K. S.

Group Of Institutions, Bangalore-62

K.S. School Of Engineering & Management
First Internal Test

Define Consumer Behavior & Consumerism:

The behavior that consumers display(shows) in searching for, purchasing, using,evalauting and disposing
of products and services that they expect will satisfy their needs.”
Consumerism: A modern movement for the protection of the consumer against useless, inferior, or
dangerous products, misleading advertising, unfair pricing, etc.
Define Opinion Leadership? Distinguish opinion leader & surrogate buyers.
The process by which one person (the opinion leader) informally influences(changes) the consumption
actions or attitudes of others who may be opinion seekers or opinion recipients
An Opinion Leader Opinion Leader is Someone Who is Knowledgeable About Products and Who gives
Advice and information to Other customers.
Ex: A parent wants admission for his child in a particular school. He contacts other parents sending their
children to the same school.
Difference between Opinion leader & Surrogate buyers

Explain Dynamics of the Opinion Leadership Process

1. Credibility (share more valuable information)
2. Positive and Negative Product Information
3. Information and Advice
4. Opinion Leadership Is Category-Specific (particular to few product).
Credibility (share more valuable information)
Opinion leaders are knowledgeable. Their advice about a product or service is considered reliable. As
opinion leaders are informal sources of information, it is perceived that they give advice in the best
interest of opinion seekers. The first hand information received from opinion leaders helps in reducing
perceived risks. It properly tackles the anxiety in buying new products as the opinion is based on the first
hand experience.

Information and Advice

They simply share their experience about a product or service. Their talk is related to what they know
about a product. In their more aggressive talks, they advise others to buy or avoid a specific product.
They base their advice on proper reasons.
Opinion Leaders communicate informally about product and service offerings and/or brands; they
give product news and advice to consumers (current and potential) and also narrate their
personal experience to others.

