MA CB PPT.pptx

1. CONSUMER BEHAVIOR MA IN MARKETING MANAGEMENT AAU SCHOOL OF COMMERCE By: Mulugeta Gebremedhin (PhD)

2. DEFINITION OF CONSUMER BEHAVIOR  Consumer behavior is defined as the behavior of consumers displayed in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs. (Schiffman and Kanuk)

3. DEFINITION OF CONSUMER BEHAVIOR (CTD…)  Consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related item. That includes:  What they buy  Why they buy it  When they buy it  Where they buy it  How often they buy it  How often they use it  How they evaluate it after the purchase  The impact of such evaluation on future purchases and  How they dispose of it.

4. WHAT IS CONSUMER BEHAVIOR? (CTD…)  Individuals or groups acquiring, using, and disposing of products, services, ideas, or experiences. Arnould, Price, and Zinkhan

5. WHAT IS CONSUMER BEHAVIOR? (CTD…) Acquiring includes: Receiving Finding inheriting Producing purchasing Consuming encompasses: Collecting Preparing Displaying Storing Wearing Sharing Evaluating serving Disposing spans: Giving Throwing away Recycling and depleting

6. WHAT IS CONSUMER BEHAVIOR? (CTD…)  Consumer behavior is the study of the process involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experience to satisfy needs and desires. (Solomon, Michael R.)

7. ELEMENTS OF CONSUMER BEHAVIOR The totality of decisions Whether What Why How Where When How much How often About the consumption Acquisition Usage disposition Of an offering Products Services Time Ideas By decision making units Initiator Influencer Information keeper Decider Purchaser user Over time Days Weeks Months years

8. CONCEPTUAL MODEL OF CONSUMER BEHAVIOR The Psychological Core •Motivation, Ability, & Opportunity Exposure, Attention, & perception Categorization & comprehension Attitude formation Memory & retrieval The Process of Making Decisions •Problem recognition Information search Judgment & decision making Post- decision processes The Consumers Culture •Regional, ethnic & religious influences Social class influences Age, gender, & family influences Social influences Psychographics: values, personality, and lifestyles. Consumer Behavior Outcomes Adoption of, resistance to, and diffusion of innovations

9. MARKETING IMPLICATIONS OF CONSUMER BEHAVIOR 1. Developing and Implementing Customer-Oriented Strategy  How is the market segmented?  How proﬁtable is each segment?  What are the characteristics of consumers in each segment?  Are customers satisfied with existing offerings?  Selecting the target market  Positioning 2. Developing Products and Services  What Ideas Do Consumers Have for New Products?  What Attributes Can Be Added to or Changed in an Existing Offering?  What Should Our Offering Be Called?  What Should Our Package and Logo Look Like?

10. MARKETING IMPLICATIONS OF CONSUMER BEHAVIOR (CONT’D…) 3. Making Promotion and Marketing Communications Decisions  What are our advertising objectives?  What should our advertising look like?  Where should advertising be placed?  When should we advertise? 4. Making Pricing Decisions  What price should be charged?  How sensitive are consumers to price and price changes? 5. Making Distribution Decisions  Where are target consumers likely to shop?

11. CONSMER BEHAVIOR MODELS

12. THE ORIGIN AND IMPORTANCE OF CONSUMER BEHAVIOR  Consumer behavior is regarded as a relatively a new field of study. The concepts of consumer behavior are borrowed from  Psychology (the study of the individual)  Sociology (the study of groups)  Social psychology (the study of how individuals operate in groups)  Anthropology (the influence of society on the individual) and  Economics.  Consumer behavior became an important field of study with the development of the ‘marketing concept’.

13. THE MARKETING CONCEPT  According to the marketing concept, marketers first need to define benefits sought by consumers in the marketplace, followed by the drafting of marketing plans supporting the needs of consumers.  Assael summarized the importance of understanding consumer behavior "Consumers determine the sales and profits of a firm by their purchasing decisions. As such, their motives and actions determine the economic viability of the firm".  To be a successful marketer, organizations need to understand consumer needs and behavior and draft their marketing strategies to incorporate such behavioral needs of consumers.

14. THE MARKETING CONCEPT  Kohli and Jaworski (MARKOR) • Intelligence generation • Intelligence dissemination • Intelligence responsiveness  Narter and Slater and (MKTOR)  Customer orientation  Competitor orientation  Inter-functional coordination

15. MODELS OF CONSUMER BEHAVIOR  It is an extremely difficult task to uncover the reasons why people buy.  Models of human behavior provide valuable input to consumer behavior, since they attempt to provide insights into why human beings, and therefore consumers, rationalize purchase decisions.  Human beings generally can be viewed from many perspectives (economic, social, psychological, etc).  If human beings are viewed from economic perspective, marketers may attempt to influence them with economic incentives.  If human beings are viewed from psychology perspective, marketer may attempt to influence them with offers that appeal to their psyches.  If human beings are viewed from a social theory perspective, marketers may attempt to influence people through appeals to group norms, references and values.  The major models that describe human and consumer behavior are: 1. Economic model 2. The Veblenian social psychology model 3. Pavlovian model 4. Freudian psychoanalytic model 5. Bettman's information processing model 6. The Nicosia model 7. The Howard Sheth model and 8. Engel – Blackwell – Milniard model

16. THE MARSHALLIAN ECONOMIC MODEL  According to the Marshallian economic model, individual buyers will spend their income on goods that will offer the greatest satisfaction, depending on their taste and the relative prices of goods.  In accordance with a doctrine of economic growth developed by Smith, man is said to be motivated in all his actions by self-interest.  Marshall's methods and assumptions have been refined to the Modern Utility Theory, where the economic man maximizes his utility and does this by carefully calculating the ''felicific'' consequences of any purchase.  Marshall used money as the common denominator of psychological needs, where the value of satisfying a specific need could be equated and compared with other needs in terms of cost.

17. MARKETING IMPLICATIONS OF ECONOMIC MODEL  The model provides logical norms for buyers who want to be "rational", therefore it is a normative rather than a descriptive model of behavior.  The consumer is not likely to employ an economic analysis for all purchases, but is rather selective in using an economic theory (purchase a new house or car)  Hypotheses of the Marshallian model 1. The lower the price of a product, the greater the sales will be for that product. 2. The lower the price of a substitute product is than that of a specific product, the greater the sales of the substitute product will be. 3. The sales of a product will be higher, provided it is not an inferior product, if the real income is higher. 4. The last hypothesis states that greater volumes of sales will follow as promotional expenditure is increased.  Economic factors alone cannot explain all variations in the sales and buying process and also that the fundamentals of how brand and product preferences are formed are ignored in this theory.  The model offers a useful frame of reference for analyzing only a small portion of the consumer's psyche.

18. VEBLENIAN SOCIAL PSYCHOLOGY MODEL  According to this model, man is perceived to be a "social animal", where man conforms to norms of its larger culture and to more specific standards of subcultures.  This model implies that human behavior and needs are moulded by present group memberships.  Veblen hypothesized that, for the so-called leisure class, a great portion of economic consumption is influenced and motivated by prestige seeking and not on needs or satisfaction.  Veblen placed specific emphasis on emulative factors that would influence people when purchasing conspicuous products, for example cars and houses or even less expensive items, such as clothes.  The model is criticized as it is perceived to be overstated. Not all people consider the leisure class to be a frame of reference and many people aspire to the social class immediately above their current social class.  More affluent people of the society would also under-spend than overspend on conspicuous items since they would rather "fit in" than "stand out".

19. THE PAVLOVIAN LEARNING THEORY  Pavlov discovered that he could induce the dog to salivate by ringing the bell regardless of whether or not food was offered to the dog.  Based on his experiment, Pavlov conclude that learning occurred due to a process of association and that a large component of human behavior can be conditioned.  The result of the experimental psychologists research led to a stimulus-response model of human behaviour, based on four central concepts, namely drive, cue, response and reinforcement.  According to classical conditioning, for a learning to take place there has to be a connection between some stimulus and a true reflex reaction (response).

20. PAVLOVIAN MODEL OF CLASSICAL CONDITIONING Unconditioned Stimulus Meat paste Conditioned Stimulus Bell Conditioned Stimulus Bell Unconditioned Response Salivation Conditioned Response Salivation After Repeated Pairings:

21. MARKETING IMPLICATIONS OF THE PAVLOVIAN MODEL  The model does contribute to marketing by providing insights to the marketer concerning consumer behavior and advertising strategy.  An example of the usefulness of the model for the marketer would be the introduction of a new product into a highly competitive market through association with the existing and well established brand name.  The model emphasizes the repetition in advertising since a single exposure is very likely to be a weak cue, hardly able to sufficiently arouse the individual's consciousness to inspire the drive as discussed in the model.  Repetition in advertising also has two desirable effects Repetition (or frequency of association) firstly combats forgetting and secondly provides reinforcement since the consumer becomes selectively exposed to advertisements of the product after purchase.  The model helps marketers to identify the strongest product- related drives, for example hunger may be identified for candy bars and status for motor vehicles.

22. PSYCHOANALYTICAL THEORY  Sigmund Freud was an Austrian Neurologist who became fascinated with studying hysteria. He is known as the father of psychoanalysis.  Human behavior is dominated by repressed, unconscious sexual, biological drives.  Freud’s psychoanalytic perspective proposed that childhood sexuality and unconscious motivations influence personality.  Human behavior is driven by unconscious forces (sexual and aggressive forces).

23. THE ICEBERG ANALOGY OF CONSCIOUSNESS

24. LEVELS OF CONSCIOUSNESS  1. Conscious mind – like the top of the iceberg, only a small portion of our mind is accessible to us.  2. Preconscious mind – material that is unconscious, but can be easily brought into awareness. Moves back & forth easily between conscious & unconscious.  3. Unconscious mind – is completely outside of our awareness (could produce anxiety if made conscious).  Unconscious-large below the surface area which contains thoughts, wishes, feelings and memories, of which we are unaware.

