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Eg: Tooth paste

Types – Gel, Regular, Striped, In a tube etc.

Brand – National, Private etc.

Why – To prevent cavities, to remove stains, to whiten

teeth, to use as a mouth wash
Where – Supermarket, drugstore, local retailer etc.

How often they use -- When they wake up, after each
meal, when they go to bed, or any

How often they buy it – Weekly, biweekly, monthly.

Consumer Behaviour is the study of behaviours that

consumers display in searching for, purchasing, using,
evaluating, and disposing of products and services that they
expect will satisfy their needs.

Disposing — After use, does the consumer store it, throw it,
sell it, rent it, lend it out etc. The answers are required to
match the frequency of production. Also, for environmental
concerns. Packaging and new product development should
be environment friendly.


 To enable us to become wiser and better customers

 To enable marketers to make better strategic marketing


 As students, to better our understanding of overall

human behaviour

 Positivism: Predicting CB to influence it. If you could

predict CB, you could influence it. Consumer Researchers
primarily concerned with predicting CB are known as

 Interpretivism: The study of CB from the point of view of

understanding consumption behaviour and the meanings
behind such behaviour is called interpretivism.

Many interpretivists consider each purchase experience unique

because of the diverse set of variables at play at that time. Because
of its focus on the consumption experience, the interpretive
approach is also known as experientialism.



 Marketers noted that consumers did not always react as

marketing theory would suggest.

 Consumer preferences were changing and becoming highly


 Billions of Dollars spent for marketing.

 Consumers prefer differentiated products that they feel reflect

their own special needs, personalities, and lifestyles.

 Then came the concepts of segmentation and positioning.

 Today we have a cross-cultural consumer.

 Development of Marketing Concept: Customer is king.

The Consumer Movement
In 1962, President John Kennedy declared that consumers had the
rights to safety, to be informed, and to be heard.
The consumer movement finally started in 1964.

Consumer Boycott: Refusal by a group of consumers to do

business with one or more companies to express disapproval of
certain company policies and to attempt to coerce the target
companies to modify those policies.

Eg: Consumer boycott by animal rights advocates resulted in the

gradual elimination of product testing on animals by cosmetic


 Motivation is the driving force

within individuals that impels them to

 This driving force is produced by a state of tension,

which exists as the result of an unfulfilled need.

 Individuals strive – both consciously and

subconsciously – to reduce this tension through
behaviour that they anticipate will fulfill their needs
and thus relieve them of the stress they feel.

 The specific goals they select and the patterns of action they
undertake to achieve their goals are the results of individual
thinking (cognition) and learning.

Needs : Every individual has needs; some are innate, others are
acquired. Innate needs are physiological (biogenic) needs; they
include the need for food, shelter, water, clothes etc. Because they
are considered vital for survival, they are also called as Primary
Acquired needs are needs that we learn in response to our
culture or environment. These may include the need for self-
esteem, for prestige, for affection, for power, and for learning.
Because acquired needs are generally psychological (i.e.,
psychogenic), they are also called Secondary Needs or Motives.

Example: The house which an individual purchases may serve to
fulfill both primary and secondary needs.

Goals: Goals are the sought after results of motivated behaviour.

They are of two kinds: Generic Goals and Product-Specific Goals.

Generic goals are general classes or categories of goals that

consumers select to fulfill their needs.

Product-specific goals are specifically branded or labeled

products which consumers select to fulfill their needs.

Example: Lipton wants customers to view Iced Tea as a good way

to quench summer thirst (generic goal). However, it is even more
interested in having consumers view Lipton’s Iced Tea as the best
way to quench summer thirst (product-specific goal).

Selection of goals: For any given need, there are many

different and appropriate goals. The goals selected by individuals
depend on their personal experiences, physical capacity,
prevailing cultural norms and values, and the goal’s accessibility
in the physical and social environment.

Example: Choice of a restaurant for satisfying hunger need.

A person’s self - image also has influence on the specific goals


 There is interdependence between needs and goals.

 People are more aware of their primary needs than they are
of their secondary needs. You may join a club without
knowing your need for social acceptance. But your need for

food when you are hungry will never be unknown to you. So,
in case of secondary needs it may happen that goals are
chosen first and corresponding needs are felt later.

Positive and Negative Motivation:

Motivation can be positive or negative in direction.

We may feel a driving force toward some object or condition, or a

driving force away from some object or condition.
Example: A person may be motivated toward a restaurant to fulfill
hunger need and away from motorcycle transportation to fulfill
safety need.

Positive and Negative Goals:

A positive goal is one toward which behaviour is directed and thus
is referred to as an Approach Object.

A negative goal is one from which behaviour is directed away and

thus is referred to as an Avoidance Object.

Example: A middle-aged woman may have positive goal of fitness,

and so she joins a health club. Her husband may view getting fat
as a negative goal, and he also joins a health club. The wife’s
action is designed to meet a positive goal of maintaining good
physique. The husband’s action is designed to avoid the negative
goal of getting fat.

In 1985, when the Coca-Cola company changed its traditional

formula and introduced “New Coke”, many people reacted
negatively to the fact that their “freedom to choose” had been
taken away, and refused to buy the New Coke. Coca-Cola

responded by reintroducing the original formula as “Classic
Coke”. This is also called as Psychological Reactance.

Rational versus Emotional Motives:

Consumers behave rationally when they carefully consider all
alternatives and choose that give them the greatest utility. It means
that consumers select goals based on totally objective criteria,
such as size, weight, price, discounts etc.

Emotional motives imply the selection of goals according to

personal or subjective criteria like desire for individuality, pride,
fear, status etc.

Both behaviours are justified because at the time of purchase the

customer was trying to fulfill his/her needs and needs vary with

The Dynamic Nature of Motivation

Motivation is highly dynamic and changes in reaction to life

Needs and goals are constantly changing: As individuals attain

their goals, they develop new ones. Eg. A student may initially
want to pass the exams, but when he does so, the next time he
would want to attain a rank in the class.

Needs are never fully satisfied: Most human needs are never fully
or permanently satisfied. Eg. Hunger needs are never fully or
permanently satisfied. Ego needs also keep on increasing with
New needs emerge as old needs are satisfied: There is a hierarchy
of needs that exists and consumers satisfy the higher order needs
after fulfilling the basic needs.
Eg. After getting a job in a reputed company, you may want to
have more freedom in decision making.

Success and failure influence goals: Success leads to higher

levels of aspiration, whereas failure leads to de-motivation and
change of goals.
Eg. A student who could not qualify the medical entrance exam
may not want to appear again in the same exam and rather go for
a dental course.
Marketers must understand that goals should be reasonably
attainable. Advertisements should not promise more than the
product will deliver.
Even a good product will not be purchased if it fails to live up to
the expectations.

Substitute goals: When an individual cannot attain a specific goal

that he/she anticipates will satisfy the need, behaviour may be
directed to a substitute goal, though the substitute goal may not be
as satisfactory as the original goal.
Eg. A student is not able to clear the CAT exam and takes
admission in an average institute for an MBA program of study.


Failure to achieve a goal often results in feelings of frustration.

The barrier that prevents attainment of a goal may be personal to

the individual (e.g., limited physical or financial resources), or it
can be an obstacle in the physical or social environment.

People respond by adaptive behaviour to reduce the feelings of



People who cannot cope with frustration often mentally redefine

their frustrating situations in order to protect their self-images and
defend their self-esteem.
E.g., A young woman may want to have an European vacation she
cannot afford. The coping individual may select a less expensive
vacation trip to a national park.

Types of defense mechanisms:

1. Aggression: Individuals who experience frustration may

resort to aggressive behaviour in attempting to protect their
self-esteem. In the above example, the woman could react
with anger toward boss for not paying her enough money to
afford the vacation she prefers. A boy who has failed in an
examination may destroy all his books and notes.

Frustrated consumers have boycotted manufacturers in an
effort to improve product quality, and have boycotted
retailers in an effort to have prices lowered.

