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BBA Marketing
Personal Consumer
The individual who buys goods and services for his or her own use, for household use, for the use of a family member, or for a friend.
Organizational Consumer
A business, government agency, or other institution (profit or nonprofit) that buys the goods, services, and/or equipment necessary for the organization to function.
Consumer Behavior
It is study of human behavior in the specific context of consumption of products and services. It is a decision process a person goes through when purchasing,using, evaluating and disposing of products. The ultimate objective of this process is satisfaction of needs and wants
Future of CB in India
Increasing number of women in workforce Rise in the number of nuclear families Changes in lifestyle and income distribution Increase in mobility due t industries Increasing level of stress Need for consumer privacy
Consumer Behaviour focuses on.. Wants more than Needs Discretionary spending More than Utilitarian spending
This is a Need
Needs - state of felt deprivation including physical, social, and individual needs.
Types of Needs
Physical: Food, clothing, shelter, safety Social: Belonging, affection Individual: Learning, knowledge, self-expression
This is a Want
Wants - form that a human need takes, as shaped by culture and individual personality.
This is Demand
Wants
Demand
Needs
satisfy
Goals
Motivation
Forces that stimulate and direct consumers towards purposeful goal oriented behaviour
The energizing force that causes behavior-each person is unique with a hierarchy of needs. A need becomes a motive when it is aroused sufficiently.
Action what I do do
Effort how hard I try Persistence how long I keep trying How we construe expectations, needs, drives, efforts and results (actual & 'rationalised'/felt) - self & others
Personality
Inner psychological characteristics that reflect how a person responds to his/her environment.
A persons consistent behavior or response to recurring situations. Classification according to personality types permits some predictability of behavior.
Personality Structure according to Freud ID-A warehouse of primitive or instinctual needs for which
individual seeks immediate satisfaction - survive, reproduce, and aggress.
The id operates on the pleasure principle: If not constrained bu reality, it seeks immediate gratification.
Traits Theory
Personality theory with a focus on psychological characteristics Trait - any distinguishing, relatively enduring way in which one individual differs from another Personality is linked to how consumers make their choices or to consumption of a broad product category - not a specific brand
Vigilance Warmth
Suspicious Outgoing
versus versus
trusting reserved
Neuroticism: Individuals high in this trait tend to experience emotional instability, anxiety, moodiness, irritability, and sadness.
Openness: This trait features characteristics such as imagination and insight, and those high in this trait also tend to have a broad range of interests.
2. When dressing, I have sometimes dared to be different in ways that others are likely to disapprove
3. When products or brands I like become extremely popular, I lose interest in them 4. As far as Im concerned, when it comes to the products I buy and the situations in which I use them, custom and rules are made to be broken 5. I have sometimes purchased unusual products or brands as a way to create a more distinctive personal image
Brand Personality
Personality-like traits associated with brands Examples
Purdue and freshness Nike and athlete BMW is performance driven Levis 501 jeans are dependable and rugged
Brand personality which is strong and favorable will strengthen a brand but not necessarily demand a price premium
BLUE
YELLOW
Eyes register it faster Coffee in yellow can perceived as weak Stops traffic Sells a house Good work environment Associated with vegetables and chewing gum Canada Dry ginger ale sales increased when it changed sugar-free package from red to green and white
RED
Makes food smell better Coffee in a red can perceived as rich Women have a preference for bluish red Men have a preference for yellowish red Coca-Cola owns red
Powerful, affordable, informal Informal and BROWN relaxed, masculine, nature Goodness, purity,
ORANGE
Draws attention quickly Coffee in a dark-brown can was too strong Men seekreduced calories in brown Suggests products packaged
chastity, cleanliness, Pure and wholesome food delicacy, Clean, bath products, feminine refinement, formality Sophistication, Powerful clothing BLACK power, authority, High-tech electronics mystery SILVER, Regal, wealthy, Suggests premium price Copyright 2007 by Prentice Hall GOLD stately WHITE
Perception
Process by which an individual selects, organizes, and interprets information. It is selective. How to get attention?
