CONSUMER BEHAVIOUR - MG UNIVERSITY 3RD SEMESTER - FULL NOTES

1. CONSUMERBEHAVIOUR – MG UNIVERSITY
MODULE 1
Responses
1) Affective responses- Feelingsandemotions
2) Cognitive responses- Beliefs,opinions
3) Behavioural responses- Actioninvolvedwhile obtaining,usingand disposinggoodsor services
“ConsumerBehaviourcan be defined as the behaviourthat consumersdisplay in searchingfor,
purchasing, evaluating,and disposingofproducts and servicesthat they expectwill satisfytheir
needs”.
Whobuys products or services?
What do they buy?
How do they buy products or services?
Where do theybuy them?
Whendo theybuy them?
How often do theyuse them?
Relevance ofUnderstanding
1) Knowledge ofbuyer(s),hisor her buyingmotivesand buying habits
2) Adopt a customer culture
3) Meettheir needs
4) Solicit supportfrom society
NATURE

2. SCOPE
A ) Involvesan understandingof consumer behaviourat two levels:
1) Personal consumer level
2) Organisational consumerlevel
B) Obtaining
C) Consuming
D) Disposing
Applicationsof ConsumerBehaviour
• Marketing Strategy
• Regulatory Policy
• Social Marketing
• InformedIndividuals
Products and servicesare external experience isinternal to each customer
Marketing Strategy and ConsumerBehavior

3. • Regulatory Policy: Various bodiesexistto develop,interpretand/or implementpolicies
designedtoprotect and aid consumers
Social Marketing:Applicationof marketing strategiesand tactics to alter or create
behaviorsthat have a positive effectontargeted individualsor societyas a whole
• InformedIndividuals:Consumersunderstandthe strategiesand tactics beingusedso they
can be more effective consumers.
Factors influencingConsumerBehaviour
The ConsumerResearch Process
– definingthe objectivesofthe research
– collectingand evaluatingsecondary data
– designinga primary research study
– collectingprimary data
– analyzing the data
– preparing a report on the findings
ConsumerDecisionMaking
• It may be definedas a process of gatheringand processinginformation,evaluating it and
selectingthe bestpossible optionso as to solve a problemor make a buyingchoice.

4. Types ofConsumer BuyingDecisions
Routine
Response
Behavior
Limited
Decision
Making
Extensive
Decision
Making
Extensive ProblemSolving
Unaware of the various brands that are available and from whichto evaluate and thus,
The situationrequiresextensive informationsearchand evaluation
He has to gather knowledge about

5. – the decisioncriteria;
– the brands available;and make a choice amongst the brands
–
Types ofproducts withEPS
• These goods are onesof high involvement
• They are expensive
• They are infrequentlybought
• There is considerable amount of risk involved
• These are generallyfirst time purchases
Examples:Jewelers,electronicgoods,Real estate and propertyetc
Limitedproblemsolving
• The consumeris familiar withthe product category but unfamiliarwith the brands.
• The consumer:
– Is aware of some brands and also of the various criteriaused to evaluate the
product or service offering.
– Is unaware of the newbrands that have beenintroduced.
• These goods are onesof mediumlevel involvement
• They are generallymoderatelypriced
• They are bought occasionally
• There is lesseramount of risk involved.
• Example :A newpair of shoes,a secondTV for the home
RoutinizedResponse Behavior
The consumeris well informedand experiencedwiththe product or service offering,aware of
both the decisioncriteria,as well as the various brands available
• The goods are onesof low involvement
• They are inexpensive
• They are frequentlybought
• There is no risk involved

6. RolesPlayedby a Buyer While Makinga BuyingDecision
• Initiator- A personwho starts the process of consideringa purchase since he/she feelsthe
needfor the product.
• Influencer- Persuadesothersinthe decisionmakingprocess to influence itsoutcome.
• Decider- The personwho decidesonthe final choice: what is to be bought, when, from
where and how
• Payer- Person with the power and financial authority to purchase the product
• Buyer- The person who entersinto the final transaction and exchange process or is
involvedinthe physical activity of making a purchase.
• User- The person(s) whoactually consumesthe product or service offering.
ConsumerModeling
• Facilitate learningof what is known of ConsumerBehaviour
• Assiston constructinga theory that can guide research inConsumerBehaviour
MODELS
ECONOMETRIC MODELS: The Focus is on the “Act ofPurchase” ofan “Average Consumer”.
Explains“What” a Consumer wouldpurchase and “In What Quantity”.
ASSUMPTIONS
• Individual needsare unlimited
• Individual needscannot be fullysatisfied
• Individual is completelyaware of his needs
• Individual is a rational buyer
• Individual has the perfectinformationabout the utilityof products available in the market
CRITICISMS
• Economic Modelsignoresthe effectof
o Perception
o Attitude
o Motivation
o Personality
o Learning Process
o Social Classand culture

7. Psychoanalytical Model
• Introducedpersonalityas a motivating force in human behavior.
• Mental framework of a human beingiscomposed ofthree elements
 The Id
 The Superego
 The Ego
CRITICISMS
• All the behaviourscannot be attributed to satisfaction ofId.
• This model viewsconsumersas individualswithminimal influence ofthe family,society,
reference groups,or other social and group influences.
• Valuesof individual are liable to change over a period oftime
Sociological Model
• Individual is a part of the society & various groups
• Buying Behavior ofan individual isinfluencedbythese groups
• family,friendsand close associates exertthe maximuminfluence
• OpinionLeader influencesthe life-style andbuyingbehaviourof an individual
END OF MODULE 1

8. MODULE 2
Individual Determinantsof ConsumerBehaviour
Motivation
Personality
Perception
Learning
Attitude
Dynamics of Motivation
Motivationis produced by a state of tension,by having a needwhich is unfulfilled
Motivationis the drivingforce withinindividualsthat impelsthemto action.
PROCESS OF MOTIVATION
A needis somethingthat is necessaryfor humans to live a healthylife.
Needscan be objective andphysical
• Innate Needs(BiogenicorPrimary) – Physiological needs
• AcquiredNeeds(Psychological or Secondary) – Learnedfrom culture or environment.
• Needsmay have a positive or negative direction.