2. Rationalization: Sometimes, individuals redefine a

frustrating situation by inventing plausible reasons for being
unable to attain their goals. Or, they may decide that the goal
really is not worth pursuing. These are not deliberate lies,
since the individual is not fully aware of the cognitive
distortion that occurs as a result of the frustrating situation.
Example: A person may not know how to use a product and
explain to himself that the product is not worthy of use.

3. Regression: Sometimes people react to frustrating situations

with childish or immature behaviour. Example: A shopkeeper
attending a bargain sale may fight over merchandise and
resort to tearing a garment that another shopper will not
relinquish, rather than allowing the other person to have it.

4. Withdrawal: Frustration is often resolved by simply

withdrawing from the situation. A person who has difficulty
achieving officer status in an organization may simply quit
the organization. He may also rationalize his resignation by
deciding that the organization is not true to its stated ideals
and that its other members are shallow. As a customer you do
not like the product and stop using the same without any
explanation to the company’s salesman. You withdraw from
the scene.

5. Projection: An individual may redefine a frustrating

situation by projecting blame for his/her failures and
inabilities on other objects or persons. A driver who has an
automobile accident may blame the other driver on the road
or the condition of the road for the accident. As a customer
you may blame your friend for deciding upon a purchase
with which you are not happy.

6. Autism: Autism, or autistic thinking, refers to thinking that is

almost completely dominated by needs and emotions, with
little effort made to relate to reality. Such daydreaming or
fantasizing enables the individual to attain imaginary
gratification of unfulfilled needs. A person who is shy and
lonely may daydream about a romantic love affair. As a
customer you are not able to afford an expensive car and start
fantasizing about a luxury car. The advertisements of luxury
cars would further make the person happy.

7. Identification: Sometimes people resolve their feelings of

frustration by subconsciously identifying with other persons
or situations that they consider relevant. This is often used to
generate ad appeals. That is why slice-of-life commercials are
so popular. Such ads usually portray a stereotypical situation
in which an individual experiences a frustrating situation and
then overcomes the problem that has caused the frustration
by using the advertised product. If the viewer can identify
with the frustrating situation, he may adopt the proposed
solution and buy the product advertised. Example: A fellow
who has difficulty in attracting dates may decide to use the
same mouthwash, shampoo, or clothing that worked for the
man in the advertisement.

8. Repression: Another way that individuals avoid the tension

arising from frustration is by repressing the unsatisfied need.
Thus, individuals may “forget” a need; that is they force the
need out of their conscious awareness. Sometimes repressed
needs manifest themselves indirectly. A couple who cannot
have children may surround themselves with plants or pets.
The wife may teach school and the husband may do
volunteer work in a club. The manifestation of repressed
needs in socially acceptable forms is called “Sublimation”
which is another type of defense mechanism.

The above list of defense mechanisms is far from exhaustive.

People have limitless ways of resolving their frustrating situations
so that they can protect their self-esteem and reduce the anxiety
resulting from failure.

Multiplicity of needs: A consumer’s behaviour often

fulfills more than one need. Goals are often selected because they
fulfill more than one need. We buy clothing for protection and
modesty; in addition our clothing fulfills an enormous range of
personal and social needs. Usually there is one overriding or
prepotent need that initiates behaviour. Example: A woman wants
to lose weight because she wants to wear more stylish clothing.
She also may be concerned about high blood pressure. In addition
she has noticed her husband admiring slimmer girls. She may act
(diet) if she finds enough cumulative tension within her. However,
just one of the reasons (her husband’s straying eye) may serve as
the triggering mechanism; that would be the prepotent need.

Needs and goals vary among individuals

 People with different needs may seek fulfillment through

selection of the same goals.

 People with the same needs may seek fulfillment through

selection of different goals.

Eg. Goal: To buy an iPhone (Smart Phone).

Needs: 1. To stay in regular touch with family members.
2. To stay in regular touch with friends.
3. To use it in examination.
4. To use various apps.
5. To be seen by friends as a savvy consumer.
6. Since iPhone (Apple) is the best in the game.

Eg. Need: Ego need

Goals: 1. Seek advancement and recognition through a
professional career.
2. Become active as a politician
3. Become an administrative officer.
4. Try to attain intellectual superiority in society.

Eg. Need: To stay in regular touch with others.

Goals: 1. Write letters frequently.
2. Obtain a landline connection.
3. Connect through internet (e-mail, Facebook,
Twitter, etc.).
4. Purchase a pager set.
5. Purchase a mobile phone / smart phone.

Arousal of Motives
Most of an individual’s specific needs are dormant much of the

The arousal of a particular set of needs at a specific point in time

may be caused by internal stimuli found in the individual’s
physiological condition, emotional or cognitive processes, or by
stimuli in the outside environment.

Physiological arousal: A drop in blood sugar level or stomach

contractions will trigger awareness of hunger need. A decrease in
body temperature will induce shivering, which makes the
individual aware of the need for warmth. Most of these
physiological cues are involuntary; however they arouse related
needs that cause uncomfortable tensions until they are satisfied.
Like the shivering man may turn the heat in his home to relieve his
discomfort; he also may make a note to buy warm pajamas.
“Television programs often generate physiological arousal in
viewers that affects the impact of ensuing commercials”.

Emotional arousal: Sometimes daydreaming results in the arousal

or stimulation of latent needs. People who are bored or frustrated
in attempts to achieve their goals often engage in daydreaming, in
which they imagine themselves in all sorts of desirable situations.
These thoughts tend to arouse dormant needs, which may produce
uncomfortable tensions that “push” them into goal oriented
Example: A young woman who dreams of becoming a successful
business leader may enroll for an MBA program of study.

Example: Advertisements generally tend to arouse emotional
feelings which push the target audience for action that will release
LML Freedom advertisements arouse emotional feelings of
Freedom and Liberty in life. People who view freedom as a
priority in life may go for purchasing LML Freedom.

Cognitive Arousal: Sometimes, random thoughts or personal

achievements can lead to a cognitive awareness of needs.
Example: An advertisement that provides reminders of home might
trigger instant yearning to speak with one’s parents. But cost of the
calls may be a factor for deciding the service provider. That is the
basis for many long distance telephone company campaigns that
stress the low cost of calls.

Environmental Arousal: The set of needs activated at a particular

time are often determined by specific cues in the environment.
Without these cues, the needs might remain dormant.
Example: Fast food commercials on television may arouse hunger
and so the need for food is felt.
Example: A woman may feel the need for a new sofa when she
sees a neighbor’s new sofa.
Example: A man may feel the need for a new car when passing a
dealer’s display window.

Types and Systems of Needs

For many years people interested in human behaviour have tried to

develop an exhaustive list of human needs or motives. But needs or
motives could be infinite or innumerable.

Diversity of need systems

Most list of human needs tend to be diverse. Although there is little
disagreement about physiological needs, there is a lot of debate
over psychological or psychogenic needs.

Hierarchy of Needs

Dr. Abraham Maslow, a clinical psychologist, formulated a widely

accepted theory of human motivation based on the notion of a
universal hierarchy of human needs.

This theory postulates five basic levels of human needs, which

rank in order of importance from lower-level (biogenic) needs to
higher-level (psychogenic) needs. It says that individuals satisfy
lower level needs first before higher level needs emerge. When a
lower level need is satisfied, the next level of need emerges and
plays a dominant role. However, since no need is ever completely
satisfied, the lower level needs may emerge again.

1. Physiological Needs: This is the first and most basic level of

need. These needs which are required to sustain biological, include
food, water, air, shelter, clothing, sex- all the biogenic needs.

If a person is hungry, he cannot think of anything else. So it is
useless for a company to launch operations of expensive goods in
an underdeveloped country where basic necessities are not

2. Safety Needs: After the first level of needs is satisfied, safety

and security needs become the driving force behind an individual’s
behaviour. These needs are concerned with much more than
physical safety. They include order, stability, routine, and control
over one’s life and environment.
Example: An individual wants food not only for one day but for the
whole life. So if he has the knowledge that he will get food for
whole life and so will his family members, he will feel safe.
Health is also a safety concern.

