What is Consumer Behavior?

Consumer Behavior is The behavior that consumers display

in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs
Consumer Behavior is Activities people undertake

when obtaining, consuming and disposing of products and services

What is Consumer Behavior?

Consumer Buying Behavior refers to the buying behavior of final consumers -individuals & households - who buy goods and services for personal consumption. These final consumers make up the consumer market. The central question for marketers is: How do consumers respond to various marketing efforts the company might use?

 Think of a recent purchase: Briefly draw a flowchart of the

steps you recall moving through from the awareness of need to post purchase

Model of the Issues that arise during stages in the Consumption Process
Consumers Perspective PrePurchase issues What to buy, what he needs, where to seek information, alternatives Marketers Perspective

How is consumers attitude formed/or changes toward a product, how they judge which product is superior

Purchase issues

Is acquiring the product a stressful or pleasant experience, what the purchase reflects about the consumer

How Time , Pressure or Store display, affect the consumer purchase

PostPurchase issues

How satisfactory is the product, does it fulfill the need

Will the consumer buy the product again, does he refer.

PRODUCT

PRICE
PLACE PROMOTION

Marketing Mix Determination

PRODUCT
What size shape and the

features should the product have.

How should it be packaged
What aspect of service is

most important to consumers

How it is to be designed

Marketing Mix Determination

PRICE
PRICE SENSITIVITY OF CONSUMERS PRICE AWARENESS NEW PRODUCT LAUNCH LIST PRICE DISCOUNTS,ALLOWANCES AND

PAYMENT METHODS

Marketing Mix Determination

PLACE
DISTRIBUTION PROCESS RELATED ISSUES

CONSUMERS LOYALTY.
WHAT TYPE OF RETAIL OUTLET

SHOULD SELL.
LOCATION AND IN WHAT

NUMBERS

Marketing Mix Determination

PROMOTION
THE ADVERTISING

IDENTIFY TARGET MARKET

REGION SPECIFIC CONSUMER ATTENTION COLOUR AND CONTRAST SIZE MEDIUM EXPENDITURE

Consumer behavior is a blend of :

Psychology

Economics

C.B.

Sociology

Cultural Anthropology

Social Psychology

Factors Influencing Consumer Buying Behavior

Model of Buyer Behaviour

How And Why Consumers Buy

Model of Customer Buyer Behavior

Factors Affecting Consumer Behavior: Culture

Culture is the Most Basic Cause of a Person's Wants and Behavior.
The fundamental determinant of a persons wants and behaviors acquired through socialization processes with family and other key institutions. Subculture Groups of people with shared value systems based on common life experiences. Hispanic Consumers African American Consumers

Asian American Consumers

Mature Consumers

Factors Affecting Consumer Behavior: Culture Social Class

Societys relatively permanent & ordered

divisions whose members share similar values, interests, and behavior.

Measured by a Combination of: Occupation,

Income, Education, Wealth and Other Variables.

Subcultures
Nationalities: Indian

Religions: Hindu, Sikh, Muslim,

Geographic regions: East, West, North,

South Special interests: Business, Service, Army

Factors Affecting Consumer Behavior: Social

Groups Membership, Reference, or Aspirational

Family Most Important Consumer Buying Organization

Roles and Status

Characteristics of Social Classes

Within a class, people tend to behave alike. Social class conveys perceptions of inferior or

superior position. Class may be indicated by a cluster of variables (occupation, income, wealth). Class designation is mobile over time. Upper uppers, Lower uppers, Upper middles, Middle class, Upper lowers, Lower lowers, Working class

Social Factors

Reference groups

Family

Social roles

Statuses

Family
Family of Orientation
Religion

Politics
Economics

Family of Procreation
Everyday buying behavior

Reference Groups
Membership: groups having direct influence on person Primary: with whom interaction is fairly continuously & informally e.g. family, friend Secondary: with whom interaction is formal & requires less continuous interaction

Aspirational: the group which person hopes to join

Dissociative: the group which person rejects

Consumer Buying

Process

 Problem Recognition (awareness of need)- The buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal or external stimuli. With an internal stimulus, one of the person's normal needshunger, thirst, sexrises to a threshold level and becomes a drive; or a need can be aroused by an external stimulus difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat. Can be stimulated by the marketer through product information--did not know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes.