25. ID, EGO, SUPEREGO

26. STRUCTURE OF THE MIND (PERSONALITY)  1. Id – “pleasure principle” unconscious impulses that want to be gratified, without regard to potential punishment.  2. Ego “reality principle” – tries to satisfy id impulses while minimizing punishment & guilt.  3. Superego – the “moral principle” of our personality which tells us right from wrong our conscience

27. DEFENSE MECHANISMS  Defense mechanisms shape how our personality deals with unpleasant emotions and thoughts.  1. Repression: “motivated forgetting” the suppression of unpleasant thoughts. We push unpleasant thoughts into unconscious so that we can’t access them.  the basic defense mechanism that banishes anxiety- arousing thoughts, feelings, and memories from consciousness (e.g., memories of childhood or past marriage)  E.g., a child who is molested, may suppress the traumatic event so that he/she has no memory for the event.  2. Rationalization – we justify the actions or events that have happened.  You steal and say, “Well, I spend a lot of money at this store!”

28. 3. REGRESSION  Dealing with problems by “regressing” or going backward in terms of maturity.  Ex: Soldiers crying for “mommy” or party behavior. 4. Displacement- you take out your anger & frustration on a person or object not the actual target of your anger in a negative way  E.g., After being grilled by your boss, you go home & yell at your partner or the dog/cat.  Peeing on the teacher’s car.

29. 5. PROJECTION – YOU ATTRIBUTE YOUR NEGATIVE CHARACTERISTICS TO ANOTHER PERSON.  When people project their own faults onto others, they generally do not deny that they themselves possess those faults.  E.g., Your partner tells you how selfish you are, when they are in fact selfish. 6. Reaction Formation – acting the opposite of how you feel.  You do the opposite of how you feel to defend your own doubts.  E.g., A person who doubts his faith may act like a religious zealot to defend his religion.

30. THE BETTMAN’S INFORMATION PROCESSING MODEL  The Bettman model describes the consumer as possessing a limited capacity for processing information. The consumer rarely analyzes the complex alternatives in decision making and apply very simple strategy.  When faced with a choice, the consumer rarely undertakes very complex analyses of available alternatives. Instead, the consumer typically employs simple decision strategies or heuristics.  Heuristics simplifying decision rules assist the consumer in arriving at a choice by providing a means for sidestepping the overly overburden task of assessing all the information available about all the alternatives.  The model provides an analytical 'framework for understanding consumer behavior in an environment where choice is made by selecting between a set of alternatives.  The model focuses on the information processing perspective by viewing the type of information used by consumers, how the information is evaluated and finally, how decisions are made.

31. THE NICOSIA MODEL  The Nicosia model provides a sophisticated attempt to show the interrelationship between attributes of the consumer, the consumer decision-making process, the marketing communication of an organization and feedback of the response of the consumer to the organization.  Schiffman & Kanuk provide a simplistic explanation of the model by stating that it is interactive in design, where the organization attempts to influence consumers through marketing actions and the consumers in return influence the organization through their purchase actions (or lack of action if products are not purchased).  The model consists of four different fields namely:  Exposure of the organization’s message  Search and evaluation  Purchase  feedback

32. THE HOWARD-SHETH MODEL  The Howard-Sheth model of buying behavior presents a sophisticated integration of the psychological and various social and marketing influences on consumer choice, into a coherent sequence of information processing.  The model attempts to explain rational brand choice behavior within the constraints of incomplete information and limited individual capacities, and also that it provides an empirically testable description of behavior in terms of cognitive functioning together with its outcomes.  The Howard-Sheth model distinguishes between three different stages or levels of decision-making, also referred to as levels of learning. Namely:  Extensive problem-solving.  Limited problem-solving.  Routinized problem-solving.

33. Stage/level of decision making Amount of information needed prior to purchase Speed of decision Extensive problem solving Great Slow Limited problem solving Moderate Moderate Routinized response behavior Little Fast

34. THE ENGLE, BLACKWELL, MINIARD (EBM) MODEL  The Engel, Blackwell, Miniard model is based on the same model as that of Engel & Blackwell, and Engel, Kollat & Blackwell.

35. MOTIVATION The Psychological Core Motivation, Ability, & Opportunity (MAO) Exposure, attention, & perception Categorization and comprehension Attitude formation Memory and retrieval Motivation Personal relevance Consistency with values, goals, and needs Perceived risk Moderate inconsistency with prior attitudes Effects of Motivation Goal-related behavior: High effort behavior High effort Information processing and decision making Felt involvement

36. CONSUMER MOTIVATION DEFINED  Motivation is defined as “an inner state of arousal” directed to achieving a goal.  A motivated consumer is energized, ready, and willing to engage in goal-relevant activity.

37. EFFECTS OF CONSUMER MOTIVATION  Goal – Relevant Behavior  When motivation is high, consumers are willing to engage in goal relevant behavior.  Motivation not only drives behavior consistent with a goal but also creates a willingness to expend time and energy engaging in goal relevant behavior.  High-Effort Information Processing and Decision Making  When motivation to achieve a goal is high:  consumers pay careful attention to the goal  consumers attempt to comprehend the information presented  Consumers critically evaluate the information and  Consumers try to remember the information  Felt Involvement  Motivation evokes a psychological state in consumers called involvement.  Felt involvement is the psychological experience of the motivated consumer such as interest, excitement, anxiety, passion, & engagement.

38. WHAT AFFECTS MOTIVATION? 1. Personal relevance 2. values, goals, and needs 3. Risk 4. Inconsistency with prior attitudes

39. WHAT AFFECTS MOTIVATION (CONT’D)  Personal Relevance – A marketing stimuli will be personally relevant when:  It solves the consumers problem (Propecia–Hair loss treatment)  It bears on the consumers self concept (Clothing – professional, student, sport team)   Marketing implication: Make an ad personally relevant to the consumer. (Volvo: This Car Saved My Life)  Values, Goals, and Needs  Values are culturally held beliefs about what is good or appropriate. E.g. education, cigar etc.  Goals are objectives that we would like to achieve. (ACCA certification to become a licensed auditor).  An internal state of tension caused by disequilibrium from an ideal/desired physical or psychological state.

40. TYPES OF NEEDS: MASLOW’S NEED HIERARCHY

41. Physiological: Food, water, sleep, and to some extent, sex are physiological motives. Products Health foods, medicines, sports drinks, low-cholesterol foods, and exercise equipment. Themes Quaker Oats - “Eating oatmeal is good for your heart.” Safety: Seeking physical safety and security, stability, familiar surroundings, and so forth are manifestations of safety needs. Products Smoke detectors, preventive medicines, insurance, retirement investments, and seat belts. Themes Sleep Safe - “We’ve designed a travel alarm that just might wake you in the middle of the night- because a fire is sending smoke into your room. You see, ours is a smoke alarm as well as an alarm clock.” Belongingness: These motives are reflected in a desire for love, friendship, affiliation, and group acceptance. Products Personal grooming, foods, entertainment, clothing, and many others. Themes Restaurants - “When You’re Here, You’re Family.” Esteem: Desires for status, superiority, self-respect, and prestige are examples of esteem needs. These needs relate to the individual’s feelings of usefulness and accomplishment. Products Fashionable clothing, furniture, liquors, hobbies, stores, cars, and many others. Themes BMW – “The Ultimate Driving Machine.” Self-Actualization: This involves the desire for self-fulfillment, to become all that one is capable of becoming. Products Education, hobbies, sports, some vacations, gourmet foods, museums. Themes School - “Minds in Motion.”

42. AN EVALUATION OF THE NEED HIERARCHY THEORY  Maslow’s need hierarchy is an easy and useful tool for understanding what are the needs of the consumer and the relevant products that can be made and appropriate marketing strategies that can be adopted.  Maslow’s need hierarchy has been called an “emotional trigger” that enables marketers to promote products and communicate with target group.  The hierarchy can be used in two ways to create appealing ads for the products.  First, it can be used for segmenting the market with specific ad appeals directed to individuals in one particular “group”.  Ad for Pepsi which is directed toward the young generation to have a good time with Pepsi and fast food.  Second, the need hierarchy can be used for positioning products.  Volvo’s ad which focuses on premium quality and safety.

43. TYPES OF NEEDS: FUNCTIONAL, SYMBOLIC, AND HEDONIC Modeling Support Status Affiliation Belonging Achievement Functional needs Symbolic needs Hedonic needs Sensory stimulation Cognitive stimulation Novelty Self-control Interdependence Safety Order Physical well- being Reinforcement Sex Play

44. CHARACTERISTICS OF NEEDS  Needs are dynamic  Needs exist in a hierarchy  Needs can be internally or externally aroused  Needs can conflict  Approach – avoidance conflict  Approach – approach conflict  Avoidance – avoidance conflict  Approach Object – A positive goals toward which behavior is directed.  Avoidance Object – A negative goal from which behavior is directed away.

45. Approach – Avoidance Conflict  A conflict that occurs when a given behavior or outcome is seen as both desirable and undesirable  When a consumer wants the taste and emotional satisfaction associated with snack food, burger, ‘kitfo’ , ‘kurt’ etc (approach) but does not want to gain weight (avoidance), this conflict may occur.  the desire to eat foods that are high calories and fat.  A consumer who likes the quality of the product but not the price. Approach – Approach Conflict  A conflict that occurs when a consumer must choose between tow or more equally desirable options that fulfill different needs.  A consumer who has to choose between two equally attractive brands.  When a consumer has to invest his money to start up a new business or to cover his tuition fee to pursue his academic career, this conflict may occur. Avoidance – Avoidance Conflict  A conflict that occurs when the consumer must choose between tow equally undesirable options.  Choosing between two equally undesirable products.  When a consumer has to either incur substantial cost to maintain his old car or whether he has to buy a new car, this conflict may occur.