WHAT IS PERCEPTION?
YOUR
CONT..
Filtered out Selected Organized Defined .using YOUR existing
CONT..
Knowledge Needs Beliefs Values Assumptions Attitudes.
ELEMENTS OF PERCEPTION
Sensation The absolute threshold The differential threshold Subliminal perception
PRICE/QUALITY RELATIONSHIP
The perception of price as an indicator of product quality (e.g., the higher the price, the higher the perceived quality of the product).
DISTORTING INFLUENCES
Physical Appearances Stereotypes Irrelevant Cues First Impressions Jumping to Conclusions Halo Effect
Defective haircut- Service Retail store Image Brand Image is a set of human characteristics linked to the brand that consumers hold in memory Consumer loyalty associated with positive brand image
PERCEIVED RISK
The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision
Seek Information Stay Brand Loyal Select by Brand Image Rely on Store Image Buy the Most Expensive Model Seek Reassurance Buy Small Packs
Some people purchase a watch from a cognitive and rational viewpoint where as some may go for its
styling or its association with a certain life style or status level this is an experimental emotional approach
Dec.Process
Cognitive
Route
think/feel/do
Products
cars, new products with high involvement snacks, beverages, small house holds
Impulse
do/feel/think
Experience
feel/do/think
Repeat/habit
do/think/feel
Learning
Behavior resulting from repeated experience and thinking. Consumption is largely learnt behavior. Demand is built on strong drives, motivating cues and positive reinforcement.
4 ELEMENTS OF LEARNING
MOTIVES
Motives arouse individuals and as a result they respond. This arousal function is essential because it activates the energy needed to engage in learning activity. By achieving the goal ,the arousal reduces, but have a greater tendency to occur again, that is why marketers put their product in a way that when relevant consumer motive arouse their products are their to satisfy the need. This result that consumer will learn a connection b/w the product and motive.
CUES
Capable of providing direction i.e. it influences the manner in which, to respond to motive. e.g. hungry man is guided by restaurant signs or aroma of food.
RESPONSE
Mental or physical activity in reaction to a stimulus.
REINFORCEMENT
Anything that follows the response and increase the tendency of response to reoccur in a similar situation.
Classical Conditioning - Leaning via association Operant Conditioning - Learning via reinforcement
Unconditioned response
(salivation, fun& enjoyment, purity ,freshness)
Conditioned response
(salivation, fun& enjoyment, purity ,freshness)
1. Repetition 2. Stimulus Generalization: According to classical conditioning theorists, learning depends not only on repletion but also on the ability of individuals to generalize. 3. Stimulus Discrimination
diversifying in to different products in different categories using the same established brand
Instrumental Conditioning
Consumers learn by means of a trial and error process, in which some purchase behaviors result in more favorable outcomes i.e., rewards than other purchase behaviors. A favorable experience is instrumental in teaching the individual to repeat a specific behavior
Contd
Reinforcement- increases the strength of the response and
tends to induce repetition of the behaviour that preceded it.
Positive
Negative
Classical Conditioning:
Based on the association of a stimulus and response Most common in low involvement situations Involve an already established response to another stimuli The outcome is not dependant on consumers actions Influences and change the opinions
Operant Conditioning
Based on reward / punishment to desired response Use of free samples highly effective in operant conditioning Also known as Instrumental Learning No previous stimuli response relation The outcome is dependent on learners action Influences changes in goal oriented behavior
Stimulus (popcorn)
Brand Loyalty
The beahvioural aspect- repeat purchase
Memory in Marketing
Brand Image
Is the schematic memory of the brand
Product Positioning
Is the decision by the management to try and achieve a defined brand image relative to competition in a market segment Related Concepts:
Product Repositioning Product Depositioning
Brand Equity
Is the value assigned by consumers to a brand over and above the functional characteristics of the product People are willing to pay a Premium for brands with higher equity
Brand Leverage
Is the use of brand equity of an existing brand for a new product Is also known as brand extension, family branding or umbrella branding
68
ATTITUDES
Peoples attitude towards products is based on their attitude towards the country of their origin. --Impact of manufacturing countries varies with the product. --Different countries enjoy different reputations for different products. --A buyers perception of country affects his perception of the products of that country. --Attitudes can change over a period of time.
