Consumer psychology

By: Erim ijaz

Chap#1: an introduction to consumer psychology

Who is a Consumer ? A consumer is one who consumes goods and services available in the market. Example - Tom might purchase a tricycle for his son or Mike might buy a shirt for himself. In the above examples, both Tom and Mike are consumers. What is consumer Interest ? Every customer shows inclination towards particular products and services. Consumer interest is nothing but willingness of consumers to purchase products and services as per their taste, need and of course pocket. Let us go through the following example: Both Maria and Sandra went to the nearby shopping mall to buy dresses for themselves. The store manager showed them the best dresses available with him. Maria immediately purchased two dresses but Sandra returned home empty handed. The dresses were little too expensive for Sandra and she preferred simple and subtle designs as compared to designer wears available at the store. In the above example Sandra and Maria had similar requirements but there was a huge difference in their taste, mind set and ability to spend. What is psychology? Psychology is the science of behavior and mental processes.

CONSUMER PSYCHOLOGY:It is a branch of social psychology concerned with the market behavior(how people relate to the products and services that they purchase or use) of consumers. Consumer psychologists examine the preferences, customs, and habits of various consumer groups; their research on consumer attitudes is often used to help design advertising campaigns and to formulate new products.
What is Consumer Behaviour ? Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use. The study of consumer behaviour explains as to: Why and why not a consumer buys a product ? When a consumer buys a product ? How a consumer buys a product ?

Scope of consumer behavior:The scope of consumer behavior is the wide variety of activities consumers engage in as they research, buy, use, and dispose of products. This is a topic of interest for marketers and other researchers who examine how consumers behave in the market. This information can be important for the development of products and ad campaigns that meet the needs of consumers effectively. Psychologists and anthropologists study consumer behavior for more theoretical reasons, with an interest in how it interacts with other aspects of human behaviors.

The marketing concept:The fields of Consumer Psychology and Consumer Behavior are rooted in the development of Marketing Concept. According to this concept Customers are knowledgeable about the variety and quality of goods available in the market. Businesses base their decisions on customers needs and wants by conducting research and producing goods and services that satisfy the customer. Consequently, your business benefits from increased reputation to the public, loyalty from customers, increased profits to the business, improved share capital and a highly motivated staff. Implementing marketing concept:The best practice to implement a marketing concept is to combine the production, product and selling concept with marketing concept in objectives to focus on customer orientation and customer satisfaction. Organization should produce and sell improved quality products in the most effective and efficient approaches which provide what customers expect in order to increase customer satisfaction. Thus, the marketing concept not only need to focus on customer needs before developing the products, it also needs to align all functions of the company to focus on those needs and realizing a profit by successfully satisfying customer needs over the long-term. Integration of all business functions such as production, finance, human resources, research and development, and technology within the organization is truly important to maximize customer orientation. Customer orientation is the set of beliefs in sales that says that customer needs and satisfaction are the priority of an organization. It is "the business seen from the point of view of its final result, that is, from the customer's point of view." The role of consumer research:Consumer research is an important part of any company. Most large corporations allocate large budgets to consumer research because they know how valuable the information gained from listening to consumers is. However, large corporations are not the only companies that can benefit from consumer research. Even a small one location business could benefit tremendously by asking its customers for feedback. Consumer research helps companies improve their products and generate new ideas based on consumer demand. Market segmentation:Market Segmentation is dividing the market into subsets of consumers with common needs. Consumers are grouped together according to some criteria, such that those within a group will respond similarly to a marketing action and those in different groups will respond differently. Some of the potential segmentation variables are sex, age, marital status,race & income etc. Mraket targeting:Target Marketing refers to a concept in marketing which helps the marketers to divide the market into small units comprising of like minded people. Such segmentation helps the marketers to design specific strategies and techniques to promote a product amongst its target market. Mraket positioning:The process of creating an image of a product in the minds of the consumers is called as positioning. Positioning helps to create first impression of brands in the minds of target audience. In simpler words positioning helps in creating a perception of a product or service amongst the consumers. Example:The brand Bisleri stands for purity.

Customer satisfaction:it is customer perception of the degree to which the customerss expectations have been fulfilled. Customer retention:it is a strategy whose objective is to keep a companys customer & to retain their revenue contribution. Primarily it aims to prevent customer from going to the competitor. Customer value:customer satisfaction & retention leads to customer value it is defined as The difference between what a customer gets from a product, and what he or she has to give in order to get it or it is the ratio between the customerss perceived benefits and the resources used to obtain those benefits Consumer & decision making process:To understand the complete process of consumer decision making, let us first go through the following example: Tim went to a nearby retail store to buy a laptop for himself. The store manager showed him all the latest models and after few rounds of negotiations, Tim immediately selected one for himself. In the above example Tim is the consumer and the laptop is the product which Tim wanted to purchase for his end-use. Why do you think Tim went to the nearby store to purchase a new laptop ? The answer is very simple. Tim needed a laptop. In other words it was actually Tims need to buy a laptop which took him to the store. The Need to buy a laptop can be due to any of the following reasons: His old laptop was giving him problems. He wanted a new laptop to check his personal mails at home. He wanted to gift a new laptop to his wife. He needed a new laptop to start his own business. The store manager showed Tim all the samples available with him and explained him the features and specifications of each model. This is called information. Tim before buying the laptop checked few other options as well. The information can come from various other sources such as newspaper, websites, magazines, advertisements, billboards etc. This explains the consumer buying decision process. A consumer goes through several stages before purchasing a product or service. 1. 2. 3. 4. 5. NEED INFORMATION GATHERING/SEARCH EVALUATION OF ALTERNATIVES PURCHASE OF PRODUCT/SERVICE POST PURCHASE EVALUATION

