Beruflich Dokumente
Kultur Dokumente
Developed by
Prof. Ashish V. Hathi
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
!
Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe
2. Dr. B.P. Sabale
3. Prof. Dr. Vijay Khole
4. Prof. Anuradha Deshmukh
Group Director
Chancellor, D.Y. Patil University, Former Vice-Chancellor
Former Director
Welingkar Institute of Navi Mumbai
(Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)
Contents
! !3
CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Chapter 1
Consumer Behaviour Knowledge –
Introduction, Nature, Scope and Its
Applications
Objectives
Structure:
1.1 Introduction
1.2 Importance of Consumer Behaviour
1.3 Forces that Drive the Change in Consumer Behaviour
1.4 The Application of Consumer Buying Behaviour Principles to Strategic
Marketing
1.5 The Role of Consumer Behaviour on Strategic Planning
1.6 Consumer Scene in India
1.7 What have you Learnt – A Summary
1.8 Self Assessment Questions
1.9 Multiple Choice Questions (MCQ)
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
1.1 INTRODUCTION
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
We can also consider a similar example for one of the consumer durable
items namely printer. Here complexities need to be understood thus you
need to know buying aspects like what kind of consumers buy it (home/
office)? What features do they look for? How much are they willing to pay
for it? What are the considerations during purchase about its recurring
cost? How many will buy now? How is their sensitivity to prices of the
printers? Answers to such information either through secondary sources or
primary consumer research will help manufacturers to plan their product
portfolio, production scheduling, feature modifications, launch strategy and
promotional strategy.
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Differences
In the way
customer buy
Variations May or
in purchase may not
reflects different consult other
values
sought
!
Activity A
Nature of Consumers
As a consumer, you buy goods for self, family, friends and relatives or you
also buy for running your business or as a responsible manager of an
organization who sources equipment, raw materials and consumables for
the organisation. Thus, we have one nature of consumers known as
! !7
CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Classifications of Consumers
A buyer is not always the end user or the only user of a product purchased,
e.g., a toy purchased by the parent is for the kid but a toothpaste
purchased is for more than one family member. Family here will be a joint
user. Interestingly, one who goes to buy the product may be buying what
has been told to him/her, e.g., mother buying a beauty cream suggested
by her teenage daughter. In certain cases, users and buyers are influenced
by another person known as influencer. e.g., father took household fire
insurance based on recommendation of his friend. Thus to summarise,
marketers must understand three natures of consumers namely user,
buyer and influencer. Marketers must decide at whom to direct their
promotional efforts – the user, buyer or the influencer. It will enable you to
direct your marketing efforts in the right direction, e.g., toy manufacturer
has a choice to advertise on children’s magazine or parents specific
magazine or both. Clarity regarding who is the buyer will enable you to
channelize your efforts towards say children’s magazine. Different school of
thoughts are prevalent regarding directing your marketing efforts towards
user, buyer or influencers. What is important for marketers to know is the
personal attachment with a product your consumer has – more personal
the product in nature, it’s the user who decides, e.g., mobile phones –
iPhone or Samsung; Desktop for son as a student may get decided by the
father as a buyer depending on his financial capabilities; which LED TV to
buy may get decided based on the influence being played either from
existing owners or store salesman.
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Activity B
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Activity C
Identify one situation each where buyer is a final user, buyer is not a final
user and buyer needs to be influenced for purchasing a specific product.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Four forces are identified that drive the changes in consumer behaviour.
Diagrammatically represented as follows;
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
At this juncture, few marketers started realising that it is easy to sell more
goods, if they produce only those goods that they had predetermined that
consumers would buy. This consumer-oriented marketing approach,
popularised by General Electric in the early 1950s, is recognised as the
marketing concept. The underlying principle in this orientation is that, to be
successful, a company must determine the needs and wants of specific
target markets and deliver the desired satisfaction better than the
competition.
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Step 1: Define The Firm’s Business Domain – The definition of the firm’s
business domain must be market-oriented (i.e., it should be related with
satisfying consumer needs). In other words, it should be consumer-
oriented.
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Early 90s onwards, India opened itself to the world economy and
liberalised itself to allow foreign investments in our country. As a result,
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Family
Orientation
Progress
Orientation
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
In other words, the buoyancy in India is palpable in its lanes and by lanes,
in its boardrooms and in the eyes of every Indian looking forward to
‘Acchey Din’. Needless to say, this new India is making news all over the
world today. As the equation of world economy changes in favour of India
and China, the world’s attention is turning sharply toward these markets.
India and China look attractive for their potential. A closer look will reveal
that they are not easy to crack. Marketers of the other world must consider
it as a new market, and that the consumers here think and behave very
differently. Today, it offers the biggest challenges to marketers to
understand the cultural transformation going on and offer products and
services based on an understanding of this new, emerging and changing
India and Indian consumers. Consumer buyer behaviour will play a critical
role in the success of many new ventures entering India.
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
There are two natures of consumers – Personal consumers who buy goods
for their own use or for family and organisational consumers, who buy
products, equipment, and raw materials to run their organisation. It is also
important to understand the consumer’s classification as user, buyer and
influencer.
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
a. True
a. user consumer
b. buyer consumer
c. personal consumer
d. direct consumer
a. buyer
b. user
c. consumer
d. influencer
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
a. media boom
b. sociocultural
c. corporate activity
d. economic prosperity
5. Indian consumers are different and they are driven by four core values
namely family orientation, value seeking, progress orientation
and______________. Fill in the blank.
a. prosperity consciousness
b. equality consciousness
c. class consciousness
d. income consciousness
Answers:
1. (b)
2. (c)
3. (a)
4. (d)
5. (c)
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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MARKET SEGMENTATION
Chapter 2
Market Segmentation
Objectives
Structure:
2.1 Introduction
2.2 Market Segmentation
2.3 Benefits of Segmentation
2.4 Limitations of Segmentation
2.5 Bases for Segmentation
2.6 Criteria for Effective Targeting of Market Segments
2.7 Implementing Segmentation Strategies
2.8 What have you Learnt – A Summary
2.9 Self Assessment Questions
2.10 Multiple Choice Questions (MCQ)
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MARKET SEGMENTATION
2.1 INTRODUCTION
During our visits to shoes selling retailer’s shop, we have seen so many
different nature of shoes on display – their structure is different, designs
are different, usages are different and prices are also different. Similarly
when you visit a spectacles shop, automobile distributor’s showroom,
consumer durables showroom to see wide varieties of refrigerators, air
conditioners on display, LED TVs on display, do you know that LED TVs are
available from ` 40,000 onwards going up to ` 16.00 lacs! Unbelievable
but true. We often buy what we need and leave the showroom thinking
who must be really buying other varieties or who could afford such a costly
item? This information is shared so that you can later appreciate the
concept of market segmentation. Marketers use consumer research not
only to determine their segmentation but develop their effective
segmentation strategies – discover meaningful ways to divide their
markets, design products to meet segmentation needs, and prepare
segment specific promotion plans.
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MARKET SEGMENTATION
India’s total population = 125 crores, felt need for television is say 12
crores, interested in Sony say 25% of those who felt the need; that equals
to 3 crores. But Sony LED costs almost 1.4 times the normal next best
television, thus say only 10% of them have so much money to buy, thus it
comes to 30 lacs. But at any given point of time say only 10% are willing
to spend on television purchase, especially Sony’s, thus the number will be
3.00 lacs. It can be concluded that Sony’s LED market in India is to the
tune of 3.00 lacs units per annum.
Segmented Markets
Mass Market
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MARKET SEGMENTATION
There are two alternatives available to a marketer – either treat the whole
market as an entity or split them into different homogeneous groups with
distinct characteristics. When the whole market is served as one single
entity, it is identified as undifferentiated marketing strategy or mass
marketing. When you split them and serve them separately, you have
adopted market segmentation.
It is natural as well as evident that the market today has great diversity
and individuals aspire to meet specific needs, wants, and desires. As a
result, marketers today thus split one homogeneous market into two or
more sub-markets based on their varying needs for targeting and effective
covering. This also means that a target market is a subgroup chosen out of
the total market for which a product is offered at a price acceptable to this
subgroup and to which communication is directed and the product is made
available through an appropriate channel. Out of subgroups evolved from
the large total market, marketers may be keen to pursue few of them only
through specific marketing programs. Such chosen groups are known as
target segments of the total market after which the advertiser has decided
to go. It is also known as target audience.
! !27
MARKET SEGMENTATION
Approaches to Segmentation
Overall there are two approaches to market segmentation – (1) divide the
total market into homogeneous subgroups as segments. As explained
earlier, you split your total market into small subgroups identified based on
common characteristics shown having almost identical needs. (2) In this
second approach, you start with individual customers and profile them.
Potential customers are later identified based on similarity of
characteristics identified from previously compiled profiles of customers.
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MARKET SEGMENTATION
We have seen that marketing starts with segmentation thus it’s the first
step in a three-phase marketing strategy and not an end in itself. After
segmenting the market into homogeneous clusters, the marketer must
then select one or more segments to target with a specific product or
promotional appeal. The third and final step is to position the product so
that it is perceived by each target market as satisfying its needs better
than the competitive offerings. In marketing it is also known as S-T-P
(segmentation-targeting-positioning) approach to marketing.
Biscuit manufacturers have since long just focused on children and their
health, linking ‘glucose and health nutrients’ with ‘being good for kids’. Real
growth came when they developed segments and understood their taste
and reason to eat biscuits such as family with nuts and dry fruits, calorie
conscious with diet biscuits, young generation with chocolate cream. Later,
they even introduced cookies to corner more market and stop users to try
other kinds of snacks.
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MARKET SEGMENTATION
The service industry also uses segmentation. You have a laundry service
provider who renders basic service vis-a-vis others who may be providing
value added services like hanged clothes delivery, clothes folded post
ironing in a non-wrinkle paper, dry cleaning and more to target upmarket
families needing such support. Hotel industry also offers different kinds of
rooms to cater to different segments of their visitors such as economy,
deluxe, luxury rooms and suites, A/C – Non A/C rooms.
Activity A
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MARKET SEGMENTATION
Marketers use segmentation to determine their way forward and can cover
numerous areas like:
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MARKET SEGMENTATION
b. The product, promotion, price and place are all aligned to consumer
needs. Thus it is more impactful.
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MARKET SEGMENTATION
Marketing
Utilitaria
Mix 1
n Custom
Marketing Trendy-
Mix 2 Casual
LEVI
Marketing Price
Jeans Mix 3 Shopper
Marketing Mainstre
Mix 4 am
Marketing Tradition
Mix 5 alist
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MARKET SEGMENTATION
(f) Segmentation itself is not a solution for success and can’t bring
success unless an organisation is aligned to serve its consumers as per
their needs.
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MARKET SEGMENTATION
a. Geographic Segmentation
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MARKET SEGMENTATION
Table 2.1
Variables Examples
Geographic Segmentation
More personal the product in nature, it is the user who decides, e.g.,
mobile phones – iPhone or Samsung, Desktop for son as a student may get
decided by the father as a buyer depending on his financial capabilities,
which LED TV to buy may get decided based on influence being played
either from the existing owners or store salesmen.
b. Demographic Segmentation
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MARKET SEGMENTATION
Most population and media readership and viewership data are expressed
in demographic forms. Most media develop their profile using demographic
characteristics to attract advertisers looking to influence certain
demographic strata of the society.
Table 2.2
Variables Examples
Demographic
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MARKET SEGMENTATION
Activity B
c. Geodemographic Segmentation
This segmentation approach believes in the notion that people who live
next to one another have similar financial stature, taste, means,
preferences, lifestyles and consumption habits, e.g., residents of Malabar
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MARKET SEGMENTATION
d. Psychological Segmentation
Table 2.3
Variables Examples
Psychological Segmentation
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MARKET SEGMENTATION
A brand like Charms cigarettes in India has used this approach. Besides
this, Thumps Up has introduced the macho aspect by bringing in Salman
Khan. Other products for which buyers are going to exercise personal
choice can use this approach, e.g., beauty products, liquor, clothing tend to
use this approach.
Since it is difficult to try and tie a specific personality trait to the purchase
of a specific brand, marketers turned to psychographic (lifestyle
segmentation).
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MARKET SEGMENTATION
The researcher derives these aspects by probing AIO statements and then
uses statistical techniques to group consumers into similar cluster/s. It can
also be differently derived like – users/non-users cluster characteristics/
traits. E.g., for age-miracles cream, we can have psychographic profile as
‘Dynamically involved women, living life fully, self conscious but open and
bold, socially oriented, educated, focused on health and grooming, married
with self expression of their own’.
e. Sociocultural Segmentation
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MARKET SEGMENTATION
Table 2.4
Variables Examples
Sociocultural Segmentation
Subculture
Family Life Cycle (FLC) - Marital Young single, Young married with no
children, With children
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MARKET SEGMENTATION
Family Life Cycle: We will put an effort to understand this in detail, this
being a very important segmentation approach, despite the fact that it
comes under sociocultural segmentation, which we are expected to cover in
brief only.
People go through different life states. Family Life Cycle (FLC) exactly
represents the specific life state in which a specific class of individuals is
living and thus they have similar needs and wants. FLC describes the
process of family formation and dissolution.
There are several ways in which a person’s life state can be illustrated.
From society perspective there is a classification as students, bachelors,
young married and empty nesters. Empty nesters mean people whose kids
have left them and settled elsewhere. Students naturally do not have self
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MARKET SEGMENTATION
(i) Young and single bachelor stage: Income has just started, free of
burden and full of life, willing to explore, develop own taste and
personalities, be with friends, spend on lifestyle items like bikes,
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MARKET SEGMENTATION
(iii)Young married with children: Life’s focus shifts towards the child
and his well-being. Buys kids dresses, games, baby foods and care
items, and nourishments.
(vii)Old single and retired: Not able to earn thus, they look for
sustenance. They live an economical life, mostly repeat purchases, scale
down preferences from luxury to basic, health, medicines and living
basic life.
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MARKET SEGMENTATION
We would have noticed that many times a specific occasion determines our
selection. We stretch beyond our general means to get the item of our
choice. Thus, marketers often select user behaviour as a segmentation
variable. Other aspects of user behaviour that have been proved effective
include usage rate, user status and degree of brand loyalty.
Table 2.5
Variables Examples
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MARKET SEGMENTATION
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MARKET SEGMENTATION
will help you to find non-brand loyal customers by using loyal customers
profile and targeting them.