Attitude Models
Tri-component Attitude Model
According to this model,
attitudes
Cognitive
1.
2. 3.
Cognitive component
Affective component Conative component
Conative Affective
4.
What Is a Group?
Two or more people who interact to accomplish either individual or mutual goals A membership group is one to which a person either belongs or would qualify for membership A symbolic group is one in which an individual is not likely to receive membership despite acting like a member
Copyright 2007 by Prentice Hall
Membership Group
Primary
Secondary
Reference Groups
A Reference Group is an Actual or Imaginary Individual or Group Conceived of Having Significant Relevance Upon an Individuals Evaluations, Aspirations, or Behavior. Reference Groups Influence Consumers in Three Ways:
Informational
Value-Expressive
Utilitarian
Nature of the Group: James H. Leigh and Terrance G. Gabel note that reference groups are more likely to influence a group member's behaviour if they are: i. Cohesive, that is having similar values and norms. ii. Frequently interacting and thus creating more opportunities to influence members. iii. Distinctive and exclusive, that is, the membership in the group is highly regarded. Harley-Davidson group example, the group is closely knit and for many members biking has become a full-time hobby. Membership is exclusive and distinctive as they refer to each other as "brothers" and outsiders as "citizens.
Nature of the Product: The nature of the product also determines the degree of influence a group has on an individual. Groups are more likely to be influential for products, which are: (a) visible such as clothing and (b) exclusive that might speak of status such as a Mercedes.
Membership Groups
1. 2. 3. 4.
Primary Informal Groups Primary Formal Groups Secondary Informal Groups Secondary Formal Groups
This same individual may aspire to belong to a cricket club and would be said to be apart of an aspiration group.
A disclaimant group is one to which an individual may belong to or join and then reject the group's values.
An individual may also regard the membership in a specific group as something undesirable and to be avoided. Such a group is a dissociative group.
Aspiration Groups Anticipatory Aspiration Groups: These are groups that an individual anticipates to join at some future time. The individual, generally, has some direct contact with such group(s). For instance, the individual may wish to join a group higher in the organisational hierarchy. The individual's aspiration is more likely to be an outcome of anticipated rewards that go with higher position in an organisation such as power, status, prestige, money and other perks. A good example of a direct appeal to aspiration group norms within the organisation is the ad for Johnnie Walker. The ad appeal focuses on anticipation of ultimately reaching at the top in the business organisation.
Symbolic Aspiration Groups: The individual admires these groups but is unlikely to join them despite acceptance of the group's beliefs and attitudes. In a study Robert J. Fisher and Linda L. Price found that individuals establish a vicarious connection with such a group by purchasing a product associated to the aspiration group. For example, a tennis fan may buy a Nike sports jacket and shoes because many tennis star wear these. It is important for such an influence that the product is visually obvious. Marketers use certain celebrities to advertise the product and thereby appeal to the symbolic aspirations of consumers
2.
3.
4.
'Status' is the achieved or ascribed position that the individual occupies within the group's hierarchy. As one may expect, greater power and influence goes with higher status. For instance, the executive vice-president in an organisation has a higher status than the sales manager. The vicepresident will most likely have a large, well-furnished office symbolising her/his status. In a typical Indian family, the head of the family has more status than anyone else. Consumer purchases of products or services sometimes demonstrate status to match the wealth and implied superiority. Elegant dresses, expensive watches and cars etc. are considered symbols of status in many cultures.
5.
