Unit2 161017112537 PDF
Unit2 161017112537 PDF
Unit2 161017112537 PDF
Behaviour
Dr. ANANDA KUMAR
Professor,
Department of Management
Studies,
Christ College of Engg. & Tech.
Puducherry, India.
Mobile: +91 99443 42433
E-mail: [email protected]
UNIT – I
1. Personal Factors
2. Product Factors
3. Situational Factors
1. Personal Factors
Self-concept, needs, and values are the three personal
factors that influence the extent of consumer
involvement in a product or service. The more product
image, the value symbolism inherent in it and the needs
it serves are fitting together with the consumer self-
image, values and needs, the more likely the consumer
is to feel involved in it.
2. Product Factors
Product differentiation affects involvement. The
involvement increases as the number of alternatives that
they have to choose from, increases.
Involvement increases when a product gains public
attention. Any product that is socially visible or that is
consumed in public, demands high involvement. For
example, involvement in the purchase of car is more
than the purchase of household items.
3. Situational Factors
The situation in which the product is bought or used can
generate emotional involvement. The reason for
purchase or purchase occasion affects involvement.
The need to make a fast decision also influences
involvement. A consumer who needs a new refrigerator
and sees a ‘one- day- only sale’ at an appliances retailer
does not have the time to shop around and compare
different brands and prices. The eminence of the
decision heightens involvement.
Types of Involvement
1. Situational Involvement
Situational involvement is temporary and refers to
emotional feelings of a consumer, experiences in a
particular situation when one thinks of a specific product
2. Enduring Involvement
Enduring involvement is persistent over time and refers
to feelings experienced toward a product category
across different situations. For example, holiday- makers
renting a resort for their trip are highly involved in their
choice, but their involvement is temporary.
Effects of Consumer Involvement
1. Search for Information
2. Processing Information
3. Information Transmission
Case Study
Abstract:
Though the sale of the BMW branded vehicles in North America have
been growing at a steady pace, many industry-watchers felt that it was
not as big a brand in North America as it is in Europe. With market
research data in 2005 suggesting that a very high proportion of people
buying luxury cars in the US did not even consider buying BMW, the
company attempted to reposition the brand to appeal to the 'creative
class' rather than relying on its traditional customer base consisting of
'yuppies'.
Issues:
» Socio-economic classification
» Social class
» Consumer behavior and marketing - market segmentation, targeting,
promotion
Case Study
Introduction
For the year 2007, BMW of North America LLC (BMW LLC), the North
American arm of a leading German luxury car manufacturer BMW AG, reported
sales of 293,795 BMW branded vehicles. This represented a growth of 7.1
percent compared to 2006. Even in 2006 the BMW branded vehicles had
posted a growth of 3 percent compared to 2005...
Questions for Discussion:
1. How do socio-economic factors influence consumer behavior? Use relevant
examples to put forward your view. What are the implications for marketers?
2. Do you think BMW’s new strategy in North America will work? Why (not)?
Models of Consumer Involvement
There are four prominent models of consumer behavior
based on involvement which help marketers in making
strategic decision particularly in marketing
communication related strategies. The four models are
as follows.
Thinking Feeling
HIGH INVOLVEMENT
1. Information 2. Affective
(Thinker) (Feeler)
Model: Learn-Feel-Do Model: Feel-Learn-Do
3. Habit Formation 4. Self-Satisfaction
(Doer) (Reactor)
Model: Do-Learn-Feel Model: Do-Feel-Learn
LOW INVOLVEMENT
2. Learn-Feel-Do Hierarchy Model
Information Search
Evaluation of Alternatives
Purchase Decision
Post-Purchase Behavior
1. Need Recognition
When a person has an unsatisfied need, the buying
process begins to satisfy the needs. The need may be
activated by internal or external factors. The intensity of
the want will indicate the speed with which a person will
move to fulfill the want. On the basis of need and its
urgency, the order of priority is decided. Marketers
should provide required information of selling points.
2. Information Search
Identified needs can be satisfied only when desired
product is known and also easily available. Different
products are available in the market, but consumer must
know which product or brand gives him maximum
satisfaction. And the person has to search out for
relevant information of the product, brand or location.
Consumers can use many sources e.g., neighbors,
friends and family.
3. Evaluation of Alternatives
This is a critical stage in the process of buying.
Following are important elements in the process of
alternatives evaluation
a. A product is viewed as a bundle of attributes. These
attributes or features are used for evaluating products or
brands. For example, in washing machine consumer
considers price, capacity, technology, quality, model and
size.
b. Factors like company, brand image, country, and
distribution network and after-sales service also become
critical in evaluation.