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MARKET SEGMENTATION
Table 2.6
Gentle nature Children below Loves to taste Fun, dependent Just for kids
5 years on mother
Activity C
Write down the benefits you are looking for while consuming following
personal and household goods.
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MARKET SEGMENTATION
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MARKET SEGMENTATION
can target major metros, A class towns and within those areas where you
are likely to get such enterprising women. However, in psychographic,
behavioural and benefits segmentation, it is difficult to identify the target
market. Knowledge of consumer behaviour and consumer research insights
only can help you to target, e.g., we have seen in the earlier example of
toothpaste market, if we can determine out of given six consumer benefits
which are the two most sought after benefits, then we can target those
segments.
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MARKET SEGMENTATION
After segmenting the market and determining target segments, a firm can
either pursue concentrated marketing strategy or a differentiated
marketing strategy. Marketers may deploy counter-segmentation strategy.
Concentrated Marketing Strategy: Post identifying the most promising
segments to target, marketers must decide their final strategic aspect,
namely to implement concentrated strategy or differentiated strategy.
Basic assumption in marketing is that each targeted segment receives a
specially designed marketing mix: that is, a specially tailored product, or
price or distribution network or promotional mix. Targeting just one
segment with a unique marketing mix is called concentrated marketing.
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MARKET SEGMENTATION
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MARKET SEGMENTATION
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MARKET SEGMENTATION
a. True
b. False. It is the splitting of identical market...
c. False. It is the splitting of heterogeneous market...
d. False. It is the splitting of large market...
2. A marketer who considers the whole market as one entity and prepares
his marketing plan accordingly has known to have adopted
_____________ strategy. Fill in the blank.
a. unclassified marketing
b. undifferentiated marketing
c. classified marketing
d. differentiated marketing
a. unclassified marketing
b. undifferentiated marketing
c. classified marketing
d. differentiated marketing
a. geodemographic segmentation
b. psychological segmentation
c. family life cycle segmentation
d. behavioural segmentation
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MARKET SEGMENTATION
a. prime segment
b. counter segmentation
c. concentrated segmentation
d. unique segment
Answers:
1. (a)
2. (b)
3. (d)
4. (c)
5. (c)
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MARKET SEGMENTATION
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !57
CONSUMER RESEARCH
Chapter 3
CONSUMER RESEARCH
Objectives
Structure:
3.1 Introduction
3.2 Consumer Research Process
3.3 Conducting Segmentation Research Study
3.4 Development of Motivational Research
3.5 Methods in Psychology (For Motivation and Other Psychological
Aspects to be Probed)
3.6 What have you Learnt – A Summary
3.7 Self Assessment Questions
3.8 Multiple Choice Questions (MCQ)
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CONSUMER RESEARCH
3.1 INTRODUCTION
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CONSUMER RESEARCH
!
Fig. 3.1: Process Model of the Consumer Research (Marketing
Research)
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CONSUMER RESEARCH
Marketing Marketing
Research Manager Solution to....
(Does research and (Uses the market- Marketing
provides market- related information
Problems
related information to solve market
to marketing problems....)
manager....)
!
! !61
CONSUMER RESEARCH
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CONSUMER RESEARCH
! !63
CONSUMER RESEARCH
! !64
CONSUMER RESEARCH
! !65
CONSUMER RESEARCH
Nature
v/s
Contrived
Human Disguised
v/s
v/s
Undisguised
Mechanical
Classification
of
Observational
Techniques
Direct Structured
v/s v/s
Indirect Unstructured
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CONSUMER RESEARCH
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CONSUMER RESEARCH
- It’s the only method which helps in measuring attitude and motivations
- The versatility of the survey method, its speed, and its relatively lower
cost are its selling points when it is compared with the observation
method.
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CONSUMER RESEARCH
Activity A
Survey can be conducted either in person, through mail or over the phone.
Nowadays surveys can be conducted using Internet also.
However, for this research technique, you need trained and experienced
interviewers. This method is time consuming and costly. Respondent needs
to give sufficient time and must answer honestly. It is possible that the
interviewer’s bias can affect the answer being noted.
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CONSUMER RESEARCH
However, in this digital age, this method has lost its significance and is not
used much.
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CONSUMER RESEARCH
where a form gets opened. Form has easy to answer options. When the
entire form is completed, the respondent can submit the form. He gets a
thank you note. Google Doc, Survey Monkey and other such online solution
providers make implementation of such methodology possible.
Table 3.1
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CONSUMER RESEARCH
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CONSUMER RESEARCH
b. Sample Size: Size of the sample means the number of respondents out
of the total target population that needs to be covered to gain insights
which can be later applied to the total target population. As it is not
possible to meet all individuals who qualify to be a part of your target
population, small representative numbers of individuals are met during
the survey. This is known as sample size. Size needs to be decided first
as it impacts the budget and degree of confidence which marketers
expect from the findings. Whether it is a large sample size or small
sample size, finding of the study gets impacted more by accuracy with
which the sampling procedure is followed. Sample size number is a
matter of statistical formula.
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CONSUMER RESEARCH
Table 3.2
Sampling Methods
Simple random sample Every member of the population has a known and
equal chance of selection.
Non-probability Sample
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CONSUMER RESEARCH
include only relevant questions helping you with either the purpose of the
study or the analysis point of view (like demographic questions).
The format of the questionnaire, the way questions are asked needs to be
tested and debugged to ensure that the answers are finally obtained the
way it will help you to analyse the outcome. A smooth questionnaire helps
you to get a better response rate and accurate answers.
There are different formats for questions laid out – close-ended questions
or open-ended questions. In a close-ended question, you expect a specific
answer, thus the same is mentioned and the respondent needs to raise
those alternatives in front of the respondents and get a specific reply only.
In an open-ended question, you allow respondents to express freely
whatever comes to their mind that’s relevant to the question asked. Close-
ended questions are relatively simple to tabulate and analyse and give an
outcome that can facilitate an inference or conclusion. As against this,
open-ended questions get more insightful information but are difficult to
code, tabulate and analyse, thus tricky to infer or conclude. However, it is
not as irrelevant as it sounds here. As we move forward, we will gain
insights about the way it gets analysed and inferences drawn.
a. The Likert Scale: It’s the most popular form of attitude measurement
scale in which the respondent is presented with a statement.
Respondent needs to give his agreement or disagreement. However,
they are spread over 5 different points to have the degree aspect
included – 1 = Strongly Agree, 2 = Agree, 3 = Neither / Nor, 4 =
Disagree, 5 = Strongly Disagree. There is an equal degree of
agreement/disagreement from a neutral point. To uncover consumer
views on different aspects, a number of questions can be asked. Not
only this, questions can be asked differently to really uncover the
consumers’ mind e.g. – ‘I like Westside mall’ or alternatively ‘Westside
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CONSUMER RESEARCH
Table 3.3
Instruction
Please place the number which best describes how strongly you agree or
disagree with each of the following statements about your experiences of
shopping at the Phoenix Mall, Lower Parel, Mumbai. Write the number in
the space provided at the left side of the statement.
Number Understanding
Agree strongly
Agree
Neither Agree nor Disagree
Disagree
Disagree Strongly
Statements
_________ a. It is fun to shop at the Phoenix Mall.
_________ b. Products at Phoenix often cost more than they are worth.
_________ c. It is a good place to meet friends and neighbours.
_________ d. Most branded products are available at the Phoenix Mall.
_________ e. Parking is very difficult to find.
_________ f. You get goods for all age groups at the Phoenix Mall
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CONSUMER RESEARCH
Table 3.4
Semantic Differential Scale Application
Instruction
Please place the number which best describes how strongly you feel about each
attribute about your experiences of shopping at the Phoenix Mall-Lower Parel,
Infinity Mall-Goregaon and R-Mall-Ghatkopar. Write the number at the space
provided at the left side of the statement.
7 6 5 4 3 2 1
Attributes
Courteous 6 4 5
Salespeop
le
Helpful 5 4 4
Salespeop
le
Comforta 7 4 5
ble
Walkways
Widest 7 6 4
Brand
Range
Competiti 3 4 5
ve Prices
High 6 6 5
Quality
Products
Quality 7 7 4
Food
Outlets
When the above ratings are plotted on a graph, it gives a comparative picture on each
attribute.
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CONSUMER RESEARCH
Table 3.5
Instruction
Rank the following brands in terms of your preference. (However, the same could
be done for quality, functionality, features, user friendliness, etc)
Rank the following SMART TV brands in order of your preference to own the
same.
National - ____
LG - ____
Sony - ____
Toshiba - ____
Sharp - ____
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CONSUMER RESEARCH
Here we will not cover steps a), b) and c) covered earlier while
understanding the research process. We are trying to understand designing
our primary research and second technique under it, namely qualitative
research design. Under qualitative research design, the data can be
collected by in-depth interviews, focus groups and various projective
techniques. The questionnaire consists of open-ended, free-to-express
nature of probing questions to encourage the respondents to reveal their
innermost thinking and beliefs.
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CONSUMER RESEARCH
! !80
CONSUMER RESEARCH
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CONSUMER RESEARCH
• Last but not the least, individuals are not under any pressure to
‘make up’ answers to questions.
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CONSUMER RESEARCH
Table 3.6
A GOOD FOCUS GROUP
Essence:
Arrangements:
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CONSUMER RESEARCH
• Sample Size: Size of the sample here either means the number of
respondents out of the total target population that needs to be
covered to gain an in-depth insight or the number of groups to be
covered consisting of a number of respondents in each group. This
may be a size whose findings may not be applicable later to the
total target population.
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Activity B
For qualitative research, there are two options to this – in-depth interview
questionnaire and checklist.
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Activity C
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Table 3.7
Explanations with Examples of Various Projective Techniques
Respondents are presented with a series of words or phrases and are asked to
answer quickly with the first word that comes to their mind.
Doing a research to name new luxury bath soap, respondents are presented
with words like face, glow, charm, beauty and asked to give a spontaneous
response with the word coming to their mind. This enables the researcher to
propose a proper brand name.
Ashok is asked a question – ‘Why do you think your friend Sameer must be
using a deodorants every time he goes to a party? Here Ashok is asked to
inform reasons about Sameer, which he will more willingly answer. But in
reality, he answers reasons from his subconscious mind pertaining to him.
Ashok will not correctly answer this question if it pertains to him.
There can be one picture or a series of pictures. Respondents are asked to give
their interpretation at the end. Series of pictures may have a dialogue as well
and at the end, respondents will be asked to complete the last dialogue box.
Same pictures can be shown to different sets of individuals with variables in it
altered eg: one set of people will be asked to evaluate pictures if that product is
available at ` 100/- and other set of people will be asked to evaluate pictures if
that product is available at ` 15/-.
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Table 3.8
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the Gold card as “a symbol of position for people who have control over
their lives and finances”.
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Introspection Survey
Developmental
Observation
!
Students are requested to follow the above table for understanding the
following section.
I. Statistical Method
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A variable is anything that can change and can be measured as well. For
example, emotional quotient is a variable as it can be measured and
individuals differ in their levels of emotional quotient.
It means that high values of one variable go with high values of the other
variable and low values of one variable go with lower values of the other
variable.
For example, best fashion brand goes at a high price tag but for many
other day to day items, higher the prices, lower would be their demand.
Negative correlation can be graphically illustrated as:
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Negative correlation means that high values of one variable go with low
values of the other variable.
II.Descriptive
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Disadvantages of Interview
• When rating scales are used, this method suffers from defect.
Advantages of Interview
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It is of three types:
a. Casual: Not used in research. The person just happens to notice how
he is feeling. There is no deliberate attempt to focus on him.
Daydreaming, having fantasies are examples. Then we begin to
remember the details of the daydream.
Disadvantages of Introspection
• May differ from person to person – people with the same experience
may give different versions.
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• May give contradictory results – what is true for one may not be true
for the other.
• Emotions and deeper feelings may cloud your introspection. “May come
in the way of being scientific and objective”.
Advantages of Introspection
III.Experimental
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the effect of one variable (IV) on another variable (DV). E.g. Demand, i.e.,
effect of price on demand.
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- T h e r a p y o r T r e a t m e n t : Tr e a t e d b y p s y c h o t h e r a p y,
psychoanalysis.
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Types of Questions
• It has a wide scope and can gather a lot of information from large
groups.
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• It does not give us information about cause and effect and can’t
test hypotheses.
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Activity D
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a. 6
b. 7
c. 8
d. 9
2. While you are constructing your primary research plan based on the
nature of information you are seeking, you need to undertake
development of specific research design. Identify two types of research
designs.
a. experiential
b. introspection
c. in-depth
d. statistical
a. experiential
b. projective technique
c. survey
d. experiment
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a. methods in experimentations
b. methods in sociology
c. methods in physiology
d. methods in psychology
Answers:
1. (b)
2. (c)
3. (a)
4. (b)
5. (d)
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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CONSUMER NEEDS AND MOTIVATION
Chapter 4
Consumer Needs and Motivation
Objectives
Structure:
4.1 Introduction
4.2 Constantly Evolving Needs and Goals
4.3 Arousal of Motives
4.4 Types and System of Needs
4.5 What have You Learnt – A Summary
4.6 Self Assessment Questions
4.7 Multiple Choice Questions (MCQ)
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4.1 INTRODUCTION
On the face of it, we believe that each human being is different because
that is what we see. However, we overlook the fact that people are really
very much alike due to diversity of behaviours happening in front of our
eyes. Psychologists have established that most people experience the same
kind of needs and motives but the way they fulfil it, is different. Long back
marketers realised that understanding of human motives is very important
as it enables them to understand and anticipate human behaviour in the
marketplace.
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Tension Drive
Unfilled Goal or
(Motivation is (Result of
needs, wants Behaviour need
need induced thinking and
and desires fulfilment
tension) learning)
!
At this stage, it is very vital to note that the specific goals being pursued
and the specific course of action that a consumer takes, are based on their
thinking processes and previous learning. Why? Marketers who understand
motivational cues attempt to influence the consumers' thinking process.
Needs: As an individual, we have our own needs. All individuals have their
specific needs – some are innate, and others are acquired. Innate needs
are physiological (more to do with the biological body); they include the
needs for food, water, and air, for shelter, for clothing and for sex. As these
needs are necessary to be fulfilled for survival they are considered as
primary needs.
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Primary need gets evolved depending upon exposure and stature. For
someone a room in a chawl could be a primary need but for some other
individual, a flat in the upmarket south Mumbai could be a primary need.
Also, many times fulfilment of primary needs also concurrently fulfils the
secondary needs – A flat in the upmarket south Mumbai also satisfies
secondary needs like prestige and stature.