CHAP#02 : CONSUMER RESEARCH

What is consumer research? Part of market research in which the preferences, motivations, and buying behavior of the targeted customer are identified through direct observation, mail surveys, telephone or face to face interviews, and from published sources (such as demographic data). Consumer research paradigms:consumer researchers tried to identify reasons for purchasing a product, usually customers hesitates to reveal their reasons or motivational factor which made them to purchase a product or service at that time the consumer researchers use the two different types of research methodology to study consumer behavior: quantitative research and qualitative research. Quantitative research:It is descriptive in nature and this method is used to predict the consumer behavior. This method always consists of experiments, surveys techniques, and observations. The findings are empirical and if collected randomly this can be generalized to large populations and the data are quantitative, they lend to sophisticated statistical analysis Qualitative research:.This includes depth interviews, focus groups, metaphor analysis, and projective techniques. Here sample sizes are necessarily small so we cannot generalized to larger population they are used to obtain new ideas for promotional campaigns. Combining qualitative and quantitative research findings:By combining both research finding marketers can design more effective marketing strategies and always they use qualitative research findings to discover new ideas and quantitative to predict consumer reactions to various promotional inputs. The consumer research process:The important steps in the consumer research process are 1. 2. 3. 4. 5. 6. defining the objectives of the research collecting and evaluating secondary data designing a primary research study collecting primary data analyzing the data preparing the report on findings

Developing the research objectives:It is first and the most difficult step in research process hare the questions like is it to segment the market for plasma television sets? To find out consumer attitude about the experience with online shopping?. And it is always important for the marketing manager to agree at the out set on the purposes and the objectives of the study to ensure that .

Collecting secondary data:Secondary data includes both internal and external data it is collected or generated for some purpose other than the present research objective. Internal secondary data such information as data generated in house for earlier studies for earlier studies as well as analisis of customer files, such as past customer transactions etc. Designing primary research:IT IS basically designed on the basis of the purposes of the study. If the descriptive study is needed then the quantitative study is likely to be under taken. If the purpose is of the new ideas then we can go for the qualitative research. Data analysis and reporting research findings:In qualitative research, the moderator usually analyses the responses received. In quantitative research, the research supervises the analysis open ended questions are first coded and classified then all of the responses are tabulated and analyzed. using sophisticated analytical programs that correlate the data by selecting variables and cluster the data by selected demographic characteristics. Conducting research study:Field Staff in Quantitative Research: A quantitative study generally uses filed staff that is either recruited and trained directly by the researcher or contracted from a company that specializes in in conducting field interviews Qualitative & Quantitative Research: Qualitative Research: The moderator or test administrator usually analyzes the responses received Quantitative Research: The researcher supervises the analysis: Open ended responses are first coded and quantified (i.e. converted into quantified scores) Then all of the responses are tabulated and analyzed using sophisticated analysis programs that correlate the data by selected variables and cluster the data by selected demographic characteristics Research Report: In both qualitative and quantitative research, the research report includes: Brief executive summary if the findings May or may not include recommendations for marketing action The body of the report includes a full description of the methodology used Quantitative research report also includes tables and graphics to support findings A sample of questionnaire is usually included in the appendix to enable the management to evaluate the objectivity of findings

Ethics in consumer research:1. Consumer researchers must ensure that studies are objective and free of bias. 2. Consumer Researchers must not mistreat respondents 3. Avoid unnecessary long interviews stemming from the logic that as long as we are interviewing this person we may also try to find out . 4. At the start of all surveys, interviewers must clearly identify themselves and the company for which they are working , explain what the survey entails and state the true expected duration of theinterview 5. They should reassure the respondents that there are no right or wrong answers 6. If the respondents are being paid they should be notified so at the start of the interview 7. Privacy of the respondents must be protected and guarded 8. Some unethical consumer researchers have sold data about consumers to marketers seeking persons with specific characteristics that will be targeted as prospective buyers.

Chap#03 : marketing segmentation.

What is a market? A set up where two or more parties engage in exchange of goods, services and information is called a market. Ideally a market is a place where two or more parties are involved in buying and selling. The two parties involved in a transaction are called seller and buyer. The seller sells goods and services to the buyer in exchange of money. There has to be more than one buyer and seller for the market to be competitive. What is segmentation? Segmentation refers to a process of bifurcating or dividing a large unit into various small units which have more or less similar or related characteristics.

