MBA - Sales & Marketing - SEM IV

Subject Name: Consumer Behaviour

Module 1: CONSUMER AS AN INDIVIDUAL
 Personality & Self Concept:
• Personality
• To understand a buyer needs and convert them into customers is the main purpose of the
consumer behavior study. To understand the buyer habits and his priorities, it is required to
understand and know the personality of the buyer.

• Personality signifies the inner psychological characteristics that reflect how a person reacts
to his environment. Personality shows the individual choices for various products and
brands. It helps the marketers in deciding when and how to promote the product.
Personality can be categorized on the basis of individual traits, likes, dislikes etc.
•
• Though personality is static, it can change due to major events such as death, birth or
marriage and can also change gradually with time. By connecting with the personality
characteristics of an individual, a marketer can conveniently formulate marketing strategies.
We will discuss in this chapter the various theories of personality.
 Personality & Self Concept:
• Trait Theory:
• Traits are the features of an individual or tendency of an individual in a particular manner. Traits help
in defining the behavior of consumers. According to the Trait theorists, an individual’s personality
make-up stems out of the traits that he possesses, and the identification of traits is important.

• Following are the few of the most common traits:

– Outgoing
– Sad
– Stable
– Serious
– Happy go lucky
– Relaxed
– Self assured
– Practical
– Imaginative
 Personality & Self Concept:
• Trait theory is representative of multi-personality theories.
Trait theory is based on certain assumptions, such as traits
which are certainly stable in nature and a limited number of
traits are common to most of the people. According to the Trait
theorists, an individual’s personality make-up stems out of the
traits that he possesses, and the identification of traits
•
is important. The trait theories can be of two broad categories,
viz., Simple trait theories and general trait theories.
 Personality & Self Concept:
• Simple Trait Theories:
•
• In simple trait theories, a limited number of traits are identified, and people are categorized and
classified on the basis of these traits.

• General Trait Theories:

• In general trait theories, a large variety of traits are identified.

• The Psychoanalytic Theory of Freud: Sigmund Freud, the father of psychology, became famous with
his psychoanalytic theory of personality. In fact, the theory is regarded as the cornerstone of modern
psychology. Sigmund based his theory on certain assumptions which is as follows−Unconscious needs
or drives lie at the heart of human motivation and personality. The socialization process that takes
place within people in a social set up has a huge impact on individual behavior. Freud explained
much of how the psyche or the mind operates, and proposed that, human psyche is composed of
parts within our awareness and beyond our awareness.
 Personality & Self Concept:
• He said that all behavior within an individual cannot be explained, much
lies in the subconscious.
– Id − According to Freud’s psychoanalytic theory of personality, the id operates
based on the pleasure principle, which stresses on immediate fulfillment of
needs. The id is the personality component made up of unconscious psychic
energy which satisfies basic urges, needs, and desires.
– Ego − Ego is that state of awareness which thinks of you as separate from the
other. It always thinks of the glories of the past and hopes of the future and
focuses on guiltiness. It always thinks of what was and what could be.

– Super Ego − The superego provides guidelines for making judgments. It is the
aspect of personality that holds all our moral standards and ideals that we
acquire from both parents and society.
 Neo-Freudian Theory
• There were a group of psychologists who believed that social
interaction and resultant relationships formed the basis for the
growth and development of personality. Here, they disagreed
with their contemporary, Freud, who believed that personality
was −
– Biological and rooted in genetics, and
– Was groomed as a result of early childhood experiences. This group
of researchers who laid emphasis on the process of socialization
came to be known as the Neo. To form a personality, social
relationships are very important.
 Self Concept:
• Self concept is defined as the way, in which we think, our preferences, our beliefs, our
attitudes, our opinions arranged in a systematic manner and also how we should behave
and react in various roles of life. Self concept is a complex subject as we know the
understanding of someone’s psychology, traits, abilities sometimes are really difficult.
Consumers buy and use products and services and patronize retailers whose personalities or
images relate in some way or other to their own self-images.
•
• Traditionally, individuals are considered to be having a single self-image which they normally
exhibit. Such type of consumers is interested in those products and services which match or
satisfy these single selves. However, as the world became more and more complex, it has
become more appropriate to think of consumers as having multiple selves.
•
• What is Self-Concept?
• The below are some of the major aspects of Self-concept
•
 Self Concept:
• Self-Concept is Organized
• We all have various views about ourselves. We all may think we are kind, calm, patient,
selfish, rude and what not. It doesn’t matter what perception you have about yourself, but
the one perception that facilitates all these insights is organized self concept. When a
person believes in something that matches his self concept he sticks to his view and does
not agree to change the same and even if does, it takes a lot of time.
•
• Self Concept is Learned
• It is believed that self concept is learned and no person is born with a self concept. It
develops as and when we grow old. Our self concept is built when we meet people socially
and interact with them. We are the ones who shape or alter our self concept and its quite
natural that we may have a self concept different for ourselves as compared to what people
think about us.
•
 Self Concept:
• For example − If an individual thinks, he is very generous and helpful, it may not
necessarily be the case with others. Others may see him as a selfish person.
• Self Concept is Dynamic
• Our self concept in life is not constant and it may change with instances that take
place in our lives. When we face different situations and new challenges in life,
our insight towards things may change. We see and behave according to the
things and situations.
• Thus, it is observed that self concept is a continuous development where we let
go things that don’t match our self concept and hold on those things that we
think are helpful in building our favorable perception.
• Self concept is the composite of ideas, feelings, emotions and attitudes that a
person has about their identity and capabilities.
 Consumer Motivation