46. PERCEIVED RISK  Perceived risk is the extent to which the consumer is uncertain about the consequences of an action of buying, using, or disposing of an offering.  Perceived risk will be higher when:  Little information is available about the offering.  The offering is new  The offering is technologically complex.  Substantial quality differences exist between brands.  The consumer has little experience or confidence about the offering

47. TYPES OF PERCEIVED RISK 1. Performance Risk- Uncertainty about whether the offering will perform as expected. 2. Financial Risk- Risk associated with monetary investment in an offering. 3. Physical Risk- The potential harm that an offering might pose to ones’ safety. 4. Social Risk- The potential harm to ones social standing that may arise from buying, using, or disposing of an offering. 5. Psychological Risk-Risk associated with the extent to which the offering fits with the way consumers perceive themselves. 6. Time Risk- Uncertainties over the length of time consumers must invest in buying, using, or disposing of the offering.

48. PERSONALITY  Personality can be defined as those inner psychological characteristics that both determine and reflect how a person responds to his or her environment.  Inner characteristics are traits, qualities, attributes, and mannerisms that distinguish one individual from other individuals.  Personality influences the consumers:  Product choice  Response to marketers promotional efforts  When, where, and how they use products

49. THE NATURE OF PERSONALITY 1. Personality reflect individual differences  The inner characteristics that constitute an individuals personality are a unique combination of factors, so that no two individuals are exactly alike.  Many individuals may be similar in terms of a single personality characteristic but not in terms of others.  If each person were different in terms of all personality traits, it would be impossible to group consumers into segments.  Personality helps to categorize consumers into different groups on the basis of one or several traits. 2. Personality is consistent and enduring  As personality tends to be consistent and enduring, it helps marketers to explain or predict consumer behavior.  Although consumers personality may be consistent, their consumption behavior varies because of the various psychological, socio-cultural, environmental, and situational factors that affect behavior. 3. Personality can change  Personality may change by major life events (birth of a child, the death a loved one, a divorce, or significant career change).

50. HIPPOCRATES’ (460 – 371 B.B) FOUR PERSONALITY TYPES  Sanguine individuals with abundance of blood: they tended to be cheerful, optimistic, and active.  Phlegmatic people who are sluggish, and tired because they had too much phlegm.  Melancholic: Sad, brooding individuals with temperaments resulted from too much black bile.  Choleric (easy to anger) personalities resulted from an excess of yellow bile.

51. PERSONALITY THEORIES

52. FREUDIAN THEORY (PSYCHOANALYTIC THEORY) Super Ego System 2 Ego System 3 ID System 1 Gratification  The psychoanalytic theory stresses the unconscious nature of personality as a result of childhood conflicts.  Childhood conflicts are derived from three components of personality: the id (libido), ego, and superego.

53. MBTI (CARL JUNG, MEYER AND BRIGGS) Extroversion (E) An extravert’s source and direction of energy expression is mainly in the external world. How a person is energized Introversion (I) An introvert has a source of energy mainly in their own internal world. Sensing (S) A person mainly believes information he or she receives directly from the external world How a person perceives information & makes decisions Intuition (N) A person believes mainly information he or she receives from the internal or imaginative world Thinking (T) A person makes a decision mainly through logic How a person process information Feeling (F) A person makes a decision based on emotion, i.e. based on what they feel they should do. Judging (J) A person organizes all of his life events and, as a rule, sticks to his plans. how a person implements the information he or she has processed Perceiving (P) A person is inclined to improvise and explore alternative options.

54. 16 PERSONALITY TYPES ESTJ ISTJ ENTJ INTJ ESTP ISTP ENTP INTP ESFJ ISFJ ENFJ INFJ ESFP ISFP ENFP INFP

55. FREUDIAN THEORY AND “PRODUCT PERSONALITY  Psychoanalytical theory appeals to the buyer’s dreams, hopes and fears.  Consumer purchases and consumption are a reflection and an extension of the consumer personality.  Consumer’s appearance and possessions – grooming, clothing, jewelry, etc are a reflections of the individual’s personality.

56. NEO-FREUDIAN PERSONALITY THEORY (SOCIAL AND CULTURAL THEORY)  Neo-Freudians believe that Social relationships are fundamental to the formation and development of personality.  Alfred Adler viewed human beings as seeking to attain various rational goals called style of life and an individual’s effort to overcome feelings of inferiority. Karen Horney – CAD Theory  Individuals can be classified in to three groups 1. Compliant individuals – Those who move toward others - desire to be loved, wanted, and appreciated. 2. Aggressive individuals – Those who move against others – desire to excel and win admiration. 3. Detached individuals – Those who move away from others – desire for independence, self-reliance, self-sufficiency, and freedom from obligation.

57. TRAIT THEORY  A trait is defined as any distinguishing, relatively enduring way in which one individual differs from another.  Trait theorists believe that character traits account for consistency of behavior in different situations.

58. BIG 5 PERSONALITY TYPE (OCEAN) Talkative, energetic, and assertive, sociable, fun-loving, and affectionate Extraversion Retiring, and reserved. imaginative, independent, and interested in variety Openness to Experience practical, conforming, and interested in routine organized, thorough, and full of planning, careful, and disciplined Conscientiousness Disorganized, careless, and impulsive. sympathetic, kind, and affectionate, soft-hearted, trusting, and helpful Agreeableness Ruthless, suspicious, and uncooperative calm, secure, and self-satisfied Neuroticism Anxious, insecure, self- pitying, tense, and moody.

59. P5 PERSONALITY TYPES Extroversion Flow of energy Introversion Detailed/Analytical thinking Thinking style Big picture thinking Rational approach Decision making Value/people approach Structured working style Working style Emergent/Flexible working style Calm Emotional responsiveness Excitable

60. PERSONALITY AND UNDERSTANDING CONSUMER DIVERSITY  Trait personality tests measures such traits as:  Consumer innovativeness – How receptive a person is to new experiences.  Consumer materialism – The degree of consumer’s attachment to “worldly possessions”  Consumer ethnocentrism – consumer’s likelihood to accept or reject foreign-made products.

61. CONSUMER INNOVATIVENESS & RELATED PERSONALITY TRAITS  Consumer innovators – Those who are likely to be the first to try new products.  The market response of innovators is a critical indication of the eventual success or failure of a new product.  Personality traits that have been useful in differentiating between consumer innovators and non innovators:  Dogmatism  Social character  Need for uniqueness  Optimum stimulation level  Sensation seeking  Variety novelty seeking

62. DOGMATISM  Dogmatism is a personality trait that measures the degree of rigidity vs openness that individuals display toward the unfamiliar and toward information that is contrary to their own established beliefs.  A person who is high dogmatic (rigid or close minded) approaches the unfamiliar defensively and with considerable discomfort and uncertainty.  A person who is low dogmatic (open minded) will readily consider unfamiliar or opposite beliefs.  Highly dogmatic consumers tend to be receptive to ads that are endorsed by an authoritative figure involving celebrities, experts, etc to accept the innovation.  Low dogmatic consumers are more receptive to ads that stress on factual differentiation, product benefits, etc.

63. SOCIAL CHARACTER  Social character is a personality trait that ranges on a continuum from inner directedness to other directedness.  Inner directedness – tend to rely on their own inner values or standards in evaluating new products and are likely to be consumer innovators.  Other directed consumers tend to look to others for direction on what is right or wrong; thus they are less likely to be consumer innovators.  Inner directed consumers are attracted to ads that stress product features, and personal benefits.  Other directed consumers prefers ads that feature social acceptance.

64. NEED FOR UNIQUENESS (NFU)  Conformity to others expectations or standard is avoided.  High NFU individuals do make unconventional (unique) choices. Optimum Stimulation Level (OSL)  High OSL are linked with greater willingness to take risks, to try new products, to be innovative, to seek purchase related information, and to accept new retail facilities than low OSLs.

65. SENSATION SEEKING (SS)  SS is a trait characterized by the need for varied, novel, and complex sensations and experience, and the willingness to take physical and social risks for the sake of such experience.  Male teenagers with high SS tend to music metal music and engage in reckless behavior. Variety or Novelty Seeking  Switching brands to experience new and possibly better alternatives.

66. COGNITIVE PERSONALITY FACTORS Two cognitive personality traits 1. Need for cognition (NC) 2. Visualizers vs verbalizers Need for Cognition (NC)  Consumers high in NC are responsive to an ad that is rich in product related information or description.  Consumers low in NC are attracted to the background or peripheral aspects of the an ad, such as an attractive model or a public celebrity.

67. VISUALIZERS VS VERBALIZERS  Visualizers – are consumers who prefer visual information and products that stress visual, such as membership in a video tape club.  Verbalizers – are consumers who prefer written or verbal information and products, such as membership in book clubs or audio tape clubs.

68. CONSUMER MATERIALISM AND COMPULSIVE CONSUMPTION  Consumption and possession traits may take three forms:  Consumer materialism  Fixated consumption behavior  Consumer compulsive behavior Consumer Materialism  Materialism is a personality trait which distinguishes between individuals who regard possessions as essential to their identities and their lives and those for whom possessions are secondary.  Characteristics of materialistic consumers: a) They value acquiring and showing off possessions. b) They are self-centered and selfish c) They seek life styles full of possessions d) Their many possessions do not give them greater satisfaction.

69. COMPULSIVE CONSUMPTION  Compulsive consumption is an abnormal behavior where consumers have an addiction, in some cases out of control, and their actions may have damaging consequences to them and to those around them.  Examples include uncontrollable shopping, gambling, drug addiction, alcoholism, and various food and eating disorders. Fixated Consumption Behavior  It is a socially acceptable behavior that consumers don’t keep their objects or purchase secret & frequently display them.  Characteristics a) A deep (passionate) interest in a particular object or product category. b) A willingness to go to considerable lengths to secure additional examples of the object c) The dedication of a considerable amount of discretionary time and money to searching out the object or product.