 Information search- An aroused consumer will be inclined to search for more information. We can distinguish between two levels of arousal. The milder search state is called heightened attention. At this level a person simply becomes more receptive to information about a product Internal search, memory. External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc. A successful information search leaves a buyer with possible

alternatives, the evoked set.

Hungry, want to go out and eat, evoked set is

chinese food indian food KFC, Pizza Hut etc

 Evaluation of Alternatives How does the consumer process competitive brand information and make a final value judgment? No single process is used by all consumers or by one consumer in all buying situations. There are several processes, the most current models of which see the process as cognitively oriented. That is, they see the consumer as forming judgments largely on a conscious and rational basis. Need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, Indian gets highest rank etc. If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by "framing" alternatives.

 Purchase decision--Choose buying alternative, includes

product, package, store, method of purchase etc.

 Post-Purchase Evaluation After the purchase, the consumer might experience dissonance that stems from noticing certain disquieting features or hearing favorable things about other brands, and will be alert to information that supports his or her decision. Marketing communications should supply beliefs and evaluations that reinforce the consumer's choice and help him or her feel good about the brand. Outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc. After eating an indian meal, may think that really you wanted a chinese meal instead.

Determinants of Consumer Behavior

Economic Determinants
Personal Income Family Income Consumer Credit

Living Standard
Consumer Income Expectations Availability of Consumer Credit

Consumer Liquid Assets

 Psychological Determinants
Motivation and Morale

Perception

Perception and Communication Perception and Price

Perceived risk
Store perception Attitude Learning Personality

 Sociological Determinants
Group of Individual can be in the form of

Family Reference Groups Opinion Leaders Social Class & Caste Culture

 CONSUMER

RESEARCH PROCESS

Market Research
Marketing research is the function that links the consumer,

customer, and public to the marketer through information-information used to identify and define marketing opportunities and problems; generate refine and evaluate marketing actions ; monitor marketing performance; and improve understanding of marketing as a process

Classification of Marketing Research

Problem Identification Research
Market Potential Research
Market Share Research Market Characteristics

Problem Solving research

Segmentation Research

Product Research
Pricing Research Promotion Research Distribution Research

Research Forecasting Research Business Trends Research

Consumer Research Process

Problem Definition and Research Objective Identify Sources of Data

Collect Secondary data

Research Method Sampling Data Collection

Research Method Screening Questionnaire

Collect Primary Data and Field Work

Research by Trained Staff

Analysis & Interpretation

Analysis & Interpretation

Research Report

Research Report

Selecting the Research Design

Exploratory Research Conclusive research
Descriptive Research

Cross Sectional Design Single Cross Sectional Design Multiple Cross- Sectional Design Longitudinal Design

Methods Of Gathering Consumers Information

Type of Data Used
Primary Data

Cross Sectional Longitudinal Secondary Data Internet search, using online resources to gather data for research purposes. Library search and indexing, this technique requires to go through written texts that have already done similar work and utilizing their researches for your dissertations. Data collection organizations, for example Gallup and AC Nielsen News Papers and Magazines, journals and other similar periodicals.

QUANTITATIVE RESEARCH AND QUALITATIVE RESEARCH

QUALITATIVE
The aim is a complete,

QUANTITATIVE
The aim is to classify features,

detailed description. Researcher may only know roughly in advance what he/she is looking for. Recommended during earlier phases of research projects.
The design emerges as the

study unfolds. Researcher is the data gathering instrument. Data is in the form of words, pictures or objects.

count them, and construct statistical models in an attempt to explain what is observed. Researcher knows clearly in advance what he/she is looking for. Recommended during latter phases of research projects. All aspects of the study are carefully designed before data is collected. Researcher uses tools, such as questionnaires or equipment to collect numerical data. Data is in the form of numbers and statistics.

Qualitative
Subjective - individuals?

Quantitative
Objective ? seeks precise

interpretation of events is important ,e.g., uses participant observation, indepth interviews etc. Qualitative data is more 'rich', time consuming, and less able to be generalized. Researcher tends to become subjectively immersed in the subject matter.

measurement & analysis of target concepts, e.g., uses surveys, questionnaires etc. Quantitative data is more efficient, able to test hypotheses, but may miss contextual detail. Researcher tends to remain objectively separated from the subject matter.

