Consumer Behaviour Module 1 and 2 PGCHM KCCMS SEM 2

Consumer Behaviour

Our Road Map

1. Introduction to the study of Consumer Behaviour and is strategic application

2. Understanding the Consumer as an Individual

3. Examining the consumer in his social and cultural setting

4. The Consumer Decision making process

5. Consumerism and Various Consumer Protection Acts

How will it help to study Consumer

Behaviour?

To be able to better understand the application of

Consumer behaviour to Marketing

Strategy.

To make

better

Marketing

campaigns

To understand

the psychological

and Social

underpinnings to

the behaviours of

consumers

To k

now

ho

w

Con

sum

ers

Rea

ct to

Inno

vation

s

To learn how new products are adopted and

diffused through society

Grading System

Internals 40 Marks

(Assignments/ Internals at Group/ Individual levels)

External Theory Paper 60 Marks

Total 100 Marks

Module 1

Consumer Behaviour

Origins, Strategic Applications, Consumer Research and Market Segmentation

Module 2

The Consumer as an Individual

Consumer Motivation, Personality, Consumer Perception, Learning, Attitude Formation and Change, Communication and Consumer Behaviour

Module 3

Social and Cultural Settings

Reference Groups and Consumer behaviour, Influence of Culture and subculture on Consumer Behaviour

Module 4

Consumer decision making process

Consumer Influence and diffusion of Innovations

Module 5

Consumerism and Consumer protection with reference to India

Our Syllabi

Recommended Reference Books

• Schiffman, L.G. and Kanuk L.L. Consumer Behaviour, Pearson Education, New Delhi.

• Michael R. Solomon, Consumer Behaviour, PHI New Delhi, 2003

• Kumar: Conceptual Issues in Consumer Behaviour : The Indian Context, Pearson education, New Delhi.

Consumer Behaviour


Module 1

Module 1 - Consumer Behaviour

New Age Solutions when you…

Missed a television programWant to read a bookWant to avoid pesky commercialsWant to remember a friends birthdayNeed to send a quick gift to your loved onesNeed to rush to another city for workWant to socializeWant to be on time everywhereNeed to impress boss while on holidayNeed to impress wife on her birthdayHave to throw an impromptu lunch party for your friendsDidn’t get time to make lunch for the dayFeel drowsy but need to keep awakeWant to avoid calling someone but still pass on a messageFeel Bored, Down and Out

Meaning and Origins


All these New ways of selling products and services became available to us in the past fifteen years and are the result of digital technologies.

Another thing in common being… They exist today because they reflect an understanding of Consumer Needs and Consumer Behaviour.

Meaning and Origins

Which means that…

So how does one define Consumer Behaviour ?

“Consumer Behaviour is the behaviour that Consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs.”

Consumer behaviour focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items. That includes what they buy, how they buy, when they buy, how often they buy

Module 1 - Consumer Behaviour Meaning and Origins

Consumer behaviour focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items.

What I buy

How I buy

When I buy

Where I buyHow often

I buy

How often I use what

I buy

How I evaluate

after I buy

How I allow my evaluations to impact future

purchases

How I dispose after I use what I

buy

CONSUMER


Consumer Behaviour has its roots in the “Marketing concept”

Production ConceptEg Henry Ford

Tata NanoProduct Concept

Eg Skywalks in Mumbai,Indian Education SystemLimitation: Marketing

Myopia

Selling ConceptEg Political

Parties promoting candidates

Marketing ConceptEvolved in late 1950s

“Make what it can sell instead of sell what it can make”

Eg. Colonel Sanders KFCRay Croc McDonalds


Marketing Mix

Marketing Mix

Product or ServiceFeatures, Designs, Brands

& Packaging Offered, along with post purchase

benefits such as warranties and return

policies

PriceList Price, Discounts,

allowances and Payment Methods

PromotionAdvertising, Public

elations, Sales Promotion, Personal

Selling, Direct Marketing of product/

service

PlaceDistribution through Specific Store and Non Store outlets


Three Drivers of Successful Relationships between Marketers and Customers

•Customer Value

•Customer Satisfaction

•Customer Retention



Customer Value Customer Satisfaction Customer Retention

Customer Value

Customer’s Perceived Benefits : Resources

(economic, functional & psychological) (monetary, time, effort, psychological)

Perceived Value is relative and subjective

Eg. Multiplex Experience, Meal at McDonalds




Customer Satisfaction

The Individuals perception of the performance of the product or service in relation to his or her expectations. Eg. Expectations from Multiplex Experience versus Local Cinema Hall Experience.