• Why do people shop? How a consumer does assess his/her needs? What motivates them to
choose a particular product over other? These questions are essence of marketing concepts,
key for a given company to be successful, profitable and market leader. When a
•
consumer engages in a trade (i.e. exchange a product/service for the money), it is mostly to
satisfy a need. But what could be of interest to marketer here is that, consumer needs are
sometimes unfelt to consumer, but it represents a great deal of opportunity to the
marketer.
•
• As the marketing evolves, production orientation transforms into marketing orientation,
which revolves around what the consumer wants and how to elicit the unfelt need of a
consumer. Need can be innate (basic biological needs) or it can be acquired (learned
through society and environment).
 Consumer Motivation

• Consumer motivation is defined as driving force within individuals

that leads to an action. In marketing concept that action would be
acquiring a product or availing a service, that fulfills their needs and
wants. This motivated behavior is always goal oriented, that what
exactly is required to satisfy a particular need. This is one of the
reasons why marketer doesn’t just focus on what a particular need
is, but inclined to represent their product and service as the only
means of solution for a particular consumer need. Needs are the
core of the marketing concept. The study of Motivation refers to all
the processes that drives in a person to perceive a need and pursue
a definite course of action to fulfill that need.
 Consumer Motivation

• What are Needs − Every individual has needs that are required to be fulfilled. Primary needs
are food, clothing, shelter and secondary needs are society, culture etc.
•
• What are Wants − Needs are the necessities, but wants are something more in addition to
the needs. For example, food is a need and type of food is our want.
•
• What are Goals − Goals are the objectives that have to be fulfilled. Goals are generic and
product specific in nature. Generic goals are general in nature, whereas product specific
goals are the desires of a specific nature.
• Needs and fulfillment are the basis of motivation. Change takes place due to both internal
as well as external factors. Sometimes needs are satisfied and sometimes they are not due
to individual’s personal, social, cultural or financial needs.
 Theories of Motivation:

• Maslow’s Theory of Need Hierarchy

• Based on the notion of a universal hierarchy of human needs Dr
Abraham Maslow, a clinical psychologist formulated a widely
accepted theory of human motivation. This identifies five basic
levels of human need which rank in order of importance from
lower level needs to higher level needs.
•
• This theory signifies the importance of satisfying the lower level
needs before higher level needs arise. According to this theory,
dissatisfaction motivates the consumer.
 Theories of Motivation:

• Maslow’s Need Hierarchy Theory

•
– Physiological Needs − Food, clothing, air, and shelter are the first level needs. They are
known as the basic necessities or primary needs.
– Safety or Security Needs − Once the first level needs are satisfied, consumers move to
the next level. Physical safety, security, stability and protection are the security needs.
– Social Needs − After the safety needs are satisfied, consumers expect friendship,
belonging, attachment. They need to maintain themselves in a society and try to be
accepted.
– Esteem Needs − Then comes esteem needs such as self-esteem, status, prestige.
Individuals here in this stage want to rise above the general level as compared to others
to achieve mental satisfaction.
– Self-Actualization − This is the highest stage of the hierarchy. People here, try to excel in
their field and improve their level of achievement. They are known as self-actualizers.
 Theories of Motivation:

• Motivational Theory and Marketing Strategies:

• Marketers have to understand the motives of their potential customers to enjoy
good sales. A buyer has several motives and each change with various elements.
In such cases the marketers can readily help their customers by changing their
marketing strategy so that the conflict is resolved. Following are the major
conflicts that may arise –
•
– Approach Conflict − This conflict arises when a consumer has two different choices of
similar products or services. He gives equal importance to them, but is unable to choose
one over the other.
– Approach Avoidance Conflict − This type of conflict happens when the consumer
decides in favor of a product, but is unhappy with a particular feature of the product and
wants to avoid it. Under such circumstances, the marketer may come up with few
modifications in the existing product and make it suitable for the consumer.
 Theories of Motivation:

• Motivation is an inner drive that reflects goal-directed arousal. In a consumer

behavior context, the results is a desire for a product, service,
or experience. It is the drive to satisfy needs and wants, both physiological and
psychological, through the purchase and use of products and services.
•
Five stages of the motivation process:
•
– Latent need
– Drive
– Want or desire
– Goal
– Behavior
•
 Theories of Motivation:

• CONSUMER PERCEPTION:

• A marketing concept that encompasses a customer's impression, awareness and/or consciousness about a
company or its offerings. Customer perception is typically affected by advertising, reviews, public relations,
social media, personal experiences and other channels.

Definition:

• CUSTOMER PERCEPTION
• Consumer perception refers to the process by which a customer selects, organizes, and interprets
information/stimuli inputs to create a meaningful picture of the brand or the product. It is a three stage process
that translates raw stimuli into meaningful information.
• Each individual interprets the meaning of stimulus in a manner consistent with his/her own unique biases,
needs and expectations. Three stages of perception are exposure, attention and interpretation
 Theories of Motivation:

• In simpler terms, it is how a customer see's a particular brand with

whatever he or she has been able to understand by watching the products,
its promotions, feedback etc. It is the image of that particular brand in the
mind of the customer
•
• Examples
• Sensory data emanating from an external environment (e.g., hearing a
tune on the radio) can generate internal sensory experiences; a song might
trigger a young man’s first dance and bring to mind the smell of his date’s
perfume and his first kiss. Hence, this concludes the definition of Customer
Perception along with its overview.
 CONSUMER ATTITUDES AND CHANGING
ATTITUDES:

• Consumer attitudes are a composite of a consumer's(1) beliefs

about, (2) feelings about,
• and behavioral intentions toward some object--within the
context of marketing, usually a brand or retail store The first
component is beliefs.
 CONSUMER ATTITUDES AND CHANGING
ATTITUDES
• Beliefs:
•
• The first component is beliefs. A consumer may hold both positive beliefs toward an object (e.g.,
coffee tastes good) as well as negative beliefs (e.g., coffee is easily spilled and stains papers). In
addition, some beliefs may be neutral (coffee is black), and some may be differ in valance depending
on the person or the situation (e.g., coffee is hot and stimulates-- good on a cold morning, but not
good on a hot summer evening when one wants to sleep). Note also that the beliefs that consumers
hold need not be accurate (e.g., that pork contains little fat), and some beliefs may, upon closer
examination, be contradictory (e.g., that a historical figure was a good person but also owned slaves).
•
• Since a consumer holds many beliefs, it may often be difficult to get down to a “bottom line” overall
belief about whether an object such as McDonald’s is overall good or bad. The Multiattribute (also
sometimes known as the Fishbein) Model attempts to summarize overall attitudes into one score
using the equation:
•
 CONSUMER ATTITUDES AND CHANGING
ATTITUDES
• That is, for each belief, we take the weight or importance (Wi) of that belief and
multiply it with its evaluation (Xib). For example, a consumer believes that the
taste of a beverage is moderately important, or a 4 on a scale from 1 to 7. He or
she believes that coffee tastes very good, or a 6 on a scale from 1 to 7. Thus, the
product here is 4(6)=24. On the other hand, he or she believes that the potential
of a drink to stain is extremely important (7), and coffee fares moderately badly,
at a score -4, on this attribute (since this is a negative belief, we now take
negative numbers from -1 to -7, with -7 being worst). Thus, we now have 7(-4)=-
28. Had these two beliefs been the only beliefs the consumer held, his or her
total, or aggregated, attitude would have been 24+(-28)=-4. In practice, of
course, consumers tend to have many more beliefs that must each be added to
obtain an accurate measurement.
 Behavioral Intention:
• The behavioral intention is what the consumer plans to do with respect to the object (e.g., buy or not buy the
brand). As with affect, this is sometimes a logical consequence of beliefs (or affect), but may sometimes reflect
other circumstances--e.g., although a consumer does not really like a restaurant, he or she will go there because
it is a hangout for his or her friends.