Methods Of Research Data Collection

Quantitative Research Design

Surveys

Qualitative Research Design Observational Research

Natural Vs Contrived Disguised Vs Undisguised Structured Vs Unstructured Direct Vs Indirect Human Vs Mechanical

Personal Interviews
Telephone Surveys Mail Surveys Dairy Panel Method

Depth Interview Focus Group Interview Projective Techniques Biography Case Studies Ethnography Phenomenology Grounded Theory

Innovative Ways of Collecting Data

Service camps

Virtual Shopping
Consumer Consultants Game Stalls Carnival

 Market Segmentation

Market Segmentation
Market Segmentation can be defined as the process of dividing a market into distinct

subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix.

Benefits of Segmentation

Facilitates

proper

choice

of

target

market Facilitates tapping of the market, adapting, the offer to the target Makes the marketing effort more efficient and economic Benefits the customers as well

Bases for Market Segmentation

Geographic

Demographic
Age Life Cycle Stage

Social Class
Others

Psychographic Segmentation
Life Style

Buyer Behavior Segmentation

Readiness Stage Occasion Loyalty Status Hard Core Loyal

Soft Core Loyal

Switchers

Bases of Industrial Market Segmentation

Size of the customer Small Buyers Geographic Location

End use
Buyer behavioral motivation or Purchase

criteria

Stages of Segmentation
Define the total market Choose the bases of segmentation Evaluation of the segments

Is it sizeable Is it growing Is it profitable Is it accessible Is it compatible with the firms resources and capabilities Draw chart and Map products and segments Target an opportunity and positions a solutions

Measurement of Segments
Cluster Analysis

Multi Factor analysis method

Using Index numbers for selecting

demographics

 Evolution of

Consumer Behavior

Consumer Decision Making

Views on Consumer decision making

Economic Person Passive Person Cognitive Person Emotional Personal or Impulsive Model Brand recall Recall of attributes Recall of Evaluation Recall of experience

Information retrieved from internal search

Factors Influencing purchase decision

Situational Product Consumer related factor

Alternative Evaluation

Decide the brand to be purchased Gather information on alternative brands Determine the criteria for evaluation Take a final decision on brand based on determinative criteria

Levels of Consumer decision Making

Extensive Problem Solving Limited Problem Solving Decision Category Basic Purchase or consumption Decision Brand purchase or Consumption decision. Channel Purchase decision Payment purchase decision

Consumer Decision Making Rules

Compensatory Rule Non Compensatory Rule Lexicographic decision rule Conjunctive Rule Disjunctive decision Rule

Post Purchase Stage

Perception is right Acquire knowledge for his future decision Is he satisfied Disposition about the product after usage Cognitive Dissonance

Take No action Discontinue Complaint to the consumer court/other forums Private responses Factors effecting complaint Significance of consumption Knowledge and experience Difficulty of seeking redress Chances of success in complaining

Disposition

Consumer Decision Making Model

External Influence

Sociocultural Environment:

Input

Firms marketing effort: Product Price Channels of Distribution Promotion

Family Informal Sources Other noncommercial sources Social Class Subculture and Culture

Consumer Decision Making

Process

Need Recognition Prepurchase search Evaluation of Alternatives

Psychological Field:

Motivation Perception Learning Personality Attitudes

Experience
Post decision Behavior

Output

Purchase Trial Repeat Purchase

Postpurchase Evaluation

Motivation

Motivation is a propelling energy within a individual that directs him towards action. Unfulfilled needs create unrest in individuals this produces propelling force.