'Socialisation' refers to the process by which new members learn the group's system of values, norms and expected behaviour patterns. When an individual leaves one job and joins another organisation, she/he must learn the informal rules and expectations from the work groups, besides the formal rules and expectations.
Normative Influence
The social power of reward and punishment that produces behavioral compliance but may not produce any private acceptance of the position advocated.
Comparative Influence
The group does not attempt to set, or enforce, rules for your behavior, but only serves as a standard you choose for comparison.
Informational influence is likely to be Power important when consumers perceive more Normative Reward Reward or Conformity financial, social, or performance risk in buying a product.
coercion
Advertising often makes use of informational influence through expert spokespersons who communicate information about product features and performance. One approach employed is to use a character posing as an expert, such as a doctor for commonly used remedies, or the engineer for technical products.
Advertising applies comparative influence by using either an actual referent in the form of a "typical consumer" or use a celebrity as a symbolic referent with whom consumers identify because she/he is likeable or attractive. The "typical consumer" (Lalitaji of Surf ad) persuades consumers that people like themselves have used the advertised product (a)). The typical consumer is a referent because she/he mentions common needs and problems faced by the target group members. In case of symbolic referent, the ad takes advantage of her/his fame in some area of activity and not her/his expertise in the product category. The ad for Fiat Palio uses Sachin Tendulkar as a symbolic referent (b)).
Cont.
2.
3.
4.
Closed System
Open System
Social class (also referred to as social standing) means societal rank, which is one's position relative to others on one or more dimensions valued by society. Social class is based on demographic variables that others in society aspire for and hold in high esteem. These characteristics precipitate unique behaviours.
Socio-economic factors Education Occupation Income level Ownership Heritage Social class Upper class Middle class Lower-middle class Lower class Unique behaviours Preferences Purchases Consumption
Symbols of Status Consumers buy products not only for what they can do but also for what they mean, because products or services are seen to possess personal and social meanings in addition to their functional attributes.
Conspicuous consumption refers to the tendency of the affluent class to demonstrate upper-class membership through their possessions.
Marketers use status and prestige appeals based on the following assumptions:
1. The need for self-esteem is universal. Everybody desires to be admired, acknowledged and respected by others. 2. Consumers believe that their purchases of products or services reflect prestige and status. 3. The expression and satisfaction of need for prestige varies across cultures. 4. A marketer must communicate product prestige in a way that is culturally suitable for the target audience.
The most general categorisation of social class structure can be put under three groups: 1. Upper class 2. Middle class 3. Lower class
CULTURE
Knowledge Art Music Language Religion Social customs Food Festivals
Culture
It is a detailed examination of the character of the total society, including such factors as language, knowledge, laws, religion, food customs, music, art, technology, work patterns, products, and other artifacts that give a society its distinctive flavor. In a sense, culture is a societys personality. Culture is the sum total of learned learned beliefs, values, and customs that server to direct the consumer behavior of members of a particular society.
Subculture
It is a distinct cultural group that exists as an identifiable segment within a larger, more complex society.
Cross-cultural Influences
The theme of cultural influences in a given country has two variations. Cross-cultural influences and sub-cultural influences.
Cross-cultural analysis helps marketers determine to what extent the consumers of two or more nations are similar or different. The greater the similarity between consumers, the more feasible it is to use relatively similar strategies in each
country.
Age Subcultures
Consumers undergo predictable changes in values, lifestyles, and consumption patterns as they move through their life cycle. Four Major Age Trends Baby Boomers Generation X Generation Y Elderly
Categories 1. Nationality 2. Religion 3. Geographic region 4. Race 5. 6. 7. 8. 9. Age Gender Occupation Social class Ethnicity
Examples Jamaican,Vietnamese,French Mormon, Baptist, Catholic Northeast, Southwest etc. Pacific Islander, Native American, Caucasian. Senior citizen, teenager Female, male Bus driver, mechanic, engineer. Lower, middle, upper. Similar values and customs.
