TABLE OF CONTENTS

S.NO CONTENTS PAGE NO

1 Course overview 3-4

2 Learning outcomes 5

3 Evaluation criteria 5-6

4 Session plan 7-11

5 Detail of Instructor 12-13

6 Compiled notes and reference material 14-116

7 Question bank 117-130

8 Case study 131-134

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 Course Title Consumer behavior

Course Code MK 503

No of credits 4

Department Management

Course Leader Dr. Aditi Malhotra

Faculty Dr. Pooja Arya

Email Aditim15@yahoo.com

Phone no 9971523087

Course Type Core course

Offer in Academic Year 2022.23

COURSE OUTLINE BBA –V Sem

Course Description

In today’s time it is important to study the behavior of consumers for the purpose of applying
such knowledge toward improving an organization’s performance, sales and profit.

The course of Consumer behavior is concerned with the study of the behavior of consumer
before, during and post purchase. It involves the understanding, prediction and control of
consumer behavior and the factors which influence the behaviour. The best way of
understanding this course is that student(s) should develop a better understanding of
themselves as a consumer and their behaviours before, during and post purchase. This class
is designed to combine theory and practice in order to bring about a better understanding
how Cnsumers behaviour affect the decisions of organisations and innovation in
marketplace.

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The course includes a general overview of Consumer Behavior. Some of the issues
addressed include:

 How it works as the nature and dynamics of the Consumer (Their actions, behaviour, decision
process, post purchase behaviour )?
 How do elements of culture, sub culture, social class, references and family members influence
the consumer buying behaviour?
 What are the various steps involved in consumer buying behaviour?
 How the process of adoption for innovation affects the organisations?

This course will review the key literature in the study of consumer behaviors and its various
determinants. The readings and discussions will focus on core topics in the field, such as
factors affecting consumer behaviour, purchase decision making and diffusion of innovation
process.

The students are expected to review the course readings and the indicated portion of
the prescribed text for class discussions prior to attending each session.

COURSE CONTENT

Unit 1: ( 04 hours)

INTRODUCTION: Meaning of Customers & Consumers, Importance / relevance of

consumer behaviour, studies in the field of Marketing.

Unit 2: ( 14 hours)

Individual Determinants of Consumer Behavior 14Hrs Personality & Self Concept: Meaning
of Personality, Influence on Purchase Decisions Motivation & Involvement: Types of
Buying Motives, Motive Hierarchy, Dimensions of Involvement Learning & Memory:
Meaning & Principal Elements of Learning, Characteristics of Memory Systems, Recall
Attitudes: Meaning & Characteristics, Strategies for Changing Attitudes

Unit 3: (10 hours)

External determinants of consumer behaviour: Culture, subculture, social class & reference
group

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Unit 4: ( 12 hours)

Consumers’ Buying Decision Making Process, Post-purchase Evaluation & Behavior:

Consumer Satisfaction, Dissatisfaction, Customer Delight, Consumer Complaint Behavior
and Post- Purchase Dissonance. Types of Buying Behavior: Complex, Extensive,
Dissonance Consumer buying Vs. Organizational buying. Consumer Behavior Models
Howard Sheth Model, Nicosia model

Unit 5 : (05 hours)

Diffusion of innovation: meaning and definition, diffusion process. The adoption process.

Learning Outcomes:

After undergoing this course, the student will be able to:

1. Understand the consumers’ attitude towards a particular product / service in a better

manner.

2 Use the factors that influence the consumers’ buying behaviour in determining the
marketing

mix strategies.

3 Identify new market segments to cater to their needs

4 Design effective marketing strategies

ASSESSMENT:

Assessment Description Weightage Learning

method outcome

End Term It will be based on conceptual questions, 60% End term exam
Exams situation specific application oriented will cover both
questions and short case studies. Course pre mid-term
and post mid-

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 readings are an integral component of learning term course
in this course. coverage.

Mid Term It will be based on conceptual questions, 20% First 3 units

Exams situation specific application oriented for First
questions and short case studies. Course Internal and
(First Internal
readings are an integral component of learning
last 3 units
Exams and
in this course. At least one of the questions will
for second
second be based on these readings which will not be
internals
Internal specified to the students.
Exams)

First Internal First Internal 10 % First 3

exams units for
First
Internal
Second Second Internal 10 % Unit 4 to 6
Internal for second
exams
Internal.
CES Activity Three CES Activities: Class Test, Moodle quiz 10% Must to
(3) Best of and Presentation participate
Two Best two CES will be considered if student
in all

will appear for all three CES activities CES (Marks

of two CES
are
considered)

Class- Students will be awarded marks for active and 10% Enhancing
Attendance constructive participation in class. Students the skill
need to fulfil the criteria of 75% attendance sets for
overall
dealing in OB

Note: Out of the CES activities (assignment, presentations, 2 quizzes) best 2 activities shall be
considered for scores.

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 LESSON PLAN

LECTURE TOPICS TO BE DISCUSSED PEDOGOGY REQUIRED

NO READING
OR CASES

UNIT 1 INTRODUCTION TO CONSUMER T-1, R-4

BEHAVIOR- types of Consumers, consumer
L1, 2
typology. Consumer Behavior: Implications
for Marketing Strategy. How consumer
influences drive marketing decision.

L 3 &4 Different Buying Roles in Consumer Lecture with T-1, R-4

Behavior, Importance of Consumer Behavior presentation
in Marketing. Consumer lifestyle and
consumer decisions

UNIT 2 Individual Determinants of Consumer Lecture with T-1, R-4

Behavior Consumer Needs- Meaning of presentation
L 5&6
Consumer Needs, Maslow’s Hierarchy of
Needs. Motivation and Involvement–
Meaning of Motivation, Elements of
Motivation, Buying Motives

L7&8 Meaning and Types of Involvement, Lecture with T-1, R-4

Measures of Involvement. Personality and presentation
Self-concept–Meaning of Personality, Nature
of Personality

L9 & 10 Meaning of Self-concept, Components of Lecture with T-1, R-4

Self-concept. Perception Learning– Meaning presentation
of Perception, Elements of Perception.

L11 Learning - Meaning of Learning, Elements of Lecture with

Learning. presentation

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L12 &13 Personality and Self-concept–Meaning of Lecture with T-1, R-4
Personality, Nature of Personality presentation

L 14 CES 1 PRESENTATIONS

L 15&16 Attitude and Attitude change–Meaning of Lecture with T-1, R-4

Attitude, Characteristics of Attitude, and presentation
Strategies for Attitude change.

UNIT 3 Cultural influences, Sub cultural influences, Lecture with T-1, R-4
Social Class influences, Social Group presentation
L 17,18,19
influences, Family influences and Personal
influences on Consumer Behavior.

L20, Need recognition, Information Search, Lecture with T-1, R-4

21,22 Evaluation of alternatives, Purchase decision, presentation
and Post Purchase behavior.

L 23,24,24 Howard Seth Model, Engel-Blackwell- Lecture with T-1, R-4

Miniard Model and Nicosia Model of presentation
Consumer Buying behavior.

L 25,26,27 Complex Buying Behavior, Dissonance- Lecture with

Reducing Buying Behavior, Habitual Buying presentation
Behavior and Variety Seeking Buying
Behavior. E-Buying Behavior.

L28 CES 2 BRAND RACE

Meaning of Adoption of Innovation, Lecture with T-1, R-4

Adoption of Innovation Process, Importance presentation
L29,30,31
of Adoption and Diffusion of Innovation in
Consumer Behavior

L 32&33 Meaning of Business Marketing, Business Lecture with T-1, R-4

Market Customers, Characteristics of presentation

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 Business Markets, Organizational Buying
Behavior, Marketing Strategies for

L 34 Business Markets, Organizational Markets in Lecture with T-1, R-4

India presentation

L 35 - 36 Diffusion of Innovation, Innovation Process, Lecture with

Adoption of Innovation. Presentation

L37 Adoption of Innovation. Diffusion of Lecture with

Innovation in consumer behavior. Presentation

L 38-40 Consumer research Lecture with

Presentation

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Assessment method Description Weightage

CES 1 MOODLE 10 (Best of Two)

CES 2 Case Study Compulsory for the students

to attempt all
CES 3 PRESENTATIONS
Three CES

Internal I 10

Internal II 10

ATTENDANCE 10

TOTAL 40 Marks

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10
STUDY MATERIAL

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12
 UNIT – 1

Introduction to Consumer Behaviour

All of us are consumers. We consume things of daily use, we also consume and buy these products
according to our needs, preferences and buying power. These can be consumable goods, durable
goods, speciality goods or, industrial goods. What we buy, how we buy, where and when we buy,
in how much quantity we buy depends on our perception, self-concept, social and cultural
background and our age and family cycle, our attitudes, beliefs, values, motivation, personality,
social class and many other factors that are both internal and external to us. While buying, we also
consider whether to buy or not to buy and, from which source or seller to buy. In some societies,
there is a lot of affluence and, these societies can afford to buy in greater quantities and at shorter
intervals. In poor societies, the consumer can barely meet his barest needs.

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Consumer behaviour is the study of how individual customers, groups or organizations select, buy,
use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions
of the consumers in the marketplace and the underlying motives for those actions.

Consumer behaviour can be defined as the decision-making process and physical activity involved
in acquiring, evaluating, using and disposing of goods and services. This definition clearly brings
out that it is not just the buying of goods/services that receives attention in consumer behaviour but,
the process starts much before the goods have been acquired or bought.

A process of buying starts in the minds of the consumer, which leads to the finding of alternatives
between products that can be acquired with their relative advantages and disadvantages. This leads
to internal and external research. Then follows a process of decision-making for purchase and using
the goods, and then the post-purchase behaviour which is also very important, because it gives a
clue to the marketers whether his product has been a success or not. The marketers, therefore tries
to understand the needs of different consumers and having understood his different behaviours
which require an in- depth study of their internal and external environment, they formulate their
plans for marketing.

Consumer generally refers to any one engaging in any one or all of the activities stated in our
definition. The traditional viewpoint was to define consumers strictly in terms of economic goods
and services and purchasers of products offered for sale. The view now has been broadened. It now
also holds that monetary change is not essential for the definition of consumers. Few potential
adopters of free services, or even philosophic ideas can be encompassed by this definition.
Sometimes, the goods are bought by the father and the children use it. The children ultimately
become the consumer. A packet of coloured crayons

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bought by the father and used by his children in school. The father buys a refrigerator and the
user is the entire household. Therefore, we study certain consumer behaviour roles.

Consumer Behaviour Buying Roles

Roles Descriptions
Initiator The individual who determines that certain need or want is not being
fulfilled and purchases a product to fulfill the need.
Influencer A person who by some intentional or unintentional word or action
influences the purchase decision.
Buyer The individual who actually makes the purchase transaction mostly is
the head of the family
User/ Consumer The person or persons who consume or use the purchase product

To understand the consumer, researches are made. Sometimes, motivational research is handy
to bring out hidden attitude, uncover emotions and feelings. Many firms send questionnaire to
customers to ask about their satisfaction, future needs and ideas for a new product. On the basis
of the answers received a change in the marketing mix is made and advertising is also
streamlined.The most important reason for studying consumer behaviour is the role that it plays
in our lives. We spend a lot of time in shops and market places. We talk and discuss with friends
about products and services and get lot of information from T.V. This influences our daily
lives. Consumer decisions are affected by their behaviour. Therefore, consumer behaviour is
said to be an applied discipline. This leads to the microperspective and societal perspective.

Micro Perspective - It involves understanding consumer for the purpose of helping a firm or
organization to achieve its objectives. All the Managers in different departments are keen to
understand the consumer. They may be Advertising Managers, Product Designers, Marketing
and Sales Managers and so on.

Societal Perspective is on the macro level. Consumers collectively influenced economic and
social conditions within a society. Consumers strongly influence what will be product, what
resources will be used and it affects our standard of living.

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Management is the youngest of sciences and oldest of arts and consumer behaviour in management
is a very young discipline. Various scholars and academicians concentrated on it at a much later
stage. It was during the 1950s, that marketing concept developed, and thus the need to study the
behaviour of consumers was recognised. Marketing starts with the needs of the customer and ends
with his satisfaction. When everything revolves round the customer then the study of consumer
behaviour becomes a necessity. It starts with buying of goods. Goods can be bought individually, or
in groups. Goods can be bought under stress (to satisfy an immediate need), for comfort and luxury
in small quantities or in bulk. For all this, exchange is required. This exchange is usually between
the seller and the buyer. It can also be between consumers.

To understand the likes and dislikes of the consumer, extensive consumer research studies are
being conducted. These researches try to find out:

• What the consumer thinks of the company’s products and those of its competitors?

• How can the product be improved in their opinion?

• How the customers use the product?

• What is the customer’s attitude towards the product and its advertising?

• What is the role of the customer in his family?

The following key questions should be answered for consumer research. A market comes into
existence because it fulfils the needs of the consumer. In this connection, a marketer has to know
the 70s framework for consumer research.

Consumer behaviour is a complex, dynamic, multi-dimensional process, and all marketing

decisions are based on assumptions about consumer behaviour.

Relevance of Consumer Behaviour Studies in the field of Marketing

 Consumer behaviour knowledge is applied in Marketing Management. A sound

understanding of the consumer behaviour is essential to the long-term success of any

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 marketing programme. It is the corner stone of marketing concept which stress on
consumer wants and needs, target market selection, integrated marketing and profits
through the satisfaction of the consumers.
 Consumer behaviour is also important in non-profit and social organizations. Such organizations
are govt. agencies, religious organizations, universities and charitable organization Consumer
behaviour is applied to improve the performance of government agencies as well. For
instance, the performance of government transportation is poor. It can be improved by
knowing the needs and wants of the consumers. Getting checks from them for their likes
or dislikes. Same can be applied to other organizations like universities and charitable
organizations.
 Consumer behaviour also helps in marketing of various goods which are in scarcity.
People are made aware that gas, fuel, water and natural resources are in scarcity.
Consumers are encouraged to reduce their consumption of these commodities.
 Consumer benefit from the investigation of their own behaviour. When the consumer
learns the many variables that affect his behaviour.

What is learnt about consumer behaviour also benefit consumer in a formal sense. There can be
many benefits of a product, for example, for owning a motor bike, one can be looking for ease of
transportation, status, pleasure, comfort and feeling of ownership. The cost is the amount of money
paid for the bike, the cost of maintenance, gasoline, parking, risk of injury in case of an accident,
pollution and frustration such as traffic jams. The difference between this total benefit and total cost
constitutes the customer value. The idea is to provide superior customer value and this requires the
formulation of a marketing strategy. The entire process consists of market analysis, which leads to
target market selection, and then to the formulation of strategy by juggling the product, price,
promotion and distribution, so that a total product (a set of entire characteristics) is offered. The total
product creates an image in the mind of the consumer, who undergoes a decision process which
leads to the outcome in terms of satisfaction or dissatisfaction, which reflects on the sales and image
of the product or brand.

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A simplified framework for studying consumer behaviour

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 The process of decision-making varies with the value of the product, the involvement of the
buyer and the risk that is involved in deciding the product/service. The figure shows the
consumer lifestyle in the centre of the circle. The consumer and his lifestyle is influenced by a
number of factors shown all around the consumer. These are culture, subculture, values,
demographic factors, social status, reference groups, household and also the internal make up
of the consumer, which are consumers’ emotions, personality motives of buying, perception
and learning. Consumer is also influenced by the marketing activities and efforts of the
marketer. All these factors lead to the formation of attitudes and needs of the consumer.

Consumer Behaviour & Market Segmentation

By market segmentation we imply that the entire market is broken down into smaller groups
having similar wants. They are homogeneous in themselves and heterogeneous with other
groups. The market can be broken down on various bases. These are Demographic,
Psychographic, Benefit Segmentation etc. The concept of divide and rule applies to the market
segmentation. You divide the market, choose your target market and then master it.

Market segmentation is a process of dividing a potential market into distinct sub-sets of

consumers with common needs and characteristics and selecting one or more segments to target
with a distinct marketing mix. Consumers are better satisfied when a wide range of products
are available to them. Thus, market segmentation has proved to be a positive force for both
consumers and markets alike. If the market was not segmented the same product will be sold
to every prospect with a single marketing mix it satisfies a generic or a common need, and it
becomes ineffective and ends up appealing to none. Since the consumers ar e

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different in their needs, wants, desire and are from different backgrounds, education experience
therefore segmenting the market is very necessary for effective marketing of goods/services.
Segmentation helps in expanding the market by better satisfying the specific needs or desires of
particular customers. Today, nearly every product category in the consumer market is highly segmented.
For instance, billion-dollar vitamin market is segmented by age for children, young adults, the elderly
etc. The vitamin market provides benefits like increased energy, illness, tension and stress reduction,
enhanced sexuality, improved skin.

According to American Marketing Association: - market segmentation refers to dividing the

heterogeneous market into smaller customer group having certain homogeneous characteristicsthat can
be satisfied by the firm”

Objective of market segmentation

It is a well-known fact that no buyers are identical they may differ on the basis of their nature,habit.
behavior, age, professionals, liking, disliking and buyer preferences. Therefore, the main objective of
buyer market segmentation is to locate the difference among the buyer so that homogeneous groups
of buyers can be determined.

Philip Kotler define the objectives of market segmentation in the following words the purpose of market
segmentation is to determine difference among buyers which may be consequential in choosing among
them or marketing to them

 To make grouping of customer on the basis of their common characteristics such as nature,
behaviour, income, age, education, profession, religion.
 To identify the needs, priority given by the target customers
 To identifying the areas where customers may be created and market areas can beexpended
 To determine marketing strategy target and goals of the organization.
Market segmentation has its own benefit and cost the strength of its lies in better understanding of the
customers for making intelligent marketing decisions and their segmentation. Segmentingthe market
can be beneficial when the segment is used to make separate marketing programs for each segment and
implementing them for effective market segmentation.

Following requirements criteria must be considered

Identifiable: - the segment on the group of consumer must be clearly identified that is who is in segment

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and who is outside the segment. There must be clear difference between different segments
Measurable: - the effectiveness of segmentation depends upon the measurability of variable on the basis
of which market is segmented. There are many basis of what segmenting the market demographics,
social, economic, resources are the objectives and measurable such as income, age, sex, education,
profession.
Accessible: - the segment which is identified must be accessible so that a firm can be reached through
suitable means of communication and channels of distribution.
Responsiveness: - identified market segment should respond favorably to our market efforts. Clearly
defined segment must respond to change in any of the elements of marketing mix. For example, if a
particular segment is defined as price conscious it should react negatively to rise in price.
Significant: - Another criterion for effective segmentation is that it must be worth by for cultivating and
exploring it it must have sufficient buying power, willingness to purchase on ability to pay.
Sustainable- segment must be large enough to justify a separate marking program. It should be large
enough to justify the investment of market for the product and it should be large enough to be profitable

Major bases for segmentation

Market segment should be based on certain clear-cut variable like Geographic, demographic
psychographics, behavioral, value-based volume based and benefit based.

Demographic segmentation

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This segmentation dividing the larger Markets into smaller groupings on the basis of the demographic
variables such as income, age and life cycles, gender, education profession, families, generation or social
class. Demographic is the most common basesfor segmenting consumer market they are frequently used
because wants difference andusage rates are often highly associated with demographic variables and are
relatively easy to measure.

Age and life cycle stage divide the market on the basis of age as under 10 years ,10 -20years, 20 -30
years and so on. Gender, such segmentation has been long applied in clothing, cosmetics, fashion,
accessories motorcycle, perfume. Income determines the ability to purchase and hence is basis of
segmentation. On the basis of education provide segment is done of illiterate, highly educated.
Secondary, Senior Secondary graduate, post graduate, professional class of customers.

Geographic segmentation: -marketers are frequently segmented markets on a Geographic basis.