What is market segmentation? Market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising of consumers with a similar taste, demand and preference. A market segment is a small unit within a large market comprising of like minded individuals. One market segment is totally distinct from the other segment. A market segment comprises of individuals who think on the same lines and have similar interests. The individuals from the same segment respond in a similar way to the fluctuations in the market.
Bases for segmentation:The first step in developing the segmentation strategy is select most appropriate base(s) on which to segment the market Eight Bases for Segmentation: Geographic Segmentation Geographic segmentation refers to the classification of market into various geographical areas. A marketer cant have similar strategies for individuals living at different places. Nestle promotes Nescafe all through the year in cold states of the country as compared to places which have well defined summer and winter season. Psychographic segmentation The basis of such segmentation is the lifestyle of the individuals. The individuals attitude, interest, value help the marketers to classify them into small groups.

Demographic Segmentation Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. As one might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups. This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process. Behaviouralistic Segmentation The loyalties of the customers towards a particular brand help the marketers to classify them into smaller groups, each group comprising of individuals loyal towards a particular brand. Social class segmentation it employs a combination of demographic traits that are commonly believed to reflect membership in different social class strata. Occupation, education, and income are the primary demographic traits that reflect social class membership. Use- Related Segmentation Categorizing consumers in terms of product, service, or brand usage characteristics is included into Use Related Segmentation. The variables usually include:Levels of usage, Level of awareness ,Brand loyalty. Usage-Situation Segmentation Occasion or situation often determines what consumers will purchase or consume. They sometimes focus on the usage situation as a segmentation variable. For example: Whenever our son Ali gets a promotion or raise we always take him out to dinner Benefit segmentation: A form of market segmentation based on the differences in specific benefits that different groups of consumers look for in a product. One of the five common segmentation strategies, its objective is to define specific niches that require custom-tailored promotion. Hybrid segmentation: Hybrid segmentation is the kind of segmentation where instead of sticking to one particular segmentation style, marketers combine one or two segmentation variables and arrive at another segmentation. This style is referred to as Hybrid segmentation. Criteria for Effective Targeting of Market Segments To be an effective target market a segment should be: Identifiable Sufficient (in terms of size) Stable or growing Accessible in terms of both media and cost

To divide the market into separate segments on the basis of common or shared needs or characteristics that are relevant to the product or service, a marketer must be able to identify the relevant characteristics. Variables such as Geography (location) and Demography (age, gender, occupation, race) are easy to identify. Education, income and marital status can be known through questionnaires. Other characteristics such as benefits sought and lifestyles are more difficult to identify.

Implementing segmentation strategies: Once an organization has identified it most promising segments it must decide whether to target one segment or several segments Each targeted segment receives a specially designed marketing mix i.e. a specially tailored product, price, Differentiated Marketing Strategy A differentiated marketing strategy is when a company creates campaigns that appeal to at least two market segments or target groups. For example, a store can promote a sale that appeals to people in at least two cities or locations, or a company can market a product that appeals to women in at least two age groups. Differentiated marketing strategies can target many more than two segments; shoe companies often create campaigns that appeal to both men and women in a variety of age groups. Differentiated marketing strategies can also use different messages in the same campaign for different segments. For example, a retailer might market low cost to a budgetconscious segment and product quality to an affluent market segment. Concentrated Marketing Strategy A concentrated marketing strategy is targeted to one specific market segment or audience. For example, a company might market a product specifically for teenage girls, or a retailer might market his business to residents in a specific town. Concentrated marketing strategies are often geared for smaller groups of people, because they are designed to appeal to a specific segment. Undifferentiated Marketing Strategy When discussing differentiated and concentrated marketing strategies, it is also important to understand undifferentiated marketing strategies. Basically, in an undifferentiated marketing strategy, marketers use the same message for all segments of the market. This is similar to mass marketing; marketers typically create a message that appeals to everyone, so the message is often general or simple to allow more people to relate. Example To better understand differentiated, concentrated and undifferentiated marketing strategies, it helps to look at an example from each perspective. Assume a restaurant is trying to market its new business. Using a differentiated marketing strategy, the restaurant can appeal to the college crowd by marketing cheap specials on food and drinks, the family crowd by marketing kid-friendly meal options and table entertainment and to the elderly by marketing senior discounts and earlybird specials. Using a concentrated marketing strategy, the restaurant can market its convenient location to a group of residents within 10 miles of the business. Using an undifferentiated marketing strategy, the restaurant can highlight its grand opening celebration. Countersegmentation: A strategy in which a company combines two or more segments into a single segment to be targeted with an individually tailored product or promotion campaign. Example Some business schools with wide course offerings in each department were forced to use Countersegmentation strategy when they discovered that students simply did not have enough available credits to take a full spectrum of in depth courses in their major areas of studies. They had to use Countersegmentation, e.g. by combining advertising, publicity, sales promotion and selling course into a single course called promotion.