4. Purchase Decision
Outcome of the evaluation develops likes and dislikes
about alternative products or brands in consumers. This
attitude towards the brand influences a decision as to
buy or not to buy. Thus the prospective buyer heads
towards final selection. In addition to all the above
factors, situational factors like finance options, dealer
terms, falling prices etc., are also considered.
5. Post- Purchase Behavior
Post-purchase behavior of consumer is more important
as far as marketer is concerned. Consumer gets brand
preference only when that brand lives up to his
expectation. This brand preference naturally repeats
sales of marketer. A satisfied buyer is a silent
advertisement. But, if the used brand does not yield
desired satisfaction, negative feeling will occur and that
will lead to the formation of negative attitude towards
brand.
Levels Of Consumer Decision
Making
1. Extensive Problem Solving (EPS)
2. Limited Problem Solving (LPS)
3. Routine Problem Solving (RPS)
1. Extensive Problem Solving (EPS)
When consumers buy a new or unfamiliar product it
usually involves the need to obtain substantial
information and a long time to choose. They must form
the concept of a new product category and determine
the criteria to be used in choosing the product or brand.
2. Limited Problem Solving (LPS)
Sometimes consumers are familiar with both product
category and various brands in that category, but they
have not fully established brand preferences. They
search for additional information which helps them to
discriminate among various brands.
3. Routine Problem Solving (RPS)
When consumers have already purchased a product or
brand, they require little or no information to choose
the product. Consumers involve in habitual and
automatic purchases.
Consumer Behavior and Marketing
Implications
The basic belief of marketing-oriented company is that
the customer is the hub around which the business
revolves. Therefore, understanding what makes people
in general buy and what makes your customer in
particular buy, is a vital part of business success. Market
itself means – customer, around whom all marketing
strategies are formulated and implemented. In order to
meet competition at the market place, the marketing
managers are using various methods to add value to the
final product which will reach the hands of the
consumers.
Consumer Behavior and Marketing
Implications
Consumer Behavior and Marketing Strategies
Consumer Behavior and Market Segmentation
Consumer Behavior and Product Positioning
Consumer Behavior and Marketing Research
Consumer Behavior and Non-Profit and Societal
Marketing
Consumer Behavior and Governmental Decision
Making
1. Consumer Behavior and
Marketing Strategies
Understanding the consumer behavior is the basis for
marketing strategy formulation. Consumer’s reaction to
strategy determines the organization success or failure.
In this competitive environment organizations can
survive only by offering more customer value - difference
between all the benefits derived from a total product and
all the costs of acquiring those benefits - than
competitors.
2. Consumer Behavior and Market
Segmentation
The most important marketing decision a firm makes is
the selection of one or more segments to focus their
marketing effort. Marketers do not create segments but
they find it in the market place. Market segmentation is
the study of market place in order to discover viable
group of consumers who are homogeneous in their
approach in selecting and using goods or services.
2. Consumer Behavior and Market
Segmentation
The most important marketing decision a firm makes is
the selection of one or more segments to focus their
marketing effort. Marketers do not create segments but
they find it in the market place. Market segmentation is
the study of market place in order to discover viable
group of consumers who are homogeneous in their
approach in selecting and using goods or services.
3. Consumer Behavior and Product
Positioning
Product positioning is placing the product, service,
company, or shop in the mind of consumer or target
group. Through positioning marketers seek the right fit
between a product and desired customer benefits. The
right positioning means understanding the consumer
perception process in general and perception of
company’s product in particular.
4. Consumer Behavior and
Marketing Research
Studying consumer behavior enables marketing
researchers to predict how consumers will react to
promotional messages and to understand why they
make the purchase decision they do. Marketers realized
that if they know more about the consumer decision
making criteria, they can design marketing strategies
and promotional messages that will influence consumers
more effectively.
5. Consumer Behavior and Non-
Profit and Societal Marketing
A sound knowledge of consumer behavior can help the
organizations that sell ideas and concepts of social
relevance. Institutions that promote family planning,
AIDS free society, governmental agencies, religion
orders and universities also appeal to the public for their
support in order to satisfy some want or need in society.
The knowledge about potential contributors, what
motivate their generosity, how these motives can be
effectively appealed is useful for the organizations
involved in these activities.
6. Consumer Behavior and
Governmental Decision Making
Two major areas where consumer behavior study helps
government is in policy making on various services, and
in designing consumer protection legislation. The
knowledge of people’s attitudes, beliefs, perceptions and
habits provides adequate understanding of consumers.