9. A goal or objective isa projectedstate of affairs that a personor a system plans or intendsto
achieve
• Generic goals:are general categoriesof goals that consumers see as a way to fulfill their
needs
• Product-specificgoals:Are specificallybrandedproductsor servicesthat consumersselect
as their goals
• Goalscan be positive or negative.
– Positive Goal (Approach Object) – towards which behavioris directed.
– Negative Goal (Avoidance Object) – behavior whichis directedaway.
Types and Systemsof Needs
1) Murray’s list of PsychogenicNeeds
AmbitionNeeds,materialisticneeds, powerneeds,affectionneedsandinformation
needs.
AmbitionNeeds
– 1) Needfor achievement- To overcome obstaclesand succeed
– 2) Needfor Recognition - To attract attention
– 3) Needfor Social Recognition - To gain approval and social status
–
Material Needs
1) Acquisition- To obtainpossessions
2) Construction- To buildor create
3) Order - To arrange, organize
4) Retention- To keepthings that have beenacquired.
InformationNeeds
Cognizance:To seekknowledge and ask questionsabout things in order to understand.
Exposition-Educatingothers
Power Needs
• Abasement- Confessing& apologizing
• Autonomy
• Aggression
• Blame avoidance-Followingthe rulesandavoidingblame

10. • Deference-Obeyingandcooperatingwith others
• Dominance
AffectionNeeds
• Affiliation-Spendingtime withotherpeople
• Nurturance-Takingcare of anotherperson
• Play
• Rejection
• Succorance - Beinghelpedor protectedby others
2 ) Maslow’sHierarchy of Needs
Trio of Needs
Power refersto individual’sdesire tocontrol other people andobjects
Affiliationsuggeststhat behavioris influencedbythe desire for social ties.
Achievementregardneedfor personal accomplishment
The MeasurementofMotives
• Self-reportedmeasuresofmotivesconsistof writtenstatementswhich ask respondentsto
indicate how relevanteach statementis to them.
• Qualitative research to delve intothe consumer’sunconsciousor hiddenmotivations.
Self-Actualization
(Self-Fulfillment)
Ego Needs
(Prestige, Status, Self-
esteem)
Social Needs
(Affection, Friendship, Belonging)
Safety& SecurityNeeds
(Protection, Order, Stability)
Physiological Needs
(Food, Water, Air, Shelter)

11. • Motivational research refersto qualitative studiesdesignedtouncover consumer’s
hiddenmotivations
Personality
• The innerpsychological characteristics (the specificqualities,attributes,traits, factors, and
mannerismsthat distinguishone individual fromother individuals) thatboth determine
and reflecthow we think and act.
• Personal reflectsindividual differences
• Personalityis consistentand enduring
• Personalitymay change
Theoriesof Personality
• Freudiantheory suggestsunconsciousneedsor drivesare at the heart of human
motivation.
• Neo-Freudiantheorysuggestssocial relationshipsare fundamental to the formation and
developmentofpersonality.
• Trait theorytakes a quantitative approach to personalityas a set of psychological traits
PersonalityTraits and ConsumerBehavior
1) ConsumerInnovators and Innovativeness
1. Functional factors reflectinterestinthe performance of an innovation.
2. Hedonicfactors relate to feelinggratifiedbyusing the innovation.
3. Social factors reflectthe desire tobe recognizedby othersbecause of one’spursuit of
innovations.
4. Cognitivefactors expressthe mental stimulationexperiencedbyusingan innovation
Levelsof Innovativeness
Global innovativeness—atraitthat existsindependentofanyproduct-relatedcontext
Domain-specificinnovativeness—anarrowlydefinedactivitywithina specificdomainor
product category
Innovativebehavior—actionsorresponsesthat indicate earlyacceptance of change and
adoption of innovations
2) Dogmatism
One’sdegree of rigiditytoward informationand opinioncontradictory to one’sbeliefsand
views(i.e.,closed-mindedness).
Dogmatic individualsare lesslikelyto be innovators.

12. 3) Social Character
Social character describesan individual’sinneror other-directedness.
Inner-directedconsumersrelyon theirown inner valuesor standards in evaluatingnew
products
Other-directedconsumerslookto others for guidance
4) Needfor uniqueness
An individual’spursuitof differentnessrelativetoothersthat is achievedthrough the
acquisitionof consumergoods
5) Optimum stimulationlevel (OSL)
Degree to which people like novel,complex,andunusual experiences
6) Sensationseeking
One’sneedfor varied,novel,and complexsensationsand experiences,andthe willingness
to take risks for the sake of such experiences.
7) Varietyand noveltyseeking
Consistsof:
1. Exploratorypurchase behaviorincludesswitchingbrands to experience new,different,
and possiblybetteralternatives.
2. Vicariousexploration consistsofgathering informationabout new and different
product alternativesand contemplatingbuying them.
3. Use innovativeness meansusingan already adopted product in a new or novel way.
8) Needfor cognition(NFC)
Measuresa person’scraving for or enjoymentof thinking.
9) VerbalizersVs.Visualizers
Verbalizerspreferpromotional messagescontaininga lot of written, textual,and verbal
information.
Visualizersare more receptive to pictorial images
10) ConsumerMaterialism
Materialismgauges the extentto which an individual ispreoccupiedwithpurchasing and
showingoff physical possessionsthat are mostly nonessential andoftenconspicuous
luxury goods.
11) Personality& Colour
Consumersnot only ascribe personalitytraits to products and services,but also associate
with specificcolours.
Coca-cola – Red which connotes“excitement”