Industries which are the geographically concentrated. Like businesses uses natural resources locate
close to the source. Sometimes need from source to locate near the industry pioneer so as to provide
them with the supplies conveniently. Considering geographical segmentation marketing as means to
considerthe reliability of public utilities, for quality of transportation, distribution structure in deciding
where to expand its operations
Psychographic segmentation this basis of segmentation is widely used by marketers. The important
aspects of psychographic segmentation include Lifestyle, social class cultural values, personality of a
consumer, a person Lifestyle, social class, culture. For example, one can think of breaking values
sticking to old product by getting rid of old ones.
Behavioral segmentation behavioral segmentation is based on the customer response to his
requirement. The way customer response is, address, on the way the product. Fortheir classification it
includes need motivation, perception, learning involvement, attitude occasions, benefits and the usage
rate.
Value based segmentation the segmentation should be the outcome of a match between the product
features and the customer the market mast calculates total lifetime value of their customer and
discounted to arrive at an excellent value Customer’s value
Net present value of customer = (annual revenue from customer. Number of years of association) -
cost of acquiring the customer.

Benefit segmentation market segmentation provides opportunities that exist in marketand a firm has to
decide which of these opportunities to target with their marketing efforts all the benefits of segmentation.
The main benefits of product can also be used as a basis to classify customer high quality, low price, good
taste, speed example of benefits for example some air travelers prefer economy class, other seek executive
class for comfort and status symbol. Some consumers of toothpaste give greater importance to freshness
while other equity stall brightness of tee

Buying Motive
The buying motive of the customer refers to the underlying reason or motivation that drives them to make
purchases. It can vary from customer to customer and may be influenced by a variety of factors such as
personal needs, desires, emotions, and external influences. Understanding the buying motive of the
customer is vital for businesses as it enables them to customize their marketing strategies and offerings
as per their target audience's needs.

Types of Buying Motives

When it comes to purchasing decisions, individuals are driven by various motives. Understanding the
different types of motives can provide valuable insights into consumer behavior and preferences. Also,
the different types of motives can help businesses tailor their marketing strategies accordingly.

Rational Motives- Rational motives are all about logic, practicality, and necessity. When someone has

a rational motive for purchasing a product, they are primarily focused on the functional benefits it
provides. These motives stem from the need to solve a problem or fulfill a specific purpose. For example,
let's say you're in the market for a new laptop. Your rational motive might be driven by the need for a
faster processor, more storage space, or better graphics capabilities. You're thinking logically about what
features and specifications will meet your requirements.

Emotional Motives - On the other hand, emotional motives are all about desires, aspirations, and
personal satisfaction. When someone has an emotional motive for buying a product, they are driven by
their feelings and emotions rather than practical considerations. Imagine you come across an
advertisement for a luxury watch that exudes elegance and prestige. You may find yourself drawn to it
because of how it makes you feel – confident, sophisticated, and successful. In this case, your emotional
motive is fueling your desire to own that watch.

Economic Motive - The first type of buying motive is the economic motive. This is when someone wants
to get the best value for their money or save on costs. Think about it: who doesn't love a good deal?
People are always on the lookout for discounts, promotions, and sales because they want to make sure
they're getting the most bang for their buck. Whether it's comparing prices at different stores or waiting
for a sale season, the economic motive plays a significant part in influencing purchasing decisions.

Social Motive - Another type of buying motive is the social motive. This is when people are influenced
by social factors such as their social status or peer pressure. We've all been there - wanting to fit in and
be accepted by our peers. Sometimes, people buy certain products or brands because they believe it will
elevate their social standing or make them feel like they belong to a particular group. It could be buying
designer clothes, owning the latest smartphone, or driving a luxury car. The social motive drives us to
make purchases that align with societal norms and expectations.

Psychological Motive - The third type of buying motive is the psychological motive. This one gets
personal! Psychological motives are driven by our individual needs and desires, as well as our need for
self-expression. We all have different personalities and preferences, which influence what we buy. For
example, some people may have a need for adventure and excitement, so they might splurge on
adrenaline-pumping activities like skydiving or bungee jumping. Others may have a need for comfort
and relaxation, leading them to invest in cozy home furnishings or spa treatments.

Importance of Buying Motives

Informed consumers are more likely to make choices based on knowledge rather than impulse. This is
why businesses should prioritize providing accurate information to influence buying motives positively.

Purchasing Decisions Based On Knowledge

In today's digital age, consumers have access to a wealth of information at their fingertips. They can
research products, read reviews, and compare prices before making a purchase. When consumers are
well-informed about a product or service, they are better equipped to evaluate its benefits and drawbacks.
This knowledge helps them make purchasing decisions that align with their needs and preferences. For
example, imagine you're looking to buy a new smartphone. By researching different models, reading
customer reviews, and comparing features and prices, you can gain valuable knowledge about each
option. Armed with this information, you can effectively make informed decisions that align with your
budget and needs.

Accurate Information to Influence Buying Motives

As businesses strive to attract customers and drive sales, it is imperative for them to provide accurate and
reliable information about their products or services. By doing so, they can build trust with potential
buyers and positively influence their buying motives. Clear communication about the benefits and unique
selling points of a product or service helps customers understand its value proposition. When businesses
provide detailed product descriptions, specifications, pricing transparency, and customer reviews on their
websites or in-store displays, they empower consumers with the necessary knowledge to make informed
choices. By providing accurate information upfront, businesses can reduce the likelihood of returns due
to mismatched expectations.

Uninformed Choices & Buyer's Remorse

On the flip side, when consumers lack sufficient knowledge about a product or service, they may make
uninformed choices that result in buyer's remorse. Without adequate information, they may not fully
understand the features or limitations of a product, leading to dissatisfaction after purchase.

For example, imagine buying a new camera without researching its specifications or understanding its
functionality. If it doesn't meet your photography needs or lacks essential features you were unaware of,
you might regret your decision and feel disappointed with your purchase. To avoid such scenarios,
consumers should take the time to gather relevant information before making buying decisions. By doing
so, they can minimize the chances of regretting their choices and maximize their satisfaction with their
purchases.

Six Universal Buying Motives

People are driven by various factors that influence their decision-making process. These factors, known
as buying motives, play an essential role in determining what customers want and desire. Understanding
the six universal buying motives can help businesses customize their marketing strategies to meet the
needs and desires of consumers effectively. By recognizing what drives customers' purchasing decisions,
companies can generate products and experiences that resonate with their target audience. Listed below
are the six universal buying motives:
Security - One of the primary buying motives is security. Customers seek safety and protection in their
purchases. They want to ensure that the products or services they buy are reliable, trustworthy, and will
meet their needs without any risks or complications. Whether it's purchasing insurance for their car or
investing in home security systems, individuals value peace of mind.

Convenience - Convenience is another significant factor that influences buying decisions. People
appreciate the ease of use and time-saving features of the products they choose. From smartphones with
user-friendly interfaces to online shopping platforms offering quick delivery options, consumers
prioritize convenience as it simplifies their lives and saves them valuable time and effort.

Economy- Affordability and cost-effectiveness play a vital role in shaping consumer behavior. The
motive of the economy drives individuals to prioritize products or services that offer good value for
money. They want to make sure they are getting the most out of their hard-earned cash while still meeting
their needs or desires. This motive can be seen when people compare prices or look for discounts before
making a purchase.

Variety - The desire for variety is another common buying motive among consumers. People enjoy
having options and choices when selecting products or services. Whether it's different flavors of ice
cream or a wide range of clothing styles, individuals appreciate diversity as it allows them to express
themselves uniquely and cater to their specific preferences.

Esteem - The motive of esteem revolves around recognition, prestige, or self-esteem through purchases.
Consumers may be motivated by owning luxury items that symbolize success or status wit hin society.
From designer handbags to high-end cars, people seek products that enhance their self-worth or elevate
their social standing.

Belongingness- The motive of belongingness stems from the innate desire to fit in or be part of a group.
Consumers may choose products or brands that align with their values, interests, or identity. Whether it's
wearing a sports team jersey or using a certain brand of electronics, individuals seek a sense of belonging
and connection through their purchases.

Identifying Buyer's Motives

Understanding the reasons behind a buyer's decision is important for businesses to effectively cater to
their needs and preferences.

Direct Questioning: Uncovering Explicit Buying Motivations- To understand why potential

customers, make certain purchasing decisions, businesses can use direct questioning techniques. By
asking customers straightforward questions, companies can uncover explicit buying motivations. For
instance, they can ask questions like "What made you decide to purchase this product?" or "What factors
influenced your decision?" Direct questioning allows businesses to gain valuable insights into the specific
reasons behind a customer's purchase. This information helps them tailor their marketing strategies and
offerings to better meet the needs and desires of their target audience.

Observation Techniques: Identifying Implicit Cues & Non-Verbal Signals

In addition to direct questioning, observation techniques play a crucial role in identifying buyer's motives.
Sometimes, customers may not explicitly state their motivations but instead convey them through implicit
cues or non-verbal signals. These cues could include body language, facial expressions, or even subtle
remarks. By keenly observing these cues during interactions with potential customers, businesses can
gain deeper insights into their underlying motives. For example, if a customer appears hesitant while
discussing price but expresses excitement about product features, it suggests that they value quality over
affordability.

Data Analysis: Revealing Patterns In Buyer's Motives

Another effective method for identifying buyer's motives is data analysis of past purchases. By analyzing
patterns in customer behavior and purchase history, businesses can uncover common motivations among
buyers. For example, if an online retailer notices that a significant number of customers who purchased
fitness equipment also bought nutritional supplements, it could indicate that health improvement is a
primary motivation for those buyers. This insight allows the retailer to create targeted promotions or
bundles that cater specifically to health-conscious individuals. Data analysis provides concrete evidence
of buyers' motives by revealing trends and correlations within customer data sets. It can assist businesses
in making data-driven decisions and developing strategies that align with the motivations of their target
audience.
Utilizing Buying Motives in Sales - Tailoring marketing messages to address specific buying motives
is a sure fire way to boost sales effectiveness. By understanding what drives consumers to make
purchasing decisions, businesses can create targeted marketing strategies that resonate with their target
audience. By utilizing buying motives in sales strategies, businesses are more likely to make successful
sales. Understanding what drives buyers' purchasing decisions allows for more targeted marketing efforts
and personalized interactions. Whether it's appealing to rational or emotional motivations, tailoring
messages to address specific buying motives is key to enhancing sales effectiveness.

Highlighting Product Benefits

One effective way to tap into buyers' motivations is by highlighting the benefits of a product that aligns
with their specific needs and desires. Rational product buying motives are often driven by practical
considerations such as quality, affordability, and functionality. By emphasizing these aspects in
marketing campaigns and product descriptions, businesses can appeal to buyers who prioritize logical
decision-making. On the other hand, emotional buying motives play a significant role in consumer
purchasing decisions. Emotional patronage buying motives stem from personal values, aspirations, and
desires for self-expression or status. To cater to this group of buyers, marketers should focus on
showcasing how their products can fulfil emotional needs or provide a sense of belonging or identity.

Building Emotional Connections

The power of storytelling lies in its ability to build emotional connections with customers. By
incorporating narratives that resonate with different buying motives, businesses can evoke emotions that
drive purchase decisions. For example, telling stories about how a product has positively impacted
someone's life can appeal to both rational and emotional buyers. Furthermore, using testimonials or case
studies from satisfied customers who share similar motivations as potential buyers can be highly
persuasive. These real-life examples provide social proof and build trust among consumers who are
considering making a purchase.
Appealing to Various Buying Motives

It's essential for salespeople to recognize that different individuals have distinct buying motives. Some
may be motivated by the desire for pleasure or enjoyment (impulse buys), while others prioritize
practicality or necessity when making purchasing decisions. Understanding these diverse motivations
allows salespeople to tailor their approach accordingly. For instance, when selling a product with a high
price point, highlighting the long-term benefits and cost savings can appeal to rational buyers. On the
other hand, appealing to the emotional side of impulse buyers by emphasizing how the purchase will
bring them joy or satisfaction in the moment can be highly effective.

Challenges in Interpreting Buying Motives

Understanding why consumers make certain purchasing decisions can be a complex task for marketers.
This section will discuss some of the challenges that arise when interpreting buying motives.

Multiple & Conflicting Buying Motives

Consumers often have multiple reasons for making a purchase, and these motives may not always align
with each other. For example, someone might buy a luxury car because they value status and prestige but
also because they prioritize safety features.

These different motivations can sometimes clash, making it difficult to pinpoint the primary driving force
behind a purchase. Marketers must navigate through this complexity to effectively tailor their messaging
and offerings to meet consumers' diverse needs.

Identifying Hidden or Subconscious Motives

Not all buying motives are immediately apparent or consciously recognized by consumers themselves.
Many purchasing decisions are influenced by hidden or subconscious desires and emotions. For instance,
someone may choose a particular brand of sneakers not just for their quality but because they associate
that brand with a sense of belonging or identity. Uncovering these underlying motives requires careful
research and analysis on the part of marketers. Techniques such as surveys, focus groups, and
observational studies can help reveal these hidden motivations.
Cultural Differences in Interpretation

Interpreting buying motives becomes even more challenging when dealing with diverse cultural contexts.
Different cultures have distinct values, beliefs, and norms that shape consumer behaviour. What
motivates individuals in one culture may not hold true for another culture. For instance, while
individualistic cultures may prioritize personal achievement and self-expression in their buying
decisions, collectivist cultures might prioritize group harmony and social relationships. Marketers need
to be aware of these cultural nuances to avoid misinterpreting or miscommunicating buying motives
across different markets. To overcome these challenges in interpreting buying motives, marketers should
employ various strategies as listed below:

 Conduct thorough market research: By gathering data from surveys, interviews, and focus groups,
marketers can gain insights into consumers' motivations and preferences

 Utilize advanced analytics: Leveraging data analytics tools can help identify patterns and
correlations in consumer behavior, enabling marketers to uncover hidden motives.

 Segment the target audence: By dividing their target market into smaller segments based on
demographics, psychographics, or buying behaviors, marketers can tailor their messages to
resonate with specific motives within each segment.

 Adapt to cultural differences: When operating in international markets or diverse cultural

contexts, marketers should invest time and effort in understanding the local culture's values and
norms.

By addressing these challenges head-on, marketers can better understand consumers' buying motives
and create more effective marketing strategies that align with their customers' needs and desires.
MODERN ORGANISATIONAL CHART

Successful marketing companies invert the chart at the top are customers; next in importance are frontline
people who meet, serve, and satisfy customers; under them are the middle managers, whose job is to
support the frontline people so they can serve customers well; and at the base is top management, whose
job is to hire and support good middle managers.

Customers have been added along the sides to indicate that managers at every level must be personally
involved in knowing, meeting, and serving customers.

Some companies have been founded with the customer-on-top business model, and customer advocacy
has been their strategy—and competitive advantage
 CUSTOMER LOYALTY LADDER

It is said that the cost of attracting new customers is 4-6 times more than that of doing business with
existing customers. Hence it is worth for any organization to keep its existing customers happy and
satisfied in order to do a more profitable business. Customer Loyalty Ladder thus helps an organization
plan engagement strategy wisely so that the customers would be tempted to move up the ladder.

• Suspects: They are the potential customers for an organization. They may be aware of the
promotional campaigns of the organization but are currently doing no business with that
organization.

• Prospects: - They are the ones who have been impressed with the organization’s promotions and
are in serious consideration of buying products of the organization. The organization must treat
them cordially and solve all of their doubts.

• Customers: They have bought products of the organization for the first time and are currently
using them. The organization must extend them all possible after-sales assistance in order to pacify
their concerns. These customers can be engaged with a loyalty program or a loyalty discount

• Clients: They are doing business repetitively with the organization and are willing to foster the
engagement in future. Clients if well engaged can help boost business with their brand loyalty

• Advocates: They are not only doing repetitive business with an organization but are also
recommending the organization to their own acquaintances. They are the most valuable players
and the organization must treat them royally with the highest priority.
 Customer Perceived Value

• Consumers are better educated and informed than ever, and they have the tools to verify
companies’ claims and seek out superior alternatives.

• CPV: - It is the difference between the prospective customer’s evaluation of all the benefits and
all the costs of an offering and the perceived alternatives.
 • Customer benefit is the perceived monetary value of the bundle of economic, functional, and
psychological benefits customers expect from a given market offering because of the product,
service, people, and image.

• Total customer cost is the perceived bundle of costs customers expect to incur in evaluating,
obtaining, using, and disposing of the given market offering, including monetary, time, energy,
and psychological costs.

• Customer-perceived value is thus based on the difference between benefits the customer gets and
costs he or she assumes for different choices.

Complex buying behavior occurs when you make a significant or expensive purchase, like buying a new
car. Because you likely don’t buy a new car frequently, you’re highly involved in the buying decision,
and you probably research different vehicles or talk with friends or family before reaching your decision.
By that time, you’re likely convinced that there’s a significant difference among cars, and you’ve
developed your own unique set of criteria that helps you decide on your purchase.
Dissonance-reducing buying behavior occurs when you’re highly involved in a purchase but see little
difference among brands. Let’s say you’re replacing the flooring in your kitchen with ceramic tile—
another expensive, infrequent purchase. You might think that all brands of ceramic tile in a certain price
range are “about the same,” so you might shop around to see what’s available, but you’ll probably buy
rather quickly, perhaps as a result of a good price or availability. However, after you’ve made your
purchase, you may experience post-purchase dissonance (also known as buyer’s remorse) when you notice
some disadvantages of the tile you purchased or hear good things about a brand you didn’t purchase.

Habitual buying behavior has low involvement in the purchase decision because it’s often a repeat buy,
and you don’t perceive much brand differentiation. Perhaps you usually buy a certain brand of organic
milk, but you don’t have strong brand loyalty. If your regular brand isn’t available at the store or another
brand is on sale, you’ll probably buy a different brand.

Variety-seeking buying behavior has the lowest customer involvement because brand switching is your
norm. You may not be unhappy with your last purchase of tortilla chips, but you simply want to try
something new. It’s a matter of brand switching for the sake of variety rather than because of
dissatisfaction with your previous purchase.
UNIT:2
FACTORS INFLUENCING CONSUMER BEHAVIOUR

As consumers go through their day, buying, using and disposing of companies’ offerings, what are the
various factors that impact on their decisions? What forces are operating to lead them to purchase the
product and brand that they fi nally choose? There are several factors that can impact on consumer
behaviour. These factors can be grouped into three conceptual domains:

 external influences
 internal processes (including consumer decision making)
 post-decision processes.

Determinants of Consumer Behaviour

Motivation and Involvement

In a society, different consumers exhibit different consumer behaviour because they are unique and have
unique sets of needs. Motivation is that internal force that activates some needs and provides direction of
behaviour towards fulfilment of these needs.
While talking of motivation, we cannot afford to forget the Maslow’s Hierarchy of needs which tells us
about the primary and secondary needs. First the biological needs of hunger, thirst, shelter are satisfied
then the safety needs and then the psychological desires of being accepted in society, seeking status,
esteem, etc. aresatisfied. People adopt different methods to fulfil their needs. The need of transport can be
metby car, rail, bus or aeroplane. People choose different modes of transport because of their level of
involvement in different activities.

Involvement refers to the personal relevance or importance of a product or a service, that a consumer
perceives in a given situation. Depending on the value and personal interest, a consumer can have a high
or low involvement. For a professional tennis player, the choice of a tennis racket is made with great care.
He sees the weight, size, grip and tension of the strings, etc. The racket is his most important professional
tool. Similarly, a professional photographer has to buy a camera with the right specifications and attributes.
For another person, a tennis racket may only be a means of entertainment or in the case of a camera, the
recording of family and other events by a camera which is convenient and handy.

Attitudes
These are learned predispositions towards people, objects and events. Attitudes are responsible for our
responses and are not inborn but are learnt from people around us.
Our attitudes influence our purchase decisions and consumer behaviour. A person having a carefree
attitude will buy an object without much involvement. People who want to play safe and avoid risk talking,
will go for a safe investment. People who want convenience and are short of domestic help, will have a
positive attitude towards canned and frozen foods.

Personality and Self-concept

It is the sum total of our mental, physical and moral qualities and characteristics that are present in us
and that make us what we are. Consumers try to buy the products that match their personality. People
wanting to look manly will buy products with a macho appeal, which would enhance their image and
personality. People who give emphasis on comfort and care, will purchase comfort products and so on.
If one wants to emulate a film star his choice will be different from others.

Learning and Memory

Every day we are exposed to a wide range of information, but retain only a small portion of it. We tend to
remember the information that we are interested in or, that is important to us. In a family different members
of the family are interested in different types of information which they individually retain. Mothers retain
information regarding household items. Father retains information regarding his interest in cars, motor
cycles and other objects. Children are interested in objects of their interest like amusement parks, joy rides,
Barbie dolls, etc.
Our motives, attitudes, personality filters the information. Keeping only relevant information in our minds
and, keeping the others out. This is known as selective retention. We retain in our memory only selective
information that is of interest to us.