Researchers propose that Companies should strive to create , raise the satisfaction of and turn them into ,

avoid having or , and reduce the number of

APOSTLESDEFECTORS LOYALISTS

TERRORISTS HOSTAGES MERCENARIES




Customer Retention

In almost all business situations, it is more expensive to win new customers than to keep existing ones.

• Loyal Customers buy more products

• Loyal Customers are less price sensitive and pay less attention to competitors’ advertising

• Servicing Existing customers, who are familiar with the firms’ offerings and process, is cheaper

• Loyal Customers spread positive word-of-mouth and refer other customers

• Attracting new customers is expensive and almost impossible in saturated markets


Classifying Customers

Traditional method : Subdivision on the basis of demographic, sociocultural, psychographic, behavioural characteristics.Customer Probability-Focused Marketing : Tracks costs and revenues of Individual customers and then categorizes them into tiers based on consumption behaviours that are specific to the Company's offerings. “Customer Pyramid”

Platinum Tier

Gold Tier

Iron Tier

Lead Tier

Heavy users, not price sensitive, willing to

try new offerings

Compared to Platinum tier, more price sensitive hence not profitable. Ask for more

discounts, likely to buy from several providers

Spending Volume and profitability do not merit special treatment from Company

Cost the Company Money; Attention>Merit by spending; Overutilise Company resources; Negative Word of mouth


Simplified Model of Consumer Decision MakingExternal Influences

Input

Process

Output

Consumer Decision Making

Post decision Behaviour

Firm’s Marketing Efforts

4 Ps

SocioCultural Environment

Family, Informal Sources, Other Noncommercial Sources, Social Class, Culture and Subculture

Need Recognition

Prepurchase Search

Evaluation of Alternatives

Psychological Field Motivation, Perception, Learning, Personality, Attitudes

Experience

Purchase Trial; Repeat PurchasePostpurchase Evaluation

Consumer Behaviour


Module 1

Consumer Research Process

Module 1 - Consumer Behaviour – Consumer Research

Quantitative Research Qualitative Research

Develop Objectives

Collect Secondary Data

Design Qualitative Research

•Method

•Screener Questionnaire

•Discussion Guide

Design Quantitative Research

•Method

•Sample Design

•Data Collection Instrument

Conduct Research

(using highly trained interviewers)

Analyze Data (Subjective)

Prepare Report

Collect Primary Data

(Usually by Field Staff)

Analyze Data (Objective)

Prepare Report

Exploratory Study

The Consumer Research Process (simplified model)

Define the Objective


Develop Research Design


Analyze Data

Prepare Report of Findings


Consumer Research Paradigms


Quantitative Research Qualitative Research

Quantitative Measures

ObservationObservation

SurveySurvey

ExperimentationExperimentation



Three Basic Designs:

Observation – Mechanical (Eg Casino, Wal Mart) Physiological (eye movements, brain activity)

Experimentation (in laboratory or field) – Causal Research, Test Marketing, Virtual Reality Methods

Survey ( by questioning people)

Quantitative Research

Comparative Advantages and Disadvantages of various types of Surveys

Cost

Speed

Response RateGeographic FlexibilityInterviewer Bias

Interviewer Supervision

Quality of Response

MAIL TELEPHONE PERSONAL INTERVIEW ONLINELow

Slow

Low

Excellent

N/A

N/A

Limited

Moderate

Immediate

Moderate

Good

Moderate

Easy

Limited

High

Slow

High

Difficult

Problematic

Difficult

Excellent

Low

Fast

Self Selected

Excellent

N/A

N/A

Excellent


Data Collection Instruments: (Reliable and Valid)

Questionnaires

Attitude Scales

Quantitative Research

• Avoid negatives• Avoid hypotheticals• Avoid words that could be misheard• Use response bands• Use mutually exclusive categories• Allow for “other” in fixed response questions

Questionnaire Do’s and Don’ts• Ensure questions are free of bias• Make questions simple• Make questions specific• Avoid jargon• Avoid sophisticated words• Avoid ambiguous words

Question Types - Dichotomous

In arranging this trip, did you contact American Airlines?