Goals: Goals are the expressed pursuit that will result in need satisfaction.
Expressed pursuit is the result of MOTIVATED BEHAVIOUR. If thirst
quenching is our need, the goal could be to buy a bottle of mineral water
or may be buy a soft drink or may be buy a juice. In these few listed goals
to quench thirst, having water is a generic goal (i.e., most general goal
that can satisfy consumers’ basic need – here it is water). However, if
consumer considers buying Aquafina mineral water bottle or buying
Thumps Up or buying a Tropicana fruit juice then such goals are classified
as product-specific goals (i.e., choosing specifically branded product).
a. The Selection of Goals: For any specific need, there are several goals.
The goals selected by individuals depend on their personal experience,
physical capacity, prevailing cultural norms and values and goals’
accessibility in the physical and social environment. When thirsty, the
poor will approach any public tap and drink water, salesman may pull
out his Tupperware bottle and drink water, occasional field visitors may
buy a small mineral water bottle, a collegian may buy Thums Up, and a
housewife may buy a fruity juice.
The goal object selected must be socially acceptable and physically
accessible. In India, drinking alcohol with parents is not socially
acceptable. In India, cow beef is prohibitive thus not physically
accessible.
Finally, an individual’s own perception of himself also influences his
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selection of the specific goals. Marketers are fully aware that the
products which an individual owns, desires to own and would not like to
own are closely reflected from the person’s self-image. Thus a product
that is aligned to meet the specific need relate to the self-image of a
person has a greater chance of being selected than the one that is not.
Rayban for wealthy image conscious individuals, Colgate for economy
conscious middle class, Colgate Total for health conscious higher middle
class and more such as theatre seats we book, brands of clothing we
wear, restaurants we frequent for family meal, we select specific goal
objects, mostly product specific, because they symbolically reflect the
individual’s self-image while they satisfy specific needs.
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a. Needs are never fully satisfied: There are biological needs which we
need to continuously satisfy such as hunger and thirst besides
emotional needs like love, security and self-satisfaction. While you are
hungry, food should be sufficient, but even there we need variety. There
are other kinds of needs more psychological in nature. E.g., a person
living in a hutment got a small one room house in SRA (Slum
Rehabilitation Scheme); sooner or later he would want to move into a
bigger flat. Those already staying in a flat would love to move into a
larger house or those staying at Dadar would wish to move to Pali Hill
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and likewise. The moment one need gets fulfilled, sooner or later a
higher need emerges. Thus needs are never fully satisfied.
b. New needs emerge as old needs get satisfied: As per the hierarchy
of needs theory, new, higher-order needs develop as basic, lower needs
get satisfied. Once our lower level needs are regularly satisfied, we look
for the next level of needs and accordingly shape our goals. A person
who consecutively won two assembly elections wants to contest the
state level election to be a member of parliament. Later, he aspires to
be the Prime Minister or the President of the country. An officer who got
promoted as a Manager wants to be a Dy. General Manager, later
General Manager, AVP, VP and President. This aspect of emerging needs
must compel marketers to keep a watch on emerging needs linked with
their product. If they do not align with emerging needs, they may fail to
remain with their prospects! Not only that, a person has alternatives
available to satisfy higher needs. It may not be your product. Marketers
thus align their advertising appeal to match his emerging needs. E.g.,
one who has strived for status may buy a high-end car. But when he
looks for prestige, he may want to buy a duplex flat/bungalow at
Lonavla. Marketers of high-end cars thus need to change the appeal
from status to say, safety of their cars, to remain in their prospective
buyers’ consideration set (whether that is an emerging need must be
found out by the marketer).
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Activity A
Determine one example from your side about the above three points
connected with needs, namely (a) Needs are never fully satisfied (b) New
needs emerge as old needs get satisfied (c) Success and failure influence
goals.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
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Activity B
Write your own example for each of the frustration states such as
aggression, rationalisation, autism, regression, immature behaviour and
withdrawal.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
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…………………………………………………………………………………………………………………………
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e. Needs and Goals Vary among Individuals: You can’t precisely infer
motives from behaviour. People with different needs may seek fulfilment
through selection of the same goals. Other way round, people with
same needs may seek fulfilment through different goals. It is a
challenging situation for marketers to influence people with same needs
but seeking fulfilment through different goals.
Most of the specific needs of any individual remain dormant for much of
the time till any specific internal stimuli found in the individual’s
physiological condition, emotional or thinking process (cognitive), trigger it,
or any external stimuli in the outside environment may trigger it. This
understanding helps marketers to explore where the stimuli for their
product lie in the psyche of the consumers and how they can trigger the
same. There are three personal arousal routes identified by the consumer
behaviour specialists
Emotional
Arousal
Arousal of
Motives
Physiological Cognitive
Arousal Arousal
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pass by window display items, you realise a need that you have for such
an item. Advertiser looks at triggering cues by offering an
environmental arousal. Environmental cues trigger a dormant need and
thus it has its own negative side – unwarranted expenditure gets
incurred or lower strata of society gets frustrated and it comes out
either as an aggression or resorting to unfair means to reduce the
tension of satisfying desired needs.
There are two philosophies concerned with the arousal of human motives.
The behaviourist school considers motivation to be mechanical in nature
as it is seen as response to a stimulus. Elements of conscious thoughts are
ignored. Window shopping is the best example as the person gets carried
away so much by stimuli on display that he buys the item even if he does
not have an immediate need, disregarding his conscious thoughts, i.e.,
cognitive controls. The cognitive school believes that all behaviour is
directed at goal achievement. Through our past experience, reaction to
need fulfilment, we reason our behaviour, categorise it and transform it
into attitudes and beliefs that act as predispositions to behaviour. These
predispositions determine the direction that he or she takes to achieve the
satisfaction he is looking at.
Collectively, there are numerous needs and motives which are universally
characterised under either physiological, social and psychological needs or
motives. Way back in 1923, Daniel Starch had prepared a list of numerous
advertising appeals for adults.
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Table 4.1
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Table 4.2
Sado-masochistic needs –
aggression, abasement
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Activity C
Write your own example for each of the hierarchy states specified in
Maslow’s theory.
…………………………………………………………………………………………………………………………
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!
Fig. 4.6: A Trio of Needs
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a. True
b. False as some are required needs
c. False as some are acquired
d. False as some are physical needs
a. cognitive arousal
b. curative arousal
c. psychological arousal
d. none of the above
a. egoistic needs
b. self-fulfilment needs
c. primary needs
d. innate needs
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Answers:
1. (d)
2. (c)
3. (a)
4. (a)
5. (b)
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APPENDIX 1
Water purifier Kent RO Purest water on the Purity and safe from
earth bacteria and other
impurities
APPENDIX 2
Emotions
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Definition
Differentiation
• Moods are diffused affective states that generally last for much longer
durations than emotions and are also usually less intense than emotions.
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Components
Characteristics of Emotions
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3. Emotions are subjective and purely individual. The same situation may
evoke different emotions in different individuals.
5. Emotions have wide range and are not restricted to a particular age
period. They occur to children, adolescents and adults.
6. Emotions rise abruptly. The passing away of emotions is, however slow,
leaving behind an emotional state which lasts for some time.
7. Emotions have swings. One emotion may give rise to another emotion
and the two may get merged.
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• Develop relationships
• Master the ability to initiate, discover, play and learn
• Develop persistence and attention
• Self-regulate their behaviour
• Develop emotional range
The eight stages of social and emotional development from baby to adult
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the two year old yelling "NO!" every second of the day is going through his
entry into the second stage of social and emotional development, according
to Erikson. Mothers know this is annoying, but you can take heart that it’s
a sign of emotional and social development.
• To imagine, to broaden his skills through active play of all sorts, including
fantasy
• Mastering social studies, reading, and maths at school and creating self-
disciplined approaches to learning.
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Learning Intimacy vs Isolation: The successful young adult, for the first
time, can experience true intimacy - the sort of intimacy that makes
possible good marriage or a genuine and enduring friendship.
(This article was written by Alex Brooks for Kidspot's Child Discovery
Centre from sources including Child Development Info)
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Brain
The core parts of the brain that are directly involved in regulating
emotional responses are the hypothalamus and the limbic system which
includes the thalamus, pituitary gland and the area around the
hypothalamus.
Physiological/Physical component
The physical component of emotion is a psychological arousal that usually
accompanies the emotion the body is feeling. If the body did not
experience this arousal, the intensity of this emotion would be greatly
decreased. During the arousal, the body experiences a surge of powerful
feelings known as emotions.People who can detect changes in their arousal
level experience their emotions much more intensely than those who
cannot detect the changes in their arousal level.
Behavioural component
This component has been called the outward expression of our emotions.
Body gestures, posture, facial expressions and our tone of voice display
what emotions we are feeling. Many of our facial expressions are universal.
For instance, if somebody has a mad look on their face, it doesn't matter
what language they Speak or where they are from, chances are... they're
mad. However, some emotional expressions are influenced by our cultures
and society's rules for displaying emotions. For example, the guards
outside of Buckingham Palace are not allowed to display any emotion on
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their face. Some people have described them as looking mad when in
reality they are not.
Cognitive component
Our perception to the imaginary threat is what makes it feel real to us and
causes the emotion in our body.
• Have you ever thought why your heart pounds and you burst into tears
on hearing dreadful news?
• Why heart beats at a very high speed while you do jogging exercise?
Emotions make our life bright and enlightened, because without the
experience of emotions, our Life would be dull, uninteresting, gloomy and
without any purpose
They are:
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Stirred up for the fight or flight action After seeing a snake or after an
un usual incident as Natural disaster; the body is prepared to stirred up our
bodies to face and deal them.
Modifying the future responses and behavior Learning take place after
the emotional state that Prepares us to manifest appropriate behaviors in
future, i.e., strategies should be adapted to minimize the aftermath of
disasters and avoid us to face the snake.
Social interactions are enhanced As emotions are both verbal and non-
verbal so they help people to better understand the responses whether
they are being expressed or not.
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prevent goal attainment, lead to inner conflict, lead to more conflict with
others and poor mental health. Rational thought/images lead to goal
attainment and more inner harmony. In other words rational beliefs reduce
conflicts with others and improved health.
Theories of Emotions
James–Lange theory
In his 1884 article, William James argued that feelings and emotions were
secondary to physiological phenomena. In his theory, James proposed that
the perception of what he called an "exciting fact" directly led to a
physiological response, known as "emotion."To account for different types
of emotional experiences, James proposed that stimuli trigger activity in
the autonomic nervous system, which in turn produces an emotional
experience in the brain. The Danish psychologist Carl Lange also proposed
a similar theory at around the same time, and therefore this theory
became known as the James–Lange theory. As James wrote, "the
perception of bodily changes, as they occur, is the emotion." James further
claims that "we feel sad because we cry, angry because we strike, afraid
because we tremble, and neither have we cried, strike, nor tremble
because we are sorry, angry, or fearful, as the case may be.
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Although mostly abandoned in its original form, Tim Dalgleish argues that
most contemporary neuroscientists have embraced the components of the
James-Lange theory of emotions.
Cannon–Bard theory
Phillip Bard contributed to the theory with his work on animals. Bard found
that sensory, motor, and physiological information all had to pass through
the diencephalon (particularly the thalamus), before being subjected to any
further processing. Therefore, Cannon also argued that it was not
anatomically possible for sensory events to trigger a physiological response
prior to triggering conscious awareness and emotional stimuli had to
trigger both physiological and experiential aspects of emotion
simultaneously
Two-factor theory
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Cognitive theories
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Lazarus stressed that the quality and intensity of emotions are controlled
through cognitive processes. These processes underline coping strategies
that form the emotional reaction by altering the relationship between the
person and the environment.
There are some theories on emotions arguing that cognitive activity in the
form of judgements, evaluations, or thoughts are necessary in order for an
emotion to occur. A prominent philosophical exponent is Robert C.
Solomon (for example, The Passions, Emotions and the Meaning of Life,
1993). Solomon claims that emotions are judgements. He has put forward
a more nuanced view which responds to what he has called the ‘standard
objection’ to cognitivism, the idea that a judgement that something is
fearsome can occur with or without emotion, so judgement cannot be
identified with emotion. The theory proposed by Nico Frijda where
appraisal leads to action tendencies is another example.
It has also been suggested that emotions (affect heuristics, feelings and
gut-feeling reactions) are often used as shortcuts to process information
and influence behaviour. The affect infusion model (AIM) is a theoretical
model developed by Joseph Forgas in the early 1990s that attempts to
explain how emotion and mood interact with one's ability to process
information.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 5
Personality and Consumer Behaviour
Objectives
Structure:
5.1 Introduction
5.2 Personality Characteristics
5.3 Personality Theories
5.4 Personality and Consumer Behaviour
5.5 Brand Personality
5.6 What have you Learnt – A Summary
5.7 Self Assessment Questions
5.8 Multiple Choice Questions (MCQ)
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5.1 INTRODUCTION
• What personality traits distinguish those car buyers who opt for Indian
origin sedan cars?
• What personality traits distinguish those mall buyers vis-a-vis local shops
buyers?
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Activity A
There are three theories related to personality (a) Freudian Theory (b)
Jungian (non-Freudian Theory and (c) Trait Theory. There are other
theories also which bring out the relationship between consumer behaviour
and personality.
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a. Freudian Theory
ID EGO
GRATIFICATION
System 1 System 3
SUPER-
EGO
System
2
!
Id: This aspect covers primitive and impulsive drives; it consists of basic
physiological needs like thirst, hunger and sex. For such physiological
needs, an individual seeks immediate satisfaction without concern for the
specific means of satisfaction. The individual will resort to any means to
satisfy such needs and such behaviour is more animalistic in nature as it is
unrestrained. It is restrained by a second system called super-ego.
Products like perfumes, herbal tonic and condoms use such basic instinct
trigger to get desired action.
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area of the body where a child’s sexual instincts are focussed at the time –
oral, anal, phallic, latent and genital stages.
(i) Oral stage: The infant first starts sucking milk and eating through
mouth. That is his first experience of social contact with the world. This
is applicable also to bottle feed babies. A crisis develops at the end of
this stage when the child is deprived of this due to parents’ perceived
need to develop a better habit.
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consumers are not consciously aware of their true motives. Marketers must
work their ways through motivational research to discover the underlying
motivations for specific consumer behaviour. To uncover consumers’
unconscious motives and personality, various consumer research
techniques are used such as observation, projective techniques, focus
group discussion and in-depth interviews.
Activity B
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Compliant: He is the one who desires to have love, be loved and wants
appreciation to be in harmony with societal decorum and code of conduct.