Information Processing
All consumers analyse and process the information they receive. These are activities that a consumer
engages in, while gathering, assimilating and evaluating information. Consumers assimilate and evaluate
selective information and this reflects on their motives, attitudes and personality and self-concept. Same
information can be evaluated in a different manner by different individuals. The most common example
is a glass half filled with a liquid. It can be interpreted as “half empty” or half full. The first is a pessimistic
view and the other is an optimistic view of processing the information.

Determinants of Consumer Behaviour

The determinants of consumer behaviour can be grouped into three major captions namely, economic,
psychological and sociological. An attempt is made to elucidate these with least complications.

I. Economic Determinants:
Economic scientists were the first among social scientists to study consumers and their behaviour 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:

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.

In other words, disposable income causes change in the relative demand for different categories of
products and services. On the other hand, ‘discretionary income’ is the income which is available after
meeting the basic needs of living.

It is the residual disposable income left after meeting all the expenses essential to provide a minimum
subsistence needs to a family. Discretionary income changes have their own implications.

A rise in discretionary income results in usually an increased spending by consumers on those items that
raise their living standards. Therefore, a continuous rise in the discretionary income is likely to change the
very life-style of the consumers.

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 t he
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.

1. 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.
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.

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.

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 lear ning, attitude
and personality.
Psychological Factors That Influence Consumer Buying Behaviour

Your buying choices are further influenced by several major psychological factors, including
motivation, perception, learning, feelings, beliefs, and attitudes
Motivation: Motivation is the ‘why’ of behavior. It is an intervening variable between stimulus and
response and a governing force of consumer behavior.

“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-Esteem and Self Actualization. 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.

Motivation is the process that initiates, guides, and maintains goal-oriented behaviors. It’s the driving
force behind your actions. One of the most widely known motivation theories is Maslow’s hierarchy of
needs Abraham Maslow asserted that all individuals have five needs, arranged from the most basic lower-
level deficiency needs to the highest-level growth needs. physiological needs are at the most basic level
and include things like adequate food, water, and shelter. Think about how marketers may try to appeal to
consumers based on physiological needs. For example, Snickers ran a very successful ad campaign based
on the slogan “You’re not you when you’re hungry.”

The second level is safety and security, the need to be safe from physical and psychological harm. Once
again, consider just a few successful marketing campaigns that have focused on safety—“You’re in Good
Hands with Allstate” and Lysol’s “Practice Healthy Habits” campaign with its tagline “What It Takes to
Protect.” The third level is belonging, or social needs. This level includes things like the need for emotional
attachments, friendship, love, or belonging to community or church groups.

Esteem, the fourth level, includes such needs as recognition from others, taking pride in your education
or work, awards, and/or prestige. The highest level is self-actualization, which involves self-development
and seeking challenges. For example, Nike’s “Find Your Greatness” campaign was intended to spark
greatness in ordinary people, not just professional athletes. Maslow asserted that people strive to satisfy
their most basic needs before directing their behavior toward satisfying higher-level needs, so it stands to
reason that consumer buying behavior would follow this model. For example, you’d first have to fulfill
your needs for food and shelter before you might consider putting money away for retirement or
purchasing a home security system.

Important links

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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 respond 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 behavior; 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
behavior of consumers. Evaluation of personality’s role in marketing is seen in drawing consumer profiles
and psychographic market segmentation.

Personal factors, such as your occupation, age and life cycle stage, economic situation, lifestyle,
and personality and self-concept also play a major role in your buying behavior.

Age is a major factor that influences buying behavior because consumer needs and wants change with
age. Your buying habits as a teenager or twentysomething are likely to be vastly different from your
buying habits in middle age and beyond. Consider the four generational cohorts currently comprising the
consumer market:
  Baby boomers (born between 1946 and 1964) are currently in their 60s and 70s. This generational
cohort is approximately 70 million people strong in the United States and accounts for $2.6 trillion
in buying power, so you can imagine its impact on the consumer market. What types of products
would you expect baby boomers to buy? Key categories for this group of buyers include pharmacy
and health care products, household goods and appliances, wine, books (both digital and physical),
cosmetics, and skin care products.
 Generation X (born between 1965 and 1979/80) are currently in their 40s and 50s. This cohort is
approximately 65 million strong and generally has more spending power than younger generational
cohorts because they’re at or reaching the peak of their careers, and many Gen Xers are dual-
income families. This makes them an optimal target for higher-end brands and convenience-related
goods, like made-to-order or prepared meals from the grocery store.
 Generation Y, also known as Millennials, (born between 1981 and 1994/96) are currently in
their 20s and 30s. This cohort is the largest generation group in the United States, with an estimated
population of 72 million. One interesting aspect of Millennial buying is that they shop sustainably.
They shop for brands that produce items with natural ingredients and ethical production lines and
sustainable goods in every sector, such as food, household cleaning products, linens, and clothes.
 Generation Z, also known as Zoomers, (born between 1997 and 2012) are currently in their teens
to early 20s, and they are just starting to have an economic impact on the consumer market.
Although over 67 million strong, many Zoomers are still in school and living with their parents,
and their discretionary spending is limited.

Likewise, your life cycle stage has a major influence on your buying habits. Consider the different buying
choices you would make as a single person who is renting an apartment in an urban area versus the choices
you would make as a homeowner in the suburbs with children. It should be noted, though, that age and
life cycle stage can often be poor predictors of buying behavior. For example, some 40 -year-olds are just
starting their families, while others are sending their kids off to college. Still other 40-year-olds are single
(or single again). Some 70-year-olds may fit the stereotype of a retired person with a fixed income; others
are still active or perhaps still working, with plenty of disposable income.

Your economic situation (income) is a huge influence on your buying behavior. Higher income typically
means higher disposable income, and that disposable income gives consumers more opportunity to spend
on high-end products. Conversely, lower-income and middle-income consumers spend most of their
income on basic needs such as groceries and clothing.
 Your occupation is also a significant factor in your buying behavior because you tend to purchase
things that are appropriate to your profession. For instance, a blue-collar worker is less likely to
buy professional attire like business suits, whereas attorneys, accountants, and other white-collar
workers may favor suits or business casual work clothes. There are even companies that specialize
in work clothes for certain types of workers, such as health care professionals who buy scrubs or
construction workers who buy steel-toed boots.
 Your lifestyle reflects your attitudes and values. What do you consider to be your lifestyle? Do
you strive to live an active, healthy lifestyle? If so, your purchasing decisions may focus on
healthier food alternatives instead of fast food. Do you consider yourself to be a soccer parent?
You may (perhaps reluctantly) forgo that sports car for a minivan in order to transport your kids
to youth sporting events or other activities.
 Your personality and self-concept are also important factors influencing your buying
behavior. Personality is the characteristic patterns of thoughts, feelings, and behaviors that make
a person unique. It’s believed that personality arises from within the individual and remains fairly
consistent throughout life. Some examples of the many personality traits people might have
include things like self-confidence, individualism, extroversion, introversion, aggression, or
competitiveness. Your personality greatly influences what you buy as well as when and how you
use or consume products and services.
 Perhaps even more importantly, as consumers, people tend to buy not only products they need but
also those products or services that they perceive as being consistent with their “self-concept.” In
other words, they generally want the products they buy to match or blend in with who they think
they are.

• Personality consist of the inner psychological characteristics that both determine and reflect how
we think and act, which together form an individual’s distinctive character.
• Consumers often purchase products and brands because advertisers have given them
PERSONALITIES that differentiates them from competing offerings.
• BRAND PERSONIFICATION: - It occurs when consumers attribute human traits or
characteristics to a brand.
• A brand personality provides an emotional Identity for a brand, which produces sentiments and
feelings towards it among consumers.
 • Brand personification is a form of ANTHROPOMORPHISM which refers to attributing human
characteristics to something that is not human

Perception is the way in which people identify, organize, and interpret sensory information. It’s another
variable in consumer buying behavior because the perceptions you have about a business or its products
or services have a dramatic effect on your buying behavior. What makes perception even more complex
is that consumers can form different perceptions of the same stimulus because of three perceptual
processes: selective attention, selective distortion, and selective retention. Let’s take a closer look.
Every day, you’re bombarded with marketing messages from TV commercials, magazine and newspaper
ads, billboards, and social media ads. As of 2021, it was estimated that the average person encounters
between 6,000 and 10,000 ads every single day It stands to reason that you can’t possibly pay attention to
all of the competing stimuli surrounding you, so you’ll pay attention to only those stimuli that you consider
relevant to your wants and needs at the time and screen out the rest. That’s the process known as selective
attention.

Even the stimuli that people notice don’t always come across in the way in which the marketers
intended. Selective distortion is the tendency of people to interpret information in a way that fits their
preconceived notions. This was demonstrated years ago when PepsiCo launched its Pepsi Challenge blind
taste test commercials. Participants were presented with two colas in unmarked plastic cups and asked to
taste both colas and choose the one they liked better. Then the tester would lift a small screen to reveal
the brand the participants preferred. In TV commercials that aired for years, Pepsi showed the stunned
reactions of loyal Coca-Cola drinkers who had chosen Pepsi over Coke in the test. One grandmother in a
commercial said, “I can’t believe it. I’ve never had a Pepsi in my life, but it must be better!”

People also tend to forget much of what they learn and to retain information that supports their
preconceived attitudes and beliefs. That’s the power of selective retention, a bias by which you’re more
likely to remember messages that are closely related to your interests, values, and beliefs rather than those
that are contrary to those values and beliefs.

Beliefs, feelings, and attitudes also play an important role in consumer buying behavior. Beliefs are
consumer perceptions of how a product or brand performs relative to different attributes. These beliefs are
generally formed through personal experience, advertising, and conversations with others, and they play
a vital role because they can be either positive or negative. You can even hold both positive and negative
beliefs about the same thing. For example, you may believe that coffee is good for you because it helps
you focus and stay alert, but you may also worry about the effect of coffee on your health and the way it
stains your teeth. Human beliefs aren’t always accurate and can change according to the situation
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.

The personal factor of perception is his self-concept, need, span of apprehension, mental set and the past
experiences.

Perception has its own impact on consumer behavior or consumer decision-making.

Perception and communication: It is estimated that 90 per cent of the stimuli that the individuals
perceive come through sight and rest from hearing. That is why, advertisements bank heavily audio on
visual stimuli.
However, it does not mean that loud noises, bright colours and large ads themselves guarantee consumer
attention and response. Contrary to this, it is the use of haunting melodies, pastel shades, regional accents
and careful adjustment of ad size in relation to the total page or poster size all affect perception and these
factors may give better results.

Product and brand perception: Good many studies have been made of the ways in which the consumers
perceive the products and the brands they choose regularly. It is brand images and the brand differentiation
that play vital role in perception in addition to the physical characteristics of the product. Therefore, it is
a must for a marketer to examine all the factors that impinge on the construction of a brand image to
ascertain their effects on consumer perception of the company’s marketing mix.

Price perception: Price is another element of marketing mix where perception has its implications.
Studies have proved beyond doubt that consumers judge product or service quality by price. ‘Higher the
price better the quality’ that goes. This goes on establishing that there is going to the direct or positive
relationship between price and demand where marketer is cared to gain. Another aspect of this price
perception is psychological pricing. The reasoning behind such pricing strategies is that consumers are
likely to perceive used in cut-price sales promotions to increase the feeling that a price has been drastically
reduced.

Store perception: There are five major components of stores image namely, location design-product
assortment-services and personnel each of which contributes to consumer perception of the place from
which he or she buys. Mere physical attributes do to talk of a store image. Other intangible factors, too,
influence consumer perception of stores image such as advertising, inter-personal communication and
experience. Consumer perceptions of stores are greatly influenced by consumer’s own self- perception
and motives. Further, consumer’s self-images influence the places in which they shop.

Perceived risk: The concept of perceived-risk recognizes that consumer experiences a sense of risk in
purchase and that consumer behavior can be studied profitably as a risk reducing behavior. Consumer
behavior involves risk in the sense that any action of a consumer will produce results which he cannot
predict with certainty. The perception of risk in a purchase situation is a function of the possible
consequences and the product uncertainty involved. Perceived risk can be divided into forms namely,
‘functional’ and ‘psychological’. Functional risk is related with the performance and the psychosocial risk
is related with the fact whether the product enhances one’s sense of wellbeing or self-concept.
The level of perceived risk is a function of the uncertainty involved and the possible consequences of
purchase and can be reduced by gaining greater certainty or by minimizing consequences. In most cases,
it is increasing the element of certainty.

Do you remember Nestle faced a crisis in India in 2015 when high lead levels were allegedly found in its
Maggi noodles? This severely impacted customer perception and sales. Nestle tackled this by
withdrawing over 38,000 tonnes of Maggi from stores, investing in rigorous testing, and communicating
these measures to the public. They relaunched Maggi with clear safety messages and assurance of
adherence to food safety standards. Over time, with consistent communication and safety assurances,
consumer trust was regained, and Maggi reclaimed its market position.
The Maggi crisis exemplifies how customer perception can significantly impact a brand’s standing. A
negative perception led to plummeting sales, urging Nestle to act decisively. Through this example, we
see why companies prioritise managing customer perception as a crucial aspect of brand resilience and
market success. Let’s understand perception in consumer behavior.

Customer Perception is the impression customers form about a brand based on their interactions and
experiences. Advertising, reviews, product quality, and customer service shape it. This perception
influences their decisions to engage with a brand. A positive perception can lead to loyalty, referrals, and
increased sales, making it a vital aspect for businesses to manage. By understanding and enhancing
customer perception, businesses can build a stronger, more positive brand image, crucial for long-term
success and competitive advantage in the marketplace.

Importance of Consumer Perception

Brand Positioning: Positive consumer perceptions help in positioning a brand as a leader in its
segment, enhancing its value in the eyes of consumers.
Influence on Buying Decisions: How consumers perceive a product influences their willingness to buy,
making perception management a key marketing strategy.
Customer Loyalty: When customers have a positive perception of a brand, they’re more likely to return
and engage with it long-term. Loyalty goes beyond just making repeat purchases; it can lead to customers
recommending the brand to others, creating a loyal customer base.
Competitive Advantage: In crowded marketplaces, a positive customer perception can serve as a
differentiation factor. Customers choose brands they perceive positively over competitors, even if the
offerings are similar.
Brand Equity: Positive perception enhances a brand’s value and reputation in the market. It helps build
trust and credibility, which are invaluable assets for any brand.
Increased Sales: A good perception encourages customers to buy, increasing sales. It directly reflects
customer satisfaction and willingness to continue buying from the brand.
Customer Advocacy: Satisfied customers often become brand advocates. They share their positive
experiences with others, providing valuable word-of-mouth marketing which can be more effective and
trustworthy compared to other marketing strategies.
Marketing Strategy Development: Understanding customer perceptions guides businesses in crafting
marketing messages that resonate well with their target audience, increasing the effectiveness of
advertising campaigns.

Factors Influencing Consumer Perception

Quality of Products/Services: The quality and reliability of a brand’s offerings are crucial. Customers
often gauge the value they’ll receive from a product or service based on its quality, making it a pivotal
factor in shaping perception.
Customer Service: Exceptional customer service can significantly enhance a brand’s image. Responsive,
courteous, and helpful interactions, whether pre or post-sale, form a lasting impression on customers,
influencing their perception and loyalty.
Price: Pricing plays a vital role in perceived value. Customers tend to compare the cost with the benefits
they receive, and against competitors’ pricing. A fair pricing strategy can foster a positive perception.
Brand Reputation: A brand’s reputation, formed through past actions, reviews, and public opinion, is a
strong influencer of perception. Positive reputation fosters trust and a favorable perception.
Marketing and Advertising: Through marketing and advertising, brands communicate their values,
features, and benefits. Effective marketing that resonates with customers can significantly improve their
perception of the brand.
Steps to Improve Customer Perception
Improve Customer Service
Providing exceptional customer service ensures that customers feel valued and understood, which in turn,
builds trust and satisfaction. Zappos, for example, is known for its outstanding customer service, where
representatives often go above and beyond to assist customers, thereby creating a positive perception of
the brand.

Positive Online Presence

Engaging with customers online, addressing their concerns promptly, and showcasing positive reviews
are crucial steps in building a good online reputation. For instance, Amazon actively manages its online
reviews and promptly addresses negative feedback, which helps maintain a positive online presence.

Community Engagement
Brands that engage in local communities or support causes resonate well with customers. Starbucks, for
example, engages in various community service initiatives which not only benefit the communities but
also improve the brand’s perception.

Consistent Branding
Maintaining consistency in branding across all platforms creates a recognizable and reliable brand image.
Apple’s consistent branding across products and advertising, for example, establishes a recognizable
identity which enhances customer trust and loyalty.

Innovative Marketing Campaigns

Creative and resonant marketing campaigns help in positively shaping customer perception by connecting
with them on an emotional level. Nike’s “Just Do It” campaign, for instance, inspires and resonates with
a broad audience, thereby enhancing brand perception and loyalty.

Enhance Product Quality: Ensuring your products or services meet high-quality standards fosters
positive consumer perceptions.

Strengthen Customer Service: Exceptional customer service can significantly improve consumers'
views of your brand, leading to higher satisfaction levels.

Leverage Social Media: Effectively using social media to engage with consumers can help shape
positive perceptions through interactive and personalised communication.

Focus on Brand Messaging: Clear, consistent, and authentic messaging helps build trust and align
consumer perceptions with your brand's values.

Gather and Act on Feedback: Regularly collecting customer feedback and acting on it demonstrates
a commitment to meeting consumer needs and enhancing their perception of your brand.

A few examples of customer perception: -

Tesla: Tesla has shaped consumer perception through innovation and a strong commitment to
sustainability, positioning itself as a leader in electric vehicles and clean energy.

Amazon: Known for its customer-centric approach, Amazon has mastered the art of positive customer
perception. Fast delivery and an easy return policy enhance its reputation.

Coca-Cola: Coca-Cola's effective marketing strategies and consistent brand messaging have
maintained a positive consumer perception as a timeless and enjoyable beverage for all occasions.

Sociological Determinants- In the area of psychological determinants, the consumer behavior was seen
from the stand point view of an individual. However, the sociologists and social psychologists have
attempted to explain the behavior of a group of individuals and the way in which it affects and conditions
and individual’s behavior 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.

Let us see these in brief to know their marketing implications-

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-grandparent’s 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.

The family impact on consumer buying behavior can be traced in two ways:
1. The family influence on the individual personality characteristics, attitudes and the evaluative criteria.

2. The family influence in the decision-making process involved in the purchases. Family is both a
purchasing and consuming unit. Therefore, it is essential to note the distinguished family roles of the
members.

These roles are:

Initiator: The person who senses the need for the purchase;
Influencer: The person who provides input into the purchase decision;
Decider: The person who has the final say over the decision and
User: The person who is most directly involved in using the purchase.
That is why; every marketer is keenly interested in four points in case of family purchase. There
are:
1. Who influences the buying?

2. Who does family buying?

3. Who makes buying decision?

4. Who uses the product?

In nuclear families, it is mostly the house-wife that has an upper hand in family purchases regarding her
family role such as food, clothing, cosmetics, interior decoration and jewelries.

Father has say over clothing, education, insurance etc., The children have say in clothes, sports-
equipment’s and recreational facilities such as TV, stereo-sets and the like.

Family life-cycle also has its own influence on buying behaviour. Thus, the proportion of a family budget
spent on food, clothing and children goes on increasing in the ‘procreation stage’ than in ‘home making
stage’.
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 behavior.

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
behavior.

The groups that serve as comparison points- Here, the individual compares himself, his attitudes, his
behavior and his performance with the group of members. Thus, he may feel poor if members are richer
than himself or vice versa.

Groups to which a person aspires to belong- Here, the individual aspires to be the member of such
group and imitates the behaviour of that group including buying behaviour. Thus, the group may be of
higher social status or a cult group such as ‘hippies’ or the ‘jet-set’.
Groups whose social perspectives are assumed by the individual as a frame-work of reference for
his own actions: Here, an individual may adopt the views of the group without becoming a member. A
person need not be a professional sportsman to have the opinion and outlook of a professional sportsman.
Some non-military persons behave more than ‘military’ personnel. Similarly, a person belonging to
minority may adopt the values and the perspectives of a majority which he dislikes by very nature.