Positive and Negative Product Information

Opinion Leaders provide both favorable and unfavorable information about product and service
offerings and/or brands, and this adds to their credibility. Compared to positive and neutral
information and/or evaluation, the impact of negative information and/or evaluation is much
greater and has a bigger impact on Opinion Receivers/Seekers. Thus, they would avoid such product
and service offerings and/or brands that are spoken negatively by Opinion Leaders.
Opinion Leadership Is Category-Specific
They are specific to a product or service category, and possess expertise and specialization in it.
Because of the in depth knowledge they have about the product category, people approach them for
information and advice for that product or service category.
Define market maven & purchasing pal
There are some people who seem to know about everything and offer their advice about
anything and everything. Such people are called market mavens.
 Market maven: These consumers possess a wide range of information about many different types of
products, retail outlets, and other dimensions of markets.
 Special category of Opinion Leadership who have market involvement rather than product
involvement
 Individuals whose influence stems from a general knowledge or market expertise that leads to an
early awareness of new products and services
 These consumers possess a wide range of information about many different types of products, retail
outlets, and other dimensions of markets.
Explain the Nature/Characteristics of Consumer Behavior?
 Consumers are heterogeneous in nature
 Consumer behavior is basically social in nature.
 Buyer behavior is very complex.
 Buyer behavior is very dynamic (changes sequencly).
 Consumer behavior comprises both mental and physical activities of a consumer.
 It covers both visible and invisible activities of a buyer.
 An individual’s behavior is influenced by internal and external factors.
 It is an integral part of human behavior.
 In many cases, it is the sum total of the behavior of a number of persons.
 It is influenced by a number of marketing stimuli offered by the marketer.
 It involves both psychological and social process.
Explain briefly the stages in product adoption process
The 5 Stages to Consumer Adoption Process(AIETA)
Awareness Stage:
 Individual consumer becomes aware of the innovation by few clues or hints from various means of
advertising like newspapers, magazines, Internet, television, outdoor media, etc. He is exposed to
innovation but knows very little regarding the innovation.
 He has only limited information about it.
 He is aware of either by discussion with friends, relatives, salesmen, or dealers.
 At this stage, he doesn’t give much attention to the new product.
Interest and Information Stage:
 In this stage, the consumer becomes interested in innovation or idea got through awareness stage and
tries to collect more valuable information.
 He collects information from advertising media, salesmen, dealers, current users, or directly from
company. He tries to know about qualities, features, functions, risk, producers, brand, color, shape,
price, incentives, availability, services, and other relevant aspects. Simply, he collects as much
information as he can.
Evaluation Stage:
Now, accumulated information is used to evaluate the innovation by mental ability or thinking. The
consumer considers all the significant aspects to judge the worth of innovation. He compares different
aspects of innovation like qualities, features, performance, price, after-sales services, etc., with the
existing products to arrive at the decision whether the innovation should be tried out.
Trial Stage:
Consumer is ready to try or test the new product. He practically examines it. He tries out the innovation
in a small scale to get self-experience. He can buy the product, or can use free samples. This is an
important stage as it determines whether to buy it.
Adoption Stage:
If trial produces satisfactory results, finally the consumer decides to adopt/buy the innovation. He
decides on quantity, type, model, dealer, payment, and other issues. He purchases the product and
consumes individually or jointly with other members. If a consumer satisfies with a new product and
related services, he continues buying it frequently, and vice-versa. He becomes a regular user of
innovation and also talks favorable to others. This is a crucial step for a marketer.
Define Post-purchase Dissonance & product disposition.
 Doubt or anxiety (nervous) experienced after taking a difficult purchase decision.
 If customer thinks that if he had purchased some other product it would have been better than the one
he brought
Explain briefly the Four elements of diffusion
(1) Innovation,
(2) Channels of Communication
(3) Social System, and
(4) Time.
Communication channels
How quickly an innovation spreads through a market depends to a great extent on communication
between marketer and consumer as well as communication among consumers i.e. W.O.M. Correct
communication channels used during the process of diffusion, oriented towards behaviour and
preferences of the target category of adopters.Internet, TV, radio, banners, Sms, News papers, e-
Commerce.
The simplest channel is face-to-face word-of-mouth. It can also be a very effective method as the
communication includes Body Language and vocal intonation as well as words. Marketers interested in
diffusion pay attention to how the information (product related) is spread through various
communication channels. Not only this they are interested in knowing the impact of both the messages
and the channels on the adoption or rejection of new products. Once the awareness is created, early
adopters will depend more on friends and relatives to help them evaluate new products.
Time: Time is the backbone of the diffusion process.
Proper timing of introduction of innovation (new product) into the market.This form of time has been
characterized as the amount of time gap between the consumers’ initial awareness of the new product
and the point at which they purchase or reject the product.
Three ways of considering time are important:
a) The amount of purchase time.
b) The identification of adopter categories.
c) The rate of adoption.
Innovation:
The first step in the process of diffusion is innovation that can be defined as any idea or product
perceived by the potential adopter to be new.
Innovations can be technological advances that create new or improved products, or they can be
symbolic representations that change the meaning of products.
Marketers are concerned with the spread of new products, particularly innovations, across markets. This
means how the new product is adopted, as success of new product is linked to profitability, on an average
only one out of five products that a company develops and tests is successful. Therefore, by diffusion of
new products we mean that the majority of products are not adopted by consumers and diffused across
groups.
The Social System
A social system is a physical, social, or cultural environment to which people belong and within which
they function.
The diffusion(spread) of a new product usually takes place in a social setting frequentlyreferred to as a
social system.The orientation of a social system, with its own special values or norms, is likely to
influence the acceptance or rejection of new products.
If the social system is modern in orientation, the acceptance of innovations is likely to be high.If the
social system is traditional in orientation, innovations that are perceived as radical or as infringements on
established custom are likely to be avoided.
Explain briefly the Consumer buying process
 Need recognisation
 Information search
 Evaluation of alternatives
 Purchase decision
 Post purchase evaluation

Problem/Need Identification:
 A purchase cannot take place without the recognition of the need. This step is also known as
recognizing of unmet need. The need is a source or force of buying behaviour. Buying problem arises
only when there is unmet need or problem is recognized. Need or problem impels an individual to act
or to buy the product.
 The need can be triggered by internal or external stimuli. Internal stimuli include basic or normal
needs – hunger, thirst, sex, or comfort; while external stimuli include external forces, for instance,
when an individual watch a new brand car, he desires to buy it.
Information Search:
Interested consumer will try to seek information about the need or product. Now, he will read
newspapers and magazines, watch television, visit showroom or dealer, contact salesman, discuss with
friends and relatives, and try all the possible sources of information.
Evaluation of Alternatives:
In the former stage, the consumer has collected information about certain brands. Now, he undergoes
evaluation of brands. He cannot buy all of them. Normally, he selects the best one, the brand that offers
maximum satisfaction. Here, he evaluates competitive brands to judge which one is the best, the most
attractive. Evaluation calls for evaluating various alternatives with certain choice criteria.
Following criteria are considered while evaluating alternatives:
 Benefits offered by the brands
 Qualities, features or attributes, and performance
 Price changed by various brands
 History of brands
 Popularity, image or reputation of brands
 Product-related services offered by the brands, such as after-sales services, warrantee, and free
installation
 Availability of brands and dealer rating.
Purchase Decision:
This is the stage when the consumer prefers one, the most promising band, out of several brands. The
former stage helps consumers evaluate various brands in the choice set. The brand that offers maximum
benefits or satisfaction is preferred.
Simply, the most attractive brand, that can offer more benefits in relation to price paid, is selected by
comparing one brand with others. Comparison shows superiority/inferiority of the brands.
Post purchase evaluation
The purchase of the product is followed by post purchase evaluation. Post purchase evaluation refers to a
customer’s analysis whether the product was useful to him or not, whether the product fulfilled his need
or not? Marketers want their customers to be happy even after the purchase of the product. If the
customer is not happy, he is likely to leave the product or bad mouth it. Worse, if there are issues in the
product, the customer can go legal and spoil the name of the brand.
Define Diffusion of innovation & adoption
It is the process by which an innovation/new product is communicated through certain channels over
time among the members of a social system