He thus prefers brand names, brushes twice a day, uses mouthwash and
likewise.
c. Trait Theory
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Marketing people are keen to know and influence specific personality traits
in individual groups. We can examine some specific personality traits and
its relevance in marketing.
Mr. David Reisman has classified the consumers on the basis of social
character. As per this theory, consumers either follow ‘ways of behaviour’
or ‘conform to the culture and society’ or vice-a-versa. Three major types
of social characters are (1) tradition-directed individuals who are slow to
adopt any change. (2) inner-directed individuals who are self-movers and
take decisions based on interpreting their changing needs and product
conformity to satisfy their need e.g. people moving from traditional a
shaving razor blade to twin shaving razor blades. The third classification is
(3) other directed individuals are those who are directed by others,
especially society. If they find social mobility towards a specific product or
service, they will adopt it. Marketers need to understand whom to attract
and how to attract. Marketers can address the ‘inner-directed’ individuals
by providing them with enough information and cues to enable them to
self-evaluate and adopt a product. Today’s digital age is making many of us
inner-directed individuals by making information for evaluation and word of
mouth possible, and that’s the result we see in the surge of online e-
retailers. For ‘other directed’ individuals, may be through promotions you
need to create an appropriate social setting. For E.g., If an opinion maker
in a specific social set up starts using the product or service, others will
gradually follow. Further in this social character theory, there is a concept
called the optimum stimulation level (OSL). OSL indicates the desired
lifestyle and the ability to risk. Consumers with a high OSL would be ready
to take risks and try innovative products / services. If OSL and lifestyle
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matches, it makes the consumer satisfied with what he has, thus making
him slow to try new things. On the other hand, if OSL is high and current
lifestyle is under-stimulated, there will be boredom in such consumers and
they remain passive to any change. If OSL is low and current lifestyle is
over-stimulated, there could be a desire for rest and relaxation and thus
such products/services find easy entry in their life. OSL thus impacts
product/service choice and time management needs of consumers.
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Personality traits also can influence the selection of outlets from where
consumers purchase their products. Self-confident consumers are open to
exploring outlets such as off-price stores, shops selling trendy outfits and
more. As against this, a less self-confident shopper may just prefer to buy
from the same old shop, and more traditional and neighbourhood stores.
Based on the nature of products you sell, the target audience you have and
their personality trait, you can choose your channel development strategy.
Freud and Carl Jung were considered as the pioneers of personality theory
in which consumers are classified as per their personality types. Another
unconventional pair of researchers namely Myers-Briggs have developed
another dimension to this theory, thus making it more relevant to markets.
In this new approach, pairing is done on the basis of Jung-inspired
psychological dimensions as follows:
• Sensing – intuiting
• Thinking – feeling
• Extroversion – introversion
• Judging – perceiving
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Each of the above pairing is like the two different poles, distinct in their
meaning. It shows consumer response to the world they live in. However, if
we resort to permutations and combinations of these 4 pairs, it becomes
cumbersome. Thus, we take the first two pairs and cross tabulate four
personality types. We get following table:
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ST – Very rational, objective and logical personality. Thus they search all
possible means to get maximum information. They avoid risk as they wish
to remain within their economic criteria. They take quick decisions or leave
it and seek materialism in their possessions.
NF – Like NT they too have a broader viewpoint. They too consider a wide
range of possible options. They are willing to listen to others’ views but
being people oriented, they get impacted as well, and thus they may
consider others’ view at times. They are subjective, risk takers and thus
least sensitive to price. Time frame is indefinite in making a decision.
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This is the reason why marketers are keen to understand the personalities
of their consumers. However, more understanding about four kinds of self-
image is essentially needed. This is explained below:
How others See me? How I would like others to see me?
(Social Self-image) (Ideal Social Self-image)
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However, these four images deal with the current state and do not take in
to consideration the future. Rather than what is the current state of an
individual in terms of his image, it’s the expected self-image at a future
date that is more interesting for the marketers. This is because, it’s the
expected self-image in which a consumer builds his dream to be someone
as expected by him, which generates needs, wants, desires and pursuit for
its fulfilment. This is useful in developing a new product, modifying an
existing product, building a brand position and developing an appeal and
change the appeal in due course to be in sync with him for retaining the
bond established.
Activity C
2. Extended Self
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A platinum ring from Gitanjali jewels from a husband to his wife not only
elates her but gives her that sense of ideal social self-image. Individuals
are used to establish an emotional attachment to their own possessions.
3. Self-alteration
Within the realm of being ‘self’, we like to improve it for better. Within the
realm of actual-self, we are open to alteration to better it for ourselves.
This feeling is at the base level of every individual – creating a new self-
image while maintaining the existing image. Products like fashion
accessories, cosmetics, contact lenses, clothes help us alter the self for
better. Only when we either evolve our self better, we subsequently wish to
extend the self. Once you alter yourself with a specific product/brand, you
then continue to move upward and that is what marketers like and exploit
to their advantage by introducing products with better features, look and
style.
A brand does have its own personality like human beings do. Brand
personality consists of a set of characteristics for which it is recognised and
recalled. This gives it a feasibility to enter the human mind in the form of a
specific brand position (students must however be conscious that brand
position is a much wider subject in itself). Specific brand personality
attracts a specific mass of the market and thus marketers are very careful
about developing and maintaining a specific brand personality. If Raymond
is for the complete man, i.e., a man who has arrived in life, means
prestige. On the other hand, brand Cambridge has a professional appeal
for the common man, thus preferred by junior and middle level individuals
to remain in sync with the ongoing corporate wear trends. Similarly, the
brand SONY stands for unbeatable technology but LG is referred to as
advanced technology with style and look.
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Brand personality generally remains the same for many years as it has its
own advantage such as enabling positioning to get stronger and stronger,
gaining new prospects from the target audience and more. Lux soap is a
beauty soap of film stars for decades, Raymond for the impeccably dressed
complete man.
Brand’s personality creates two divides among the target audience, namely
adopters or non-adopters, i.e., Close-up gel toothpaste’s personality is that
of teenage and youth; it will compel them to start using this product but it
may not impact the mid-aged people. Also, users build a perception in the
minds of brand users while non-users will have a different perception about
this same personality of the brand. E.g., Cambridge shirts and trousers
brand users will perceive the Raymond brand as ‘it is not for me but for my
boss’. This understanding helps brand marketers to develop an appropriate
marketing plan to get volume from such non-users.
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Brands get recognised in more than many ways such as ‘as a person’ or
‘specific characteristics’ or ‘having certain skills and capabilities’ or ‘certain
association and attitudes’ or a mix of these aspects. Ambuja cement has a
masculine physique, with characteristics of unbreakable strength capable
to give a solid structure, associated with contractor as its best friend. In
other words, like any individual’s personality, a brand personality too
appeals to the senses of their target audience. Thus, it is essential and
challenging for the marketers to identify a brand’s personality and make
the consumer accept and be most comfortable with its personality. Thus it
is also essential for the brand personality to be consistent over a period of
time. This is required to allow acceptance, sinking the minds of target
audience and leverage its benefits. Another example could be Castrol
Lubricants considered as the truck owners’ best friend as it protects their
engine against the sludge by developing lubricants that create a thin film of
lubricants inside piston shafts/engine, thereby reducing friction, giving
better mileage and longer life to the engine (which is considered as the
heart of their owned vehicle).
While you are developing your brand personality, certain elements of your
communication, be it visual or audio, become synonymous with your
recognition. This is known as brand property – Parle biscuit’s girl picture,
Amul butter girl’s picture, Asian Paints’ painter recognised as Gattu, Nirma
detergent’s dancing girl or Britannia biscuits’ tune ‘ting ting Tiring’. One
look at it or the moment you hear it, it summarises the entire brand
personality in your mind.
Activity D
Attempt to write the brand personality of brands like DHL, Mercedes Benz,
and Flipkart.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
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Brand personality can get created due to numerous factors and some of
them are described below:
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e. You can determine the social strata and income status from the branded
possessions owned by your target audience. Isn’t there a difference
between a person owning a Maruti Alto and the one owning a
Volkswagen Polo?
f. Maintaining the same brand personality over a long term helps you to
attract customers in the future too – person who got inspired to own
you with specific personality traits being demonstrated by your brand.
j. Many times, the product may be same but users with same socio-
economic characteristics can have different kinds of relationship with the
brand, e.g., one young college student may have a relationship of
security with the Close-Up toothpaste while other may have a romantic
relationship as he is looking forward to getting close to a girl friend in
college.
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k. Brand personality also helps you to choose the appropriate medium for
communication. A brand known to have a hi-end/status-oriented
personality needs to choose hi-end media popular among status
conscious target audience to avoid being looked down upon if they start
featuring in common medium.
m. Brand personality can help you develop loyalty among the chosen
segments. A personality which can communicate care and commitment
is likely to get more accepted and admired.
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Table 5.1
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3. What are the other theories of personality (other than the Freudian
theory)? Explain how they are different from the Freudian theory.
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a. True
b. False as point 1 is wrong
c. False as point 2 is wrong
d. False as point 3 is wrong
a. Superior ego
b. Super ego
c. Superficial ego
d. Superlative ego
a. compelling
b. common
c. consistent
d. compliant
a. consumer as a self
b. consumer proximity
c. consumer versatility
d. consumer affirmation
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a. connections
b. competence
c. communications
d. commitment
Answers:
1. (c)
2. (b)
3. (c)
4. (a)
5. (b)
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 6
Consumer Psychographics and Perception
Objectives
Structure:
6.1 Introduction
6.2 Understanding Psychographics
6.3 Application of Psychographic Analysis
6.4 Psychographic Consumer Segmentation Research: SRI VALS Program
6.5 Consumer Perception
6.6 Perceptual Mechanism
6.7 Store Image
6.8 What have you Learnt – A Summary
6.9 Self Assessment Questions
6.10 Multiple Choice Questions (MCQ)
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6.1 INTRODUCTION
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Table 6.1
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Activity A
Personal statement:
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Family statement:
• We use pictures to decorate our house, table and make other items using
family pictures
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Table 6.2
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1. Market Segmentation
A leading bank wanting to expand its credit card business develops the
following segmentation for identifying the segment to target.
• He likes to acquire flashy things, and would take a loan for any and
every thing, converts big card payments into EMIs.
• He believes in living life today and doesn’t care about the future.
Similar detailing can be done about other identified segments above. This
enables a marketer to select a specific segment, attractive to their
business.
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Table 6.3
Walking/Exercising 90
Indoor/Outdoor sports 25
Movie 15
Photography 20
Weekend outings 10
Stayed at hotel 35
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6.4 P S Y C H O G R A P H I C C O N S U M E R S E G M E N TAT I O N
RESEARCH: SRI VALS PROGRAM
What is VALS?
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Under this, adults (18 yrs plus) are classified into distinctive lifestyle
groups. Each group has psychological needs (values) and behavioural
response patterns (lifestyle). Much of VALS blends together demographics,
attitudes, activities, consumption patterns, brand preferences and media
graphics. Marketers across the world have greatly benefited by using VALS
typology to segment markets for their products and services and to target
their promotional efforts.
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!
Fig. 6.2: VALS 1 Segmentation Approach
VALS 1
The VALS 1 typology classified the American population into four general
consumer groups, and then subdivided these categories into a total of nine
distinct subgroups or segments. Four major groups are the need-driven
(the poor and uneducated), the outer-directed (middle and upper-middle
class consumers whose lifestyle is directed by external criteria) and the
inner-directed (people who often are more motivated by personal needs
than by the expectations of others). The fourth segment, called integrated
(individuals who have been able to combine the best of both outer-directed
and inner-directed values) represents individuals who achieve success as
well as they are societally conscious.
Mitchell used statistics to identify attitudinal and demographic questions
that helped categorize the adult American consumers into one of nine
lifestyle types: survivors (4%), sustainers (7%), belongers (35%),
emulators (9%), achievers (22%), I-am-me (5%), experiential (7%),
societally conscious (9%), and integrated (2%). The questions were
weighted using data developed from a sample of 1,635 Americans and
their partners, who responded to an SRI International survey in 1980.
From the marketer’s perspective, it provides two distinct sets of data –
(1) Demographic profile of each VALS 1 type and (2) General attitude of
each VALS 1 type. This makes it a lethal combo to get insights about the
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VALS 2
!
Fig. 6.3: VALS 2 Segmentation Approach
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Resources
The main dimensions of the VALS framework are primary motivation (the
horizontal dimension) and resources (the vertical dimension). The vertical
dimension segments people based on the degree to which they
are innovative and have resources such as income, education, self-
confidence, intelligence, leadership skills, and energy. The horizontal
dimension represents primary motivations and includes three distinct
types:
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At the top of the rectangle are the Innovators, who have such high
resources that they could have any of the three primary motivations. At
the bottom of the rectangle are the Survivors, who live complacently and
within their means without a strong primary motivation of the types listed
above. The VALS Framework gives more details about each of the groups.
Resources under VALS 2 help you to develop a demographic/socio-
economic profile. Postprofiling, you develop the segments description
(Refer Table 6.4 for details). You must also realise that each of these eight
segments differ in some important ways. For instance, Believers tend to
buy goods produced by domestic manufacturers, thus slow to create a
behavioural shift. This knowledge can thus be utilised by marketers to
segment and target their marketing activities.
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Table 6.4
VALS 2 Types Description
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Strivers - Strivers are trendy and fun loving. Because they are motivated
by achievement, Strivers are concerned about the opinions and approval of
others. Money defines success for Strivers, who don't have enough of it to
meet their desires. They favor stylish products that emulate the purchases
of people with greater material wealth. Many see themselves as having a
job rather than a career, and a lack of skills and focus often prevents them
from moving ahead.
Strivers are active consumers because shopping is both a social activity
and an opportunity to demonstrate to peers their ability to buy. As
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Sensation
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interesting to know how our senses work and how this information is
organized and interpreted. Sensation is the process by which our senses
gather information and send it to the brain. A large amount of information
is being sensed at any one time such as room temperature, brightness of
the lights, someone talking, a distant train, or the smell of a perfume.
With all this information coming into our senses, the majority of our world
never gets recognized. We don’t notice radio waves, x-rays, or the
microscopic parasites crawling on our skin. We don’t sense all the odours
around us or taste every individual spice in our gourmet dinner.
• Sensation depends upon how we distinguish the inputs. (As in Figure 6.4,
some will see the girl’s face and a few may see the musician.