Need-feature that arouses an organism to action toward a goal, giving purpose and direction to behavior.
Classification of need Physiological needs Safety and Health needs Needs for love and companionship Need for pleasure Social Image needs Need to posses Characteristics of need Needs cannot be created Needs are never fully satisfied New needs emerge after satisfaction Multiplicity of needs Needs and wants are Interdependent Single need Multiple product and Single product multiple needs

Goal Selection

Personal experience Prevailing cultural norms and values Accessibility of goal Role of needs Needs and goal vary amongst individual Success and failure influence goals Frustration and self image defense mechanism in goal settings
Aggression Rationalization Regression Projection Autism Identification Repression

Characteristics of Motivation

Valence Stimulated Reflects individual differences Guided by need hierarchy Influence of effect Primary or Basic Motivation Secondary Motivation Extrinsic Motivation Internal Motivation Achievement Motivation Affiliation Motivation Competence Motivation Power Motivation Attitude Motivation Incentive Motivation Fear Motivation

Types Of Motivation

Motivation Process
Previous Learning

Unfulfilled Needs, Wants and Desire

Tension

Drive

Behavior

Goal need or Fulfillment

Cognitive Processes Tension Reduction

Arousal of Motives/ Triggering of Motives

Physiological Arousal Emotional Cognitive Environmental or Situational

Motivational Research
Development of Motivational Research Qualitative research Techniques used in Motivational research Metaphor Analysis Storytelling Word association and Sentence Compilation Thematic Appreciation test Drawing Pictures and Photo sorts

Theories of Motivation
McClellands Theory of Trio

of Needs
Needs For power
Need For Affiliation Need for Achievement

Maslows Need Hierarchy Theory

Physiological Needs Safety needs Social needs Esteem Needs Self-Actualization

Personality

Personality
Personality refers to those inner psychological

characteristics that both determine and reflect how a person responds to his/her enviornment

 Nature of Personality Personality reflects individual differences Personality is consistent and enduring Personality can change Characteristics of personality Unique Consistent Change Determinants of Personality
Heredity

Physical appearance, energy level, temperament, muscle composition. The contribution of heredity to personality development is for developing external appearance, behavior, social stimuli, self inner awareness, organizing traits etc. Environment Family members, culture, traditions, group members. Full potential of a individuals personality can be measured by observing how well that individual adjusts to a environment. Situation Individual personality tend to show a great variation in different situations. New situations bring new life experiences with them.

Theories of Personality
1. Psychoanalytic Theory (Freudian Theory): Developed by Sigmund Freud who developed his ideas about psychoanalytic theory from work with mental patients.

Psychoanalysis term used to refer to many aspects of Freuds work and research, including therapy and the research methodology. He relied heavily upon his observations and case studies of his patients According to Freud, the human mind is divided into two parts

Conscious Mind includes what you are aware of at any particular moment, your present perceptions, memories, thoughts, fantasies, feelings, what have you. Also includes the preconscious; anything that is not in our awareness but can be introduced. Unconscious Mind - includes all the things that are not easily available to awareness, such as our drives or instincts. According to Freud, the unconscious continues to influence our behavior and experience, even though we are unaware of these underlying influences.

Freudian Theory The ID

Entirely unconscious. Includes the instinctive and primitive behaviors. Primary component of personality. Has no contact with reality. a) Component of personality responsible for dealing with reality. b) Functions in the conscious, preconscious, and unconscious mind. c) Operates based on the reality principle, which strives to satisfy the id's desires in realistic and socially appropriate ways

The Ego

The Super Ego a) Freudian structure of personality that is the moral branch of personality. b) It

is our sense of right and wrong. c) Provides guidelines for making judgments

Defense Mechanism
The ego must defend itself against the id impulses and the superego. But when

the conflict becomes too much to handle, anxiety results. In such a case, the ego must protect itself and it does so by using certain defense mechanisms which twist the reality to suit the current scenario. Some of the defense mechanisms are given below.

Repression - banishing certain thoughts or memories from the conscious mind Denial - blocking external events from affecting ones own awareness.

Projection - tendency to see your own unacceptable desires in other people.

Sublimation transformation of an unacceptable impulse into a socially

acceptable form
Rationalization - the cognitive distortion of "the facts" to make an event or an

impulse less threatening.