70. CONSUMER ETHNOCENTRISM: RESPONSE TO FOREIGN MADE PRODUCTS  CETSCALE – A consumer ethnocentrism scale that measures the likelihood of consumers to be receptive to foreign-made products and those that are not.  Highly ethnocentric consumers feel that it is inappropriate to purchase foreign-made products because of the resulting impact on domestic economy.  Non ethnocentric consumers evaluate foreign made products more objectively.

71. BRAND PERSONALITY  Consumers attribute personality like traits or characteristics to different brands.  Personality like images of brands reflect consumers’ vision of the inner core of many strong brands.  Volvo – Safety  BMW - Performance driven  Nike - The athlete in all of us  Levis - Real and authentic  Brand personality can either be functional (provides safety) or symbolic (the athlete in all of us).  Any brand personality, as long as it is strong and favorable, will strengthen a brand.

72. PERSONALITY AND COLOR Blue Commands respect Yellow temporary, warmth, caution, novelty Green Secure, natural, relaxed, easy going Red Human, exciting, hot, passionate, strong Orange Powerful, affordable, informal Brown relaxed, masculine, and informal White Goodness, purity, cleanliness, delicacy, refinement, formality Black Sophistication, power, authority, mystery Gold, platinum, silver Regal, wealthy, stately

73. BRAND PERSONALITY AND COLOR (CONT’D) Brand Color Association Connotation Coca Cola Red Excitement Wine Brands Blue Appealing to women Fast food Restaurant Combination of red, yellow, and blue Fast service and inexpensive food Fine Dinning Restaurants Sophisticated colors – gray, white, soft pale etc Feeling of fine, leisurely service, etc

74. PERSONALITY TYPES: IMPORTANT CLASSIFICATION FOR SALESPERSONS 1. The Thinker Style - This person places high value on logic, ideas, and systematic inquiry. A thinker type is a direct, detail-oriented person. A thinker type is usually neat and conservative. The salesperson should preplan with adequate facts and supporting data. 2. The Intuitor Style - This person is a knowledgeable, future-oriented person who likes to abstract principles from a mass of material. The salesperson should strive to build the buyer's concepts and objectives into the presentation. 3. The Feeler Style- This person places high value on being people oriented and sensitive to people's needs. The feeler likes to small talk with you, so engage in conversation and wait for this person's cue to begin your presentation. Keep the presentation on a personal note (tea, coffee, lunch, etc.,) 4. The Sensor Style - This person places high value on action. The key point with a sensor is to be brief and to the point. With a sensor, verbal communication is more effective than written communication. In presenting, start with conclusions and results and have supporting data to use when needed.

75. CHARACTERISTICS OF CUSTOMERS PERSONALITY: IMPORTANT CLASSIFICATION FOR CUSTOMER SERVICE The “Put-it-Off”er  Characteristics: This is the type of customer who hates to make decisions. They always say, “I want to think about it,” when it comes time to close a sale. They always seem to want to know what else might be available to them.  Action Plan: Point out what this customer could have to lose by not making a decision now. Curious Prospect  Characteristics: This is the type of customer who says, “I’m just looking right now” or “I’m not really in the market, but just wanted to see what was available in case I ever am.”  Action Plan: You need to find out if this customer is really just curious or a potential buyer. Perfectionist  Characteristics: This type of person will want to know everything about the product or service, particularly any guarantees or warranties that are applicable.  Action Plan: Give this customer all the information that he or she wants. Be knowledgeable about what you are selling and able to back up any statements or claims that you make. Optimist  Characteristics: This customer is typically warm and friendly. He or she is anxious to hear what you have to say about your product or service.  Action Plan: Be enthusiastic and positive in your approach with this type of customer. Emphasize all of the best features or points about what you are selling. The Over-Cautious Buyer  Characteristics: This customer is convinced that he or she should not buy now and is looking for reasons to support this decision.  Action Plan: Be positive and reassuring. Give this customer reasons why he or she should buy.

76. SALES PEOPLE OR SERVICE PROVIDERS PERSONALITY TYPES Assuring Personality  This type of person can be relied on and trusted.  Gets the customer to believe in him or her.  Gives the customer accurate information and facts.  Knows the product or service completely.  Pays attention to details that are important to the customer.  Meets all deadlines and honors all commitments. Engaging Personality  This is the type of person that everybody likes.  Relates to all different types of customers.  Quickly determines a common denominator with other people.  Gets the customer talking about their requirements.  Is considerate of the needs of the customer.  Remains loyal to building strong relationships with customers. Compelling Personality  This person can get customers to act on their recommendations.  Is very determined and able to set goals and carry them through.  Won’t take the first “no” from a customer.  Is determined to be successful in providing the best customer service possible.  Customers feel confident in these people’s ability to meet their needs. Dynamic Personality  This describes the person who is considered to be very competent as well as enthusiastic.  Can get the customer very excited about doing business together.  Brings imagination and creativity into the business relationship.  Has many ideas to improve customer service.  Likes to work with many different customers.  Tends to look more at the “big picture” than on day-to-day activities.

77. PERCEPTION Definition  Perception is the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. (Schiffman and Kanuk)  Perception is the process by which incoming stimuli activate our sensory receptors (eyes, ears, taste buds, skin, etc) (Hoyer and MacInnis)  Perception is a process of giving meaning to sensory stimuli. People act and react on the basis of their perception. (Arnould, Price, Zinkhan)

78. PERCEPTION (CONT’D)  Perception is how we see the world around us.  Two individuals may be exposed to the same stimuli under the same apparent conditions, but how each person recognizes, selects, organizes, and interprets these stimuli is a highly individual process based on each person’s:  needs  values and  expectations.

79. FORM PERCEPTION Figure and Ground-the organization of the visual into objects (the figures) that stand out from their surroundings. (the ground is the background in which the individual stands) - Example of figure & ground

80. FORM PERCEPTION Can you see the old woman? Can you see the young woman?

81. Do you see a vase? Or two faces?

82. WHICH LINE IS BIGGER  Muller-Lyer Illusion Which line is bigger?

83. FACTORS INFLUENCING PERCEPTION Stimulus Factors  Color and contrast  Size  Intensity  Position  Isolation Individual Response Factors  Interest, involvement, values, and needs  Cognitive set (predispositions)

84. DYNAMICS OF PERCEPTION: THE PERCEPTUAL PROCESS

85. SENSATION  Sensation is the immediate and direct response of the sensory organs to a stimuli.  Stimuli is any unit of input to any of the senses (product, brand names, ads, etc).  Sensory receptors are the human organs (eye, ear, mouth, nose, & skin) that receive sensory inputs.  Sensory functions are to see, hear, smell, taste, and feel.  Human sensitivity refers to the experience of sensation.  Sensitivity to stimuli varies with:  The quality of the sensory receptors  The intensity (amount) of the stimuli to which one is exposed.  Energy change within the environment (differentiation of input which is increase or decrease in the intensity of the stimuli)

86. EXPOSURE  Exposure is the process by which the consumer comes in physical contact with a marketing stimuli.  Marketing stimuli are information about products or brands (ads, salespeople, brand symbols, packages, signs, prices, media etc)  As exposure is critical to consumers’ subsequent processing of any stimulus, marketers need to make sure that consumers are exposed to marketing stimuli.  Exposure begins with media selection.

87. FACTORS INFLUENCING EXPOSURE  The position of an ad within a medium.  Exposure is greater when a commercial is placed at the beginning or end of a commercial break.  Exposure to a magazine is greater when the magazine is placed facedown.  Product distribution and shelf placement  The more widespread the product distribution is, the greater the likelihood that consumers will encounter it.  Consumers will be exposed to products which are featured at the end of aisle display.  Products placed from waist to eye level get more exposure.

88. SELECTIVE EXPOSURE  While marketers work hard to affect consumers’ exposure, ultimately consumers control whether exposure occurs or not.  Consumers can actively seek certain stimuli and avoid others.  Consumer avoidance mechanisms:  Zipping – Fast forwarding through the commercials recorded on a VCR.  Zapping – Use of a remote control to switch channels during commercial breaks.

89. ATTENTION  Attention is the process by which an individual allocates part of his or her mental activity to a stimulus.  A certain amount of attention is necessary for information to be perceived – for it to activate our senses.  After information has been perceived, additional levels of attention may be paid to the information. The additional attention allows us to perform the higher-order processing activities.

90. FOUR WAYS OF CAPTURING ATTENTION 1. Personally relevant 2. Pleasant 3. Surprising 4. Easy to process Making Stimuli Personally Relevant  Messages tend to be personally relevant when they: 1. Appeal to consumers needs, values, and goals. 2. Show sources similar to the target audience 3. Use dramas 4. Use rhetorical questions “How would you like to win a million dollars?”

91. MAKING STIMULI PLEASANT 1. Using attractive models 2. Using music 3. Using humor Making Stimuli Surprising 1. Using novelty – Consumers notice any stimulus that is new or unique as it stands out relative to other stimuli. 2. Using unexpectedness

92. MAKING STIMULI EASY TO PROCESS 1. Prominent stimuli  Prominent stimuli stand out relative to the environment because of their intensity.  What enhances prominence?  The size or the length of the stimulus can affect its prominence. (larger or longer ads, full page ads, etc).  Things moving tend to be prominent.  Loud sounds enhance prominence. 2. Concreteness  Stimuli are easy to process if they are concrete as opposed to abstract.  Concreteness is the extent to which we can imagine the brand. 3. Contrasting stimuli  Color ad in a newspaper is more likely to capture attention because everything around is black and white.  Wine makers start using blue bottles as they stand out from the traditional amber or green color. 4. The amount of competing information  Stimuli are easy to process when few things surround them to compete for your attention.

93. THE ABSOLUTE THRESHOLD  It is the lowest level at which an individual can experience a sensation.  It is the lowest level of input to be detected by the various sensory receptors.  It is the point at which a person can detect the difference between some thing and nothing Sense Modality Detection Threshold Light A candle flame seen at 30 miles on a dark clear night. Sound The tick of a watch under quiet conditions at 20 feet. Taste One teaspoon of sugar in two gallons of water. Smell One drop of perfume diffused into the entire volume of three-room apartment. Touch The wing of a bee falling on your back from a distance of one centimeter.