Types of CB Models
Consumer Buying Behavior Models
Engel-Kollat-
Howard Sheth Model
Blackwell Model
Nicosia Model
Black Box Model
Consumers make many decisions every day. Most large
companies research consumer buying decisions in great
detail to answer questions about what consumers buy
where they buy, how and how much they buy, when they
buy, and why they buy. Marketers can study actual
consumer purchases to find out what they buy, where,
and how much. Buy learning about they whys of
consumer buying behavior is not so easy – the answers
are often locked deep within the consumer’s head.
Black Box Model
Buyers
Marketing Other Buyers Decision Buyers
Characteri
Stimuli Stimuli stic Process Decisions
Confidence
F B I P S
Brand
Information Intention Purchase Satisfaction
recognition
A
Attitude
John Howard Model
EPS implies that the consumer has yet to form a
concept of the product class or category. In the case of
LPS, the consumer does have a concept of the product
category but has yet to form a concept of the new brand
falling into a familiar product category. In the case of
RPS, the consumer has formed both a concept of the
product category and a concept of each of the relevant
brands.
John Howard Model
Basic to all there decision categories is the concept of
product category. Howard defines a “product category”
as a group of brands that consumers view as close
substitutes for each other. As Howard views product
category it leads him to dismiss the utility of the PLC for
brands, even though there are those who argue that the
classic bell-shaped curve applies best to brands. In this
Howard is supported by Lambkin and Day, who argue
convincingly that the life cycles of brands and product
forms (e.g., sports cars) simply reflect competitive
developments within life cycles rather than any overall
life cycle pattern.
UNIT – 2
2. Popular culture:
The culture of the masses with norms of mass appeal
3. Subculture:
The culture of a group within the larger society.
Group identification based on nationality of origin,
race, region, age, religion, gender, etc.
4. Corporate culture:
The company’s values, rituals, customs, myths and
heroes
Consumer
Behaviour
UNIT – 2
2. Popular culture:
The culture of the masses with norms of mass appeal
3. Subculture:
The culture of a group within the larger society.
Group identification based on nationality of origin,
race, region, age, religion, gender, etc.
4. Corporate culture:
The company’s values, rituals, customs, myths and
heroes
Cultural Influences
Culture is that complex whole which includes
knowledge, belief, art, law, morals, customs and any
other capabilities and habits acquired by humans as
members of society. Culture influences the pattern of
living, of consumption, of decision-making by individuals.
Culture is acquired and it can be acquired from the
family, from the region or from all that has been around
us while we were growing up and learning the ways of
the world.
Variation of Cultural Values
influencing Behavior
Other Oriented Environmental Self Oriented
Values Oriented Values Values
Objectives /
Societies View of Societies View of
approaches to
relationship relationship with
life, society finds
between people environment
desirable
Consumption
purchase
communications
I. Other Oriented Values
Individual/ collective
Romantic orientation
Adult/ child theme
Masculine/ Feminine
Competitive/ Cooperation
Youth/ age
I. Other Oriented Values
a. Individual/ collective: Whether individual initiation
has more value than collective activity?
b. Romantic orientation: This depicts whether the
communication is more effective which
emphasizes courtship or otherwise. In many
countries a romantic theme is more successful.
c. Adult/ child theme: Is family life concentrated round
children or adults? What role do children play in
decision-making?
d. Masculine/ Feminine: Whether the society is male
dominant or women dominant or balanced.
I. Other Oriented Values
e.Competitive/ Cooperation: Whether competition
leads to success. This is achieved by forming
alliances with others.
f. Youth/ age: Are prestige roles assigned to younger or
older members of the society. American society is
youth oriented and Korean is age oriented. Decisions
are taken by mature people in Korea.
2. Environment Oriented Values
Cleanliness
Performance/ status
Tradition/ change
Risk taking/ security
Problem solving
Nature
2. Environment Oriented Values
a. Cleanliness: If a culture lays too much stress on
cleanliness. There is scope for the sale of beauty
creams, soaps, deodorants, insecticides, washing
powder, vacuum cleaner, etc. In western countries, a
lot of emphasis is placed on this aspect and
perfumes and deodorants are widely used.
b. Performance/ status: A status oriented society
cares for higher standards of living, and chooses
quality goods and established brand names and high
prices items. This is true for the United States, Japan,
Singapore, Malaysia, Indonesia, Thailand and most
Arabic countries.
