Consumer

Behaviour

SRIRAM S 1
 Customers versus Consumers

The term ‘customer’ is specific in terms of
brand, company, or shop. It refers to person who
customarily or regularly purchases particular
brand, purchases particular company’s product,
or purchases from particular shop.

Thus a person who shops at Bata Stores is a
customer of the firm.

Whereas the ‘consumer’ is a person who
generally engages in the activities - search, select,
use and dispose of products, services, experience,
or ideas.
SRIRAM S 2
 INTRODUCTION:
• CB is the study of how people make
decisions to spend their available
resources-like time, money, effort on
consumption related items that they
expect will satisfy their needs.
• Consumer behaviour is the outcome of
both individual & environmental
influences.
• Consumer is the pivot, around which the
entire system of marketing revolves.
SRIRAM S 3
INTRODUCTION Cont’...
• Over the last decade, per capita income
have risen along with GDP & falling birth
rates → have led to changes in
consumption patterns of Indian house
holds.
• CB is helpful in understanding the
purchase behaviour & preferences of
different consumers.
• Similar products – yet different companies
use different approaches – based on
different assumptions about CB & how to
influence it
SRIRAM S 4
Why study Consumer Behaviour?

Consumer preferences are changing and
become highly diversified
◦ Environmental concerns
◦ Changing lifestyles

Reduced PLC

Consumer research has vividly pointed out
that customers dislike using identical
products & prefer differentiated products

Rapid introduction of new products with
technological advancement

SRIRAM S 5
 Models of CB
Model is an abstract
conception of the real world
situation

The Howard – Sheth model
(H – S Model)

Nicosia model

Engel – Kollat – Blackwell
(EKB) theory

6 SRIRAM S
 The Howard – Sheth model (H – S Model)
• In this theory consumer buying is treated as
rational & systematic behaviour. H-S model
attempts to describe the process occurring in
an individual between the time stimuli (Ad
messages …) are received & some form of
buying response is initiated.
1) Input variables 4) Processing
determinants
2) Behavioural
determinants 5) Inhibitors
3) Perceptual reaction 6) Output variable
SRIRAM S 7
 Nicosia model
• Based on computer flow chart technique with feedback
loops.
Message exposure / environmental factors /
→ personality / learning
↑ ↓
Attitude /data search (internal & external
Experience
search)/ evaluation
(Feed back)
↓
↑ Motivation / decision (act of buying)
↑ ↓
Purchasing behaviour /Storage & use of
←
SRIRAM S product 8
 The Engel, Blackwell & Miniard model
• Originally developed in 1968 by Engel, Kollat &
Blackwell (EKB). Recent version 1990…
• Decision process comprises 5 major activities.
– Need recognition
– Search for information
– Alternative evaluation
– Purchase
– Outcome
• This theory talks about the individual’s psychological
makeup (personality, emotions, attitudes ….) which
is believed to affect his mental process & thus
behaviour in the market place.
SRIRAM S 9
 The Engel, Blackwell & Miniard model Cont’….

• It incorporates the differences between high & low

involvement as part of buying process
• More – perceived risk – high involvement
• Low – perceived risk – low involvement

SRIRAM S 10
 Experiences & Acquisition
EXTERNAL
ENVIRONMENT

SELF CONCEPT NEEDS

DECISION
&
PROCESS
LIFE STYLE DESIRES

INTERNAL
OR
INDIVIDUAL
INFLUENCES
Experiences & Acquisition

11 SRIRAM S
 External environment
All the variables emanating from the
society within which individual lives,
interacts & which bear a strong influence.
• Culture
• Sub – Culture
• Demographics
• Social Status
• Reference Groups
• Family
• Marketing Activities
SRIRAM S 12
 Internal / Individual Determinants
The specific variables unique to each individual
which influence his/her behaviour as a
consumer. These variables are psychological in
nature.
• Perception
• Learning
• Memory
• Motivation
• Personality
• Attitude
• Emotions
SRIRAM S 13
 Self Concept & Life Style

• Self Concept is the totality of an individual’s

thoughts and feelings about Him/Herself.
• Life Style is How one Lives.

SRIRAM S 14
 Decision process
• Problem Recognition
• Information search & Evaluation
• Purchasing process – Product / Outlet
selection
• Post purchase behaviour

SRIRAM S 15
 Application of CB in Marketing
• Marketing can be defined as “Human activity
directed at satisfying needs & wants through
exchange processes”.
• CB & Marketing go Hand-in-Hand.
• An understanding of CB is of critical importance to
all persons engaged in any form of marketing
activity, its importance stems from the fact that…
Behaviour of consumers can be
understood
Behaviour can be influenced
• Marketer can manipulate these influencing
variables to his advantage
SRIRAM S 16
Application of CB in Marketing cont’

• Analysing Market Opportunity

• Selecting the Target Market
• Determining the Marketing Mix
To successfully Market to consumers with
different personal characteristics, the marketer
must accordingly modify his marketing
strategies.
Thus studying Customers provides clues for
developing New Products, Product features,
Prices, Channels, Messages & other Marketing
Mix elements.
SRIRAM S 17
Application of CB in Marketing cont’

• P & G – disposable diaper (Pampers)

– launched -unmodified form (as in US) in Japan
– ad approach – rational – diaper absorbing a cup
of water
– Corporate name not highlighted
– Result – Sales drop
– Product modified (made thinner)
– Ad approach – emotional – a talking diaper that
it won’t leak or cause diaper rash
– Corporate name P & G highlighted
– Result - Sales improved multifold
SRIRAM S 18
Application of CB in Marketing cont’

