Unit 3

Group Determinants of CB:

The determinants of consumer behavior can be grouped into three major captions
namely, economic, psychological and sociological. An attempt is made to elucidate
these with least complications. It is basically divided into following parts:
1. Economic Determinant
2. Phycological Determinant
3. Sociological Determinants

I. Economic Determinants:
Economic scientists were the first among social scientists to study consumers and
their behavior and provided the details about the solutions to the consumer and
consumption problems. Economists, as we are aware, took man as a social and
rational animal.

The basic economic determinants among others are:

1. Personal income:
One’s income is the reward for one’s economic efforts. Income means purchasing power. When we talk of
income in marketing sense, we are more concerned with ‘disposable income’ and “discretionary income’.
‘Disposable income’ is the amount of money that a consumer has at his disposal for spending or saving or
both. In other words, of the total gross income, whatever balance remains after meeting pre­emptive
demands like taxes, debt repayment and debt servicing charges and the like. Any change in disposable income
will have change in consumer buying decisions. Decline in disposable income reduces the consumer spending;
however, when disposable income rises, consumer spending not only rises but makes them to go in for more
of luxuries.

2. Family income:
Where a consumer is the member of a joint family, the buyer behaviour is influenced by the family income
rather than the individual income. It does not mean that one can ignore the individual income, for family
income is the aggregate of individual income of all the members of the family.
In a joint family, it may so happen that a rise in an individual member’s income may be neutralised by a fall in
another member’s income. That is why; it is the relationship between the family size or the requirements and
the income that finally determines the buying behaviour or the family members.

3. Consumer income expectations:

Many a times, it is the future income expectations of the consumer that influences such consumer behaviour.
It is the optimism or the pessimism about consumer income that determines the level of current spending.
If there are bleak prospects of future expected income, he spends less now and saves more and vice versa. It
is worth the noting here that the force and vitality of a tendency to spend or save depends on the nature of
consumer needs.
In case of basic needs of living, such tendency will be too weak for no consumer denies the minimum
subsistence level merely because to bleak future income expectations. However, in case of non-essential
goods, such tendency may be very strong to save than to spend if he is expecting weak future income
generation and vice versa.
4. Consumer liquid assets:
It is the consumer liquid asset position that influences the consumer behaviour. Liquid assets of
consumers are the assets held in the money or near-money forms of investments. The best
examples of this kind are hard cash, bank balance, bank deposits, shares and bonds and saving
certificates. These assets are built up to buy some consumer durables or to meet unexpected
future needs or contingencies.
If a person has more such liquid assets, more carefree he comes in spending the current or the regular
income.

5. Consumer credit:
Availability or paucity of consumer credit has its impact on consumer buying behaviour. Consumer
credit is a facility extended by a market to postpone the payment of products bought to some
future date.
Consumer credit takes number of shapes like deferred payment, instalment purchasing, hire-purchase
arrangements and the like. Easy availability of consumer credit makes the consumer to go in for
those consumer durables which he would have postponed otherwise. Further, it makes him to
spend more freely the current income.

6. The level of standard of living:

The consumer behaviour has the impact of the established standard of living to which he is
accustomed. Even if consumer income goes down, the consumer spending will not come down
proportionately because, it is very difficult to come down from an established standard of living.
On the other hand, rise in income tends to improve upon the established standard of living. In case the
income falls, the short-fall is made good by borrowings to a certain extend over a short period of
time.
II. Psychological Determinants:
Psychologists have also provided certain clues as to why a consumer behaves this way or that way. The major psychological
determinants internal to the individual are motivation perception learning, attitude and personality.
Here is an attempt to explain and to know their implications in so far as consumer behaviour is concerned.
1. Motivation:
Motivation is the ‘why’ of behaviour. It is an intervening variable between stimulus and response and a governing force
of consumer behaviour.
“Motivation refers to the drives, urges, wishes or desires which initiate the sequence of events known as behaviour.” as
defined by Professor M.C. Burk. Motivation is an active, strong driving force that exists to reduce a state of tension and to
protect, satisfy and enhance the individual and his self-concept. It is one that leads the individual to act in a particular way.
It is the complex net-work of psychological and physiological mechanisms.
Therefore, motives can be conscious or unconscious, rational or emotional, positive or negative. These motives range from
a mere biological desires like hunger and thirst to the most advanced scientific pursuits like landing on the Moon or Mars.
It was Abraham Maslow who developed five steps human need hierarchy those of survival-Safety Belongingness and Love-
Easteem and Self Actualisation.
According to him, fulfillment of one will lead to the fulfillment of higher motives. The implications are that as we move up
in the ladder, the input of marketing becomes more and more deep and subtle.
2. Perception:
Marketing management is concerned with the understanding of the process of perception because, perception leads to
thought and thought leads to action. Perception is the process whereby stimuli are received and interpreted by the
individual and translated into a response.
In other words, perception is the process by which the mind receives, organises and interprets physical stimuli. To perceive
is to see, hear, touch, taste, smell and sense internally something or some event or some relation.
Perception is selective because, and individual cannot possibly perceive all stimulus objects within his perceptional field;
hence, he perceives selectively. Perception is organized because, perceptions have meaning for the individual and they do
not represent a buzzing confusion. Perception depends upon stimulus factors. That is, the nature of physical stimulus itself
is a determinant of perception.
The variables like colour size, contrast, intensity, frequency and movement are of this kind. Again, perception depends on
the personal factors. What the individual brings to the situation governs perception his ability to see or hear the message,
his needs, his moods, memory, expressions and values all these modify the message reception.
3. Learning:

In behavioural science, learning means any change in behaviour which comes about as a result of experience. Learning
is the process of acquiring knowledge. Consumer behaviour is a process of learning because; it is modified according to
the customer’s past experience and the objectives he or she has set. This process of learning is made up of four stages
namely, Drive- cue-response and Reinforcement. ‘Drive’ refers to an internal state of tension which warrants action. As
most consumer behaviour is learnt behaviour, it has deep impact on consumer buying process. Prior experience and
learning acts as buying guide. In-spite of such habitual behaviour, one can think of reasonable amount of brand
switching, trying new products, does take place.
The strong tendency of most consumers to develop brand loyalties definitely benefits the makers of established
brands. This makes the manufacturer of a new brand to face difficulty in breaking such loyalties and encouraging brand
switching.

