Prof. B. D. Gupta

How do we make buying decisions?

 Consumer Behavior: How do we make buying decisions?Consumer behavior theory prior to the

Second World War was based on accepted economic theory of the "rational man" model of decision making.

The central idea of economics is that people make decisions by weighing costs and benefits in a rational manner.

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Examples of Consumer Behavior : Holiday Plan

If you have a choice between:1) an all-expenses paid trip to Paris, or2) an all-expenses paid trip to Rome, or3) trip to Rome where you have to pay for

morning breakfast and lunch and dinner, which one will you take?Conclusion: Most consumers select Rome,

when they have an alternative option for Rome and Paris.

 Examples of Consumer Behavior :Insurance PlanWhich Option will you choose?Yearly subscription: Rs.5000Monthly subscription: Rs.600.Monthly subscription Rs.5o0 ( Free Gift : FM

Radio)

Process of consumer learningClassical conditioning: Ivan PavlovObedience to authority: Milgram experimentGroup conformityGender conformity

ConditioningPavlov’s experiment

ConditioningPavlov used a metronome ( clock) to call the

dogs to their food and, after a few repetitions, the dogs started to salivate in response to the metronome.

Thus, a neutral stimulus (metronome) became a conditioned stimulus (CS) as a result of consistent pairing with the unconditioned stimulus (US - meat powder in this example).

Pavlov referred to this learned relationship as a conditional reflex (now called conditioned response).

ConditioningStimulus-response theory, referred to as

S-R theory, is a theoretical model of behavioral psychology that suggests humans and other animals can learn to associate a new stimulus — the conditioned stimulus (CS) — with a pre-existing stimulus — the unconditioned stimulus (US), and can think, feel or respond to the Conditioned Stimulus as if it were actually the Unconditioned Stimulus.

Which

one?

Classical conditioningIn classical conditioning, a secondary

stimulus is paired with a primary stimulus that already elicits a particular response.

As a result of this pairing, an association is formed.

Eventually the secondary stimulus will elicit the same reaction as the primary stimulus.

An effective advertisement campaign may link a product to a stimulus that evokes a positive feeling.

Requirements for Utilizing Classical Conditioning in advertisementThere should be no other stimuli that could

overshadow the unconditional stimulus.Example: Overshadowing effect : In case of KFC,

uncle Sanders ( 102 years old!) was not be related to any product other than fried chicken, by the consumers!

Requirements for Utilizing Classical Conditioning in advertisementThere should be no other stimuli that could

overshadow the unconditional stimulus.Example: Overshadowing effect : In case of KFC,

uncle Sanders ( 102 years old!) was not be related to any product other than fried chicken, by the consumers!

?

Test Yourself

Examples of Group conformity in marketing In a consumer decision-making situation

where no objective standards are present, individuals who are exposed to an emphatic group norm will tend to conform to that norm.

Examples:FacebookOrkutTwitter

Case study: Gender conformity: application in marketingMarketing to Women on the WebSixty-three percent of online shoppers are

women.According to a Harris Interactive study,

women control 75 percent of household finances and 80 percent of purchasing decisions.

A recent report from The Strategis Group showed that women are now the dominant demographic on the Internet.

ReferenceConsumer Behaviour and Marketing ActionHenry Asseal ( Chapter 4; Consumer

learning)