Yes No

Question Types – Multiple Choice

With whom are you traveling on this trip?

No one

Spouse

Spouse and children

Children only

Business associates/friends/relatives

An organized tour group

Question Types – Likert Scale

Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.

Strongly disagree

Disagree

Neither agree nor disagree

Agree

Strongly agree

Question Types – Semantic Differential

American Airlines

Large ………………………………...…………….Small

Experienced………………….………….Inexperienced

Modern………………………..………….Old-fashioned

Question Types – Importance Scale

Airline food service is _____ to me.

Extremely important

Very important

Somewhat important

Not very important

Not at all important

Question Types – Rating Scale

American Airlines’ food service is _____.

Excellent

Very good

Good

Fair

Poor

Question Types –Intention to Buy Scale

How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?

Definitely buy

Probably buy

Not sure

Probably not buy

Definitely not buy

Qualitative MeasuresDepth Interviews

(one on one, usually half hour to an hour)Depth Interviews

(one on one, usually half hour to an hour)

Focus Group(8-10 respondents, screener questionnaire)

Focus Group(8-10 respondents, screener questionnaire)

Projective Techniques(Disguised tests with ambiguous stimuli)

Incomplete sentences, untitled pictures or cartoons, word association)

Projective Techniques(Disguised tests with ambiguous stimuli)

Incomplete sentences, untitled pictures or cartoons, word association)

Metaphor Analysis(Zaltman Metaphor Elicitation Technique)

Metaphor Analysis(Zaltman Metaphor Elicitation Technique)


Focus Group in Session

Question Types –Completely Unstructured

What is your opinion of American Airlines?

Question Types –Word Association

What is the first word that comes to your mind when you hear the following?

Airline ________________________

American _____________________

Travel ________________________

Question Types –Sentence Completion

When I choose an airline, the most important consideration in my decision is: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

Question Types –Story Completion

“I flew American a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings.” Now complete the story. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Question Types –Picture (Empty Balloons)

Question Types – Thematic Apperception Test

Make up a story that reflects what you think is happening in this picture.

42

Sampling Methods – Two Broad Categories

• Probability sampling– Randomization w/o subjective judgment– Each unit has a known, nonzero probability to be selected

• Non-probability sampling– Depends on researcher’s subjective judgment– Based on convenience or systematically employed criteria.– Some units will surely not be selected

Types of Samples

Probability Sample• Simple Random (every member of the population has a known and equal chance of being selected)• Systematic Random ( a member of the population is selected at random and then every nth person is selected)• Stratified Random ( The population is divided into mutually exclusive groups, such as age groups, and random

samples are drawn from each group)• Cluster ( The population is divided into mutually exclusive groups, such as blocks, and the researcher draws a

sample of the groups to interview

Nonprobability Sample• Convenience (The researcher selects the most accessible population members (E.g. Students in a classroom)• Judgment (The researcher uses own judgment e.g. experts in the relevant filed of study)• Quota (The researcher interviews a prescribed number of people in each of several categories. E.g. 50 men and 50

women)


The Consumer Research Process (simplified model)

Define the Objective


Develop Research Design


Analyze Data

Prepare Report of Findings


Module 1 - Consumer Behaviour – Market Segmentation

Market Segmentation

MarketMarket

MarketSegmentMarket

Segment

MarketSegmentation

MarketSegmentation

People or organizations with needs or wants and the ability and

willingness to buy

People or organizations with needs or wants and the ability and

willingness to buy

A subgroup of people or organizations sharing one or more characteristics that

cause them to have similar product needs.

A subgroup of people or organizations sharing one or more characteristics that

cause them to have similar product needs.

The process of dividing a market into meaningful, relatively similar, identifiable

segments or groups.

The process of dividing a market into meaningful, relatively similar, identifiable

segments or groups.

A Market is...

(1) people or organizations with

(2) needs or wants, and with

(3) the ability and

(4) the willingness to buy.

A group of people that lacks any one of these characteristics is not a market.

The Importance of Market Segmentation

Markets have a variety of product needs and preferences

Marketers can better define customer needs

Decision makers can define objectives and allocate resources more accurately

Learning Objective

Discuss criteria for successful Discuss criteria for successful market segmentation.market segmentation.

Criteria for successful segmentation:

Heterogeneous

Measurable

Substantial

Actionable

Accessible

Heterogeneous •Clear differences in consumer preferences for a product must exist.

