Consumer

psychology
Chap#1: an introduction to consumer psychology
Who is a Consumer ?
“A consumer is one who consumes goods and services available in the market”.

Example - Tom might purchase a tricycle for his son or Mike might buy a shirt for himself. In the
above examples, both Tom and Mike are consumers.

What is consumer Interest ?

Every customer shows inclination towards particular products and services. Consumer interest is
nothing but willingness of consumers to purchase products and services as per their taste, need
and of course pocket.

Let us go through the following example:

Both Maria and Sandra went to the nearby shopping mall to buy dresses for themselves. The store
manager showed them the best dresses available with him. Maria immediately purchased two
dresses but Sandra returned home empty handed. The dresses were little too expensive for
Sandra and she preferred simple and subtle designs as compared to designer wears available at
the store.

In the above example Sandra and Maria had similar requirements but there was a huge difference
in their taste, mind set and ability to spend.

What is psychology?
“Psychology is the science of behavior and mental processes”.

CONSUMER PSYCHOLOGY:-
“It is a branch of social psychology concerned with the market behavior(how people
relate to the products and services that they purchase or use) of consumers.
Consumer psychologists examine the preferences, customs, and habits of various
consumer groups; their research on consumer attitudes is often used to help design
advertising campaigns and to formulate new products”.
What is Consumer Behaviour ?
“Consumer Behaviour is a branch which deals with the various stages a consumer goes through
before purchasing products or services for his end use”.
The study of consumer behaviour explains as to:

 Why and why not a consumer buys a product ?

 When a consumer buys a product ?
 How a consumer buys a product ?

Scope of consumer behavior:-

The scope of consumer behavior is the wide variety of activities consumers engage in as they
research, buy, use, and dispose of products. This is a topic of interest for marketers and other
researchers who examine how consumers behave in the market. This information can be
important for the development of products and ad campaigns that meet the needs of consumers
effectively. Psychologists and anthropologists study consumer behavior for more theoretical
reasons, with an interest in how it interacts with other aspects of human behaviors.
The marketing concept:-
The fields of Consumer Psychology and Consumer Behavior are rooted in the development of
Marketing Concept.
According to this concept Customers are knowledgeable about the variety and quality of goods
available in the market. Businesses base their decisions on customers’ needs and wants by
conducting research and producing goods and services that satisfy the customer. Consequently,
your business benefits from increased reputation to the public, loyalty from customers, increased
profits to the business, improved share capital and a highly motivated staff.

Implementing marketing concept:-

The best practice to implement a marketing concept is to combine the production, product and
selling concept with marketing concept in objectives to focus on customer orientation and
customer satisfaction. Organization should produce and sell improved quality products in the most
effective and efficient approaches which provide what customers expect in order to increase
customer satisfaction.
Thus, the marketing concept not only need to focus on customer needs before developing the
products, it also needs to align all functions of the company to focus on those needs and realizing
a profit by successfully satisfying customer needs over the long-term. Integration of all business
functions such as production, finance, human resources, research and development, and
technology within the organization is truly important to maximize customer orientation. Customer
orientation is the set of beliefs in sales that says that customer needs and satisfaction are the
priority of an organization. It is "the business seen from the point of view of its final result, that is,
from the customer's point of view."

The role of consumer research:-

Consumer research is an important part of any company. Most large corporations allocate large
budgets to consumer research because they know how valuable the information gained from
listening to consumers is. However, large corporations are not the only companies that can benefit
from consumer research. Even a small one location business could benefit tremendously by
asking its customers for feedback. Consumer research helps companies improve their products
and generate new ideas based on consumer demand.

Market segmentation:-
Market Segmentation is dividing the market into subsets of consumers with common needs.
Consumers are grouped together according to some criteria, such that those within a group will
respond similarly to a marketing action and those in different groups will respond differently. Some
of the potential segmentation variables are sex, age, marital status,race & income etc.

Mraket targeting:-
Target Marketing refers to a concept in marketing which helps the marketers to divide the market
into small units comprising of like minded people. Such segmentation helps the marketers to
design specific strategies and techniques to promote a product amongst its target market.

Mraket positioning:-
The process of creating an image of a product in the minds of the consumers is called as
positioning. Positioning helps to create first impression of brands in the minds of target audience.
In simpler words positioning helps in creating a perception of a product or service amongst the
consumers.
Example:The brand “Bisleri” stands for purity.
Customer satisfaction:-
it is customer perception of the degree to which the customers’s expectations have been fulfilled.

Customer retention:-
it is a strategy whose objective is to keep a company’s customer & to retain their revenue
contribution. Primarily it aims to prevent customer from going to the competitor.

Customer value:-
customer satisfaction & retention leads to customer value …
it is defined as “The difference between what a customer gets from a product, and what he or she
has to give in order to get it” or “ it is the ratio between the customers’s perceived benefits and the
resources used to obtain those benefits”

Consumer & decision making process:-

To understand the complete process of consumer decision making, let us first go through the
following example:
Tim went to a nearby retail store to buy a laptop for himself. The store manager showed him all the
latest models and after few rounds of negotiations, Tim immediately selected one for himself.

In the above example Tim is the consumer and the laptop is the product which Tim wanted to
purchase for his end-use.
Why do you think Tim went to the nearby store to purchase a new laptop ?
The answer is very simple. Tim needed a laptop. In other words it was actually Tim’s need to buy
a laptop which took him to the store.

The Need to buy a laptop can be due to any of the following reasons:
His old laptop was giving him problems.
He wanted a new laptop to check his personal mails at home.
He wanted to gift a new laptop to his wife.
He needed a new laptop to start his own business.