The above points are narrated to emphasise that we are not overwhelmed
by random sensation, but our cognitive structure allows a meaningful
interpretation.
Threshold
Although God has given us five different sensory receptors, we may not be
able to sense everything around us. It depends on the strength of our
receptors and the level. We only sense things that we are able to, since we
don’t have the sense of smell like a bloodhound or the sense of sight like a
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hawk; our thresholds are different from these animals and often even from
each other. Threshold is thus a level.
Absolute Threshold
This is the biggest problem being faced by advertisers. Around the highest
TRP program, many ads compete with each other, along with the
interesting twist in the episode itself. If they continue to repeat the same
advertisement, the audience ignores it due to the seen-before attitude.
Thus they must consider whether the same ad can be presented with any
idea, or they need a new campaign periodically? This is the primary reason
why media innovation is considered as essential – larger space ad,
gatefold, and partial fold are the ways in which the limitations of absolute
threshold can be minimised and changed stimuli will help your
communication in getting noticed.
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Subliminal Perception
Subliminal is a two part word consisting of the prefix sub- and the root
word limen (Latin origin). Sub- means below and limen means threshold.
Thus, subliminal comes to mean below threshold. But what is a threshold?
From the subliminal perception point of view, threshold is the level of their
conscious awareness. In other words, people perceive stimuli without being
aware of them consciously. Even weak and brief stimuli may be perceived
by us. This is called subliminal perception. It is that perception where the
stimulus is under the threshold or limen of awareness, but is certainly not
under the absolute threshold of the receptor cells involved.
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The argument goes that you'd feel more compelled to consume the tasty
treats as a result of these subliminal visual stimuli. And the weird part is
you wouldn't even know why you were craving for them because the
messages were below the threshold of your perception. Pretty deceptive,
right?
The term subliminal message was popularized in a 1957 book entitled The
Hidden Persuaders by Vance Packard. This book detailed a study of movie
theatres that supposedly used subliminal commands to increase the sales
of popcorn and Coca-Cola at their concession stands. However, the study
was fabricated, as the author of the study James Vicary later admitted.
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1. Perceptual Selection
Size: The larger the size of the stimulus, the more likely it is to be
perceived. E.g., published headlines in the newspaper, printed brand name
on the packaging of a product.
Contrast: Any stimulus that stands out from the rest of the environment is
more likely to be noticed. E.g., capital and bold letters, a black and white
advertisement amongst coloured ads on TV, or a coloured advertisement in
a black and white newspaper. Sometimes, a lack of contrast also leads to
perception such as role model association, personality association, and
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Besides the above mentioned stimuli, there are few others like intensity,
motion, and repetition which attract our attention.
Advertisers like to use such relevant stimuli, provide the same in their
marketing communication to get them recognised, interpreted and retained
in memory. The following aspects of perception therefore need closer
examination.
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People are also selective about the message and the channel through
which this information would be transmitted; we could relate this to
the split-brain theory, the right side processing and the left side
processing. Some prefer emotions in TV; others prefer logic and facts
in print media. This phenomenon of being selective towards the input
based on our needs and desires is called selective attention. For
example, if a person intends buying a refrigerator in the coming 2-3
months, he would be very receptive to any input that comes his way
and relates to refrigerators.
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Activity B
2. Perceptual Organisation
While exposed to the various stimuli, human beings do not select them as
separate and unrelated identities, but group them and perceive them as “a
unified whole.” The various stimuli are put together as a unified integrated
structure. This organization of the stimuli is based on certain principles,
which were first proposed by the Gestalt school of psychology, and hence
the name “Gestalt principles”. The marketer should aim at making the
principles of the Gestalt philosophy work in the product's favour.
There are four basic principles of perceptual organization, viz., figure and
ground, grouping, closure and simplification. Each of these is discussed
below.
a. Figure and ground: The figure and ground principle states that any
stimulus that stands apart from its environment, and contrasts
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!
Fig. 6.5: Perception through Foreground and Ground
The implication that a marketer needs to draw from the principle is that:
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- While placing their brands in a store, the packaging should be such that
the brand stands out against the many others which should recede to
the background. Thus, the packaging design should be chosen very
carefully.
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- When marketers launch new brands, they should try and brand it as
the blanket family name or go for a corporate name combined with
individual product names, and have the brand logo. Consumers
perceive the new brand to be related to the old one, in terms of the
fact that they share the same logo. The benefits associated with the
original product get translated to the newer product as well.
- Consumers relate the various stimuli that lie in proximity to each other.
A product is perceived in the same way as the other stimuli are
perceived in the proximate surroundings. If the mood generated by the
surrounding stimuli is regal and royal, the product tends to get related
to sophistication and style. So the marketer must be careful in using
stimuli that blend perfectly with the product.
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3. Perceptual Interpretation
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Perceptual Mapping
Branding or brand management has two conversation parts (1) verbal part
more between buyers and the seller (you will go to a retail store and ask
for Cadbury Crackle; and (2) Between seller and the buyer - it is more
psychological part (as the seller needs to gain an entry in the minds of
target customers). Your brand will gain an entry in the minds of consumers
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• Quick-Slow/Expensive-Inexpensive (SPEED:COST)
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Activity C
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A consumer may buy his routine suiting from a normal store, but for his
wedding suit, he will prefer to choose the Raymond’s store.
Company Image
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Notice that unlike the Likert scale, the semantic differential scale does not
have a neutral or middle selection. A person must choose, to a certain
extent, one or the other adjective.
The outcome of this scale is a snake chart. It clearly brings out the
attributes/factors on which you score better over competition. However, it
is difficult to develop and get deep insights as it does not get into
reasoning.
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Consumers select the stimuli from the environment, which meet his
expectations and motives. This aspect of selection includes variations like –
selective exposure, selective attention, selective distortion, selective
retention and perceptual blocking. It summarises the fact that people
usually perceive things they need or want, and block the perception of
unnecessary, unfavourable, or painful stimuli.
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Products, brands and organisations including stores have their own images
for which we studied perceptual mapping and use of the semantic
differential scale.
Above learning was vital from the marketer’s perspective, which we have
studied under the respective sections above. In brief it can be summarised
from what Jack Trout said on perception – marketing is a battle of
perceptions. They mistakenly believe that the best product will win. It is an
illusion. There is no objective reality here. There are no best products. All
that exists in the world of marketing is perceptions in the mind of the
customer or prospects. Perception is the reality. Everything else is an
illusion. In short, marketers must put relevant efforts in managing
perceptions as well.
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a. Perception analysis
b. Belief analysis
c. Need analysis
d. Lifestyle analysis
2. Tw o m a j o r a p p l i c a t i o n s o f p s yc h o g ra p h i c a n a l y s i s a r e ( a )
______________ and (b) promotional campaign development. Fill in
the blank.
a. behaviour understanding
b. perception detection
c. market segmentation
d. promotional offer development
a. absolute threshold
b. just noticeable difference
c. subliminal perception
d. just negligible difference
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a. perceptual selection
b. perceptual organisation
c. perceptual interpretation
d. perceptual mapping
a. perceptual selection
b. perceptual organisation
c. perceptual interpretation
d. perceptual mapping
Answers:
1. (d)
2. (c)
3. (c)
4. (b)
5. (a)
6. (b)
7. (c)
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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LEARNING AND CONSUMER INVOLVEMENT
Chapter 7
Learning and Consumer Involvement
Objectives
Structure:
7.1 Introduction
7.2 What is learning?
7.3 Behavioural Learning Theories
7.4 Determinants of Learning
7.5 Storage, Retention and Retrieval of Information
7.6 Involvement Theory
7.7 Advertising Effect
7.8 What have you Learnt – A Summary
7.9 Self Assessment Questions
7.10 Multiple Choice Questions (MCQ)
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7.1 INTRODUCTION
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Intentionally
OR
Incidentally
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1. Learning is growth
The individual grows as he lives. This growth implies both physical as well
as the mental development of the learner. The individual gains experiences
through various activities. These are all sources of learning. The individual
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grows through living and learning. Thus growth and learning are inter-
related and even synonymous.
• Use our newly acquired ability or knowledge in conjunction with skills and
understanding we already possess.
• Do something with the new knowledge or skill and take ownership of it.
2. Learning is adjustment
3. Learning is purposeful
All kinds of learning are goal-oriented. The individual acts with some
purpose. He learns through activities. He gets himself interested when he
is aware of his objectives to be realized through these activities. Therefore,
all learning is purposeful in nature.
4. Learning is experience
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5. Learning is intelligent
6. Learning is active
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Characteristics of a Learner
2. Confidence: It’s an individual’s sheer mind set which allows him to act
on his own. We find many individuals who decide things on their own
while we also see many who depend on others, including their needing
someone to accompany them during their shopping.
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Characteristics
of the learner
that affect
performance
Prior
Confidence Heredity Ability personality
Experience
!
Many attempts have been made by academicians and others to map and
explain the learning processes.It is generally recognised that learning takes
place in a repetitive cycle - an ongoing series of processes.
The diagram below represents a generic learning cycle and uses the
acronym PACT. The cycle is relevant to all types of learning.
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Cues serve to direct the consumer drive when they are consistent with
consumer expectations. Marketers must ensure that cues continue to meet
expectations. High-end consumer products must ensure that they are
stylised well, advertised in an exclusive manner, sold through exclusive
outlets, represented through recognised brand ambassadors and likewise.
Each aspect of the marketing mix must reinforce the others if cues are to
serve as the stimuli that guide consumer actions in the direction desired by
the marketer.
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Activity A
This perspective was first articulated in 1913 by John Watson, who argued
that psychology should be the study of observable phenomena, not the
study of consciousness or the mind. Watson believed that objective
measurement of observable phenomena was the only way to advance the
science of psychology.
The second type of learning theory argues that intervening variables are
appropriate and necessary components for understanding the processes of
learning. This perspective falls under the broad rubric of cognitive
learning theory, and it was first articulated by Wilhem Wundt, the
acknowledged "father of psychology." He used introspection as a means of
studying thought processes.
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LEARNING
Behavioural Cognitive
or S-R
Classical Instrumental or
Conditioning Operant
Conditioning
!
There are two main types of learning in the behaviourist tradition. The first
is classical conditioning, which is associated with the work of Ivan Pavlov
(1849–1936), a Russian physiologist who studied the digestive processes
of dogs. Pavlov noticed that dogs salivated in the absence of food if a
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particular stimulus was present that had previously been paired with the
presentation of food. Pavlov investigated the way in which an association
between a neutral stimulus (e.g., a lab technician who fed the dogs), an
unconditioned stimulus (food), and an unconditioned reflex (salivation) was
made. Pavlov's classic experiment involved the conditioning of salivation to
the ringing of a bell and other stimuli that were not likely to make a dog
salivate without a previously learned association with food.
Unconditioned Conditioned
Stimulus (US) Stimulus (CS)
Meat Paste Bell
Unconditional
Response (UR)
Salivation
Conditioned
Response (CR)
Salivation
Conditioned
Stimuli (CS) Bell
!
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Conditioned
Stimulus (CS) Co
me
st
o Eli
cit
s
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4. Most of our likes and dislikes that relate to PEOPLE, PLACES, and
EVENTS OR THINGS are the result of conditioning. For example, exam
evokes fear and also that of evaluation, of exam-failure.
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Marketers use this principle to take advantage of a well known and trusted
brand in a number of ways:
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This theory is not sufficient to explain the entire learning process although
it is extensively used in advertising, brand management and marketing.
This theory assumes consumers as passive beings. This theory considers
consumers as information seekers. It only touches one aspect of
influencing consumer behaviour by exposure and thus frequencies of ads
are considered as essential. However, it does not account for other
purchase behaviour which evaluates different products’ alternatives. As per
this theory, product evaluation is based on our rewards after using the
product which means the theory of instrumental conditioning.
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Non-
Response rewarding
Try Brand X Too Loose
Stimulus
Non-
Situation Response rewarding
Wedding Try Brand Y Too Loose
Outfit
Response Rewarding
Try Brand Z Suits Her
Structure
!
Reinforcement
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Reinforcement and punishment are the core tools through which operant
behaviour is modified. These terms are defined by their effect on
behaviour. It may either be positive or negative, as described below.
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Operant Conditioning
Skinner is regarded as the father of Operant Conditioning, but his work was
based on Thorndike’s Law of Effect. Skinner introduced a new term into the
Law of Effect - Reinforcement. Behaviour which is reinforced tends to be
repeated (i.e., strengthened); behaviour which is not reinforced tends to
die out-or be extinguished (i.e., weakened).
Experiment
• The box contained a lever on the side and as the rat moved about the
box it would accidentally knock the lever. When it did so, immediately a
food pellet would drop into a container next to the lever. The rats quickly
learned to go straight to the lever after a few times of being put in the
box. The consequence of receiving food if they pressed the lever ensured
that they would keep repeating the action.
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a rat in a Skinner box gets food when it presses a lever, its rate of
pressing will go up. This procedure is usually simply
called reinforcement.
It is important to note that actors (e.g., rat) are not spoken of as being
reinforced, punished, or extinguished; it is the actions (e.g., lever press)
that are reinforced, punished, or extinguished. Also, reinforcement,
punishment, and extinction are not terms whose use is restricted to the
laboratory. Naturally occurring consequences can also reinforce, punish, or
extinguish behaviour and are not always planned or delivered by people.
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Shaping
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that the animal or person already emits with some probability. The form of
this behaviour is then gradually changed across successive trials by
reinforcing behaviours that approximate the target behaviour more and
more closely. When the target behaviour is finally emitted, it may be
strengthened and maintained by the use of a schedule of reinforcement.
Use of this by marketers is during their media planning. A high pitch dose
of advertising is necessary to educate the customers about the new
product being launched, or counter a market share threatening
advertisement by your competitor. As against this, for established products
expected to be bought repeatedly, we have a distributed advertising
schedule. In an intensely competitive market, even combination of
concentrated and distributed scheduling is used.
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Difference between human beings and animals is that humans can think
through acquired knowledge. Humans learn by solving problems they face
or by observation or by the knowledge they have. We have often seen that
some solutions come to our mind instantly whereas some problems need
careful collection and evaluation of information to take decisions and some
issues haunt us as we are unable to resolve them. We have also observed
that we do not get into solving every problem we have, we do not observe
which is not relevant to us and we do not have the knowledge of
everything (doctors require a professional financial planner to manage their
money). It is therefore believed that learning is thus a function of exerting
the mind. This is called cognitive learning. A consumer buys and continues
to buy a specific brand as through his past experiences he has realised that
it works the way he wants. He buys it again and again as this brand
continues to satisfy his expectations. For him thus, to change the brand
may be difficult because he visualises a risk in strange things.