4. Attitude:

The concept of attitude occupies a central position in the consumer behaviour studies in particular and social
psychology in general because; attitude measurements help in understanding and prediction of consumer behaviour.
‘Attitude’ refers to a predisposition to behave in a particular way when presented with a given stimulus and the
attitudes towards people, places, products and things can be positive or negative or favourable or unfavourable.
Attitudes develop gradually as a result of experience; they emerge from interaction of a person with family, friends,
and reference groups. There are three distinct components of attitude namely, cognitive, affective and co-native.
‘Cognitive’ component is what an individual believes about an object, thing or an event whether it is good or bad,
necessary or unnecessary, useful or useless.
It is based on the reason and is linked with knowledge and about the object, thing or an event whether it is pleasant or
unpleasant, tasty how an individual responds to the object, thing or an event. It is based on the other two components
and is related with his behaviour.
Each of the three attitude components vary according to both the situation and the person. The marketing manager’s
success is determined partly by his ability to understand, predict and influence the consumer attitudes.
5. Personality:
Very often, the word ‘personality’ is used to refer to the capacity of a person for popularity,
friendliness or charisma. However, in strict sense, it refers to the essential differences between one
individual and another.
Therefore, personality consists of the mannerisms, habits and actions that make a person an
individual and thereby serve to make him distinct from everyone else. It is the function of innate
drives, learned motives and experience.
This means that an individual responds with certain amount of consistency to similar stimuli.
Personality is the interplay of three components namely, ‘id’, ‘the ego’ and the ‘super ego’.
The ‘id’ governs the basic drives and the instincts of an individual. On the other hand, the ‘super
ego’ disciplines the ‘id’ by suppressing anti-social behaviour; it drives the individual in the direction
of more high minded pursuits of civilizations.
The ‘ego’ component is the executive and makes the conscious decisions and reconciles the
inflicting demands of ‘id’ and ‘super ego’, wherever necessary. For instance, ‘id’ may force an
individual to make full use of consumer credit to buy an automobile, ‘super ego’ dissuades such an
activity as borrowing is a kind of social sin in Indian society.
It is ‘ego’ that reconciles these and works out a compromise making the individual to pay
instalments regularly without any strain on his regular budget.
The personality of an individual is either expressed in terms of traits or type. The personality traits
may be aggressiveness honesty anxiety independence sociability and so on.
The personality types may be introvert or extrovert or another classification as tradition direction
outer direction and inner direction. Each of these traits and types has been explored as the possible
clues to the behaviour of consumers.
Evaluation of personality’s role in marketing is seen in drawing consumer profiles and
psychographic market segmentation.
III. Sociological Determinants:
In the area of psychological determinants, the consumer behaviour was seen from the stand point view
of an individual. However, the sociologists and social psychologists have attempted to explain the
behaviour of a group of individuals and the way in which it affects and conditions and individual’s
behaviour in marketing or purchase decisions.
These groups of individuals as determinants are:
(1) Family
(2) Reference groups
(3) Opinion leaders
(4) Social class and
(5) Caste and culture.

1. Family:
Many of the decisions made by consumers are taken within the environment of the family and are
affected by the desires, attitudes, and values of the other family members. Family, as a primary
group, is vital because, it links the individual with a wider society and it is through this that the
individual learns the roles appropriate to the adult life. The family can be ‘nuclear’ or ‘extended’.
A ‘nuclear’ family is a two generational family which consists, usually, a mother-father and children.
The ‘extended’ family is one that spans at-least three generations which consists of mother-father-
children-grandparents uncle-aunts, cousins-nephews and other in-laws. There is another way of
classifying the family based on family life-cycle.
This classification is ‘home making phase’ from marriage to birth of the first child; the ‘procreation
phase’ from the birth of the first child to the marriage of the first child’s; the dispersion phase’ from
the marriage of the first child to the marriage of the last and the ‘final phase’ from the marriage of
the last child to the death of original partners.
2. Reference groups:
Each person in the society is not only the member of his family but the member of some
group or groups outside the family circle. These groups can be called as ‘reference
groups’.
‘Reference groups’ are those groups which an individual identifies with to the extent that
these groups become a standard or norm which influences his behaviour.
Reference group is a social and professional group that influences the individual’s
opinions, beliefs and aspirations. It is one that provides an individual with a sense of
identity, accomplishment and stability.
Generally, a person refers to any one of the following types of reference groups in
building his or her behaviour.

3. Opinion leaders:
Like reference groups, ‘opinion leaders’ or ‘influentials’ play a key role in influencing the
buying behaviour of their followers. Very often we come across situations where a person
refers to an individual than a group in formulating his or her behaviour pattern. The
individual to whom such reference is made by a person or persons is the opinion leader.
The beliefs, preferences, attitudes, actions and behaviour of the leader set a trend and a
pattern for others to follow in given situation. In very intimate reference group, there is a
reference person, an informal group leader.
The group of followers respects him and looks up to him. He is the innovator in the group
of followers who respect him and look up to him. He is the innovator in the group who
first tries new ideas and products and then propagates them to his followers.
4. Social class and caste:
Buying behaviour of individuals is also influenced by the social class and the caste to which they
belong. Social class is a relatively permanent and homogeneous division of a society into which
individuals or families sharing similar values, life-style, interests and behaviour can be categorized.
Social class is a larger group than intimate group in structure.
Constitution of a social class is determined by the income, authority, power, ownership, life­styles,
education, consumption patterns, occupation, type and place of residence of the individual
members. In our country, we can think of three classes are as ‘rich’, ‘middle’ and ‘poor’. Caste, on the
other hand, is the group of the membership by birth. It is not the wealth but the birth that decides
his or her caste. These castes were based on activity specialisation of profession or occupation.

5. Culture:
Culture adds yet another dimension to the study of consumer behaviour. ‘Culture” refers to all those
symbols, anti-factor and behavioural patterns which are passed on socially from one generation to
the next.
It includes cognitive elements, beliefs, values, and norms, signs and non-normative behaviour.
Cultures are specific to the areas in which they evolve. Yet two nations can enjoy a common cultural
heritage. Thus, each nation has its distinct culture ; however, in a particular nation, there may be
subcultures identified on the basis of ethnicity, nationality, religion and race.
Cultural and sub-cultural groups have their unique consumption patterns that provide important
bases to the marketers.
Cultural trends have significant implications for market segmentation, product development,
advertising, merchandising, branding and packaging. While designing the marketing-mix, it is but
essential to determine the broad cultural values that are relevant to the product as well as the most
effective means of conveying these values.
The Family Life Cycle:

As we all grow and enter different phases in our lives, we go through various challenges
and conquer milestones unique to that phase. For example, in the first few years of life,
a baby is dealing with learning to trust his or her caregivers, whereas the main task of a
teen is the need to figure out their own identity. the stages an individual goes through
during life is not the only type of growth that counselors should pay attention to. For
counselors doing family therapy, it is also important to understand that the family itself
has its own stages of development. This can be described by the family life cycle, or a
series of developmental stages a family moves through over time.

the traditional FLC models proposed over the years can be synthesized into jut five basic
stages which are as follows—
• Stage-I : Bachelorhood – Young single adult living away 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 This FLC stage consists of young single men and women w h o have established households away
from their parents. Although most members of this FLC stage are fully employed, many are college or university
students who have left their parents’ homes. Young single adults are apt to spend their incomes o n rent, basic
home furnishings, the purchase and maintenance of automobiles, travel & tourism, entertainment, cloth in g and
accessories. Members of bachelorhood stag e have sufficient disposable income. Marketers target singles for a wide
variety of products and services. In most large cities t h e r e a r e t r a v e l a g e n t s , health clubs, sports clubs and
other service and product marketers that find this FLC stage a lucrative target niche. Moreover, this FLC stage is not
that much lucrative for home appliance marketers.

• Stage II :
– Honeymooners The honeymoon stage starts immediately after the marriage vows are taken and generally
continues until the arrival of the couple's firs t child . This FLC stage serves as a period o f adjustment to married
life. Because many young husbands and wives both work, 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 home appliances, bed room and living room furniture, carpeting,
drapes, dishes and a host of utensils and accessory items). This stage is one of the lucrative FLC stages for home
appliance marketers.

