed. Print media allows an elaborated
and repeated scrutiny of information which is helpful when a customer
is comparing brands. Communication should focus on how the customers
view the influence of important others on the brand choice. Salespeople
should ensure that the customer understands the importance of attributes
of a product and also ensure that he correctly evaluates their
consequences.
 In low involvement purchase, trying to achieve top of the mind awareness
by the means of advertising and positive reinforcement like sales promotions
to gain trial may be more vital than providing information. The customer is
considered a passive receiver and does not seek information actively.
Therefore, advertisements need to be short with a high repetitive value of
the key points. Television allows passive reception of messages and may
be the best medium for an advertiser to communicate.
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Purchase and Action
13.3 PURCHASE AND POST-PURCHASE
EVALUATION OF DECISION
NOTES Once the customer has zeroed in on the right choice, he makes a purchase. The
product can be purchased from retail stores, online, ordered by telephone or
purchased directly from the company. The purchase process itself involves several
more decisions. It involves decisions about the place and mode of purchase,
payment terms and conditions, delivery of the product, instalment, training for
usage of the product, etc. Marketers can study each of these processes to discover
sources of competitive advantage. Marketers can either conduct these activities
themselves, or they may employ intermediaries to perform these tasks. For instance,
the goods may be delivered by the retailer while engineers of the company may
install the products and train the customer. In case of high involvement products,
the purchase process may itself take a long time. It may stretch from a few days to
a few months or longer. The marketer has to take particular care of the customer
during this crucial period in their relationship.
Post purchase concerns that customers may face are called cognitive
dissonance. These concerns arise out of the uncertainty of making the correct
choice. This happens because choosing one product means rejecting the attractive
features of the alternatives. Dissonance increases with expense of the purchase,
difficulty of making decisions (many alternatives, many choice criteria and each
alternative offering benefit not available with others); risks involved in the purchase
(functional, psychological or social risk) and when decision is irrevocable shortly
after purchase. Car buyers will look at ads and brochures of the models and want
reassurance from others who own the same model. Car dealers can build confidence
in the buyer by interacting with recent purchasers to reinforce the feasibility of
their decision and also to confirm the quality after sales service available.
13.4 OUTLET SELECTION
Outlet means a point from where goods are sold or distributed and selection
means the action or fact of carefully choosing something as being the best or the
most suitable. The outlet selection can be made on the basis of the following
factors:
 Outlet image
 Advertising
 Outlet location and size
 Consumer characteristics
 Point of purchase displays
 Price reductions
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 Store layout Purchase and Action
 Store atmosphere
 Outlet Image: It concerns all the traits related with the store. Advertisers
utilize these measurements to plan retail procedures. First they attempt to NOTES
create a great picture and present the clients with suitable alternatives of
their needs. Then they combine the two to advertise themselves as a retail
location. They extend their continuous support and give a great deal of
importance to it. This way, an outlet image is created in the mind of a
purchaser.
 Advertising: Retailers use value publicizing to attract customers to the stores.
Most of the people visit the stores to purchase the publicized products;
however, they wind up purchasing different items. In addition, cost is a
significant factor for buying an item.
Customers see the value of the advertisement as decrease in cost. Numerous
advertisers advertise the ordinary cost just as the offered value, demonstrating
a markdown.
Different variables like item classification, brand, starting value level, customer
gathering and retail source are considered for value promoting.
 Outlet Location and Size: Store location is a significant factor for the
customers to decide their purchase as it is likely for them to visit the store
that is nearest to the locality. After considering all the factors, it can be said
that the bigger stores are wanted more than the modest stores. Customers
will prefer a modest store that is near to the place they live for minor things,
but for buying things of excessive cost, they will take the difficulty of going
to a bigger store, be it somewhere far from their place of living.
Fig. 13.1 Outlet Selection
Location affects a customer’s purchase decision. Customers like plentiful

space to move around and admire good presentations of the items. Area of
the store may not be such a huge amount of significance to numerous as
might be different factors like the value, the assortment, store quality and
tidiness and the vibe of the store.
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Purchase and Action  Consumer Characteristics: Customer qualities must be examined in light
of the fact that they give an insight of the buyer’s perception. Various
customers have various reasons for shopping.
 Point of Purchase Displays: These are imperative to persuade the
NOTES
customer to settle on a choice. Their effectiveness increases when combined
with promoting.
 Price reductions: Price reductions can be done in the form of limits,
coupons, endowments, etc. When brands offer a reduced price to their
customers, their popularity increases and they move quickly up the ladder
in comparison to the contending brands. After getting a reduced price of
their purchase, the buyers may stock the item in a prominent amount than is
wanted. This is known as stockpiling.
 Store layout: This is a significant factor in store retailing. Unmistakably the
item shown with great lighting and perceivability, draw in more noteworthy
consideration of purchasers which increases the chances of it being sold.
The store format ought not to be tedious, and should be updated with the
time.
 Store atmosphere: An amiable environment of a store affects an individual
mentally by making him spend more time there and purchase more items.
In atmospherics the importance is given to lighting, floor design,
introduction installations, colours, sound, dress, conduct of sales
representative.
 E-commerce
Electronic business or electronic commerce is the purchasing and selling of products
and enterprises, or the communicating of assets or information, over an electronic
platform, essentially the web. These business exchanges happen either as business-
to-business, business-to-purchaser, shopper-to-buyer or customer-to-business. The
terms Internet business and e-business are regularly utilized conversely. The term e-
tail is additionally at times utilized concerning the value-based cycles for internet
shopping. Anytime accessibility, the speed of access, the wide accessibility of
merchandise and ventures for the buyer, simple openness and global reach, Lower
cost, Personalization and item proposals are some of the benefits of e-commerce.
 Store Marketing Issue
There are several problems in store marketing or retail marketing which are as
follows:
1. A service cannot be illustrated.
2. Usage, production and sale of services take place simultaneously.
3. A service cannot be stored.
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4. These services cannot be protected through any other licences or any patents. Purchase and Action
5. These services cannot be separated from the service provider.