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Meaningfulness
Organisation
Pronounceability
Frequency
Distinctiveness
Imagery
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2. Methods of Learning
Part-whole learning
A learning technique in which the task to be learned is broken down into its
parts for separate practices. The part-whole method is commonly used
when parts do not form a natural and meaningful sequence of actions and
do not need to be practised together. They can be learned in any order,
practised separately, and once mastered, can be incorporated together in,
for example, a game. Compare part-method learning.
Thus, a drama script can be learnt in parts but a poem needs to be learnt
in whole to understand the complete meaning.
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KOR is based on the principle that learning is facilitated when the learner
receives immediate evaluation of learning performance. The concept also
hypothesizes that learning is facilitated when the learner is promptly
informed whether a response is correct, and, if incorrect, of the direction of
error.
Transfer of Training
Holding (1991) says that "transfer of training occurs whenever the effects
of prior learning influence the performance of a later activity" (in Training
for Performance, Morrison, J. (Ed p. 93). The degree to which trainees
successfully apply in their jobs, the skills gained in training situations, is
considered as "positive transfer of training" (Baldwin & Ford, 1980).
Positive Transfer
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Negative Transfer
Zero Transfer
3. Characteristics of a Learner
In the learning process there are always two parties – one who imparts
learning and one who receives learning – known as learner.
ii. Age: Age is directly correlated to the ability of the brain to absorb
knowledge and contemplate. Most of the learning is acquired between
5 to 10 years; educational learning and knowledge can be acquired
till 20 to 25 years. Later, it is supposed to remain constant between
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Decision Process
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Sensory memory holds sensory information less than one second after an
item is perceived. The ability to look at an item and remember what it
looked like with just a split second of observation, or memorization, is an
example of sensory memory. E.g.: When we see Amitabh Bacchhan
anchoring a show and enact something, we remember that enactment live
in our memory, for a split second.
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From the information processing perspective there are three main stages in
the formation and retrieval of memory:
Level of Processing
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• Second Level: Structural features of the inputs are analysed. E.g.: what
it looks like or sounds like, or is familiar to.
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Activity B
This theory has got more to do with functioning of the brain and how
learning happens. The human brain has two hemispheres – the left and the
right and each has unique information processing capabilities. This theory
is therefore also called as (1) Hemispheral Lateralization or (2) Split Brain
Theory.
The basic premise of the split brain theory is that the Right and Left
hemispheres of the brain specialise in the kinds of information they
process. The Left hemisphere is primarily responsible for cognitive
activities such as reading, speaking and attributional information
processing.
Put another way, the left side of the brain is supposed to be rational,
active, and realistic; the right side of the brain is emotional, metaphoric,
impulsive and intuitive.
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High involvement media: To extend this line of thought, print media are
high involvement media (newspapers and magazine) because cognitive
(verbal) information is processed by the left-side of the brain. According to
this theory, print advertising is processed in the complex sequence of
cognitive stages as follows:
Tri--component Model
The key point of the Social Judgment Theory is that attitude change
(persuasion) is mediated by judgmental processes and effects. Put
differently, persuasion occurs at the end of the process where a person
understands a message, then compares the position it advocates to his
position on that issue. A person's position on an issue is dependent on
Consider the course choices available to you in the next term. For the sake
of argument, let's say you have four required courses to finish but have
one course needing science background in which you are weak. What
courses open to you would you definitely not enrol in, no matter what?
Those courses fall in your Latitude of Rejection. Do you think anyone could
persuade you to take a class that falls in that latitude? Not likely. And the
more ego-involved you are in the decision to enrol in your course (the
more you care about that decision) the larger your Latitude of Rejection
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Now consider the courses that you really don't have an opinion about, that
you don't have positive or negative feelings toward. Those courses fall in
your Latitude of Non-commitment. It's possible that someone could
persuade you to enrol in one of those courses, but you'd have to learn
more about the course first, at least enough until you have an opinion or
judgment about it.
Now, consider all those courses you would consider enrolling in. Those
courses fall in your Latitude of Acceptance. A person with good arguments
might be able to persuade you to take one of those courses, especially if, in
your judgment, the course is similar to your anchor point course.
Persuasive messages that advocate positions in your Latitude of
Acceptance will be assimilated by you. That is, they will appear to be closer
to your anchor point than they actually are. That's good news for the
would-be persuader.
If you are persuaded, then the further a message's position is away from
your anchor point, the larger your attitude change will be. But remember
that it is very unlikely that you will be persuaded out of your Latitude of
Rejection. So, once a message enters that region and moves away from
your anchor point, the amount of your attitude change decreases.
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Edward Thorndike put forward a “Law of effect” which stated that any
behaviour that is followed by pleasant consequences is likely to be
repeated, and any behaviour followed by unpleasant consequences is likely
to be stopped.
(i) Other things remaining equal, of several responses made to the same
situation which are accompanied by satisfaction to the animal will be
more firmly connected with the situation, so that when it recurs, they
will be more likely to recur.
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Also, we can see that higher the frequency, higher the recall because of
increased reinforcements. Thus one conclusion which emerges that
advertisements must get repeated subject to the frequency threshold
determined. However, the frequency threshold will vary depending on
product categories (daily consumer goods will need higher v/s durable
goods) and the brand’s market share (it must match if not higher than your
planned market share. It also depends on whether you are a new entrant
or it’s a new product. Last but not the least; it also depends on the PLC
stage of the brand.
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Intermittently, we have also seen how this theory knowledge can be useful
to marketers and finally we have learnt its relevance with understanding
advertising recall effect due to frequency of exposures.
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a. a change in behaviour
b. acquiring information
c. knowledge
d. problem recognition
3. There are two types of learning theories. The first perspective argues
that learning can be studied by observation and manipulation of
________________. The second type of learning theory argues that
intervening variables are appropriate and necessary components for
understanding the processes of learning. This perspective falls under the
broad rubric of cognitive learning theory. Fill in the blank.
a. cue-reinforcement association
b. learner-knowledge association
c. practice-experience association
d. stimulus-response association
a. cue
b. reinforcement
c. stimulus discrimination
d. none of the above
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a. working memory
b. transfer store
c. retention store
d. temporary store
Answers:
1. (b)
2. (a)
3. (d)
4. (c)
5. (a)
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
Chapter 8
The Nature of Consumer Attitudes and
Change
Objectives
Structure:
8.1 Introduction
8.2 What are Attitudes?
8.3 Components of Attitude
8.4 Learning Process
8.5 What have you Learnt – A Summary
8.6 Self Assessment Questions
8.7 Multiple Choice Questions (MCQ)
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8.1 INTRODUCTION
!
Fig. 8.1: Attitude is Everything
We need to discuss the reasons why attitude research has had such a
pervasive impact on consumer behaviour. We will also discuss the
properties that have made attitudes so attractive to consumer researchers,
and a number of important models depicting the structure and composition
of attitudes. Finally, we will review the approaches frequently employed to
measure consumer attitudes.
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It is not immediately evident from our definition that attitudes occur within
and are affected by the situation. Situations are events or circumstances
that, at a point in time, influence the relationship between attitudes and
behaviour. A situation can cause consumers to behave in a manner
seemingly inconsistent with their attitudes. For instance, let us assume
that a consumer purchases a different brand of coffee each time his
inventory runs low. Although his brand switching may seem to reflect a
negative attitude or dissatisfaction, it actually may have been influenced by
a specific situation – for example, the need to economize. Although the
consumer may have a strong preference for Nescafe coffee, a tight budget
may influence him to purchase whatever brand is on “special discount” at
the supermarket.
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You may not like ‘Protinex’ as biscuits but you continue to buy them due to
medical advice.
Salience
Under different conditions, our attitude does not hold the same relevance
or salience for the product or an individual. Our negative attitude towards
the public display of affection (PDA), may not bother us much when we see
actor and actresses do the same in a movie. This is because our negative
attitude towards the PDA has no relevance when we have gone to watch a
movie.
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What comes out from this understanding is that attitudes towards products
and brands are not salient to the average consumer. There is some
preference towards a specific brand. There may or may not be some
attitude. Even if there is some attitude, it is not relevant all the time – eg.,
we may not like Pepsi for its sweet taste but when you are with the family
for a weekend dinner where all want to have some soft drink at the end of
the meal and your choice of soft drink is not available, you may allow Pepsi
and you may also drink with other family members.
Activity A
Identify four properties of attitude and give your one example for each.
…………………………………………………………………………………………………………………………
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same basic belief similarly for each brand. For example, with regard to
long-lasting quality, Scope is evaluated positively, while Listerine is
evaluated negatively.
Product Mouthwash
Evaluation (+ + + ) (+ + + ) (+ +) (+) (- -) (+ + + ) (- -)
Since the affective component assesses the overall feelings about the
attitude object, it is frequently considered the essential aspect of an
attitude. Indeed, as we will discuss later, some researchers treat the
affective component as the attitude itself, with the two other components
serving related or supportive functions.
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Table 8.1
How likely is it that you will buy a Which of the following statements best
HUBLOT watch in the next 3 months? describes the chance that you will buy
a HUBLOT watch in the next 3 months?
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Attitude = Affect
Overall assessment
(e.g., good/bad,
plus/minus,
favourable/unfavourable)
The single component unit fails to provide useful insights as to the ‘why’
behind an attitude. Two consumers may either have positive attitude or
negative attitude affecting their overall assessment of an attitude object
but their reason (why?) for the same could be totally different.
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Attitude
=
Cognitions (Beliefs) Attitudes Interact
Reflects Attitudes Affect with Conation
Cognition Conation
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
Table 8.2
Activity B
!
where Attitudeo is a separately assessed overall measure of affect for or
against the attitude-object (e.g., a product, brand, service, retail
establishment); bi is the strength of the belief that the attitude-object
contains the ith attribute (e.g., the likelihood that Duncan Hines cake mix
tastes “home-made”); ei is the evaluative dimension associated with the
ith attribute (e.g., how good or bad is the quality of being “homemade”);
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
and indicates that there are n salient attributes over which the bi and ei
combinations are summated.
!
where Attitude(beh) is a separately assessed overall measure of affect for
or against carrying out a specific action or behaviour (e.g., buying,
preparing, or serving a Taj Birdy’s cake); bi is the strength of the belief
that an ith specific action will lead to a specific outcome (e.g., the
preparation of a Taj Birdy’s cake will indeed taste “homemade”); ei is the
evaluation of the ith outcome (e.g., the “favorableness” of a cake’s tasting
homemade); and indicates that there are n salient outcomes over which
the bi and ei combinations are summated.
Theory-of-reasoned-action Model
Behaviour can be traced back to intention to act which itself results from
the consumer’s attitude towards the behaviour and subjective norm.
Diagrammatically, it can be represented as follows:
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
Attitude-towards-the-ad Model
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
Affective responses describe what we feel after seeing the ad, e.g.,
amused, sad, inspired, joyous, etc. Cognitive evaluations describe our
judgement regarding the ad, e.g., humorous, interesting, believable,
horrible, etc. Both affective and cognitive responses can be measured on a
five-point scale.
Attitude Formation
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Personality Family
Sources
Mass Peer and
of
Media Group
Influence
Direct
Experience
Marketing
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Though peers and groups affect our attitudes, it is also true that we make
friendship with those peers or join such a group which has a value system
similar to our own. Larger groups like social classes, ethnic groups and
entire cultures also influence our beliefs and altitudes. ‘Namastey’ as a
gesture is acceptable among Hindus but may not be in other religions.
Experience: Direct experience with products through trial and repeat
purchases affect our attitudes. Incentives are often given to try the
products.
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
Activity C
Identify attitude influencing sources and list your experiences for some of
those influencing factors.
…………………………………………………………………………………………………………………………
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Attitude Change
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Under the learning process, we have learnt that we can shift attitudes
favourably towards an object, when there is a condition of no attitude
towards an object in question. Learning is a medium which can cause this
shift or attitude formation. We have learnt different sources of influences
such as family, peer & group, experiences, direct marketing, mass media
and personality influence.
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
a. brand Personality
b. their Attitude
c. their Perception
d. their Evaluation
a. compelling
b. common
c. consistent
d. conative
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THE NATURE OF CONSUMER ATTITUDES AND CHANGE
a. Communication
b. Learning
c. Exposure
d. Experimentation
Answers:
1. (b)
2. (c)
3. (d)
4. (a)
5. (b)
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
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COMMUNICATION AND PERSUASION
Chapter 9
Communication and Persuasion
Objectives
Structure:
9.1 Introduction
9.2 What is Communication?
9.3 The Communication Process and its Structure
9.4 Role of Marketing Communication
9.5 Marketing Communication
9.6 Different Marketing Communication Mix
9.7 Communication Model
9.8 Role of Marketing Communication
9.9 Advertising Objectives and Advertising Purpose
9.10 Advertising Appeals
9.11 What have you Learnt – A Summary
9.12 Self Assessment Questions
9.13 Multiple Choice Questions (MCQ)
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9.1 INTRODUCTION
Channel
However, this model leaves us with many open and unanswered questions.
Thus, we need to first have an understanding of the communication
process.
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COMMUNICATION AND PERSUASION
way. Actions reveal a lot about the message. However, the environment in
which the communication process happens along with other ongoing things
like other brand messages, distractions, and thoughts within the minds of
consumer, distracts his attention and thus it is known as (noise).
!
Fig. 9.2: Comprehensive Communication Process
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COMMUNICATION AND PERSUASION
Brand Messages
Media Channels
It’s the method/mode by which the communication travels from the sender
to the receiver. Media channels link companies to their customers through
newspapers, magazines, TV, Radio including innovative mediums like In-
cinema, digital, etc. Word of mouth and packaging also play the role of a
media channel.
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Noise
Intended receiver is the target audience. Sender and media channel can
only ensure that a message reaches the receiver. It’s the receiver who
decodes the message. Thus, it is the receiver who interprets what the
source is trying to communicate. If he understands, he decides to take
action. Pre-test is therefore, very essential and critical.
Feedback
Activity A
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The five major modes (elements) of MCM/PM are personal selling, direct
and interactive marketing, advertising, sales promotion, publicity and
public relations.
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!
Common Frame of Reference and Field of Experience
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Personal Selling
Advertising
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Sales Promotion
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COMMUNICATION AND PERSUASION
PR specialists and firms use no. of tools and techniques like news releases,
newsletters, etc. and include internet tools like social media and blogs.