Savings accounts, insurance policies, education, and vocational

training are all means by which individuals satisfy the need for
security and safety.

3. Social Needs: This includes the need for love, affection,

belonging, and acceptance.
Example: Because of this social motive, ads for personal care
products often emphasize this appeal in advertisements. Like
Close-Up ads, Axe ads etc.

4. Egoistic Needs: When social needs are satisfied, the fourth

level of needs emerges. This level is concerned with egoistic
needs. These needs can take either an inward or an outward
direction, or both.

Inwardly-directed ego needs reflects an individual’s need for self-

acceptance, for self-esteem, for success, for independence, for
personal satisfaction with a job well-done.

Outwardly-directed ego needs include the needs for prestige, for
reputation, for status, for recognition from others.

Example: The ads for many fabrics and wines play upon the ego
needs of individuals. Like the advertisement for Haywards, Bullet,
Parker pens etc. play upon the ego needs.

5. Need for Self-Actualization: According to Maslow, most

people do not satisfy their ego needs sufficiently to ever move to
the fifth level- the need for self-actualization (self-fulfillment).
This need refers to an individual’s desire to fulfill his or her
potential-to become everything he or she is capable of becoming.
In other words “What a man can be, he must be”.

Example: A young man may desire to be an Olympic Star and

work single-mindedly for years to become the best in sport.

Example: Advertisements for art lessons, for banking services, for

military services and for marine services try to appeal to the self-
actualization needs. They challenge your potential and bring you in
a state of discomfort leading to tension. A person who accepts the
challenge will act accordingly and try to fulfill his self-
actualization need.

Maslow’s Theory in One Sentence:

“Dissatisfaction, not satisfaction, motivates behaviour”.


Despite many criticisms, this theory is a useful tool for

understanding consumer motivations and is readily adaptable to
marketing strategy, primarily because consumer goods often satisfy
each of the level of needs. Example:

 Buying houses, food, clothing ----- Satisfying physiological


 Buying insurance, radial tires, vocational training --- Satisfying

safety and security needs

 Buying personal care products (cosmetics, mouthwash,

deodorants) ---- Satisfying social needs.

 Buying luxury products (jewels, furs, big cars) ---- Satisfying

ego needs.

 Buying special training, complex financial services ---

Satisfying self-actualization needs.

Segmentation Applications

The need hierarchy is often used as the basis for market

segmentation, with specific advertising appeals directed to
individuals on or more need levels.


 Soft drinks ads directed to teenagers often stress a “social

appeal” by showing a group of young people sharing good
times as well as the advertised product.
Like the ads for Coca-Cola, Pepsi.

 The same product will have a different advertisement when a

report comes from the government or some scientific body.
Like what happened in the case when a report came that soft
drinks have a huge proportion of pesticides. Here the “safety
and security need” will be stressed.

 The same product can also be advertised as fulfilling “ego

needs”. Like the ad for Thums-Up.

 The same product can also be advertised as fulfilling “self-

actualization needs”.
Like the ads for Mountain Dew.

Positioning Applications:

Another way to use the need hierarchy is for positioning products-

that is, deciding how the product should be perceived by
prospective consumers.

The key to positioning is to find a niche that is not occupied by a

competing brand or product. This application of the need hierarchy
relies on the notion that no need is ever fully satisfied, that it
always continues to be somewhat motivating. Safety, for example
is a continuing need.
Most manufacturers use:

 Status appeals (“Impress your friends”, “Neighbours envy

owners pride”)

 Self-actualizing appeals (“You deserve the best, Bring home

the leader”)

 Social appeals (“The whole family can ride in luxurious

comfort”, “Saath –saath chalne ka mazaa hi kuch aur hai”)

 Safety appeals (“Your safety is our concern”, “Aapke saath,

aapke liye”).

Versatility of the Need Hierarchy

Take the example of a promotional program for home exercise

 Appeal to physiological needs --- Show

how the physical exercise unit can
improve body tone and health.
 Appeal to safety needs --- Show how safe the equipment is for
home and solo use.

 Appeal to social needs --- Show how much fun it can be to

exercise with friends or even how a streamlined figure would
encourage social encounters.

 Appeal to ego needs --- Show a narcissistic appeal such as “be

proud of your body”.
 Appeal to self-actualization needs --- Show to career couples
that they deserve the convenience and luxury of home exercise
after a long and challenging workday.


Some people believe in the existence of a trio of basic needs:

The needs for power

The needs for affiliation

The needs for achievement

The Power Need: This relates to an individual’s desire to

control his or her environment. It includes the need to control other
persons and objects.

Example: A number of products, such as automobiles, lend

themselves to promises of power or superiority for users. Like the

ads for Tata Safari, Toyota Qualis, Bullet, etc. play upon the power
needs of individuals.
Example: A person who wants to become a politician or an IAS

The Affiliation Need: This need suggests that

behaviour is highly influenced by the desire for friendship,
acceptance, and belonging.

Example: People with high affiliation needs will purchase products

that they consider would be approved by their peer groups. Like
the ads for soft drinks such as Coca-Cola and Pepsi tries to play
upon affiliation needs. Similarly, the ads for personal care products
try to arouse affiliation needs and suggest that if the advertised
product is not used, the individual may suffer from isolation.

Example: A person who takes the membership of a club.

The Achievement Need: Individuals with strong

needs for achievement often regard personal achievement as an
end in itself. Such people try to be more self-confident, enjoy
taking calculated risks, actively research their environments, and
are very interested in feedback.

Example: Such persons are good prospects for cleverly presented,

innovative products, or for do-it-yourself projects, for older
houses, and even for moderately speculative stock issues.

Example: A person who enrolls for an MBA program.

The Measurement of Motives

 Motives are hypothetical constructs-they cannot be seen,

touched, smelled, or otherwise tangibly observed. For this
reason, no single measurement method can be considered to
be reliable index. Instead, researchers usually rely on a
combination of observation and inference, self-reports, and
projective techniques and try to establish the presence and/or
the strength of various motives.

 Identification and measurement of motives is an inexact


 Some psychologists are concerned that most measurement

techniques do not meet the crucial test criteria of validity and

 Projective techniques also rely on the researcher’s analysis,

they focus not only on the data obtained but also on what the
researcher thinks these data imply.

So, no single measurement technique is strongly believed,

rather a set of measurement techniques are given importance
for the measurement and identification of motives. However,
there is a clear need for improved methodological procedures
for measuring human motives.

Motivational Research

The term motivational research, which should logically include all

types of research into human motives, has become a term of art
used to refer to qualitative research designed to uncover the
consumer’s subconscious or hidden motivations.

Based on the premise that consumers are not always aware of the
reasons for their actions, motivational research attempts to
discover underlying feelings, attitudes, and emotions concerning
product, service, or brand use.

Development of Motivational Research

Sigmund Freud’s psychoanalytic theory of personality provided the

basis for the development of motivational research.

This theory was built on the premise that unconscious needs or

drives-especially biological and sexual drives-are at the heart of
human motivation and personality. Freud constructed his theory
from patients’ recollections of early childhood experiences,
analysis of their dreams, and the specific nature of their mental and
physical adjustment problems.
Dr. Ernest Dichter, a psychoanalyst in Vienna, then adapted
Freud’s techniques to the study of consumer buying habits.

Limitations of Motivational Research

 Small samples for in-depth study. Findings could not be


 Analysis of projective and depth interviews was highly
 Many of the tests that were used were originally developed
for clinical purposes rather than for studies on marketing etc.
 Freud’s psychoanalytic theory was specifically structured for
use with disturbed people, while consumer behaviour
researchers were interested in explaining the behaviour of
“typical” consumers.
 Freudian theory was developed in an entirely different social
context (19th century Vienna), while motivation al research
was introduced in 1950s postwar America.
 Motivational researchers imputed highly exotica and sexual
reasons to rather prosaic consumer purchases.

Note: Despite these criticisms, motivational research is still

regarded as an important tool by marketers.