13. Brand Personification
• Brand personificationoccurswhen consumersattribute human traits or characteristics to
brand.
• A “brand personality” providesan emotional identityfora brand, which produces
sentimentsand feelingstowardsthe brand among consumers.
Self-Concept/SelfImage
• Representsthe way a person viewsherselforhimself.
• Perceptionsofselfare oftenrelated to the purchasesof products and services
Componentsof SelfImage
• Actual self-image ishowthe consumerssee themselves
• Ideal self-image ishow consumerswouldlike to see themselves
• Social self-image ishowconsumersfeel otherssee them
• Ideal social self-image ishowconsumers wouldlike others to see them
ConsumerPerception
• The processby whichan individual selects,organizes,andinterpretsstimuli intoa
meaningful and coherentpicture of the world
• It can be describedas “how we see the world around us”
ElementsofPerception
1) Sensory Input
– Sensationis the immediate anddirect response ofsensory organs to stimuli.
– A stimulusis any unit of input to any of the senses.
– Examplesof stimuli (sensoryinputs) include products,packages, brand names,
advertisements
–

14. 2) The Absolute Threshold
Lowest level at whichan individual can experience asensation
The pointat which a person can detect a difference between“something” and“nothing”
is that person’sabsolute thresholdfor that stimulus.
3) The Differential Threshold
The minimal difference thatcan be detectedbetweentwosimilar stimuli
Also calledJust Noticeable Difference
4) Subliminal Perception
People can be stimulatedbelowtheir level ofconsciousawareness as well.
They perceive stimuli withoutconsciouslyaware that theyare doing so
Stimuli that are too weak or too briefto be consciouslyseenor heard may not be strong
enoughto be perceivedbyone or more receptorcells.
PROCESS OF PERCEPTION
Perceptual Selection
• An individual maylookatsome things,ignore others,andturnawayfromstill others.
• People receive onlyafractionof stimuli towhichtheyare exposed
ConceptsConcerningSelective Perception
• SelectiveExposure
• SelectiveAttention
• Perceptual Defense
Selective Exposure
Occurs whenconsumerstune intomessagesthattheyfindpleasantorwithwhichtheyare
sympathetic,andtheyactivelyavoidpainful orthreateningones
Selective Attention
Consumersare likelytonote adsforproductsthat wouldsatisfytheirneedsanddisregardthose in
whichtheyhave nointerest.
Perceptual defense
Occurs whenconsumersscreenoutpsychologicallythreateningstimuli.Individualssometimes
unconsciouslydistortinformationthatisnotconsistentwiththeirneeds,valuesandbeliefs

15. Perceptual Organization
• People donotexperience the numerousstimuli theyselectfromthe environmentas
separate
• Theytendto organise them intogroupsandperceive themasunifiedwhole
Principlesof Perceptual Organisation
1) Figure & Ground
2) Grouping
3) Closure
1) Figure andground
– Referstothe interrelationshipbetweenthe stimulus(figure) andthe environment
(ground)
– Stimuli thatcontrastwith environmentare more likelytobe noticed
2) Grouping
– Refersto peoples’instinctive tendencytogroupstimuli togethersothat they
become a unifiedpictureorimpression
3) Closure
– Lays emphasisonanindividual’sneedforcompletion.
– If theyperceive astimulusasincomplete,theyare compelledtofigure outits
complete meaning
Perceptual Interpretation
• The final sub-processinthe perceptual processisreferredtoasperceptual interpretation.
• It isa purelycognitiveprocess,whichisresponsibleforextractingmeaningoutof the
organizedstimuli(“whole picture”) thatapersonis exposedto.
Perceptual Influences
• Physical Appearance
• Stereotypes-Individualscarrybiasedpicturesintheirmindsof the meaningof variousstimuli
• Firstimpressions
• Halo effectreferstooverall evaluationof anobjectbasedonone or few of dimensions.

16. ConsumerImagery
Referstoconsumers’perceptionsof all the componentsof products,services,andbrandsandto
howconsumersevaluate the qualityof marketers’offerings
ConsumersPerceivedImage are formedrelatedto:
• Brand
– The marketercreatesan image of the product/service offeringand/orthe brandin
the mindof a consumerthroughpositioning
– Thispositioningmay be onpointsof parity,stressinghow he isbetterthanthe
competitororit may be on pointsof difference,stressinguponthe USPor the
unique sellingproposition.
• Package
– Alsoconveysbrand’simage
• Service:Service marketersface several uniqueproblemsinpositioningandpromotingtheir
offerings
• PerceivedPrice isthe customer’svalue thathe or she receivesfromthe purchase
PerceivedRisk
• Uncertaintythat consumersface whentheycannotforesee the consequencesof their
purchase decisions
• Two dimensions
• ElementsofPerceivedRisk are:
• Functional Riskdealswiththe riskthatthe productwill notperformasexpected.
• Physical Riskisthe riskto self andothers.
• Financial Riskisthatthe product will notbe worthitscost
• Psychological Risk apoorproductchoice will hurtthe consumer'sego
• Time Riskisthat the time has beenwastedinpurchasingthisproduct.
How ConsumersHandle Risk
• SeekInformation sothat theyhave more knowledge whentheypurchase.
• Stay Brand Loyal therebyavoidingriskbystickingwithaknownproduct.