•Difference in preferences for a product must be identifiable and capable of being related to measurable variables.

Measurable

•The proposed market segment must have enough size and purchasing power to be profitable.

Substantial

•Companies must be able to respond to difference in preferences with an appropriate and profitable marketing mix.

Actionable

•The proposed market segment must be readily accessible and reachable with targeted programs.

Accessible

Segmentation VariablesSegmentation Variables

Use-Situation Use-Situation SegmentationSegmentation

Geographic Geographic SegmentationSegmentation

Use-Related Use-Related SegmentationSegmentation

Demographic Demographic SegmentationSegmentation

Benefits-SoughtBenefits-Sought SegmentationSegmentation

Hybrid Hybrid SegmentationSegmentation

Psychological & Psychological & Psychographic Psychographic

SegmentationSegmentation

Sociocultural Sociocultural


SexSexSexSex

Income LevelIncome LevelIncome LevelIncome Level

OccupationOccupationOccupationOccupationEducationEducationEducationEducation

AgeAge

Demographic Segmentation

Under 12, 12-17, 17-20, 20-25…

Below 1 lac pa., 1-3 lacs p.a., 3-6 lacs p.a., 6-9 lacs p.a., 10 lacs + p.a.

Some school, school, some college, college graduate, post graduate…

Professional, blue collar, white collar, agricultural, military

Male, Female, Transgender

Marital StatusMarital StatusSingle, married, divorced, living –in, widowed

Geographic Segmentation

• When an organization localizes its marketing efforts to accommodate the unique needs of specific geographic regions

Density of AreaDensity of AreaDensity of AreaDensity of Area

City SizeCity SizeCity SizeCity Size

ClimateClimateClimateClimate

Geographic Segmentation

Major Metropolitan areas, small cities, towns, villages

Temperate, hot, humid, rainy, spring

Urban, Suburban, Rural

RegionRegionMaharashtra, Madhya Pradesh, North East, North India etc.

PerceptionPerceptionPerceptionPerception

PersonalityPersonalityPersonalityPersonality

Learning InvolvementLearning InvolvementLearning InvolvementLearning Involvement

Psychological Segmentation

Extroverts, Novelty Seekers, aggressives, innovators

Low Involvement, High involvement

Low Risk, Moderate Risk, High Risk

Needs- MotivationNeeds- MotivationShelter, Safety, security, affection, sense of self-worth

AttitudesAttitudesAttitudesAttitudesPositive Attitude, Negative Attitude

• Psychographics represents a combination of consumers’ activities, interests and opinions (AIO items)

• Useful but more difficult to identify and measure compared to demographic variables

Psychographic Segmentation

Lifestyle Lifestyle Lifestyle Lifestyle Economy Minded, Couch Potatoes, Outdoors, Enthusiasts,

status seekers










SegmentationSegmentationHybrid Hybrid


Social ClassSocial ClassSocial ClassSocial Class

CulturesCulturesCulturesCultures

Family Life CycleFamily Life CycleFamily Life CycleFamily Life Cycle

Sociocultural Segmentation

American, Indian, Greek, Chinese, Japanese, Mexican, French, Pakistani

Bachelors, Young marrieds, full nesters, empty nesters

Lower, Middle, upper

ReligionReligionCatholic, Protestant, Islam, Jewish…

Subcultures (race/ ethnic)Subcultures (race/ ethnic)Subcultures (race/ ethnic)Subcultures (race/ ethnic)African American, Indian American, Hispanic

Awareness StatusAwareness StatusAwareness StatusAwareness Status

Brand LoyaltyBrand LoyaltyBrand LoyaltyBrand Loyalty

Use Related Segmentation

None, Some, Strong

Unaware, aware, interested, enthusiastic

Usage RateUsage RateSuper Heavy Users, Heavy Users, Medium

Users, Light users, Nonusers

Light Users80%

Light Users80%

Heavy Users20%

Heavy Users20%

Behavior/Usage Segmentation

• Markets can be segmented by how often or how heavily consumers use a specific product– 80/20 Principle - 80% of revenue generated by 20% of customers

Situation Segmentation

ObjectiveObjectiveObjectiveObjective

LocationLocationLocationLocationHome, work, friends home, in-store

Personal, Gift, Snack, Fun, Achievement

TimeTimeLeisure, work, rush, morning, night

Self , Family members, friends, boss, peers

PersonPerson

Benefits-Sought SegmentationMarkets can be segmented based on the

benefits that consumers desire from using a specific product

Convenience, Social Acceptance, Long Lasting, Economy, Value-for-money

Learning Objective

List the steps involved List the steps involved in segmenting markets.in segmenting markets.