Note: The new science of Semiotics is concerned with the

conscious and subconscious meanings of nonverbal symbols to
consumers. These insights are usually obtained through
motivational research.

Uses of Motivational Research

 Development of new ideas for promotional campaigns.

 Development of new product categories.
 Helps in designing structured marketing research studies.
 Useful for nonprofit organizations.
 Indicates the actual reasons behind consumer purchases.
 It suggests new ways for marketers to present their products
to the public.


 Personality is the supreme realization of the innate

individuality of a particular living being.

 Personality can be defined as those inner psychological

characteristics that both determine and reflect how a
person responds to his or her environment.

 Inner characteristics—Specific qualities, attributes, traits,

factors and mannerisms that distinguish one individual from
other individuals.

 The deeply ingrained characteristics which we call as

personality are likely to influence the individual’s product
choices and may be even brand choices.
 They also affect the way consumers respond to promotional
efforts and when, where, and how they consume particular

Therefore, the identification of specific personality characteristics,

associated with consumer behaviour may be highly useful in the
development of a firm’s market segmentation strategy.

The Nature of Personality

There are three distinct properties of personality.

 Personality reflects individual differences

 Personality is consistent and enduring

 Personality can change


Freudian Theory: His theory is also called the psychoanalytic

theory of personality. This theory was built on the premise that
unconscious needs or drives, especially, sexual and other biological
drives, are at the heart of human motivation and personality. He
constructed this theory on the basis of patients’ recollections of
early childhood experiences, analysis of their dreams, and the
specific nature of their mental and physical adjustment problems.

Id, Superego, and Ego: Based on his analysis, Freud proposed

that the human personality consists of three interacting systems:
the Id, the Superego, and the Ego.

The Id was conceptualized as the warehouse of primitive and

impulsive drives-basic physiological needs such as thirst, hunger,
and sex-for which the individual seeks immediate satisfaction
without concern for the specific means of satisfaction.

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.

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 socio-cultural constraints of the

Stages of Personality Development:

Freud emphasized that an individual’s personality s formed as
he/she passes through a number of distinct stages of infant and
childhood development. The stages are:

Oral Stage: The infant first experiences social experience with the
outside world through the mouth (eg. Eating, drinking, sucking).
A crisis develops at the end of this stage when the child is
weaned from the mother’s breast or from the bottle.

Anal Stage: During this stage, the child’s primary source of

pleasure is the process of elimination.
A second crisis develops at the end of this stage when parents
try to toilet train the child.

Phallic Stage: The child experiences self-oriented sexual pleasure

during this phase with the discovery of the sex organs.
A third crisis develops when the child experiences sexual
desire for the parent of the opposite sex. How the child resolves
this crisis affects later relationships with persons of the opposite
Latency Stage: The sexual instincts of the child lie dormant from
about age 5 until the beginning of adolescence and no important
personality changes occur during this time.

Genital Stage: At adolescence, the individual develops a sexual

interest in persons of the opposite sex, beyond self-oriented love
and love for parents.

According to Freud, an adult’s personality is determined by how

well he/she deals with the crisis that is experienced while passing
through each of these stages.

Example: If a child’s oral needs are not adequately satisfied at the
first stage of development, the person may become fixated at this
stage and as an adult display a personality that includes such traits
as dependence and excessive oral activity (like gum-chewing and

When an adult is fixated at the Anal stage, the adult

personality may display other traits, such as an excessive need for

Freudian Theory and Product Personality

Consumer purchases are a reflection and extension of their own

personality. In other words, what one wears, what one eats, what
one rides etc. are reflections of an individual’s personality.

Brand Personality: Consumers tend to ascribe various

descriptive “personality-like traits or characteristics-the ingredients
of brand personality-to different brands in a wide variety of
product categories. Companies try to give brand personification to
different brands in the market.
Example: Mr. Coffee was seen as being dependable, friendly,
efficient, and intelligent/smart. The word Mister did wonders for
that coffee brand.

Discussion of case of Mr. Coffee.

Jungian Personality Types

 Carl Jung was a contemporary and colleague of Freud.

 Carl Jung’s personality types capture two pairs of dimensions

i.e, Sensing-Intuiting and Thinking-Feeling.

 The Sensing (S) and Intuiting (N) dimensions capture how

consumers find out about things (obtaining and processing
information), and the Thinking (T) and Feeling (F)
dimensions are opposite ways of making decisions (decision

Summary Characteristics of Selected

Jungian Personality Types

Sensing-Thinking (ST)

 Rational in decision-making.
 Logical and empirical in viewpoint.
 Makes decisions following an “objective orientation”.
 Heavily weighs economic considerations-most price
 Will extend considerable effort to search for decision-making
 Risk avoider.
 Materialism reflects personal or private motives (i.e.,
identifies with material objects or things).
 Short-time horizon in making decisions.

Sensing-Feeling (SF)

 Empirical viewpoint.
 Propelled by personal values rather than logic.
 Makes decisions following a “subjective orientation”.
 Likely to consider others while making a decision.
 Shares risk with others.
 Materialism reflects how objects will impact on others (i.e.,
status conscious).
 Short-time horizon in making decisions.

Intuiting-Thinking (NT)

 Takes a broad view of personal situation or world.

 Relies heavily on imagination, yet uses logic in
approaching decisions.
 Imagines a wider range of options in making a decision.
 Weighs options mentally.
 Willing to take risks or be speculative in decisions.
 Long-time horizon in making decisions.

Intuiting-Feeling (NF)

 Takes a broad view of personal situation or world.

 Imagines a wide range of options in making a decision.
 Highly “people oriented” – likely to consider others’ views.
 Makes decisions following a subjective orientation.
 Least price sensitive.
 Risk seeking (venturesome and novelty seeking).
 Indefinite time horizon in making decisions.

Neo-Freudian Personality Theory:
Several of Freud’s colleagues disagreed with his contention that
personality is primarily instinctual and sexual in nature. Instead,
these neo-Freudians believed that Social Relationships are
fundamental to the formation and development of personality.

Karen Horney, one of the neo-Freudians, proposed that individuals

can be classified into three personality groups.

 Compliant Individuals: These are those individuals who

move toward others (they desire to be loved, wanted, and
Ads showing group work or team work will highly appeal to
these people.

 Aggressive Individuals: These are those individuals who

move against others (they desire to excel and win
Ads of Army or other challenging works attract these people.

 Detached Individuals: These are those individuals who

move away from others (they desire independence, self-
reliance, self-sufficiency, and freedom from obligations).
These people are less brand loyal and are likely to try
different brands.

Trait Theory

The orientation of trait theory is primarily is quantitative or

empirical; it focuses on the measurement of personality in terms of
specific psychological characteristics, called traits.

A trait is defined as “… any distinguishing, relatively enduring

way in which one individual differs from another.”

Accordingly, proponents of this theory are concerned with the

construction of personality tests that pinpoint individual
differences in terms of specific traits.

These tests measure such traits as consumer innovativeness,

consumer susceptibility to interpersonal influence, consumer
materialism, and consumer ethnocentrism.


1. Consumer Innovativeness: How receptive consumers are

to new products is quite important to marketers. The sub points

Dogmatism: It is a personality trait that measures the degree of

rigidity individuals display toward the unfamiliar and toward the
information that is contrary to their own established beliefs. A
person who is highly dogmatic approaches the unfamiliar
defensively and with somewhat discomfort and uncertainty. At the
other end, a person who is low in dogmatism will readily consider
unfamiliar or opposing beliefs. Firms use celebrities and experts to
provide authoritative appeal to ads which are directed towards
dogmatic consumers.

Social Character: This is a personality trait that ranges on a

continuum from inner-directedness to other-directedness.
Inner directed people tend to rely on their own inner values or
standards in evaluating products and messages. They prefer ads
that stress product features and benefits.
Other directed people tend to look to others for direction on what is
right or wrong. These seem to prefer ads that feature a social
environment or social acceptance.

Optimum Stimulation Level: This is the level at which a person

gets actually stimulated and excited. Some people like relaxed and
calm lives while others like complex and busy life schedules.
Example: Holiday package companies stress on this parameter to
make promotional appeals for their target market.