17. • Selectby Brand Image toreduce theirriskbecause theymayalreadyknow andtrust the
brand
• Rely on Store Image
• Buy the Most Expensive Model assumingthatthe price/qualityrelationshipwill safely
deliverthemthe bestproduct.
• SeekReassurance throughmoney-backguarantees,warranties,sealsof approval andfree
trials.
Attitude
• A learnedpredispositiontobehave inaconsistentlyfavorableorunfavorable mannerwith
respectto a givenobject.
• Objectcan be products,brands,services,package,promotional measures,price,pointof
purchasesi.e retailersellingthe product.
• Attitudesare learnedfromdirectexperience withthe product,exposure tomassmedia,and
otherinformationsourcesthatconsumersare exposedto.
Attitude Formation
• Consumerslearnattitudes
• Sourcesof attitude formation
– Experience
– Familyandfriends
– Media/Internet/Social Media
• Role of personalityfactors
– Needforcognition
– Innovativeness

18. Modelsthat explainhow attitudesaffect behavior
1) Tri-ComponentAttitude Model
The cognitive component
• Consistsof a person’sknowledge andperceptionsof the featuresof anattitude object
• Commonlyexpressedas beliefs;
The affective component
• Representsthe consumer’semotionsandfeelingsregardingthe attitude object,or
evaluations
The conative component
• Reflectsthe likelihoodthatanindividual will undertakeaspecificactionorbehave ina
particularwaywithregard to the attitude object
2) Multi-attribute attitude models
Portrayconsumers’attitudesasfunctionsof theirassessmentsof the objects’prominent
attributes.
a) Attitude-Toward-ObjectModel
Maintainsthat a consumer’sevaluationof aproductis a functionof:
a. The extenttowhich the product has (orlacks) eachof a givensetof attributes.
b. The importance of eachof these attributestothe consumer.
b) Attitude-toward-behaviormodel
Capturesindividual’sattitude towardbehavingoractingwithrespectto an object

19. c) Theory of ReasonedAction
Like the tri-componentmodel,the theoryofreasonedaction (TRA) incorporatesthe
cognitive,affective,andconative components.
It addsthe measurementof subjectivenorms thatinfluence aperson’sintentiontoact
before gaugingthe levelof intention.
d) The Theory Of Trying-to-consume
Representscaseswhere the outcome of acontemplatedaction(e.g.,apurchase),stemming
froma positive attitude,isuncertain,butisstill beingpursuedbythe consumer.
3) The Attitude-Toward-The-AdModel
Proposesthatthe feelingsconsumersformwhentheyseeandhearadssignificantlyimpact
theirattitudestowardsthe brandsadvertised.
Four Basic Functions of Attitudes
• The UtilitarianFunction
– How well itperforms
• The Ego-defensive Function
– To protectone’sself-concept
• The Knowledge Function
– To understandthe charactersof people,eventsandobjects
• The Value-expressive Function
– To conveyone’svaluesandlifestyles(self-concept)
END OF MODULE 2

20. Module III
Group Influences
GroupsDefined
• Group: ‘Twoor more individualswhoshare aset of norms,values,orbeliefs,andhave
certainimplicitlyorexplicitlydefinedrelationshipswhichmake theirbehaviour
interdependent’.
• Reference group:‘A groupwhose presumedperspectivesorvaluesare beingusedbyan
individualasthe basisforhisor her currentbehaviour’
Reference GroupInfluence
• Normative influence consistsof learningandadoptingagroup’snorms,values,and
behaviors.The mostpertinentnormativeinfluence comesfromgroupstowhichpeople
naturallybelong,suchasfamily,peers,andothermembersof one’scommunity.
• Comparative influence ariseswhenpeople compare themselvestootherswhomthey
respectandadmire,andthenadopt some of those people’svaluesorimitate their
behaviors.
•
Types ofReference Groups
• A groupto whicha personbelongsto,or realisticallycanjoin,iscalleda membershipgroup.
• A symbolicgroup is a group to whichan individual isunlikelytobelong,butwhose values
and behaviorsthatpersonadopts
Consumption-RelatedReferenceGroups
• . Friendshipgroups
– Friendsfulfillawide range of needs
– Theyprovide companionship,security,andopportunitiestodiscussproblemsthat
an individualmaybe reluctanttodiscusswithfamilymembers.