• Ford – Pinto launch at Brazil

– Failed miserably
– Changed the name - reason – In Brazil Pinto
means (slang) – small male sex organ
• La Choy (Hunt – Wesson Inc. Brand)
– Frozen food – introduced large egg rolls – fast
food category
– Result – forced to withdraw from the market
within 2 years
– Reason – Took 30 minutes to heat in a regular
oven

SRIRAM S 19
Application of CB in Marketing cont’

• Fed – Ex
– 30 sec commercial – humor approach – different
versions for different places
– Tag line “Let fed ex take the load off your
shoulder”
– Latin America & Caribbean – nude version
– Mexico – soccer players with under wear version
– Changed due to legal & cultural aspects

SRIRAM S 20
 The Dark side of Consumer Behaviour
• Consumer Terrorism / Anti Consumption
– Product Tampering / Tylenol pills laced with
cyanide / Pepsi cans with syringes / Release of
computer virus / Destroying Bill boards -
Hoardings
• Consumer Addiction: Addictive consumption.
Physiological or Psychological dependency on
products.
– Alcoholism / Drug addiction / Cigarettes.
• Consumed Consumers: Who are used or exploited
willingly or not for commercial gain in the market
place.
– Prostitutes / Organ – Blood donor …
SRIRAM S 21
 The Dark side of Consumer Behaviour cont’…

• Compulsive Consumption: Expression “Born to

Shop”. Refers to repetitive shopping often
excessive as an antidote to tension, anxiety,
depression or boredom. “Shopaholics”.
– 3 common elements
1) The Behaviour is not done by choice
2) The gratification derived from the behaviour is
short lived
3) The person experiences strong feelings of regret
or guilt afterwards
• Consumer Theft: Shrinkage – Industry term for
inventory & cash losses from shoplifting &
employee theft.
SRIRAM S 22
LEARNING

SRIRAM S 23
 LEARNING
• Learning is knowledge got by study or systematic
investigation or through experience & it causes
change in individuals behaviour.
– Learning is an ongoing process
– The newly acquired knowledge helps people to
form a behaviour pattern which is used for
future buying
• High involvement learning: Consumer is
motivated to process or learn the material
• Low involvement learning: Consumer has little or
no motivation to process or learn the material.

SRIRAM S 24
CULTURE → VALUES
SUB - CULTURE → L ATTITUDES
SOCIAL CLASS → E TASTES
A PURCHASE
FAMILY → PREFERENCES
R
FRIENDS → N → SKILLS → &
INSTITUTIONS → I FEELINGS USE
EXPERIENCES → N MEANINGS BEHAVIOUR
MASS MEDIA → G BEHAVIOURS
ADVT →

SRIRAM S 25
 BEHAVIOURAL THEORIES OF LEARNING
• Classical conditioning occurs when a stimulus
that elicits a response is paired with another
stimulus that initially does not elicit a response on
its own.
– If certain things are associated for a long time, it
gets embedded in consumer memory, as a result
if one of them is brought in front of the
consumer, consumer anticipates & expects the
happening of the other (affective response)
– Eg: Consistently advertising a product on exciting
sports program may result in – generating
excitement due to product itself.
SRIRAM S 26
 Behavioural theories of learning cont’

• Operant conditioning occurs as the individual learns to

perform behaviour that produce +ve outcomes & to
avoid those that yield –ve outcomes.
• Can also be called as instrumental learning.
– It involves the actual usage of the product.
– Marketing strategy is aimed at securing an initial
trial.
– The process of encouraging partial responses
leading to the final desired response is known as
“SHAPING”.
– Free sample – Buy at a discount – Buy at full price
SRIRAM S 27
Cognitive Learning

• Cognition – The formal process of knowing,

understanding & learning something.
• The consumer collects information on various
competitive products with regard to Price,
Performance & other aspects – Process it
logically & then only arrives at a conclusion.

SRIRAM S 28
 Cognitive Learning

Doesn’t work separately – But works together

like an integrated processor

EMOTIONAL
RIGHT RESPONSES
HUMAN BRAIN

LEFT COGNITIVE
ACTIVITIES

SRIRAM S 29
Exercise …

SRIRAM S 30
The strength of learning is heavily influenced
by 6 factors.
• Importance: The value that the customer places on
the information to be learned.
• Message involvement: More involved or less
involved.
• Mood: +ve or –ve.
• Reinforcement or punishment :
• Repetition: ↑↓ the strength & speed of learning (more
exposure)
• Imagery contained in the material: ↑↓Effective

SRIRAM S 31
 Perception
• Perception is how
Optical Illusions...
consumer see things.
• Exposure, Attention
& Interpretation
constitute
perception.

SRIRAM S 32
SRIRAM S 33
 Perception cont’…

• Exposure occurs when a stimulus comes within

range of our sensory receptor nerves.
Random −−−− Deliberate
Impact of the active, self selecting nature of exposure
can be seen in
Zipping (Fast forwarding)
Zapping ( Switching channels)
Muting
– Infomercials are more likely viewed by early
adopters, opinion leaders & active shoppers.