Explain briefly consumer rights & responsibilities ( explain by yourself )

Consumer rights
 Right to safety.
 Right to information.
 Right to choose.
 Right to heard.
 Right to redressed .
 Right to consumer education.
 Right to basic needs.
Consumer has the responsibility to protect himself/herself by:
• Shopping carefully and wisely
• Understanding the terms of the sale
• Reading and following instructions
• Getting guarantees in writing
• Saving receipts
• Asking questions at point of sale
• Keeping informed about new products
Explain briefly various Measuring Opinion Leadership
1. self-designating method:
2. sociometric method
3. key informant method:
4. objective method:
In the self-designating method,
Here respondents are asked to evaluate the level/amount to which they have provided others with
information about a product category or specific brand or have otherwise influenced the purchase
decisions of others.
Sociometric method
It measures the person-to-person informal communication of consumers concerning products or product
categories.
The specific individuals (if any) who provided them with advice or information about the product or
brand under study.Individuals designated by the primary respondent are tentatively classified as opinion
leaders.
key informant
These key informants are asked to identify and/or designate individuals in the social group who are
Opinion Leaders or who are most likely to be Opinion Leaders
The objective method
People are chosen, given information about new products and service categories, and the as ked to
act out as Opinion Leaders.
It identifies and measures Opinion Leadership by placing people in controlled environments (just
as controlled experiments).
Explain briefly Adoption categories

Innovators
 Innovators are the first individuals or consumers to adopt an innovation.
 Innovators are the category of consumers who are interested to adopt the product which is newly
launched and 2.5% of consumers in market are innovators.
 Innovators are willing to take risks, youngest in age, high educated professional have the highest
social class, have great financial lucidity, very social and have closest contact to scientific sources
and interaction with other innovators .
Early Adopters(13.5%)
 This is second fastest category of individuals who adopt an innovation.
 Early adopters are typically younger in age, have a higher social status, have more financial
lucidity, advanced education, and are more socially forward than late adopters
 These individuals have the highest degree of opinion leadership among the other adopter categories.
 They are opinion leaders and provide information to groups, but they are also concerned about
failure.
 Therefore, they weigh advantages and disadvantages of the product before plunging in for a
purchase.
Early Majority(34%)
 Individuals in this category adopt an innovation after a varying degree of time.
 This time of adoption is significantly longer than the innovators and early adopters.
 They are elders, well educated and less socially mobile. They rely heavily on inter-personal source of
in- formation.
 They constitute 34 per cent of the consumers.
 Early Majority tend to be slower in the adoption process, have above average social status, contact
with early adopters, and show some opinion leadership.
Late Majority(34%)
 Individuals in this category will adopt an innovation after the average member of the society.
 These individuals approach an innovation with a high degree of skepticism(doubt) and after the
majority of society has adopted the innovation.
 Late Majority are typically skeptical about an innovation, have below average social status, very little
financial lucidity,in contact with others in late majority and early majority, very little opinion
leadership.
Laggards(16%): They constitute a small portion of 16 per cent of the consumers
 Individuals in this category are the last to adopt an innovation.
 These individuals typically have an dislike to change-agents and tend to be advanced in age.
 They possess limited social interaction and are oriented to the past. They adopt the innovations with
great reluctance.
 Laggards typically tend to be focused on “traditions”, have lowest social status, lowest financial
fluidity, oldest of all other adopters, in contact with only family and close friends, very little to no
opinion leadership .
LIST OUT THE BENEFITS OF CONSUMERISM
LIST OUT THE FACTORS THAT EFFECT POST PURCHASE DISSONANCE
LIST OUT THE PRODUCT DISPOSAL METHODS.