Variety-Novelty Seeking: Consumers seek variety and try new
brands just for experience (“try once” or “ek baar istemal karke
dekho” appeal ads). The consumer may also try used products in a
new or novel way. Such people like mobile phones, calculators,
and other electronic gadgets with many functions because they
want to use them in a variety of ways.

2. Consumer Susceptibility to Interpersonal Influence:

This tries to study the traits of consumers who are likely to be

responsive to the influence of others. The consumer researchers
have developed a twelve point scale called SUSCEP designed to
measure consumers’ susceptibility to interpersonal influence.
Consumers who scored high on SUSCEP were less self-confident
than consumers who scored low on SUSCEP.

Cognitive Personality Factors: Two cognitive personality traits

are of importance. They are as below:

Visualizers versus Verbalizers: Visualizers are those consumers

who prefer visual information and products that stress the visual.
Verbalizers are consumers who prefer written or verbal information
and products.

Need for Cognition: (NC) This measures a person’s craving for or

enjoyment of thinking. Research suggests that people who are high
in NC are more likely to be responsive to the part of an ad that is
rich in product-related information or description and unresponsive
to the contextual or peripheral aspects of the ad, such as the
presence of a celebrity endorser etc. Those who are low in NC
would be more attracted to the presence of a beautiful model or a
celebrity or other peripheral aspects of the advertisement.

3. From Consumer Materialism to Compulsive

Consumer Materialism: This is a personality trait which

distinguishes between individuals who regard possessions as
particularly essential to their identities and lives and those for
whom possessions are secondary.

Fixated Consumption Behaviour: Fixated consumers normally

possess the following characteristics:

 A deep interest in a particular object or product category

 A willingness to go to considerable lengths to secure
additional examples of the object or product category of
 The dedication of a considerable amount of discretionary
time and money to searching out the object or product.

Examples: Collectors or Hobbyists (like coins, stamps, antique


Research suggests that such people not only enjoy collecting

objects but also enjoy the process of buying or acquiring those
objects. That is why for some people the “shopping experience”
becomes as important as the product itself. This is one of the main
reasons for the growth of Shopping Malls and Arcades.

Compulsive Consumption Behaviour: Unlike materialism and

fixated consumption behaviour, compulsive consumption
behaviour is in the realm of abnormal behaviour. Such consumers
have an addiction, they are out of control, and their actions may be
damaging. Example: Uncontrollable gambling, drug addiction,
alcoholism, food and eating disorders etc. To get rid of this type of
disorder, therapy or clinical treatment is required.
4. Consumer Ethnocentrism: Responses to Foreign –
Made Products

This measures the receptiveness of consumers towards products of

foreign origin or linkage. A scale has been developed to measure
this trait and is called CETSCALE (consumer ethnocentrism
scale). Consumers who are highly ethnocentric are likely to feel
that it is wrong or inappropriate to purchase foreign - made
products because of the economic impact on the domestic
economy. Whereas, non-ethnocentric consumers tend to evaluate
foreign-made products more objectively for their extrinsic

Example: Indians boycotted the purchase of British goods.

Japanese boycotted the use of American goods.

Domestic marketers can attract ethnocentric consumers by

stressing a nationalistic appeal in their promos. Like “Made in
America”, “The jeans that built America”, “Born in Japan,
entertaining the world”, “We know India better”, “Hum desh ka
namak khate hain” etc.

Self and Self-Image

 Consumers have a number of enduring images of themselves.

 These self-images or perceptions of self are very closely

associated with personality in that individuals tend to buy
products, and patronize retailers, with images or personalities
that closely correspond to their own self-images.

One or Multiple Selves:

 Historically, individuals have been thought to have a “single

self” and to be interested in products that satisfy that single

 However, research indicates that it is more accurate to think

of the consumer in terms of a multiple self or multiple

 This is because a single consumer will act quite differently

with different people and in different situations.

The Makeup of the Self-Image:

 Each individual has an image of himself/herself as a certain

kind of person, with certain habits, traits, possessions,
relationships etc.

 The individual’s self-image is unique which is the outgrowth
of that person’s background and experience.

 Individuals develop their self-images through interactions

with other people, initially their parents and then other
individuals or groups with whom they relate over the years.

 The notion of a consumer having multiple selves or multiple

roles is consistent with the idea of use-situation
segmentation. Example: Clothes to be worn at different
functions/parties, watches and jewellery to be used for
different parties etc.

 Consumers attempt to preserve or enhance their self-images

by selecting products with images or personalities they
believe are congruent with their own self-images and
avoiding products that are not.

There are five specific kinds of self-images:

 Actual Self-Image: How consumers in fact see

 Ideal Self-Image: How consumers would like to see
 Social Self-Image: How consumers feel others see them.
 Ideal Social Self-Image: How consumers would like
others to see them.
 Expected Self-Image: How consumers expect to see
themselves at some specified future time. The expected
self-image is somewhere between the actual and ideal self-
images. This is of more use to marketers as it provides
consumers with a realistic chance to change themselves.

Example: You feel that you are an introvert person. You want to
be an extrovert person. You know that others see you as a shy
and harmless creature. You want others to see you as a potent
and capable person who takes challenges in life. You want to
change yourself within five years from now so that you are no
longer shy and introvert rather an energetic person who likes

 In different contexts, consumers might select a different self-

image to guide their attitudes or behaviour.

 Example: With some everyday household products,

consumers might be guided by their actual self-images;
whereas, for some socially enhancing or socially conspicuous
products, they might be guided by their social self-images.
Like, the purchase of a toothpaste or tomato sauce may
depend on the actual self-image, but the purchase of a car or
perfume may depend upon the social self-image.

The Extended Self:

 Consumers’ possessions can be seen to confirm or extend

their self-images. For instance, acquiring a desired or sought-
after tennis racquet might serve to expand or enrich a
person’s self-image. The person might now see himself or
herself as being more competitive, more fit, and more

 Thus, possessions are considered extensions of the self.

 It has been proposed that possessions can extend the self in a

number of ways:

1. Actually, by allowing the person to do things that otherwise
would be very difficult or impossible to accomplish (problem
solving using a computer).
2. Symbolically, by making the person feel better or bigger
(receiving an employee award for excellence).
3. By conferring status or rank (status among peers because
of the possession of a rare work of art).
4. By bestowing feelings of immortality, by leaving valued
possessions to young family members.
5. By endowing with magical powers (a chain or necklace
inherited from one’s aunt might be perceived as a magic
figure bestowing good luck when it is worn.

Altering the Self:

 Sometimes consumers wish to change themselves to become

a different or improved self. Clothing, grooming aids, and all
kinds of accessories (e.g., cosmetics, jewelry) offer
consumers the opportunity to modify their appearances and
thereby to alter themselves.

 Sometimes, consumers use self-altering products to conform

to or take on the appearance of a particular type of person
(e.g., military person, a physician, a business executive, a
film actor etc.)

 Altering one’s self, particularly one’s appearance or body

parts, can be accomplished by cosmetics, hair restyling or
coloring, switching from eye glasses to contact lenses, or
undergoing cosmetic surgery.

 Sometimes people hire image consultants to provide
information on such personal attributes as clothing, color,
presentation, appearance, posture, speaking, and media skills.

Perception can be described as “how we see the world
around us.”

Perception is based on every individual’s needs, values, and


Perception is defined as “the process by which an

individual selects, organizes, and interprets stimuli
into a meaningful and coherent picture of the
A stimulus is any unit of input to any of the senses.
Examples: Products, packages, brand names, advertisements etc.

Sensory receptors are the human organs (eyes, ears, nose,

mouth, and skin) that receive sensory inputs.

The study of perception is largely the study of what we add or

subtract to the raw sensory inputs to make our own picture of
the world.

Sensation: Sensation is the immediate and direct response of the

sensory organs to simple stimuli (a package, a brand name etc.).
Sensitivity to stimuli varies with individuals.