 Non Freudian Personality theory CAD Theory

Complaint style Aggressive Style Detached Style

Traits theory Consumer Innovativeness Dogmatism Inner directed and other directed Optimum stimulation level Variety Seeking Behavior Ethnocentrism Impulse buying behavior

Difference between impulse and non impulse buying behavior. Nature of Impulse purchase Pure Impulse Suggestion impulse Reminder impulse Planned Impulse

 Factors influencing impulse behavior Marketing Implication

Compulsive buying behavior Gender and Personality Cognitive related personality factors Need for cognition Visualiser and verbalizer Personality measurement Objective and subjective tests

Word association tests Thematic appreciation tests Rorschach inkbolt tests The MMPI-2 Believers Primary Motivation Strivers Primary Motivation Experiencers Primary Motivation Makers Primary Motivation

VALS

Self Concept
Characteristics Learned Organized Dynamic Types Of self concept Actual self concept Ideal Self concept Social self concept Extended self

Brand Personality
Brand Personification

Product personality and gender

Product personality and geography Personality and color

Perception

Consumer Perception
Perception is the process by which an

individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world

 Sensory Perception Stimuli Individual sensory receptors

Taste Touch Smell Hearing Vision

Absolute Threshold Marketing implications Differential Threshold Webers Law Marketing Implications Subliminal Perception

Perception Process
Perceptual Selection Stimuli Characteristic

Size and intensity of stimulus Advertisement Placement White space Mood arousing Properties

Consumers Situational factors

Perceptual organization and Interpretation Figure and Ground Grouping

Proximity Closure Marketing Implication

Perceptual distortion Physical Appearance Stereotypes First impression Jumping to conclusions Halo effect

Perception and marketing Strategy

Company image Product Positioning Umbrella Positioning Positioning against competition Positioning based on a specific benefit Finding an un-owned position Ladders in customers head Positioning of a leader Positioning of a follower Positioning the competition Power of Name Power of No name The free ride trap Line Extension trap When can line extension work

Low Volume Product Crowded Market Small ad budget Commodity Product Distribution by sales rep

 Product repositioning Perceptual mapping Positioning of services Perceived price

Reference price Tensile and objective price Psychological pricing Price and product quality Premium pricing and Perception Value based pricing and perception Inflection price point and perception

Perceived Risk: is the uncertainty that consumers face when they cannot foresee the consequences of their purchase decisions
Types of Perceived risk Functional Risk Physical risk Financial Risk Social risk Psychological risk Time risk How consumers handle risk Consumers seek information Consumers are brand loyal Consumers select by brand image Consumers rely on store image Consumers buy the most expensive model Consumers seek reassurance

Learning

Learning : Is a process by which individuals acquire the purchase and

consumption knowledge and experience that they can apply to future related behavior

Elements of learning Motives Cues Response Reinforcement Importance of Learning

Behavioral Learning Theory

Classical Conditioning Classical conditioning applications

Classical conditioning and advertisements Retention of advertising Advanced classical conditioning concepts
Its application Massed vs distributed learning Brand loyalty Required Conditions Effect on behavior

Instrument (operant) conditioning

Observational ( social ) Learning

Cognitive Theory of Learning

Cognition as a psychological response Cognitive process of consumer decision-making Cognitive processing terms Activation Spreading activation Capacity limits Automatism Implications for advertisements by cognitive elaboration Hard selling Story grammar Big idea approach color

Memory
Sensory Short term Long term Semantic memory Episodic memory Schema Scripts Implications for marketers: Memory and advertisement

Memory and Branding

 How to make a consumer learn Linguistic mode

Note taking Charting Active learning

Non Linguistic mode Affective mode

Picture of Emotions : ICON Brand Consumer relationship Visual mnemonics relatively better on recall Audio mnemonics die faster when discarded

Brand Image & Product Positioning

Brand image Product positioning
Product position v. Brand image
Perceptual map

Product repositioning Brand Image

Brand equity

Nike Brand leverage Two requirements Risks

Attitude

Attitude is a learned predisposition to behave in a consistently favorable or unfavorable way with respect to given object

Characteristics Learned from personal experience Predisposed Directed toward an object Consistent Direct relationship with behavior Functions of attitude Knowledge function Value expressive function Utilitarian function Ego defensive function

Models
Tri component attitude model Single component attitude model

Multi attribute model Attitude toward object Attitude towards behavior model Fishbein theory of reasoned action model
Theory of reasoned action