• Stage III :
– Parenthood When a couple has it's first child the honeymoon is considered to be 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. During this stage the interrelationships of family members
and the structure of the family gradually change. Furthermore, the financial resources of the family change
significantly, as one (or both) parents progress in a career and as child rearing an d educational responsibilities grad
u al l y increase and finally decrease as children become self-supporting. They also are an important market for
many investment and 11 insurance services. It is again a lucrative FLC stage for home appliance marketers.
• Stage IV :
– Post-parenthood Because parenthood extends over many years, it is only natural to find that post–
parenthood, when all the children have left home; it is traumatic for some parents and liberating for
others. This so-called emptynest 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 here 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.
It is during this stage that married couples tend to be most comfortable financially. Today's empty
nesters have more leisure time. They travel more frequently, take extended vacations, and are likely
to purchase a second home in a different climate. They h a v e higher disposable incomes because of
savings and investments, and they have fewer expenses. For this reason families in the post–
parenthood stage are an important market for luxury goods, new automobiles, expensive furniture,
and vacations to far–a way places. This stage is also quite lucrative from the point of view of home
appliance marketers.

• Stage V :
– Dissolution Dissolution of the basic family unit occurs with the death of one spouse. When the
surviving spouse is in good health, is working or has adequate savings, and has a supportive family
and friends, the adjustment is easier. The surviving spouse (usually, the wife) often tends to follow a
more economical lifestyle. Many surviving spouses see each other out f o r companionship; others
enter into second (or third or even fourth) marriages. In this stage people generally, buy more
medicinal products and other products like the retired people, seek more attention, affection and are
more security conscious. This stage is not lucrative at all for home appliance marketers
Opinion Leadership:
The most important thing for the marketer is to understand about the role of
‘opinion leadership’ in marketing of goods and services. Opinion leadership which is
otherwise known as word of mouth communication is an important personal
influence on consumers. With the proliferation of cell phone usage and e-mail, many
people are always available to friends, family and business associates. Message
spreads like virus among people. Opinion leaders offer advice or information about a
product, service and how a particular product may be used. Words of mouth takes
place through personal or face to face communication.

Examples of Opinion Leadership

The role of opinion leadership could be seen in the following examples.
1. During casual talk, a friend talks about the car he recently bought. He recommends
buying it.
2. A person shows a friend photographs of his recent tour abroad. He suggests that by
using a particular make of camera, better pictures could be shot.
3. A family wants to have a swimming pool in their spacious house. The family head asks
neighbors which pool construction company they should call.
4. A parent wants admission for his child in a particular school. He contacts other
parents sending their children to the same school.
Personal Influences
The Personal Factors are the individual factors to the consumers that strongly
influences their buying behaviors. These factors vary from person to person
that results in a different set of perceptions, attitudes and behavior towards
certain goods and services
• Age: The consumer buying behavior is greatly influenced by his age, i.e. the life
cycle stage in which he falls. The people buy different products in different stages
of the life cycle. Such as the purchase of confectionaries, chocolates is more when
an individual is a child and as he grows his preferences for the products also
changes.

• Income: The income of the person influences his buying patterns. The income
decides the purchasing power of an individual and thus, the more the personal
income, the more will be the expenditure on other items and vice-versa.

• Occupation: The occupation of the individual also influences his buying behavior.
The people tend to buy those products and services that advocate their profession
and role in the society. For example, the buying patterns of the lawyer will be
different from the other groups of people such as doctor, teacher, businessman,
etc.

• Lifestyle: The consumer buying behavior is influenced by his lifestyle. The lifestyle
means individual’s interest, values, opinions and activities that reflect the manner
in which he lives in the society. Such as, if the person has a healthy lifestyle then he
will avoid the junk food and consume more of organic products.
Diffusion of Innovation
Diffusion of innovation is the process by which the adoption of an innovation spreads over a period of time to other
consumers through communication.
The process of diffusion will occur for new products as informational influence and is likely to affect the adoption of
new products across groups. Consumer researchers trying to explore the area of consumer acceptance of new
products are primarily interested in understanding two closely related processes.

The diffusion process.

The diffusion process is a macro process related to the spread of a new innovation from its source (or manufacturer)
to the final consumers. Whereas, adoption is a micro process focusing on the stages through which an individual
passes when deciding to accept or reject a new innovation Over and above these two interrelated processes,
marketers are also interested in identifying the “Consumer innovators “, those who are first to purchase a new
product for it is felt that this group will play a major role in the success or failure of the innovation.
A consumer is likely to find a new idea, or product or even a new service attractive. But the organisation which is
trying its hand at the new innovation is likely to be concerned about how fast the diffusion of the innovation is likely
to take place. Even though, it is only after an intensive research that a new concept or product is launched, there is
always an element of risk involved. Through research, answers to certain questions are sought.

1. Does the innovation cater to the need of the target customer?

2. Have the target consumer understood how the innovation is relevant to their need?

3. Is the new product available and being demonstrated widely?

4. Has the firm identified the opinion leaders? If yes, is the firm making efforts to convert opinion leaders into
committed customers?

5. Is the company providing suitable incentives to sceptics to get them converted to adopters?
 These questions are pertaining to certain broad areas which can be of
concern to marketers launching new products. One way of educating
customers about new innovations will be by communicating the benefits
the new innovations would provide. Thus diffusion of innovation is a
challenge before the marketer to identify the ‘value added benefits’ which
can be associated with the product and communicate it to the consumer.

‘Diffusion’ is regarded as a macro-process that deals with the adoption and

spread of a new product or service offering amongst the potential market.
It relates to the acceptance/rejection of an innovation by the segment(s).
‘Adoption’, on the other hand, is a micro-concept that lays emphasis on
the various phases or stages through which an individual consumer goes
through while accepting/ rejecting a new product offering.

While diffusion is a group phenomenon, which explains how a new product or

service is spread in the marketplace, adoption is an individual process,
which explains the stages one goes through from first hearing about the
innovation to finally adopting it.
Stages involved in the Process of Adopting New Products

1. Awareness Stage:
In this stage an individual comes to know about a new innovation or new idea or new
product/service. He becomes aware of the innovation from any source of information
such as from friends, neighbour, co-workers, commercial sources etc.

2. Interest Stage:
After being aware of the new product or innovation, in this stage, the consumer gets
stimulated and interested in the innovation. He goes about seeking more information
about the new product. He is interested in gathering more detailed information
related to the innovation in terms of its utility aspects, performance, durability and so
on.

3. Evaluation Stage:
The consumer ‘interested’ in the innovation will seek more information on it from all
the sources he finds reliable. After collecting all the information on the innovation,
the consumer will mentally try to evaluate the worthiness of the innovation. He will
assign weights to the product attributes and work out to what extent the new
product will be useful to him and then decide on whether or not to buy the new
product.
4. Trial Stage:
After evaluating the worthiness of the new product, the consumer
may decide to try out the innovation on a small scale basis initially
and make an actual assessment of the value of the new product. This
stage also indicates that now the consumer is mentally prepared to
try out the innovation, though initially on a small scale.
He/she wants to experiment with the innovation and depending on
how comfortable they are with the product, they will decide whether
or not new product or innovation, it looks more logical and practical
to go for a sample trial before opting for full time usage.