The store manager showed Tim all the samples available with him and explained him the features
and specifications of each model. This is called information. Tim before buying the laptop checked
few other options as well. The information can come from various other sources such as
newspaper, websites, magazines, advertisements, billboards etc.

This explains the consumer buying decision process.

A consumer goes through several stages before purchasing a product or service.

1. NEED
2. INFORMATION GATHERING/SEARCH
3. EVALUATION OF ALTERNATIVES
4. PURCHASE OF PRODUCT/SERVICE
5. POST PURCHASE EVALUATION
 CHAP#02 : CONSUMER RESEARCH
What is consumer research?
Part of market research in which the preferences, motivations, and buying behavior of the targeted
customer are identified through direct observation, mail surveys, telephone or face to face
interviews, and from published sources (such as demographic data).

Consumer research paradigms:-

consumer researchers tried to identify reasons for purchasing a product, usually customers
hesitates to reveal their reasons or motivational factor which made them to purchase a product or
service at that time the consumer researchers use the two different types of research methodology
to study consumer behavior: quantitative research and qualitative research.

Quantitative research:-
It is descriptive in nature and this method is used to predict the consumer behavior. This method
always consists of experiments, surveys techniques, and observations. The findings are empirical
and if collected randomly this can be generalized to large populations and the data are
quantitative, they lend to sophisticated statistical analysis

Qualitative research:.-
This includes depth interviews, focus groups, metaphor analysis, and projective techniques. Here
sample sizes are necessarily small so we cannot generalized to larger population they are used to
obtain new ideas for promotional campaigns.

Combining qualitative and quantitative research findings:-

By combining both research finding marketers can design more effective marketing strategies and
always they use qualitative research findings to discover new ideas and quantitative to predict
consumer reactions to various promotional inputs.

The consumer research process:-

The important steps in the consumer research process are

1. defining the objectives of the research

2. collecting and evaluating secondary data

3. designing a primary research study

4. collecting primary data

5. analyzing the data

6. preparing the report on findings

Developing the research objectives:-

It is first and the most difficult step in research process hare the questions like is it to segment the
market for plasma television sets? To find out consumer attitude about the experience with online
shopping?. And it is always important for the marketing manager to agree at the out set on the
purposes and the objectives of the study to ensure that .
Collecting secondary data:-
Secondary data includes both internal and external data it is collected or generated for some
purpose other than the present research objective.
Internal secondary data such information as data generated in house for earlier studies for earlier
studies as well as analisis of customer files, such as past customer transactions etc.

Designing primary research:-

IT IS basically designed on the basis of the purposes of the study. If the descriptive study is
needed then the quantitative study is likely to be under taken. If the purpose is of the new ideas
then we can go for the qualitative research.

Data analysis and reporting research findings:-

In qualitative research, the moderator usually analyses the responses received. In quantitative
research, the research supervises the analysis open ended questions are first coded and
classified then all of the responses are tabulated and analyzed. using sophisticated analytical
programs that correlate the data by selecting variables and cluster the data by selected
demographic characteristics.

Conducting research study:-

Field Staff in Quantitative Research:
A quantitative study generally uses filed staff that is either recruited and trained directly by the
researcher or contracted from a company that specializes in in conducting field interviews

Qualitative & Quantitative Research:

Qualitative Research: The moderator or test administrator usually analyzes the responses
received

Quantitative Research: The researcher supervises the analysis:

• Open ended responses are first coded and quantified (i.e. converted into quantified
scores)
• Then all of the responses are tabulated and analyzed using sophisticated analysis programs that
correlate the data by selected variables and cluster the data by selected demographic
characteristics

Research Report:
In both qualitative and quantitative research, the research report includes:

• Brief executive summary if the findings

• May or may not include recommendations for marketing action

• The body of the report includes a full description of the methodology used

• Quantitative research report also includes tables and graphics to support findings

• A sample of questionnaire is usually included in the appendix to enable the management to

evaluate the objectivity of findings
Ethics in consumer research:-

1. Consumer researchers must ensure that studies are objective and free of bias.
2. Consumer Researchers must not mistreat respondents
3. Avoid unnecessary long interviews stemming from the logic that “as long as we are
interviewing this person we may also try to find out ….
4. At the start of all surveys, interviewers must clearly identify themselves and the company
for which they are working , explain what the survey entails and state the true expected
duration of theinterview
5. They should reassure the respondents that there are no right or wrong answers
6. If the respondents are being paid they should be notified so at the start of the interview
7. Privacy of the respondents must be protected and guarded
8. Some unethical consumer researchers have sold data about consumers to marketers
seeking persons with specific characteristics that will be targeted as prospective buyers.
 Chap#03 : marketing segmentation.
What is a market?
A set up where two or more parties engage in exchange of goods, services and information is
called a market. Ideally a market is a place where two or more parties are involved in buying and
selling.
The two parties involved in a transaction are called seller and buyer.
The seller sells goods and services to the buyer in exchange of money. There has to be more than
one buyer and seller for the market to be competitive.

What is segmentation?
Segmentation refers to a process of bifurcating or dividing a large unit into various small units
which have more or less similar or related characteristics.

What is market segmentation?