94. SENSORY ADAPTATION  Getting used to certain sensations and becoming accommodated to certain level of stimulation (constant stimulation).  As exposure to the stimulus increases, people notice less. The problem of sensory adaptation  Ads no longer provide sensory inputs to be noted.  Solution  Change ad campaigns regularly (Pepsi & Coke ads)  increase sensory input (Full page ad, buy all ad space)  Decrease sensory input (Print ads include lot of empty space to accentuate the brand name & TV ads use silence to generate attention)  Seek unusual or novel inputs (Fragrance sample in magazine ads )

95. DIFFERENTIAL THRESHOLD/J.N.D/ WEBER’S LAW  The minimal difference that can be detected between two similar stimuli.  The j.n.d. (just noticeable difference) between two stimuli was not an absolute amount, but an amount relative to the intensity of the first stimulus.  Weber’s law states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different.  An additional level of stimulus equivalent to the j.n.d. must be added for the majority of people to perceive a difference between the resulting stimulus and the initial stimulus.

96. J.N.D (CONT’D) Pricing Decisions  If the price of 1 gram of gold goes up by Birr 1, consumers may not notice the increase as the increment would fall below the j.n.d.  A 1 Birr increase on the price of gasoline per liter would be easily noticed as it falls above the j.n.d.

97. J.N.D (CONT’D)  Product quality reduction that fall below the j.n.d. wouldn’t be perceived by consumers which makes it a waste from marketers point of view.  Making product improvement just equal to j.n.d. is the most efficient marketing decision.

98. MARKETING APPLICATION OF THE J.N.D. 1. Negative Changes  Reduction in product size, quantity, and quality.  Price increase.  Negative Changes shall not be noticeable to the public. They shall remain below the j.n.d. 2. Positive Changes  Product improvement (increase in product size, quality)  Updated packaging  Price reduction.  Positive changes shall be noticeable to consumers without being wastefully extravagant. It shall be at or just above the j.n.d.

99. SUBLIMINAL PERCEPTION  It is perception of stimuli without conscious awareness.  It is the process of perceiving stimuli that are too weak or too brief to be consciously seen or heard.  Perception of stimuli that are above the level of conscious awareness are called supraliminal perception.  Extensive research has shown no evidence that subliminal advertising can cause behavior changes  Some evidence that subliminal stimuli may influence affective reactions

100. CONSUMER LEARNING Definition  Learning is a change in behavior occurring as a result of past experience. (Henry Assael)  The term learning encompasses the total range of learning, from simple, reflexive responses to the learning of abstract concepts and complex problem solving. (Schiffman and Kanuk)  As consumers gain experience in purchasing and consuming products, they learn not only what brands they like and do not like, but also the features they like most in particular brands.  Consumers adjust their future behavior based on past experience.

101. DEFINITION OF LEARNING (CONT’D…)  Learning is any change in the content or organization of long term memory and/or behavior.  Information processing is a key concept in the learning process.  Information processing is a series of activities by which stimuli are perceived, transformed into information, and stored.  The four activities in the series are: 1. Exposure 2. Attention 3. Interpretation 4. Memory  Learning is the term used to describe the process by which memory and behavior are changed as a result of conscious and non-conscious information processing. (Hawkins, Best, and Coney)

102. CONSUMER BEHAVIOR – A LEARNED BEHAVIOR Culture Subculture Social class Schools Church Family Friends Personal experience Advertising Learning Values Attitudes Tastes, preferences Feelings Symbolic meanings Behaviors Purchase And use Behaviors

103. ELEMENTS OF LEARNING THEORIES 1. Motivation – It is a spurs to learning. A consumer motivated to buy a family car may seek information concerning the prices, quality, and other characteristics. 2. Cues – If motives serve to stimulate learning, cues are the stimuli that give direction to these motives. E.g. an ad for a car, price, styling, packaging, etc serve as cues. 3. Response – How individuals react or behave to a drive or cue constitutes response. If the auto manufacturer succeeds in forming a favourable image of an automobile model in the consumer’s mind, when the consumer is ready to buy, it is likely that he or she will consider buying. 4. Reinforcement – The likelihood that a specific response will increase in the future as a result of repeated satisfaction.

104. TWO SCHOOLS OF THOUGHT I. The Behaviorist School  Concerned with observing changes in responses as a result of exposure to a stimuli. 1. Classical conditioning  Views behavior as a result of a close association (contiguity) between a primary stimulus and a secondary stimulus 2. Instrumental conditioning  Views behavior as a function of the consumer’s assessment of the degree to which purchase behavior leads to satisfaction which in turn leads to repeat repurchase. II. The Cognitive School  Views learning as problem solving and focuses on changes in the customer’s psychological set (consumer’s attitudes and desired benefits) as a result of learning.  It describes learning with a frame work of complex decision making.

105. LEARNING SCHOOLS OF THOUGHT Learning Theories Behaviorist Cognitive Classical Conditioning Instrumental Conditioning

106. BEHAVIORAL LEARNING THEORIES  Also known as stimulus-response theories because they are based on the premise that observable responses to specific external stimuli signal that learning has taken place.  When a person reacts (responds) in a predictable way to a known stimulus, he is said to have “learned”.  Behavioral theories are not so much concerned with the process of learning as they are with the inputs (the stimuli that consumers select from the environment) and outcomes (the observable behaviors that result) of learning.  Behavioral theories do not focus on thought processes. They approach the mind as a “black box”.

107. CLASSICAL CONDITIONING  Regards all organisms (animal and human) as relatively passive entities that could be taught certain behaviors through repetition or “conditioning”.  A secondary stimulus (conditioned stimulus) is paired with a primary stimulus (unconditioned stimulus) that already elicits a particular response.  As a result of the pairing an association will be formed. Eventually, the secondary stimulus will elicit the same reaction as the primary stimulus.  An effective ad may link a product to a stimulus that evokes a positive feeling.  E.g. Marlboro cowboy campaign. The cowboy is the primary (unconditioned) stimulus and the positive feeling the cowboy elicits is the unconditioned response.

108. CLASSICAL CONDITIONING (CONT’D)  Consumers associate Marlboro cigarettes (conditioned stimulus) with the cowboy (unconditioned stimulus) through: 1. Repetitive advertising 2. Contiguity (association) between the unconditioned and conditioned stimulus (cowboy always linked to Marlboro) and the secondary or conditioned stimulus will evoke the same positive feeling as does the cowboy.  Advertising a product during a holiday or exciting sport program may result in the product itself generating an “excitement” response.  Pleasant cultural music played in stores may elicit a flamboyant mood.

109. PAVLOVIAN MODEL OF CLASSICAL CONDITIONING Unconditioned Stimulus Meat paste Conditioned Stimulus Bell Conditioned Stimulus Bell Unconditioned Response Salivation Conditioned Response Salivation After Repeated Pairings:

110. ANALOGOUS MODEL OF CLASSICAL CONDITIONING Unconditioned Stimulus Dinner aromas Conditioned Stimulus 8 o’clock news Conditioned Stimulus 8 o’clock news Unconditioned Response Salivation Conditioned Response Salivation After Repeated Pairings:

111. APPLICATIONS OF CLASSICAL CONDITIONING 1. Association  Associate products with positive symbols and images. 2. Repetition  It increases the strength of the association between a conditioned stimulus and an unconditioned stimulus and slows the process of forgetting.  Three-hit theory – Three exposures to an ad are needed. Research suggests that there is limit the amount of repetition that will aid retention.  Advertising wear out – Due to over-learning an individual can become satiated with numerous exposures, and both attention and retention will decline.  Marketers avoid wear-out by using: a) Cosmetic variations in the ads – use different backgrounds, different print types, different ad spokesperson. b) Substantive variations – change ad content across different versions of an ad.

112. APPLICATIONS OF CLASSICAL CONDITIONING (CONT’D….) 3. Stimulus Generalization (rub-off effect) – Making the same response to a slightly different stimuli  Learning depends not only on repetition but also on the ability of individuals to generalize.  Pavlov found out that a dog could learn to salivate not only to the sound of a bell but also to the similar sound of jangling keys.  The principle of stimulus generalization is applied by marketers to product line, form, category extensions, licensing.  The marketer adds related products to an already established brand, knowing that the new product is more likely to be adopted when it is associated with a known & trusted brand.

113. APPLICATIONS OF CLASSICAL CONDITIONING (CONT’D….) 4. Stimulus Discrimination  It is the opposite of stimulus generalization and results in the selection of a specific stimulus from among similar stimuli.  The consumer’s ability to discriminate among similar stimuli is the basis of positioning strategy which seeks to establish a unique image for a brand in the consumer’s mind.  Position and Product differentiation methods include product quality, price, distribution, service, image, etc.

114. REQUIREMENTS FOR UTILIZING CLASSICAL CONDITIONING 1. There should be no other stimuli that could overshadow the unconditioned stimulus. (Avoid overshadowing effect) e.g. Cowboy portrayed on a white horse. 2. Unconditioned stimuli should have no previous associations to other brands or product categories. (Avoid blocking effect) e.g. A beer ad using a cowboy. 3. The unconditioned stimulus should not be overly familiar and should be presented alone. (Avoid preexposure effect) e.g Serawit and Mulualem’s overexposure as a source person. 4. Classical conditioning is more effective when the conditioned stimulus is new.

115. INSTRUMENTAL (OPERANT) CONDITIONING  It requires the development of a link between a stimulus and a response where the individual determines the response that provides the greatest satisfaction.  Like classical conditioning, instrumental conditioning requires a link between a stimulus and a response. However, in instrumental conditioning, stimulus that results in the most satisfactory response is the one that is learned.  No previous stimulus-response association is required; response is within the conscious control of the individual.  In classical conditioning, the unconditioned stimulus is already linked to a response and response if reflexive.