5. Adoption Stage:
On being satisfied with the use of the new product, purchased by
him on a trial basis, the consumer now decides to make full and
regular use of the innovation. This is the last stage in the adoption
process. The consumer takes the decision to go for a full-fledged and
continuous use of the new product or innovation.
 UNIT 4
communication, the exchange of meanings between individuals through a common system of symbols.
Process of Communication
Communications is a continuous process that mainly involves three elements viz. sender, message, and receiver. The
elements involved in the communication process are explained below in detail:
1. Sender
The sender or the communicator generates the message and conveys it to the receiver. He is the source and the one who
starts the communication
2. Message
It is the idea, information, view, fact, feeling, etc. that is generated by the sender and is then intended to be communicated
further.
3. Encoding
The message generated by the sender is encoded symbolically such as in the form of words, pictures, gestures, etc. before it
is being conveyed.
4. Media
It is the manner in which the encoded message is transmitted. The message may be transmitted orally or in writing. The
medium of communication includes telephone, internet, post, fax, e-mail, etc. The choice of medium is decided by the
sender.
5. Decoding
It is the process of converting the symbols encoded by the sender. After decoding the message is received by the receiver.
6. Receiver
He is the person who is last in the chain and for whom the message was sent by the sender. Once the receiver receives the
message and understands it in proper perspective and acts according to the message, only then the purpose of
communication is successful.
7. Feedback
Once the receiver confirms to the sender that he has received the message and understood it, the process of
communication is complete.
8. Noise
It refers to any obstruction that is caused by the sender, message or receiver during the process of communication. For
example, bad telephone connection, faulty encoding, faulty decoding, inattentive receiver, poor understanding of message
due to prejudice or inappropriate gestures, etc.
Process of Communication
TYPES OF COMMUNICATION

VERBAL COMMUNICATION
Verbal communication occurs when we engage in speaking with others. It can be face-to-face, over the telephone, via Skype
or Zoom, etc. Some verbal engagements are informal, such as chatting with a friend over coffee or in the office kitchen, while
others are more formal, such as a scheduled meeting. Regardless of the type, it is not just about the words, it is also about the
caliber and complexity of those words, how we string those words together to create an overarching message, as well as the
intonation (pitch, tone, cadence, etc.) used while speaking. And when occurring face-to-face, while the words are important,
they cannot be separated from non-verbal communication.
NON-VERBAL COMMUNICATION
What we do while we speak often says more than the actual words. Non-verbal communication includes facial expressions,
posture, eye contact, hand movements, and touch. For example, if you’re engaged in a conversation with your boss about
your cost-saving idea, it is important to pay attention to both the their words and their non-verbal communication. Your boss
might be in agreement with your idea verbally, but their nonverbal cues: avoiding eye contact, sighing, scrunched up face, etc.
indicate something different.
WRITTEN COMMUNICATION
Whether it is an email, a memo, a report, a Facebook post, a Tweet, a contract, etc. all forms of written communication have
the same goal to disseminate information in a clear and concise manner – though that objective is often not achieved. In fact,
poor writing skills often lead to confusion and embarrassment, and even potential legal jeopardy. One important thing to
remember about written communication, especially in the digital age, is the message lives on, perhaps in perpetuity. Thus,
there are two things to remember: first, write well – poorly constructed sentences and careless errors make you look bad; and
second, ensure the content of the message is something you want to promote or be associated with for the long haul.
LISTENING
The act of listening does not often make its way onto the list of types of communication. Active listening, however, is perhaps
one of the most important types of communication because if we cannot listen to the person sitting across from us, we
cannot effectively engage with them. Think about a negotiation – part of the process is to assess what the opposition wants
and needs. Without listening, it is impossible to assess that, which makes it difficult to achieve a win/win outcome.
VISUAL COMMUNICATION
We are a visual society. Think about it, televisions are running 24/7, Facebook is visual with memes, videos, images, etc.,
Instagram is an image-only platform, and advertisers use imagery to sell products and ideas. Think about from a personal
perspective – the images we post on social media are meant to convey meaning – to communicate a message. In some cases
that message might be, look at me, I’m in Italy or I just won an award. Others are carefully curated to tug on our heartstrings –
injured animals, crying children, etc.
• What is Persuasive Communication
The act of presenting arguments to move,
motivate, or change your audience is
called persuasion. Persuasion can be either
implicit or explicit. Motivation involves force, a
stimulus, or enough influence to bring about a
change. Motivation is the stimulus while
persuasion is the process that compels your
audience to change their beliefs and behavior,
adopt your place and relate to your arguments.
Principles Common to Persuasive Communications
Social psychologist Robert Cialdini mentions six principles of persuasion that are impactful
and effective:
Reciprocity - Reciprocity is the expectation for the exchange of services or value mutually. You
build in a moment making people feel urged from social norms and standards to
reciprocate once you take the lead and give.
Scarcity - People are generally attracted to something rare and exclusive. Scarcity is the idea of
limited supply or inadequate resources.
Authority - Trust is the most important virtue to the decision of purchase. Your expertise needs
to be known for you to gain credibility. Referencing experts and expertise involve the
principle of authority.
Commitment and Consistency - It is difficult to recall oral communication at all times. The
principle of commitment and consistency brings the social standard of respecting ones
words to bear during purchase.
Consensus - People tend to look at each other while making a purchase or a decision. The herd
mentality prevails among humans at a higher level across humanity. When we don't have
enough information about something, we tend to follow others paths. The tendency of the
individual to follow the leader of the group is the principle of consensus.
Liking - Effective communication goes hand in hand with safety. We are more likely to make
conversation or interact only when we feel safe. We are drawn to people who like us and
communicate to us. It is quite effective. We are also attracted to people who are like us
irrespective of caste, race and other socio-economic backgrounds.
• Desired Effects of Persuasive Communications
• The objectives of persuasive communications include:
• Stimulate - To strengthen their beliefs and bring them to the
foreground, facts need to be presented. This way, the issue is
delivered to the surface. You can keep in mind the common ground
and shared beliefs, and then introduce information that the audience
may not be aware of. The common ground serves as a strategy to
stimulate interest.
• Convince - The objective is to bring change in beliefs, attitudes,
judgments and values of your audience. As the audience may involve
their bias in judgement, plan a few valid points for them to listen to
and understand your topic. If the audience agrees with you mind that
scarcity or a problem exists, they will look for solutions. Then you may
refer your product as a better alternative and then recommend an
improved future action.
• Call to Action - With this option, you call your audience to action by
getting their attention. The objectives is to create curiosity, solve a
problem, or propose a range of options as solutions.
End Results of Persuasive Communications