Consumers as social animals spend most of their time in group situations, and accept information provided
by their groups on products, price, performance, style and the like. It is group norms that direct the
attention of its members towards a new product, a new brand. These reference groups have face to face
interactions that provide word of mouth communication which is more powerful than formal advertising.
A satisfied customer becomes the salesman of the product.

Opinion leaders:
Like reference groups, ‘opinion leaders’ or ‘influential’ play a key role in influencing the buying behavior
of their followers. Very often we come across situations where a person refers to an individual than a
group in formulating his or her behavior 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. Marketers very often try to catch hold of the
opinion leaders through ads and other means of communication. If they succeed in selling their ideas and
products to the opinion leaders, then they have sold it to the entire group of followers behind them.

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.In our country, we have four such
broad categorization as ‘Brahmins’ ‘Kshatriyas’ ‘Vaishyas’ and ‘Shudras’.

From the marketing stand point, both social class and caste frame are quite relevant as buyer behaviour is
influenced by these. Each class and caste develops its own standards of style, living and behaviour
patterns.

It is not a surprise, and then if the members of such a class select a particular brand of product, shops at a
particular store which caters to their group norms.

This does not mean that all the members of the group buy the same products, same brands, or conform to
same styles; however, more or less, it becomes a pattern with differential range of likings and leanings.
Thus, ‘Shudras’ may not enter the restaurants where ‘Brahmins’ and ‘Kshatriyas’ enter, though t he
‘shudras’ are not barred from entering.

It is because of income pattern and traditional respect for higher castes, for in the eyes of Indian
Constitution, all are equal.

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.

A shrewd marketer never contradicts these cultural values in product, promotion, price and distribution
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.
Thus, hunger or thirst can be a drive. A ‘cue’ is an environmental stimulus. For instance, it can be an ad
on food item or soft- drink, ‘Response’ represents the person’s reaction to cues within his environment.
Here, it can be purchased of food item or soft-drink. ‘Reinforcement’ is the responses reward.

The food item or soft-drink. ‘Reinforcement’ is the response reward. The food item or soft drink satisfies
the hunger or the thirst. When reinforcement happens, the response may be duplicated resulting in habit
formation or absence of reinforcement results in extinction of learnt habit.

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.

He succeeds in his efforts when he shows that his product is potentially much more satisfying than his
competitors. Free sampling, in store trial and demonstrations and deal activities may be used to break the
existing brand barrier to establish new patterns of purchase behaviour.

To the extent the learning and brand loyalty can be gained for a product, the manufacturer activates a more
stable sales profile less vulnerable to the competitive inroads.
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.

The marketer may be interested in confirming the existing attitudes, or change in the existing attitudes or
create new attitudes depending on how his product is performing in the market.

Attitude confirmation is, perhaps, the easiest course of action which is followed in case of established
products. Such an act involves only reminding the consumers as to why they like it and why they should
continue it to purchase.

Attitude changing is more difficult task than mere confirming it. It is a change from disposition to act in
the direction of the original attitude to a disposition to act in the opposite direction.

A product disliked is to be liked by the consumers. It is really a difficult process. Attitude creation is to
make the consumers to forget the old products or brands and to make them to go in for new product or
brand entirely altogether, in fact, it is comparatively easier to create new attitudes than to change the
existing one. The most powerful instrument of attitude change and creation is advertising.
Consumer attitude may be defined as a feeling of favorableness or unfavorableness that an individual has
towards an object. As we, all know that an individual with a positive attitude is more likely to buy a
product and this results in the possibility of liking or disliking a product.

Consumer attitude basically comprises of beliefs towards, feelings towards and behavioral intentions
towards some objects.

Functions of Attitudes

The following are the functions of attitudes

 Adjustment Function − Attitudes helps people to adjust to different situations and circumstances.

 Ego Defensive Function − Attitudes are formed to protect the ego. We all are bothered about our
self-esteem and image so the product boosting our ego is the target of such a kind of attitude.

 Value Expression Function − Attitudes usually represent the values the individual posses. We
gain values, though our upbringing and training. Our value system encourages or discourages us
to buy certain products. For example, our value system allows or disallows us to purchase
products such as cigarettes, alcohol, drugs, etc.

 Knowledge Function − Individuals’ continuously seeks knowledge and information. When an

individual gets information about a particular product, he creates and modifies his attitude
towards that product.

Strategies of Attitude Change

A tendency to respond positively or negatively towards a certain idea, object, person or situation is
called Attitude. Our attitudes are formed by the influence of the personal experience, social media, and
even from the environment. Therefore, the key strategy for the marketers is to alter the attitudes of the
consumers. The aim of the marketers is to create a positive attitude in consumer minds to attract the
product comparison to competitor’s. Generally, it is very difficult to change the attitude of the consumers
when they suspect that the marketer has a self-serving agenda in bringing about this change.
There are five attitude change strategies

Changing The Basic Motivational Function

By making a particular needs prominent, we can change the consumer attitudes towards a product or a
brand. One method that we can use to change the motivation of the consumer is called functional approach.
They are classified into four functions: (i) Utilitarian Function, (ii) Ego-defensive function (iii) Value
expressive function and (iv) Knowledge Function
For example, Value Expressive Function; Attitudes can be expressed when the consumer reflect a
product or service based on their self-concept or central values. It gives consumers to gain positive feelings
about themselves through expressing their self-image of who they are. If the consumer likes wearing
active wear like sportswear it shows her identity that he/she enjoys being active and, sporty . Marketers
can approach by targeting the consumer’s attitude on their outlook, lifestyle and self-image by reflecting
these characteristics while advertising and marketing.
Associating the product with an admired group or event
Attitudes of consumers towards the particular brands and services can possibly be changed by
consolidating with social groups or events. For example, recently Mc Donald’s made a biggest fast food
collaboration with cartoon Despicable Me 3. Mc Donald’s added a new menus with minions influenced
items in order to help promote Despicable Me 3 . The research shows that it is indicated a good idea to
exposed to the consumers the reason of their sponsorship in order to avoid negative motives.

Resolving two conflict attitudes Sometimes, attitude change strategies can have determined actual and
possible conflict between two attitudes. If the consumers were made to have a negative impact on the
product or a specific brand, but if they do not have any conflict, this made the consumers to alter their
judgment of the product. For example, disposing nappies can be made for the environment but as it is
made with organic cotton, it helps with the environment sustainability.

Altering components of the multi-attribute model

Multi attribute is a strategy to change the attitude of the consumer by altering the evaluation of products,
changing the perception about the brand and remodeling the over-all brand rating by adding an attribute
to a product. It changed the negative aspect that the consumers have towards the product or brand by
reinforcing their persisting beliefs. It is done by adding an attribute that has been ignored by reflecting its
actual product innovation. Therefore, it changed the rating of the brand. Eg- Guinness beer
Changing the consumer beliefs about competitors brands
It is the strategy of changing consumer’s beliefs by comparing with the competitors brands.For e.g.- Nike
Vs Adidas

MODELS OF ATTITUDES

1. TRICOMPONENT ATTITUDE MODEL: According to the tricomponent attitude model,

attitudes consist of three major components: cognition, affect, and conation.

The Cognitive Component: Cognitions are knowledge and perceptions that are acquired by a
combination of direct experience with the attitude object and related information from various
sources. This previous knowledge and perceptions commonly take the form of beliefs b) The
consumer believes that the attitude object possesses various attributes and that specific behavior
will lead to specific outcomes.

The Affective Component: The affective component of an attitude consists of the consumer’s
emotions or feelings. Researchers frequently treat these emotions and feelings as evaluative in
nature. Affect-laden experiences manifest themselves as emotionally charged states (such as
happiness or sadness). These states may enhance positive or negative experiences for the
consumer. Later recollections of such experiences may impact what comes to mind and how the
individual acts. Recent research suggests that “positive and negative forms of affect operate
differently and that their direct and indirect effects on attitudes are influenced by brand
familiarity.” In addition to using direct or global evaluative measure of an attitude object,
consumer researchers can also use a battery of affective response scales to construct a picture of
consumers’ overall feelings about a product, service, or ad.

Conative Component 1. Conation, the final component of the tricomponent attitude model, is
concerned with the likelihood or tendency that an individual will undertake a specific action or
behave in a particular way with regard to the attitude object. a) The conative component may
include the actual behavior itself. 2. In marketing and consumer research, the conative component
 is frequently treated as an expression of the consumer’s intention to buy. a) Intention-to-buy scales
are used to assess the likelihood of a consumer purchasing a product or behaving in a certain way.

2. MultiAttribute Attitude Models: Multiattribute attitude models portray consumers’ attitudes

with regard to an attitude object as a function of consumers’ perception and assessment of the key
attributes or beliefs held with regard to the particular attitude object. There are many variations of
the attitude model, three to consider are: attitude-toward object model, attitude-toward-behavior
model, and the theory-of-reasoned-action model. The attitude-toward-object model is especially
suited for measuring attitudes toward a product category or specific brands. According to the
attitude-toward-object model, the consumer’s attitude toward a product or specific brands of a
product is a function of the presence (or absence) and evaluation of certain product-specific beliefs
and/or attributes. Consumers generally have a favorable attitude toward those brands they believe
have an adequate level of attributes that they evaluate as positive, and they have unfavorable
attitudes toward those brands they feel do not have an adequate level of desired attributes or have
too many negative or undesired attributes.

3. The Attitude-Toward-Behavior Model: The attitude-toward-behavior model is designed to

capture the individual’s attitude toward behaving or acting with respect to an object, rather than
the attitude toward the object itself. The appeal of this model is that it seems to correspond
somewhat more closely to actual behavior than does the attitude-toward-object model.

4. The theory-of-reasoned-action represents a comprehensive integration of attitude components

into a structure that is designed to lead to both better explanation and better predictions of behavior.
Like the basic tricomponent attitude model, the theory-of-reasoned-action model incorporates a
cognitive component, an affective component, and a conative component; however, these are
arranged in a pattern different from that of the tricomponent model. To understand intention we
also need to measure the subjective norms that influence an individual’s intention to act. A
subjective norm can be measured directly by assessing a consumer’s feelings as to what relevant
others (family, friends, roommates, co-workers) would think of the action being contemplated.
Consumer researchers can get behind the subjective norm to the underlying factors that are likely
to produce it. They accomplish this by assessing the normative beliefs that the individual attributes
to relevant others, as well as the individual’s motivation to comply with each of the relevant others.
An extension of the TRA model is the theory of planned behavior which includes an addition factor
 leading to “intention” – the construct of perceived behavioral control – which is a consumer’s
perception of whether the behavior is or is not within his or her control.

5. THEORY OF TRYING-TO-CONSUME MODEL: The theory of trying-to-consume is

designed to account for the cases where the action or outcome is not certain but reflects the
consumer’s efforts to consume. Sometimes personal impediments or environmental impediments
prevent the desired outcome. Researchers have recently extended this inquiry by examining those
situations where consumers do not try to consume—that is, fail to try to consume. In this case,
consumers appear to fail to see or are too ignorant of their options. Consumers appear to make a
conscious effort not to consume.

6. ATTITUDE-TOWARD-THE-AD MODELS: As the attitude-toward-the-ad model depicts, the

consumer forms various feelings (affects) and judgments (cognitions) as the result of exposure to
an ad. These feelings and judgments in turn affect the consumer’s attitude toward the ad and beliefs
about the brand acquired from exposure to the ad. Finally, the consumer’s attitude toward the ad
and beliefs about the brand influence his or her attitude toward the brand. Consumer socialization
has also shown itself to be an important determinant of a consumer’s attitudes toward advertising.

LEARNING: Learning can be defined as the permanent change in behavior due to direct and indirect
experience. It means change in behavior, attitude due to education and training, practice and experience.
It is completed by acquisition of knowledge and skills, which are relatively permanent.

Nature of Learning

Nature of learning means the characteristic features of learning. Learning involves change; it may or may
not guarantee improvement. It should be permanent in nature, that is learning is for lifelong.

The change in behavior is the result of experience, practice and training. Learning is reflected through
behavior.

Factors Affecting Learning

Learning is based upon some key factors that decide what changes will be caused by this experience. The
key elements or the major factors that affect learning are motivation, practice, environment, and mental
group.
Coming back to these factors let us have a look on these factors −

 Motivation − The encouragement, the support one gets to complete a task, to achieve a goal is
known as motivation. It is a very important aspect of learning as it acts gives us a positive energy
to complete a task. Example − The coach motivated the players to win the match.

 Practice − We all know that” Practice makes us perfect”. In order to be a perfectionist or at least
complete the task, it is very important to practice what we have learnt. Example − We can be a
programmer only when we execute the codes we have written.

 Environment − We learn from our surroundings; we learn from the people around us. They are
of two types of environment – internal and external. Example − A child when at home learns
from the family which is an internal environment, but when sent to school it is an external
environment.

 Mental group − It describes our thinking by the group of people we chose to hang out with. In
simple words, we make a group of those people with whom we connect. It can be for a social
cause where people with the same mentality work in the same direction. Example − A group of
readers, travelers, etc.

These are the main factors that influence what a person learns, these are the root level for our behavior
and everything we do is connected to what we learn.

How Learning Occurs?

Learning can be understood clearly with the help of some theories that will explain our behavior. Some
of the remarkable theories are −

 Classical Conditioning Theory

 Operant Conditioning Theory

 Social Learning Theory

 Cognitive Learning Theory

Classical Conditioning Theory: The classical conditioning occurs when a conditioned stimulus is
coupled with an unconditioned stimulus. Usually, the conditioned stimulus (CS) is an impartial stimulus
like the sound of a tuning fork, the unconditioned stimulus (US) is biologically effective like the taste of
food and the unconditioned response (UR) to the unconditioned stimulus is an unlearned reflex response
like salivation or sweating.

After this coupling process is repeated (for example, some learning may already occur after a single
coupling), an individual shows a conditioned response (CR) to the conditioned stimulus, when the
conditioned stimulus is presented alone. The conditioned response is mostly similar to the unconditioned
response, but unlike the unconditioned response, it must be acquired through experience and is nearly
impermanent.

Operant Conditioning Theory

Operant conditioning theory is also known as instrumental conditioning. This theory is a learning process
in which behavior is sensitive to, or controlled by its outcomes.

Let’s take an example of a child. A child may learn to open a box to get the candy inside, or learn to
avoid touching a hot stove. In comparison, the classical conditioning develops a relationship between a
stimulus and a behavior. The example can be further elaborated as the child may learn to salivate at the
sight of candy, or to tremble at the sight of an angry parent.

In the 20th century, the study of animal learning was commanded by the analysis of these two sorts of
learning, and they are still at the core of behavior analysis.
Social Learning Theory

The key assumptions of social learning theory are as follows −

 Learning is not exactly behavioral, instead it is a cognitive process that takes place in a social
context.

 Learning can occur by observing a behavior and by observing the outcomes of the behavior
(known as vicarious reinforcement).

 Learning includes observation, extraction of information from those observations, and making
decisions regarding the performance of the behavior (known as observational learning or
modeling). Thus, learning can occur beyond an observable change in behavior.

 Reinforcement plays an important role in learning but is not completely responsible for learning.

 The learner is not a passive receiver of information. Understanding, environment, and behavior
all mutually influence each other.
Cognitive Learning Theory

Cognition defines a person’s ideas, thoughts, knowledge, interpretation, understanding about himself and
environment.

This theory considers learning as the outcome of deliberate thinking on a problem or situation based upon
known facts and responding in an objective and more oriented manner. It perceives that a person learns
the meaning of various objects and events and also learns the response depending upon the meaning
assigned to the stimuli.

This theory debates that the learner forms a cognitive structure in memory which stores organized
information about the various events that occurs.

Learning & Organizational Behavior

An individual’s behavior in an organization is directly or indirectly affected by learning.

Example − Employee skill, manager’s attitude are all learned.

Behavior can be improved by following the listed tips −

 Reducing absenteeism by rewarding employees for their fair attendance.

  Improving employee discipline by dealing with employee’s undesirable behavior, drinking at
workplace, stealing, coming late, etc. by taking appropriate actions like oral reprimands, written
warnings and suspension.

 Developing training programs more often so as to grab the trainees’ attention, provide required
motivational properties etc.

5 principles of learning are;

1. Participation.
2. Repetition.
3. Relevance.
4. Transference.
5. Feedback.

1. Participation

Learning should permit and encourage active participation of the learner. Participation improves
motivation and apparently engages more senses that reinforce the learning process. As a result of
participation, people learn more quickly and retain that learning longer. For example, most people never
forget how to ride a bicycle because they actively participated in the learning process. The learning
activities should be experiential rather than just informational. Therefore, the trainers should arrange the
physical surroundings to facilitate small group interaction and promote the sharing of ideas.

2. Repetition

An important principle of the learning is to provide the learner with the opportunity for practice and
repetition. To gain the full benefit of training learned behaviors must be overlearned to ensure smooth
performance and minimum of forgetting at a later date. Proficiency in learning and retaining new skills is
improved when individuals visualize themselves performing the new behavior.

3. Relevance

Learning is helped when the material to be learned is meaningful. The learning should be problem-
centered rather than content centered. People are motivated to learn when training is immediately relevant
to help them solve a current problem. Learning something just because someone says “it is important” is
not as motivating.

4. Transference

Because the training occurs in a special environment, an important question to ask is whether learning will
transfer to the actual job situation. Transfer of training occurs when trainees can apply the knowledge and
skills learned in training course to their jobs. If the learning in one setting does not transfer to the actual
job situation, the training has failed.

Three transfers training situations are possible

(1) Positive transfer of training when the training activities enhance performance in the new situation;
(2) negative transfer of training, when the training activities inhibit performance in a new situation; and
(3) no observable effect of training.

5. Feedback

Feedback gives learners information on their progress. Performance feedback is a necessary prerequisite
for learning. Feedback improves performance not only by helping learners correct their mistakes but also
by providing reinforcement for learning. Knowledge of results is a positive reinforcement itself. Learning
activities have more intrinsic interest if the feedback is available. Nevertheless, performance feedback
should do more than inform learners whether they were right or wrong. Merely informing the trainees that
they were wrong is not as effective as telling them why they were wrong and how they can avoid making
mistakes in the future. In general, knowledge of results is an essential feature of learning, and this
knowledge comes after the learner’s response.
UNIT–3

EXTERNAL DETERMINANTS OF CONSUMER BEHAVIOUR

External factors Influencing Consumer Behaviour

External factors cannot affect the decision process directly but, these are also instrumental and exert an
influence on consumer behaviour.

Factors affecting consumers can also be studied by dividing the factors into four groups as shown below.
This can be done under four broad headings which can have subheadings as shown in Figure: Factors
influencing consumer behaviour classification in four broad categories

Cultural Influences

It is defined as a complex sum total of knowledge, belief, traditions, customs, art, moral law or any other
habit acquired by people as members of society. Our consumer behaviour, that is the things we buy are
influenced by our background or culture. Different emphasis is given by different cultures for the buying,
use, and disposing of products. People in South India have a certain style of consumption of food, clothing,
savings, etc. This differs from the people in the North of India. Different cultures and habits are
predominant in different parts of the world. Japanese have a different culture from that of USA, England
or Arabian countries. Therefore, in consumer behaviour culture plays a very important part.

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.

A shrewd marketer never contradicts these cultural values in product, promotion, price and distribution

Sub-cultural Influences

Within a culture, there are many groups or segments of people with distinct customs, traditions and
behaviour. In the Indian culture itself, we have many subcultures, the culture of the South, the North, East
and the West. Hindu culture, Muslim culture, Hindus of the South differ in culture from the Hindus of the
North and so on. Products are designed to suit a target group of customers which have similar cultural
background and are homogeneous in many respects.

Social Class

By social class we refer to the group of people who share equal positions in a society. Social class is
defined by parameters like income, education, occupation, etc. Within a social class, people share the
same values and beliefs and tend to purchase similar kinds of products. Their choice of residence, type of
holiday, entertainment, leisure all seem to be alike. The knowledge of social class and their consumer
behaviour is of great value to a marketer.
Social Group Influences

A group is a collection of individuals who share some consumer relationship, attitudes and have the same
interest. Such groups are prevalent in societies. These groups could be primary where interaction takes
place frequently and, consists of family groups. These groups have a lot of interaction amongst themselves
and are well knit. Secondary groups are a collection of individuals where relationship is more formal and
less personal in nature.