6. These services are inconsistent but not standardized.
7. Service providers have appointed few franchisees may face many problems NOTES
for service quality.
 Dealing with Complaints
The complaints raised by the customers can be authentic or a fallacy. Here are five
procedures that will help you handle a client protest in a smooth and expert way as
follows:
 Stay quiet
 Listen well: As the client vents out his annoyance and sees that you are not
responding, he will start to quiet down. The client needs to get into a quiet
attitude before the person in question can hear anything.
 Acknowledge the issue
 Know the fact
 Offer a solution and solve the issues
If you settle client objections effectively, you will comprehend their necessities
in a better way, hold them as faithful clients, and upgrade your business.
Check Your Progress

1. What happens in high involvement decisions?
2. What types of decisions are involved in a purchase process?
3. Define cognitive dissonance.
4. What is stockpiling?
5. What is e-commerce?

QUESTIONS
1. In high involvement decisions, the consumer carries out extensive evaluations

of the brands. High involvement purchases typically incur high expenditure
or personal risks.
2. Purchase process involves decisions about the place and mode of purchase,
payment terms and conditions, delivery of the product, instalment, training
for usage of the product, etc.
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Purchase and Action 3. Post purchase concerns that customers may face are called cognitive
dissonance.
4. After getting a reduced price of their purchase, the buyers may stock
the item in a prominent amount than is wanted. This is known as
NOTES
stockpiling.
5. Electronic business or electronic commerce is the purchasing and selling of
products and enterprises, or the communicating of assets or information,
over an electronic organization, essentially the web
13.6 SUMMARY
 The consumer, after recognizing the need for a product, searches for
alternatives that may fulfil his needs, and evaluates these alternatives on the
basis of various choice criteria.
 Involvement can be explained as the degree of perceived relevance and
personal importance accompanying a particular purchase decision. In high
involvement decisions, the consumer carries out extensive evaluations of
the brands. High involvement purchases typically incur high expenditure or
personal risks.
 Low involvement products incur less expenditure and personal risk, and
hence, the consumer spends less time and effort in such decisions. In such
purchases, simple and lesser evaluative criteria are used.
 Once the customer has zeroed in on the right choice, he makes a purchase.
The product can be purchased from retail stores, online, ordered by telephone
or purchased directly from the company. The purchase process itself involves
several more decisions. It involves decisions about the place and mode of
purchase, payment terms and conditions, delivery of the product, instalment,
training for usage of the product, etc.
 Outlet means a point from where goods are sold or distributed and selection
means the action or fact of carefully choosing something as being the best
or the most suitable. The outlet selection can be made on the basis of the
following factors:
o Outlet image
o Advertising
o Outlet location and size
o Consumer characteristics
o Point of purchase displays
o Price reductions
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o Store layout Purchase and Action
o Store atmosphere
 Location affects a customer’s purchase decision. Customers like plentiful
space to move around and admire good presentations of the items. Area of NOTES
the store may not be such a huge amount of significance to numerous as
might be different factors like the value, the assortment, store quality and
tidiness and the vibe of the store.
 Electronic business or electronic commerce is the purchasing and selling of
products and enterprises, or the communicating of assets or information,
over an electronic platform, essentially the web. These business exchanges
happen either as business-to-business, business-to-purchaser, shopper-to-
buyer or customer-to-business.
13.7 KEY WORDS
 Involvement: It is the fact or condition of being involved with or

participating in something.
 Choice criteria: It refers to the specific attributes or consequences that
are used by consumers to evaluate and choose from a set of alternatives.
 E-commerce: It is the commercial transactions conducted electronically
on the Internet.

EXERCISES
1. What is e-commerce?
2. State the store marketing issue.
1. Explain low involvement and high involvement purchases.
2. Illustrate the factors on the basis of which the outlet selection is made.