Chap#04 Environmental Influences

Culture:What is culture? Culture is the characteristics of a particular group of people, defined by everything from language, religion, cuisine, social habits, music and arts. Today, in the United States as in other countries populated largely by immigrants, the culture is influenced by the many groups of people that now make up the country. How culture is learned? Schein (1985) has argued that culture is transmitted or learned in two different ways, either through 'problem solving' / 'positive reinforcement' or 'anxiety avoidance' / 'trauma'. The former refers to a policy of repeating successful work strategies, the latter to a policy of avoiding unpleasant situations by basing thought and action on previous negative experiences. Enculturation and Acculturation: Enculturation is learning one's own culture, a process that is influenced strongly by home and family. Acculturation, on the other hand, is learning aspects of a culture other than one's own particularly those aspects which will enable the individual to survive in that culture. Symbols and Language in Human Culture To the human mind, symbols are cultural representations of reality. Every culture has its own set of symbols associated with different experiences and perceptions. Thus, as a representation, a symbol's meaning is neither instinctive nor automatic. The culture's members must interpret and over time reinterpret the symbol. Symbols occur in different forms: verbal or nonverbal, written or unwritten. They can be anything that conveys a meaning, such as words on the page, drawings, pictures, and gestures. Clothing, homes, cars, and other consumer items are symbols that imply a certain level of social status. Perhaps the most powerful of all human symbols is languagea system of verbal and sometimes written representations that are culturally specific and convey meaning about the world. Language is an important source of continuity and identity in a culture. Rituals: Ritual is a type of symbolic activity consisting of a series of steps (multiple behaviors) occurring in fixed sequence and repeated over time Ritualized Behavior: In addition to language and symbols culture includes ritualized experiences and behaviors. Rituals extend over the human life cycle from birth to death including a host of intermediate experiences (confirmations, graduation and marriage). Ritualized behavior is rather formal and often scripted behavior. Dynamic culture: Dynamic refers to the variability. Culture is formed by the peoples whose values, Beliefs and religions combine them to live together. With the inclusion of more people in the society, new era of developments and the forces of evolution the culture changes its shape. The culture is the product which varies with its producer.

Subculture:what is subculture? a subculture is a group of people within a culture (whether distinct or hidden) which differentiates them from the larger culture to which they belong. Nationality subcultures Nationality subcultures in a larger society in which members often retain a sense of identification and pride in the language and customs of their ancestors. This is especially true for a population of a country like UK and US that have a history of attracting people from all over the globe. When it comes to consumer behaviour, this pride or identification is manifested most strongly in the consumption of ethnic foods, in travel to the homeland, and in the purchase of numerous cultural artifacts (ethnic clothing, art, music, foreign language newspapers). Age subculture: Age subcultures have cultural differences that affect the consumption behaviors of these people for food, personal care products and clothing. Gender as subculture: All societies tend to assign certain roles to women and others to men. The masculine role for example is that of aggressiveness and competitiveness, whereas the feminine role is that of neatness, tactfulness, gentleness, and talkativeness A study was conducted to understand the gender differences in reactions to similar prints. It was found that women show superior affect and purchase intent towards ads that are verbal, harmonious, complex and category oriented. Men show superior affect towards ads that are comparative, simple and attribute oriented. It was concluded that it may be best to advertise differently to men and women.

Social class:What is social class? Social class is more than just how much money you have. It's also the clothes you wear, the music you like, the school you go to -- and has a strong influence on how you interact with others. Measurement of Social Class Social class is measured by the people in that group. It is perception, not necessarily something you can quantify. It is associated with financial status, family values, appearances, housing, etc. Social class can be a deterrent to some people who wish to improve themselves socially or financially. Being born poor, or very low income, its hard to establish yourself as 'worthy' of being with people for whom money is not an issue. There are things such as social graces, using the correct fork at dinner for salads etc, how to properly serve wine, deal with situations that may be unpleasant etc. that are definitely tied to social class. Affluent Consumer Affluent Households place more importance on friendship, leisure times, and hobbies. They seem to place less importance on money which is why they consume more domestic airline tickets, own more vehicles, hold more securities and spend more money on desktop, laptop and hand held computers as well as other electronic gadgetries. Members of the affluent class have incomes that provide them with disproportionately larger share of all discretionary income. The extras allow the purchase of: Luxury cruises Foreign sports cars Tourism resorts Fine jewelry Ready access to

Middle Class Consumer Middle Market is the middle 50% household income. Households composed of college educated adults, who are involved in childrens education and are confident that they can maintain the quality of their life.Middle class can be thought of as including households that range from lower middle to middle class in terms of some acceptable variable or combination of variables (income, education, age or income).This view does not include the upper middle class which over the years has been exceedingly treated as affluent consumers. The Working Class and other Non Affluent Consumers Although advertisers would prefer to show their products as part of an affluent lifestyle, blue collar or working class represents a vast group of consumers. Downscale consumers may actually be more brand loyal than wealthier customers because they can not afford to make mistakes by switching into unfamiliar brands. A sensitive fact for marketers should be that non affluent consumers often spend higher percentage of their available income on food than their middleclass consumers.