Adoption - Adoption is where the speaker wants for the receivers to think differently
and adopt a new habit or action.
Deterrence - Deterrence makes the speaker persuade the audience not to start
something if they have not already begun.
Discontinuation - Discontinuance involves the speaker persuading the audience to stop
doing something that they have been doing for a while such as smoking.
Continuance - Continuance makes the speaker want to persuade the audience to keep
doing what they have been doing such as re-elect a candidate or continuing their
education.
Increased Consideration - You would want to increase consideration on the audience
who hold hostile views or are neutral and curious. Their support for your argument
increases the consideration of your position. In this presentation, you won't be
asking for action but an increase in consideration. This may lead the customer to the
point at future.
Tolerance of Alternative Perspectives - As a speaker, you would want your audience to
develop an understanding of the alternate point of views and perspectives, but not
necessarily, the acceptance of alternate viewpoints. By starting from a common
point of interest and by introducing a similar idea, you are persuading the audience
to consider another perspective.
Strategies for Persuasion
Persuasion requires a truthful and well-organized presentation of facts upon which a person
may choose to act. Being persuasive in communication involves:

Understanding of the Product, Service, or Idea - Knowing the product, idea or service well
enough. Being well informed about the product. The product should be used, and usage of
the product should be monitored. Comparing product with rivals in the market. Request
feedback from others. Knowing the answers to the following questions:
What good will the item or service do to its users?
What are its features that are superior to others? (design, manufacture, the benefit of the
receiver)
What makes the product or idea different from and superior to others?
What costs does the user have to bear?

Knowledge of the Audience - To whom is the message directed? What are the consumers wants
and needs? Is the message directed towards an individual or a group of individuals? If a
group of individuals, what are the common things between the individuals in that group?
What are the goals, work and education pursued by the group of individuals? How much of
their requirements have been satisfied with this product or by another product? How will
cultural differences affect your product? This requires prediction of the arguments that
might come from the audience and having a reasonable response to those arguments. It
requires identification of the action that is desired.
Types of Persuasive Communications
Ethos, Pathos, and Logos are referred to as the 3 Persuasive Appeals (Aristotle coined the terms) and are all
represented by Greek words. They are modes of persuasion used to convince audiences.

Ethos
Ethos, or the appeal to ethics, refers to the effort to convince your audience of your credibility or character. Before
you can convince an audience to accept anything you say, they have to accept you. Whether you are creating a
flier, giving a presentation, applying for a job, or teaching a workshop, people won’t be persuaded by you unless they
trust you. When it comes to communication, trust can be built in a number of ways. It is up to you to understand
how you need to respond in each situation and adapt accordingly.
Ethos can be promoted by choosing appropriate language & vocabulary (dependent on the audience and topic), by
making yourself look honest, by paying attention to your movements and the way you dress (for your digital
presence pay attention to design details, functionality, content, etc.) and by documenting on the areas of your
expertise. Ethos finally, may be hard to acquire and maintain, sometimes it may take years to build a strong, credible
reputation which can be lost in minutes…
Pathos
Pathos, or the appeal to emotions, refers to the effort to persuade your audience by making an appeal to their
feelings. Your audience is more receptive to being persuaded by someone with whom they can identify. Pathos
can be used in a variety of ways (to promote positive and negative feelings) as it is the Greek word for referring both
to “suffering” and “experience”. When you use pathos to persuade your audience, you need to make them feel an
emotion in order to act. Any emotion can cause people to act, (happiness, compassion, nostalgia, anger etc.) even in
a ‘small scale’.
Pathos can be promoted by using simple & meaningful language, emotional tone of voice (oral or written), pauses
and emotional metaphors or stories. Remember however, most people are aware of when we are trying to touch
their emotions and we need to do it cautiously and responsibly. Generally, pathos is most effective when used in the
introduction and conclusion. You want to grab readers' attention in the beginning and to leave them with conviction
at the end and emotion is a useful tool for those purposes.
Logos
Logos, or the appeal to logic, refers to the effort to convince your audience by using logic and reason. Effective
arguments should include testimonials, surveys and other supporting details to back up your claims/positions. Logos
means to document your point through storytelling, logical arguments, facts, recorded evidence, historical data and
literal analogies.
The consumer decision-making process can
seem mysterious, but all consumers go through
basic steps when making a purchase to
determine what products and services will best
fit their needs.

If you work in sales or marketing, make more

of an impact by putting yourself in the
customer’s shoes and reviewing the steps in
the consumer decision-making process.
Steps in the consumer decision process
Generally speaking, the consumer decision-making process involves five
basic steps.
1. Problem recognition
The first step of the consumer decision-making process is recognizing the
need for a service or product. Need recognition, whether prompted
internally or externally, results in the same response: a want. Once
consumers recognize a want, they need to gather information to understand
how they can fulfill that want, which leads to step two.
But how can you influence consumers at this stage? Since internal stimulus
comes from within and includes basic impulses like hunger or a change in
lifestyle, focus your sales and marketing efforts on external stimulus.
Develop a comprehensive brand campaign to build brand awareness and
recognition––you want consumers to know you and trust you. Most
importantly, you want them to feel like they have a problem only you can
solve.
Example: Winter is coming. This particular customer has several light jackets,
but she’ll need a heavy-duty winter coat if she’s going to survive the snow
and lower temperatures.
2. Information search
Content Map With Funnel (B2C) Example (Click on image to modify
online)When researching their options, consumers again rely on internal
and external factors, as well as past interactions with a product or brand,
both positive and negative. In the information stage, they may browse
through options at a physical location or consult online resources, such as
Google or customer reviews.
Your job as a brand is to give the potential customer access to the
information they want, with the hopes that they decide to purchase your
product or service. Create a funnel and plan out the types of content that
people will need. Present yourself as a trustworthy source of knowledge
and information.
Another important strategy is word of mouth—since consumers trust each
other more than they do businesses, make sure to include consumer-
generated content, like customer reviews or video testimonials, on your
website.
Example: The customer searches “women’s winter coats” on Google to see
what options are out there. When she sees someone with a cute coat, she
asks them where they bought it and what they think of that brand.
3. Alternatives evaluation
At this point in the consumer decision-making process, prospective buyers have
developed criteria for what they want in a product. Now they weigh their
prospective choices against comparable alternatives.

Alternatives may present themselves in the form of lower prices, additional

product benefits, product availability, or something as personal as color or style
options. Your marketing material should be geared towards convincing consumers
that your product is superior to other alternatives. Be ready to overcome
objections—e.g., in sales calls, know your competitors so you can answer questions
and compare benefits.

Example: The customer compares a few brands that she likes. She knows that she wants a
brightly colored coat that will complement the rest of her wardrobe, and though she
would rather spend less money, she also wants to find a coat made from sustainable
materials.
4. Purchase decision
This is the moment the consumer has been waiting
for: the purchase. Once they have gathered all the
facts, including feedback from previous customers,
consumers should arrive at a logical conclusion on
the product or service to purchase.
If you’ve done your job correctly, the consumer will
recognize that your product is the best option and
decide to purchase it.
Example: The customer finds a pink winter coat that’s
on sale for 20% off. After confirming that the brand
uses sustainable materials and asking friends for
their feedback, she orders the coat online.
5. Post-purchase evaluation
This part of the consumer decision-making process involves
reflection from both the consumer and the seller. As a seller, you
should try to gauge the following:

1. Did the purchase meet the need the consumer identified?

2. Is the customer happy with the purchase?
3. How can you continue to engage with this customer?

Remember, it’s your job to ensure your customer continues to

have a positive experience with your product. Post-purchase
engagement could include follow-up emails, discount coupons,
and newsletters to entice the customer to make an additional
purchase. You want to gain life-long customers, and in an age
where anyone can leave an online review, it’s more important
than ever to keep customers happy.
Tools to better understand your customer

Putting yourself in the customer’s shoes can help you steer consumers towards your product. Here are
some tools to help you analyze their decision-making process and refine your brand marketing and sales
tactics.