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Purchase and Action Kumar, A, K Singh. 2013. Consumer Behaviour and Marketing Communication:
NOTES
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190 Material
Organizational Buyer
UNIT 14 ORGANIZATIONAL BUYER

Structure
14.1 Objectives
14.2 Meaning and Nature of Organizational Buyer
14.3 Decision Approach and Purchase Pattern
14.4 Organizational Buyer Decision Process
14.6 Summary
14.7 Key Words
14.0 INTRODUCTION
A considerable share of the market for goods and services may be attributed to
organizational buyers besides individual buyers. Generally, organizational buyers
tend to be more sophisticated than ordinary consumers. They make buying decisions
for the companies they work for. Since their job involves buying for a company or
an industry, they face big risks like going with a new, possibly better (lower price
or higher quality) supplier whose product may later turn out to be problematic. Thus,
the fear of running this kind of risk is greater than the potential rewards for getting
a better deal. Organizational buyers include wholesalers, retailers, producers, etc.
This unit deals with the nature, decision approach and purchase pattern of
organization buying. Let us study in detail about the organizational buying in the
following unit.
14.1 OBJECTIVES

 Understand the meaning and nature of organizational buyer
 Explain the approach taken to decide a purchase
 Differentiate between organizational buyer and ordinary consumer
 Discuss the standard process of organizational buyer’s decision making
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14.2 MEANING AND NATURE OF
ORGANIZATIONAL BUYER
NOTES Organisation buyers are those who buy goods and services for the purposes of
further production, release and redistribution. The industrial buyers buy goods
and services for the purpose of increasing sales, cutting costs and supplying their
products to the customers at the lower costs consistent with quality.
Meaning and Definition
Fredrick E Webster and Yoram wind have defined organisational buying as “the
decision making process by which formal organisations establish the need for
purchased products and services, and identity, evaluate and choose among the
alternative brands and suppliers.”
Industrial consumer may be defined as “business or institutional organisations
that buy products services either to use in making other goods and services or to
use in their own business.” Today, the term organisational customer refers to not
only the business firms but also includes the government, retail institutions, other
service institutions like universities, colleges, financial firms like banks and social
organisations like Red Cross, Family Planning Foundation, etc. Thus, the scope
for marketing to institutions has got significantly enlarged and hence offers a challenge
to the marketer. For example the customers of MRF company include, besides
the above mentioned ones, Government and its agencies which need auto tyres
for their vehicles. Defence is an important government department needing auto
tyres. Municipal corporations, too, need them for their vehicles. And state transport
undertakings (STUs) need them as well. So for MRF the challenge is not only to
remain a leader in auto manufacturers’ purchases, and in the replacement market
for consumer purchases, but also in the government and its several agencies like
STUs and local bodies like municipalities.
Types of Industrial Consumers
According to Canfield there are three types of industrial consumers, which are as
follows:
(i) Manufacturers, who purchase goods for turning them in to finished goods
such as cotton, pig iron or sheets, and all types of raw materials.
(ii) Manufacturers and service organisations which buy goods for
consumption in the operation of their business, such as lighting equipments
and furniture and fixtures, fitting in a cinema hall.
(iii) Industrial distributors who buy for resale to industrial consumers. Industrial
consumers are concentrated in industrial areas where a large number of
industries are developed and located. Typical industrial buyers are in
extractive, processing, construction and transportation industries, public
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utilities, services and distributive industries, governmental institutions, Organizational Buyer
commercial institutions, specialised service industries (hotels, restaurants,

theatres, laundries, dry cleaners, tailoring and barber shops, etc).
The industrial market (also referred to as the producer /manufacturer /
NOTES
business market) consists of all the individuals or organisations who acquire goods
and services that enter into the production of the other products or services that
are sold, rented or supplied to others.
The major types of industries making up the industrial market are (a)
Transportation, distribution and storage (b) Banking finance and insurance (c)
Agriculture, forestry and fisheries.
Organisation buying is in one way similar to consumer buying since it is not
“organisations” making the buying decisions but people within those organisations.
But there are significant differences that must be understood by marketers in order
to succeed in the organisational market.
Purpose of Organisational Buying
Organisational buyers make purchase decisions in order to satisfy their goals, as
do the final consumers. But the goals differ. Organisations have the goals of
producing a good, providing a service, or reselling an item, and therefore, buy
products and services that will allow them to effectively engage in these activities.
Buyers may be for-profit operations or not-for-profit, product or service-oriented,
governmental or private. In all cases, organisational buying takes places in order
to produce, provide a service, or engage in resale. Organisational buying, therefore,
is the decision making processes by which organisations establish the need for
purchased products and services, and identify, evaluate, and choose among
alternative brands and suppliers.
Organisational buying activities have evolved significantly. Shifting from very
unsophisticated operations in which clerks with little expertise or specialisation in
purchasing did most of the buying, today even companies with as few as twenty
employees have a purchase. In this current complicated environment the purchasing
specialist attempts to satisfy the organisation’s product or service needs in a complex
process requiring balancing of relations with suppliers, colleagues, superiors,
product specifications, trade regulations, his or her personal reputation, price and
other factors.
Classification of Industrial Buyers
Industrial buyers can be classified into seven types:
1. Loyal buyer: This buyer remains loyal to a source year after year.
2. Opportunistic buyer: This buyer selects those vendors who will further
his or her long-term interests and drive a hard bargain.
3. Best-deal buyer: This buyer selects the best deal available at the time.
Self-Instructional
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Organizational Buyer 4. Creative buyer: This buyer tells the seller what he or she wants in the way
of a product, services and prices.
5. Advertising buyer: This buyer attempts to obtain advertising money as a
part of every deal.
NOTES
6. The defrauder: This buyer constantly negotiates extra concessions in price.
7. Nuts-and-bolts buyer: This buyer selects the merchandise offering the
best value.
Organisational Buyers versus Final Consumer
The same consumer behaviour concepts cannot be simply applied to individuals
engaging in purchasing behaviour as part of their job in the organisation because
the context is different. There are several ways in which organisational markets
and their buying behaviour differ from consumer markets and buying behaviour.
The major variations are in market structure and demand, buyer characteristics,
and decision processes, and buying patterns.
The organisational marketer should recognise that several factors related to market
structure and demands distinguish these buyers:
1. Geographical concentration: Buyers are more concentrated than in
consumer market. This situation is compounded when concentration of
specific industries is considered. For example, textiles are clustered
predominantly at Ahmedabad and Surat.
2. Fewer, larger buyers: Buyers are also concentrated by size in the
organisational market. Organisational marketers look for a few good
customers.
3. Vertical or horizontal markets: Organisational buyer marketers may be
either vertical or horizontal. In a vertical market the product or service
would be sold to virtually all organisations in perhaps one or two industries.
Certain drilling bits are intended only for use in the oil exploration industry.
Certain knitting materials are used in hosiery industry only. Downturns in
the target industry may hit vertical marketers extremely hard. Horizontal
markets are those which are very broad, in which the product or service is
sold to a wide spectrum of industries. Computer services, office supplies,
etc., are not radically affected by shifts in any one industry, as effort will be
focused on other industries not affected by changing technology or tastes.
4. Derived demand: Organisational demand is derived from consumer
demand. If the demand from consumers slumps, the suppliers face reduced
demand for their products.
5. Inelastic demand: Total industry demand for industrial goods is relatively
unaffected by changes in price in the consumer markets. If all tyre producers
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were to raise their tyre prices by ` 50/- to auto manufactures this would Organizational Buyer
have little effect on demand. Auto manufacturers would continue to purchase