Through such tools, PR specialists give the target audience better insight
into client’s activities, products/services and increase publicity.
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Despite what critics say, PR goes beyond getting publicity for clients in
media; it stands at the very centre of modern day communications.
Activity B
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Uncontrolled Communication
Personal selling, advertising, and promotion elements are within the control
of marketers. As against these, publicity is not under their control as same
is not paid for directly by them and can’t be controlled. Media will not carry
news as you wish. They will publish news post due diligence which may or
may not be in your favour.
Corporate Communications
- Management Communication
- Marketing Communication
- Organizational Communication
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AIDA Model
The AIDA model represents the Personal Selling model in which a salesman
needs to take his customers through attention, interest, desire and action.
It starts with engagement with an advertisement. The Advertisement must
be attention grabbing to gain interest in the product. Interest needs to be
first established post which customers must desire the product enough to
take the action desired. Interest can be crafted through a product demo,
information and advertisements. Message must be persuasive to build
desire. Lastly, make the customer take the expected call to action through
promotions, discounts and calling out of features or benefits.
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playful mood and suddenly the wife gets a backache. Husband is shown
worried but quickly brings MOVE OINTMENT and is shown lovingly applying
it to wife’s affected area. Wife is shown enjoying his caring touch and is
relieved from back pain. Husband tries to get close to her and a kid moves
in; and the ad ends with the entire family being shown in a happy mood.
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• Action: CTA - Move the buyer to interacting with your company and
taking the next step, i.e., downloading a brochure, making the phone
call, joining your newsletter, or engaging in live chat, etc.
Interest: Once you've gained the prospects' attention, the next step is to
maintain interest in your product or service to keep the recipients engaged.
Explain to the recipients how the problem you've identified in the attention
step is adversely affecting their lives. A demonstration or illustration can
help the recipients to further identify with the problem and want to actively
seek possible solutions. By personalizing the problem, you're making it hit
closer to home.
As the belief goes – An ad seen does not mean an ad read. Thus the
creative needs to focus on illustrations, and headlines to induce further
reading of the copy which also needs to be crisp, meaningful and self-
understanding or easy to decode.
In the MOVE advertisement, the sudden back pain with a freezing moment
induces interest as to what will happen next. In the print advertising it is
the headline, sub-title, etc., that can do this task. Copy allows interest
building.
Desire: In the desire stage, your objective is to show the prospects how
your product or service can solve their problem. Explain the features of the
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product or service and the related benefits and demonstrate how the
benefits fulfil the need. A common advertising process is the "before and
after" technique, such as when a cleaning product makes a soiled item look
brand new. If done effectively, the prospects should now have the desire to
make a purchase.
Action: Now that you've created the desire to make a purchase, the final
step is to persuade the prospects to take immediate action. In a one-on-
one sales process, this is the time to ask for the sale. In the advertising
world, techniques involve creating a sense of urgency by extending an offer
for a limited time or including a bonus of special gift to those who act
within a specific time frame. Without a specific call to action, the prospect
may simply forget about your offer and move on.
In the MOVE advertisement, the closing line compels individuals to buy one
Move ointment immediately.
• Interest: How will we gain their interest? What is our content strategy?
What is the social proof available to back up our reputation? How do we
make this information available and where i.e. on website, via videos,
customer ratings?
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• Action: What are the calls to action and where do we place them? Is it
easy for consumers to connect and where would they expect to find it?
Think about which marketing channel/platform you are using and how to
engage, i.e., across emails, website, landing pages, inbound phone calls,
etc.
AIDA model has four stages and at times found to be not complete to
accommodate consumer response and during promotional planning. Thus,
a six step model known as ‘Hierarchy of Effects’ was developed by Robert
Lavidge and Grey Steiner in 1961, found to be effective in setting and
measuring advertising/communication objectives. It highlights six steps
from noticing an advertisement to product purchase. Consumer passes
through a series of steps sequentially. It is known as ‘hierarchy’ because
the number of consumers moving through one stage to the next reduces.
AIDA and Hierarchy of Effects are interrelated with the concept of three
psychological stages namely – Cognitive, Affective and Behavioural.
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- Awareness
- Knowledge
- Liking
- Preference
- Conviction
- Purchase
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The basic premise of this model is that advertising effects occur over a
period of time. Advertising communication may not lead to immediate
behavioural response; series of effects must occur, each step needs to be
fulfilled sequentially.
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Table 9.1
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Marketer-Buyer Dyad
Marketing Marketing
Buyer Goals
Goals Communication
Product
Offering
!
Marketer-Market Dyad
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Earlier, Sales used to speak with distributors and end consumers something
different from what marketing used to communicate. PR would have its
own take and would speak with media in a way they thought would make a
newsworthy proposition for channels, etc. As a result, message used to get
tweaked/cracked and thus, not uniform. Under IMC, they need to come
together to deliver one unified message.
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We have understood what IMC is but this section highlights the role of
marketing under IMC era. As we understand, IMC strives to promote one
central idea as a message; thus marketing must do things in such a way
that various initiatives/options available to them are used not only to
deliver this central message but also grow the idea bigger for better
impact. If we consider the launch of Kajal Pencil for black linings around
eyes by Lakme, we can notice the popular and very attractive heroine
Kareena Kapoor used for advertising in which she establishes how practical
it is to look beautiful. Lakme also did more to take this further by launching
an online contest allowing beautiful girls to share their picture with Lakme
Kajal being used, sponsored fashion shows within the city, participated in
college fests, direct marketing to connect with loyal customers, publicity in
which Lakme’s female grooming initiatives were covered and likewise more
initiatives possible under marketing were utilised to grow the idea rather
than speak the same idea. Thus, impact of it was much higher than what
any other approaches would have created.
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!
Fig. 9.11: Growing the Idea Bigger Using IMC
DAGMAR Approach
DAGMAR (Defining Advertising Goals for Measured Advertising Result) is a
concept pioneered by Russell H. Colley (1961). DAGMAR helps in
establishing a measurable link between advertising goals and advertising
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9.9 A D V E RT I S I N G O B J E C T I V E S A N D A D V E RT I S I N G
PURPOSE
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Promotional objectives evolve from the company’s marketing plan and are
rooted in the firm’s marketing objectives and have statements of what is to
be accomplished by the overall marketing program. Advertising objectives
are the various communication tasks required to deliver the message.
However, two schools of thoughts operate here - usually to communicate or
usually to increase sales or market share. Clarity regarding which side of
thought you wish to pursue, must come.
Many believe that the only objective of advertising is sales, but lack of
sales can be due to any of the other marketing mix elements or due to
factors like competition, price, quality, changing taste, etc. Advertising can
make consumers aware and interested. But all the marketing elements
must be synchronized together to make a brand successful. Additionally,
the effect of advertising happens over a period of time post multiple
exposures.
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Advertising Strategy
Determine what's going on in the market. What's the history, the major
trends and the current situation? And what are the risks and opportunities?
Also, what does the future look like? With the product, with competitors,
with consumer attitudes.
What action should you take regarding the competition, technological and
media trends? Specifically, how can you address those issues with
advertising and related tools? For example what, if anything, should you do
with the brand, with direct marketing, and on social media platforms?
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1. Your objectives
Before deciding whether to use advertising, clarify what you are trying to
achieve.
ii. You may need to convey a specific one-off message to your market.
For example, informing people of a special offer, or a particular
benefit of your product.
iii. You may need to prompt a specific action, such as the customer
visiting your premises.
If you are building up a database of leads, your objective might be to
gather the contact details of potential customers. If your product is
suitable, your objective may be to create sales there and then.
iv. You may need to address your existing customers, rather than win
new ones.
Keeping upfront of mind awareness encourages customers to
consider you first when they place their next orders. Be specific about
who you are trying to communicate with.
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Based on your profession and whom you wish to target and serve,
advertise in a local newspaper if you are a local plumber or estate
agent. You may use your website to advertise special offers and
events in your restaurant. Advertise for your accountancy firm in a
local online directory - Just Dial.
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• Direct mail with a mailing list that more closely matches your target
market.
3. The budget
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4. Media selection
Identify your segment of the market and decide which media would best
reach your target audience.
ii. Choose the media that match your needs. Ask yourself some key
questions:
How many members of your target group read a particular
publication or visit a certain website and how often? Does the
publication or site have the right image for your advertisement?
How much will your ad cost to produce? How much will the ad cost to
run?
Look for circulation figures audited by the Audit Bureau of
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When do you want your targets to respond and what is the likely lead
time from advertisement to action?
Will you be able to handle the response? Make sure your response is
professional and carefully planned.
6. Measuring effectiveness
ii. Calculate the total costs of your campaign and weigh them against
the response.
Your advertising will not be effective if it is not backed up with trained
staff, brochures, adequate stock levels and the ability to live up to
the promise of the advertisement.
Make sure you have allowed for all the likely costs. For example:
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iii. Some ads may generate many responses but convert few into sales.
If your conversion rate is poor, something is wrong.
Review your brochure or follow-up literature. It may not provide
enough information or live up to the promises made in the
advertisement.
Check the employees who are handling the response. Telephone staff
may not be sufficiently trained in the right areas.
Re-examine your price structure. The price you are offering may be
unsuitable for your target market.
Advertising which leads to a large number of enquiries that do not
convert into sales will work out very expensive per sale.
Thus advertising strategy is a comprehensive coverage of above
mentioned aspects which not only covers pre-development but also
the post-release issues.
Message Presentation
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Message Format
The word format means the setting, organisation, structure and style of the
ad message. The message format takes care of how the message content
and structure strategy are implemented. It is characterised by the type of
media vehicle in which the message is delivered. In a print ad, the
message format elements are headline, body copy, illustration and colour,
whereas in radio advertising it is words, voice modulation and dialogue
(conversation). Your format makes your advertising appeal stand out.
Message Development
There are so many media that carry the ad campaign for the same product.
In other words, there are so many products that get advertised on the
same media by different companies. Your target population receives
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Buying Motives
We have just concluded that unfulfilled needs motivate us. When we get
motivated, our buying motive may differ from other person’s buying
motive, e.g., one may buy a flat to move out from chawl living but
someone has bought a flat next to you as an investment.
There are different kinds of consumers. So, their wants and needs are also
different. They buy goods or services to satisfy their needs. The causes and
factors which stimulate consumers to buy certain goods or services, are
called buying motives. In fact, the motivating factor to direct consumer
behaviour is buying motives.
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(a) Primary buying motives: Primary buying motives are related to the
basic needs of human beings such as hunger, thirst, sleep, sex, etc.
Due to these needs people get motivated to purchase the goods.
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stars, sportsmen and athletes etc. So, all the producers advertise
their products with the help of these popular personalities.
f. Fear: People are generally afraid of losing their health, wealth and
life. Thus, it motivates them to purchase goods such as insurance
policy, hiring lockers in bank and membership of health club, etc.
These goods or services help them to avoid their fear.
All consumers do not buy any goods or services with an emotional motive.
They become thoughtful, and carefully consider their needs, priorities,
financial capacity etc. They study and analyze the necessity, utility, price,
etc., of the goods or services. Then they make the final decision to buy or
not. The consumers become logical, rational, apt and knowledgeable. Such
quality can be seen in their buying decision. The customers buy goods or
services considering cheapness, health and security, utility, comfort, etc.
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3. Prestige Motive
Prestige motive is related with the want of consumers for promotion of self-
image and protection of their ego. Under this, vanity and pride are the
motives of consumers.
4. Patronage Motive
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Appeals make us realise our unfulfilled needs and thus it cues our
attention. Appeals provide us the buying motives, thus they lead to action.
Lower-priced Wheel detergent has the price appeal, but it incorporates
economy motives.
Deciding an appeal that will convert your ‘Big Creative Idea’ is to determine
the advertising appeal i.e. what the advertising message should
communicate which has linkage with consumers’ buying motives.
• Informational/Rational Appeals
• Emotional Appeals
• Transformational Appeals
• Combining Rational and Emotional Appeals
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1. Informational/Rational Appeals
(d) News Appeal: This kind of appeal can be used when your product
has some newsworthy point or the company has that appeal in its
development. It is not released as news but advertisement
communicates in the form of a newsworthy appeal. Many product
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(f) High Quality and Performance Appeal: Some products are just
preferred for their high quality or performance. Such products’
advertisements too take an advantage of this appeal - E.g., Dettol –
The trusted name in anti-septic lotion v/s Savlon, Sony Bravia LED,
etc.
(h) Long Life Appeal: Many consumers prefer long lasting products
having minimal trouble. Product durability is thus a very dominant
appeal. People are willing to pay the premium too for long lasting
quality products - E.g., BOSE Headphones v/s ordinary, Dura Cell,
Amaron car batteries.
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2. Emotional Appeals
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Direct and Indirect Appeals are another way of classifying ad appeals based
on its being linked directly or indirectly with consumer needs. Sometimes
advertisers are explicit about the need to which they are appealing,
whereas at other times, appeals are veiled or purposely kept ambiguous,
and the consumer has to determine the relevance of the appeal to him.
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Direct Appeals
Direct appeals are those that clearly communicate with the consumers
about a given need, followed by a message that extols the advertised
brand as a product that satisfies that need. In Industrial advertising, some
ads may have a direct appeal, satisfying the customer's technical need; but
in consumer advertising, the direct appeal plays a very limited role.
Examples of direct appeal ads for consumer products are rare – Snickers
Chocolate writes “Hungry Kya?”
Indirect Appeals
Indirect appeals are those that do not emphasize a human need, but allude
to a need. Because advertisers understand the influence of needs upon
selective perception, they leave some ambiguity in the message so that the
consumers may be free to interpret it and the need to which the advertiser
is appealing. Since this interpretation of the consumer is not difficult, there
is no risk involved in keeping the ambiguity in the message.
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need of belts or strings or pins. How ‘convenient it is’, taking away all
botheration of women!
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Selling points are those product attributes that are listed in the
advertisement copy to impress upon the consumer the significance of a
product to him. These could be specifications, quality statements,
composition statements, descriptive or narrative or performance
statements. Some selling points are primary selling points and the rest are
subsidiary selling points. Selling points in order to be effective must have
the force to appeal to a particular buying motive. So selling points
successfully touch upon the buying motives. Thums Up soft drink’s selling
appeal is Aaj Kuch Toofani Kartey Hain, which in a way affects your buying
motives of having great fun. Mountain Dew says Darr Ke Aagey Jeet Hai
which appeals to our buying motives of enjoying adventurous moments
with the team.
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Activity C
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6. Slice of Life: Real life problem is shown being solved by the brand –
bad breath.