SRIRAM S 34
 Perception cont’…

• Attention occurs when a stimulus activates one or

more sensory receptor nerves and the resulting
sensations go to the Brain for processing.
• Attention is determined by 3 factors.
– Stimulus – size & intensity, colour & movement,
position, isolation, contrast, format ...
– Individual – characteristics of the individual –
interest, need …
– Situation – environmental factors – time
pressure, crowd …
• The same individual may devote different levels of
attention to the same stimulus in different situations.
SRIRAM S 35
Perception cont’…

• Interpretation is the assignment of meaning

to sensations.
– Cognitive interpretation is a process
whereby stimuli are placed into existing
categories of meaning.
– Affective interpretation is the emotional or
feeling response triggered by a stimulus
(music, colours, characters in Advertisements ....)
• Understanding of the perception process is an
essential guide to marketing strategy
• Ad can trigger both emotional and cognitive
interpretation SRIRAM S 36
 Perception & Marketing strategy
• Retail strategy:
– SKU – Eliminate low preference without reducing
total product category shelf space.
– Exposure – High margin items to be placed in high
traffic areas.
– Shelf position – space – highly visible shelves/signs
- POP materials
• Brand name & logo development:
- Example: Compaq – com means computer &
communications while paq means small – Name lab
created the Compaq computer name.
co-branding strategy – Intel inside / VISA cards
affiliated with airlines….
SRIRAM S 37
Perception & Marketing strategy cont’…
• Media strategy:
– Exposure process is more of selective rather than
random
– To look for matching media – to reach targeted
markets.
• Advertisements & package design:
– To capture attention
– To convey meaning
– To utilise stimulus characteristics like full page, bright
colours, animated cartoons, surrealism (strange, unusual),
celebrities, sex - appeal

SRIRAM S 38
Attitude

SRIRAM S 39
 Attitude
• The opinions & feelings about something. It
gets reflected in the behaviour towards
someone or in a particular situation.
• 3 components (Tri component attitude model)
– Cognitive: Individuals knowledge / beliefs about
the object.
– Affective: Feelings / emotional reactions to an
object.
– Behavioural: Overt actions & statements of
behavioural intentions with specific attributes of
the object / overall object.
SRIRAM S 40
 Attitude
• The factors responsible for attitude formation are
the factors responsible for attitude change.
• Congruent change: Change in attitude in a
direction that reinforces the present attitudinal
position.
• Incongruent change: Change in attitude in
opposite direction from the existing behaviour.
Marketers to change consumer attitude
1) Changing consumers’ basic motivational factor.
2) Associating the product with a desired group.
3) Resolving conflicting attitudes.
4) Altering the product attributes.

SRIRAM S 41
MEMORY

SRIRAM S 42
• Memory is the total accumulation of prior
learning experiences & storing it so it will be
available when needed.
• Explicit Memory → Characterised by the
conscious recollection of an exposure event.
• Implicit Memory → Involves the non
conscious retrieval of previously encountered
stimuli. It is a sense of familiarity, a feeling, or
a set of beliefs about an item without conscious
awareness of when & how they were acquired.

SRIRAM S 43
Memory cont’….

• Short term memory → has a limited

capacity to store information for a limited
period of time.
• Long term memory → is viewed as an
unlimited, permanent storage for a longer
period of time.
Brands must enter into memory in a
favourable manner & they must be recalled
when required.
Measuring memory for advertisement.
Retrieval through recognition & recall
SRIRAM S 44
MOTIVATION

SRIRAM S 45
 Motivation
• Motivation is the driving force within
individuals that impels them to action.
Maslow’s hierarchy of needs

Physiological : Food / water / sleep / sex
e.g., Health foods, medicines, mineral water
etc…

Safety : physical safety & security, stability,
familiar surroundings.
e.g., Insurance, burglar alarms, preventive
medicines like i-pill etc.
SRIRAM S 46
 Motivation – Maslow’s hierarchy cont’

Belongingness : Love, friendship, affiliation, group

acceptance.
e.g., personal grooming, entertainment, clothing
etc…

Esteem : status, superiority, self respect, prestige
e.g., Cars, furniture, certain apartments etc…

Self Actualisation : Self fulfillment – to become all
one that is capable of becoming
e.g., Hobbies, higher education, sports, some
vacations etc…

SRIRAM S 47
 McGuire’s psychological motives
• Cognitive - Related to the process of knowing,
understanding & learning something.
• Affective - Related to the emotions.
• Preservation – Related to the act of making sure that a
situation continues without changes.
• Growth – Related to the increase – in economy,
strength, importance, personal development…
 Active - Busy, Involved, doing something.
 Passive - Tend to accept things as it is.
 Internal - Existing in people’s mind
 External – Relating to the environment or situation,
rather than to your own qualities, ideas…

SRIRAM S 48
 McGuire’s psychological motives
Need for consistency
Cognitive Need for attribution
preservation motives Need to categorize
Need for objectification
Need for autonomy
Cognitive growth Need for stimulation
motives Teleological need
Utilitarian need
Need for tension reduction
Affective preservation Need for expression
motives Need for ego defense
Need for reinforcement
Need for assertion
Affective growth Need for affiliation
motives Need for identification
SRIRAM S Need for modelling 49
 Cognitive Preservation Motives
Need for consistency (Active, Internal)
Consumers have a need for internal
consistency, so they are reluctant to accept
information that disagrees with existing
beliefs.
Cognitive dissonance – A state of tension
created when the beliefs or behaviour conflict
with one another.

SRIRAM S 50
 Cognitive Preservation Motives cont’

Need for attribution (Active, External)

Consumers tend to assign particular meanings
to the behaviour of others & has been used
primarily for analysing consumer reactions to
promotional messages (in terms of
credibility) e.g., Sales persons view is
attributed as sales motive, they tend to
discount the advice. Similar advice given by
a friend would likely be attributed to a desire
to be helpful & might therefore be accepted.
SRIRAM S 51
 Cognitive Preservation Motives cont’

Need to categorise (Passive, Internal)

Consumers have a need to categorise &
organise the vast array of information's &
experiences they encounter in a meaningful
yet manageable way
Need for objectification (Passive, External)
Objectification is treating a person or idea as a
physical object. These motives reflect needs
for observable cues or symbols that enable
people to infer what they feel and know.
SRIRAM S 52
 Cognitive Growth Motives
Need for Autonomy (Active, Internal)
The ability or opportunity to make own
decisions without being controlled by
anyone else – Independence, Individuality
themes…
Need for Stimulation (Active, External)
To encourage someone by making them excited
about and interested in something – Variety
and difference (Variety seeking behaviour) &
it changes over time.
SRIRAM S 53
 Cognitive Growth Motives cont’