21. • Shoppinggroups : People mayshoptogetherjusttoenjoyshoppingortoreduce their
perceivedrisk;thatis,theymaybringsomeone alongwhose expertiseregardingaparticular
productcategory will reduce theirchancesof makingincorrectpurchases.
• Virtual communities:
– Many websitesencourageconsumerstoleave commentsandhave othersrespond
to them.
– The fact that people canshare theirinterests,hobbies,andopinionswiththousands
of peersonline hasbenefitedmarketers.
• Advocacy groups:
– The objective of consumption-focusedadvocacygroupsistoassistconsumersin
makingconsumptiondecisionsandsupporttheirrights.
– There are twotypesof advocacy groups:
– Entitiesorganizedtocorrecta specificconsumerabuse andthendisband,and
– groupswhose purpose istoaddressbroader,more pervasive problemareasand
operate overan extendedperiodof time.
Factors AffectingReference GroupInfluence
Conformity
To influence itsmembers,areference groupmust:
• Informmembersthatthe brandor productexists.
• Provide opportunitytocompare thinkingwiththe attitudes/behaviorof the group.
Group powerand expertise
• Differentreference groupsmayinfluence the beliefs,attitudes,andbehaviorsof individuals
at differenttimesorunderdifferentcircumstances.
• Consumerswhoare primarilyconcernedwithapproval fromothersusuallyadoptthe same
productsand brandsas those group memberswhohave status.

22. Relevantinformationand experiences
• Individualswhohave firsthandexperience withaproductor service,orcan easilyobtain
detailedinformationaboutit,are lesslikelytobe influencedbythe advice orexampleof
others.
Product conspicuousness
• The degree of reference groupinfluence onpurchase decisionsvariesaccordingtoproduct
conspicuousness.(Verbal orVisible)
• Productsthat are especiallyconspicuousandstatusrevealingare mostlikelytobe
purchasedwithaneye to the reactionsof relevantothers.
PersonalityTraits
• People whoare compliant,have atendencytoconformanda highneedforaffiliation,need
to be likedbyothers,andare other-directedare more receptive togroupinfluences.
Opinionleadership
• Opinionleadershipisdefinedasthe processbywhichone person-the opinionleader-
informallyinfluencesothers
• Theymay be opinionseekersorrecipients
• Opinionleadersare influential membersof acommunity,group,orsocietytowhomothers
turn foradvice,opinions,andviews.
OpinionLeaders
• Informationprovided
– Bestbrands
– Use of brands
– Where to buy
• Importantfor services
• Categoryspecific
• Motivations

23. Characteristics ofOpinionLeaders
• Knowledgeable inproductcategory
• Self-confident,outgoing,sociable
• Readspecial-interestpublicationsandwebsites
• Oftensame socioeconomic&age groupas receivers
MeasuringOpinionLeadership
• The self-designatingmethodemploysaself-administeredquestionnaire
• It requiresrespondentstoevaluate:
• The extenttowhichtheyhave providedotherswithinformationaboutaproduct categoryor
specificbrand
The sociometricmethod
• Measuresthe person-to-personcommunicationsaboutaproductor brand amongmembers
of a same communitywhere mostpeopleknow eachotherbyname.
Key Informant
• A personwhoiskeenlyknowledgeableaboutthe nature of social communicationsamong
membersof a specificgroup
Klout Scores
• Measurespeople’sinfluence online basedontheirabilitiestogenerate engagementand
feedbacktowhattheypost.
• Measuresinfluence onascale of 1 to 100
Personal influence andOpinionLeadership
• An individual haslimitedknowledge
• A personcannotevaluate options
• The consumerdoesnot trustadvertisingorothersourcesof information
• Otherinformationsourceshave low credibilitywiththe consumer
• The individual hasahighneedforsocial approval
• Strongsocial tiesexistbetweensenderandreceiver

24. • The product iscomplex
• The product isdifficulttotestagainstobjectivecriterion
• The product ishighlyvisibletoothers
DiffusionofInnovation
positive word-of-mouthleadstothe widespreadadoptionof productsthatfulfill needs,workwell,
are clearlydifferentiated,andprovidevalue.
Adopter Categories
The concept of adopter categories is a classificationthatdepictswhere consumersstandinrelation
to otherconsumersintermsof the firsttime theypurchase aninnovation
• ClassificationdevelopedbysociologistsentitleditasDiffusionof Innovationsconsistsof 5
categoriesof adopters:
• Sociologically,the model assumesthat all membersof a givensocietywould,eventually,
adoptthe innovation.
• Thus,the numberof people belongingtoeachcategorywascalculatedina manner
resemblingastatistical normal distribution:
• innovators— the first2.5%to adopt;earlyadopters—the next13.5%;earlymajority—the
next34%; late majority—the following 34%;and the laggards—the last15%.

25. The Innovators
• Earliestconsumerstobuynewproducts.
• Theyare preparedtotake the riskthat the
– Product will notworkwell,
– Become unavailable,orBe quicklyreplacedbyanimprovedmodel
The Early Adopters
• Consumerswhobuynewproductswithinarelativelyshortperiodfollowingintroduction,
but notas earlyas the innovators.
• Theyare venturesome,likelytoengage inword-of-mouth,andalsolikelytoassistothers
whoare consideringadoptingthe new products.
The Early Majority
• Consistsof consumerswhobuyinnovationsafterthe earlyadoptershave done so.
• This segmentislargerthanthe precedingtwogroupscombined.
The Late Majority
• Membersof thisgroup are riskaverse andslow to adoptinnovation.
• Theywaituntil mostotherconsumershave adoptedthe new productbefore buyingit.
The Laggards
• The verylast consumerstoadopt innovations.
• By the time theygetaroundto make firsttime purchase,the innovatorsandearlyadopters
are alreadyswitchingtomore advancedmodelswithadvancedfeatures.
Non-adopters
• Marketersoften“write off”non-adopters,butnotall non-adoptersare the same,and
understandingnonusersisimportant.
• Prospectiveadopters, whocouldpotentiallybecome customers.
• Persistentnon-adopters, whoare veryunlikelytobecome customers
Family
• Two or more personsrelatedbyblood,marriage,oradoptionresidingtogether.
• There are three typesof families:marriedcouples,nuclearfamilies,andextendedfamilies.
• A marriedcouple andone or more childrenconstitute anuclearfamily.