Social group:a social group is a number of individuals interacting with each other with respect to: 1. Common motives and goals; 2. An accepted division of labor, i.e. roles, 3. Established status (social rank, dominance) relationships; 4. Accepted norms and values with reference to matters relevant to the group; 5. Development of accepted sanctions (praise and punishment) if and when norms or short and simple: A group of people who interact with each other and are aware of having something in common. Reference group: People whose attitudes, behavior, beliefs, opinions, preferences, and values are used by an individual as the basis for his or her judgment. One does not have to be (or even aspire to be) a member of a reference group to be negatively or positively influenced by its characteristics. Consumer related refence groups:Consumer reference group is that group to which the consumer has close relationship and proximity and which the consumer uses for references and which effect the buying behavior of the consumer. We have generally two types of reference groups. 1: Normative reference group: Normative reference group is that group in which the consumer had direct relation or face to face relation and influence on the consumer buying decision and behavior. For example, family and friends etc. The members of the family are always in interaction with the consumer and they give different ideas and suggestions or advice to the consumer to buy a specific product or brand. And thus they influence the consumer. 2: Comparative reference group: Comparative reference group is that group in which the consumer has indirect relation and less face to face interaction, such type of groups attract the consumer and the consumer gradually start to adopt the life style of the personalities lying in the comparative reference group. For example, in this group we have television a star, cinema stars, sports mans, and other popular personalities. The consumers are attracted by the marketer through different types of promotional campaigns and start to purchase different types of products used by the personalities of the comparative reference group.

CHAP#05 Individual Determinants of Consumer Behavior PERSONALITY:what is personality? "Personality" can be defined as a dynamic and organized set of characteristics possessed by a person that uniquely influences his or her cognitions, emotions, motivations, and behaviors in various situations. Nature of personality: the Nature of Personality is a unique system defining the personality types that express all that life has to offer through the concept of twelve archetypes. These archetypes represent the inner and outer journeys of the mind, body, spirit and soul unfolding through the psyche and the birth of the self, keeping us in pace with evolution and in tune to the one cosmic body. Theories of personality: There are two major theories of personality they are (1)Freudian theory (2)trait theory. 1. Freudian theory Sigmund Freuds theory of personality is a cornerstone of modern psychology .This theory is built on bases of unconscious needs. Id, superego, and ego Id: The id was conceptualized as a warehouse" of primitive and impulsive drives basic physiological needs such as thirst, hunger, and sexfor which the individual seeks immediate satisfaction without concern for the specific means of satisfaction. superego: In contrast to the id, the superego is conceptualized as the individual's internal expression of society's moral and ethical codes of conduct. The superego's role is to see that the individual satisfies needs in a socially acceptable fashion. Thus, the superego is a kind of "brake" that restrains or inhibits the impulsive forces of the id. ego: Finally, the ego is the individual's conscious control. It functions as an internal monitor that attempts to balance the impulsive demands of the id and the sociocultural constraints of the superego. 2. trait theory: It is defined as any distinguishing, relatively enduring way in which one individual differs from another.The trait which measures just one trait, such as self-confidence, the personality tests measure such traits as consumer innovativeness, consumer materialism and consumer ethnocentrism, the explanation for this are: Consumer innovativeness: The degree to which consumers are receptive to new products, new services, or new practices.

Consumer materialism: Materialism is a personality like trait which distinguishes between individuals who regard possessions as essential to their identities and their lives those for whom possessions are secondary. Researchers have found some characteristics of materialistic people, they are: -they value acquire and showoff possessions. -they are self centered and selfish people -they seek lifestyle full of possession -they are not satisfied with their possessions. Consumer Ethnocentrism: Consumers who are highly ethnocentric are likely to feel that it is inappropriate or wrong to purchase foreign made products because of resulting economic impact on the domestic economy. Brand personality: Its defined as Brand image or identity expressed in terms of human characteristics. Distinguishing and identifiable characteristics which offer consistent, enduring and predictable messages and perceptions. What people associate the brand with.Brand personality is a setoff human characteristic associated with a brand. Self and self-image Consumers have a variety of lasting image of themselves; these images are associated with personality in that individuals consumption relates to self-image. One or multiple selves: A consumer who acts differently in different situations or with different people, for instance a person is likely to behave in different ways at home, at work or with friends. Its normal that a person is likely to display different personality in different situations and social roles. Extended self: It is an interrelationship between consumers self image and their possession. A consumers possession may extend their self image in number of ways- Actually, Symbolically, Conferring status or rank, Bestowing feelings of immortality, Endowing with magical powers. Altering the self: The consumers who try to modify their appearances to become a different or improved self by using all kind of accessories, this is frequently done to express their individualism or uniqueness by creating anew self and maintaining the existing self.