Example: A blind man may have a more highly developed sense of
hearing than the average sighted man and may be able to hear
sounds that the average person cannot.

Example: A person who lives on a busy street in Delhi may not

have any sensation from honking of horns after some time. But, a
similar sound would be of great disturbance to a fellow villager
who has just come to Delhi from a nearby village.

In situations where there is a great deal of sensory input, the

senses do not detect small intensities or differences in input.

As sensory input decreases, our ability to detect changes in input or

intensity increases, to the point that we attain maximum sensitivity
under conditions of minimal stimulation.

Example: We pay more attention to an ad that appears alone during

a program break.

Example: We pay more attention to a black-and-white ad in a full

of color ads.

The Absolute Threshold: The lowest level at which an

individual can experience a sensation is called the absolute
threshold. The point at which a person can detect a difference
between “something” and “nothing” is that person’s absolute
threshold for that stimulus.

Example: Some people may notice a minor change in packaging

while some may not.

Adaptation: Adaptation refers to “getting used to” certain


Example: We become adapted to television commercials after
seeing them a number of times. That is the reason TV advertisers
try to change their ad campaigns regularly.

Sometimes we get adapted to the medium of advertisement so that

any ad which appears on radio or TV goes unnoticed by us. For
this reason some marketers resort to unusual media for advertising
their products. They advertise on buses, trains, bus stands, etc.
They hope to attract our attention by advertising through
innovative mediums.

The Differential Threshold: The minimal difference that can

be detected between two similar stimuli is called the differential
threshold, or the j.n.d (just noticeable difference).

Weber’s Law: This states that the stronger the initial stimulus,
the greater the additional intensity needed for the second stimulus
to be perceived as different.

Example: A Rs. 1,000 increase in the price of a motorcycle may go

unnoticed, but a Rs. 10 per liter increase in the price of gasoline
might be easily noticed because the increase is a significant
percentage of the initial price of gasoline.

According to Weber’s Law, an additional level of stimulus

equivalent to the j.n.d must be added for the majority of people to
perceive a difference between the resulting stimulus and the initial
stimulus. This law holds for all the senses and for almost all

Marketing Applications of the j.n.d.

Marketers endeavor to determine the relevant j.n.d. for their

products for two very different reasons:

1. So that negative changes (e.g., reductions in product sizes,
increases in product price, or reduced quality) are not readily
discernible to the public
2. So that product improvements (such as improved or updated
packaging, larger size, lower price) are very apparent to
consumers without being wastefully extravagant.

Example: Rising costs for manufacturers leads to increased prices

or reduced quantity offered at the existing price, keeping the
increased price or reduced quantity just under the j.n.d to avoid
negative consumer reactions.

Example: When the price of coffee beans goes up, coffee

processors often downgrade quality by adding inferior beans to the
mix, up to but not including the j.n.d. --- the point at which the
consumer will notice a difference in taste.

Example: Marketers often want to update existing packaging

without losing the ready recognition by consumers who have been
exposed to years of cumulative advertising impact. In such cases,
they usually make a number of small changes, each carefully
designed to fall below the j.n.d., so that consumers will not
perceive any difference. The packaging of Ivory soap, which was
introduced in 1879, was subtly changed over the years to retain a
contemporary look. The change in packaging was not noticed by
the consumers as it fell below their j.n.d. The latest Ivory package
is considerably different from the original, but the changes made
were unnoticed by customers.

Example: Lexmark International Inc. which bought the office

supplies and equipment line from the International Business
Machine Corporation in March 1991, agreed to relinquish the IBM
name by 1996. Recognizing the need to build a brand image for
Lexmark while they moved away from the well-known IBM name,
Lexmark officials conducted a four-stage campaign for phasing in
the Lexmark name on products.

Stage 1: Carry only the IBM name.

Stage 2: Feature the IBM name and downplay Lexmark.
Stage 3: Feature the Lexmark name and downplay IBM.
Stage 4: Feature only the Lexmark name.

Subliminal Perception: People are stimulated below their level of

conscious awareness; that is they can perceive stimuli without
being consciously aware that they are doing so. Stimuli that are too
weak or too brief to be consciously seen or heard may nevertheless
be strong enough to be perceived by one or more receptor cells.
This process is called subliminal perception because the stimulus is
beneath the threshold, or “limen” of awareness.
Perception of stimuli that are above the level of
conscious awareness is called “Supraliminal perception”.

“Embeds” are defined as disguised stimuli not readily recognized

by readers that are planted in print advertisements to persuade
consumers to buy their products. Embeds are generally of a sexual

In general, there are three types of subliminal perception:

1. Briefly presented visual stimuli.

2. Accelerated speech in low-volume auditory messages.
3. Embedded or hidden imagery or words (often of a sexual
nature) in print ads or on product labels.

Example: The words “Eat Popcorn” and “Drink Coca-Cola”

were flashed on the screen during a movie in New Jersey in 1957.
The exposure times were so short that viewers were unaware of
seeing a message. It was reported that during the 6-week test
period, popcorn sales increased 58% and Coca-Cola sales
increased 18%.

Example: People were visually exposed to the word “beef” for

1/200th of a second every seven seconds. At the end of the
experiment, the people in the test group reported being hungrier
than those in the control group, who did not receive the messages.
When asked to choose from a menu however, few chose beef.

Example: Department stores are incorporating subliminal

messages in musical soundtracks played on their public address
systems to motivate employees and to discourage shoplifting.
Subliminal messages, such as “ I am honest”, “I won’t steal”, and
“Stealing is dishonest” have reportedly brought about significant
decreases in shoplifting and inventory shrinkage.


Perception is the result of two different kinds of inputs that interact

to form the personal pictures-the perceptions-that each individual

One type of input is the “physical stimuli” from the outside

environment; the other type of input is provided by individuals
themselves in the form of certain predispositions (e.g.,
expectations, motives, and learning) based on previous experience.
The combination of these two very different kinds of inputs
produces for each of us a very private, very personal picture of
the world.

Perceptual Selection: The selection of stimuli depends on three
major factors.

 Nature of the Stimulus: Attractive stimuli are more noticed

than those which are not. This is the reason “Contrast” is one
of the most attention-compelling attributes of a stimulus.
Example: Black & White ads, Colorful ads, absence of sound
in the commercial’s opening scene, are very attractive. The
ads of “TAGHeuer” line of sports are very attractive. The ads
make use of breathtaking visuals to attract the consumer’s
attention and dramatically communicate the message.

 Expectations: People usually see what they expect to see,

and what they expect to see is usually based on familiarity,
previous experience, or preconditioned set. Example: A man
who has been told by his friends that a new film is horrible
will probably find the film to be the same. A lady who is
advised by another lady that a particular brand of detergents
is soft on hands will probably find so.
Sometimes, stimuli that conflict sharply with
expectations often receive more attention than those
that conform to expectations. Example: MAK Ads.

Another ad technique designed to attract the reader’s

attention is the so called topsy-turvy ad in which the top
half is printed right side up, while the bottom half is
printed upside down.

 Motives: People tend to perceive things they need or want;

the stronger the need, the greater the tendency to ignore
unrelated stimuli in the environment. Example: A woman
interested in a portable computer is more likely to notice and
to read carefully ads for computer laptops than her neighbour,
who does not use a computer.

There is a heightened awareness of stimuli that are

relevant to one’s needs and interests, and a decreased
awareness of stimuli that are irrelevant to those needs.
Someone who is hungry is more likely to spot a
restaurant sign. A sexually repressed person may
perceive sexual symbolism where none exists.

Important Selective Perception Concepts:

Selective Exposure: Consumers actively seek out messages that

they find pleasant or with which they are sympathetic, and they
actively avoid painful or threatening ones. Thus, heavy smokers
avoid articles that link cigarette smoking to cancer. Instead, they
note the relatively few articles that deny the relationship.

Selective Attention: Consumers tend to have a heightened

awareness of stimuli that meet their needs or interests and minimal
awareness of stimuli irrelevant to their needs. Thus, they are likely
to note ads for products that would satisfy their needs and for
stores in which they shop, and disregard those in which they have
no interest. Clearly, consumers exercise a great deal of selectivity
in terms of the attention they give to commercial stimuli.