 Market segmentation is a marketing concept which divides the

complete market set up into smaller subsets comprising of
consumers with a similar taste, demand and preference.
 A market segment is a small unit within a large market comprising of
like minded individuals.
 One market segment is totally distinct from the other segment.
 A market segment comprises of individuals who think on the same
lines and have similar interests.
 The individuals from the same segment respond in a similar way to
the fluctuations in the market.
Bases for segmentation:-
The first step in developing the segmentation strategy is select most appropriate base(s) on which
to segment the market
Eight Bases for Segmentation:

Geographic Segmentation
Geographic segmentation refers to the classification of market into various geographical areas. A
marketer can’t have similar strategies for individuals living at different places.
Nestle promotes Nescafe all through the year in cold states of the country as compared to places
which have well defined summer and winter season.

Psychographic segmentation
The basis of such segmentation is the lifestyle of the individuals. The individual’s attitude, interest,
value help the marketers to classify them into small groups.
Demographic Segmentation
Demographic segmentation consists of dividing the market into groups based on variables such as
age, gender, family size, income, occupation, education, religion, race and nationality. As one
might expect, demographic segmentation variables are amongst the most popular bases for
segmenting customer groups. This is partly because customer wants are closely linked to
variables such as income and age. Also, for practical reasons, there is often much more data
available to help with the demographic segmentation process.

Behaviouralistic Segmentation
The loyalties of the customers towards a particular brand help the marketers to classify them into
smaller groups, each group comprising of individuals loyal towards a particular brand.

Social class segmentation

it employs a combination of demographic traits that are commonly believed to reflect membership
in different social class strata. Occupation, education, and income are the primary demographic
traits that reflect social class membership.

Use- Related Segmentation

Categorizing consumers in terms of product, service, or brand usage characteristics is included
into Use Related Segmentation. The variables usually include:Levels of usage, Level of
awareness ,Brand loyalty.

Usage-Situation Segmentation
Occasion or situation often determines what consumers will purchase or consume. They
sometimes focus on the usage situation as a segmentation variable. For example:
Whenever our son Ali gets a promotion or raise we always take him out to dinner

Benefit segmentation:
A form of market segmentation based on the differences in specific benefits that different groups
of consumers look for in a product. One of the five common segmentation strategies, its objective
is to define specific niches that require custom-tailored promotion.

Hybrid segmentation:
Hybrid segmentation is the kind of segmentation where instead of sticking to one particular
segmentation style, marketers combine one or two segmentation variables and arrive at another
segmentation. This style is referred to as Hybrid segmentation.

Criteria for Effective Targeting of Market Segments

To be an effective target market a segment should be:

 Identifiable
 Sufficient (in terms of size)
 Stable or growing
 Accessible in terms of both media and cost

To divide the market into separate segments on the basis of common or shared needs or
characteristics that are relevant to the product or service, a marketer must be able to identify the
relevant characteristics. Variables such as Geography (location) and Demography (age, gender,
occupation, race) are easy to identify. Education, income and marital status can be known through
questionnaires. Other characteristics such as benefits sought and lifestyles are more difficult to
identify.
Implementing segmentation strategies:
Once an organization has identified it most promising segments it must decide whether to target
one segment or several segments Each targeted segment receives a specially designed
marketing mix i.e. a specially tailored product, price,

Differentiated Marketing Strategy

A differentiated marketing strategy is when a company creates campaigns that appeal to at least
two market segments or target groups. For example, a store can promote a sale that appeals to
people in at least two cities or locations, or a company can market a product that appeals to
women in at least two age groups. Differentiated marketing strategies can target many more than
two segments; shoe companies often create campaigns that appeal to both men and women in a
variety of age groups. Differentiated marketing strategies can also use different messages in the
same campaign for different segments. For example, a retailer might market low cost to a budget-
conscious segment and product quality to an affluent market segment.

Concentrated Marketing Strategy

A concentrated marketing strategy is targeted to one specific market segment or audience. For
example, a company might market a product specifically for teenage girls, or a retailer might
market his business to residents in a specific town. Concentrated marketing strategies are often
geared for smaller groups of people, because they are designed to appeal to a specific segment.

Undifferentiated Marketing Strategy

When discussing differentiated and concentrated marketing strategies, it is also important to
understand undifferentiated marketing strategies. Basically, in an undifferentiated marketing
strategy, marketers use the same message for all segments of the market. This is similar to mass
marketing; marketers typically create a message that appeals to everyone, so the message is
often general or simple to allow more people to relate.

Example
To better understand differentiated, concentrated and undifferentiated marketing strategies, it
helps to look at an example from each perspective. Assume a restaurant is trying to market its
new business. Using a differentiated marketing strategy, the restaurant can appeal to the college
crowd by marketing cheap specials on food and drinks, the family crowd by marketing kid-friendly
meal options and table entertainment and to the elderly by marketing senior discounts and early-
bird specials. Using a concentrated marketing strategy, the restaurant can market its convenient
location to a group of residents within 10 miles of the business. Using an undifferentiated
marketing strategy, the restaurant can highlight its grand opening celebration.

Countersegmentation:
A strategy in which a company combines two or more segments into a single segment to be
targeted with an individually tailored product or promotion campaign.
Example
Some business schools with wide course offerings in each department were forced to use
Countersegmentation strategy when they discovered that students simply did not have enough
available credits to take a full spectrum of in depth courses in their major areas of studies. They
had to use Countersegmentation, e.g. by combining advertising, publicity, sales promotion and
selling course into a single course called promotion.
 Chap#04 Environmental Influences
Culture:-
What is culture?
Culture is the characteristics of a particular group of people, defined by everything from language,
religion, cuisine, social habits, music and arts. Today, in the United States as in other countries
populated largely by immigrants, the culture is influenced by the many groups of people that now
make up the country.