Motivation:
Basics of Motivation: People are motivated by many things, some positive others not. Some motivating factors can move people only a short time, like hunger which will last only until you are fed. Others can drive a person onward for years. Motivation is the driving force within individuals that impels them to action. Motivation is the activation or energization of goal-oriented behavior. Motivation may be intrinsic or extrinsic. The term is generally used for humans but, theoretically, it can also be used to describe the causes for animal behavior as well. According to various theories, motivation may be rooted in the basic need to minimize physical pain and maximize pleasure, or it may include specific needs such as eating and resting, or a desired object, hobby, goal, state of being, ideal, or it may be attributed to lessapparent reasons such as altruism, morality, or avoiding mortality. Needs : Needs are the essence of the marketing concept. Marketers do not create needs but can make consumers aware of needs. A need is something that is necessary for humans to live a healthy life. Needs are distinguished from wants because a deficiency would cause a clear negative outcome, such as dysfunction or death. Needs can be objective and physical, such as food and water, or they can be subjective and psychological, such as the need for self-esteem. On a societal level, needs are sometimes controversial, such as the need for a nationalized health care system. Understanding needs and wants is an issue in the fields of politics, social science, and philosophy. Goals : A goal or objective is a projected state of affairs that a person or a system plans or intends to achievea personal or organizational desired end-point in some sort of assumed development. It is the sought-after results of motivated behavior. Types of goals: 1.Generic goals: are general categories of goals that consumers see as a way to fulfill their needs 2.Product-specific goals: Are specifically branded products or services that consumers select as their goals Positive and negative motivation: Positive motivation is a response which includes enjoyment and optimism about the tasks that you are involved in. Positive motivation induces people to do work in the best possible manner and to improve their performance. Under this better facilities and rewards are provided for their better performance. Such rewards and facilities may be financial and non-financial. Negative motivation aims at controlling the negative efforts of the work and seeks to create a sense of fear for the worker, which he has to suffer for lack of good performance. It is based on the concept that if a worker fails in achieving the desired results, he should be punished. Negative motivation involves undertaking tasks because there will be undesirable outcomes, eg. failing a subject, if tasks are not completed. Almost all students will experience positive and negative motivation, as well as loss of motivation, at different times during their life at University.

Rational versus Emotional Motives 1.Rationality implies that consumers select goals based on totally objective criteria such as size, weight, price, or miles per gallon. A conscious, logical reason for a purchase. A motive that can be defended by reasoning or logical argument 2.Emotional motives imply the selection of goals according to personal or subjective criteria. A feeling experienced by a customer through association with a product. Types & systems of needs: For many years psychologists interested in human behavior have attempted to develop exhaustive lists of human needs. Dr. Abraham Maslow, a clinical psychologist, formulated a widely accepted theory of human motivation based on the notion of universal hierarchy of human needs/ Maslows hierarchy of needs:

Learning:what is 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

Elements of Consumer Learning

MOTIVATION: It is the processes that lead people to behave as they do. It occurs when a need arises that a consumer wishes to satisfy. Motivation is based on needs and goals. It acts as a spur of learning. Uncovering consumer motives is one of the prime tasks of marketers, who then try to teach motivated consumer segments why and how their products will fulfill the consumers needs. CUES: It is a stimulus that suggests a specific way to satisfy a silent motive. If motives serve to stimulate learning, cues are the stimuli that give direction to these motives. In the marketplace, price, styling, packaging, advertising and store displays all serve as cues to help consumers fulfill their needs in product-specific ways. Cues serve to direct consumer drives when they are consistent with consumer expectations. Marketers must be careful to provide cues that do not upset those expectations. RESPONSE: Response means how individuals react to a drive or cue or how they behave. Learning can occur even when responses are not overt. The automobile manufacturer that provides consistent cues to a consumer may not always succeed in stimulating a purchase. A response is not tied to a need in a one-to-one fashion. If the manufacturer succeeds in forming a favorable image of a particular automobile model in the consumers mind, when the consumer is ready to buy, it is likely that he or she will consider that make or model. REINFORCEMENT: A positive or negative outcome that influences the likelihood that a specific behavior will be repeated in the future in response to a particular cue or stimulus. It increases the likelihood that a specific response will occur in the future as the result of particular cues or stimuli. Through positive reinforcement, learning has taken place. Behavioral Learning Theories. Behavioral learning theories are sometimes referred to as stimulus-response theories because they are based on the premise that observable responses to specific external stimuli signal that learning has taken place.

CLASSICAL CONDITIONING: 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. Early classical conditioning theorists regarded all organisms as relatively entities that could be taught certain behaviors through repetition or conditioning. The word conditioning mean a kind of knee-jerk or automatic response to a situation built up through repeated exposure. E.g., If you get a headache every time you think of visiting a doctor. Pavlovs demonstration of conditioned learning in his studies with dogs is also a good example of it. An unconditioned stimulus might consists of a well-known brand symbol (such as Neutrogena name) that implies demonstration of dermatologists endorsement and pure. This previously acquired consumer perception of Neutrogena is the unconditioned response. Conditioned stimuli might consist of new products bearing the well-known symbol (such as the items depicted in new products bearing the well-known symbol and the conditioned response would be trying these products because of the belief that they embody the same attributes with which the Neutrogena name is associated. STRATEGIC APPLICATIONS OF CLASSICAL CONDITIONING: The three basic concepts derive from classical conditioning are: 1) Repetition 2) Stimulus Generalization 3) Stimulus Discrimination INSTRUMENTAL (OPERANT) CONDITIONING: 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. It requires a link between a stimulus and a response. In Instrumental Conditioning, the stimulus that results in the most satisfactory response is the one that is learned. In consumer behavior terms, it suggests that consumers learn by trial and error process in which some purchase behaviors results 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. Occurs as the individual learns to perform behaviors that produce positive outcomes and avoid behaviors that yield negative outcomes. This learning process is most closely associated with psychologist B.F. Skinner, who demonstrated the effects of instrumental conditioning by training pigeons to dance and play PingPong. Operant conditioning is the process in which the frequency of occurrence of a behavior is modified by the consequences of the behavior. That is, the consequences of a purchase will affect the probability of a re-purchase. Strategic/Marketing applications of instrumental conditioning: Marketers effectively utilize the concepts of consumer instrumental learning when they provide positive reinforcement by assuring customer instrumental learning when they provide positive reinforcement by assuring customer satisfaction with the product, the service, and the total buying experience.