Customer journey map

A customer journey map visualizes a hypothetical customer’s actions. Use it to empathize with your
customers as they go through a specific process or try to complete a purchase. Map out the actions the
customer is likely to take.

Empathy map
Empathy maps help teams understand the customer’s mindset when dealing with a product or service.
They can be used for personas or specific customer types. Empathy mapping is often most helpful at the
beginning of a new project. Collaborate as a team to quickly get inside the heads of your customers during
every step of product development, testing, and release.

User personas
Based on user research or past user interactions, user persona cards construct fictional or composite
personas that break down and organize your data into distinctive types of users. Build a more human
picture of your users and understand your user base better by creating user personas for the various types
of users for your product or service.

Understanding the consumer decision-making process is key if you want to attract more customers and get
them to make that crucial purchase. Use this process and the tools above to tune in to consumers and
genuinely understand how to reach them.
• customer satisfaction
• Customer satisfaction (CSAT) is a measure of how well a company’s products and services
meet customers’ expectations. It reflects your business’ health by showing how well your
products are resonating with buyers.
• How to measure customer satisfaction
• Customer satisfaction can seem like a vague concept, but there are concrete ways to
measure it. You can source a customer satisfaction score by conducting CSAT surveys, for
example. These are typically short, one- to two-question surveys offered at the end of a
business transaction. A classic question is “How satisfied are you with the product?” with
answers ranging from “very satisfied” to “very unsatisfied.”
• 5 reasons customer satisfaction is important
• Customer loyalty
• Customer satisfaction measurement
• Repeat purchases
• Customer lifetime value
• New customer acquisition
• How to improve customer satisfaction
• Customer feedback
• Convenience
• Speed(Fast delivery and response to customer's query).
• Build a customer-focused culture
• Empathy
• Customer Commitment?
• Customer commitment is a retention strategy that focuses on keeping people loyal by consistently
delivering on the brand’s value proposition and fostering relationships.
• Commitment to customers is a marketing concept that emphasizes the complete customer experience,
from initial contact to post-purchase support. A company practicing customer service also delivers on its
brand promise and builds long-term relationships with its buyers. This strategy is based on the notion that
it is easier to retain existing customers than acquire new ones.
• Attempting to build relationships with your clientele is important for several reasons:
• It increases their loyalty to your company.
• Customers feel appreciated and valued.
• They are more willing to provide feedback that helps you improve your products or services.
• They are more willing to refer your business to others.
• Maintain Customer Commitment
• Of course, not all businesses are as old school as these examples. Online businesses can potentially offer
more convenience for customers. It, therefore, makes sense for them to work hard at building this type of
commitment among their clients.
• You cannot expect that your patrons are ready to deal with any mistakes on your side. So here are some
steps which will help you in maintaining client satisfaction:
• Have a vision for your business – this will help you keep track of all the activities which have taken place in
your business so far and also analyze your current position.
• Communication is one of the most important aspects that will help you maintain customer satisfaction. You
must communicate clearly and effectively with your users to understand their requirements and
expectations from the company.
• Listen well – you need to listen carefully because if people don’t tell you what they want and need, they
won’t buy anything from you. It’s okay if they don’t buy anything now, but it’s better if they buy something
in the future.
• Elements That Make An Impressive Commitment To Customers
• Many people ask us how they can get their audience to be more committed to their brand. While that’s an important goal, it’s not one you
can work directly toward.
• To know about elements, you need to adopt the basic 5 levels of commitment:
• Self-Awareness.
• Willingness to adapt.
• Intense concentration.
• Commitment.
• Character
• With these commitment levels, focus on the elements for better results:
• Customer Satisfaction
• The first element is Customer Satisfaction. Also, it measures how satisfied your customers are. It is an important metric because it establishes
a baseline for the dedication level of your customers to your brand. If you have many dissatisfied people, it will be very difficult to build loyal
and committed relationships with them.
• Customer Loyalty
• The second element is Customer Loyalty. This measures how much your customers love doing business with you. Your loyal consumers always
do business with you and never look elsewhere for alternatives even if there is a cheaper option elsewhere.
• Advocacy
• The first element of good business service is advocacy. This is when a customer refers one of their friends to your business, like when they
share your content on social media or write positive reviews about your company on Yelp or Amazon reviews. A customer becomes an
advocate when they believe in you so much that they want to spread the word about your company to other people who might benefit from
it.
• Building a customer-centric culture
• It goes beyond the marketing department. Every single team within your company must be committed to customer satisfaction.
• You can bring your organization together by asking a few key questions:
• What do we stand for as an organization?
• What are our common goals and values?
• How does our team contribute to those goals and values?
• How do we measure success?
• These questions will help you create a foundation for building a strong customer-centric culture across your entire organization.
• Resistance
• This is when a customer resists going with a competitor, even if that competitor has a cheaper price or better service. A customer will resist
switching companies if they have developed an emotional connection with you and your team, if they trust the quality of your products and
services, or if it would cost them more time and money than it’s worth to switch providers.
• Three different forms of committing
• When employees commit to their company, they are more likely to be happy and productive. As a small-business
owner, you need to find ways to encourage the development of that sense of loyalty.
• Instrumental commitment
• This is when an employee stays at a company because of the material benefits it provides — things like salary,
benefits, and perks. Instrumental commitments are relatively shallow and may not last very long. They don’t give
workers much incentive to stay with a company if offered something better elsewhere.
• Strong relationships between coworkers can promote effective and normative commitments. Knowing that people
feel attached or obligated can help build loyalty within teams since they are less likely to leave for other
opportunities when they know someone will miss them.
• Relational commitment
• Relational commitment refers to your desire and willingness to stay in a relationship. You’re willing to work through
problems and be patient with each other. It’s the glue that holds relationships together when the going gets tough.
• Relational commitment takes time to develop, which is why we usually don’t have it in the beginning stages of a
relationship. If you have it at that point, it’s more likely you’ve fallen in love with the idea of being in love than the
person you’re with.
• So how can we cultivate relational commitment? Here are some ways:
• Be honest about what you want and need from your partner. Let them know when they’re on track or off course. If
they’re unwilling to make room for your feelings and needs, they’re not worthy of your commitment.
• Stand behind them when they need you most. This doesn’t mean you should enable destructive behavior but
rather help them through trying times instead of making things more difficult with criticism or blame.
• Make time for each other regularly. Set aside time to connect without distractions so you can be present for one
another and catch up on what’s going on in your life together.
• Commitment to your values
• We all have values that we choose to live by. Deeply rooted in what makes you a person, you can think of these as
your guiding principles. Perhaps you value honesty, kindness, compassion, or generosity. Maybe you are a stickler
for punctuality or organization. Whatever the case, these principles shape our behaviors and actions in all areas of
life.
Unit 5
consumer behavior models
Consumer behavior models are theories that
identify consumers' behavior patterns and explain
why or how they make purchasing decisions. Buyer
behavior includes factors such as their personal
beliefs, interests, education, background and goals.
These models typically include mathematical
constructs that describe common behaviors
between groups of consumers and predict how
similar consumers may behave. Many companies
create these predictions by gathering data on their
own consumers.
Traditional Behavior Models
Traditional behavior models were developed by economists
hoping to understand what customers purchase based on their
wants and needs. Traditional models include the following:
Learning Model
Psychoanalytical Model
Sociological Model
Economic Model
1. Learning Model of Consumer Behavior
The Learning Model of customer behavior theorizes that buyer
behavior responds to the desire to satisfy basic needs required
for survival, like food, and learned needs that arise from lived
experiences, like fear or guilt. This model takes influence from
psychologist Abraham Maslow’s Hierarchy of Needs (pictured
below).
The bottom level of this hierarchy represents basic needs, and ascending
sections describe learned needs, or secondary desires, that allow consumers
to feel as though they’ve reached self-fulfillment.
The Learning Model says that consumers first make purchases to satisfy their
basic needs and then move on to meet learned needs. For example, a hungry
customer would fulfill their need for food before a learned need to wear
trendy clothing.
2. Psychoanalytical Model of Consumer Behavior