roughly the same amount, since tyres represent such a small price in the
overall cost of the finished automobile, and a fractional increase in automobile
price will have no perceptible effect on the consumer. Similarly, an overall NOTES
increase in the price of computer chips will have little overall effect on the
price of the finished computer and, therefore, little, if any, impact on total
computer demand. While this situation is true for industry demand, an
individual firm’s demand may be strongly affected by a price change.
6. Fluctuating demand: Organisational demand is characterised by much
greater fluctuation than that of consumer markets. Generally, organisational
buying is closely related to the economic cycle. When demand for consumer
goods is up, industrial goods are also up; and organisational buyers may
build large inventories of raw materials and component parts and may to
their plant and factories, office equipment and other items. When the economy
slows down or reverses, manufacturers, wholesalers, and retailers may use
up existing inventories and postpone purchases of supplies, equipment, and
so forth.
There are several important organisational buyer characteristics typically cited
that differentiate them from final consumers.
1. Group involvement: As products purchased by organisational buyers are
often costly and complex, a group of individuals may be involved in the
decision.
2. Technical knowledge: Professional buyers, generally quite knowledgeable
about the products or services being bought, make the purchase decision
or may be directed by other technically competent individuals (such as
engineers) to the appropriate purchase decision based on a group decision.
These buyers are known as purchasing agents in industrial, governmental,
and institutional organisations.
3. Rational motivations: Organisational buyers are often strongly directed
by rational motivations. Such factors are generally economically based and
can be translated into rupees so that costs and benefits may be carefully
weighed. In addition, the buyers are also influenced by emotional motivations,
and these are often difficult for a vendor to assess. Many personal and
individual factors may play a significant role in purchasing behaviour, but
they are difficult to calculate.
In this section, we will go through the characteristics of organizational buyers based
on some predefined factors.
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Organizational Buyer Nature and Size of Customers
With the number of customers in business markets being small, 80 per cent of the
output is sold to 20 per cent of customers whose number may be fewer than a
NOTES dozen. In such a situation, every single customer is of paramount importance.
Because order sizes are large, it becomes economical to sell directly from
manufacturers to customers, dispensing with the services of middlemen. In view of
the importance of large customers, it is sensible to invest in close, long term
relationships with them. A dedicated sales team is needed for servicing large
accounts.
Complexity of Buying
In business purchases that involve heavy investment of money and products that
are new to the company, there are many people operating at different places.
While deciding, for example, which machine should be bought, several top
functionaries of the company, such as marketing director, production managers,
purchasing managers and even the Chief Executive Officer (CEO) may be involved
in one way or the other. The task of the sales department is to influence the maximum
number of customers. It may involve multi-level selling by a sales team instead of
an individual salesperson. The sales team should include people who have extensive
technical knowledge of the product to be sold. The CEO of the seller company
may also form a part of the sales team in case of high priced products (e.g.,
machinery).
Economic and Technical Choice Criteria
The economic and technical criteria determine business buying since buyers need
to justify their purchases to other members of the organization. Priorities for different
departments of the organization are different. Operations people, for example,
would be interested in knowing whether the output from the machine would be
large enough to meet their production targets. Similarly, the quality control
department would be interested in knowing whether the new machinery would
produce goods of adequate quality. Thus, the buying function is formalized by
establishing a purchasing department, which is guided by economic criteria, such
as life cycle cost and value-in-use analysis, rather than emotional choice criteria.
Risks
The contract being agreed upon before the product is often a main feature of
industrial markets. Suppliers may be selected and given long-term contracts for
the components of the products which are still at the development stage. The
seller is expected to contribute to the designing of the particular component and, in
some cases, the entire designing of the component may be left to him. Mahindra
and Mahindra, for example, while designing its multi-utility vehicle Scorpio for the
Indian market, involved suppliers in the design phase and awarded them long-
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term contracts. As the products are technical in nature, the seller may face Organizational Buyer
unforeseen problems once the work starts. The final product design and
development may take longer than planned, and the supplier may have committed
resources in terms of buying equipments and hiring relevant people. If the time to
market increases inordinately, the chances of the new product failing upon NOTES
introduction is higher. And, if this happens, the suppliers’ resource commitment for
the component may be wasted. More and more buyers are expecting their suppliers
to the share the risks involved in the development of new products for the long-
term supply contracts with them.
Buying to Specific Requirements
Business buyers draw a product specification and ask suppliers to make their
products according to that specification. In consumer markets, the product is
developed to meet a need of a market segment, but beyond that, meeting individual
needs would prove uneconomical. Customized products make a long-term