2. Environment Oriented Values
c. Tradition/ change: Traditional oriented societies stick
to the old product and resist innovation or new
techniques. In traditional societies, there is less scope
for new products, and old traditional products are in
greater demand. In some societies which are upwardly
mobile, consumers are looking for modern methods,
new products, new models and new techniques.
d. Risk taking/ security: An individual who is in a
secure position and takes a risk can be either
considered venturesome or foolhardy. This depends on
the culture of the society. For developing new
entrepreneurs risk taking is a must. It leads to new
product development, new advertising themes and
new channels of distribution.
2. Environment Oriented Values
e. Problem solving/fatalist: A society can be optimistic
and have a problem solving attitude or, be inactive and
depend on fate. This has marketing implications on the
registering of complaints when consumers are
dissatisfied with the purchase of the products.
f. Nature: There are differences in attitude over nature
and its preservation. Consumers stress on packing
materials that are recyclable and environment friendly.
Some countries give great importance to stop
environmental pollution and to recycling of
products.
3. Self-Oriented Values
Active/passive
Material/ non-material
Hard work/leisure
Postponed gratification/ immediate
gratification
Sexual gratification/Abstinence
Humor/ serious
3. Self-Oriented Values
a. Active/passive: Whether a physically active
approach to life is valued more highly than a less active
orientation. An active approach leads to taking action all
the time and not doing anything. In many countries,
women are also taking an active part in all activities.
b. Material/ non-material: In many societies money is
given more importance, and a lot of emphasis is on
being material minded. While in many societies things
like comfort, leisure and relationships get precedence
over being materialistic.
3. Self-Oriented Values
c. Hard work/leisure: This has marketing implications
on labor saving products and instant foods. Some
societies value hard work and consider it as a fuller life.
Others adopt labor saving devices and instant foods to
have more leisure time at their disposal.
d. Postponed gratification/ immediate gratification:
Should one save for the rainy day or live for the day?
Sacrifice the present for the future, or live only for the
day? Some countries like The Netherlands and
Germany consider buying against credit cards as living
beyond one’s means, whereas credit cards are very
popular in America and other countries having a different
cultural orientation, some prefer cash to debt.
3. Self-Oriented Values
e. Sexual gratification/Abstinence: Some traditional
societies curb their desires, food, drinks or sex, beyond
a certain requirement.
f. Humor/ serious: Should we take life lightly and laugh
it off on certain issues or, take everything seriously? This
is an- other aspect of culture. Advertising, personnel
selling techniques and promotion may revolve around
these themes and the way the appeal for a product is to
be made in various cultures.
Subcultures and Consumer Behavior
Culture can be divided into subcultures. A subculture is
an identifiable distinct, cultural group, which, while
following the dominant cultural values of the overall
society also has its own belief, values and customs that
set them apart from other members of the same society.
Innovation
An Innovation is “an idea, practice or object perceived as
new by an individual or other unit of adoption.
Diffusion of Innovations
We as consumers always find a new innovation-idea or
product or even new service attractive. However, for the
firm which is trying its hand at the new innovation, there
is always a question hanging around ‘How fast will the
diffusion of the innovation take place?” This is to say that
any innovation has got an element of risk involved. The
firm will introduce a new concept or a new product after
an intensive research is carried out by it. Thus we see
that the process of diffusion of innovation is very critical
to a firm.
Adoption
Unit – 3
UNIT – 3
kjals
Operant Conditioning Theory
Conditioning
Learning can occur from repeated exposure to stimuli
We are more likely to develop a positive attitude
towards behaviour that continually brings rewards
Modelling
Develop attitudes by watching others that we trust or
respect
Cognitive Learning
Involves problem solving or reaching logical
conclusions based on information
Functions of attitudes
1. Tri-component model
1. Self-Perception Theory
– This theory holds that individuals’ inferences or judgements
cause their own behaviour. A consumer trys to justify his
purchase decision as the correct ones.
2. Attribution towards others
– Consumers tries to evaluate the words or deeds of others.
3. Attitude towards things
– Consumers form product attributions
– They want to ascertain why a product meets or does not meet
their expectations.
Attitude change
Cognitive
Learning
Process
Unfulfilled Fulfill of
Tension Drive Behavior
Needs goals/Needs
Motivation vs Motive
a) Freudian theory.
b) Neo-Freudian personality theory.
c) Trait theory
a) Freudian theory
Unit – 4
UNIT – 4
1. Geographic Segmentation
2. Demographic Segmentation
3. Psychological Segmentation
4. Socio-Cultural Segmentation
5. User-related Segmentation
6. Benefit Segmentation
Market Segmentation Stragies
1. Concentration strategy
2. Selective segmentation strategy
3. Product Specialisation Strategy
4. Market Specialisation Strategy
5. Full Market Coverage
Positioning