How culture is learned?

Schein (1985) has argued that culture is transmitted or learned in two different ways, either
through 'problem solving' / 'positive reinforcement' or 'anxiety avoidance' / 'trauma'. The former
refers to a policy of repeating successful work strategies, the latter to a policy of avoiding
unpleasant situations by basing thought and action on previous negative experiences.

Enculturation and Acculturation:

Enculturation is learning one's own culture, a process that is influenced strongly by home and
family.
Acculturation, on the other hand, is learning aspects of a culture other than one's own -
particularly those aspects which will enable the individual to survive in that culture.

Symbols and Language in Human Culture

To the human mind, symbols are cultural representations of reality. Every culture has its own set
of symbols associated with different experiences and perceptions. Thus, as a representation, a
symbol's meaning is neither instinctive nor automatic. The culture's members must interpret and
over time reinterpret the symbol.
Symbols occur in different forms: verbal or nonverbal, written or unwritten. They can be anything
that conveys a meaning, such as words on the page, drawings, pictures, and gestures. Clothing,
homes, cars, and other consumer items are symbols that imply a certain level of social status.
Perhaps the most powerful of all human symbols is language—a system of verbal and sometimes
written representations that are culturally specific and convey meaning about the world. Language
is an important source of continuity and identity in a culture.

Rituals:
Ritual is a type of symbolic activity consisting of a series of steps (multiple behaviors) occurring in
fixed sequence and repeated over time
Ritualized Behavior:
In addition to language and symbols culture includes ritualized experiences and behaviors.
Rituals extend over the human life cycle from birth to death including a host of intermediate
experiences (confirmations, graduation and marriage). Ritualized behavior is rather formal and
often scripted behavior.

Dynamic culture:
Dynamic refers to the variability. Culture is formed by the peoples whose values, Beliefs and
religions combine them to live together. With the inclusion of more people in the society, new era
of developments and the forces of evolution the culture changes its shape. The culture is the
product which varies with its producer.
Subculture:-
what is subculture?
a subculture is a group of people within a culture (whether distinct or hidden) which differentiates
them from the larger culture to which they belong.

Nationality subcultures
Nationality subcultures in a larger society in which members often retain a sense of identification
and pride in the language and customs of their ancestors. This is especially true for a population of
a country like UK and US that have a history of attracting people from all over the globe. When it
comes to consumer behaviour, this pride or identification is manifested most strongly in the
consumption of ethnic foods, in travel to the “homeland”, and in the purchase of numerous cultural
artifacts (ethnic clothing, art, music, foreign language newspapers).

Age subculture:
Age subcultures have cultural differences that affect the consumption behaviors of these people
for food, personal care products and clothing.

Gender as subculture:
All societies tend to assign certain roles to women and others to men. The masculine role for
example is that of aggressiveness and competitiveness, whereas the feminine role is that of
neatness, tactfulness, gentleness, and talkativeness
A study was conducted to understand the gender differences in reactions to similar prints. It was
found that women show superior affect and purchase intent towards ads that are verbal,
harmonious, complex and category oriented.
Men show superior affect towards ads that are comparative, simple and attribute oriented. It was
concluded that it may be best to advertise differently to men and women.
Social class:-
What is social class?
Social class is more than just how much money you have. It's also the clothes you wear, the music
you like, the school you go to -- and has a strong influence on how you interact with others .

Measurement of Social Class

Social class is measured by the people in that group. It is perception, not necessarily something
you can quantify. It is associated with financial status, family values, appearances, housing, etc.
Social class can be a deterrent to some people who wish to improve themselves socially or
financially. Being born poor, or very low income, its hard to establish yourself as 'worthy' of being
with people for whom money is not an issue. There are things such as social graces, using the
correct fork at dinner for salads etc, how to properly serve wine, deal with situations that may be
unpleasant etc. that are definitely tied to social class.

Affluent Consumer
Affluent Households place more importance on friendship, leisure times, and hobbies. They seem
to place less importance on money which is why they consume more domestic airline tickets, own
more vehicles, hold more securities and spend more money on desktop, laptop and hand held
computers as well as other electronic gadgetries.
Members of the affluent class have incomes that provide them with disproportionately larger share
of all discretionary income. The extras allow the purchase of:

 Luxury cruises
 Foreign sports cars
 Tourism resorts
 Fine jewelry
 Ready access to

Middle Class Consumer

Middle Market is the middle 50% household income. Households composed of college educated
adults, who are involved in children’s education and are confident that they can maintain the
quality of their life. Middle class can be thought of as including households that range from lower
middle to middle class in terms of some acceptable variable or combination of variables (income,
education, age or income).This view does not include the upper middle class which over the years
has been exceedingly treated as affluent consumers.

The Working Class and other Non Affluent Consumers

Although advertisers would prefer to show their products as part of an affluent lifestyle, blue collar
or working class represents a vast group of consumers. Downscale consumers may actually be
more brand loyal than wealthier customers because they can not afford to make mistakes by
switching into unfamiliar brands. A sensitive fact for marketers should be that non affluent
consumers often spend higher percentage of their available income on food than their middleclass
consumers.
Social group:-
a social group is a number of individuals interacting with each other with respect to:

1. Common motives and goals;

2. An accepted division of labor, i.e. roles,

3. Established status (social rank, dominance) relationships;

4. Accepted norms and values with reference to matters relevant to the group;

5. Development of accepted sanctions (praise and punishment) if and when norms

or short and simple:

A group of people who interact with each other and are aware of having something in common.