These could be political groups, work group and study groups, service organisations like the Lions, Rotary,
etc. The behaviour of a group is influenced by other member of the group. An individual can be a member
of various groups and can have varied influences by different members of groups in his consumption
behaviour. An individual can be an executive in a company, can be a member of a political party. He may
be a member of a service organisation and of entertainment clubs and study circles. These exert different
influences on his consumption.

Family Influence

As has already been said, the family is the most important of the primary group and is the strongest source
of influence on consumer behaviour. The family tradition and customs are learnt by children, and they
imbibe many behavioral patterns from their family members, both consciously and unconsciously. These
behaviour patterns become a part of children’s lives. In a joint family, many decisions are jointly made
which also leave an impression on the members of the family.

These days the structure of the family is changing and people are going in more for nucleus families which
consists of parent, and dependent children. The other type of family is the joint family where mother,
father, grandparents and relatives also living together.

Personal Influences

Each individual processes the information received in different ways and evaluates the products in his
own personal way. This is irrespective of the influence of the family, social class, cultural heritage, etc.
His own personality ultimately influences his decision. He can have his personal reasons for likes, dislikes,
price, convenience or status. Some individuals may lay greater emphasis on price, others on quality, still
others on status, symbol, convenience of the product, etc. Personal influences go a long way in the
purchase of a product.

Other Influences

Consumers are also influenced by national or regional events which could be like the Asiad, the Olympics,
cricket test matches, World Cup, the war or a calamity. These leave permanent or temporary impressions
on the mind of the consumer and affect his behaviour. In these events, products are advertised and
sometimes the use of a product like drugs, etc. is discouraged. People are urged to adopt family planning
methods. Situation variables such as product display, price reduction, free gifts and attractive offers also
influence consumer behaviour.

In Figure: A simplified framework for studying consumer behaviour, the broken lines indicate that these
factors influence and in turn are influenced by each other. The various factors percolate from the external
to the individual determinant, to finally influence the decision process.

Sociological Determinants- In the area of psychological determinants, the consumer behavior was seen
from the stand point view of an individual. However, the sociologists and social psychologists have
attempted to explain the behavior of a group of individuals and the way in which it affects and conditions
and individual’s behavior 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.

Let us see these in brief to know their marketing implications-

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-grandparent’s 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.

The family impact on consumer buying behavior can be traced in two ways:
1. The family influence on the individual personality characteristics, attitudes and the evaluative criteria.

2. The family influence in the decision-making process involved in the purchases. Family is both a
purchasing and consuming unit. Therefore, it is essential to note the distinguished family roles of the
members.

These roles are:

Initiator: The person who senses the need for the purchase;
Influencer: The person who provides input into the purchase decision;
Decider: The person who has the final say over the decision and
User: The person who is most directly involved in using the purchase.
That is why; every marketer is keenly interested in four points in case of family purchase. There
are:
1. Who influences the buying?

2. Who does family buying?

3. Who makes buying decision?

4. Who uses the product?

In nuclear families, it is mostly the house-wife that has an upper hand in family purchases regarding her
family role such as food, clothing, cosmetics, interior decoration and jewelries.

Father has say over clothing, education, insurance etc., The children have say in clothes, sports-
equipment’s and recreational facilities such as TV, stereo-sets and the like.

Family life-cycle also has its own influence on buying behaviour. Thus, the proportion of a family budget
spent on food, clothing and children goes on increasing in the ‘procreation stage’ than in ‘home making
stage’.

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 behavior.

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
behavior.

The groups that serve as comparison points- Here, the individual compares himself, his attitudes, his
behavior and his performance with the group of members. Thus, he may feel poor if members are richer
than himself or vice versa.

Groups to which a person aspires to belong- Here, the individual aspires to be the member of such
group and imitates the behaviour of that group including buying behaviour. Thus, the group may be of
higher social status or a cult group such as ‘hippies’ or the ‘jet-set’.
Groups whose social perspectives are assumed by the individual as a frame-work of reference for
his own actions: Here, an individual may adopt the views of the group without becoming a member. A
person need not be a professional sportsman to have the opinion and outlook of a professional sportsman.
Some non-military persons behave more than ‘military’ personnel. Similarly, a person belonging to
minority may adopt the values and the perspectives of a majority which he dislikes by very nature.
Consumers as social animals spend most of their time in group situations, and accept information provided
by their groups on products, price, performance, style and the like. It is group norms that direct the
attention of its members towards a new product, a new brand. These reference groups have face to face
interactions that provide word of mouth communication which is more powerful than formal advertising.
A satisfied customer becomes the salesman of the product.

Opinion leaders:
Like reference groups, ‘opinion leaders’ or ‘influential’ play a key role in influencing the buying behavior
of their followers. Very often we come across situations where a person refers to an individual than a
group in formulating his or her behavior 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. Marketers very often try to catch hold of the
opinion leaders through ads and other means of communication. If they succeed in selling their ideas and
products to the opinion leaders, then they have sold it to the entire group of followers behind them.

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.
In our country, we have four such broad categorization as ‘Brahmins’ ‘Kshatriyas’ ‘Vaishyas’ and
‘Shudras’.

From the marketing stand point, both social class and caste frame are quite relevant as buyer behaviour is
influenced by these. Each class and caste develops its own standards of style, living and behaviour
patterns.

It is not a surprise, and then if the members of such a class select a particular brand of product, shops at a
particular store which caters to their group norms.

This does not mean that all the members of the group buy the same products, same brands, or conform to
same styles; however, more or less, it becomes a pattern with differential range of likings and leanings.
Thus, ‘Shudras’ may not enter the restaurants where ‘Brahmins’ and ‘Kshatriyas’ enter, though the
‘shudras’ are not barred from entering.

It is because of income pattern and traditional respect for higher castes, for in the eyes of Indian
Constitution, all are equal.
UNIT–4
Consumers’ Buying Decision Making Process, Post-purchase Evaluation & Behavior

Consumer Decision Process (Buyer Decision Process)

The consumer decision process also called the buyer decision process, helps markets identify how
consumers complete the journey from knowing about a product to making the purchase decision.
Understanding the buyer buying process is essential for marketing and sales. The consumer or buyer
decision process will enable them to set a marketing plan that convinces them to purchase the product or
service for fulfilling the buyer’s or consumer’s problem.

The consumer decision process is composed of problem recognition, search, evaluation, and purchase
decision. Post-purchase behavior is the result of satisfaction or dissatisfaction that the consumption
provides. The buying process starts when the customer identifies a need or problem or when a need arises.
It can be activated through internal or external stimuli.

5 Stages of Consumer or Buyer Decision Process

Consumers go through 5 stages in deciding to purchase any goods or services.

 Problem Recognition or Need Recognition.

 Information Search.
  Evaluation of Alternatives.
 Purchase Decision.
 Post-Purchase Evaluation.

When making a purchase, the buyer goes through these 5 stages of the decision process.

The buying process starts long before the actual purchase and continues long after. The marketer’s job is
to understand the buyer’s behavior at each stage and its influences. The first step of the buyer decision
process is the need recognition stage. Here the consumer recognizes a need or problem and feels a
difference between the actual state and some desired state. They try to find goods to satisfy such needs.

This leads to the second stage of searching for information about the product. The consumer tries the find
out as much as possible about the product’s available brands. At the Third stage, is consumer uses the
information to evaluate alternative brands.

After that, the buyer makes the purchase decision at the fourth stage by selecting the most suitable
product.The fifth stage is the post-purchase evaluation, and it is the most important one. Depending on
the level of satisfaction or dissatisfaction, the consumer will become a loyal customer or actively avoid
the brand and tells others to do so via online reviews and word of mouth.

1. Problem or Need Recognition

Need recognition of Problem Recognition is the first stage of the buyer decision process. During need or
problem recognition, the consumer recognizes a problem or need satisfied by a product or service in the
market.

The buyer feels a difference between his or her actual state and some desired state. Internal stimuli can
trigger the need. This occurs when one person’s normal needs, such as hunger, thirst, sex, rise to a level
high enough to become a driver. External stimuli can also trigger a need.

At this stage, the marketer should study the buyer to find answers to some important questions. These ar e:

 What kinds of needs or problems arise?

 What is the root of these needs or problems?
 How they led the buyer or customer or consumers to a particular product?

This could be a simple as “I’m hungry; I need food.” The need may have been triggered by internal stimuli
(such as hunger or thirst) or external stimuli (such as advertising or word of mouth).

Need or Problem Recognition Process

When a consumer becomes aware that there is a difference between the desired state and an actual
condition, problem recognition occurs. Every individual has unsatisfied needs and wants that create
tension or discomfort. Certain needs can be satisfied by purchasing and consuming goods and services.
Deciding what to buy starts when a need that can be satisfied through consumption becomes strong enough
to stimulate a person. Thus, a problem is recognized when consumers have an unmet need, and everyday
consumers recognize purchase or consumption-related problems.

Consumers may have routine problems when they run out of daily necessities and may have unexpected
problems when major appliances suddenly go out of order. In addition to these two, there is another type
of problem that is subtle and evolve slowly over time, such as a desire to buy a washing machine.

Consumer decision-making arises when an individual recognizes a problem or need that is not met.

A problem or need exists when there is a discrepancy between a consumer’s actual state and the desired
state. This is shown in the following figure, along with different stages of the problem recognition process.
The above figure states that the desired state and existing state result from its lifestyle and current situation.
His desired and current state could be the same, or there could be discrepancies between these two states.
If a consumer perceives a discrepancy between his desired and current state, he will recognize that he is
having a problem. A consumer defines his problems in terms of his motivation that we have discussed in
unit eleven. The degree of an individual’s desire to resolve a particular problem depends on the degree of
discrepancy between the desired and existing states and the importance of the problem. Thus, an individual
consumer will be desirous of solving a problem if he considers the degree of discrepancy as large enough
and the problem as very serious or important.

After the problem is identified, the buyer has to define it in some meaningful term to help him initiate an
action to solve his problem. For example, one may recognize that he is having a status related problem.
This is problem recognition. Now he has to define it in some meaningful term, which is causing the status
problem. A consumer may recognize both an active as well as the inactive problem that he is having. An
active problem is that he is aware of or will become aware of, and, on the other hand, an inactive problem
is one he is not aware of. Situations Leading to Problem Recognition

There could be many situations that may lead a consumer to recognize a problem to exist. Major situations
leading to problem recognition are;

 Insufficient Stock of Goods

 Dissatisfaction or Discontentment with the Stock
 Changes in the Environmental Characteristics
 Changes in the Financial Status
 Promotional Activities
 Consumer’s Previous Decisions
 Individual Development
 Efforts of Consumer Groups and Governmental Agencies
 Availability of Products

Insufficient Stock of Goods: The most common situation leading to problem recognition by a consumer
is the depletion of the stock of goods that he uses. If, for example, an individual runs out of necessities
that he uses, he will identify a problem to exist.
Dissatisfaction or Discontentment with the Stock: If a consumer becomes dissatisfied with the goods
he owns or uses, he will recognize that he is having a problem. A family having a ten year’s old car may
be willing to buy a late model car. Such a feeling will lead to discontent, and as a result, the family will
recognize a car-related problem.

Changes in the Environmental Characteristics: With the change in an individual’s or family’s

environmental characteristics, the individual or the family may recognize a problem. For example,
when a family moves from one stage of its life cycle to another stage, it requires different types of products
and services, and as a result, problems occur.

More so, friends and reference groups’ influence may demand new and different products to be bought by
an individual or a family. Such a situation also leads to the recognition of a problem.

Changes in the Financial Status: Changes in the financial status or position of an individual or a family
may also lead to problem recognition. For example, if an individual’s financial position improves or
worsens or anticipates an improvement or deterioration, he may recognize a problem associated with his
actual or anticipated changing financial position.

Promotional Activities: By promotional activities, marketers try to trigger drives in consumers. Through
different promotional activities, marketers try to create a discrepancy between actual and desired states of
consumers. Such a situation will trigger problem recognition in consumers.

Consumer’s Previous Decisions: Other purchases made by a consumer may also lead to problem
recognition. For example, if an individual buys a television, it may trigger buying an antenna or a voltage
stabilizer. The purchase of a computer may lead to the recognition of the problem of not having a printer.

Individual Development: With an individual’s mental development and change in outlook, he may
recognize not having certain products.

Efforts of Consumer Groups and Governmental Agencies: Activities of different consumer interest
groups and different government agencies may also lead to problem recognition. For example, if consumer
groups advocate environmentally friendly products, they may feel the need for such products creating
problems.
If the government puts an embargo on using private vehicles on the city’s main roads, consumers can buy
bicycles, thus causing a problem.

Availability of Products: The availability of a product makes customers aware of it, making them feel to
have one of those. Such a feeling may also lead to problem recognition.

Marketing Strategy with Regards to Problem Recognition

Recognition of problems by consumers bears important marketing implications. They should first identify
the problems that consumers face, and, in the second stage, they should develop a marketing mix aiming
at consumers’ problem solutions. Marketers may also create situations where consumers look for problems
or create situations that may suppress the consumers’ problem recognition.

Measuring Problem Recognition: The fast task is to identify the problems faced by the consumers or the
problems they recognize. A marketer can take many approaches in measuring problems recognized by the
consumers. One such approach is “intuition.”

By evaluating his product, a marketer can determine whether he should improve his product, and if so,
how can he do so. Second, he can conduct surveys to identify the problems recognized by his customers.

A marketer can also conduct activity analysis focusing on consumers’ particular activity, such as how
breakfast items are prepared. A product analysis may also be undertaken to identify consumers’ problems
or problems using a particular product.

Another technique used in identifying problems consumers recognize to undertake problem analysis.
Here, consumers are requested to identify the problems they face and give suggestions relating to such
problems.

Marketing Mix Decision Aiming at Problem Solution: After the consumers’ problem is identified, a
marketer may adjust their marketing mix variables to help consumers overcome problems. This may be
done through product modification, changing the distribution strategy channel, adjusting prices, or
changing advertising or communication strategy.

Activating Problem Recognition: Marketers themselves may activate problem recognition by the
consumers. Marketers may activate problem recognition, first, by influencing the desired state. By
emphasizing the benefits of products, marketers may encourage people to buy a particular product they
lack actively. Through advertising, personal selling, and sales promotion activities, marketers can
influence consumers’ desired state, causing them to recognize problems. Marketers may also activate
problem recognition by influencing perceptions of consumers’ actual state.

For example, an individual buying a particular brand of a product may be given the idea that another
alternative is better than one he is having or using. This may also lead to problem recognition by a
consumer. Marketers may also activate problem recognition by influencing the timing of problem
recognition. If a consumer thinks of buying a refrigerator before “Eid- Ul-Azha,” he may be given the
idea that refrigerators’ prices will rise during Eid time, causing him to recognize the problem now instead
of buying later.

Suppressing Problem Recognition: By this time, you are aware of the situations that trigger problems in
consumers. Some of the problems recognized by consumers may create problems for certain marketers.
In such a situation, marketers try to suppress the problem to be recognized by consumers. A tobacco
marketer may suppress problem recognition by the tobacco users caused by consumer groups or other
agencies by developing an advertisement that shows tobacco users in a lively mood.

Information Search

The second stage of the purchasing process is searching for information. Once the need is recognized, the
consumer is aroused to seek more information and moves into the information search stage.

The consumer may have heightened attention or may undertake an active search for information. The
amount of searching a consumer will depend on the strength of his drive, the amount of information he
starts with, the ease of obtaining more information, the value he places on additional information, and the
satisfaction he gets from searching. Buyers or customers can get information about goods from different
sources

 Personal sources: This includes family, friends, neighbours, acquaintance, etc.

 Commercial source: This includes advertising, salespeople, dealers, packaging, display, etc.
 Public sources: This includes mass media, consumer rating organizations, etc. they also become
confidential to provide information.
  Experimental sources: This includes handling, examining, using, etc. Such information becomes
decisive and confidential.

The relative influence of these information sources varies with the product and the buyer. Generally, the
consumer receives the most information about a product from commercial sources-those controlled by the
marketer. The most effective sources, however, tend to be personal. Personal sources appear to be even
more important in influencing the purchase of services. Commercial sources normally inform the buyer,
but personal sources legitimize or evaluate products for the buyer. For example, doctors normally learn
new drugs from commercial sources but turn to other doctors for evaluative information.

The consumer’s awareness and knowledge of the available brands and features increase as they get more
information. In designing the marketing mix, a company should make the target customers aware of its
brand. Buyers’ sources of information should be carefully identified, and the importance of each source
should also be assessed.

Nature of Consumer’s Information Search

Consumers arrive at purchase decisions based on information gathered regarding the product under
consideration. They collect information from many different sources. The effort, a consumer, will put into
collecting information from external sources depends on several factors. Once information is gathered,
the consumer evaluates them to arrive at the purchase decision. Understanding how consumers evaluate
alternatives is essential from a marketing point of view.

The second step in the buying decision-making process is obtaining purchasing related information to
solve the buyer’s problem. Once the consumer is aware of a problem or need, the consumer (if he decides
to continue the decision-making process) searches for information.

Such a search may focus on numerous dimensions, such as brands’ availability, product features, sellers’
characteristics, after-sales service, warranties, prices, quality, and use instructions.

How long the consumer will search for information and how intense his search process will depend on his
buying the product and the importance of purchase to him.
The consumer may go for both internal as well as an external search of information. Information search
is a mental process, and physical activity performed to make decisions and attain the desired goals. Such
a search requires time, energy, as well as money. It may also require a consumer to forego more desirable
activities. Time consumers spent seeking information, and the amount of information a consumer seeks
depends on many factors. A consumer may seek information from within, or he may search externally. If
he tries to recollect his memory to help him decide on the brand to buy, he searches internally. Past
purchase experience may help him decide on the desired course of action related to his perceived problem.
If he fails to arrive at an appropriate solution to his problem, he may go for an external search. A consumer
may solve some of his recognized problems using his past experiences that he is having with purchases of
similar products or brands. By recalling his memory, he may decide to buy the same brand that he bought
before the previous purchase is considered satisfactory. Marketers can influence internal search through
different marketing activities, such as advertising and personal selling, or sales promotion that may remind
consumers of the brand he bought last time. A consumer may go for an external search of information if
he fails to find a satisfactory solution to his recognized problem using his stored information. Externally,
he may take friends’, neighbors’, and relatives’ opinions; may rely on information provided by the
marketers through different advertising materials; he may go for sampling and gather first-hand
experience; or he may gather information reading articles, books, or company brochures, pamphlets, or
leaflets.

Sources Used by Consumers in Gathering Information

In seeking information, a consumer may turn to one of several major sources of information. The most
widely used source is experience. This is one of the primary sources of information. Personal experience
with a product may provide selected kinds of information to the consumer. This is most vital because such
a selected kind of information may not be acquired in any other way by a consumer. In acquiring
information through personal experience, marketers can help consumers significantly. This may be done
by distributing free samples, arranging a demonstration of the product, or allowing consumers to use the
product temporarily with or without charging any price. Another important source of information used by
consumers includes friends, relatives, family members, neighbors, or associates. This is referred to as a
personal source. Consumers rely heavily on their friends, family members, relatives, neighbors, and
associates. The reason is that consumers trust this source more than any other source. Another source of
information, as used by the consumers, is the marketing source. It includes salespersons, advertisements,
product displays, and packages and labels. Though such a source provides marketer generated messages,
it can influence other information sources that consumers use. Consumers can also use public or
independent sources of information. They include government reports, news presentations, reports from
product testing information, and reports published by different consumer groups. These sources are
considered most credible as they are independent sources and are likely to provide the most neutral and
factual information. Another most widely used source is the memory search.

Here consumer tries to recollect his memory to find any relevant information if there is any stored in his
memory. If a consumer can successfully search for information, it can yield him a group of brands that he
may view as possible alternatives.

Factors Influencing the Level of External Search A consumer goes for an external search if an internal
search cannot provide him with sufficient information to solve his recognized problem. He also goes for
an external search if he perceives that the external search benefits will offset its costs. Several factors
determine a consumer’s level of external search. They are;

 marketplace characteristics;
 product characteristics;
 consumer characteristics; and,
 situational characteristics.