Steps in Segmenting a Market

Select a market

for study

Choosebases

for segmen-

tation

Selectdescrip-

tors

Profileand

analyzesegments

Selecttarget

markets

Design,imple-ment,

maintainmkting

mix

Consumer BehaviourThe Consumer as an IndividualConsumer Motivation, Personality, Consumer Perception, Learning, Attitude Formation and Change, Communication and Consumer Behaviour

Module 2

Module 1 - Consumer Behaviour Consumer Motivation

Creating Needs

Charles Revson – Revlon Nail Polish

Deep Red Polish – fire and ice

Dark Red Polish – Berry Bon Bon

“In the factory we make cosmetics, in the store we sell hope”


Motivation is the Driving Force within individuals that impels them into action

Unfulfilled Needs, Wants or Desires

Tension Drive BehaviourGoal or Need

Fulfillment

Previous Learning

Cognitive Processes

Tension Reduction


Needs

Innate Needs, Physiological Needs (biogenic), Primary Needs- Food, water, air, clothing, shelter and sex

Acquired Needs, Secondary Needs – Self esteem, prestige, affection, power and learning

Example:

Executive… newly transferred… searching for a home.

Reflects Primary Need for shelter.

The type of home the individual buys or rents reflects Secondary Needs


Goals

Two types of Goals:

•Generic Goals

•Product Specific Goals

Example:

I want to make a career with airline services –Generic Goals

I want to study how to become a Pilot from ABC Institute of Flying Technology – Product Specific Goal

The goals marketers are more interested in… brand specific and need fulfilling

Example:

Girl needs tan. Two Options – Sun tan or Chemical Tan. The sun tan is an option provided by nature. The chemical tan is what the marketer provides.


Goals and Needs Model

Goal SettingFormation of a goal Intention

Action Planning

Action Initiation

and Control

Goal Attainment or failure

Feedback reactions

What are the goals I can pursue and why do I want to pursue them?

What is it for which I strive?

How can I achieve my

goal?

(when where how and how long should I

act?)

How well have I enacted my

plans?

Progress?

Adjustments needed?

Degree of achievement/

failure?

Goal: Lose Weight

Live Longer Boost Self Confidence

Look and feelgood

DietingExercising


Interdependence of Needs and Goals

There is an interdependence but people do not recognize their needs as well as they do their goals

Example:

Teenager with social needs finds himself making friends on chat rooms

Person with power needs finds himself standing for elections when a chance is available

College student with achievement needs may end up studying very hard to achieve good marks


Positive or Negative Motivation

Example:

Driven towards Restaurant for hunger needs

Away from motorcycles for safety needs

Driving force towards or away from an object or condition

Rational or Emotional Motives

Considering alternatives and careful selection or emotional decision based on pride, fear, affection or status

Example:

Person opting for cosmetic surgery


Dynamics of Motivation

•Needs are never fully satisfied

•New needs emerge as old needs are satisfied

•Success and failure influence Goals

-Substitute Goals

-Frustration

-Defense Mechanism (Aggression, Rationalization, Regression, Withdrawal, Projection, day dreaming, Identification, Repression)

•Multiplicity of Needs and variations of goals


Arousal of Motives

Physiological Arousal

Drop in Blood sugar level or stomach contractions…

Secretion of sex hormones…

A decrease in body temperature…

Emotional Arousal

Young lady day dreaming about torrid romance… chat room regular

Young man dreaming about being a novelist… enroll for writing course

Cognitive ArousalInvolves random thoughts that may lead to a cognitive awareness of needsRaymond Advertisement showing loving school teacher may arouse need for instantly calling teacherAdvertisement showing vote registration need may arouse immediate need for logging onto website and registering.