supplier–buyer relationship imperative. For instance, if the seller is selling heavy
equipment customized for the buyer, and if the buyer refuses to buy equipment for
some reason (for instance, shifts in consumer preferences for the goods sold by
the buyer, rendering the equipment being bought redundant, etc.), the seller may
not be able to get another buyer for it. In another instance, a seller may have
committed resources for supplying components in bulk to a buyer. If the buyer
switches suppliers, or no longer requires components, the committed resources of
the seller go waste. Therefore, in the business buying process, trust is a vital element
between the seller and the buyer. Else, problems such as reluctance of seller to
commit resources, payment issues, etc., would continually crop up between the
two parties. If trust is difficult to build, contractual obligations must be tight.
Nonetheless, business buyers understand the importance of quality and the
role it plays in their performance and rating in the marketplace. They know that
only if the quality of their products and services is good, they will be able to do
well. Sellers can provide fine quality goods and services only when they get sufficient
profits that they can turn over back into their business to enhance their capability.
Thus, buyers are facilitating sellers to have respectable profit margins. Sellers are
aware of the fact that their ability to sell to the buyers depends only on the survival
of the buyers. They do not want to harm their buyers by selling them low-grade
products at lofty prices. They wish for their buyers to do well so that they can
continue to supply them with their ware. It is very clear among business buyers
and sellers that they rely on each other and are supporting each other to make
their operations better.
Reciprocal Buying
In some situations, buyers may demand that sellers buy some of their products in
return for securing the order. The chances of reciprocal buying increase when the
two partners have diversified businesses. An automobile manufacturer, for example,
Self-Instructional
Material 197
Organizational Buyer may insist that the computer manufacturer from whom they plan to buy their
computers should buy its cars for their employees.
Derived Demand
NOTES The demand for business goods is determined to a great extent by the demand for
consumer goods. Thus, suppliers should keep tabs on the consumer trends as well
as their buying habits and business customers. The buyer might give complete
charge of a component to a supplier. In such a scenario, the buyer goes down on
internal capability and market awareness about that specific element. In such a
situation, the supplier should feel accountable for making in the component better
and keeping track of fluctuating consumer needs. The component may be so vital
in the design of the final creation that the quality of the component may be the
distinguishing aspect. In such circumstances, the buyer’s dependency on the seller
increases to provide aggressive benefits for his product.
In recent years, the demand for some industrial goods and services has
become more volatile than that for consumer goods and services. This means that
if the demand for the consumer good goes up by, say ten per cent, the demand for
equipment and material used in making it will go up by much more than ten per
cent. In the reverse case, if the demand for the consumer good goes down by say
ten per cent, the demand for equipment and material used in making it will go
down by much more than ten per cent. This implies that during the period of
economic growth, suppliers of equipments and materials should be willing to spread
out their business as there would be enormous stress on them to supply more and
more volumes. As capacity growth is time-consuming, companies would be well
counselled to pursue signals of movements in consumer markets before time.
However, the period of economic recession would witness a drastic fall in the
demand for equipment and material and companies may want resort to extreme
measures like closing down the unit and retrench their manpower. These types of
tactics are likely to render a company inoperative for a long time to come.
Negotiation
Negotiation has become important in view of the existence of powerful buyers
and sellers and the size and complexity of business buying. For complex and
customized equipments, there is lot of dialogue between the buyer and the seller
about the actual requirements and specifications. The seller will need to understand
the exact requirements and this may require plant visits and discussions with the
people of various functional areas. The seller will proceed to make the equipment
only when the specifications have been agreed upon by both parties. Price also
has to be negotiated. Since standard equipment is rarely being sold, price depends
on the features demanded by the buyer, materials used in making the equipment
and technological sophistication of the equipment. Another point of negotiation
would be the date of delivery of the equipment. The buyer would like the
equipment to be delivered to match his business cycle. If this is in the immediate
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future, the seller would face problems in delivering the equipment. The seller Organizational Buyer
and the buyer would have to agree upon a delivery date that enables the latter to
catch his business cycle and that does not increase the cost for the seller due to
expediting the order.
NOTES
For standard equipment and materials, buyers have the power to demand
price concessions. The supplier’s list price may be considered the starting point
for negotiations and the final price is greatly influenced by the negotiating skill of
the seller. The buyer may be in negotiation with many sellers simultaneously to get
the best deal for himself. Sometimes the buyer may encourage overt competition
among sellers to bring down the price. The buyer may also require sellers to
submit bids and samples of the item. The buyer may not necessarily buy the lowest
priced item, but this process gives him an idea about the price range and the
available quality level. He can choose to negotiate within this available price and
quality range if they are acceptable to him or he may start looking for a new set of
suppliers.
Check Your Progress