Perceptual Defense: Consumers subconsciously screen out stimuli

that they would find psychologically threatening, even though
exposure has already taken place. Furthermore, individuals
unconsciously may distort information that is not consistent with

their needs, values, and beliefs. Example: A cigarette smoker may
doubt the authenticity of an article relating smoking to cancer. He
may even find the author of that article to be confused and biased
and to have been sponsored by some government agency.

Perceptual Blocking: Consumers protect themselves from being

bombarded with stimuli by simply “tuning out”- blocking such
stimuli from conscious awareness. This perceptual blocking – out
is similar to consumers “zapping” commercials using remote
controls. Research shows that enormous amounts of advertising are
screened out by consumers; they mentally tune out because of the
visually over stimulating nature of the world in which they live.


People do not experience the numerous stimuli they select from the
environment as separate and discrete sensations; rather they tend to
organize them into groups and perceive them as unified wholes.
Three of the most basic principles of perceptual organization are
figure and ground, grouping, and closure.
The specific principles underlying perceptual organization are
often referred to by the name given the school of psychology that
first developed it; Gestalt Psychology. Gestalt, in German, means
pattern or configuration.

Figure and Ground: Stimuli that contrast with their

environment are more likely to be noticed. The simplest visual
illustration consists of a figure on a ground (i.e., background). The
figure is usually perceived clearly because, in contrast to its
ground, it appears to be well defined, solid, and in the forefront.
The ground is perceived as indefinite, hazy, and continuous.

Figure is perceived more clearly because it appears to be dominant;
in contrast, ground appears to be subordinate and, therefore, less
Advertisers have to plan their advertisements carefully to make
sure that the stimulus they want noted is seen as figure and not as
The musical background must not overwhelm the jingle; the
background of an ad must not detract from the product. Print
advertisers often silhouette their products against a white
background to make sure that the features they want noted are
clearly perceived.

Grouping: Individuals tend to group stimuli that they form a

unified picture or impression. The perception of stimuli as groups
or chunks of information, rather than as discrete bits of
information, facilitates their memory and recall.
Grouping can be used advantageously by marketers to imply
certain desired meanings in connection with their products.
For example, an advertisement for tea may show a young man and
woman sipping tea in a beautifully appointed room before a
blazing hearth. The overall mood implied by the grouping of
stimuli leads the consumer to associate the drinking of tea with
romance, fine living, and winter warmth.
Most of us can remember and repeat our Mobile numbers
because we automatically group them into three “chunks” rather
than remember ten different digits separately.

Closure: Individuals have a need for closure. They express this

need by organizing their perceptions so that they form a complete
picture. If the pattern of stimuli to which they are exposed is
incomplete, they tend to perceive it as complete, that is, they
subconsciously or consciously fill in the missing pieces.

Thus, a circle with a section of its periphery missing is
invariably perceived as a circle, not as an arc. The need for closure
in individuals is also seen in the tension one experiences when a
task is incomplete, and the satisfaction and relief that come with its
The tension created by an incomplete message leads to
improvement in memory for that part of the message that has
already been heard..

Example: Digen Verma’s ad campaign for Frooty.

Example: Pepsi and Coke ads in series.
Example: Television serials break just before exciting plots and
Moreover, one episode ends on an exciting note so that viewers are
motivated to see the next episode the day after.

Perceptual Interpretation: The interpretation of stimuli is also

uniquely individual.
Through the interpretation of ambiguous stimuli (projective tests
etc.), respondents reveal a great deal about themselves.
How close a person’s interpretations are to reality depends on
the clarity of the stimulus, the past experiences of the perceiver,
and his/her motives and interests at the time of perception.

Distorting Influences: Individuals are subject to a number of

influences that tend to distort their perceptions; some of them are
discussed below.

 Physical Appearances: Customers perceive products to be

good if the package is good. Attractive men are perceived as
more successful than ordinary – looking men.

 First Impressions: First impressions tend to be lasting. A

shampoo commercial successfully used the line “You will
never have a second chance to make a first impression”.
Since first impressions are long lasting, introducing a new
product before it has been perfected may prove fatal to its
ultimate success, because subsequent information about its
advantages, even if true, will often be negated by memory of
its early failure.

 Jumping to Conclusions: Many people jump to conclusions

before examining all the relevant evidence. Example: The
consumer may hear just the beginning of a commercial
message and draw conclusions regarding the product being
advertised on the basis of such limited information. For this
reason, some copywriters are careful not to save their most
persuasive arguments for last.

 Halo Effect: The Halo Effect has been used to describe

situations in which the evaluation of a single object or person
on a multitude of dimensions is based on the evaluation of
just one or few dimensions. Example: A man is trustworthy,
fine, and noble because he looks you in the eye when he

Consumer behaviorists broaden the notion of the Halo

Effect to include the evaluation of multiple objects
(e.g., a product line) on the basis of evaluation of just
one dimension (a brand name or a spokesperson). Using
this broader definition, marketers take advantage of the
halo effect when they extend a brand name associated
with one line of products to another.
The mushrooming field of “Licensing” is also based on
the Halo Effect. Manufacturers and retailers hope to
acquire instant recognition and status for their products
by association with a well-known celebrity or designer

Example: BIC successfully introduced a line of
disposable razors under the BIC name. Earlier BIC had
a reputation for manufacturing inexpensive, reliable,
disposable pens.
Consumer Imagery

Products and brands have symbolic value for consumers, who

evaluate them on the basis of their consistency with their personal
pictures of themselves.

Retail stores select mannequins that they feel reflect the store’s
image as well as the targeted consumer’s self-image.

Today, mannequins have more athletic look in response to the

health and fitness concerns of the 1990s and are shown running,
diving, and jumping, in addition to more traditional poses. It is
generally believed that if the customer identifies with the
mannequins, he/she is more likely to purchase the product.

Earlier, in the 1970s, some female mannequins were made in bold,

upright stances with tightly clenched fists to reflect women’s fight
for equality; today they have a confident, outgoing but softer

Product and Service Images

The image that a product has in the mind of the consumer-that is,
its positioning-is probably more important to its ultimate success
than are its actual characteristics.

Positioning Strategy: A product can be positioned differently to

different market segments, or can be repositioned to the same
audience, without actually being physically changed.
The marketer must try to win a distinctive place in the consumer’s

When Avis challenged Hertz by saying “We are number two. We

try harder,” it distinguished itself in the consumer’s mind as the
underdog- a clever marketing strategy because many Americans
favour underdogs.

Positioning of Services: Because services are intangible, image

becomes a key factor in differentiating a service from its

Many service providers try to tangibalize the service.

Example: Painted delivery vehicles, restaurant matchbooks,

packaged hotel soaps and shampoos, etc.

Sometimes companies market several versions of their service to

different market segments by using a differentiated positioning
strategy. However, they must be careful to avoid perceptual
confusion amongst consumers. The American Express Company
offers its regular (green) card to consumers as a short-term credit
instrument, the True Grace Card for long-term credit, and the
prestigious Gold and Platinum cards, each with increased services,
to the affluent cardholder.

The Service Environment: The design of the service environment

is an important aspect of service positioning strategy.

The physical environment is particularly important in creating a

favorable impression for such services as banks, retail stores, and
professional offices. This is because; there are so few objective
criteria by which consumers can judge the quality of the services
they receive.

Repositioning Strategies: Because of extreme competition and
changing customer preferences, the marketer has to reposition its
Example: When Revlon decided to change the image of Revlon
cosmetics to attract a younger, more diverse audience, its
repositioning strategy involved changing its copy appeals,
changing its advertising media (to youth-oriented TV shows), and
changing its distribution channels (from higher-priced
departmental stores to lower-priced retail outlets such as drugstores
and supermarkets).