• Attitude-Behavior Consistency:

• Consumers often do not behave consistently with their attitudes for several reasons:
•
• Ability. He or she may be unable to do so. Although junior high school student likes pick-up trucks and would like
to buy one, she may lack a driver’s license.
• Competing demands for resources. Although the above student would like to buy a pickup truck on her sixteenth
birthday, she would rather have a computer, and has money for only one of the two.
• Social influence. A student thinks that smoking is really cool, but since his friends think it’s disgusting, he does
not smoke.
• Measurement problems. Measuring attitudes is difficult. In many situations, consumers do not consciously set
out to enumerate how positively or negatively they feel about mopeds, and when a market researcher asks
them about their beliefs about mopeds, how important these beliefs are, and their evaluation of the
performance of mopeds with respect to these beliefs, consumers often do not give very reliable answers. Thus,
the consumers may act consistently with their trueattitudes, which were never uncovered because an erroneous
measurement was made.
 Attitude Change Strategies:
• Changing attitudes is generally very difficult, particularly when consumers suspect that the marketer
has a self-serving agenda in bringing about this change (e.g., to get the consumer to buy more or to
switch brands).

• Changing affect. One approach is to try to change affect, which may or may not involve getting
consumers to change their beliefs. One strategy uses the approach of classical conditioning try to
“pair” the product with a liked stimulus. For example, we “pair” a car with a beautiful woman.
Alternatively, we can try to get people to like the advertisement and hope that this liking will “spill
over” into the purchase of a product. For example, the Pillsbury Doughboy does not really emphasize
the conveyance of much information to the consumer; instead, it attempts to create a warm, fuzzy
image. Although Energizer Bunny ads try to get people to believe that their batteries last longer, the
main emphasis is on the likeable bunny. Finally, products which are better known, through the mere
exposure effect, tend to be better liked--that is, the more a product is advertised and seen in stores,
the more it will generally be liked, even if consumers to do not develop any specific beliefs about the
product.
 Attitude Change Strategies:

• Changing behavior. People like to believe that their behavior is rational;

thus, once they use our products, chances are that they will continue
unless someone is able to get them to switch. One way to get people to
switch to our brand is to use temporary price discounts and coupons;
however, when consumers buy a product on deal, they may justify the
purchase based on that deal (i.e., the low price) and may then switch to
other brands on deal later. A better way to get people to switch to our
brand is to at least temporarily obtain better shelf space so that the
product is more convenient. Consumers are less likely to use this
availability as a rationale for their purchase and may continue to buy the
product even when the product is less conveniently located. (Notice, by
the way, that this represents a case of shaping).
 Attitude Change Strategies:
• Changing beliefs. Although attempting to change beliefs is the obvious way to attempt attitude
change, particularly when consumers hold unfavorable or inaccurate ones, this is often difficult to
achieve because consumers tend to resist. Several approaches to belief change exist:
•
• Change currently held beliefs. It is generally very difficult to attempt to change beliefs that people
hold, particularly those that are strongly held, even if they are inaccurate. For example, the
petroleum industry advertised for a long time that its profits were lower than were commonly
believed, and provided extensive factual evidence in its advertising to support this reality. Consumers
were suspicious and rejected this information, however.
• Change the importance of beliefs. Although the sugar manufacturers would undoubtedly like to
decrease the importance of healthy teeth, it is usually not feasible to make beliefs less important--
consumers are likely to reason, why, then, would you bother bringing them up in the first place?
However, it may be possible to strengthen beliefs that favor us--e.g., a vitamin supplement
manufacturer may advertise that it is extremely important for women to replace iron lost through
menstruation. Most consumers already agree with this, but the belief can be made stronger.
 Attitude Change Strategies
• Add beliefs. Consumers are less likely to resist the addition of
beliefs so long as they do not conflict with existing beliefs. Thus, the
beef industry has added beliefs that beef (1) is convenient and (2)
can be used to make a number of creative dishes. Vitamin
manufacturers attempt to add the belief that stress causes vitamin
depletion, which sounds quite plausible to most people.
• Change ideal. It usually difficult, and very risky, to attempt to
change ideals, and only few firms succeed. For example, Hard
Candy may have attempted to change the ideal away from
traditional beauty toward more unique self expression.
•
 Change Consumer Attitudes:
• Companies may focus on changing consumer attitudes for a variety of reasons. Dropping
sales, increased product or service complaints and new, or renewed, competition in the
marketplace can all necessitate a hard look at the reasons behind trends related to
consumer perceptions and attitudes. Deciphering the cause of negative perceptions
requires appropriate planning and the commitment to make the necessary changes to
ensure success. For small businesses, analyzing consumer behavior becomes an essential
part of developing a targeted marketing and promotional campaign.
• Identify consumer perceptions. In order to develop an action plan for changing consumer
attitudes, you need to understand current perceptions of products and services. Evaluate
captured feedback, such as customer service contact statistics regarding complaints and
concerns. Service businesses can leave comment cards for customers to complete and mail
back. Utilize surveys, paper and electronic, and focus groups to receive an accurate
representation of problems or concerns that may exist.
 CONSUMER LEARNING AND INFORMATION
PROCESSING:
CONSUMER LEARNING: Consumer learning is the process by which individuals acquire the
purchase and consumption knowledge and experience they apply to future related behavior.
Most of the learning is incidental.