1. Who are organization buyers?
2. Name the major types of industries making up the industrial market.
14.3 DECISION APPROACH AND PURCHASE

PATTERN
Organisational buying patterns are characterised by a number of differences from

final consumers in their decision process and purchases patterns.
1. Formality: Much organisational buyer behaviour is typified by greater
formality than that of final consumers. Often proposals, quotation requests,
and purchase contracts are involved which lend to the formality.
2. Complexity: This is a prime cause of the formality necessary in purchasing.
Because organisational buyer behaviour is so much more complicated
than consumer behaviour, products and services are more technically
complex, and the financial risks are greater; generally decision making
requires the conscious consideration of the large number of factors involved
in the decision.
3. Lengthy negotiation: Much organisational buying requires more extensive
negotiation over a longer time period than typically occurs among final
consumers. Some of the reasons for this situation are: (a) the size of the
order is large and the purchase price is very important, (b) a large number
of people are involved in the decision and (c) the product is complex and
specifications must be carefully agreed to.
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Organizational Buyer 4. Multiple suppliers: Organisational buyers hesitate to limit their buying of
an item to a single source because their supply could be jeopardised by
unforeseen circumstances such as strikes, fires, etc.
5. Large orders: The typical organisational purchase is much larger than that
NOTES
made by final consumers.
6. Infrequent purchase: Very large scale and costly items would be only
infrequently purchased by organisations. But even smaller, less expensive
products may be bought on a contract basis, which reviews only periodically.
The organisational marketer must, therefore, be vigilant about selling
opportunities because they may arise only infrequently.
7. Direct buying: Although marketing directly from product to final consumer
is growing, such a pattern has long been quite common in the organisational
market. Because of the order size, product complexity and bulk, technical
assistance prior to and after the sale, and geographic proximity of customers,
a direct relationship between producers and buyers has been widely adopted
for many organisational purchasing situations.
8. Reciprocity: Reciprocity occurs when two organisations agree to purchase
from each other, and is found more frequently in industries where products
are homogeneous with little price sensitivity. For example, an auto company
may buy steel from one supplier and that supplier buys trucks from the auto
company.
9. Importance of service: More than the final consumers, organisational buyers
require service because it has such a direct bearing on their costs, sales,
and profits. Companies known for their exceptional service tend to be the
ones who excel in an industry.
10. Direct Purchasing: Industrial buyers often buy directly from producers
rather than through middlemen, especially those items that are technically
complex and/or expensive.
11. Leasing: Many industrial buyers lease their equipment instead of buying it.
This happens with computers, shoe machinery, packaging equipment, heavy-
construction equipment, delivery trucks, machine tools, and company
automobiles. These lessee gains a number of advantages: conserving capital,
getting the seller’s latest products, receiving better service, and gaining some
tax advantages. The lesseer often ends up with a larger net income and the
chance to sell to customer who could not afford outright purchase.
Check Your Progress

3. Why does organisational buying require more extensive negotiation?
4. What is reciprocity?
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14.4 ORGANIZATIONAL BUYER DECISION
PROCESS
In most buying situations, a company will follow the process given in fig 14.1, NOTES
sometimes unconsciously.
Recognition of the problem or need
Determination of specification and quantity of needed item
Search for and qualification of potential sources
Acquisition and analysis of proposals
Evaluation of proposals and selection of suppliers
Selection of order routine
Performance feedback and evaluation