116. INSTRUMENTAL (OPERANT) CONDITIONING (CONT’D)  In B.F. Skinner’s experiment a subject was free to act in a variety of ways. The consequences of the act (degree of satisfaction or dissatisfaction) will influence future behavior.  In consumer behavior terms, instrumental conditioning suggests that consumers learn by means of a trial-and-error process in which some purchase behaviors result in more favorable outcomes (rewards) than other purchase behaviors.  Behavior results in an evaluation of degree of reward or punishment obtained from past behavior.  Reward will increase the probability of repeating the behavior; punishment will decrease that probability.  A favorable experience is “instrumental” in teaching the individual to repeat a specific behavior.

117. REINFORCEMENT- DEPENDENCE OF OUTCOME ON LEARNERS ACTIONS Behavior Reward or Punishment Increase or decrease probability of Response (Repeat Behavior) Stimulus (Rice popcorn) Increases probability of response to the stimulus (future purchase) Desired response (Consumption) Reinforcement (Pleasant taste)

118. REINFORCEMENT OF BEHAVIOR  Skinner distinguished two types of reinforcement (reward) that reinforce the probability that a response will be repeated which leads to habit formation. 1. Positive Reinforcement (The Presence of Reward)  consists of events that strengthen the likelihood of a specific response.  An ad that shows using a shampoo that leaves your hair feeling silky and clean is likely to result in a repeat purchase of the shampoo. 2 Negative Reinforcement (The Absence of Punishment)  Unpleasant or negative outcome that also serves to encourage a specific behavior.  An ad that shows fear appeals - insurance, cigarette smoking or using anti dandruff shampoo which avoids social harassment is likely to result in a purchase.

119. EXTINCTION AND FORGETTING Extinction  When a learned response is no longer reinforced, it diminishes to the point of extinction, that is, to the point at which the link between the stimulus and the expected reward is eliminated.  If a consumer is no longer satisfied with the product, a process of extinction – elimination of the link between stimulus and expected reward – takes place.  Successful antismoking commercials will create extinction by eliminating the link between a cigarette and the pleasure of smoking.  Marketers can combat extinction through the deliberate enhancement of consumer satisfaction. Forgetting  Forgetting occurs when the stimulus is no longer repeated or perceived.  If a product is not used or if its advertising is discontinued, consumers may forget that product.  Marketers can combat extinction through the deliberate enhancement of consumer satisfaction.

120. MARKETING APPLICATIONS OF INSTRUMENTAL CONDITIONING  Product quality: Have consistent quality products so that the use of the product to meet a consumer need is reinforced.  Customer Satisfaction (Reinforcement)  The objective of all marketing strategy should be to reinforce the consumer’s purchase through product satisfaction.  Consumers will repurchase a product when they are satisfied.  Marketers must be certain to provide the best possible product for the money and to avoid raising consumer expectations beyond what the product can deliver.  Relationship Marketing – developing a close personalized relationship with customers – is a form of non product reinforcement.  Use Sales Promotion to create an initial inducement to try the product. Give ‘extra’ reinforcement (free samples, rebates, discount coupons) for purchasing a product.

121. COGNITIVE LEARNING  Learning based on mental activity is called cognitive learning.  Not all learning takes place as the result of repeated trials.  Learning takes place as the result of consumer thinking and problem solving.  Sudden learning is also a reality. When confronted with a problem, we sometimes see the solution instantly.  Cognitive psychology views learning as a problem- solving process rather than as the development of connections between stimulus and response.  Cognitive learning theory holds that learning involves complex mental processing of information.  Instead of stressing the importance of repetition or the association of a reward with a specific response, cognitive theorists emphasize the role of motivation and the mental process in producing a desired response.

122. PROBLEM SOLVING: UNDERSTANDING RELATIONSHIPS Goal Purposive Behavior Insight Goal Achievement Cognitive learning for consumers is a process of perceiving stimuli, associating stimuli to needs, evaluating alternative brands, and assessing whether products meet expectations. Learning is equated to a process of complex decision making because of the emphasis on problem solving. While cognitive theory emphasizes the thought process involved in consumer learning, classical and instrumental conditioning emphasize the results based on the stimulus association.

123. VICARIOUS LEARNING, MODELING, OR OBSERVATIONAL LEARNING  Learning theorists have noted that a considerable amount of learning takes place in the absence of direct reinforcement, either positive or negative, through a process psychologists call modeling, observational learning, or vicarious learning.  Consumers often observe how others behave in response to certain situations (stimuli) and the ensuing results (reinforcement) that occur, and they imitate (model) the positively reinforced behavior when faced with similar situations.  Modeling is the process through which individuals learn behavior by observing the behavior of others and the consequences of such behavior.  The role models are people that consumers admire because of such traits as appearance, accomplishments, skill, and social class.  Advertisers use models or celebrities who match with the profile of the target market.

124. INFORMATION PROCESSING & MEMORY STORES Sensory Input Rehearsal Encoding Retrieval Sensory Store Short term Store (working Memory Long term Store Memory is the total accumulation of prior learning experience.

125. HOW CONSUMERS STORE, RETAIN, & RETRIEVE INFORMATION: STRUCTURE OF MEMORY  Central to information processing is memory.  Memory is the total accumulation of prior learning experience.  Because information processing occurs in stages, it is generally believed that there are sequential “storehouses” in memory where information is kept temporarily before further processing. 1. A sensory store 2. A short term store, and 3. A long term store

126. SENSORY STORE  All data come to us through our senses where the image of a sensory input lasts for just a second or two in the mind’s sensory store. i.e., if it is not processed, it is lost immediately.  As consumers are bombarded with stimuli they block out or filter information that they don’t need or can’t use. SHORT TERM STORE  It is the stage of real memory in which information is processed and held for just a brief period.  Looking up a number in a telephone book, only to forget it just before dialing.  If information in the short-term store undergoes the process known as rehearsal (the silent, mental repetition of information), it is then transferred to the long-term store from 2 to 10 seconds.  If information is not rehearsed and transferred, it is lost in about 30 seconds or less.  The amount of information that can be held in short-term storage is limited to about four or five items.

127. LONG-TERM STORE  In contrast to the short-term store, where information lasts only a few seconds, the long-term store retains information for relatively extended periods of time.  Information might be kept in long-term stores from few minutes to days, weeks, or years. Retention  As individuals gain more knowledge about a subject, they expand their network of relationships and search for additional information.  This process is known as activation, which involves relating new data to old to make the material more meaningful. Retrieval  It is the process by which we recover information from long storage.  Marketers maintain that consumers tend to remember the product’s benefits rather than its attributes, suggesting that advertising messages are most effective when they link the products’ attributes with the benefits that consumers seek from the product.

128. MODELS OF COGNITIVE LEARNING (CONSUMER RESPONSE PROCESS): LIMITED AND EXTENSIVE INFORMATION PROCESSING Sequential Stages of Processing Tri- component model AIDA model Decision Making Model Innovation Adoption Model Information Processing Model Cognitive Attention Awareness Knowledge Awareness Presentation Attention Comprehension Affective Interest Desire Evaluation Interest Evaluation Yielding (liking) Retention Conative Action Purchase Post-purchase valuation Trial Adoption Behavior

129. INVOLVEMENT THEORY  Purchases of minimal personal importance are called low involvement purchases.  Complex search-oriented purchases are considered high- involvement purchases.  Involvement theory developed from a stream of research called hemispheric lateralization or split-brain theory.  The basic premise of split-brain theory is that the right and left hemispheres of the brain specialize in the kinds of information they process.  The left hemisphere is primarily responsible for cognitive activities such as reading, speaking, and attributional information processing.  The right hemisphere of the brain is concerned with nonverbal, pictorial, and holistic information.  While the left side of the brain is rational, active, and realistic; the right side is emotional, metaphoric, impulsive, and intuitive.

130. INVOLVEMENT THEORY & MEDIA STRATEGY Low Involvement Medium  TV is a low involvement medium as individuals passively process and store right-brain (nonverbal, pictorial) information with out active involvement.  Passive learning occurs through repeated exposure to a TV commercial. High Involvement Medium  As cognitive (verbal) information is processed by the left side of the brain, print media (newspaper, and magazines) and interactive media (internet) are high involvement media.

131. CENTRAL AND PERIPHERAL ROUTE TO PERSUASION  This theory illustrates the concepts of extensive and limited problem solving for high and low involvement purchase situations.  Consumers are more likely to carefully evaluate the merits and weaknesses of a product when the purchase is of high relevance.  Consumers will engage in very limited information search and evaluation when the purchase holds little relevance.  For high involvement purchases, C-R-P is the most effective marketing strategy. Focus on the quality of the argument and message elements.  For low involvement purchases, P-R-P is the most effective marketing strategy. Focus on non message elements such as drama, spokes person, or back ground music.

132. THE ELABORATION LIKELIHOOD MODEL (ELM)  According to ELM, the person’s level of involvement during message processing is a critical factor in determining which route to persuasion is likely to be effective.  When involvement is high, consumers follow the central route and base their attitudes or choices on the message arguments.  When involvement is low, consumers follow the peripheral route and rely on non message elements to form attitudes or make product choice.

133. ELM MODEL  According to the ELM model, the attitude formation or change process depends on the nature of information processing that occurs in response to a persuasive message.  High elaboration means the receiver engages in careful consideration, thinking, and evaluation of the information or arguments contained in the message.  Low elaboration occurs when the receiver does not engage in active information processing or thinking but rather makes inferences about the position being advocated in the message on the basis of simple positive or negative cues.

134. MEASURES OF CONSUMER LEARNING: RECOGNITION AND RECALL MEASURES  The dual goals of consumer learning are increased market share and brand loyal consumers. Recognition and recall tests are conducted to determine whether:  consumers remember seeing an ad,  the extent to which consumers have read or see an ad,  the extent to which consumers can recall the content of an ad,  Consumers resulting attitudes toward the product and the brand, and  Consumers purchase intentions.  Recognition tests are aided recall where the consumer is shown an ad and asked whether he remembers seeing it and can remember any of its salient points.  Recall tests use unaided recall where the consumer is asked whether he has read a specific magazine or watched a specific TV show, and if so, can recall any ads or commercials seen, the product advertised, the brand, and any salient points about the product.