What is customer learning?

Consumer learning is the pursuit of lifelong learning by individuals (read: yourcustomers) who
want to further their knowledge in areas of personal interest and are learning on their
own accord. That means hobbies, nutrition and fitness, sports, fine arts, crafts, career
development, and personal improvement.

Consumer Learning is the process by which individuals acquire the purchase and consumption
knowledge and experience they apply to future related behavior.
 CONSUMER LEARNING AND INFORMATION
PROCESSING
Most of the learning is incidental. Some of it is intentional. Basic elements that
contribute to an understanding of learning are:

Motivation
Cues
Response
Reinforcement

There are 2 theories on how Individuals learn:

Behavioral Theory
Cognitive Theory
Both contribute to an understanding of consumer behavior.
 CONSUMER LEARNING AND INFORMATION
PROCESSING
Major Behavioral Learning Theories are :

Classical Conditioning : Includes Repetition, Stimulus generalization and Stimulus discrimination.

Instrumental Conditioning: Instrumental Learning theorists believe that learning occurs through a trial and
error process in which the positive outcomes in the form of results or desired outcomes lead to repeat behavior
like Repeat Purchase or Repeat Positive Word of Mouth. Both positive and negative reinforcement can be used
to encourage the desired behavior. The timing of repetitions influences how long the learned material is
retained. Learning usually persists longer with distributed re- inforcement schedule, while mass repetitions
produce more initial learnings.

Observational Conditioning or Vicarious Learning: Cognitive learning theory holds that the kind of learning
most characteristics of humans is PROBLEM SOLVING. Cognitive theorists are concerned with how information
is processes by the human mind: how it is stored, retained, and retrieved. Involvement theory proposes that
people engage in limited information processing in situations of low relevance to them and people engage in
extensive information processing in situations of high relevance.
 Importance of Studying Consumer Behavior:
CONSUMER INFORMATION PROCESSING:

The common dimension effect is a bias in human information processing. It indicates that
unique product attributes (features, extras) may have less influence in the
consumer choice process than the common attributes. Marketing experience, however, says
that a new and innovative product attribute may attract buyers.
The process through which consumers are:
exposed to information
attend to it
comprehend it
place it in memory and
retrieve it for later use.

PERCEPTION
The process through which individuals are:
exposed to information,
attend to the information, and
 THE COMPREHENSION STAGE
The process through which individuals organize and interpret information
Perceptual Organization: the way people perceive shapes, forms, figures, and lines in their
visual world
Gestalt Psychology: attempts to understand how people perceive patterns in the world
THE COMPREHENSION STAGE
Interpretation processes: people draw upon their experience, memory and expectations to
attach meaning to a stimulus
Expectations: prior beliefs about what should happen in a given situation can influence the
interpretation of information
Semiotics: how it is that people interpret meaning from signs

signs: words, gestures, pictures, products, and logos used to communicate information
T h a n k Yo u !