Marketplace Characteristics Influencing the Level of External Search: Certain characteristics of the
marketplace determine the level of external search of a consumer. These characteristics affect the level of
external search as they determine the costs involved in search and the corresponding benefits that a
consumer may derive from such a search. They include an available number of alternatives, price range,
store distribution, and information availability. If there is only one brand available in a particular product
category, the consumer does not require an external search regarding that product. But, if the number of
alternative products, brands, and stores is numerous, there will be an extensive external search that a
consumer will go for. The consumer goes for extensive external search if prices of alternatives vary greatly
as he intends to make the best utilization of his money being spent on a product. If the stores selling a
particular type of product are clustered, the external search will be intense. But, if stores selling a particular
product are situated in dispersed locations, it will reduce the external search level because it involves
consumers’ time and money to move around stores. Instant availability of external information may also
increase the level of external search. It provides convenience to the consumer looking at and comparing
many alternatives, which helps him make the most appropriate decision to solve his recognized problem.

Product Characteristics Influencing the Level of External Search: Product characteristics such as
price level and product differentiation also influence the level of external search of consumers. The
consumer will do a limited external search if a product’s price is considered insignificant or very low.

On the contrary, if the price level is high from the consumer’s point of view, he will go for an extensive
external search. Product differentiation is another product related characteristic that influences the level
of consumer’s external search. If a consumer perceives many differences between alternative brands, he
will heavily be involved in the external search. He may consider competing brands differ in quality,
features, design, appearance, or style.

Consumer Characteristics Influencing the Level of External Search: Consumer characteristics, such
as learning and experience, personality and self-concept, social class, age and stage in the family life cycle,
and perceived risk, may also influence the level of a consumer’s external search of information.If a
consumer is satisfied with his prior purchase and consumption of a particular brand in a product categor y,
he will go for repeat purchase instead of searching externally for more information on that product
category (applies in case of habitual or routine purchase). One’s personality characteristics and self-
concept also influence his level of external search of information.

An individual who considers himself a deliberate information seeker will go for extensive external search.
A person of an authoritarian type of personality will go for less external search. The social class of a
consumer is another determinant of the level of external search. Generally, lower and middle-class people
go for more external searches than upper-class people. The level of information search decreases with an
individual’s age as his learning and maturity increase. Families in the earlier stages of the life cycle involve
them heavily in external information search. With the increase in risk perception, the level of external
search increases as the consumer tries to minimize his dissatisfaction with the purchase and consumption.

Situational Characteristics Influencing the Level of External Search: Situations surrounding

consumers influence his level or intensity of external search. If a consumer, for example, is time-pressed,
he will go for a limited external search. A consumer will reduce his search if he finds shops are
overcrowded that he visits. He may also search less for information if he considers a desirable purchase
offer made by a seller. The physical and mental conditions of a consumer may also influence his level of
external search. If he is not physically or mentally energetic, he will reduce his level of external search.

Marketing Strategies Based on Information Search Patterns

While developing marketing strategies, a marketer should actively consider the information sear ch
patterns of his target consumers. The following discussion will illustrate the strategy implication
concerning the information search patterns of consumers. If a marketer finds that his brand falls in the
routinely purchased product category, he should reinforce consumers’ existing behavior patterns. He can
maintain product quality, ensure regular distribution, and reinforce consumers through persuasive
advertising. He should also combat competitive, disruptive activities immediately. If a marketer finds that
his brand is not included in the buyer’s evoked set of alternatives, he may try to disrupt the existing
decision pattern by product improvement and persuasive marketing communication that attracts target
consumers’ attention to his brand. He may also disrupt the existing decision pattern by distributing free
samples, reducing price and announcing price cuts, or offering coupons or other inducements to customers.

Where consumers search for limited information, a marketer can identify the places where consumers
search for information and then provide them with sufficient attention-getting and influencing information
to capture a large market size as possible.

Evaluation of Alternatives
With the information in hand, the consumer proceeds to alternative evaluation, during which the
information is used to evaluate” brands in the choice set. Evaluation of alternatives is the third stage of
the buying process. Various points of information collected from different sources are used in evaluating
different alternatives and their attractiveness. While evaluating goods and services, different consumers
use different bases. Generally, the buyer evaluates the alternatives based on the product’s attributes, the
degree of importance, belief in the brand, satisfaction, etc. to choose correctly.

A marketer must know how the consumer processes information to arrive at brand choices. Consumers do
not always follow a simple and single evaluation process. Rather several evaluation processes are in
practice. Consumer evaluation processes can be explained with the help of some basic concepts

 First, it is assumed that each consumer sees a product as a bundle of product attributes. For
refrigerators, product attributes might include cooling capacity, size, space, price, and other
features. Buyers will pay more attention to those attributes relevant to their needs.
 Second, the importance of depending upon their needs and wants.
 Third, the consumer will develop a set of brand beliefs about where each brand stands on each
attribute. The set of beliefs buyers hold about a particular brand is called brand image. Based on
the buyer’s experience and the effects of selective perception, distortion, and retention, the
consumers’ beliefs may differ from actual attributes.
  Fourth, the consumer’s expected total product satisfaction will vary with the changes at the levels
of different attributes.
 Fifth, the consumer develops attitudes toward the different brands through some evaluation
procedure. Buyers use one or more of several evaluation procedures, depending on the consumer
and the buying decision.

The mode of evaluating purchase alternatives depends on the individual consumer and the specific buying
situation. In some instances, consumers apply meticulous calculations and logical thinking. In other
situations, the same consumers may not make any evaluation. Rather they buy on impulse and use
intuition. Sometimes consumers themselves make buying decisions. At other times they rely on friends,
consumer guides, or salespeople for buying advice. Marketers should study buyers to know how they
evaluate brand alternatives. Marketers can take appropriate steps to influence the buyer’s decision to know
what the buyers follow evaluative processes.

Purchase Decision

At this stage of the buyer decision process, the consumer buys the product. After the alternatives have
been evaluated, consumers decide to purchase products and services. They decide to buy the best brand.
But their decision is influenced by others’ attitudes and situational factors. Usually, the consumer will buy
the most preferred brand. But two factors might influence the purchase intention and the purchase
decision. The first factor is the attitudes of other people related to the consumer. The second factor is
unexpected situational factors. The consumer may form a purchase intention based on factors such as
expected price and expected product benefits. However, unexpected events may alter the purchase
intention. Thus, preferences and even purchase intentions do not always lead to actual purchase choice.

Post Purchase Evaluation: - consumer determines if they are satisfied or dissatisfied with the purchasing
outcome in the buyer decision process’s final stage, post-purchase-purchase behavior, the consumer takes
action based on satisfaction or dissatisfaction. In this stage, the consumer determines if they are satisfied
or dissatisfied with the purchasing outcome. Here is where cognitive dissonance occurs, “Did I make the
right decision.” At this stage of the buyer decision process, consumers take further action after purchase
based on their satisfaction or dissatisfaction. What determines whether the buyer is satisfied or dissatisfied
with a purchase? The answer lies in the relationship between the consumer’s expectations and the
product’s perceived performance. If the product falls short of expectations, the consumer is disappointed;
if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted.

The dissatisfaction by a consumer towards product may lead to:

Discontinuing purchase of those products or brands by which a customer is dissatisfied.
If he had been patronizing that product which has led to his dissatisfaction, he may change to a new brand
or a new product. Negative Word of mouth: He speaks negatively about the product to his friends, peers
and associates. Instead of propagating the positive aspects, he starts defaming the product/brand and shows
his dissatisfaction openly. Lodges a complaint to the concerned authorities. Consumer Forum is one such
agency that entertains such complaints. It may be a time-consuming process and difficult for all
dissatisfied customers to resort to. Complaints directly to the seller and gets his claim settled or the
product/brand changed according to his liking or agrees for any such settlement.
It is the effort of every firm to produce satisfied customers. This is essential to fight increasing
competition. Some dissatisfied customers however remain repeat purchasers, as they do not find a suitable
alternative or, find that brand readily available and buy it due to force of habit or, because of low price.
These purchasers may not be brand loyal. A brand loyal or a committed customer is attached to the brand
emotionally. He believes in the firm and trusts the brand. Brand loyalty increases if the performance of
the brand is more than the expected performance. In case of committed customers, they believe and have
faith in line extension and brand extension of the firm. Committed customers also promote the product by
positive word of mouth.

What is Post Purchase Behaviour?

Post Purchase Behaviour defines the overall reaction and response of a cu stomer after buying a product
or service. Generally, after a product purchase the buyer can either be happy and fine or can regret the
purchase altogether. In this case the customer undergoes post purchase dissonance.The modern customers
have lot of options to express their post purchase feelings and reactions. Customers can use social media,
reviews and other means to immediately recommend or complain about a product.

Importance of Post Purchase Behaviour

Understanding the customer behaviour after a sale has been made is very very important. Many
organizations tend to ignore the post purchase behavior of a customer as the sale has already been made
but what is important here is that if the customers are not happy then the probability of repeat business
would reduce significantly. Repeat business is one of the parameters on which a business can sustain for
a long term. The post purchase dissonance can impact the brand image and the overall sales in the market
due to poor word of mouth. If the customer is happy after a purchase, they would not only come back to
buy again but also they would recommend the product to others as well helping the brand and sales further.
Aftermarket support is very important these days to counter post purchase behavior dissonance. There is
still some time in which the customer issues can be resolved. If a customer complains about an issue and
it is resolved, it would still keep the customer happy and give the brand another chance. This is only
possible if it was due to temporary issue or defect. If the customers in general are not happy with the core
product quality and features, then the overall customer satisfaction would be very low and the perception
and brand image would suffer.

This dissonance can be due to:

1. Large number of alternatives
2. The other alternatives have better features
3. Performance of the product
4. High financial commitment towards the product but derived value is less
5. Low durability of the product
These factors should be addressed in every possible iteration to make products better and reduce the
chances of dissonance.
Steps to improve the post purchase behaviour
Many companies now focus on the customer even after they have bought the product so that the customer
can consider the brand again in future. The entire customer relationship management is based on this.
Below are some of the steps which can be taken to improve the behaviour
1. Proper Customer Service and Support Channels: In case the customer needs to understand or talk
to someone about the product after buying, the company should provide clear channels like contact center,
knowledge, service portals etc. so that customer can contact in case an issue arises. This way customer
would have a clear path to take in case there is some issue in the bought product or service. Sometimes
the issues can be minor and easily solvable through support

2. User Manual and Knowledge Portal: Proper product documentation, manual should be provided with
product especially which require high involvement like vacuum cleaners, cars, appliances so that customer
can refer them to resolve an issue. A help portal can go long way in resolving issues automatically

3. Returns Management: Customers should be assured that in case the product is not working as per
their expectations they can always return it. The company should clearly define the processes in case of
return so that the experience is good in case the customer chooses to return.
4. Understand the customer feedback: It is very important to understand what the customers are saying
about the products and services. A company should try to gather feedback from customers and use it to
improve the products so that next time, less number of customers are dissatisfied.

Post Purchase Behaviour Example

A customer buys a new toothpaste in the market which claims to have great taste and experience. After
using, the customer doesn’t like the taste and feels the previous brand was much better, this will then cause
dissonance. The customer will then not buy the product.

POST-PURCHASE DISSONANCE

This is a common consumer reaction after making a difficult, relatively permanent decision. Doubt or
Anxiety – referred as - post-purchase dissonance. The probability of a consumer experiencing post-
purchase dissonance, as well as the magnitude of such dissonance, is a function of : Degree of
commitment/irrevocability of the decision.

 Importance of decision to consumer

 Difficulty of choosing among the alternatives
 Individual’s tendency to experience anxiety

Post-Purchase Satisfaction: Satisfaction is a function of the closeness between expectations and the
product’s perceived performance

If performance fall short of expectations the consumer is disappointed.

If the performance meets expectations the consumer is satisfied.
If the performance exceeds expectations the consumer is delighted.
Consumer form their expectations on the basis of messages received from sellers, friends, and other
information sources. The importance of post-purchase satisfaction suggests that a product claim must
truthfully represent the product’s likely performance.
Tolerance level – Where the customer is Fine with the product he has brought and goes ahead with the
purchase.
Inconsistency level – Here the customer is undecided whether he really likes the product and whether the
purchase was really upto mark.
Post Purchase Dissonance – The final stage where the customer begins regretting the purchase.

Examples of Post Purchase Dissonance

If the customer has purchased a car with full payment done and now after a few weeks he is not happy
with the colour of the car. He cannot go to the car showroom and get the car exchanged and neither can
he go through a costly procedure of changing the colour of the car. So he regrets the colour of the car he
purchased even if he is happy with the car itself.

It is also not possible many times to get the money back in the case of Post Purchase Dissonance.

The aspect of Post Purchase Dissonance his highly applicable to high worth products such as automobiles,
mobile phones, designer clothes and apparels, electronic devices, and others.

What Causes Post Purchase Dissonance?

1) External pressure
One of the major reasons behind the aspect of Post Purchase Dissonance is the external pressure on the
customer whilst indulging in the purchase of the specific product or the service. For example, whilst
buying a car, the father has to listen to the needs and demands of his wife and kids who want a buy an
SUV but the father prefers to buy a sedan owing to the budget constraints and the future maintenance of
the car.

In such a case, either the father has to the give in to the demands of his family or the family has to give in
to the pressure of the main man of the family. Either the situation, the aspect of Post Purchase Dissonance
will definitely arise.

2) Wide variety of options

Another reason for the aspect of Post Purchase Dissonance is when the customer is presented with an array
of options and alternatives to pick and choose from. Most of the times, rather the being happy seeing too
many options on his platter, he tends to get confused on which one to select. Let’s take an example of a
person buying a smartphone and he has no specific brand in his mind.

Whilst at the shop, he will surely get confused between the various brands and their specific features and
attributes. Almost all smartphones have a similar level of features and user interfaces except the bigger
brands. But the customer tends to get confused with the modalities of price, color, features, and brand
selection.

After the final purchase, his mind will fickle for not selecting the contemporary brand over the one
purchased.

3) Lack of research and knowledge:

Most of the times, the customers indulge in the impulsive buying especially of the high worth times and
after the purchase, there is a feeling and perception of Post Purchase Dissonance in their minds. And one
of the major reasons behind the same is that there is a lack of research and knowledge before indulging in
the final purchase.

The customer needs to ask himself the questions such as:

 Do I really need this product?

 Do I have the budget to buy such a high-value product?
 What is the utility of the product?
 Is the product having the required features and attributes that will solve my pain areas?
 Is the brand reputed?

4) Quality of the product:

Yet another reason for the Post Purchase Dissonance is the quality of the product. And in this case, the
major fault lies in the brand and its offerings. During the purchase, the sales representatives of the brand
make tall claims and promises about the quality of the product and its unique attributes.

Many a time, the customer gets lured and the Post Purchase Dissonance strikes right after the usage of t he
product when the customer realizes that the product fails on the parameters of quality that was promised
by the brand.

5) Unique characteristics of the product:

It does occur quite a number of times when the customer indulges in the purchase of the pr oduct owing to
its unique and exclusive characteristics without realizing the fact the factors of the utility and usage of that
uniqueness.

For instance, a teenager has a new interest in the field of photography and to harp and leverage on his
newfound interest, he buys a high-end DSLR camera rather than buying a camera that works as a best one
for the starters.

And post his purchase, he does realize that the camera has so many unique options that he is unable to use
owing to the lack of knowledge.

How to reduce Post Purchase Dissonance?

The feeling of Post Purchase Dissonance in the minds of the customers affects the credibility and brand
value of the firm in the market. Plus if the loyal set of customers feels the same, they tend to prefer the
product offerings of the competitors. Hence, it is very imperative for the firm to lay impetus and astute
importance to the aspects of the quality of the product along with the customer service levels.

Majority of times, it is the poor quality of the products that give rise to the feeling and perspective of Post
Purchase Dissonance in the minds of the customers. Right from the long-lasting durability, attributes,
features, and uniqueness of the product; the firm has to pay attention to the each and every facet keeping
the customers at the focal point.
The feeling of Post Purchase Dissonance can also be avoided if the customer conducts thorough market
research and study of the product that he intends to buy. Activities such as competitive analysis, pricing
analysis, online reviews, and study of the brand need to be carried out by the customer before indulging
in the final purchase of the product. Taking care of the above factors and having a crystal clear mind and
perspective helps to avoid the feeling of Post Purchase Dissonance.

Next in the line to avoid the Post Purchase Dissonance is to not to come under the peer group pressure or
buying the product just for the social standing. It happens most of the times with the teenagers or young
adults as they buy the specific product as their friends own the same or they want to match the standing
and lifestyle of their friends. Such purchase indulgences of the kids make the parents unhappy resulting
in the Post Purchase Dissonance.
 UNIT–5

DIFFUSION OF INNOVATION

What Is the Diffusion of Innovations Theory?

The diffusion of innovations theory is a hypothesis outlining how new technological and other
advancements spread throughout societies and cultures, from introduction to wider-adoption. The
diffusion of innovations theory seeks to explain how and why new ideas and practices are adopted, with
timelines potentially spread out over long periods.1

The way in which innovations are communicated to different parts of society and the subjective opinions
associated with the innovations are important factors in how quickly diffusion—or spreading—occurs.
This is important to understand when developing market share, and this theory is frequently referred to in
the marketing of new products.

Understanding the Diffusion of Innovations Theory

The theory was developed by E.M. Rogers, a communication theorist at the University of New Mexico,
in 1962. Integrating previous sociological theories of behavioral change, it explains the passage of an idea
through stages of adoption by different actors. The main people in the diffusion of innovations theory are:

Innovators: People who are open to risks and the first to try new ideas.

Early adopters: People who are interested in trying new technologies and establishing their utility in
society.

Early majority: The early majority paves the way for use of an innovation within mainstream society and
are part of the general population.

Late majority: The late majority is also part of the general population and refers to the set of people who
follow the early majority into adopting an innovation as part of their daily life.

Laggards: As the name indicates, laggards lag the general population in adopting innovative products
and new ideas. This is primarily because they are risk-averse and set in their ways of doing things. But
the sweep of an innovation through mainstream society makes it impossible for them to conduct their daily
life (and work) without it. As a result, they are forced to begin using it.

Factors that affect the rate of innovation diffusion include the mix of rural to urban population within a
society, the society's level of education, and the extent of industrialization and development. Different
societies are likely to have different adoption rates—the rate at which members of a society accept a new
innovation.
Adoption rates for different types of innovation vary. For example, a society may have adopted the internet
faster than it adopted the automobile due to cost, accessibility, and familiarity with technological change.

Examples of the Diffusion of Innovations Theory

While the diffusion of innovations theory was developed during the 20th century, newest technologies in
human progress, whether it is the printing press during the 16th century or the internet in the 20th century,
have followed a similar path to widespread adoption.

The diffusion of innovations theory is extensively used by marketers to promote adoption of their products.
In such cases, marketers generally find an early set of adopters passionate about the product. These early
adopters are responsible for evangelizing its utility to mainstream audiences.

A recent example of this method is Facebook. It started off as a product targeted at students and
professionals in educational institutions. The students then spread use of the product to mainstream society
and across borders.

The diffusion of innovations theory is also used to design public health programs. Again, a set of people
are chosen as early adopters of a new technology or practice and spread awareness about it to others.
However, such programs are not always successful due to cultural limitations.

All new products or innovations are not always easily accepted by consumers. Some products gain easy
acceptance or are easily accepted by consumers. For instance, Nirma detergent powder (when HLVs Surf
was the market leader), Maruti 800 c.c. car etc. While there are other new products or ideas which took a
long time to be accepted.

For example, ownership of a personal credit card. There are still others which inspite of being available
in the market since quite some time, (the new product) had never gained wide spread consumer acceptance
as anticipated by the marketers.

The uncertainties associated with product marketing can be greatly reduced if marketers could anticipate
how consumers would react to new products and develop a promotional strategy accordingly. The
characteristics of the new product or innovation also affects its rate of adoption or the adoption process

Five characteristics have been identified which play an important role in influencing the diffusion
process:
Relative Advantage:

The first characteristic is the new product’s relative advantage i.e., the degree to which it appears to be
better and superior than the existing products. If the consumer perceives, the new product to be relatively
superior as compared to the existing products, more is the chance of the innovation being adopted. For
example, ‘E-mail’ and Fax were considered to be better and superior to Telex.