CHAP#06 CONSUMER & DECISION MAKING

What is consumer decision making? Process by which (1) consumers identify their needs, (2) collect information, (3) evaluate alternatives, and (4) make the purchase decision. These actions are determined by psychological and economical factors, and are influenced by environmental factors such as cultural, group, and social values. Levels of Consumer Decision Making: There are three levels of consumer decision making: Extensive problem solving, limited problem solving and routinized response behavior. Extensive problem solving: When consumers have no established criteria for evaluating a product category or specific brands in that category or have not narrowed the number of brands they will consider to a small, manageable subset, their decision-making efforts can be classified as extensive problem solving. Here, the consumer needs a great deal of information to establish a set of criteria on which to judge specific brands and a correspondingly large amount of information concerning each of the brands to be considered. Limited problem solving Here, the consumers have already established the basic criteria for evaluating the product category and the various brands in the category. They have not fully established preferences concerning a select group of brands. The search for additional information is more like finetuning; they must gather additional brand information to discriminate among the various brands. Routinized response behavior Here, consumers have experience with the product category and a well-established set of criteria with which to evaluate the brands they are considering. In some situations, they may search for a small amount of additional information; in others, they simply review what they already know. In extensive problem solving customer seek for more information to make a choice, whereas in routinized response behavior customers need only little additional information. Views on consumer decision making process: four views of consumer decision making The term models of consumers refers to a general view or perspective as to how individuals behave as they do. The models of consumers are examined in the following four views: An economic view: In the world of perfect competition, the consumer has often been characterized as making rational decisions. This model, called economic man theory, has been criticized by consumer researchers for a number of reasons. To behave rationally in the economic sense, a consumer would have to (a) be aware of all available product alternatives, (b) be capable of correctly ranking each alternative in terms of its benefits and disadvantages, and (c) be able to identify the one best alternative. Consumers rarely have all the information or sufficiently accurate information or even an adequate degree of involvement or motivation to make the so-called perfect decision.

A passive view: Quite opposite to the economic view of consumers is the passive view that depicts the consumer as submissive to the self-serving interests and promotional efforts of marketers. Consumers are perceived as impulsive and irrational purchasers in passive view, ready to yield to aims and into the arms of marketers. The principal limitation of the passive model is that it fails to recognize that the consumers play an equal, if not dominant, role in many buying situations-sometimes by seeking information about product alternatives and selecting the product that appears to offer the greatest satisfaction and at other times by impulsively selecting a product that satisfies the mood or emotion of the moment A cognitive view: The cognitive model portrays the consumer as a thinking problem solver. Within this framework, consumers frequently are pictures as either receptive to or actively searching for products and services that fulfill their needs and enrich their lives. The cognitive model focuses on the processes by which consumers seek and evaluate information about selected brands and retail outlets. An emotional view The marketers frequently prefer to think of consumers in terms of either economic or passive models. In reality, each of us likely to associate deep feelings or emotions, such as joy, fear, love, hope, sexuality, fantasy, and even a little magic with certain purchases or possessions. These feelings or emotions are likely to be highly involving. For example, a person who misplaces a favorite fountain pen might go to great lengths to look for it, despite the fact that he or she has six others at hand. Possessions also may serve to preserve a sense of past and act as familiar transitional objects when one is confronted with an uncertain future. For example, members of the armed forces invariably carry photographs of the girl back home, their families, and their lives in earlier times. These memories frequently serve as hopeful reminders that normal activities will someday resume.

CHAP#07 POST PURCHASE BEHAVIOUR

What is post purchase behavior? Post-purchase behavior involves all the consumers' activities and the experiences that follow the purchase. Usually, after making a purchase, consumers experience post-purchase dissonance. In other words, they regret their purchase decision. The reasons for high post-purchase dissonance can be attractiveness and performance of forgone alternatives, difficult purchase decision, large number of alternatives, etc. A high level of post-purchase dissonance is negatively related to the level of satisfaction the consumer draws out of product usage. While experiencing post-purchase dissonance, consumers become acutely aware of the marketers' communication. To reduce post-purchase dissonance, consumers may sometimes even return or exchange the product. Marketers, therefore, can use these opportunities to reduce consumers' risk perception by way of good return/exchange policies and reduce their post-purchase dissonance by messages targeted at this segment of their consumers. Decision related to post purchase behavior: Some very important Marketing Implications flow from Consumer Post Purchase decisions in the following twoareas: 1. Product Set up and Use 2. Related Products and Services Decision on Product Set up and Use The marketing implications resulting from Consumer behavior related to Product Set up and Use are important inthe following areas: a. Providing Information and Assistance b. Understanding the Consumer's Consumption System c. Decisions About Warranties Decisions on Related Products and Services Once a consumer makes a decision to purchase a product there can be several additional behaviors associated with that decision. Two activities are of primary importance: 1. Decisions on the products installation and use 2. Decisions on the products or services related to the items purchased Post purchase evaluation: the consumer decision process does not end once the product or service has been purchased. After using a product or service the consumer compares the level of performance with expectations. Satisfaction occurs when the consumers expectations are either met or exceeded, while dissatisfaction results when performance is below expectations. Another possible outcome of purchase is cognitive dissonance which refers to a feeling of psychological tension or postpurchase doubt a consumer may experience after making a difficult purchase choice. Consumers often look to advertising for supportive information regarding the choice they have made.