Reference group:
People whose attitudes, behavior, beliefs, opinions, preferences, and values are used by an
individual as the basis for his or her judgment. One does not have to be (or even aspire to be) a
member of a reference group to be negatively or positively influenced by its characteristics.

Consumer related refence groups:-

Consumer reference group is that group to which the consumer has close relationship and
proximity and which the consumer uses for references and which effect the buying behavior of the
consumer. We have generally two types of reference groups.

1: Normative reference group:

Normative reference group is that group in which the consumer had direct relation or face to face
relation and influence on the consumer buying decision and behavior.
For example, family and friends etc. The members of the family are always in interaction with the
consumer and they give different ideas and suggestions or advice to the consumer to buy a
specific product or brand. And thus they influence the consumer.

2: Comparative reference group:

Comparative reference group is that group in which the consumer has indirect relation and less
face to face interaction, such type of groups attract the consumer and the consumer gradually start
to adopt the life style of the personalities lying in the comparative reference group.
For example, in this group we have television a star, cinema stars, sports mans, and other popular
personalities. The consumers are attracted by the marketer through different types of promotional
campaigns and start to purchase different types of products used by the personalities of the
comparative reference group.

CHAP#05 Individual Determinants of Consumer Behavior

PERSONALITY:-
what is personality?
"Personality" can be defined as a dynamic and organized set of characteristics possessed by a
person that uniquely influences his or her cognitions, emotions, motivations, and behaviors in
various situations.

Nature of personality:
the Nature of Personality is a unique system defining the personality types that express all that life
has to offer through the concept of twelve archetypes. These archetypes represent the inner and
outer journeys of the mind, body, spirit and soul unfolding through the psyche and the birth of the
self, keeping us in pace with evolution and in tune to the one cosmic body.

Theories of personality:
There are two major theories of personality they are (1)Freudian theory (2)trait theory.

1. Freudian theory
Sigmund Freud’s theory of personality is a cornerstone of modern psychology .This theory
is built on bases of unconscious needs.
Id, superego, and ego

Id: The id was conceptualized as a “warehouse" of primitive and impulsive drives —basic
physiological needs such as thirst, hunger, and sex—for which the individual seeks
immediate satisfaction without concern for the specific means of satisfaction.

superego:
In contrast to the id, the superego is conceptualized as the individual's internal expression
of society's moral and ethical codes of conduct. The superego's role is to see that the
individual satisfies needs in a socially acceptable fashion. Thus, the superego is a kind of
"brake" that restrains or inhibits the impulsive forces of the id.

ego:
Finally, the ego is the individual's conscious control. It functions as an internal monitor that
attempts to balance the impulsive demands of the id and the sociocultural constraints of the
superego.

2. trait theory:
It is defined as “any distinguishing, relatively enduring way in which one individual differs
from another. The trait which measures just one trait, such as self-confidence, the
personality tests measure such traits as consumer innovativeness, consumer
materialism and consumer ethnocentrism, the explanation for this are:

Consumer innovativeness:
The degree to which consumers are receptive to new products, new services, or new
practices.

Consumer materialism:
Materialism is a personality like trait which distinguishes between individuals who regard
 possessions as essential to their identities and their lives those for whom possessions are
secondary. Researchers have found some characteristics of materialistic people, they are:
-they value acquire and showoff possessions.
-they are self centered and selfish people
-they seek lifestyle full of possession
-they are not satisfied with their possessions.

Consumer Ethnocentrism:
Consumers who are highly ethnocentric are likely to feel that it is inappropriate or wrong to
purchase foreign made products because of resulting economic impact on the domestic
economy.

Brand personality:
Its defined as “Brand image or identity expressed in terms of human characteristics. Distinguishing
and identifiable characteristics which offer consistent, enduring and predictable messages and
perceptions. What people associate the brand with”.Brand personality is a setoff human
characteristic associated with a brand.

Self and self-image

Consumers have a variety of lasting image of themselves; these images are associated with
personality in that individual’s consumption relates to self-image.
One or multiple selves:
A consumer who acts differently in different situations or with different people, for instance a
person is likely to behave in different ways at home, at work or with friends. It’s normal that a
person is likely to display different personality in different situations and social roles.
Extended self: It is an interrelationship between consumers self image and their possession. A
consumer’s possession may extend their self image in number of ways- Actually, Symbolically,
Conferring status or rank, Bestowing feelings of immortality, Endowing with magical powers.
Altering the self: The consumers who try to modify their appearances to become a different or
improved self by using all kind of accessories, this is frequently done to express their individualism
or uniqueness by creating anew self and maintaining the existing self.
Motivation:
Basics of Motivation:
People are motivated by many things, some positive others not. Some motivating factors can
move people only a short time, like hunger which will last only until you are fed. Others can drive
a person onward for years.

Motivation is the driving force within individuals that impels them to action. Motivation is the
activation or energization of goal-oriented behavior. Motivation may be intrinsic or extrinsic. The
term is generally used for humans but, theoretically, it can also be used to describe the causes for
animal behavior as well. According to various theories, motivation may be rooted in the basic need
to minimize physical pain and maximize pleasure, or it may include specific needs such as eating
and resting, or a desired object, hobby, goal, state of being, ideal, or it may be attributed to less-
apparent reasons such as altruism, morality, or avoiding mortality.

Needs :
Needs are the essence of the marketing concept. Marketers do not create needs but can make
consumers aware of needs. A need is something that is necessary for humans to live a healthy
life. Needs are distinguished from wants because a deficiency would cause a clear negative
outcome, such as dysfunction or death. Needs can be objective and physical, such as food and
water, or they can be subjective and psychological, such as the need for self-esteem. On a
societal level, needs are sometimes controversial, such as the need for a nationalized health care
system. Understanding needs and wants is an issue in the fields of politics, social science, and
philosophy.