26. Family’sSupportive Roles/Functions
• Socialization
• Economicwell being
• Emotional support
• Suitable familylifestyles
FamilyLife Cycle
• The familylife cycle startswithbachelorhoodandthenmovesontomarriage
• Marriage usuallyleadstoa growingfamilyandlateronto familycontraction(asgrown
childrenleave the household).
• The cycle endswiththe dissolutionof the familyunit(duetothe deathof one spouse).
The Bachelorhood
• Referstoyoungsingle men andwomen,mostlycollege educated,whohave incomesthat
allowthemtoleave home andestablishtheirownhouseholds.
• Single personsspendconsiderableamountsonclothing,cars,andtravel andentertainment.
• Marketersshoulddifferentiate betweensingleswholiveathome (withtheirparents) and
those whohave leftit.
The Honeymooners
• Stage refersto youngandnewlymarriedcouples.
• Educated,engagedcoupleshave acombineddiscretionaryincome.
• If both establishcareerpaths,theirincomesgrow steadily.
• People withconsiderable discretionaryincomesare prime targetingprospects.
The Parenthood
• Stage designatesmarriedcoupleswithatleastone childlivingathome.
• This isthe longeststage of the familylife cycle.
• Alsoknownasthe “full-nest”stage usuallyextendsovermore thana twenty-yearperiod.
• Because of itslongduration,thisstage can be dividedintoshorterphases:the preschool
phase,the elementary schoolphase,the high schoolphase,andthe college phase.

27. The Post-parenthood
• Stage refersto oldermarriedcoupleswithnochildrenlivingathome.
• Alsoknownas“emptynest”is traumaticfor some parentsandliberatingforothers.
• For manyparents,thisstage representsthe opportunitytodoall the thingstheycouldnot
do or affordwhile theirchildrenlivedhomeorwenttocollege.
The Dissolution
• Stage refersto the familywithone survivingspouse.
• If the survivingspouseis ingoodhealth,isworkingorhasadequate savings,andhas
supportive familyandfriends,the adjustmentiseasier.
• The survivingspouse oftentendstofollow amore economical lifestyle.
Attitude Change
• Change inattitude can be broughtusingfollowingstrategies:
– Comparative advertising-Identifythe maincompetitorandexplaintothe potential
consumershowyourproductis betterthanthat of marketleader.
– Emphasizingbrandattributes
– Addingnewattributes
– Providingknowledge of alternatives
– Changingthe relative valueof attributes
– Change beliefsaboutcompetitors’brands
– Change overall brandevaluation
– Change affectfirstthroughclassical conditioning
– Change behaviourfirstthroughoperantconditioning
– Changingbeliefswhichare heldcurrently
– Change the importance of beliefs
– Addbeliefs
– Change ideal

28. FamilyDecision-makingAndIts Members’Consumption-relatedRoles
Husband-Wife Decision-Making
• Husband-dominateddecisions are those where the husband’sinfluence isgreaterthanthe
wife’s.
• Wife-dominateddecisions are those where the wife’sinfluence isgreaterthanthe
husband’s.
• Joint decisionsare those where the husband’sandwife’sinfluence are equal.
• Autonomic decisions are those where eitherthe husbandorthe wife isthe primaryor only
decisionmaker.
Children’sInfluence
• Pressure:The childdemands,threatens,andtriestointimidate the parents.
• Exchange: The childpromisessomething(e.g.,to“be good”or cleanhisroom) in exchange.
• Rational: The childusesalogical arguments andfactual evidence.
• Consultation:The childseeksparents’involvementinthe decision.
• Ingratiation: The childtriestoget the parentina goodmoodfirstand thenmakesthe
request.
END OF MODULE 3

29. Module IV
Social Stratification& Social Class
• Is the divisionof membersof asocietyintoa hierarchyof distinctstatusclasses,sothat
• Membersof each classhave relativelythe same statusandmembersof all otherclasses
have eithermore orlessstatus.
• Social classis relative standingof membersof asocietysothat a higherpositionimpliesa
higherstatusthanthose in the lowerclass
• Social classstemsfrom social status
• Social statusis the degree of prestige the membersof one social classhave incomparison
withmembersof othersocial classes.
Characteristics ofSocial Classes
• Exhibitsocial status
• Are multidimensionalandare dividedonthe basisof a numberof factorssuch as income,
wealth,occupationandsoon
• Are hierarchical
• Are homogenouswithsimilarbehaviourandattitude
• Are dynamic
• Are usedas a frame of reference
MeasuringSocial Class
• Subjective Measures
– Individualsare askedtoestimate theirownsocial-classpositions.
– Subjective measuresreflectone’ssocial-classconsciousnessi.e.aperson’slevelof
identificationwithagivensocial class.
• Objective Measures
– Consistsof demographicvariablesandaskingrespondentsfactual questionsabout
themselves,theirfamiliesorplace of residence
– Objective measuresinclude variablessuchasoccupation,income,educationetc.
• Reputational Measures
– Where inindividualisaskedtojudge the social classposition of the membersof the
communitybasedonthe reputationof these individuals.