Fig. 14.1 Buyer Decision Process
The supplier has the chance to affect the buyer at all these stages.
The buyer routinely reorders (stationery) from an existing supplier. If any
decision is complex and the item to be bought is more expensive, chances are high
that the buyer may pass over each stage mentioned above and the completion of
the process will need more time.
(i) Recognition of a Problem or Need
One can recognize requirements and concerns through internal as well as
external factors. The internal factor includes the realization of not having enough
capacity, resulting in decision to purchase equipment. This realization leads to
active behaviours, such as sending a requisition for the equipment. There may
be a few issues that have been acknowledged internally but have not been
addressed due to more pressing problems. When a salesperson discovers
Self-Instructional
Material 201
Organizational Buyer that a department or an individual requires equipment but is not pressing with
the purchase, the salesperson may offer some incentives or at least send him a
proposal. There are some budding issues that may not come to anyone’s notice
internally and emerge as problems only due to external factors. Production
NOTES managers, for example, may be content with the existing production process
as long as they have not explored or come across other methods that may be
more efficient.
But the company may not be prompted to act as the product may still be
selling. These different problems have significant connotations for salespersons of
suppliers. The passive condition of the buyer means that there exists a chance for
a salesperson, after identifying the case, to emphasize the problem by assiduous
analysis of cost inefficiencies besides other related aspects, so that the problem is
considered as more serious one, needing a solution.
(ii) Determination of Specification and Quantity of Needed Items
The DMU draws up description of what is required. If marketers are able to
influence the specifications, it would give their company an advantage at later
stages of the process. By persuading the buying company to specify the features
that only their product possesses, the sale may be virtually closed at this stage.
(iii) Search for and Qualification of Potential Sources
If the item to be sold is cheaper and less important and the buyer possesses more
information about it, fewer searches would take place. The purchase department
keeps information about potential suppliers. It is important that suppliers are in
touch with the purchase department. A supplier should be sending his brochures
to the companies, so that when a requirement comes for its product, the companies
can contact the supplier.
(iv) Acquisition and Analysis of Proposals
Companies are chosen to supply the product on the basis of their technical expertise
and general reputation. Their proposals are called for, and analysis of these proposals
is undertaken.
(v) Evaluation of Proposals and Selection of Suppliers
Each proposal is evaluated in the light of choice criteria deemed to be important to
each DMU member. Different members may use different criteria while judging
the proposals. The main task of the marketer at this point is to identify the members
of the DMU and influence them.
(vi) Selection of an Order Routine
Details of payment and delivery are important. This is conducted by the purchasing
department.
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202 Material
(vii) Performance Feedback and Evaluation Organizational Buyer
The user department gives the feedback about the product. The supplier has
to work with the user department to ensure that the product works to the
satisfaction of the user. The feedback of the user department is important for NOTES
the supplier because a good feedback will enable him to procure orders from
the company in future. Since a piece of equipment remains in use for a long
time with the buyer, the equipment which works well is a live advertisement
for the supplier. A supplier can remind the buyer of the good equipment that
he has supplied when he is seeking other orders from the company. Conversely,
poor equipment will remind the buyer of the wrong purchase that he made
from the supplier and may show reluctance to do business with him in future.
When a buyer is convinced that he had made a wrong purchase from a supplier,
the supplier should try to retrieve the situation for the buyer. Buying back the
equipment or supplying new equipment should not be ruled out because it is
very unlikely that a buyer will purchase anything from a supplier due to whose
equipment he is suffering.
Marketing may affect a sale through influencing need recognition, through
the design of product specification and by clearly presenting the advantage of the
product over competition in terms which are relevant to the DMU members. By
early involvement, a company can benefit through the process of creeping
commitment which leads the buying organization to become increasingly committed
to one supplier through its involvement in the design process and the technical
assistance it provides.
Check Your Progress

5. How does marketing affect a sale?
6. How are the specification and quantity of needed items determined?

QUESTIONS
1. Organisation buyers are those who buy goods and services for the purposes
of further production, release and redistribution.
2. The major types of industries making up the industrial market are (a)
Transportation, distribution and storage (b) Banking finance and insurance
(c) Agriculture, forestry and fisheries.
3. Organisational buying requires more extensive negotiation because (a) the
size of the order is large and the purchase price is very important, (b) a
Self-Instructional
Material 203
Organizational Buyer large number of people are involved in the decision and (c) the product is
complex and specifications must be carefully agreed to.
4. Reciprocity is when two organisations agree to purchase from each other,
and is found more frequently in industries where products are homogeneous
NOTES
with little price sensitivity.
5. Marketing may affect a sale through influencing need recognition, through
the design of product specification and by clearly presenting the advantage
of the product over competition in terms which are relevant to the DMU
members.
6. The DMU draws up description of what is required. If marketers are able
to influence the specifications, it would give their company an advantage at
later stages of the process. By persuading the buying company to specify
the features that only their product possesses, the sale may be virtually
closed at this stage.
14.6 SUMMARY
 The industrial buyers buy goods and services for the purpose of increasing
sales, cutting costs and supplying their products to the customers at the
lower costs consistent with quality.
 Fredrick E Webster and Yoram wind have defined organisational buying as
“the decision making process by which formal organisations establish the
need for purchased products and services, and identity, evaluate and choose
among the alternative brands and suppliers.”
 Today, the term organisational customer refers to not only the business firms
but also includes the government, retail institutions, other service institutions
like universities, colleges, financial firms like banks and social organisations
like Red Cross, Family Planning Foundation, etc.
 Organisational buyers make purchase decisions in order to satisfy their goals,
as do the final consumers. But the goals differ. Organisations have the goals
of producing a good, providing a service, or reselling an item, and therefore,
buy products and services that will allow them to effectively engage in these
activities.
 Organisational buyers are often strongly directed by rational motivations.
Such factors are generally economically based and can be translated into
rupees so that costs and benefits may be carefully weighed.
 Business buyers draw a product specification and ask suppliers to make
their products according to that specification. In consumer markets, the
product is developed to meet a need of a market segment, but beyond that,
Self-Instructional
204 Material
meeting individual needs would prove uneconomical. Customized products Organizational Buyer
make a long-term supplier–buyer relationship imperative.