Similarly, cellular phones over took pagers, because they were accepted to have better communicative
features in comparison. This perception of greater relative advantage in using ‘E-mail’ as well as cellular
phones as communication network, resulted in sooner acceptance of this concept or new idea.

Compatibility:

The degree to which potential consumers feel that the new product is consistent with their existing needs,
values and practices is a measure of its compatibility. Greater the degree of compatibility, sooner will the
innovation be acceptable to the consumer. For example, ‘Laptop’ computers are highly compatible with
the needs and lifestyle of senior executives of companies.

Complexity:

The third characteristic is the innovation’s complexity. This means the extent or degree to which the new
product is relatively difficult to understand or use. Greater the degree of complexity, more time will be
required for the product to be accepted. For example, personal computers are complex and therefore took
a lot of time to penetrate Indian homes. This issue of complexity is important when entering a market with
hi-tech consumer products.

Divisibility or Facilitates Trial:

The degree to which the new product may be tried on a limited basis. This means the extent to which the
new product can be tried on a small scale basis before going for full-fledged use of the same. If the
consumers have got the option of trying out the product and then decide to buy if trial result found
satisfactory, the innovation’s rate of adoption increases.
For instance, when ‘Braun India’ pioneered the ‘epilator’ in a market, where its target consumers were
using the traditional method of waxing, the company needed to convince women that using ‘Silk Epil’
was more convenient, so it offered a six-day money back trial offer to its consumers, reassuring that if she
didn’t feel comfortable with the product, she (the consumer) could always return it.

At times marketers, when introducing products such as shampoo or detergent powder or tooth paste, use
small trial packs (free samples) or rupees-off coupons to enable consumers have a first-hand direct
experience with the product. Even car manufacturers such as Maruti, Hyundai, Ford etc., offer ‘test drive’
for their new car models to provide customers a direct product experience.

Communicability or Observability:

The fifth characteristic is the innovation’s communicability. The degree to which the results are observable
or can be described to others or the ease with which a new product’s salient features are observed.

A new product concept will work if the new technology or new product usage can be described and
demonstrated. For example, ‘Eureka Forbes’ has been able to gain easy acceptance of its products such as
the ‘Aqua guard’ and ‘Vacuum cleaner’ through adopting the method of observation through
demonstration.

The above are the typical product characteristics which can influence an innovation’s diffusion process
but, apart from the above, there are certain other characteristics which could influence the rate of adoption
like initial costs, ongoing costs, risk and uncertainty, scientific credibility, selection of channel of
communication and social system or social approval.

These characteristics are also important determinants affecting the rate of adoption. So marketers involved
in new products development have to undertake research and also consider the above factors.

When Air Deccan had entered the market as a low cost air flier, it had used various mass media (T.V
newspaper, magazines etc.,) to communicate about the various product services, offering benefits such as
low costs, saving of time spent on travel and so on, in an attempt to woo potential customers.

The key factor affecting the diffusion process may vary from product to product. So marketers have to
pay maximum attention to the key ones while developing new products and then design a suitable
marketing programme accordingly.

4 Basic Elements of the Diffusion Process of Innovation

Rogers (1962) defined diffusion as ‘the process in which an innovation is communicated through certain
channels over time amongst the members of a social system’. He defined diffusion of innovation process
as ‘the spread of a new idea from its source of invention or creation to its ultimate users or adopters’.
According to him, diffusion of innovation comprises four main elements, namely innovation,
communication channels, time, and social system.

The definition comprises four basic elements of the diffusion process:

1. Innovation: The term ‘innovation’ refers to the newness of the good or service offering. Rogers has
defined an innovation as ‘an idea, practice, or object that is perceived as new by an individual or other
unit of adoption’.

2. Channels of Communication: Channels of communication refer to means that helps transmit

information about an innovation from the marketers to the people in the social system as well as from one
individual to another. They include both marketing communication and interpersonal communication
through word of mouth (WOM). Marketing communication takes place between the marketer and the
potential market, or the target segment(s).

It could be personal (e.g., between the salesperson and the consumer) or impersonal (via print or audio -
visual media). Interpersonal communication takes place between the consumers or between the members
of the target segment(s). It could be WOM communication between consumers or through an opinion
leader. The quicker people come to know about an innovation through the mass media, Internet, and
WOM, both online and offline, the faster it would get diffused.

Mass media channels are regarded as cosmopolites while interpersonal channels in the form of WOM
communication are more localite. Diffusion of innovation depends a great deal on communication
between the marketer and the prospect, as well as communication amongst prospects or between prospects
and consumers. With advancement in technology and the Internet, people are exposed to newer goods and
services not only within their own country but also across the globe. Consumers are more aware and
informed today, and diffusion of innovation is faster.

3. Social System: The social system refers to the social setting in which the diffusion takes place.
Diffusion always takes place within a social system, similar to what happened with the farmer community
in case of the famous hybrid corn study. The social structure, prevalent values, and norms, as well as the
opinion leaders, influence the acceptance or rejection of innovation and affect the speed with which the
diffusion will take place.

For majority of the members of a social system (target market), the decision to adopt an innovation
depends on other members of the social system. In a way, it reflects the target market(s) for which the
good and service is designed, and within what segment(s) it would be diffused. For example, for a new
herbal anti-wrinkle cream, the social system would be confined to ladies who are in their mid-40s and
above.

Social influence is a significant factor that influences people’s decisions to accept or reject new ideas,
products, and services. Within a social system, people may possess positive or negative feelings towards
an innovation and may decide to entirely accept or reject it. The social structure can be assessed in terms
of homophile and heterophile. The more homophiles people in a group are, the stronger will be the ties,
the more will be the likelihood of transfer of ideas and information between them, and the stronger will
be the influence.

Further, when social systems are modern and people are up to date, diffusion is much faster compared to
a situation where social systems are traditional and conservative. Modern social systems are those where
people are aware and educated, and are open to change. In addition, adoption of an innovation can happen
anywhere on the social scale, and may manifest as a trickle- down effect, and trickle-up and trickle-across
innovations.

Opinion leaders are important when it comes to diffusion of innovation. The importance of opinion leaders
was proposed by Paul Lazarsfeld and his team in the 1940s and later by Katz and Lazarsfeld in the 1950s.
They proposed the concept of opinion leaders and opinion followers and how the media influenced both
the leaders and the followers. Rogers (1983) defines opinion leaders as ‘those from whom others seek
advice and information’.

Rogers (1983) defines opinion leadership as the ‘degree to which an individual is able to influence other
individuals’ attitudes or overt behaviour informally in a desired way with relative frequency’. Rogers
proposed that diffusion of innovation would be much faster if opinion leaders accepted it, and shared
information and advice about it.
With the advancement of technology, there has been a growth in electronic social networks. Today,
reviews, chats, and blogs also play an important role in the diffusion of innovation. Marketers resort to E -
WOM and encourage communication with and between current and prospective customers via social
media, often motivating their customers to spread the word. The company’s online social network page is
also used as a platform.

4. Time: Time is an important factor in the diffusion of innovation, as it determines the pace of adoption
and the resultant assimilation of the innovative offering. It specifies how long it would take for people to
adopt a new good or service. Researchers have studied the impact of time in three ways, namely amount
of purchase time, rate of adoption, and identification of adopter categories.

The amount of purchase time refers to the average time that a consumer takes to adopt a new good and
service offering. This would include the total time between the consumers’ initial awareness and the final
acceptance/ rejection of the new product or service. When the average purchase time is less, it can be
assumed that the rate of diffusion will be faster.

The rate of adoption is a measure of how long it takes a new product or service offering to be adopted by
the members of the target market. Rogers (2003) defines the rate of adoption as the relative speed with
which an innovation is adopted by members of a social system’. The rate of adoption is ‘relative’ in the
sense that people differ in the speed with which they adopt an innovation, and one adopter category is
quicker than another.

The rate of adoption depends on the traits and characteristics of people, in terms of their receptivity to
new things, as well as characteristics of the innovation itself, which draw people towards it or against it.
Some product categories get adopted instantly while some take a longer period of time. In any case,
initially, the rate of adoption of innovations is slow and gradual. With greater awareness about the good
and service category, through marketing communication and interpersonal communication, the rate of
adoption increases.

People differ with respect to their readiness to try and adopt new goods and service offerings. Based on
the length of time required for a certain percentage of the people in the target market, the adopters are
classified into adopter categories. Ryan and Gross (1943) were the first to propose the adopter categories,
which were later elaborated upon by Everett Rogers.
People in a population while adopting an innovation are normally distributed over time, as a bell-shaped
curve. The curve represents the frequency of consumers adopting a product over a period of time. Initially,
innovations are slowly adopted, then they experience a period of rapid adoption, and thereafter they
gradually level off. Further, the cumulative number of adopters in a population when plotted on a curve,
results in an S-shaped curve (i.e., adoptions across customer segments).

First, the S-shaped curve rises slowly as the adopters in a time period are few, and then it accelerates to
the maximum as about half of the people in the social system have adopted the innovation, and then it
continues to increase but at a slower rate, as the few remaining people finally adopt the new product or
service. While both curves, i.e., the bell-shaped curve and the S-shaped curve, illustrate the adoption of
an innovation over time, the bell-shaped curve illustrates the number of people adopting an innovation
each year, whereas the S-shaped curve illustrates the adoption on a cumulative basis.

5 Stages of Consumer Adoption Process (Buyer Decision Process for New Products)

It is interesting how consumers learn about products for the first time and decide whether to adopt them.

The adoption process for a new product is the mental process through which an individual passes from
first learning about an innovation to final adoption” and adoption as the decision by an individual to
become a regular user of the product. A new product is a good, service, or idea perceived by some potential
customers as new.

Concept of Consumer Adoption Process

Though most buyers of a product have some common needs, they are not alike in all respects.

Purchasers in the initial stages of a product’s life are considerably different from those who make their
purchases later. Some of their demographic characteristics may vary, their buying behavior may be
distinct, and their purchasing motives may differ.

To describe the various types of buyers who purchase a product over the course of its life cycle, the
marketing experts proposed an adoption process.

To build an effective strategy for market penetration, management must understand the consumer adoption
process. Kotler defines adoption as an individual’s decision to become a regular user of a product.

There was a time when marketers would offer their products to the mass market. Under this concept,
people everywhere were thought to buy a company’s product, and consequently, companies were inviting
everybody to buy their products by making them available in wider areas.

It would cost companies to spend heavily on promotion and distribution, most of which were wasted. It
led to the development of a concept called ‘heavy ­user target marketing.’

Under this concept, companies would target heavy users initially with their offers. This also suffered some
limitations as the heavy users vary in their tastes, preferences, adopter status, and brand loyalty levels.

From this experience, companies now prefer approaching the early adopters with their offers. To
understand the consumer adoption process, you should understand, in the beginning, two other concepts
– innovation and innovation diffusion process. If you have clear ideas on these two, you will identify early
adopters by utilizing your knowledge. “Innovation refers to any good, service, or idea that is perceived by
someone as new.” This suggests that even an old product can be considered by someone as an innovation,
provided he perceives it as new.The reason may be that he was not exposed to the product until now. On
the contrary, the innovation diffusion process is the spread of a new idea from its source of invention or
creation to its final adopters or buyers/users.
We are now in a position to define the consumer adoption process. “The consumer adoption process
focuses on the mental process through which an individual passes from first hearing about an innovation
to final adoption.” This suggests that an adopter of an innovation passes through five stages. In the
following section, we shall turn our attention to the stages of the adoption process.

These stages imply that the new-product marketer should consider how to help consumers move through
these stages. A manufacturer of large-screen televisions may discover that many consumers in the interest
stage do not move to the trial stage because of uncertainty and the large investment.

If these same consumers would be willing to use a large-screen television on a trial basis for a small fee,
the manufacturer should consider offering a trial-use plan with the option to buy.

For adopting a new product, at first, the consumer becomes aware of the new product but does not have
information about it. The consumer shows interest and searches for information about the new product. In
the third stage, the consumer evaluates whether trying the new product is worthwhile. After that, the
consumer tries the new product on a limited scale to improve its value assessment. At the last stage, the
consumer decides to make full and regular use of the new product.

1. Product Awareness: The consumer becomes aware of the new product but lacks information about it.
Initially, the consumer must become aware of the new product. Awareness leads to interest, and the
customer seeks information about the new product. Whether an innovation is continuous or not, people
are either little aware or aware of it initially.

Innovator, therefore, has to inform the adopters about the innovation. In the awareness stage, individuals
become aware that the product exists, but they have little information about it and are not concerned about
getting more. Adopters may be informed through advertising, publicity, or any other effort of the marketer.

2. Product Interest: The consumer seeks information about the new product. Once the information has
been gathered, the consumer enters the evaluation stage and considers buying the new product. By this
time, the innovation is introduced. It is now the time for the decision-makers to determine whether the
innovation relates to their needs. They enter the interest stage when they are motivated to get information
about its features, uses, advantages, disadvantages, price, or location.

Interest may or may not sparked, depending on whether the decision-makers perceive the innovation as a
relevant, feasible alternative to existing items.

3. Product Evaluation: Next, in the trial stage, the consumer tries the product on a small scale to improve
its value estimate. The consumer considers whether trying the new product makes sense. Adopters of the
innovations have to establish some evaluation measures to compare the new product with existing ones.
During the evaluation stage, individuals consider whether the product will satisfy certain critical criteria
for meeting their specific needs. The potential adopters consider the innovation’s benefits and determine
whether to try it.

4. Product Trial: The consumer tries the new product on a small scale to improve their estimate of its
value. If the consumer is satisfied with the product, they enter the adoption stage, deciding to use the new
product thoroughly and regularly. At this stage, the potential adopters examine, test, or try the innovative
product to determine its usefulness. In this stage, they use or experience the product for the first time,
possibly by purchasing a small quantity, taking advantage of a free sample or demonstration, or borrowing
the product from someone. During this stage, potential adopters determine the product’s usefulness under
the specific conditions they need. The trial stage for innovations is complex. Successful introduction
depends greatly on the new product’s characteristics, benefits, and perceived risks. Effective
communication is the key to achieving trial by consumers.

5. Product Adoption: The consumer decides to make full and regular use of the new product. The new
product is a good, service, or idea perceived by some potential customers as new. Individuals move into
the adoption stage when choosing that specific product when they need a product of that general type.
Here the buyers purchase the new product and can be expected to use it to solve problems. So, this final
stage of the process is indicated most directly by sales, but the innovation’s visibility is also a success
measure. However, please do not assume that they will eventually adopt the new product because a person
enters the adoption process. Rejection may occur after any stage, including the adoption stage.

Factors Affecting the Adoption Process

The three important factors affecting the adoption process are people’s readiness to try new products,
personal influence, and innovation characteristics. We shall now take up a brief discussion on how they
influence the product adoption process:

People’s Readiness

People differ in their readiness to accept new products, services, opinions, and ideas. Some people always
prefer adopting new market offers. Those who are venturesome and enjoy taking risks, younger in age,
have higher social status, and have favorable financial positions will be the innovators. Those who are
guided by respect treated as opinion leaders and consider themselves as cautiou s adopt early. The
deliberate persons are usually the early majority. Those who are skeptical and follow the majority adopt
once a large number of people try the product. Those who are tradition-bound, having insular attitudes,
and are suspicious, usually accept a product when the masses use it. To understand adopter categories and
locate the innovators and early adopters, a marketer should undertake an extensive study based on potential
customers’ demographic, psychographic, and media characteristics.

Personal Influence

Since we are social and human beings, we are always subject to interpersonal influence in our decisions.
The degree of personal influence varies according to the buying situation and individual in question. There
are some buying situations where we are influenced more by others. Again, personality type determines
the susceptibility of interpersonal influence. The submissive type of person is more influenced by others
than do the aggressive type of persons. In complex buying situation, particularly while buying expensive
items, personal influence works more than in simple buying situation and in buying small items.

Characteristics of the Innovation Influence Adoption Process

The following five characteristics of an innovation influence the adoption process.

 Relative Advantage: If a new product is perceived as superior to existing products, it will be

adopted quickly.
 Compatibility: If innovation is considered consistent with the individuals’ values and experiences,
it will soon be adopted.
 Complexity: If innovation is perceived as complex by a particular group of people, they will adopt
it slowly.
 Divisibility: If there is a scope of trying the innovation on a test or sample basis, the chances will
be adopted soon.
 Communicability: If the innovation benefits can be described easily or observed, it will be adopted
fast.

Categories of Adopters in the Diffusion Process of Innovations Identified by Everett Rogers

People in a social system differ with respect to innovativeness and the manner in which they respond to
an innovation.

In other words, the potential adopters of a new product or service category do not adopt it simultaneously
at the same time. The process occurs over time, and based on one’s ‘innovativeness’ (i.e., willingness and
readiness) to try out new products and services and the time taken to adopt an innovation, the various
adopters can be grouped into five adopter categories. So, the classification of people into adopter
categories is based on the relative time to adopt an innovation.

Innovativeness is always ‘relative’ in the sense that a person may be high or low on it when compared to
others in the social system. The premise of the categorization is that people in a target market differ from
one another with respect of their initial exposure to a new product and its final adoption.

So some people are fast in adoption of innovation, while others are slow and some lag behind. Researchers
have classified consumers into adopter and non- adopter categories, which range from two to five. It is
worth mentioning here that the consumers are classified based on the nature of the good or service as well
their willingness and readiness to innovate.
The adopter categories illustrate a classification scheme amongst members of the target segment(s), which
illustrates where one consumer stands in relation to another consumer with respect to time, which has
lapsed between the introduction of the new good and service and the adoption by a consumer(s). Everett
Rogers in his famous book, Diffusion of innovation, published in 1962, proposed a classification of
adopter categories.

Rogers proposed that based on people’s willingness to try out new products and services (innovativeness)
and time taken by them in adopting new products (how quick or slow one is compared to others), potential
adopters can be classified into five adopter categories.

According to Rogers, the adoption of an innovation follows a normal, bell-shaped distribution curve.
Based on the mean time of adoption (t) and its standard deviation (σ), the non-cumulative rate of adoption
and adopter distribution can be plotted as normal adopter distribution to form of a bell-shaped curve. The
adopters are classified into five adopter categories based on the mean and standard deviation.

These five adopter categories are:

i. Innovators,

ii. Early adopters,

iii. Early majority,

iv. Late majority, and

v. Laggards.

Innovators (Venturesome): Innovators are those consumers who are the first to go and purchase a new
good or service offering, and they comprise 2.5 per cent of the target market(s) adopters. They are the first
ones to buy, not because they possess a need or want, but because they desire new ideas and concepts, and
so seek product and service innovations.

They are eager and enthusiastic by nature, and continually willing to try new things, irrespective of price.
They buy innovative products because these products are new and different. As the term implies,
innovators have the greatest degree of innovativeness and are the first to own and adopt new products.

Innovators are younger by age, sound on financial resources, and higher in social status. They are generally
high on awareness, knowledge, and literacy levels. They are well informed, have access to credible sources
of information about innovative offerings, and are quick to purchase them; there are two reasons for their
purchase – one, because they have the interest and inclination to buy the ‘new’, and two, because they
have the purchasing power and the access.

Innovators are cosmopolitan, social, and gregarious by nature. They are extroverts and share information
with social networks that stretch beyond geographic boundaries.

Innovators are venturesome and adventurous, open minded, and less dogmatic. They are novelty seekers
and desire new ideas and concepts; hence, they seek product and service innovations. They are high on
need for uniqueness and desire higher OSLs. Further, they are low on brand loyalty and are always on the
lookout for new products. Because they are financially well off, they have high tolerance for risk and
ambiguity and are ready to take risks with respect to buying out the ‘new’.

Innovators are also high on self-confidence, and are always eager to try out new goods and services. They
are inner directed and rely on their own values and judgement. They seek information from a variety of
mass media sources. Their media habits include reading special-interest magazines, watching special-
interest programmes on TV, and accessing specific websites related to the product category, and they are
variety novelty seekers.

It is important to mention here that innovators are not ‘generic’. They are in most cases ‘specific’ to a
good and service type, and are heavy users of the good and service category in which they innovate.