Teleological Need (Passive, Internal)

View about how the world should work.
- The good guys win
- The hero & heroine get together ….
Utilitarian Need (Passive, External)
Intended to be useful & practical rather than
attractive or comfortable.
- View the consumer as a problem solver who
approaches situations as opportunities to
acquire useful information or new skills.
SRIRAM S 54
 Affective Preservation Motives

Need for Tension Reduction (Active, Internal)

Recreational products, Music, Yoga ….
Need for Expression (Active, External)
Gift articles, clothing, automobiles ….
Need for Ego defense (Passive, Internal)
Opting for well known Brands to avoid any chance
of making a socially incorrect purchase
Need for Reinforcement (Passive, External)
Operant Learning

SRIRAM S 55
 Affective Growth Motives
Need for Assertion (Active, Internal)
Success, Admiration, Dominance – Power, Accomplishment,
Esteem
Need for Affiliation (Active, External)
Altruism (when you care about or help other people, even though this
brings no advantage to yourself), Mutually helpful & satisfying
relationship.
Need for Identification (Passive, Internal)
Occurs as the result of consumer playing various roles.
- Student, Sportsmen …..
Need for Modeling (Passive, External)
The need for modelling reflects a tendency to base behaviour on
that of others.
Marketers utilise this motive by showing desirable types of
individuals using their brands.
SRIRAM S 56
 Motivation & Marketing Strategy
• Consumers do not buy products; instead they buy motive
satisfaction or problem solutions.
• A Manager must
– Discover which motives are likely to affect the purchase
of a product.
– Develop strategy based on the total array of motives that
are operating
– Reduce conflict between motives
• Approach – Approach motivational conflict
To choose between 2 attractive alternatives
• Approach – Avoidance motivational conflict
Facing a purchase choice with both +ve & -ve
consequences
• Avoidance – Avoidance motivational conflict
Choice involving undesirable outcomes
SRIRAM S 57
PERSONALITY

SRIRAM S 58
 Personality
• Personality is an individuals’ characteristic
responses or patterns of behaviour across
similar situations.
– Motivations are energising / driving forces
– Personality is guiding / directing the behaviour
to accomplish goals in different situations.
• Individuals have internal characteristics or
Traits.
• Most commonly used multi trait theory is
the Five – Factor Model

SRIRAM S 59
 Personality – Five Factor Model
CORE TRAIT MANIFESTATION
Prefer to be in a large group rather than
Extroversion
alone / Talkative / Bold
Instability Moody / Temperamental / Touchy

Agreeableness Sympathetic / Kind to others / Polite

Openness to Imaginative / Appreciative of Art / Find
Experience novel solutions
Conscientiousness Careful / Precise / Efficient

Proven useful in areas such as – understanding Bargaining

& Complaining behaviour, Compulsive shopping.
SRIRAM S 60
 BRAND PERSONALITY
• BRANDS like individuals, have personalities &
consumers tend to prefer products with Brand
Personalities that are pleasing to them.
• Aaker → Set of human characteristics associated
with a brand
• Kap Ferer → Brand personality is the brand’s
character.
• Brand Personality is the sum of all the significant
tangible & intangible assets of a brand.
• Consumers also prefer advertisement messages
that portray their own or a desired personality.
SRIRAM S 61
 Dimensions of Brand Personality – Aaker’s

Brand personality

Sincerity Excitement Competence Sophistication Ruggedness

Down to
earth Daring Reliable
Spirited Upper class Outdoorsy
Honest Intelligent charming
Wholesome Imaginative Successful
tough
Cheerful Up –to - date

SRIRAM S 62
Colours associated with certain personality traits
& associate products
• Red → Excitement, Hot, Passion, Power
– Women’s make up, Eveready …
• Blue → Royal blue, Respect, Authority
– IBM, Intel …
• Green → Eco friendly, Cool, Lively, Natural
– Hamam, Margo, Suzlon ….
• Yellow → Warmth, Playfulness
– Children dresses ….
• Brown → Earthiness, Masculine, Relaxed,
Suave (someone who is suave is polite, confident, and
relaxed, sometimes in an insincere way)
– Men’s shoes, Portfolio bags ….
SRIRAM S 63
 Colours associated with certain personality traits & associate
products cont…

• Black → Ultimate sophistication, Formal dress, Grief

– Raymond's, Benz
• White → Purity, Innocence, Chastity, Virginity,
Delicacy, Cleanliness
– Jockey ….
• Pink → Baby pink – Soft, Purity, Youthfulness
– J & J Baby products ….
• Silver & Gold → Wealth, Regality, Royalty
– Credit card, Entrance (Gates) ….

SRIRAM S 64
EMOTION

SRIRAM S 65
 Emotion
• Emotion is strong, relatively uncontrolled
feelings that affect behaviour.
– Anger, joy, Sadness
• Generally triggered by environmental events.
– Symptoms include
• ↑ Perspiration, Eye – Pupil dilation
• ↑ Heart & Breathing Rate
• ↑ Blood sugar level

SRIRAM S 66
Emotion cont’ …..

• Marketers to design & position products to

both arouse & reduce emotions.
– Emotion – Arousing for ↑ Attention,
Remembering & Brand preference thru’
Classical conditioning.
• Disney world, MTR gulabjamun
– Emotion – Reduction especially unpleasant
emotional states like Sad, Powerless,
Humiliated or Disgusted
• Fair & Lovely

SRIRAM S 67
SOCIAL CLASS

SRIRAM S 68
Social Class

 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 higher or lower status.