Sigmund Freud is the father of psychoanalysis. The psychoanalytical model

draws from his theories and says that individual consumers have deep-
rooted motives, both conscious and unconscious, that drive them to make a
purchase. These motives can be hidden fears, suppressed desires, or
personal longings.

Thus, customers make purchases depending on how stimuli from your

business, like an advertisement on Instagram, appeal to their desires. It’s
important to note that, since these desires can be unconscious, customers
don’t always know why it appeals to them; they just know it feels right to
have it.

This model is unique in terms of application, but it’s relevant to businesses

that sell an image that accompanies their products or services. For example,
say you sell glasses. We all long to fit in and feel like we’re valued and seen
as capable, smart people. Glasses are sometimes a symbol of intelligence, so
you’d want to appeal to this desire when crafting a customer experience.
3. Sociological Model

The Sociological Model of consumer behavior says that

purchases are influenced by an individual's place within different
societal groups: family, friends, and workgroups, as well as less-
defined groups like Millennials or people who like yoga. An
individual will essentially purchase items based on what is
appropriate or typical of the groups they’re in.
For instance, C-Suite executives are expected to be professional
and formal. People who hold these jobs will make purchases that
speak to and uphold this group’s rules, like formal business wear.
This model can apply to most businesses, especially those that
create products and services relevant to specific groups. To use
the Sociological Model, you’d want to create experiences that
speak to how these groups usually act. One example is brands
that sell exercise equipment.
4. Economic Model of Consumer Behavior

The economic model of consumer behavior is the most straightforward of the

traditional models. This model argues that consumers try to meet their needs
while spending as few resources (e.g. money) as possible.

That means that businesses and manufacturers can predict sales based on their
customers’ income and their products’ price. If companies offer the lowest-
priced product, they may feel that they’re guaranteed a consistent level of profit.

While the economic model is the easiest to understand, it’s also the most
limited. A buyer may have other reasons for purchasing a product aside from
price and personal resources.

One such example would be prescription medicine in the U.S. healthcare

industry. While the price of a prescription drug may exceed the buyer’s
resources, the buyer would still have to find a way to purchase it and meet their
needs. They might open a credit card or take out a personal loan to pay for the
medicine. Thus personal income and price don’t affect the purchasing decision
here; instead, need does.
Engel-Kollat-Blackwell (EKB) Model of Consumer Behavior

The Engel-Kollat-Blackwell model of consumer behavior outlines a five-stage decision process

that consumers go through before purchasing a product or service.
Awareness: During this stage, consumers view advertisements from a business and become aware of
their need, desire, or interest, to purchase what they've just discovered.
Information Processing: After discovering a product or service, a consumer begins to think about
how the product or service relates to their past experiences or needs and whether it will fulfill
any current needs.
Evaluation: At this point, consumers will research the product they’ve discovered and research
options from competitors to see if there is a better option or if the original product is the best fit.
Purchasing Decision: A consumer will follow through with a purchase for the product that has beat
out competitors to provide value. A consumer may also stop the process if they change their
mind.
Outcome Analysis: After making a purchase, a customer will use what they’ve bought and assess
whether their experience is positive or negative. After a trial period, they’ll keep a product and
maybe decide to become repeat customers or express dissatisfaction and return to stage three.
Overall, EKB says that consumers make decisions based on influencing factors that they assess
through rational insight.
This model applies to businesses that have many competitors with similar products or services. If
your product market is highly saturated and competitive, the goal is to outshine your
competitors by meeting customers at every stage of their journey.
Howard Sheth Model of Buying Behavior

The Howard Sheth model of consumer behavior posits that the buyer’s
journey is a highly rational and methodical decision-making process. In this
model, customers put on a “problem-solving” hat every step of the way —
with different variables influencing the course of the journey.
According to this model, there are three successive levels of decision-making:

Extensive Problem-Solving: In this stage, customers know nothing about

the product they’re seeking or the brands that are available to them.
They’re in active problem-solving mode to find a suitable product.
Limited Problem-Solving: Now that customers have more information,
they slow down and begin comparing their choices.
Habitual Response Behavior: Customers are fully aware of all the choices
they have and know which brands they prefer. Thus, every time they make
a purchase, they know where to go.
Nicosia Model

The Nicosia Model places emphasis on the business first and the consumer second. It argues that
the company’s marketing messages determines whether customers will buy.
While it’s an attractive model because it places all the power on businesses, it’s unwise to ignore
the customer’s internal factors that lead to a purchase decision. In other words, while you may
offer the wittiest and most effective marketing copy ever, a customer’s internal attributes may
have more sway in some instances over others.

The model is comprised of four “fields”:

One: The business’ characteristics and the customer’s characteristics.

What does your marketing messaging look like? And what’s your customer’s perception of that
messaging? Are they predisposed to be receptive to your message? The latter is shaped by the
customer’s personality traits and experiences.
Two: Search and evaluation.
Similar to the Howard Sheth model’s “limited problem-solving” stage, the customer begins to
compare different brands here based on the company’s messaging.
Three: Purchase decision.
The purchase decision will occur after the company convinces the customer to choose them as
their retailer or provider.
Four: Feedback.
During the feedback field, the company will determine whether it should continue using the same
messaging, and the customer will decide whether they will continue to be receptive to future
messages.
Input, Process and Output Model

This is a simple model of consumer behaviour, in which the input for the customer is the firm’s marketing effort
(the product, price, promotion and place) and the social environment. The social environment consists of the
family, reference groups, culture, social class, etc. which influences the decision-making process. Both these
factors together constitute the input in the mind of the consumer. Need recognition When one is aware of a
want, tension is created and one chooses a product to satisfy his needs. There is also a possibility that a person
may be aware of a product before its need is recognised. This is indicated by the arrows going both ways from
the need to the product and vice-versa.