 The demand for business goods is determined to a great extent by the
demand for consumer goods. Thus, suppliers should keep tabs on the
NOTES
consumer trends as well as their buying habits and business customers.
 Much organisational buying requires more extensive negotiation over a
longer time period than typically occurs among final consumers. Some of
the reasons for this situation are: (a) the size of the order is large and the
purchase price is very important, (b) a large number of people are involved
in the decision and (c) the product is complex and specifications must be
carefully agreed to.
 Many industrial buyers lease their equipment instead of buying it. This
happens with computers, shoe machinery, packaging equipment, heavy-
construction equipment, delivery trucks, machine tools, and company
automobiles. These lessee gains a number of advantages: conserving capital,
getting the seller’s latest products, receiving better service, and gaining some
tax advantages.
 The user department gives the feedback about the product. The supplier
has to work with the user department to ensure that the product works to
the satisfaction of the user. The feedback of the user department is important
for the supplier because a good feedback will enable him to procure orders
from the company in future.
14.7 KEY WORDS
 Organizational buyers: The term refers to the people who make buying
decisions for their companies for a living and are more sophisticated than
ordinary consumers.
 Industrial consumer: It refers to the person who purchases products or
services to use in the production of other products.
 DMU: It is the Decision Making Unit which consists of team of individuals
who participate in a buyer decision process.

EXERCISES
1. State the types of industrial consumers.
2. Classify the types of industrial buyers.
Self-Instructional
Material 205
Organizational Buyer 3. What are important characteristics of organisational buyers that differentiate
them from final consumers?
NOTES 1. What is the purpose of organizational buying? Explain.
2. Describe the factors related to market structure and demands that distinguish
organizational buyers from final consumers.

Self-Instructional
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BLOCK I: CONCEPT OF CONSUMERS

BLOCK II: CONSUMERS ATTITUDE

BLOCK III: SOCIAL CLASS OF CONSUMERS

UNIT 2 MARKET SEGMENTATION 19-36

UNIT 3 CONSUMER MOTIVATION 37-48

UNIT 4 CONSUMER PERSONALITY 49-70

BLOCK II: CONSUMERS ATTITUDE

UNIT 6 CONSUMER ATTITUDE 81-91

UNIT 8 MARKETING COMMUNICATION 101-130

BLOCK III: SOCIAL CLASS OF CONSUMERS

UNIT 11 SOCIAL CLASS 154-166

BLOCK IV: DECISION OF CONSUMERS

UNIT 13 PURCHASE AND ACTION 181-190

UNIT 14 ORGANIZATIONAL BUYER 191-206

After going through this unit, you will be able to:

Consumer behaviour is defined as the behaviour that consumers display while

1.3 CONSUMER ROLES

When an individual consumer makes a purchase, he unilaterally decides what he

1.4 HISTORY OF CONSUMER BEHAVIOUR AND

The field of consumer behaviour is rooted in the marketing concept, a business

Check Your Progress

1.5 CONTRIBUTING DISCIPLINES

Consumers vary tremendously in their ages, income, education level, mobility

Economics and commerce: The study of consumers is an important part of the

1.6 SCOPE AND APPLICATION OF CONSUMER

The scope of consumer behaviour is based on how individuals make decisions.

Check Your Progress

1.7 ANSWERS TO CHECK YOUR PROGRESS

1. Consumer behaviour is defined as the behaviour that consumers display

1.9 KEY WORDS

 Consumer behaviour: It is the study of individuals, groups, or organizations

NOTES Short-Answer Questions

1.11 FURTHER READINGS

Saravanavel, P and S Sumathi. 2004. Marketing Research and Consumer

UNIT 2 MARKET SEGMENTATION

After going through this unit, you will be able to:

Check Your Progress

2.3 TYPES OF SEGMENTATION – GEOGRAPHIC,

Self-Instructional Fig. 2.1 Hierarchy of Influences on Lifestyles

Check Your Progress

2.4 PRODUCT POSITIONING: NEED AND

exclusive range of premium cosmetics, besides providing grooming services.

NOTES Criteria For Successful Positioning

just an external manifestation of what the company really is. So if a company

Check Your Progress

2.5 ANSWERS TO CHECK YOUR PROGRESS

1. Segmentation refers to the division of a diverse market into a number of

 Segmentation involves identification of groups of individuals or organizations

behaviour is correlated with the personality or lifestyle of consumers. Profile

2.7 KEY WORDS

 Segmentation: It is the division into separate parts or sections.

NOTES Short-Answer Questions

2.9 FURTHER READINGS

Saravanavel, P and S Sumathi. 2004. Marketing Research and Consumer

UNIT 3 CONSUMER MOTIVATION

After going through this unit, you will be able to:

3.3 MEASUREMENT OF MOTIVES AND

The measurement of motives is concerned with finding answers to the following