SRIRAM S 69
 Social Class
Class % Income Category
(Rs/annum)
Super 0.4 10 L + Senior corporate executives, large business
Rich owners, politicians, top tier professionals
Upper 0.6 5.0 to 10 L Traders , senior government officials,
medium scale industrialists, rich farmers,
professionals
Upper 2 3.0 to 5.0 L Just started white-collar employees, mid level
Middle government officials, medium scale traders &
business people
Middle 4 1.8 to 3.0 L
Lower 21 0.90 to 1.80 L Small size shop keepers, small farmers, low
Middle skilled industrial & service workers
Lower 47 0.6 to 0.9 L Deprived
BPL 25 < 0.6 L poor
Interpretation based on NCAER/McKinsey global institute report, 2007
SRIRAM S 70
 Determination of Social Class
3 categories in which the approach for determination of SC
fall.
• Subjective measures: The individuals are asked to judge
their own social class – based on individual perception.
• Reputation measures: Knowledgeable community
member is asked to classify the other members of
community into status groupings – followed by
sociologists – but not applied in the marketing discipline.
• Objective measures:
– Single variable index – uses single socio economic
variable such as Income or Occupation or Education
– Composite variable index – combines the number of
socio economic variables ( Education + Occupation +
Income )
SRIRAM S 71
Social Class cont’….
High salaried Business
Executives, professionals
white collar employees Large & small businessmen
Class I
Lower
salaried
Class II
Skilled &
Semi skilled Petty Farmers
Owner / tenant
Manual labour Business cultivators
Mechanics, electricians
Small store owners
Roadside business Above 5 acres Class III
Tailors, weavers, carpenters
Craftsmen, rickshaw pullers

Lower
Unskilled Agriculturists Class IV
manual labour Less than 5 acres
Excluding agricultural labour Dairy, poultry farmers
Fishermen, shepherds

SRIRAM S 72
 Social Class mobility
• ↑ Upward Mobility
• ↓ Downward Mobility
• ↔ Social Class fragmentation – because of
media explosion – internet –
internationalisation occurring at the speed of
sound
• Should be aware of earlier class structure in
India but still has relevance. (~ 3000
subgroups)
– Brahmins
– Kshatriyas
– Vaishyas
– Shudras SRIRAM S 73
 Application of SC to consumption
• Buying behaviour as well as the motivational forces differ for
different SC, thereby allowing companies to target their
products to particular Class based market segments at each SC
level.
• There are members who constantly seek to achieve a higher
status by virtue of their possessions.
• Sometimes the use of certain products by the Upper classes
trickles down to other SC groups – “TRICKLE DOWN
EFFECT”
Upward pull strategy targeted at middle class
Positioning upper
Aspirations Preferred
Middle middle class
to belong to products
→ → → symbolism for
class Upper consumed by
middle class
middle Upper middle
products
↑ ↓
└ ← SRIRAM S →
Target Market ┘ 74
 SC – upper class – LS – purchasing

Social Life style

Purchasing tendencies
class orientation

Respond more to sophisticated

appeals related to status & self.
Property,
Premium products. More Info –
Prestige, Power,
search. Hi – quality merchandise,
Individual
Upper Luxury, Leisure, Designer
expression,
class clothing, Travel (D & F),
Graceful living -
Expensive hobby, Recreation
sophistification,
equipment, Art/Books, Jewellery,
Exotic, pleasure
Real estate, Stocks, Credit card –
to settle the bill.

SRIRAM S 75
 SC – middle class – LS - purchasing

Social Life style

Purchasing tendencies
class orientation
Respectability,
More Info – search, quality
Conformity,
merchandise, Fashion
Social
items, Home – Cultural
acceptance,
Middle interest, Premium 2
Focus on
class wheeler – entry level 4
possessions
wheeler. Credit card –
rather than
frequent instalment
ideas, Close
purchase. Travel (D)
family relation

SRIRAM S 76
 SC – lower class –LS - purchasing
Social Life style
Purchasing tendencies
class orientation
Un sophisticated Rely more on In store/
LS, More Sales person. Respond to
interested in Advt that depicts social
local affairs, relationship & offers
Neighbourhood solutions to practical
Lower oriented, problems in daily life.
class Immediate Economy Products,
gratification (to Clothing more associated to
make someone feel film stars. Savings – linked
pleased and to security & safety. 2nd
satisfied - to satisfy hand gadgets, Entry level 2
a desire, need etc ) wheeler.
SRIRAM S 77
CULTURE

SRIRAM S 78
 Culture
• Culture is the back ground for factors – Family, SC
& Reference groups that have an influence on CB.
• Culture is a complex set of values, ideas, beliefs,
attitudes & other meaningful symbols, created
by human beings to shape human behaviour &
the artefacts (an object such as a tool, weapon etc that
was made in the past and is historically important) of
that behaviour as they are transmitted from one
generation to another.
• People within the cultural group are more similar in
their out look & behaviour than those in other
groupings.

SRIRAM S 79
 Culture - components
I. The internal mental culture:
This can be divided into 2 parts.
a) Cognitive component: Ideas & knowledge about god,
supernatural phenomena, concepts of after life..
b) Normative component: Values, rules of conduct,
norms which regulate behaviour.
II. The external material culture:
Refers to the things that we can see, touch, feel and use in
our day – to – day living.
An important dimension of the material culture is the
influence of technology.
Electricity / TV / Radio / Telephone / Aero plane ………
– Culture is both abstract (based on general ideas or
principles rather than specific examples or real events -
synonym - theoretical) & materialistic

SRIRAM S 80
 The characteristics of Culture
I. Culture is a set of learned responses.