30. Social Mobility
• A movementof individuals,groupsorfamiliesthroughasystemof social hierarchy.
– Upward Mobilitymeansopportunitytomove from a lowersocial classtohigher
one.
– DownwardMobilityismovingdown
Culture’sinfluence onConsumerBehaviour
• Culture isthe collective values,customs,norms,arts,social institutions,andintellectual
achievementsof aparticularsociety
• Cultural valuesexpressthe collective principles,standardsandprioritiesof acommunity
• Most promotional messagesreflecttosome extenttargetaudiences’culturalvalues
• “Levels” ofCultural Norms
– Supranational
– National
– Group
• The supranationallevel reflectsthe underlyingdimensionsof culture thataffectmultiple
societies
• The nationallevel reflectssharedcore values,customs,andpersonalitiesthatrepresentthe
core of the “national character” of a particularcountry.
• The group level reflectsthe subdivisionsof acountryor society,suchassubcultures,andthe
influencesof variousreference groups.
Characteristics ofCulture
• Culture islearned
• Culture isshared
• Culture isbasedonsymbols
• Culture isdynamic
• Culture offersorder,direction,andguidance

31. Factors affectingCulture
• Values are beliefsandnormsacceptedbya societywhichisdistinctfromourcultures.
• People leadMultiple Lifestylesdue towhichtheychoose productsandservicesthatmeet
diverse needsandinterests
• Changingstructure of families
Learning Cultural Values
• Formal learningtakesplace whenparents,oldersiblings,andotherfamilymembersteach
youngermembers“howtobehave.”
• Informal learningtakesplace whenchildrenimitate the behaviorsof selectedothers,such
as family,friends,orTV
• Technical learning happenswhenteachersinstructchildren,ineducational environments
• Enculturation islearningone’sownculture.
• Acculturation islearningneworforeigncultures.
• Marketing influencesonCultural learning
– The repetitionof marketing messagesbothconveysandreinforcescultural beliefs
and values.
– In advertisements,cultural valuesare notonlydepictedinthe advertisingcopy,but
are alsocodedinthe visual imagery,colors,movements,music,andothernonverbal
elementsof anadvertisement.
– Marketersalso transmita lotof informationthatenablesconsumerstoexpress
sharedcultural values.
• Language and Symbols
Symbol isanythingthatrepresentssomethingelse,andsymbolscanbe eitherverbal or
nonverbal.
Words are verbal symbols,sothe textof any ad isa compositionof symbols.
• Ritual
– A type of symbolicactivityconsistingof aseriesof steps(multiplebehaviors)
occurringin a fixedsequence andrepeatedperiodically.

32. Subculture
• A Subculture isagroup of people-distinctorhidden-whichiswithinaculture whichis
differentfromlargerculture
Sub-Cultural divisionand Consumptionpattern ofconsumers in India
• Withina largersociety,there are subsystemsof valuesexhibitingvariationsinbehavioral
pattern.
• Marketerssegmentlargersocietiesintosmallersubgroupsthatare homogeneousinrelation
to cultural values.
• The individualsof aspecificsubculture varyintheirconsumptionpatterns.
• Theyshowvariationinlifestyle,financial viability,food preferences,readinghabits,purchase
of specificbrandsinaparticularproduct category,purchase time,store patronage,etc.
Cross-cultural Variations In ConsumerBehavior
• Cross-cultural consumer analysisisdefinedasthe efforttodeterminetowhatextentthe
consumersof twoor more nationsare similarordifferent.
MarketingAcrossCultural BoundariesisaDifficultandChallengingTask
Variations inCultural Values
• Three broad formsof cultural values
• Other-orientedvaluesreflectasociety’sview of the appropriate relationshipsbetween
individualsandgroupswithinthatsociety.
• Environment-orientedvalues

33. • Self-orientedValues
Otherorientedvalues
• Individual/Collective.Are individual activityandinitiative valuedmore highlythancollective
activityandconformity?
• Youth/Age.Isfamilylifeorganizedtomeetthe needsof the childrenorthe adults?Are
youngeror olderpeople viewedasleadersandrole models?
• Competitive/Cooperative.Doesone obtainsuccessbyexcellingoverothersorby
cooperatingwiththem?
• Diversity/Uniformity.Doesthe culture embrace variationinreligiousbelief,ethnic
background,political views,andotherimportantbehaviorsandattitudes?
• Extended/Limitedfamily.Towhatextentdoesone have alifelongobligationtonumerous
familymembers?
• Masculine/Feminine.Towhatextentdoessocial powerautomaticallygotomales?
Environment-orientedvalues
• Cleanliness.Towhatextentiscleanlinesspursuedbeyondthe minimumneededforhealth?
• Performance/Status.Isthe culture’srewardsystembasedonperformance oroninherited
factors suchas familyorclass?
• Tradition/Change.Are existingpatternsof behaviorconsideredinherentlysuperiortonew
patternsof behavior?
• Risktaking/Security.Are those whorisktheirestablishedpositionstoovercome obstaclesor
achieve highgoalsadmiredmore thanthose whodonot?
• Problemsolving/Fatalistic.Are people encouragedtoovercome all problems,ordothey
take a “whatwill be,will be”attitude?
• Nature.Isnature regardedas somethingtobe admiredorovercome?
Self-orientedValues
• Active/Passive.Isaphysicallyactive approachtolife valuedmore highlythanalessactive
orientation?
• Sensual gratification/Abstinence.Towhatextentisitacceptable toenjoysensual pleasures
• Material/Nonmaterial.Howmuchimportance isattachedtothe acquisitionof material
wealth?
• Hard work/Leisure.Isapersonwhoworksharderthan economicallynecessaryadmired
more than one whodoesnot?