Goals :
A goal or objective is a projected state of affairs that a person or a system plans or intends to
achieve—a personal or organizational desired end-point in some sort of assumed development. It
is the sought-after results of motivated behavior.

Types of goals:
1.Generic goals: are general categories of goals that consumers see as a way to fulfill their needs
2.Product-specific goals: Are specifically branded products or services that consumers select as
their goals

Positive and negative motivation:

Positive motivation is a response which includes enjoyment and optimism about the tasks that
you are involved in. Positive motivation induces people to do work in the best possible manner and
to improve their performance. Under this better facilities and rewards are provided for their better
performance. Such rewards and facilities may be financial and non-financial.
Negative motivation aims at controlling the negative efforts of the work and seeks to create a
sense of fear for the worker, which he has to suffer for lack of good performance. It is based on
the concept that if a worker fails in achieving the desired results, he should be punished. Negative
motivation involves undertaking tasks because there will be undesirable outcomes, eg. failing a
subject, if tasks are not completed.
Almost all students will experience positive and negative motivation, as well as loss of motivation,
at different times during their life at University.
Rational versus Emotional Motives

1.Rationality implies that consumers select goals based on totally objective criteria such as size,
weight, price, or miles per gallon. A conscious, logical reason for a purchase. A motive that can
be defended by reasoning or logical argument

2.Emotional motives imply the selection of goals according to personal or subjective criteria. A
feeling experienced by a customer through association with a product.

Types & systems of needs:

For many years psychologists interested in human behavior have attempted to develop exhaustive
lists of human needs. Dr. Abraham Maslow, a clinical psychologist, formulated a widely accepted
theory of human motivation based on the notion of universal hierarchy of human needs/

Maslow’s hierarchy of needs:

 Learning:-
what is learning?
The process by which individuals acquire the purchase and consumption knowledge and
experience that they apply to future related behavior.
Marketers must teach consumers:

 where to buy
 how to use
 how to maintain
 how to dispose of products

Elements of Consumer Learning

• MOTIVATION:
“It is the processes that lead people to behave as they do”.
It occurs when a need arises that a consumer wishes to satisfy. Motivation is based on needs and
goals. It acts as a spur of learning. Uncovering consumer motives is one of the prime tasks of
marketers, who then try to teach motivated consumer segments why and how their products will
fulfil the consumer’s needs.

• CUES:
“It is a stimulus that suggests a specific way to satisfy a silent motive”.
If motives serve to stimulate learning, cues are the stimuli that give direction to these motives. In
the marketplace, price, styling, packaging, advertising and store displays all serve as cues to help
consumers fulfil their needs in product-specific ways. Cues serve to direct consumer drives when
they are consistent with consumer expectations. Marketers must be careful to provide cues that do
not upset those expectations.

• RESPONSE:
“Response means how individuals react to a drive or cue or how they behave”.
Learning can occur even when responses are not overt. The automobile manufacturer that
provides consistent cues to a consumer may not always succeed in stimulating a purchase. A
response is not tied to a need in a one-to-one fashion. If the manufacturer succeeds in forming a
favorable image of a particular automobile model in the consumer’s mind, when the consumer is
ready to buy, it is likely that he or she will consider that make or model.

• REINFORCEMENT:
“A positive or negative outcome that influences the likelihood that a specific behavior will
be repeated in the future in response to a particular cue or stimulus”.
It increases the likelihood that a specific response will occur in the future as the result of particular
cues or stimuli. Through positive reinforcement, learning has taken place.

Behavioral Learning Theories.

Behavioral learning theories are sometimes referred to as stimulus-response theories because
they are based on the premise that observable responses to specific external stimuli signal that
learning has taken place.
CLASSICAL CONDITIONING:

· “A behavioral learning theory according to which a stimulus is paired with another

stimulus that elicits a known response that serves to produce the same response when
used alone”.
· Early classical conditioning theorists regarded all organisms as relatively entities that could
be taught certain behaviors through repetition or conditioning. The word conditioning mean a kind
of “knee-jerk” or automatic response to a situation built up through repeated exposure. E.g., If you
get a headache every time you think of visiting a doctor. Pavlov’s demonstration of conditioned
learning in his studies with dogs is also a good example of it.
· An unconditioned stimulus might consists of a well-known brand symbol (such as
Neutrogena name) that implies demonstration of dermatologists’ endorsement and pure. This
previously acquired consumer perception of Neutrogena is the unconditioned response.
· Conditioned stimuli might consist of new products bearing the well-known symbol (such as
the items depicted in new products bearing the well-known symbol and the conditioned response
would be trying these products because of the belief that they embody the same attributes with
which the Neutrogena name is associated.

STRATEGIC APPLICATIONS OF CLASSICAL CONDITIONING:

The three basic concepts derive from classical conditioning are:
1) Repetition
2) Stimulus Generalization
3) Stimulus Discrimination

INSTRUMENTAL (OPERANT) CONDITIONING:

“A behavioral theory of learning based on a trial-and-error process, with habits forced as
the result of positive experiences (reinforcement) resulting from certain responses or
behaviours”.
It requires a link between a stimulus and a response. In Instrumental Conditioning, the stimulus
that results in the most satisfactory response is the one that is learned. In consumer behavior
terms, it suggests that consumers learn by trial and error process in which some purchase
behaviours results in more favourable outcomes (i.e., rewards) than other purchase behaviors. A
favourable experience is “instrumental” in teaching the individual to repeat a specific behavior.
• Occurs as the individual learns to perform behaviors that produce positive outcomes and avoid
behaviours that yield negative outcomes.
• This learning process is most closely associated with psychologist B.F. Skinner, who
demonstrated the effects of instrumental conditioning by training pigeons to dance and play Ping-
Pong.
• Operant conditioning is the process in which the frequency of occurrence of a behavior is
modified by the consequences of the behavior. That is, the consequences of a purchase will
affect the probability of a re-purchase.