Attitude formation

Socialization factor
Social factor Family Direct experience

Exposure to mass media

Conditioning

Attitude and behavior linkage

Attitude specificity Attitude strength Direct experience Attitude accessibility

Attitude change
The elaboration likelihood model: Central route Peripheral route Changing the basic motivational function The utilitarian function The ego defensive function The value expressive function The knowledge function Combining several functions Associating the product with special group or cause Resolving two conflicting attitudes Altering components of multi attribute models Changing relative evaluation Changing brand beliefs Adding an attribute Changing overall brand rating Low involvement Products attitude change strategies

Cognitive dissonance
Cognitive dissonance refers to a situation

involving conflicting attitudes, beliefs or behaviors. This produces a feeling of discomfort leading to an alteration in one of the attitudes, beliefs or behaviors to reduce the discomfort and restore balance etc. For example, when people smoke (behavior) and they know that smoking causes cancer (cognition).

Cognitive dissonance
The Fox and the Grapes by Aesop. A classical illustration

of cognitive dissonance is expressed in the fable The Fox and the Grapes by Aesop (ca. 620564 BCE). In the story, a fox sees some high-hanging grapes and wishes to eat them. When the fox is unable to think of a way to reach them, he decides that the grapes are probably not worth eating, with the justification the grapes probably are not ripe or that they are sour (hence "sour grapes"). This example follows a pattern: one desires something, finds it unattainable, and reduces one's dissonance by criticizing it. Jon Elster calls this pattern "adaptive preference formation". When the fox fails to reach the grapes, he decides he does not want them after all. Rationalization (making excuses) is often involved in reducing anxiety about conflicting cognitions.

Cognitive dissonance
An educator might introduce topics by challenging students'

intuitions.
For instance, a student may be more willing to learn the real cause of the seasons after wrongly guessing that it has something to do with changes in the Earth's distance from the Sun

Cognitive dissonance
Leon Festinger (1957) proposed cognitive dissonance theory, which states that a powerful motive to maintain cognitive consistency can give rise to irrational and sometimes maladaptive behavior. According to Festinger, we hold many cognitions about

the world and ourselves; when they clash, a discrepancy is evoked, resulting in a state of tension known as cognitive dissonance. As the experience of dissonance is unpleasant, we are motivated to reduce or eliminate it, and achieve consonance (i.e. agreement).
Cognitive dissonance was first investigated by Leon Festinger, arising out of a participant

observation study of a cult which believed that the earth was going to be destroyed by a flood, and what happened to its members particularly the really committed ones who had given up their homes and jobs to work for the cult when the flood did not happen. While fringe members were more inclined to recognize that they had made fools of themselves and to "put it down to experience", committed members were more likely to re-interpret the evidence to show that they were right all along (the earth was not destroyed because of the faithfulness of the cult members).

Culture

Culture is the sum of total learned beliefs, values and customs that serve to direct the consumer behavior of members of a particular society

Belief Value Customs Ritual Language and symbol Characteristics of culture

Learned Dynamic Shared

Indian core values Savings Bargaining Family Bonds High on Masculinity Uncertainty Avoidance

Subculture is a distinct cultural group that exists as an identifiable segment within a larger more complex society

Geographic Sub culture Religious subcultures Age subcultures Gender as a subculture

Regional Language and advertising

 Group dynamics and

Reference Groups

Group : Two or more people who interact to accomplish either individual or mutual goals
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 and behavior. Types of reference Groups Degree of personal involvement Based on membership Aspirational group Dissociative Group Function Degree of Organization Formal Informal

 Selected Consumer-Related Reference Groups Friendship Groups Shopping groups Work groups Virtual Group or communities Consumer-action groups Reference group-Influence Normative Influence Value expressive Influence Informational influence Factors that effect Reference group-Influence Individual Factors Reference group related factors Product Related factors

 Reference group appeal Celebrities

Testimonial Endorsement Actor Spokesperson

Six uses of celebrity endorsements Attracts attention Associative Benefit Demographic Connect Mass Appeal Psychographic Connect Establishes credibility Causes of letdown Improper positioning Brand-celebrity disconnect Clutter Flutter Quality/Performance Confusion/Skepticism Risks Expert The Common Man Executive and Employee spokesperson Trade or spokes