Environmental or Situational ArousalSmell of pastries from bakeryBeautiful scenery in ad for Singapore TourismEffect of television on underdeveloped nations population


… Arousal of Motives


Maslows Need Hierarchy theory

Physiological Needs

Food, water, air, shelter, sex. E.g.. Health Foods, Medicines, low fat products

Safety and Security Needs

Protection, Order, Stability E.g. Insurance, Preventive Medical Services, Home Security Systems

Social Needs

Affection, Friendship, Belonging. E.g. Personal Grooming Products

Ego and Esteem Needs

Prestige Status, Self Esteem E.g. Furs, Big cars, expensive Furniture`

Self Actualization

Self Fulfillment

E.g. PG Course, Road Trip

Class Test – Time 40 minutes

1. Define and Explain Consumer Behavior. Explain the Three Drivers of Successful Relationships between Marketers and Customers.

2. Explain the Consumer Decision Making process using a Simplified Model of Consumer Decision Making.

3. Explain the Consumer Research process and also the Consumer Research paradigms (Qualitative & Quantitative)

4. Explain Market Segmentation.

TEST INSTRUCTIONS

•Kindly write your roll number on the top right hand corner of your paper. NOT your name.

•Do not make margins on the right side of your paper.

•Please number your questions.

•Highlighting important points and subtitles is essential.

•Use examples wherever possible.

•Time limit to be strictly adhered to.

•Do well and make me proud :0)

Consumer BehaviourThe Consumer as an IndividualConsumer Motivation, Personality, Consumer Perception, Learning, Attitude Formation and Change, Communication and Consumer Behaviour

Module 2

Personality and Consumer Behaviour

• Appeal to individuality“We’re all created equal. But after that it’s up to you” – Harley Davidson

• Appeal to status/ innovativeness“Never Follow” – Audi

• Appeal to non-conformity“”For those who consider conformity a serious road hazard” – Saab 97X SUV

• Appeal to self assurance“Surf Excel hai na” – Surf Excel


Learning Objectives:

Brand Personality

Concept of self and self image

Virtual personality

Personality and Consumer Behaviour

• Definition of Personality“those inner characteristics that both determine and reflect how a person responds to his or her environment”

• 3 distinct properties of Personality1 Personality reflects individual differences2 Personality is consistent and enduring3 Personality can change


Personality and Consumer BehaviourModule 1 - Consumer Behaviour

• 3 distinct properties of Personality

1 Personality reflects individual differences2 Personality is consistent and enduring3 Personality can change

• The inner characteristics that constitute and individuals personality are a unique combination of factors, hence no two individuals are exactly alike

• The concept of personality is useful in categorizing customers into different groups on the basis of one or several traits

• Example:Venturesomeness

High : Willing to try something new. Skydiving, mountain climbing

Low : Afraid to buy a recently introduced product


• 3 distinct properties of Personality1 Personality reflects individual differences

2 Personality is consistent and enduring3 Personality can change

• “My brother has always wanted to be different from the day he was born”

• Marketers cannot alter peoples personalities to conform to their products but…

• Consumers’ personalities may be consistent but consumption bahaviour often varies due to various psychological, sociocultural, environmental and situational factors that affect behaviour


• 3 distinct properties of Personality

1 Personality reflects individual differences2 Personality is consistent and enduring

3 Personality can change

• Under certain circumstances, personality may change• Major life events : MARRIAGE, CHILD BIRTH, DEATH OF PARENT, JOB CHANGE, PROFESSION

CHANGE• Change may also be part of a gradual maturation process “ She is becoming calmer as she’s growing

up”• Personality Stereotypes may also change : “Females to acquire more masculine traits in coming 50

years”

Personality is defined as “the distinctive patterns of behavior, including thoughts, and emotions, that characterize each individual’s adaptation to the situations of his or her life.”

– The goal is to identify personality variables that distinguish large groups of people from each other.

– Individual difference variables describe how one person varies from another in his or her distinctive patterns of behavior: include personality, self-concept, psychographic, and even demographic variables.


Self-concept . . .

. . . is defined as the “totality of the individual’s thoughts and feelings having reference to himself as an object.

– People have a strong need to act consistently with who and what they think they are.– People purchase products and services to build their self-image and to express

themselves to others.


Psychographic analysis is . . .

. . . the attempt to measure the life-styles of consumers.