Through family members

Educational environment

Imitative learning (informal learning)
II. Culture is shared. It acts like an umbrella
under which people share a common
heritage (Traditional belief) & a common way
of life.
III. Culture is adaptive. Continuously
changing with time – dynamic –
emergence of cosmopolitan culture.
SRIRAM S 81
 The characteristics of Culture cont’
IV. Cultures are similar yet different.
•Food •Family
•Dress •Marriage
•Habit •Calendars
•Language •Rituals
•Dialect •Music
•Housing •Dance
V. Culture is prescriptive. Culture determines
desirable norms or patterns of behaviour so that
in a given cultural context people have a
common appreciation of what is right or wrong /
proper or improper.
SRIRAM S 82
 Cultural Values
• Cultural value can be defined as a widely held
belief that endures (to remain alive or continue to exist
for a long time ) over time.
Instrumental Values Terminal Values
(Modes of Conduct) (End – states of existence)
Prosperous life, Peace,
Hard working, Neat, Tidy, Happiness, Pleasure (the feeling
Honest, Courageous, of happiness, enjoyment, or
satisfaction that you get from an
Forgiving, Obedient,
experience), Leisure (time when
Polite, Self – Disciplined, you are not working or studying
Loving, Affectionate, and can relax and do things you
Responsible, Reliable, enjoy), Self respect (self esteem),
Helpful …….. Social recognition, Wisdom,
Freedom………
SRIRAM S 83
Cultural Values cont’

• Internalising the cultural values over time is

called ‘Enculturation’.
• Once internalised it gets reflected in
attitude, personality ….
• Consumers response to the cultural value
differ depending on the subculture & SC.
• Cross culture: Transmission of cultures
across the countries ↑ due to globalisation.

SRIRAM S 84
 Subculture
• Subculture is “a subdivision of a national culture
composed of a combination of SC, Region, Religion,
Caste, Ethnic background (relating to a particular race,
nation, or tribe and their customs and traditions), Age,
Gender.
– Bengali/Oriya → Academic inclination is high.
Preference to intellectual/art rather than physical work.
In W.B → even during religious festivals – non veg
(fish) is served. Regularly take more sweets.
– Guajarati/Marwari → Simple LS; business acumen.
Extremely helpful within their caste. Generally veg food
habits. Highly religious.
– Punjabi → Lavish LS; hard working. Aggressive.
– Tamil → Intelligence & hard work. Rich traditional
heritage. SRIRAM S 85
REFERENCE GROUP

SRIRAM S 86
 Reference Group
• A group that serves as a point of reference or
comparison for an individual in the matter of
forming value, attitudes, or behaviour.
I. Category
Primary group → A group of people who interact,
meet & talk on a regular basis, such as
members of a family, neighbours or co-
workers.
Secondary group → A group of people who
interact infrequently or irregularly.

SRIRAM S 87
 Reference Group cont’ …..
II. Category
Formal group → A group that has a clearly defined structure,
specific roles / goals / objectives such as Rotary, Lions,
Jaycees, Labour unions, Social clubs..
Informal group → A group of people who see each other on
informal basis such as social acquaintances.
III. Category
Membership group → Are those to which an individual
belongs
Aspirational group → Non-membership / symbolic. A group
to which a non member would like to belong.
Reference group application in marketing:
1. Celebrities – Sports / Film personalities …..
2. Experts – Doctors / Engineers ….
3. Common man (or) Spoke persons
SRIRAM S 88
THE FAMILY

SRIRAM S 89
 The Family
• All household where people related by blood /
marriage / adoption live together are treated as
families.
• Family types
– Elemental (Husband & wife – who have started a family &
older couples who have already raised their children)
– Nuclear (Husband, wife & children)
– Extended (Nuclear + grand parents)
– Joint (More than one nuclear + grandparents)
• Family is not just a social group. It is also an
earning, consuming & decision making unit.
• The family’s influence comes from the fact that
the bonds within the family are likely to be much
more powerful & intimate.
• Reciprocal influence operates
SRIRAM S on all decisions. 90
 The Family

Husband Wife
Cognitions Cognitions
Behaviours Behaviours
Environments Environments

Child
Cognitions
Behaviours
Environments
SRIRAM S 91
The Family cont’….
Decision type categories:
Wife – dominant : Food, groceries, household
furniture & appliances….
 Husband – dominant : Insurance, automobile
….
Syncratic (joint): School, expensive items,
vacation …..
Autonomic (unilateral): Napkins, shaving
products ……

SRIRAM S 92
Elements of power with in the family:
Economic resources : ↑economic contribution
leads to ↑ power
Cultural norms : Normally males.
Expert power : ↑ Knowledge leads to ↑ power
Legitimate power : Natural role expectation in the
family.
Bargaining power : Give & take policy.
Referent power : It happens because of belief in a
member & his/her ideas.
Reward power : Doing something the other will
like.
Emotional power : Using emotion
SRIRAM S laden reaction. 93
 The Family Life Cycle
• Family size depends on factors like education
level, availability of birth control & religion.
• Fertility rate is determined by the number of births
per year per 1000 women of child bearing age (15
- 44)
– India – fertility rate is 3.11 children born per women
• The term life cycle refers to the series of life
stages through which individuals proceed over
time.
• FLC usefulness has its own limitation because of
fast changing social trends like – role of women,
divorce, childless, delayed marriages ….