Innovators buy things because they are new and they want to be amongst the first to try new things
irrespective of the uncertainty and the consequences. Further, while they are the first to buy and try new
things, innovators are not as influential as the next adopter category, that is, the early adopters, who are
second amongst the category of adopters.

Early adopters contribute a lot to WOM communication and are better skilled to convince others to try
and buy new things. Nonetheless, innovators play an important role as they introduce into the social system
anew idea, product, or practice. In this way, they play the role of gate keepers and help new ideas and
products flow into a social system.

Early Adopters (Respectable): The next 13.5 per cent of the target market(s) adopters are called early
adopters. Early adopters are also enthusiastic about trying and using new goods and services, but they are
pragmatic and rational. They look at pros and cons, and then rationalize their decision-making. They buy
the ‘new’ because they feel that it is better and offers more value. They are more confident about their
purchases. Early adopters adopt the innovation just before the average member of a social system.

Early adopters buy the ‘new’ good and service offering not because they are fascinated by the ‘new’, but
because they possess a need and want. They are quick to understand the value of innovation, in terms of
the need benefits, and are concerned with both the usability and sociability.

Like innovators, early adopters are younger by age, with high social status, high knowledge, and literacy
levels. They are less prosperous than innovators, but more than the early majority. Early adopters are more
socially directed and rely on group’s values and norms. They are well integrated and enjoy an important
position in their social contagion.

They are social and gregarious, popular amongst their social circle, and act as community leaders. They
are more localite, but cosmopolite as well, in contrast to innovators who are cosmopolitan. They are also
trendsetters and like to share their experiences with the early majority.

Early adopters are enthusiastic about an innovation but are more cautious about their decisions. They
generally tend to have some idea about the good/service category, and after gathering some more
information about the product and or brand, they go in for purchase. They are information gatherers, seek
novelty even if it means (taking risk), and have a desire for social prestige and status. Early adopters also
have their own media preferences, that is, print or broadcast. Like innovators they are heavy users of
product category.

Known as the lighthouse customers, early adopters play an active role in WOM and influence other
potential consumers. They occupy the position of centrality in the social network. They have the highest
degree of opinion leadership amongst all adopter categories. People approach them for advice, and the
very fact that they have adopted the innovation reduces the feeling of uncertainty and risk in others. They
provide information and convince others to buy.

Early adopters are also more careful in their choice of adoption, so that they retain the trust of others and
remain well respected. They believe that by being rational and buying the right product, they would be
able to enhance their social standing and maintain and/r enhance their position in the social communication
network. Because early adopters act as opinion leaders, they are often targeted by marketers.
Early Majority (Deliberate): The next in line to adopt an innovation (after innovators and early adopters)
are the early majority. The early majority makes up the next 34 per cent of the adopters, and adds towards
bringing profits to the company. The early majority are similar to the early adopters in the sense that they
buy the good or service offering because they possess a need and want and desire to satisfy it. They look
for benefits in an innovation and want to see how a new product can help them, and so they are highly
pragmatic. However, they are not as fast as the early adopters, and take longer to enter into purchase.

This is because unlike the earlier two categories, the early majority does not have much interest in the
product category. In addition, they perceive some risk with the ‘new’, and it is only after some people
have bought and used the new product and they have heard reviews or watched experiences of the
innovators and early majority that they decide to buy. They adopt a new produ ct only when they are
confident that it would be useful to them, and help them satisfy a need and want. The early majority buy
an innovative good or service just when an average person in the social system buys.

Consumers who fall into this category are above average in age and education and with medium socio-
economic status. They are careful and cautious about their purchases, and buy a new product after careful
investigation. They are conservative by nature and careful about accepting any kind of change.

The early majority seeks information from their neighbours and people within their social network and
deliberates a lot before adopting a new good or service. They rely on information on advertisements and
sales people but do not get swayed away by the marketer’s claims. In other words, while they are open to
change, they rely on suggestions, recommendations, and approval of others, who have already bought and
used the new product.

They wait for reviews of product experiences of others, and will buy a new product only after receiving
opinions and feedback from others, particularly early adopters. Because they collect information, evaluate
it, deliberate carefully, and then take a decision, the adoption process takes longer. Early majority adopt
the innovative good or service just before the average time.

Early majority are highly local, who integrate with people in their own community, and the opinions of
others matter to them. However, while they interact with others, they do not hold opinion leadership
position.

Late Majority (Sceptical): The next in line to adopt an innovation (after innovators, early adopters, and
late adopters) are the late majority. The late majority constitute the next 34 per cent of the adopters. They
are referred to as ‘late’ because of two reasons; first, members of their peer group, social class, and
reference group have already made the purchase, and the social influence is strong; second, they
themselves have evaluated the new good and/or service and are ready to buy it. The late majority take
time to think and evaluate the new product, and it is much later that they decide to buy. They buy a new
good and service just after an average person in the social system has done it. The late majority are older
in age, less educated, and lower in socio-economic status than the first three adopter categories. They
generally belong to the middle class and have a limited disposable income. They are price sensitive and
wait for prices to fall, so that they can afford it. They also like to bargain and negotiate. The late majority
are traditional and conservative, very cautious, and risk-averse by nature. They are skeptical of new goods
and services, and look for strong customer support. They have a need and want, and it is only after careful
thought and deliberation, as well as with social influence and pressure, that the ‘late majority’ make the
purchase. Even if they know that the innovation is useful, they would not buy it, and postpone the purchase
to as late as possible. However, when they buy, it is because of both social and peer pressure (to conform
and comply), as well as the necessity (due to decreased or non-availability of previously used goods and
services). This is mostly after most people in the social system have done so. The late majority adopts the
new good or service category after the average time, and after the majority of people have bought a nd
used it. Because late majority are risk-averse and cautious by nature, they depend on strong interpersonal
networks of family, peers, and colleagues for information and guidance, as it helps them reduce their level
of uncertainty. The late majority buyers buy once they have received positive reviews and heard positive
experiences of others. The late majority makes little use of mass media, and they believe more in WOM
communication. This is because they are well connected within their interpersonal networks, and trust
their friends, peers, neighbors, and relatives more than advertisements and other forms of marketing
communication. Interpersonal communication has a major role to play in their adoption of the ‘new’.

The late majority is as large a group as the early majority, and brings huge profits for the company.
However, they adopt a wait-and-watch approach before trying and/or buying a new good or service.
Because they buy the new product during later stages of the product’s life cycle, and because they are a
huge segment, they are important in extending the product lifecycle. So they constitute an important
segment for the marketer.

Laggards (Traditional): The laggards are the last to adopt a new good or service offering, and make up
the last 16 per cent of the target market. Laggards are slow and take more time than what is actually
necessary, and by the time laggards actually buy and use a new good or service, it is already on its way
towards obsolescence. In fact, it no longer remains ‘new’, and is in a new version altogether. In other
words, laggards buy the new product, X, when innovators and early adopters are in the stage of buying
the improvised or more advanced version of X, or a completely changed product as Y. Laggards are older
in age, less educated, and have a low socio-economic status. They do not have much of exposure, and
prefer to be in social contact with only their family members, relatives, and close friends, who share similar
traditional values. They rely on friends, peers, and neighbours as information sources.

Informal interpersonal WOM communication is essential in influencing the rate of adoption amongst
laggards. Because they are low on financial resources, they are price conscious and wait for prices to fall.
When they buy, they look for low prices, ease of use, and easy availability. In many cases, they buy
because of non--availability of traditional alternatives.

Laggards are conservative, and lay a lot of emphasis on ‘traditions’. They are skeptical, afraid, and
suspicious of anything ‘new’, and do not like to take risks. In other words, they are high-risk perceivers.
They are dogmatic, and dislike and resist change. Until the perceived trusted sources adopt the product,
laggards will not be convinced enough to buy something new. Laggards take the longest time to adopt an
innovation, and the innovation-decision process is the lengthiest.

They are slow in buying the innovative offering because of several reasons:

a. One, they are uninvolved with the good and service;

b. Two, they do not possess much information;

c. Three, they are tradition bound, and oriented to the past;

d. Four, they remain uninfluenced by social pressure, and social ties are not very strong; and

e. Five, they believe in making routine purchases and prefer to buy the ‘familiar’ rather than the
‘unfamiliar’.

Marketers generally try to ignore this category of adopters. This is because they cannot be convinced to
buy and use something that is new, and will buy much later when it is in the mainstream.

While laggards are often neglected by marketers, they often exhibit what is known as the ‘leapfrog effect’.
Jacob Goldenberg and Shaul Oreg (2007) introduced the concept of leapfrogging, and explained it as a
phenomenon wherein some laggards end up being innovators, or the earliest of the early adopters of an
entirely new product, by skipping various modifications and/or generations of the once considered ‘new’
product. In this way, they leave out several product generations and finally adopt the most recent
technology. This would mean high profits for the company.

For example, many people moved straight away from the personal computer (desktop) to the tablet (they
skipped the laptop). Another example is where people moved from the cassette player to the mp3 shuffle
(they skipped the Walkman or the CD Walkman). According to Jacob Goldenberg and Shaul Oreg,
laggards also upgrade to new products.

However, the difference between innovators and laggards is that while the former upgrade frequently and
immediately, the latter upgrade very infrequently. Because laggards are a big segment, they should not be
ignored. The job of the marketer is not to sell to laggards, but to persuade them to upgrade sooner rather
than later.

Rogers’ classification includes only the adopters. However, there also exist in the market a group of people
who do not venture into seeking a particular good or service, as it may not conform to their socio-economic
class or to their culture, or they may not have the need for such a good or service. Such people fall into a
class referred to as the non- adopters, which is a category that never adopts the new good or service, and
generally comprises a very small portion of the entire population.

Non-adopters may be classified into five categories, namely the unaware group, symbolic rejectors,
symbolic adopters, trial adopters, and trial rejectors. The inclusion and study of the non-adopter category
is crucial as it is reflective of reality, that not all consumers adopt all new good and service offerings.

The main focus of this process is the stages through which an individual consumer passes before arriving
at a decision to try or not to try, to continue using or to discontinue using a new product. Therefore, this
can also be called as Adoption – Decision ones a time. To know why many new products fail, marketers
need to understand the time and process required for adoption to occur.

Most of the organizations believe that if they just develop a new product that fits an important need
recognized by consumers and promote, price and distribute it well, sales will take place. But this does not
work always various models have been given by marketing analysts after examining the process of both
adoption and diffusion. The first was called AIDA (Awareness, Interest, Desire, Action), other alternative
Models were also conceptualized but with different terminology and with same process
Models of Adoption/Diffusion Process

(1) Knowledge: Consumer is exposed to the innovations existence and gains some understanding of how
it functions. In this stage, consumers are aware of the product but have made no judgment concerning the
relevance of the product to a problem or recognized need. Knowledge of a new product is considered to
be result selective perception and is more likely to occur through the mass media than in late stages which
are more influenced by opinion leaders.

(2) Persuasion: In this stage, usually attitude formation takes place that is consumer forms favorable or
unfavorable attitudes toward the innovation. Consumer may mentally imagine how satisfactory new
product might be in use, i.e., “vicarious trial” of the product in consumer’s mind. It is also considered as
the evaluation of consequences of using the product. This means consumers weigh the potential gains
from adopting the product against the potential losses of switching from the product now usedA person
may seek out new stories, pay particular attention to advertising for the product, subscribe to product
rating services, talk to experts in that product category etc. This is basically done to reduce perceived risk
in adopting new products. Each of the above information search and evaluation strategies has an economic
and/or psychological cost.

Many persuasion methods are used by marketers. One of the common arid effective method is catalogues,
specially used for new products because this provides more information than the typical retail setting. For
example – marketer can show the advantages ones present solutions of hair problems.

(3) Decision: Consumer engages in activities that lead to a choice to adopt or reject the innovation (i.e.,
adoption or rejection). Adoption can be defined as a decision to make full use of an innovation as the best
course of action. This means continued use of the product unless situational variables (lack of availability,
or money etc.) prevent usage. Rejection means not to adopt an innovation There may be some persons
who first consider adopting an innovation or at least give a trial, but then deciding not to adopt it. This is
called an active rejection. Others never consider the use of the innovation, known as passive rejection.

(4) Implementation: Implementation means consumer, puts the innovation into use. Until this stage, the
process is a mental exercise, but in this stage behavioral change is required Marketing plan is the
determinant of whether a good product has been communicated effectively (i.e., actually sales). Marketing
mix planned should be such that purchase is made easy. This means proper coordination of the channels
of distribution with new products and their communication process.

(5) Confirmation: Consumer seeks approval/reinforcement for the innovation decision, but may reverse
this decision if exposed to conflicting messages about the product. This stage is also influenced by
communication sources and consumers evaluate their purchase experiences. After evaluating, they try to
support their behaviour and later decide to continue or discontinue using the product.

Marketers consider studying discontinuance to be equally important as the rate of adoption. They study
so that marketing strategies can be tailor made with respect to the reasons for the same. It is seen that
people who adopt the product later than early adopters, are more likely to discontinue. Therefore,
marketers try to upgrade follow – up service and feedback as sales of a new product expands.
 Bharati Vidyapeeth (Deemed to be
University) Institute of Management and Research
(BVIMR), New Delhi
1st Internal Examination (February 2020)

Course: Semester:

Subject: Course Code:

Max. Marks: 40 Max. Time: 2

Hours

Instructions (if any) :- (Calculator is allowed)

Question No. 1 is compulsory. Attempt any two questions from Q2 to Q5. And attempt any
two question from section 2.

Sec
tion 1 Answer in 400 words. Each question
carry 06 marks.

Q. 1

Q. 2

Q. 3
 Q. 4

Q. 5 Write Short Note on any two. Answer in 300 words. Each carry 03 marks.

a)

b)

c)

Section 2 Attempt
any 2 questions. Each question carry 11 marks

Q 6.

Q 7.

Q 8.
 Bharati Vidyapeeth (Deemed to be University) Institute of
Management and Research (BVIMR), New Delhi
2nd Internal Examination (March 2020)

Course: Semester:

Subject: Course Code:

Max. Marks: 40 Max. Time: 2 Hours

Instructions (if any) :- (Calculator is allowed)

Question No. 1 is compulsory. Attempt any two questions from Q2 to Q5. And attempt any two question
from section 2.

Section 1
Answer in 400 words. Each question carry 06 marks.

Q. 1

Q. 2

Q. 3

Q. 4

Q. 5 Write Short Note on any two. Answer in 300 words. Each carry 03 marks.

a)

b)

c)
 Q 6.

Q 7.

Q 8.

Ist Internal Examination (August-2019)

Course: MBA Semester: III

Subject: Consumer Behaviour Course Code: MK01
Max. Marks: 40 Max. Time: 2 Hours

Instructions: Use of calculator for subjects like Financial Management, operation etc.
allowed ifrequired. (Scientific calculatoris not allowed).
Use of unfair means will lead to cancellation of paper followed by disciplinary action.
Question No. 1 is compulsory. Attempt any two questions from Q2 to Q5.
Attempt any two question from section 2.
Section 1
(Theoretical Concept and Practical/Application oriented)
Answer in 400 words. Each question carries 06 marks.

Q1. Discuss in detail the various determinants of consumer behaviour.

Q2. What is neo-Freudian theory? What are its implications for marketers?

Q3. Distinguish Id, Ego and Superego. How can these influence product choice?

Q4. What is personality? Discuss the trait theory of personality.

1
Q5. Write Short Note on any two. Answer in 300 words. Each carries 03 marks.

a)Consumer Behaviour Applications in Marketing

b) Social Class & Reference Groups

c) Characteristics of Memory
Section 2
(Analytical Question / Case Study / Essay Type Question to test analytical and
Comprehensive Skills)

Answer in 800 words. Attempt any 2 questions.Each question carries 11 marks

Q6. Interview one male and female consumer and attempt to find out products and
situations leading to high and low involvement conditions for them. What are the
implications for marketing to influence such consumers?
Q7. Assume that you are working as a marketer in an organization. Mention three
marketing situations where the principles of grouping can be used with advantage.
Q8. A Case Study (Family Influence)

A certain store was keeping a number of brands of washing machines. They had washing
machines to cater to the needs of all the segments of the society. They were stocking IFB,
Videocon, BPL, National, Godrej, and local made washing machines as well. They had
both automatic, semi-automatic and manual machines. The automatic machines were
bought by the higher income group. The middle income group were content with semi-
automatic machines. Manual hand operated machines were for the lower class of clientele,
and also those living in the rural areas, where electrification was not complete or the
electricity went off for days together.
It was observed that when customers came to buy an automatic machine, they usually came
with their spouses and they looked mainly at the colour, style of functioning, electric
consumption, care for handling, price factors, etc. Many customers would not buy on their
first visit. They would come back after an interval of time, and bought the machine after

2
careful considerations of the attributes that they were looking for. Many would lower their
choice, and come back to buy semiautomatic, instead of automatic machines.

The sale was observed to be highest during marriage seasons and at festival times. There
was a great influence of the house-wives in buying these, as they were the ultimate users.
With a lot of information imparted by the media, and the children being exposed to it for
several hours, in a day. They seemed to have a good knowledge of the attributes, and had
a great say in the purchases and their opinions were also given weightage by the parents.

Since a chain store is more interested in the sales to materialize, rather than pushing any
particular brand, the salesmen are directed to satisfy the customers or the family. This
should be their first consideration.
Answer the following questions based on above case study.

1. Do you feel that group interaction helps the buyer too, in his decision-making process?
Elaborate.-6 Marks

2. What should be the role of the marketer in the above case regarding advertisement
promotion, persuasion and closing the sales?-5 Marks

2nd Internal Examination (October, 2019)

Course: MBA Semester: III

Subject: Consumer Behavior Course Code: MK01
Max. Marks: 40 Max. Time: 2 Hours

3
Instructions:-Use of unfair means will lead to cancellation of paper followed by
disciplinary action.Question No. 1 is compulsory. Attempt any two questions from Q2
to Q5. Attempt any two question from section 2.
Section-I
Answer in 400 words. Each question carries 06 marks.
Q1. How does consumer buying differ from organizational buying? Explain with suitable
examples.
Q2. Compare and contrast between Howard-Sheth Model and Nicosia model.
Q3. Explain diffusion of innovation. How the diffusion of innovation enhances consumer
behavior?
Q4. Highlight the importance of consumer research in modern marketing environment.
What practices do the companies adopt to know more about the behavior of their
consumers and customers?
Q5. Write Short Note on any two. Answer in 300 words. Each carries 03 marks.
a. Impact of Culture on Buying Behavior
b. Customer Delight
c. Customer Satisfaction & Dissatisfaction
Section-II
Answer in 800 words.Attempt any 2 questions.Each question carry 11 marks
Q6. Suggest a plan for using the process of personal influence in the following marketing
situations:

a. A campus clothing store- (4 Marks)

b. A new food product- (4 Marks)
c. A new novel- (3 Marks)

Q7. Though technologies have improved over the years, customer satisfaction has declined.
How do you explain this contradiction? How can companies use the latest technologies to
improve customer experiences and satisfaction?

Q8. What type of innovations are the products mentioned below? Identify the
characteristics of people who adopted these products.

4
(i) Cellular Phones- (3 Marks)
(ii) Tablet PC- (4 Marks)
(iii) Wristwatch with Camera- (4 Marks)

5
MULTIPLE CHOICE QUESTIONS

The buying process starts when the buyer recognizes a _____

A. Product or service
B. Shop or market
C. Money or status
D. Need or problem

ANSWER: D

Any individual who purchases goods and services from the market for his/her end-use is called
a..................

6
A. Customer
B. Consumer
C. Purchaser
D. All options

ANSWER: B

The customers who purchase goods in order to add value and resell them. These include
Manufacturers, Wholesalers, Distributors, Retailers etc.
A. Final costumer
B. Trade Customer
C. Consumer
D. Buyer

ANSWER: B

The social factors which influence the consumer behaviour are

A. Status
B. Reference group
C. Family
D. All options

ANSWER: D

Which of the following is not an importance of studying consumer behavior?

A. Consumer Differentiation
B. Gives insight about retailer
C. Developing new product
D. Dynamic Nature of Market

Answer: B

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CASE STUDY:

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Declaration by Faculty I, Ms. Anjali Garg, Assistant Professor, Teaching Consumer Behaviourt subject in
BBA V have incorporated all the necessary pages/ sections/ question papers mentioned in this check list above

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