Freud’s Psychoanalytic Theory Personality results from the clash of 3 forces - the id, the ego, and the superego

– The id represents physiological drives

– The ego acts to curb the appetites of the id

– The superego is the conscience or “voice within”


Key Issues in Psychoanalytic Approach

– Basis for motivational researchers of 1950s.– Places high emphasis on symbols

• phallic, ovarian, and death symbols– Pleasure principle: basis for functioning of id.– Reality principle: basis for functioning of ego.– Death wish--elicited by death symbols.– Large impact on research methods

• depth interviews• focus groups


Trait Theory

• A trait is any characteristic in which one person differs from another in a relatively permanent and consistent way.

• A person’s personality is described in terms of a particular combination of traits.• To be useful trait measures must be shown to be valid (i.e., they measure what they are said

to measure) and reliable (i.e., the measures show consistency over time)


Trait Theory

• A trait is any characteristic in which one person differs from another in a relatively permanent and consistent way.

• A person’s personality is described in terms of a particular combination of traits.• To be useful trait measures must be shown to be valid (i.e., they measure what they are said

to measure) and reliable (i.e., the measures show consistency over time)


Neo Freudian Theory

• Individuals classified into 3 personality groups• 1. Compliant Individuals (move towards others, brand conscious)• 2. Aggressive Individuals ( (move against others…desire to excel, need for admiration…Old Spice)• 3. Detached Individuals ( Individualists, self sufficient, independent…heavy tea drinkers)

Consumer Innovativeness

• General Consumer Innovativeness Scale:• 1. If I like a brand, I switch in order to try something different• 2. When I go to a restaurant I feel safer to order the dishes I am familiar with

• Domain Specific Consumer Innovativeness Scale:• 1. Compared to my friends, I own fewer rock albums• 2. I will buy a new rock album even if I haven’t heard it yet


Relationship between Innovative Internet usage and buying online

Internet lovers and Risk Takers

Consumer Innovativeness


•Dogmatism… Highly Dogmatic, Low Dogmatic

•Social Character… inner directedness and other directedness

•Need for uniqueness (NFU) … Higher Innovativeness

•Optimum Stimulation Level… High OSL; Low OSL… low OSL prefer simple uncluttered, calm existence…high OSL prefer novel, complex and unusual existence

•Sensation Seeking

•Variety Novelty Seeking ( exploratory purchase behaviour, vicarious exploration, use innovativeness)

Cognitive Personality Factors


•Measures a persons craving for or enjoyment of thinking

•Eg Website

•VISUALIZERS VERSUS VERBALIZERS

Consumer Ethnocentrism

•The likeliness to be receptive to foreign made products.

Brand Personality Framework


Brand Personality

Sincerity Excitement Competence Sophistication Ruggedness

Down To Earth

Honest

Wholesome

Cheerful

Daring

Spirited

Imaginative

Up to Date

Reliable

Intelligent

Successful

Upper Class

Charming

Outdoorsy

Tough

The Self-Concept in Consumer Research

• The Self-concept represents the “totality of the individual's thoughts and feelings having reference to himself as an object.”


People have more than one self-concept:

• The actual self image• The ideal self image• The social self image• The ideal social self

• The expected self and ought to self


People have more than one self-concept:

• Sample Items. Extended Self Survey• My ________ holds a special place in my life• My ________ is central to my identity• I feel emotionally attached to my ___________• I would be a different person without my ___________• I take good care of my __________• I trust my ____________• If my ________ were stolen from me, I would feel as if a part of me is missing


Materialism: You Are What You Own

• Materialism is the importance a consumer attaches to worldly possessions


Four (4) types of possessions help to make up our personal sense of self:

• Body and body parts• Objects

• Places and time periods• Persons and pets


PRODUCT PERSONALITY AND GENDER

PRODUCT PERSONALITY AND GEOGRAPHY

PRODUCT PERSONALITY AND COLOUR

VIRTUAL PERSONALITY OR SELF


Life-Style and Psychographic Analysis

• Life-style refers to how people live, how they spend their money, and how they allocate their time

• Life-style and personality are different, yet are closely related


The distinction between personality and life-style:

– Personality refers to the internally based dispositions of the person. In contrast, life-style refers to the external manifestations of how a person lives.

• Psychographics is the quantitative investigation of consumers’ life-styles, personality, and demographic characteristics.


AIO statements identify consumer activities, interests, and opinions

– Activity questions ask consumers to indicate what they do, what they buy, and how they spend their time.

– Interest questions focus on what the consumers’ preferences and priorities are.– Opinion questions ask for consumers’ views and feelings on such things as world, local,

moral, economic, and social affairs.