 Family

Family : two ore more persons related by blood, marriage, or adoption who reside together
Functions of the Family Economic well being Emotional support Sustainable family lifecycle Family Decision Making and consumption related roles Key Consumption Roles

Initiator Influencers Gatekeepers Deciders Buyers Prepares Users Maintainers Disposers

Role Structure and relative influence across product categories Role structure and relative influence by stage of decision making

process

How a family makes Purchase decision

Characteristics Spends money continuously for many years Decisions made with private intimate and social group Decisions not independent form others Multiple decision makers Differs by the product Difference of opinion Decision making and dual career families Demographics and family decision making Dynamic husband wife decision making Studies Husband and wife conflict resolution

Family Life Cycle

Bachelorhood Honeymooners Parenthood
Stage Role of children in family decision making

Core category Peripheral category Adult category 6 I kid insight module Inquisitive Indulgent Integrity Influencer Involved Incisive Post parenthood Dissolution Implications for marketers

Social class: Is division of members of society in various hierarchical divisions which give rise to social status to members
Social Class Division Social Class Measurement Subjective measures Reputational measures Objective measures Single variable index Occupation Education Income

Casts Composite variable index Social Class categories Two category Three category Four category Five category Six category Seven category Eight category Nine category

Mobility
Upward mobility Social class profiles ( SK) 371 Downward mobility

Diffusion of Innovation
Diffusion of Innovations is a theory that seeks

to explain how, why, and at what rate new ideas and technology spread through cultures. Everett Rogers, a professor of rural sociology, popularized the theory in his 1962 book Diffusion of Innovations. He said diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.

Diffusion of Innovation : Elements

Element Innovation Definition Rogers defines an innovation as "an idea, practice, or object that is perceived as new by an individual or other unit of adoption" A communication channel is "the means by which messages get from one individual to another". "The innovation-decision period is the length of time required to pass through the innovation-decision process"."Rate of adoption is the relative speed with which an innovation is adopted by members of a social system".

Communication channels Time

Social system

"A social system is defined as a set of interrelated units that are engaged in joint problem solving to accomplish a common goal".

Diffusion of Innovation

Diffusion of Innovation : Five stages of the Adoption Process

Stage
Knowledge Definition In this stage the individual is first exposed to an innovation but lacks information about the innovation. During this stage of the process the individual has not been inspired to find more information about the innovation. In this stage the individual is interested in the innovation and actively seeks information/detail about the innovation. In this stage the individual takes the concept of the change and weighs the advantages/disadvantages of using the innovation and decides whether to adopt or reject the innovation. Due to the individualistic nature of this stage Rogers notes that it is the most difficult stage to acquire empirical evidence

Persuasion

Decision

Implementation

In this stage the individual employs the innovation to a varying degree depending on the situation. During this stage the individual determines the usefulness of the innovation and may search for further information about it. Although the name of this stage may be misleading, in this stage the individual finalizes his/her decision to continue using the innovation and may end up using it to its fullest potential.

Confirmation

Adoption Process

Adoption Process
The rate of adoption is defined as the relative speed with which members of a

social system adopt an innovation. It is usually measured by the length of time required for a certain percentage of the members of a social system to adopt an innovation . The rates of adoption for innovations are determined by an individuals adopter category.

Adoption Process
Adopter category Innovators

Definition Innovators are the first individuals to adopt an innovation. Innovators are willing to take risks, youngest in age, have the highest social class, have great financial lucidity, very social and have closest contact to scientific sources and interaction with other innovators. Risk tolerance has them adopting technologies which may ultimately fail. Financial resources help absorb these failures. This is the second fastest category of individuals who adopt an innovation. These individuals have the highest degree of opinion leadership among the other adopter categories. Early adopters are typically younger in age, have a higher social status, have more financial lucidity, advanced education, and are more socially forward than late adopters. More discrete in adoption choices than innovators. Individuals in this category adopt an innovation after a varying degree of time. This time of adoption is significantly longer than the innovators and early adopters. Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, and seldom hold positions of opinion leadership in a system. Individuals in this category will adopt an innovation after the average member of the society. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership. Individuals in this category are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership. These individuals

Early Adopters

Early Majority

Late Majority

Laggards