Rebecca Piirto has reported a study that surveyed more than 15,000 adults in 14 countries on five continents to identify global consumer segments sharing attitudes,
values and actual buying behaviour, blurring national boundaries and cultural
variations. 1. 2. 3. 4. 5. Strivers Achievers Pressured Adapters Traditional
Aspects of Sub-cultures
Sub-cultures may be based on religion, region, language, age, gender and many
other differences. As in most other countries, one may easily notice several subcultures in India. Out of several sub-cultures, only some are important from the marketers' point of view for formulating separate marketing programmes. Much depends on the relevance of a product category to a particular subculture.
Ad based on Religious Beliefs of the Largest Sub-culture in India. Durga, the Devi is believed as the destroyer of all evils.
Regional sub-cultures: Distinct regional sub-cultures arise due to climatic conditions, the natural environment and resources, language and significant social and cultural events. Such groups can be identified as having distinct and homogenous needs, tastes, lifestyles and, values.
Cont.
Part II
C8
Consumer Attitudes
Charles D. Schewe has recommended a number of guidelines to make communication effective with older people: 1. Keep the message simple 2. Make the message familiar 3. Make the message concrete 4. Take it point by point 5. Give preference to print media 6. Supply memory aids 7. Make good use of context To develop successful adverting to this group, marketers should: 1. Include older consumers in focus-group research in order to learn about their motivations and attitudes. 2. Hire older copywriters to provide new perspectives on this segment. 3. Incorporate older models in advertisements in a genuine and typical way. 4. Let the older buyers know the product will appeal to them.
Copyright 2008, Satish K Bhatra, S H H Kazmi
8 110
Consumer Behaviour
(2nd Edition)
Excel Books
Reward Power
Referent Power
Information Power
BUYING BEHAVOUR
THERE IS A DIRECT RELATION BETWEEN BUYING DECISION AND THE END CONSUMER BEHAVOUR COMPLEX--CUSTOMER DEVELOPS A BELIEF ABOUT A PRODUCT --AN ATTITUDE DEVELOPS AROUND THIS BELIEF --FINALLY, A DECISION IS ARRIVED AT AFTER CAREFUL CONSIDERATION USUALLY NOTICED FOR PRODUCTS WHICH ARE EXPENSIVE, RISKY AND PURCHASED RARELY.
BUYER BEHAVIOR-HABITUAL
There are several products that consumers buy without much involvement
They are generally not brand conscious towards products purchased frequently and which are low priced.
If they are buying a particular brand, it is only because of habit Marketers ,therefore ,believe that price and sales promotions are quite effective in pushing such products
The marketing strategy therefore revolves around a) Linking products to a specific issue Colgate for bad breadth b) Linking the product to a personal situation-Bournvita to childrens health c) Designing ads which evoke strong emotions d) Adding new features to the existing product
BUYING ROLES
INITIATOR-The person who initially suggest the idea of purchase
--PURCHASE DECISIONS
--POST PURCHASE BEHAVIOR -- POST PURCHASE SATISFACTION -- POST PURCHASE ACTIONS --POST PURCHASE USE AND DISPOSAL
PROBLEM RECOGNITION
The process begins when the consumer realizes that he has a need .Not satisfying that need is causing a problem to him.
External Stimuli
Internal Stimuli
Marketers must therefore know what type of needs are triggered by various situations and stimuli.
INFORMATION GATHERING
The consumer would then like to collect all the information necessary to satisfy the need. He will collect all the information he can about the prospective need. --To know about the product category --To know all the products in the category --To compare various attributes of different brands. --As the consumer cannot possibly gather ALL the information about All the brands, he concentrates on a set of brands called Awareness Set;from these the consumer selects a smaller group of brands called Consideration Set.