Product awareness Product awareness can be had from advertisement or exposure to different types of media
or by the social circle. The awareness and the need leads to the building of interest. In some cases, the interest
may also breakdown and, the decision process also stops or may be postponed for the time being.
Evaluation Evaluation may consist of getting more information about the product and comparing and
contrasting it with other products. This can be done theoretically or by taking a trial. Once the evaluation is
completed, the consumer’s interest may either build up and he has intentions to buy, or he may lose interest
and the decision process may again stop or be postponed.
Intention Once there is intention to purchase the product, the consumer goes ahead and acts or purchases the
product. Once the product is purchased, it is used to fulfil the need and, the more the product is used, the
more the consumer becomes aware of the positive and negative points of the product.
Post-purchase behaviour If, after the purchase and use of the product the customer is satisfied, he is happy and
goes in for repeat purchases or recommends the same to his friends and acquaintances. If, however, the
customer is dissatisfied, he discontinues further purchase of the product and builds a negative attitude towards
it, which may be harmful to the company.
The post-purchase behaviour is very important for the marketeer and the company because it leads to proper
feedback for improvement and maintaining the quality and features desired by the product. If the customer is
very happy with the purchase, he forms a good impression about the product and the company.
Industrial Buyer

Individual in a business, government agency, or

association who makes purchase decisions
regarding services, raw materials, product
components, or finished goods; also called
organisational buyer. Industrial buyers are more,
but not solely, motivated in their buying
decisions by profit objectives than by personal
objectives and require different marketing
strategies than consumer buyers.
The main characteristics of organizational buying behavior can be described as follows:

1. Derived Demand
Organizational buying is based on derived demand. Demand made by the ultimate consumers
creates demand for industrial goods or services. For instance, demand of electricity generator is
determined according to the demand made by the consumers. Demand of organizational buyer
changes in keeping with the changes in consumers' demand.

2. Geographical Concentration
Organizational buyers remain concentrated in certain geographical area whereas
consumers' market remains scattered all around. Producers want to establish industry near by
supply source. Mostly, industrial market is determined considering transport facilities and cost.
Along with this, raw materials, labor supply, climate condition etc. are also considered.

3. Few Buyers And Large Volume

The number of organizational buyers remains small but volume of sale is large. So, organizational
marketers focus on their efforts on very small number of main buyers who buy goods or services
in large volume paying bug amount of price.

4. More Direct Channel Of Distribution

High quantity of consumer goods or services is sold out through complex structure of
wholesalers and retailers. This structure keeps producers and consumers separate or it works as
the bridge between them. but in organizational selling, direct contact is established between
buyers and sellers. The organization, which buys in large volume, buys necessary goods directly
goods from producers.
5. Rational Buying

Organizational buyers use rational in buying goods or services compared to the ultimate
consumers. They want to take more information about the features, quality, technical use,
utility etc of products. Organizational buyers become aware of quality, services, delivery, price
etc. of any products.

6. Professional buying

Compared to consumer buyer, organizational buyers become systematic, rational and

professional. Buying agents become skilled professional. They should take frequent trainings on
buying process, contract, material management and legal aspects of buying. Professional
buyers develop formal methods of buying.

7. Complexity

Complexity is another characteristics of organizational buying. Under organizational buying

process, different persons participate in buying decision. So it becomes difficult to take buying
decision. While taking decision on buying, it becomes necessary to know the role of users,
motivator, decision maker and buyer whose effect goes on buying process.
 Factors Influencing Buying and Selling of Industrial Products
1. Economic Factors:
The economic conditions of the market determine how much an industry can buy and sell. Thus, emerging changes in the
economic environment which shall affect industrial marketing both in India and internationally must be closely monitored.
As noted earlier, the industrial demand is a delivered demand and depends on the consumers’ purchasing power, income, taxes,
fashion etc. When the country was passing through a recession in the late 1990s the consumers had tightened their belts and
had limited their purchases.

2. Natural Factors:
India is a country of extremes. When one part of the country is having heavy rainfall some other parts endures drought. The
drought like situation in Northern India has affected many a industry. The earth quakes and floods in the northern states of India
like Orissa and Gujarat have had direct impact on the industries. The industrial marketers must have an alternate strategy or a
contingency plan during calamities that are forecast-able or those that could be predicted.

3. Technological Factors:
Technological developments and changes affect the profitability and market acceptance of a company. The electric car “Reva” by
Maini group of companies is a technological innovation. It is yet to catch up in India due to reasons like there are no stations on
either highways or in the city for recharging and it is a very small car. But Mr. Chetan Maini, the man behind the electric car is
leaving no stones unturned.

4. Social /Cultural Factors:

Cultural customs, habits, norms and traditions greatly influence the structure and function of an organisation as well as
interpersonal relationships of organisational members. In India it is “Durability” that is important whereas in USA it is “style” that
is appealing. Say product whether industrial or targeted to the consumer must be careful when appealing to customers with
respect to the cultural values and representations.

5. Political/Legal Factors:
Government influence on the Industrial marketing environment. From the time of Jawaharlal Nehru to the time of Mr. Atal
Behari Vajapayee there has been major influence of the Government in the industry to protect the Indian industries’ foreign
investment or for that matter, foreign participation of any kind has not been allowed in the areas of defence, steel, drugs,
fertilisers, machine tools etc.
 The Industrial Buying Process

Industry buys out of need only and the informational needs of today’s industrial buyers and specifiers are very demanding.
When a need is discovered, the buying team goes into action and needs to find the best price, quality and service which
requires researching on average 4 sources of supply. These sources of supply have been researched and investigated by
multiple members of the buying team at different levels of their informational search as depicted by the funnel below.
Understanding the importance of each level of the informational search by each member of the buying team is a key strategy
for success in obtaining a purchase order.

The Industrial Buying Process Explained

Before we get started, there are two important conditions that we are assuming.
The industrial buying process involves the buying team whose goal is to find the best price, quality, and service and is best
known as professional buying.
Second, there are circumstances that do not allow application to our discussion.
These circumstances deal with emergencies that happen in the world as well as the manufacturing environment that demands
immediate action thus by-pass the effort to find the best price, quality, and service. Also, there are some purchases that are
insignificant in cost and do not require action by the buying team as well as many purchases are repeat purchases.
Members of the Industrial Buying Process
The members of the buying team have specific roles and functions, and the buying process is very dynamic and multi-faceted.
There are short term and long term projects that develop, and change the processes and planning considerably, so no one
model fits all circumstances. All members of the buying team can be initiators who first recognize the need.
Users, Influencers & Deciders
Users are important since these members have direct experience with the issue and need at hand. These members can also be
influencers who help decide if the need is worth consideration. Deciders are the ones who make the buying decision. It is
important to identify the Gatekeepers since these members control the access and information being distributed. The basic
buying team members come from Purchasing, Plant Maintenance-MRO, Engineering & Upper Management.
The Importance of Initiators
Initiators play a very important role in the success of the company. This role provides insights and efficiencies to ensure the
long term growth of the company. In all aspects of company operations, there can be many great ideas that can help the
company. There are too many examples of great ideas from all 4 segments of the buying team. Even sales and marketing can
play a role as initiators since these members provide critical feedback from the company’s clients and prospects.