SRIRAM S 94
STAGE CONSUMPTION PATTERN
Young single. Fast food, bike, cell phone, outdoor sporting
goods, entertainment, fashion clothing,
I The bachelor
recreation services, basic home furniture,
stage travel …
Newly married. Travel, high purchase of durable goods, home
II
Honeymooners appliances, home furnishings, insurance …
Young married Baby food, clothing & furniture, toys,
III with children. insurance, starter housing (flat), medical
Full nest I services …
Middle aged with Food in larger sized packages, dental care,
IV children. tri/bi cycles, music, housing, restaurants,
Full nest II education …

SRIRAM S 95
STAGE CONSUMPTION PATTERN
Older, married with Replacement buying, luxury appliances,
V dependent children. education, magazines, health products,
Full nest III savings – gold ….
Older, married with
no children living Magazines, hobbies, health products,
VI with them. home improvements, medical care,
savings….
Empty nest
Older, retired,
More economical life style, health care,
VII solitary survivor.
money saving products, security …..
Dissolution
FLC concept segments families on the basis of demographic
variables. Disadvantage is that it ignores the psychological
variables. Thus FLC is used to supplement the concept of life style.
SRIRAM S 96
BUYING DECISION PROCESS

SRIRAM S 97
 Buying decision process
A consumer purchase is a response to a
problem. Consumers go through various
stages / steps to make it.

• Problem recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Post purchase behavior
SRIRAM S 98
 1. Problem recognition
Problem can be defined as “perceived gap or discrepancy
between the existing & desired consumer positions for
a given product & service.
• To a large extent influenced by ‘Marketers stimuli’.
• The perceived gap must cross a threshold level if a
need for the product were to become a felt need,
thus ignite the buying process.
• The threshold level refers to “the minimum amount
of tension, energy or intensity which is necessary for
the feeling to occur”.
• Marketing effort – not only creating a gap but also ↑
tension level where need recognition is ensured.
SRIRAM S 99
Existing consumer Desired consumer
Position Position

Perceived gap
Contributed by Discrepancy Contributed by
Stock out Tension Recognition of
Problem new need
Dissatisfaction recognition
with present Generation of
product/service new wants

↑↓ in funds New marketing

efforts

SRIRAM S 100
 2. Information search & processing
• Information search is the act of acquiring, processing
& using relevant info for a consumption decision.
Search of info takes place after the recognition of the
need. The most important sources of info are
– Personal sources like family, friends, neighbours,
acquaintances
– Internet, sales persons, dealers, packaging displays
– Consumer rating organisations
– Samples & demonstrations
• Marketers should be careful with ‘Information
overload’ i.e., excess information – it may lead to
poor decision making.

SRIRAM S 101
 2. Information search & processing cont’….
There are several steps of information processing
• Exposure : Initial stage of info processing where the
stimuli come within the sensory systems.
– The chance to experience new ideas, ways of life etc
• Attention : The assignment of cognitive ability to the
inputs sensed by the consumers’ physical senses.
– The interest that people show in someone or
something
• Interpretation : Someone's opinion about the meaning
of something
• Acceptance : when people agree that an idea,
statement, explanation etc is right or true
• Retention : The ability to keep something in your
memory. SRIRAM S 102
 3. Evaluation of alternatives
• Consumers use different criteria in different buying
situations despite the product being the same.
Product attributes – Bundle of benefits
Importance of weights to attributes differ person to
person.
Utility function – need not be functional all the time.
It could be emotional.
Brand belief based on consumer perception.
Formation of brand sets for alternative evaluation.
Total set → Awareness set → Inept set →
Consideration set → Choice set → Choice
SRIRAM S 103
 4. Purchase decision – Product choice
• The consumer may form a purchase intention & lean
towards buying the most preferred brand. However
situational factors can intervene between the purchase
intention & the purchase decision.
Situational factors
Physical surroundings – Geographical location,
décor, sounds, aroma, lighting, weather, merchandise
…..
Social surroundings – Presence of other people &
their effect during purchase or usage of a product.
Antecedent states – Moods, physical states &
thoughts.
SRIRAM S 104
 4. Purchase decision – Product choice cont’…..
Situational factors cont’…..
Task definition – whether for self use or for gift ?

The purpose of purchase may alter the purchase
outcome.

The use situation of the product will determine the
task definition. (Occasion based marketing
opportunities.)
Temporal factor – Timing – Ranges from minutes to
season of the year perceived relevant to the purchase.
(More effect – Hunger/Happiness)
A consumer who decides to execute a purchase
intention will be making the following decisions.
•Brand •Payment method •Quantity
•Vendor SRIRAM S •Timing 105
 5. Post purchase behaviour
Dissatisfaction ………………..…. Satisfaction
The marketers job does not end when the product is
sold, but, continues into the after sales period.
Satisfaction / Dissatisfaction arises out of a
cumulative effect of many factors. The individual
impact of each is quite difficult to isolate.
Expectations of Evaluation of
How the brand actual
Should perform performance

Discrepancy between
ExpectationSRIRAM
& performance
S 106
 Discrepancy between Expectation & Performance

Expectancy
Dissatisfaction Satisfaction
Confirmation

May lead to

Discontinuing purchase & patronage

Negative word of mouth

Formal complaint

Seeking redress (compensation)

Legal action
SRIRAM S 107
 The process of Innovation & Diffusion
• Rapid changes – science & technology. Consumer is
responding to these changes – changing their habits –
food / cloth / LS / change in social customs….
• Innovation is not only to develop new products, but also
to deliver old products in a better & more efficient way.
• Innovation is newness in idea which is acceptable to
the consumer.
• Left to themselves, consumers are satisfied with the
available product, consumers generally fail to be
imaginative & cannot think beyond what is provided to
them. But there is always a latent demand. Success lies
in realising the latent demand & tapping it.

SRIRAM S 108
 Adopter Categorization of the Basis of Relative
Time of Adoption of Innovations

34 % 34 %
Early Late
majority majority
2.5 % 13.5 % 16 %
Innovators Early Laggards
adopters

Time of adoption of innovations

SRIRAM S 109
The process of Innovation & Diffusion cont’….