135. BRAND LOYALTY  Brand loyalty is the ultimate desired outcome of consumer learning.  Brand loyalty consists of both attitudes and behaviors toward a brand and that both must be measured.  Attitudinal measures are concerned with consumers overall feelings (evaluation) about the brand and their purchase intentions.  Behavioral measures are based on observable responses to promotional stimuli – repeat purchase behavior rather than attitude toward the product or brand.

136. BRAND LOYALTY AS A FUNCTION OF RELATIVE ATTITUDE AND PATRONAGE BEHAVIOR High Relative attitude Low Repeat Patronage High Low Loyalty Latent Loyalty Spurious Loyalty (Brand Habit) No Loyalty

137. PERSONAL VALUES, LIFESTYLES AND PSYCHOGRAPHICS  Values are enduring beliefs that a given behavior or outcome is good or bad.  Personal value is defined as “an enduring belief that a specific mode of conduct or end-state or outcome is desirable or good.”

138. MEASURING PERSONAL VALUES: ROKEACH VALUE SURVEY (RVS) Terminal value Instrumental value A comfortable life Ambitious An exciting life Broad-minded A sense of accomplishment Capable A world at pea Cheerful Equality Courageous Family security Forgiving Freedom Helpful Happiness Honest Inner harmony Imaginative Matured love Independent National security Intellectual Pleasure Logical Salivation Loving Self-respect Obedient Social recognition Polite True friendship Responsible Wisdom Self respect

139. LIST OF VALUES (LOV) 1. Self respect 2. Warm relationship with others 3. Sense of accomplishment 4. Self fulfillment 5. Fun and enjoyment in life 6. Excitement 7. Sense of belongingness 8. Being well respected 9. Security

140. MEANS-END CHAIN ANALYSIS (MEC)  Means-end chain analysis: A technique that helps us understand how values link to attributes in products and services.  Value laddering: One way to do MEC analysis is through determining the root values related to product attributes that are important to consumers.

141. MEANS-END CHAIN ANALYSIS (MEC) Product Attribute Benefit Instrumental value Terminal value Light beer I Fewer calories I won’t gain weight Helps me make healthy I feel good about myself Light beer II Fewer calories, light test Less filling, relaxing Good time, fun, friendship Belonging

142. LIFESTYLES  Lifestyles are consumers’ modes of living as reflected in their activity, interests, and opinions.  AIO: Lifestyles are defined by how people spend their time (Activities), what they consider important in their environment (Interest) and what they think of themselves and the world around them (Opinions). Activity Interest Opinion Work Family Social Vacation Home Culture Shopping Food Personal relations'

143. DETERMINANTS OF LIFE STYLE

144. CONSUMER LIFESTYLE AND PRODUCT CONSTELLATIONS  Lifestyle implies a pattern of behavior that is reflected in (and reflects) the consumption not merely of single product but of interrelated product clusters or product constellations.  Product constellations are clusters of complementary products, specific brands, or consumption activities.  Male professionals are defined by such products as Rolex watch, Lacoste shirt, Atlantic magazine, French wine, BMW.  Product constellations aid in identifying consumer segments.

145. PSYCHOGRAPHICS: COMBINING VALUES, PERSONALITY, & LIFESTYLES  Psychographics involves the use of psychological, sociological, and anthropological factors to determine how the market is segmented by the propensity of groups within the market and their reason to make a particular decision about a product.  Psychographics is an operational technique to measure lifestyles.  Psychographics is more comprehensive than demographic, behavioral and socioeconomic measures.  Demographics allow us to describe who buys our products, but psychographics allow us to understand why they buy.

146. VALS VALS (Values and Lifestyles Survey)  A psychographic tool that measures demographic, value, attitude, and lifestyle variables. VALS2 American Segments  Based on the consumption of 170 products, VALS2 classifies consumers into eight major segments based on tow dimensions: 1. Resources (education, income, intelligence, etc) 2. Self-orientation (principle, status, or action orientation). Three Types of self orientation 1. Principle-Oriented Consumers-Guided by intellectual aspects rather than by feelings or other people’s opinion. 2. Status-Oriented Consumers – Base their views on the actions and opinions of others and strive to win their approval 3. Action-Oriented Consumers- Desire social or physical action, variety, activity, and risk.

147. VALS FRAMEWORK

148. EIGHT SEGMENTS OF CONSUMERS Principle Oriented Segments 1. Believers (17%)  are principle oriented consumers with modest resources.  Represent the largest of the VALS2 segments.  Poorly educated and have deeply held beliefs about moral codes of conduct and ethics.  About one third are retired. 2. Fulfilleds (12%)  Are mature, responsible, well educated, well informed, and older.  Happy with their families, have high incomes, and are value oriented in their consumption practices.

149. STATUS ORIENTED SEGMENTS 3. Strivers (14%)  Have blue collar backgrounds  Strive to emulate people they find more successful than themselves. 4. Achievers (10%)  Have higher resources  Are focused on their work and families  Tend to be successful at their jobs. Action Oriented Segments 5. Makers (12%)  Are relatively young and value self-sufficiency  Not interested in material possessions  Focus on family, work, and physical recreations 6. Experiencers (11%)  Are young, energetic group who spend a great deal of time on physical exercise and social activities.  Spend in the clothing, fast food, and music categories.

150. CTD 7. Actualizers  Have greater resource base.  Have a great deal of self-confidence, high incomes, and education.  Use possessions to indicate their own personal style, taste, & characteristics.  Indulge themselves in any or all of the self- orientations. 8. Strugglers  Have the lowest incomes of the VALS2 segments.  Focus on surviving.  Not described by any self-orientation.

151. APPLICATIONS OF LIFESTYLE CHARACTERISTICS TO MARKETING STRATEGIES  Market segmentation  Media selection  Advertising

152. CONSUMER ATTITUDE FORMATION AND CHANGE  An attitude is a learned predisposition to behave in a consistently favourable or unfavourable way with respect to a given object.  The Attitude Object – Object includes marketing related concepts, such as product, brand, service, ads, people, price, medium, etc.  Attitudes are learned predispositions – Attitudes are learned. Attitudes relevant to purchase a product are formed through direct experience, word of mouth information, exposure to mass-media.  Attitudes have consistency – Attitudes are relatively consistent with the behavior they reflect. However, attitudes are not necessarily permanent; they do change.

153. STRUCTURAL MODELS OF ATTITUDE 1. Tricomponent attitude model 2. Multiattribute attitude models 3. Trying-to-consume model 4. Attitude toward the ad model

154. TRICOMPONENT ATTITUDE MODEL

155. TRICOMPONENT ATTITUDE MODEL 1. The Cognitive Component  The information, knowledge, belief and perception that are acquired by a combination of direct experience with the attitude object. 2. The Affective Component  A consumer’s emotions or feelings about a particular product or brand. 3. Conative Component  The likelihood or tendency that an individual will undertake a specific action or behave in a particular way with regard to the attitude object.  The conative component is treated as an expression of the consumer’s intention to buy.  The conative component may include the actual behavior itself.

156. MULTIATTRIBUTE ATTITUDE MODELS (FISHBEINS’ MODEL)  Attitude models that examine the compositions of consumer attitudes in terms of selected product attributes or beliefs.  Three types of Multiattribute attitude models 1. The attitude-toward-object model 2. The attitude-toward-behavior model 3. Theory-of-reasoned-action (TORA) model

157. THE ATTITUDE TOWARD OBJECT MODEL  Attitude is a function of evaluation of product-specific beliefs and evaluation.  The consumer’s attitude toward a product is a function of the presence or absence and evaluation of certain product- specific beliefs and/or attributes.  Consumers have favorable attitudes toward those brands that they believe have an adequate level of attributes that they evaluate positive.  Consumers have unfavorable attitudes toward those brands that they feel do not have an adequate level of desired attributes or have too many negative or undesired attributes. THE ATTITUDE TOWARD BEHAVING MODEL  Is the attitude toward behaving or acting with respect to an object, rather than the attitude toward the object itself.  It is a model that proposes that a consumer’s attitude toward a specific behavior is a function of how strongly he or she believes that the action will lead to a specific outcome (either favourable or unfavorable).

158. THEORY-OF-REASONED-ACTION MODEL (THE EXTENDED FISHBEIN MODEL)  A comprehensive, integrative model of attitudes which shows the interrelationships among attitudes, intention, and behavior.  Like the tricomponent model, the TORA model incorporates a cognitive, affective, and the conative component with a different pattern of arrangement.

159. SIMPLIFIED VERSION OF TORA MODEL Beliefs that Behavior leads To certain outcomes Evaluation of the outcomes Beliefs that Specific Referents think I should or Should not Perform the behavior Motivation To comply With the Specific referents Attitude toward The behavior Subjective Norm (Normative beliefs) Intention Behavior

160. THEORY OF PLANNED BEHAVIOR (TPB)  Developed by Fishbein & Ajzen  An extension of the Theory of Reasoned Action (TRA)

161. TPB VERSUS TRA  Adds the construct:  Perceived Behavioral Control  Belief about personal control in combination with belief about the one’s ability to do what needs to be done.  Actual Behavioral Control: have the skills and resources needed to quit.

162. TPB CONT.  People will perform a behavior if:  They believe the advantages of success outweigh the disadvantages of failure.  They believe that other people with whom they are motivated to comply, think they should perform the behavior.  They have sufficient control over the factors that influence success or ability to perform the behavior.

163. TPB Attitude toward the behavior Subjective Norm Intention Behavior Perceived Behavioral Control

164. ATTITUDE TOWARD THE AD MODEL  A model that proposes that a consumer forms various feelings (affects) and judgments (cognition) as the result of exposure to an ad, which in turn, affect the consumer’s attitude toward the ad and attitude toward the brand.  The consumer’s attitude toward the ad and beliefs about the brand influence his or her attitude toward the brand.