34. • Postponedgratification/Immediategratification.Are peopleencouragedto“save fora rainy
day” or to “live fortoday”?
• Religious/Secular.To whatextentare behaviorsandattitudesbasedonthe rulesspecified
by a religiousdoctrine?
Cultural Variationsin Nonverbal Communications
Nonverbal communicationsystemsare the arbitrarymeaningsaculture assignsactions,events,and
thingsotherthanwords
Factors InfluencingNonverbal Communications
Time Perspective
Monochronic
 One thingat a time
 Concentrate on1 job
 Deadlinesmatter
 Commitmenttotask
 Adhesiontoplans
 Promptnessisvalued
 Short termrelationships
Polychronic
 Many things at once

35.  Highly distractible
 Deadlinesare secondary
 Commitmentto people
 Changingplans is easy
 Promptnessdepends
 Long term preferred
Space
• The use people make of space andthe meaningstheyassigntotheiruse of space
• Office space incorporationsgenerallyisallocatedaccordingtorank or prestige ratherthan
need.
Symbols
• White Symbol formourningordeathinthe Far East; purityinthe UnitedStates.
• Purple AssociatedwithdeathinmanyLatinAmericancountries.
• Blue Connotationof femininityinHolland;masculinityinSweden,UnitedStates.
• White liliesSuggestionof deathinEngland.
• Owl Wisdominthe UnitedStates;bad luckin India.
Relationships
• The rights andobligationsimposedbyrelationshipsandfriendshipare anothernonverbal
cultural variable.
Agreements
• Efficientlegal systemforensuringthatbusinessobligationsare honoredandforresolving
disagreements.
Things
• The businessandsocial situationsthatcall fora gift,andthe itemsthatare appropriate gifts,
vary widely.
Etiquette
• Representsgenerallyacceptedwaysof behavinginsocial situations.

36. Module V
Whois an Organisational Buyer?
• BusinessOrganisations
• Government
• Educational Institutions
• Retail Institutions
• Consultingfirms
• Financial institutions
• Non-governmentOrganisations
ElementsofOrganisational Buying
Organisational buyingbehavior
• Decisionmakingprocessbywhichformal organisationsestablishthe needforpurchased
products,and identifyandevaluate andchoose amongalternative brandsandsuppliers.
Organisational
Buying
Industrial
Buyingfor
resale
Institutional

37. DifferencesbetweenOrganisational Buyerand Individual Consumer
Characteristics ofOrganisational buying
• Fewerbuyers
• Geographicallyconcentratedbuyers
• Deriveddemand
• Inelasticdemand
• Fluctuatingdemand
• Professionalpurchasing
Types of Organisational Buying Decisions –Three
• Straight/Routine Rebuyis concerningabuyingsituationwhere the purchaserwill reorder
the product withoutanymodification.
Buyershave experience inthe areainquestion.
Require littleornonewinformation.
• ModifiedRebuyissituationwhere buyerwantstomodifyproductspecifications,prices,
othertermsor specifications
• Newscars/trucks,electrical components,consultancyservices
• CompletelyNewTask issituationinwhichbuyerisbuyingproductorservice forthe first
time.

38. • Examples:Complex buildingbridges,dams,machineinstallation,custombuiltofficeor
house.
Factors influencingOrganisational Buying Behaviour
Environmental
• Level of demand
• Economicoutlook
• Value of money
• SupplyConditions
• TechnologyImprovement
• Political Environment
• Competition
Organisational
• Objectives
• Policies
• Procedures
• Organisational Structure
• Organisational Systemfollowed
Interpersonal
• Authority
• Status
• Empathy
• Persuasiveness
• Personality
Individual Participant
• Age

39. • Income
• Education
• JobPosition
• Attitude
Organisational BuyingBehaviour Process
1. ProblemRecognition
2. General Descriptionof Need
3. Product Specifications
4. SupplierSearch
5. Proposal Solicitation
6. SupplierSelection
7. Selectionof OrderRoutine
8. Performance Review
Consumer& Marketer
• Consumerorientedmarketingphilosophy
– Consumerswantsandneeds
– CompanyObjectives
– IntegratedStrategy(3Cs)
– ConsumerSatisfaction,CompanyProfitsandCommunityWelfare
Role of Marketers
• Focuson R & D
• Communicate effectively
Marketing Communication& Persuasion
• Source
• Encoding
• Message

40. • Medium
• Receiver
• Decoding
• Feedback
Factors AffectingCommunication
• Credibilityof the Source basedonnumerousfactors
– past performance
– publicimage andreputation
– quality of goodsand services
– initiativestakenforsocial welfare
– the brand ambassador
– image of the medium
• Comprehensiondependson:
• characteristicsof message
• the abilityof the receiverstoprocessit
• Motivationto process
• Personal characteristics
DevelopingPersuasive Communication
• The Target Audience
• The Objective
• The Message Design
• The Media
Marketing Regulationto Overcome ConsumerDissatisfaction
• The IndianSale of Goods Act,1930
• The Agricultural Produce (Grading&Marketing) Act,1937
• The Indian StandardInstitution(ISI) CertificationMarkAct, 1952
• The Preventionof FoodadulterationAct,1954

41. • The Drugs & Magic RemediesAct,1954
• The Essential CommoditiesAct,1955
• Weights& MeasuresAct,1958
• The Trade & Merchandise Marks Act,1958
• The Monopolies&Restrictive Trade Practices(MRTP) Act,1969
• The PackagedCommoditiesOrder,1975
• ConsumerProtectionAct
END OF MODULE 5