• Innovations take time to spread (diffusion)

through the social system.
• Innovation diffusion process can be defined as
the spread of a new idea from its source of
invention / creation to its ultimate users or
adopters.
– Mass market approach → Earlier
– Heavy user target market → Later
– Innovator / Early adopters → Latest

SRIRAM S 110
The process of Innovation & Diffusion cont’….

Factors influencing the adoption process:

People differ in readiness to try new products
Influences – Personal / Cultural / SC / Family …
Characteristics of the innovation affect rate of
adoption
Relative advantage (comparability)
Compatibility
Trial
Communicability

SRIRAM S 111
The process of Innovation & Diffusion cont’….

Stages in the adoption process:

1) Awareness
2) Interest (information)
3) Evaluation
4) Trial
5) Adoption
6) Conformation (achieving buying continuity)
Marketer should know about the personality traits of
innovators / early adopters.
Some traits: Sociable / High cognitive skills /
Independent decision makers….
SRIRAM S 112
CUSTOMER SATISFACTION
• CS is “fulfilment of a need or want”.
• Subjective phenomenon & depends on the consumers
state of mind both at the time of purchase & at the time
of consumption.
• Emphasis has shifted from mere satisfaction to delight of
customers.
• Some indicators of a satisfied customer base are
– Repeat orders
– + ve word- of- mouth reference about the product to
likely users in the industry
– Interest shown by visitors to the stall in exhibition
– Brand awareness & recall (Top of the mind)

SRIRAM S 113
SRIRAM S 114
 Life Style Marketing
• Life style refers to a pattern of consumption
reflecting a person’s choices of how (s)he spends
time & money.
• Life style is the way a person live, including the
place they live in, the things they own, the kind of
job they do and the activities they enjoy.

Life Style Marketing is a process of establishing

relationships between products offered in the
market and targeted life style groups.

SRIRAM S 115
 Characteristics of Life Style
Feldman & Theilbar described LS by the following
characteristics.
1) LS is a group phenomenon:
A persons’ LS bears the influence of his/her
participation in social groups & of his/her
relationships with others.
 Two clerks in the same office may exhibit different
LS.
2) LS pervades various aspects of life:
An individual’s LS may result in certain consistency
of behaviour. Knowing a person’s conduct in one
aspect of life may enable us to predict how (s)he may
behave in other areas.
SRIRAM S 116
 Characteristics of Life Style cont’…

3) LS implies a central life interest:

For every individual there are many central
life interests like family, work, leisure, sexual
exploits, religion, politics ….. that may fashion
his interaction with the environment.
4) LS vary according to sociologically relevant
variables:
The rate of social change in a society has a
great deal to do with variations in LS.
↑ double income families.
SRIRAM S 117
 Self Concept

Dimensions of Actual self Ideal self

self concept concept concept

Private self How I actually How I would like

see myself to see myself
Social self How others How I would like
actually see me others to see me

Self concept is defined as the totality of the

individual’s thoughts & feelings having reference
to him(her)self as an object
SRIRAM S 118
 Approaches to study LS
• LS refers to the way in which people live &
spend money.
• Consumers psychographic profiles are
derived by measuring different aspects of CB
such as
1) Products & services consumed.
2) Activities, interests and opinions.
3) Value system
4) Personality traits & self conception.
5) Attitude towards various product classes.

SRIRAM S 119
Approaches to study LS cont’…
Uses of studying consumer
psychographic profiles / variables are:

 To define the target market

 To create a new view of the market.
 To position the product.
 To better communicate product attributes.
 To develop overall strategy.
 To market social & political issues.

SRIRAM S 120
 AIO

Activities Interests Opinions Demographics

Work Family Themselves Age
Hobbies Home Social issues Education
Social events Job Politics Income
Vacation Community Business Occupation
Entertainment Recreation Economics Family size
Club member Fashion Education Geography
Community Food Products City size
Shopping Media Future Stage in LC
Sports Achievements Culture Dwelling

SRIRAM S 121
 Values and Lifestyles (VALS)
• Based on Maslow’s Hierarchy of needs and the
concept of social character, researchers in the late
1970s developed a generalised segmentation
scheme of the American population known as the
Values and Lifestyles (VALS) programme.
• In 1989, SRI revised the VALS 2 system to focus
more explicitly on explaining consumer purchase
behaviour. The current VALS 2 typology
classifies the American population into eight
distinctive subgroups or segments based on their
answers to 35 attitudinal and 4 demographic
questions.
SRIRAM S 122
 Values and Lifestyles (VALS)
• The groupings are defined in terms of three major types of
orientation on the horizontal or the x-axis:
– Principle-oriented: (consumers whose choices are
motivated by their beliefs, rather than by desire for
approval);
– Status-oriented: (consumers whose choices are guided
by the actions, approval, and opinions of others); and
– Action-oriented: (consumers who are motivated by a
desire for social or physical activity, variety, and risk
taking).
• Each of these three major self-orientations has distinct
attitudes, lifestyles, and decision-making styles.
• These are again divided on the vertical or y-axis on the
resources they have, ranging from scarce to abundant.
SRIRAM S 123
Abundant Actualisers
Resources Sophisticated with high
self esteem
Principle Action
Oriented Status Oriented
Oriented
Fulfilleds
Satisfied, reflective, Experiencers
matured & Achievers Impulsive, young,
comfortable. They Career oriented & prefer enthusiastic,
tend to be predictability to risk or rebellious & enjoy
practical and value self-discovery. offbeat or
knowledge & risky/adventure
responsibility experiences.

Believers Strivers
Have strong Similar to achievers, but Makers
principles, have fewer resources. Practical & tend to
conventional Concerned about focus energies on
conservative & approval of others their families &
favour proven home and value
functional products
brands Strugglers
Most concerned with
Scarce meeting the needs of 124
Resources the moment.