A Warning

• Psychographic inventories often result in clever descriptions of a target market that can result in stereotypes.

• It can cause managers to view the target market as more homogeneous than it really is.


Managerial Implications

• Position and differentiate product based upon the dominant personality or psychographic characteristic of the target market.

• Scan the environment to identify the dominant cultural values of the target market.• Use market research to identify the personality, self-concept, and psychographic

characteristics that distinguish the target market.• Develop promotions to be consistent with the dominant personality characteristics of target

market. Create products that fulfill the motivational needs of target—e.g., low risk products for the low need for arousal group.

• Use personality and psychographics to identify segments of consumers to target, such as one-price auto dealers for low bargain prone.


Learning

• The process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior

• Marketers must teach consumers:– where to buy– how to use– how to maintain– how to dispose of products

Behavioral Learning Theories

Classical Conditioning

Instrumental/Operant Conditioning

Modeling or Observational Learning

Classical Classical ConditioningConditioning

A behavioral learning theory

according to which a stimulus is paired

with another stimulus that elicits a known response that serves to produce the same response when used

alone.

Models of Classical ConditioningIVAN PAVLOV

Another Example

Instrumental Instrumental (Operant) (Operant)

ConditioningConditioning

A behavioral theory of learning based on a

trial-and-error process, with habits forced as the result of positive

experiences (reinforcement)

resulting from certain responses or behaviors.

Types of Reinforcement

o Positive

o Negative

o Forgetting

o Extinction

A Model of Instrumental Conditioning

Observational Observational LearningLearning

A process by which individuals observe how others behave

in response to certain stimuli and reinforcements. Also known as

modeling or vicarious learning.

The consumer observes a

positive response by two teens.

Cognitive Cognitive Learning Learning TheoryTheory

Holds that the kind of learning most characteristic of human beings is problem solving,

which enables individuals to gain some control over their environment.

Retention

• Information is stored in long-term memory

• Total package of associations is called a schema

Brand Loyalty

Loyalty

Latent Loyalty

Spurious Loyalty

No Loyalty

Harley-Davidson Has Strong Brand Loyalty

weblink

http://www.harleydavidson.com/

Consumer Attitude Formation & Consumer Attitude Formation & ChangeChange

Attitude FormationAttitude FormationHow Attitudes are Learned

Sources of Influence

Impact of Personality

How Attitude are LearnedHow Attitude are Learned

• Shift from NO ATTITUDE TO AN ATTITUDE

Sources of Influence• Through mass media we are constantly exposed to

new products, ideas etc thru advertising.

• For people without direct experience of the product, exposure to emotionally appealing Ads will create favorable attitude.

Impact of Personality• Consumer attitude is strongly influenced by

personal experience.• Primary means of attitude formation is through

consumers direct experience in trying and evaluating them.

TEST DRIVE

Strategies of Attitude ChangeStrategies of Attitude ChangeChanging the Consumer’s Basic Motivational Functions

Associating the Product with an Admired Group or Event

Resolving Two Conflicting Attitudes

Altering Components of the Multi-Attribute Model

Changing Consumer Beliefs About Competitors’ Brands

Changing the Consumer’s Basic Motivational Functions

The Utilitarian Function

The Ego-Defensive Function

The Value-Expressive Function

The Knowledge Function

Combined Several Function

The Utilitarian FunctionThe Utilitarian Function

The Ego-DefensiveThe Ego-Defensive Function Function

The Value-Expressive FunctionThe Value-Expressive Function

The Knowledge The Knowledge FunctionFunction

Combined Several FunctionCombined Several Function

Associating the Product with an Admired Group or Event

Resolving Two Conflicting Attitudes

ATTITUDE

Altering Components of the Multi-Attribute Model

Changing the Relative Evaluation of Attributes

Changing Brand Beliefs

Adding an Attribute

Changing the Overall Brand Rating

Changing the Relative Evaluation of Attributes

Changing Brand Beliefs

Adding an Attribute

Changing the Overall Brand Rating

Changing Consumer Beliefs About Competitors’ Brands

Thank You

Consumer Behaviour Module 1 and 2 PGCHM KCCMS SEM 2

Documents

Transcript of Consumer Behaviour Module 1 and 2 PGCHM KCCMS SEM 2