165. ATTITUDE TOWARD THE AD MODEL (CONT’D…) Exposure to an Ad Attitude toward the Brand Judgments about The Ad (Cognition) Beliefs about the Brand Feelings from The Ad (Affect) Attitude toward The Ad

166. ATTITUDE FORMATION ISSUES ON ATTITUDE FORMATION 1. How attitudes are learned? 2. Sources of influence on attitude formation 3. Personality factors How attitudes are learned?  Attitude formation – A shift from no attitude to an attitude is a result of learning. a. Classical conditioning - Consumers purchase new products that are associated with a favorably viewed brand name.  Favorable attitude toward the brand name is the result of repeated satisfaction with other products produced by the same company.  In terms of classical conditioning, an established brand name is an unconditioned stimulus that through past positive reinforcement resulted in a favourable brand attitude.  A new product, yet to be linked to the established brand, would be the conditioned stimulus. b. Trial – Attitudes follow the purchase and consumption of a product due to non availability of alternatives, low involvement, or free gifts from sales promotion. c. When consumers seek to solve a problem or satisfy a need; Information exposure, knowledge, and beliefs about a product or service will be the basis to form an attitude, positive or negative.

167. HOW ATTITUDES ARE FORMED AND LEARNED?  There are important links between the learning theories and the attitude formation process.  Attitudes are formed through one of three related processes. 1. Compliance- Attitudes are formed to gain reward or avoid punishment.  People avoid smoking cigarettes to avoid the problem of contracting cancer. 2. Identification-Attitude is formed to allow the person to fit in, or to be similar to others. 3. Internalization-occurs when a person is motivated to have an objectively correct or “right” position on an issue. When attitudes are internalized, they become part of a person’s value system.

168. SOURCES OF INFLUENCE ON ATTITUDE FORMATION  Personal experience – To encourage consumers experience the product, use coupons, samples, free gifts, etc.  Family and friends influence  Direct marketing  Mass media  Personality The Impact of Personality on Attitude Formation  Consumers with a high need for cognition (those who crave information and enjoy thinking) are likely to form positive attitudes in response to ads that are rich in product-related information.  Consumers who are low in need for cognition are likely to form positive attitudes in response to ads that feature an attractive model or celebrity.

169. STRATEGIES OF ATTITUDE CHANGE 1. Changing the basic motivation function 2. Associating the product with an admired group or event. 3. Resolving two conflicting attitudes 4. Altering components of the multiattribute model 5. Changing beliefs about competitors’ brands

170. CHANGING THE BASIC MOTIVATION FUNCTION  The Functional Approach - An effective strategy for changing consumer attitudes toward a product is to make particular needs prominent.  Attitudes serve four key functions for consumers. 1. The utilitarian function  Consumers hold certain brand attitudes because of a brand’s utility.  One way of changing attitudes in favor of a product is by showing people that it can serve a utilitarian purpose that they may not have considered. 2. The ego-defensive function  Most people want to protect their self images from inner feelings of doubt (perspiration, dandruff, etc) and want to replace their uncertainty with a sense of security and personal confidence.  Ads for cosmetics and personal care products develop a favorable attitude by serving the ego defensive function. (Anti perspirants, anti dandruff shampoos, etc) 3. The value-expressive function  Attitudes are an expression or reflection of the consumer’s general values, lifestyle, and self concept.  McDonalds introduction of vegetable burgers for the Indian market. 4. The knowledge function  Many product and brand positioning are attempts to satisfy the need to know and to improve the consumer's attitudes toward the brand by emphasizing its advantages over competitive brands.

171. ASSOCIATING THE PRODUCT WITH A SPECIAL GROUP, EVENT, OR CAUSE  It is possible to alter attitudes toward products, services, and brands by pointing out their relationships to particular social groups, events, or causes.  Companies regularly include mention in their advertising of the civic and public acts that they sponsor to let the public know about the good that they are trying to do.  DKT Ethiopia, MIDROC Ethiopia, Sunshine Construction, etc Resolving Two Conflicting Attitudes  Attitude-change strategies can sometimes resolve actual or potential conflict between two attitudes.  if consumers can be made to see that their negative attitude toward a product or its attributes is really not in conflict with another attitude, they may be induced to change their evaluation of the brand (i.e., moving from negative to positive).

172. ALTERING COMPONENTS OF THE MULTIATTRIBUTE MODEL  The Multiattribute attitude models have implications for attitude-change strategies; 1. Changing the relative evaluation of attributes 2. Changing brand Beliefs 3. Adding an attribute and 4. Changing the overall brand rating. Changing the Relative Evaluation of Attributes  when a product category is naturally divided according to distinct product features or benefits that appeal to a particular segment of consumers, marketers usually have an opportunity to persuade consumers to "cross over," that is, to persuade consumers who prefer one version of the product (e.g., a standard "soft" contact lens) to shift their favorable attitudes toward another version of the product (e.g., a disposable contact lens), and possibly vice versa.

173. CHANGING BRAND BELIEFS Adding an Attribute:  A cognitive strategy consists of adding an attribute.  This can be accomplished either by adding an attribute that previously has been ignored or one that represents an improvement or technological innovation. Changing the Overall Brand Rating:  It is a cognitive-oriented strategy attempting to alter consumers’ overall assessment of the brand directly, without attempting to improve or change their evaluation of any single brand attitude.  This strategy frequently relies on some form of general statement that “this is the largest-selling brand” or “the one all others try to imitate”, etc.  This is the most common form of advertising appeal. Advertisers constantly are reminding consumers that their product has "more" or is "better" or "best" in terms of some important product attribute. CHANGING AN ATTRIBUTE

174. CHANGING BELIEFS ABOUT COMPETITORS’ BRANDS  Another approach to attitude-change strategy involves changing consumer beliefs about the attributes of competitive brands or product categories.  This strategy must be used with caution. Comparative ad shall convey reliable information, it works better for newly introduced products, for market followers than leaders, where consumers in the market have low degree of brand loyalty.

175. THE ELM MODEL  A model that illustrates how consumers process information in high and low involvement situations.  A theory that suggest that a person’s level of involvement during message processing is a critical factor in determining which route to persuasion is likely to be effective.  The model presents a continuum from elaborate (central) processing to non-elaborate (peripheral) processing.  The degree of elaboration depends on: a) Consumers motivation to process information and b) Consumers ability to process information

176.  The elaboration likelihood model (ELM) proposes the view that consumer attitudes are changed by two distinctly different “routes to persuasion”: 1. A central Route to Persuasion  The central route is particularly relevant to attitude change when a consumer's motivation or ability to assess the attitude object is high;  Attitude change occurs because consumer actively seeks out information relevant to the attitude object itself.  When consumers are willing to exert the effort to comprehend, learn, or evaluate the available information about the attitude object, learning and attitude change occur via the central route. 2. A Peripheral Route to Persuasion  When a consumer's motivation or assessment skills are low (e.g., low involvement), learning and attitude change tend to occur via the peripheral route without the consumer focusing on information relevant to the attitude object itself.  Attitude change often is an outcome of secondary inducements (e.g., cents-off coupons, free samples, beautiful background scenery, great packaging, or the encouragement of a celebrity endorsement). ELM (CONT’D…)

177. SCHEMATIC PRESENTATION OF CRP VS PRP Exposure to marketing Stimuli High involvement with product, Message, or purchase Strong attention focused on central Product related features Conscious thoughts about Product attributes and use Outcomes; elaborative activities Persuasion alters product Beliefs which influence brand attitude & purchase intentions Low involvement with product, Message, or purchase Limited attention focused on Peripheral, non-product features Low or non-conscious information Processing; few or no elaborative activities Persuasion operates through Classical conditioning. Affect change Attitude toward the ad, non conscious beliefs changes led to behavioral and attitude changes.

178. BEHAVIOR CAN PRECEDE OR FOLLOW ATTITUDE FORMATION  Attitude formation and attitude change has stressed the traditional "rational" view that consumers develop their attitudes before taking action (e.g.,” Know what you are doing before you do it“ or “thinking or before acting).  The two logical and rational alternatives to this "attitude precedes behavior" perspective are: 1. Cognitive dissonance theory and 2. Attribution theory  each provide a different explanation as to why behavior might precede attitude formation.

179. WHY MIGHT BEHAVIOR PRECEDE ATTITUDE FORMATION? Form Attitude Behave (Purchase) Form Attitude

180. COGNITIVE DISSONANCE THEORY  Discomfort or dissonance occurs when a consumer holds conflicting thoughts about a belief or an attitude object.  when consumers have made a commitment, they may begin to 'feel cognitive dissonance when they think of the unique, positive qualities of the brands not selected ("left behind"). Post Purchase Dissonance  Cognitive dissonance that occurs after a purchase commitment.  Because purchase decisions often require some amount of compromise, post purchase dissonance is quite normal.  Thus, in the case of post purchase dissonance, attitude change is frequently an outcome of an action or behavior.

181. ATTRIBUTION THEORY  Attribution theory attempts to explain how people assign causality (e.g., blame or credit) to events and form or alter their attitudes as an outcome of assessing their own or other people’s behavior.  In attribution theory, the underlying question is "Why did I do this?" "Why did she try to get me to switch brands?"  This process of making inferences about one's own or another's behavior is a major component of attitude formation and change.  Issues in attribution theory 1. Self-perception theory  Foot-in-the-door technique 2. Attribution toward others 3. Attribution toward things 4. How we test our attributions

182. SELF PERCEPTION THEORY  A theory that suggests that consumers develop attitudes by reflecting on their own behavior.  it is useful to distinguish between internal and external attributions. Defensive Attribution  A theory that suggests consumers are likely to accept credit personally for success (internal attribution) and to credit failure to others or to outside events (external attribution).  It is crucial that marketers offer uniformly high-quality products that allow consumers to perceive themselves as the reason for the success. i.e., “I am competent.”

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