Example: Kentucky Fried Chicken changed its name to KFC in

order to omit the dread word “fried” to attract health conscious

Perceived Price

Let us consider perception of “Price Fairness”. There is some

evidence that customers do pay attention to the prices paid by other
customers (e.g., senior citizens, frequent fliers, club members etc.).
The differentiated pricing strategies used by marketers are
perceived to be unfair by customers.

Reference price is any price that a consumer uses as a basis for

comparison in judging another price.

Tensile price claims like “save 10 to 40%”, “save upto 60%”,

“save 20% or more”, are used to promote a range of price
discounts for a product line etc.

Objective price claims provide a single discount level say “save


Perceived Quality
Consumers often judge the quality of a product on the basis of a
variety of informational cues that they associate with the product.
Some of these cues are intrinsic to the product, others are

Perceived Quality of Products: Cues that are intrinsic concern

physical characteristics of the product itself, such as size, color,
flavor, or aroma.
Although consumers say that they buy a particular brand because
of its superior taste, they are often unable to identify that brand in
blind taste tests.
Consumer reports found that consumers often cannot differentiate
among various cola beverages and base their preferences on such
extrinsic cues as pricing, packaging, advertising, and even peer
In the absence of intrinsic cues, consumers often evaluate quality
on the basis of extrinsic cues-cues that are external to the product
itself, such as price, brand image, manufacturer’s image, retail
store image, or even the country of origin.
Example: “Japanese cars are excellent”, “German engineering is
the best”.

Perceived Quality of Services: It is more difficult for consumers

to evaluate the quality of services than the quality of goods. This is
because services are intangible, perishable, variable, inseparable,
Because of the above reasons, marketers try to provide
tangible clues to consumers. Example: In evaluating a doctor’s
services, they note the quality of the office and examine room
furnishings, the number and source of framed degrees on the wall,

the professionalism of the staff, etc. All contribute to the
consumer’s overall evaluation of service quality.
Marketers also try to standardize their services in the light of
variability. This is done to provide consistence of quality.
There is little opportunity to correct a defective service being
delivered because of inseparability. Goods can be checked before
delivery but services cannot. Thus a poor haircut being delivered
cannot be instantly checked.
Some people believe that a consumer’s evaluation of service
quality is a function of the magnitude and direction of the gap
between the customer’s expectations of service and the customer’s
assessment (perception) of the service actually delivered.
Example: A brand new graduate student may have certain
expectations about the quality of his professors, the richness of
classroom discussions, library etc. he will view the university as a
good or bad service provide according to the university
meeting/exceeding his expectations or not.
The SERVQUAL scale was developed to measure the gap
between customer’s expectations of services and their perceptions
of the actual service delivered. It is based upon the following five
dimensions: tangibles, reliability, responsiveness, assurance and
Another scale that measures service quality, called
SERVPERF, is based on the consumer’s perception of service
Recent research divides the dimensions along which
consumers evaluate service quality into two groups: the outcome
dimension (which focuses on the reliable delivery of the core
service) and the process dimension (which focuses on how the
core service is delivered).
The process dimension provides the service provider to
exceed customer expectations.

Example: Federal Express provides the same core service as other

couriers (the outcome dimension), it provides a superior process
dimension through its highly advanced tracking system which can
provide customers with instant information about the status of their

Researchers have tried to integrate the concepts of product quality

and service quality into an overall transaction satisfaction index,
on the basis that all product i.e., tangible purchases contain some
element of service. Example: Satisfaction with a retail purchase
would include evaluation of the helpfulness and efficiency of the

Price/Quality Relationship: Consumers do rely on price as an

indicator of quality.

Products with low prices may be interpreted as goods with inferior

quality, though in reality it may not be true. For this reason, it is
necessary to include other information associated with perceived
quality (e.g., brand name and specific attribute information) to
counter any negative perceptions of low quality associated with
lower price.

Consumers use price as a surrogate indicator of quality if they have

little information to go on, or if they have little confidence in their
own ability to make the choice on other grounds.

Retail Store Image: Retail stores have their own image in the
minds of the consumers so as to indicate about the quality of goods
carried and where customers should shop.

In order to create a distinctive identity, many retailers put their own

labels on the clothes of popular designers. Such private-label
clothing has been successful because consumers perceive high
quality and value in clothing that bears a well-known retail name.

A study of retail store image based on comparative pricing
strategies found that consumers tend to perceive stores that offer a
small discount on large number of items (i.e., frequency of price
advantage) as having lower prices overall than competing stores
which offer larger discounts on a smaller number of products (i.e.,
magnitude of price advantage).

People’s perceptions are influenced by ambient factors i.e., the

people within the store’s environment, the number, type, and
behaviour of other customers and sales personnel.

Manufacturer’s Image: Consumer imagery also extends to

producers themselves. Manufacturers who enjoy a favourable
image generally find that their new products are accepted more
readily than others.

Research suggests that people have favourable perceptions of

Pioneer Brands (the first in a product category), even after
Follower Brands become available.

Brand Image: Brand image is defined as the set of associations

linked to the brand that consumers hold in memory. Positive brand
image is associated with consumer loyalty, consumer beliefs about
positive brand value, and a willingness to search for the brand.

A positive brand image helps the consumer to be favourably

inclined toward future brand promotions and to resist competitor’s
marketing activities.

Advertising plays an important role in establishing a favourable

brand image.

Advertized products are often perceived to be of higher quality

than non-advertized brands.

Frequent short-term price promotions affect the brand’s long term
future image.
Perceived Risk

Perceived risk is defined as the uncertainty that consumers face

when they cannot foresee the consequences of their purchase

Types of Perceived Risk: Perceived risk is of the following types.

1. Functional Risk: The product will not perform as expected.

Example: Will the new electric car operate a full day without
needing to be recharged?
2. Physical Risk: The risk to self and others that the product
may pose. Example: Is cellular phone safe or does it emit
harmful radiation?
3. Financial Risk: The product will not be worth its cost.
Example: Will art school really help me become an artist?
4. Social Risk: The poor product choice may result in social
embarrassment. Example: Will the new deodorant really
eliminate perspiration odor?
5. Psychological Risk: A poor product choice will bruise the
customer’s ego. Example: Will I really be proud to invite
friends to this house?
6. Time Risk: The risk that the time spent in product search may
be wasted if the product does not perform as expected.
Example: Will I have to go through the shopping effort all
over again?

Perception of Risk Varies:

Consumer perception of risk varies depending upon the person, the

product, the situation, and the culture.

 The amount of risk perceived depends upon the specific
Some tend to perceive high degrees of risk in various consumption
situations (high risk perceivers); others tend to perceive little risk
(low risk perceivers).

High risk perceivers are often described as narrow categorizers

because they limit their choices to a few safe alternatives.

Low risk perceivers have been described as broad categorizers

because they tend to make their choices from a much wider range
of alternatives.

 An individual’s perception of risk varies with product

categories. Example: Consumers are likely to perceive a
higher degree of risk in the purchase of a large screen
television set than in the purchase of a cordless telephone.

 The degree of risk perceived by a consumer is also affected

by the shopping situation. Example: Traditional retailer, mail
order, catalogs order, door-to-door salesperson, etc.

 Not all people around the world exhibit the same level of risk
perception. For this reason, marketers who do business in
several countries cannot generalize the results of consumer
behaviour studies conducted in one country to other countries
without additional research. Example: Americans and Indians
portray different levels of risk tolerance.

How Consumers Handle Risk?

 Consumers seek information.

 Consumers are brand loyal.

 Consumers select by brand image.
 Consumers rely on store image.

 Consumers buy the most expensive model.

 Consumers seek reassurance (Money-Back Guarantees,

Test Drives, Pre-purchase Trials, Laboratory Test Results,

Warranties, etc.)

The concept of perceived risk has major implications for the

introduction of new products.

Because high risk perceivers are less likely to purchase new or

innovative products than low risk perceivers, it is important for
marketers to provide such consumers with persuasive risk-
reduction strategies; such as a well-known brand name,
distribution through reputed retail outlets, informative
advertising, publicity stories in the media, impartial test results,
free samples, and money-back guarantees.