Strategic/Marketing applications of instrumental conditioning:

Marketers effectively utilize the concepts of consumer instrumental learning when they provide
positive reinforcement by assuring customer instrumental learning when they provide positive
reinforcement by assuring customer satisfaction with the product, the service, and the total buying
experience.
 CHAP#06 CONSUMER & DECISION MAKING
What is consumer decision making?
Process by which (1) consumers identify their needs, (2) collect information, (3) evaluate
alternatives, and (4) make the purchase decision. These actions are determined by psychological
and economical factors, and are influenced by environmental factors such as cultural, group, and
social values.

Levels of Consumer Decision Making:

There are three levels of consumer decision making:
Extensive problem solving, limited problem solving and routinized response behavior.

Extensive problem solving:

When consumers have no established criteria for evaluating a product category or specific brands
in that category or have not narrowed the number of brands they will consider to a small,
manageable subset, their decision-making efforts can be classified as extensive problem solving.
Here, the consumer needs a great deal of information to establish a set of criteria on which to
judge specific brands and a correspondingly large amount of information concerning each of the
brands to be considered.

Limited problem solving

Here, the consumers have already established the basic criteria for evaluating the product
category and the various brands in the category. They have not fully established preferences
concerning a select group of brands. The search for additional information is more like “fine-
tuning”; they must gather additional brand information to discriminate among the various brands.

Routinized response behavior

Here, consumers have experience with the product category and a well-established set of criteria
with which to evaluate the brands they are considering. In some situations, they may search for a
small amount of additional information; in others, they simply review what they already know. In
extensive problem solving customer seek for more information to make a choice, whereas in
routinized response behavior customers need only little additional information.

Views on consumer decision making process:

four views of consumer decision making
The term models of consumers refers to a general view or perspective as to how individuals
behave as they do. The models of consumers are examined in the following four views:

An economic view:
In the world of perfect competition, the consumer has often been characterized as making rational
decisions. This model, called economic man theory, has been criticized by consumer researchers
for a number of reasons. To behave rationally in the economic sense, a consumer would have to
(a) be aware of all available product alternatives, (b) be capable of correctly ranking each
alternative in terms of its benefits and disadvantages, and (c) be able to identify the one best
alternative. Consumers rarely have all the information or sufficiently accurate information or even
an adequate degree of involvement or motivation to make the so-called ‘perfect’ decision.
A passive view:
Quite opposite to the economic view of consumers is the passive view that depicts the consumer
as submissive to the self-serving interests and promotional efforts of marketers. Consumers are
perceived as impulsive and irrational purchasers in passive view, ready to yield to aims and into
the arms of marketers. The principal limitation of the passive model is that it fails to recognize that
the consumers play an equal, if not dominant, role in many buying situations-sometimes by
seeking information about product alternatives and selecting the product that appears to offer the
greatest satisfaction and at other times by impulsively selecting a product that satisfies the mood
or emotion of the moment

A cognitive view:
The cognitive model portrays the consumer as a thinking problem solver. Within this framework,
consumers frequently are pictures as either receptive to or actively searching for products and
services that fulfill their needs and enrich their lives. The cognitive model focuses on the
processes by which consumers seek and evaluate information about selected brands and retail
outlets.

An emotional view
The marketers frequently prefer to think of consumers in terms of either economic or passive
models. In reality, each of us likely to associate deep feelings or emotions, such as joy, fear, love,
hope, sexuality, fantasy, and even a little ‘magic’ with certain purchases or possessions. These
feelings or emotions are likely to be highly involving. For example, a person who misplaces a
favorite fountain pen might go to great lengths to look for it, despite the fact that he or she has six
others at hand.
Possessions also may serve to preserve a sense of past and act as familiar transitional objects
when one is confronted with an uncertain future. For example, members of the armed forces
invariably carry photographs of the girl back home, their families, and their lives in earlier times.
These memories frequently serve as hopeful reminders that normal activities will someday
resume.
 CHAP#07 POST PURCHASE BEHAVIOUR
What is post purchase behavior?
Post-purchase behavior involves all the consumers' activities and the experiences that follow the
purchase. Usually, after making a purchase, consumers experience post-purchase dissonance. In
other words, they regret their purchase decision. The reasons for high post-purchase dissonance
can be attractiveness and performance of forgone alternatives, difficult purchase decision, large
number of alternatives, etc.
A high level of post-purchase dissonance is negatively related to the level of satisfaction the
consumer draws out of product usage. While experiencing post-purchase dissonance, consumers
become acutely aware of the marketers' communication. To reduce post-purchase dissonance,
consumers may sometimes even return or exchange the product.
Marketers, therefore, can use these opportunities to reduce consumers' risk perception by way of
good return/exchange policies and reduce their post-purchase dissonance by messages targeted
at this segment of their consumers.