Customer satisfaction /dissatisfaction Customer satisfaction is, simply put, a measure of the satisfaction of the customer, and how the sold items or services meet the customer's expectations. whereras if a customer is not delighted or not getting the expected benefits etc ..this lead to customer dissatisfaction. Consumer complaint behavior Consumers may exhibit unfavorable word-of-mouth communication, if they are dissatisfied with a product. In this case, customers tell twice as many people about bad experiences as good ones and such behavior can severely damage a companys image. Consumers may not repurchase the brand. Post purchase dissonance: Post purchase dissonance is basically an after purchase cognitive behavior. While evaluating the benefits after a purchase it is common for customers to be concerned about their purchase decision. It is caused by cognitive dissonance. Here the customer thinks that if he had purchased some other item it would have been better than the one he bought. Simply he is not completely satisfied with the purchase and is most likely to switch brands. Product disposition: Disposition alternatives and Determinants: There are various alternatives for disposing of a product. In addition, the method of disposition may vary considerably across products. For example while bicycles tend to be given away, this is not true of phonograph records which are usually thrown away or stored. At present little is known about the factors that influence the disposition choice made by the consumer. The following categories of factors have been suggested however. 1) Psychological characteristics of the decision maker: personality, attitudes, emotions, perception, learning, creativity, intelligence, social class, level of risk tolerance peer pressure, social conscience and so on. Although consumer demographic variables have not proved to be very enlightening in understanding disposition behavior Lifestyle factors have proved to be moderately useful. 2) Factors intrinsic to the product condition age, size, style, value color, power source of the product, technological innovations adaptability, reliability, durability initial post, replacement cost, and so on. 3) Situational factors extrinsic to the product finances storage space, urgency, fashion changes, circumstances of acquisition (gift versus purchase) functional use, economics (demand and supply) legal, considerations (giving to avoid taxes) and so on. Marketing Implications: The implications of the consumer product disposition process reflects on several areas of marketing. There are implications from a public policy perspective as well as from a strategy perspective.

Chap#08 consumerism
What is consumerism? Consumerism encompasses the evolving set of activities of government, business and independent organizations that are designed to protect the rights of the consumers. Consumerism is concerned with protecting consumers from all organizations with which there is exchange relationship. There are consumer problems associated with hospitals, libraries, schools, police forces, and various government agencies, as well as with business firms. Evolution of consumerism consumerism may b evolved due to following reasons: 1. Disillusionment with the system 2. The performance gap 3. The consumer information gap 4. Antagonism toward advertising 5. Impersonal and unresponsive marketing institutions 6. Intrusions of privacy. 7. Declining living standard. 8. Special problems of the disadvantaged 9.Different views of the marketplace The nature of consumerism The Nature of Consumerism may be summarized in the following points: 1. 2. 3. 4. 5. 6. 7. 8. Consumer Safety Consumer Information Consumer Choice Environmental Concerns Consumer Privacy Business Response to Social and Ethical Concerns Consumers Responsibilities Market Responses to Consumers

Responsibilities of consumers: Critical Awareness: The responsibility to be more alert and questioning about the price and quality of goods and services we consume. Action : The responsibility to assert ourselves by acting to ensure that we get a fair deal As long as we remain passive consumers we will continue to be exploited and manipulated. Social Concern: The responsibility to consider the impacts of our consumption patterns and lifestyles on other citizens especially the poor disadvantaged or powerless consumers whether they be in the local national or international community.

Environmental Awareness: The responsibility to realize the environmental costs and consequences of our consumption patterns and lifestyles. We should recognize our individual and collective social responsibility to conserve natural resources and to preserve earth for present and future generations. Solidarity: The responsibility to come together and organize consumers in order to enhance the strength and influence required to promote and protect our interests. developing marketing organization responsive to consumers The number and seriousness of consumer problems suffered by general population is not significant. Only a small vocal minority of consumers complain about the problems they experience with products and services. Great majority of those complaints are registered about products and services are resolved to the satisfaction of consumers. Business people must educate the public about the operation of the marketing system, the benefits of free enterprise, etc... They need to assess and modify their policies and practices to improve products and services offered to consumers. This highlights the need for an effective Consumer Response System that draws from the following features Understanding what consumers experience Establishing a Consumer Advisory Board Listening to consumers and responding effectively Establishing corporate consumer affairs units