EVALUATION OF ALTERNATIVES
There is no set model for evaluation of alternatives Broadly speaking Consumer wants to satisfy a need Looks for certain benefits from the product Seeks a set of attributes that can maximize the benefit These attributes may be different for different products; different customers may look for different attributes. Consumers attach different importance to different attributes. Consumers generally go for those brands that have maximum attributes. Consumers develop some beliefs about the product and this constitutes the brand image.
PURCHASE DECISIONS
At this stage the consumer is at a transition stage from PURCHASE INTENTION to PURCHASE DECISION
of others
--Totally unanticipated factors e g accident, loss of job, financial mishap sharp price rise. The consumers decision to delay, avoid ,a purchase decision varies directly with the perceived risk, which in turn varies with the amount of risk involved.
Opinion Leadership
Opinion leaders are those people who, in a given situation, are able to
exert personal influence. They are the ones most likely to influence others through word-of-mouth communication because others seek advice and
The changing structure of family Three other basic functions provided by the family are particularly relevant to a discussion of consumer behavior. These include: Economic well being Emotional support Suitable family lifestyles
In case of non-traditional family lifecycle sequences, single parents are more likely to be females. In general, divorced women face significant decrease in their financial resources and this influences their buying patterns. Single parents are compelled to spend much less time with children and are likely to spend more money on day-care services for children and toys.
making process, it is called family decision-making. Such family decisions differ from individual decisions in many ways. For example, if we consider the purchase of a bicycle for a child, some of the relevant aspects to think about can be: who recognises the need for bicycle? How a brand is selected? What role the concerned child plays?
Some family purchases are inherently emotional and affect the relationships between family members. The decision to buy a new dress, a toy, or a bicycle for the child is more than simply a routine purchase. We have already seen the different purchase roles in the opening chapter of this book:
the initiator, the gatekeeper or information gatherer, the influencer, the decider, the buyer and the user(s).
Cont.
conditions:
1. A joint decision is likely to be taken under such circumstances to reduce the uncertainty and the risk. For example, the purchase of a house for the family will most likely be a joint decision, as it would involve financial, social and psychological risks.
Joint Decision Roles
Initiator (Need recognition)1 Gatekeeper (Information search) Influencer (Evaluation of alternatives) Decision maker (Decision to buy) Buyer (Purchase) User (Consumption & evaluation)
Cont.
2.
3. i.
ii. iii.
iv.
When the buying decision is important to the household. Purchase decisions for low-involvement products are mostly made individually. Highinvolvement items such as expensive appliances etc. are generally purchased in consultation with other family members. Importance of most high-involvement decisions is generally related to some kind of perceived risk. Certain demographic factors encourage joint decision-making. Joint decisions are less likely among upper and lower socio-economic groups. However, joint decision-making is quite likely among middle-income families. Joint decisions are fairly common among younger families, particularly during the first few years of marriage. As long as the family does not have any children, joint decision-making is more likely. Once children arrive, roles of spouses become more divided and the need for joint decisions decreases. If only one parent is employed, there are few time pressures and joint decision-making is more likely. Cont.
Husband-wife Influences
Nature of Product
Traditionally, among different societies throughout the world, husbands are regarded as providers of material support and leadership authority within the
family and wife is more likely to provide affection and moral support. Husbands
are viewed as dominant decision-makers for products such as financial services and automobiles etc., while wives are regarded as decision makers for foods, toiletries and small appliances etc. However, these roles have merged as an
increasing number of wives have started going into employment and changes in
family norms, particularly in urban areas.
Cont.
Cont.
Family Characteristics
The third reason for variation in relative influence of husband/wife relates to family characteristics. Though husband and wife tend to dominate decisions for certain product categories, the degree of their dominance may vary within different families. Research shows that the influence of the husband will generally be more in making purchase decisions than wife when:
1. 2. 3. 4. 5. Husband's level of education is higher than his wife. Husband's income and occupational status are higher than wife's. His wife is not employed. The couple is young and at an earlier stage of family life cycle. If the couple has a greater than average number of children.
Cont.
Cont.
Parent-child Influences