Decision related to post purchase behavior:

Some very important Marketing Implications flow from Consumer Post Purchase decisions in the
following two areas:
1. Product Set up and Use
2. Related Products and Services

Decision on Product Set up and Use

The marketing implications resulting from Consumer behavior related to Product Set up and Use
are important in the following areas:
a. Providing Information and Assistance
b. Understanding the Consumer's Consumption System
c. Decisions About Warranties

Decisions on Related Products and Services

Once a consumer makes a decision to purchase a product there can be several additional
behaviors associated with that decision. Two activities are of primary importance:
1. Decisions on the product’s installation and use
2. Decisions on the products or services related to the items purchased

Post purchase evaluation:

the consumer decision process does not end once the product or service has been purchased.
After using a product or service the consumer compares the level of performance with
expectations. Satisfaction occurs when the consumer’s expectations are either met or exceeded,
while dissatisfaction results when performance is below expectations. Another possible outcome
of purchase is cognitive dissonance which refers to a feeling of psychological tension or post-
purchase doubt a consumer may experience after making a difficult purchase choice. Consumers
often look to advertising for supportive information regarding the choice they have made.
Customer satisfaction /dissatisfaction
Customer satisfaction is, simply put, a measure of the satisfaction of the customer, and how the
sold items or services meet the customer's expectations.
whereras if a customer is not delighted or not getting the expected benefits etc ..this lead to
customer dissatisfaction.

Consumer complaint behavior

Consumers may exhibit unfavorable word-of-mouth communication, if they are dissatisfied with a
product.
In this case, customers tell twice as many people about bad experiences as good ones and such
behavior can severely damage a company’s image. Consumers may not repurchase the brand.

Post purchase dissonance:

Post purchase dissonance is basically an after purchase cognitive behavior. While evaluating the
benefits after a purchase it is common for customers to be concerned about their purchase
decision. It is caused by cognitive dissonance. Here the customer thinks that if he had purchased
some other item it would have been better than the one he bought. Simply he is not completely
satisfied with the purchase and is most likely to switch brands.

Product disposition:
Disposition alternatives and Determinants:
There are various alternatives for disposing of a product. In addition, the method of disposition
may vary considerably across products. For example while bicycles tend to be given away, this is
not true of phonograph records which are usually thrown away or stored. At present little is known
about the factors that influence the disposition choice made by the consumer. The following
categories of factors have been suggested however.
1) Psychological characteristics of the decision maker: personality, attitudes, emotions, perception,
learning, creativity, intelligence, social class, level of risk tolerance peer pressure, social
conscience and so on. Although consumer demographic variables have not proved to be very
enlightening in understanding disposition behavior Lifestyle factors have proved to be moderately
useful.
2) Factors intrinsic to the product condition age, size, style, value color, power source of the
product, technological innovations adaptability, reliability, durability initial post, replacement cost,
and so on.
3) Situational factors extrinsic to the product finances storage space, urgency, fashion changes,
circumstances of acquisition (gift versus purchase) functional use, economics (demand and
supply) legal, considerations (giving to avoid taxes) and so on.

Marketing Implications:
The implications of the consumer product disposition process reflects on several areas of
marketing. There are implications from a public policy perspective as well as from a strategy
perspective.
 Chap#08 consumerism
What is consumerism?
Consumerism encompasses the evolving set of activities of government, business and
independent organizations that are designed to protect the rights of the consumers.
Consumerism is concerned with protecting consumers from all organizations with which there is
exchange relationship. There are consumer problems associated with hospitals, libraries, schools,
police forces, and various government agencies, as well as with business firms.

Evolution of consumerism
consumerism maybe evolved due to following reasons:
1. Disillusionment with the system
2. The performance gap
3. The consumer information gap
4. Antagonism toward advertising
5. Impersonal and unresponsive marketing institutions
6. Intrusions of privacy.
7. Declining living standard.
8. Special problems of the disadvantaged
9.Different views of the marketplace

The nature of consumerism

The Nature of Consumerism may be summarized in the following points:

1. Consumer Safety
2. Consumer Information
3. Consumer Choice
4. Environmental Concerns
5. Consumer Privacy
6. Business Response to Social and Ethical Concerns
7. Consumer’s Responsibilities
8. Market Responses to Consumers

Responsibilities of consumers:
Critical Awareness:
The responsibility to be more alert and questioning about the price and quality of goods and
services we consume.

Action :
The responsibility to assert ourselves by acting to ensure that we get a fair deal As long as we
remain passive consumers we will continue to be exploited and manipulated.

Social Concern:
The responsibility to consider the impacts of our consumption patterns and lifestyles on other
citizens especially the poor disadvantaged or powerless consumers whether they be in the local
national or international community.
Environmental Awareness:
The responsibility to realize the environmental costs and consequences of our consumption
patterns and lifestyles. We should recognize our individual and collective social responsibility to
conserve natural resources and to preserve earth for present and future generations.

Solidarity:
The responsibility to come together and organize consumers in order to enhance the strength and
influence required to promote and protect our interests.

developing marketing organization responsive to consumers

The number and seriousness of consumer problems suffered by general population is not
significant. Only a small vocal minority of consumers complain about the problems they
experience with products and services. Great majority of those complaints are registered about
products and services are resolved to the satisfaction of consumers.

Business people must educate the public about the operation of the marketing system, the
benefits of free enterprise, etc... They need to assess and modify their policies and practices to
improve products and services offered to consumers. This highlights the need for an effective
Consumer Response System that draws from the following features

 Understanding what consumers experience

 Establishing a Consumer Advisory Board
 Listening to consumers and responding effectively
 Establishing corporate consumer affairs units