9. Fantasy: It’s a style where a product becomes the central part of the
fantasies-based situation created by the advertisers – Cosmetic ads.
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This chapter on Communication and Persuasion covers all the tools / topics
mentioned above in addition to (i) Uncontrolled communication, (ii)
Corporate communication, (iii) Communication model, (iv) Promotional
tools and Consumer response, (v) Interpersonal v/s mass communication,
and (vi) Role of marketing communication.
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a. an order
b. an enquiry
c. references
d. feedback
a. Marketing communication
b. Personal selling
c. Advertising
d. None of the above
a. Advertising format
b. Buying motive
c. Advertising
d. Advertising appeal
a. Decoding
b. Development
c. Demand
d. Desire
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a. AGMARK
b. AIDA
c. DAGMAR
d. None of the above
Answers:
1. (d)
2. (a)
3. (c)
4. (d)
5. (d)
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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GROUP INFLUENCE AND CONSUMER REFERENCE GROUP
Chapter 10
Group Influence and Consumer Reference
Group
Objectives
Structure:
10.1 Introduction
10.2 What is a Group?
10.3 Types of Groups
10.4 Marketing Applications of Reference Groups
10.5 What have you Learnt – A Summary
10.6 Self Assessment Questions
10.7 Multiple Choice Questions (MCQ)
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10.1 INTRODUCTION
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Activity A
Identify and list the various groups you belong to – personal, professional,
social and others.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
There are various ways in which groups can be classified – say on the basis
of several criteria like the structure of the group, hierarchy in the group,
membership or size. Though size is an important criterion, the largeness or
smallness is a relative concept. When a person happens to know only a
few from the members of the group, the group can be considered a large
group. Sometimes our knowledge regarding the activities or roles of
members is limited to a few members. As against this, in a small group,
everyone knows everyone else and is aware of what others are doing. In
consumer behaviour, we deal with such small groups because these very
groups affect the buying behaviour of their members.
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Formal versus Informal Groups: A formal group is one where the group
purpose is defined, structure of the group is hierarchical and roles and
responsibilities of individuals are clear – A housing cooperative society or
employees’ union is a formal group.
A symbolic group does not offer formal membership, though a person acts
like a member by accepting its norms. To an amateur golfer, professional
golf club members are like a symbolic group.
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Activity B
Primary Groups
…………………………………………………………………………………………………………………………
Secondary Groups
…………………………………………………………………………………………………………………………
Formal Groups
…………………………………………………………………………………………………………………………
Informal Groups
…………………………………………………………………………………………………………………………
Membership Groups
…………………………………………………………………………………………………………………………
Symbolic Groups
…………………………………………………………………………………………………………………………
Consumer-relevant Groups
The family: We shall study the influence of family in the next chapter. A
family as an institution has the greatest effect on our buying behaviour.
However, briefly, an individual’s family is in the best position to influence
his or her consumer decisions due to frequency of contact with other family
members and the extent of influence that the family has on the
establishment of a wide range of values, attitudes and behaviour.
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Formal Social Group: Formal social groups like Lion’s Club have influence
on the buying behaviour, because members of such groups informally
discuss products, services and distribution outlets. They have a strict code
for members’ selection. An individual thus likes to be associated with such
formal groups to convey his social status. Such groups also have the power
of membership, thus it can command a better deal say with tour operators,
consumer durable manufacturers and more. They themselves organise
displays, demonstrations and talk shows for their members, thus
influencing the participating members considerably.
Shopping Group: Shopping groups are groups with people who shop
together. They are the extensions of either family or friends. A shopping
group provides a sense of reduced risk to the members as buying becomes
a group decision. It gives an assurance as collective information and
knowledge and in many cases even experience is pulled together before
making a decision. Shopping done in the congenial atmosphere of
preferred company is conducive to buying.
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Reference Groups
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It is natural for a human being to live beyond his physical needs. He can’t
live alone, thus seek the company of others to become aware, to protect
him and to enhance his identity. There is a tendency to evaluate himself
either through non-social means or by comparing himself with the opinions
and abilities of others.
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!
Fig. 10.1: Referents for a Consumer
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It is thus clear that two variables namely (1) nature of influence and (2)
membership, determines the nature of groups you belong to and its
influence on you. The same is plotted on a two x two matrix table below for
your better understanding.
Table 10.1
Both, the individual and the product determine the influence of the
reference group on buyer behaviour. So do the specific social factors. We
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We wear formal clothes in office, but informal jeans and T-shirts at parties.
We may wear jeans and a t-shirt when we go to a temple but we wear
dhoti and kurta when we go for post-death rituals of a close family
member.
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2. Provide the individual with the opportunity to compare his or her own
thinking with the attitudes and behaviour of the group.
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Celebrities
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The Expert
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Common Man
Executives
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It has two fold advantages. It increases the awareness of the brand and
reduces the perceived risk in purchasing a specific product.
Reduced Perceived Risk: The use of reference group appeal also helps to
lower the perceived risk in the minds of prospective consumers. An
advertiser is able to overcome the risk perceived by bringing in a celebrity,
an expert or a common man in such a manner that their testimony,
endorsement will make other prospective customers believe in your
product and unwarranted apprehension is overcome.
Activity C
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The study of groups and their impact on individuals in terms of their buying
behaviour is of great importance to marketers. So far we have considered
only the individual factors influencing a consumer. A group is defined as
two or more people who interact to accomplish either individual or mutual
goals. Each group has a unique ideology. It distinguishes it from other
groups. Man rarely lives in isolation. Hence, most social behaviour takes
place in the context of social groups. There are four essential
characteristics of a social group: (i) A physical collection of people, (ii) A
recognizable structure (common interests, ideas, etc.), (iii) A pattern of
interaction and (iv) a social relationship.
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Reference group concept and the broadened scope covers more about
Group Influence and Consumer reference groups, particularly factors
affecting reference group influence. We also understand about use of the
reference group concept in promotion of goods and services along with
Celebrities, Experts and the Common man. People react favourably and
positively to the association of a celebrity with the product. They can give
testimonials, endorse or act as a spokesperson. In this context, the
credibility of the celebrity is important.
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a. A family
b. An organisation
c. A group
d. A caste
a. primary group
b. formal group
c. secondary group
d. advance group
a. friendship group
b. work group
c. social group
d. reference group
a. Contractual group
b. Aspirational group
c. Disclaimant group
d. Avoidance group
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a. life drama
b. slice of life drama
c. slice of life
d. none of the above
Answers:
1. (c)
2. (b)
3. (d)
4. (a)
5. (c)
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !383
THE FAMILY
Chapter 11
The Family
Objectives
Structure:
11.1 Introduction
11.2 Functions of the Family
11.3 Family Decision Making
11.4 The Family Life Cycle
11.5 The New Urban Family (NUF)
11.6 Role of Women
11.7 What have you Learnt – A Summary
11.8 Self Assessment Questions
11.9 Multiple Choice Questions (MCQ)
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11.1 INTRODUCTION
To understand how the family makes its purchase decisions and affects the
future purchase behaviour of its members, it is useful to understand the
functions provided and the role played by family members to fulfil their
consumption needs.
Exposure to family life right from birth has a significant effect on consumer
behaviour. Conventionally, a family means two or more persons, related by
blood, marriage or adoption who resides together. A family, however, is the
basic collective social group living together and interacting to satisfy their
personal and mutual needs.
In India, we traditionally had the Hindu Undivided Family (HUF) also known
as joint families, consisting of some three generations living together.
Thus, we see grandparents, their sons and unmarried daughters, and the
children of the sons living together. Male members were responsible to
learn and earn. Post studies they either joined the family business or
pursued their own business or joined as an employee in some government
department, public sector companies, banks or private organisations.
Female members were more so supposed to look after the household
chores, with less focus on studies and were married off at an early age.
The male earning members contributed to the family kitty. The eldest male
member would generally be the head of the family or karta. The joint
family system is a good cushion against economic insecurity and emotional
well-being. However, it fosters inefficiency amongst its members. With
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Four basic functions offered by the family structure are particularly relevant
to marketers as it influences consumer behaviour and the same is covered
as under:
Economic Well-being
Inherent structural provision of financial means to its dependents is the
most primary family function. Structurally, there is/are bread earners and
dependents. Young working male (husband) is generally a bread earner
while wife, children and parents are dependents. However, this
responsibility for the provision of economic well-being has changed
considerably as even wives have started sharing this load. Kids are still
expected to focus on completing studies and get a rewarding job. Till that
time, parents either support completely or teenage children start doing
some flexi-work to generate additional source of income, primarily to
support their growing expenditure.
Emotional Support
By virtue of its structure, the provision of emotional support to its
members is an important function of the family. Here encouragement,
inspiration, motivation, skill development, education, hobby nurturing, etc.,
are supposed to be so interwoven that each individual’s emotional and
mental support needs are taken care of. If the family can’t provide the
required support, then they seek professional support such as daycare by
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THE FAMILY
double income parents, or tuition classes for studies. Thus family takes
decisions based on their knowledge and thus it is similar to other types of
consumption decisions being made by the family.
In the process of socialization, children receive their basic values (moral &
behavioural) and code of conduct in keeping with their culture. Our
grooming starts with teaching of religious practices and interpersonal skills.
We also learn how to dress well, groom ourselves, good etiquette (dinning
etiquette and more) and manners. We decide what our career would be
and how to grow up as responsible citizens. Socialisation is both direct and
indirect. Direct instruction comes from the parents. Indirectly, we learn by
observing the behaviour of our parents and other siblings. Socialisation is
the foundation on which the later experiences in life are placed one by one.
Marketers target parents often to influence socialization.
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Activity A
List the name of all your family members and identify at least two
functions being handled by each one of them as per the above
understanding.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
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After recognising the family as the basic decision making unit, marketers
most frequently examine the attitudes and behaviour of the one family
member whom they believe to be the major decision maker. What later
emerged was duality in role – one who uses it may not buy it. Personal
care products for teenage daughter are often purchased by mothers either
under brand as instructed by the daughter or what mother feels is right. In
such a scenario, it is essential for marketers to read and understand both
of them to get richer picture of their consumption process.
Family Role
Each member of a family performs some task either alone or together with
others. Traditionally each member’s roles and responsibilities were defined
within the societal context. However, in this 21st century, new roles are
being performed, shared by every member of the household. As a result,
marketers must be sensitive to the fact that how this shifting role pattern
may affect their markets. So let’s first understand key family roles.
! !389
THE FAMILY
Which role will be performed by whom, is a matter that varies from family
to family. A single family member may perform several roles. A single role
may be performed by more than one family member. In some situation, we
may not need some of these roles. A teenager may borrow a book from the
library. He may do so of his own accord, without getting influenced by
others. He himself is the decider, the buyer (one who hires or borrows) and
in one sense, the gatekeeper. But once a borrowed book enters the
household, he alone may not use it. Several other members may share
the book with him. Some products are used by several family members,
e.g., Amul butter or Dove soap. Some products are meant for the whole
family, e.g., furniture in the living room or a common TV set in the hall.
While deciding jointly, the husband and wife team generally attempts to
influence each other so as to arrive at what they perceive to be the best
decision. There are six influence strategies which we come across.
! !390
THE FAMILY
These strategies are adopted when there are conflicts and disagreements
with the other spouse. We know how different family members have
different preferences for the car to be purchased.
Experts
Impression Legitimacy
6
Influence
Strategies
Emotional Bargaining
Reward
! !391
THE FAMILY
model is a joint decision with an equal say for both the spouses. The
decision of the colour of the car is wife-dominated.
Children’s Influence
Children put forward their own demands as soon as they acquire talking
skills. They need all kinds of toys, crayons, chocolates and toffees. As they
grow, they start participating directly in the consumption process. They
influence the purchase decisions of a home PC, a music system, a video
game and a holiday destination. When parents make a purchase according
to the bidding of their children, they have a sense of fulfilment.
Children who remain at home after the school-hours while their parents are
on the job are specially targeted by marketers. Teenagers are more
interested in sportswear, T-shirts, denim clothes, mopeds, deo sprays,
perfumes, entertainment, and fitness products. They themselves are the
buyers of a large number of products and services. They also influence the
parental decisions. Besides, their age is impressionable. The consumption
pattern they learn spills over to their adult life. College-going children have
their peculiar needs. They are interested in books, personal clothes and
fuel for their bikes. They attend discos and concerts. They like to spend
holidays at some exotic place. They develop brand preferences and
shopping habits more firmly. Mothers and daughters tend to share many
! !392
THE FAMILY
brand preferences and shopping habits. But outlooks do differ about broad
beliefs regarding the market such as price-value-equation between them.
Collegians are not only current consumers, but also the potential future
ones. ‘Teens Today’ reaches this vital segment. FM channel programmes
also address the needs of this segment.
Child Models
Kids were used to model for products aimed at children. They are now
modelling for a lot of products unconnected with children, like fridges, TVs,
toothpastes, investment schemes, soaps, etc. Children have a certain
appeal and a charm. They attract more attention. Besides, advertising is
now directed to a household or a family. The child is, therefore, the best
medium to put the message across. Children evoke pure feelings –
innocence, goodness, freshness, nurturing, caring, and impulsiveness. The
parent-child bond is used to convey the bond between the product and the
user. The feelings evoked are used by advertisers.
Activity B
Children as Influencers
! !393
THE FAMILY
In other words, FLC describes how the family gets formed and finally
dissolves.
! !394
THE FAMILY
1. Young and single bachelor stage: The career has just started.
However, in the absence of responsibilities, they have a higher
disposable income. They tend to buy personal consumption items of
food and clothing, are fun-loving, be with friends and colleagues and
busy with occasional entertainment, may add to their ownership, capital
goods like 2-wheeler, car; have time to be on more frequent short
vacations and tours, indulge in flirting and look around for a life partner,
establish their own personality with chosen brands and recognition
providing accessories.
3. Young married with child directs their income to bringing up the child.
They buy toys, medicines, tonics, baby foods, formula milk etc. They cut
their expenditure but spend the most on giving their child the best, best
of care, schooling, educational support, skills development, grooming
and more.
4. Older, married with children are fairly stable income wise. They like
food products, music, educational services and a wide variety of other
products. They not only want to take care of their needs, wants, desires
but work their way to fulfil other family commitments.
! !395
THE FAMILY
! !396
THE FAMILY
Middle-
aged
divorced
without
children
Middle-
Young aged
divorced married
without without
children
Middle-
Young Young Middle- aged
Young married married aged married Older Older
single* without with married without married* unmarried*
children* children* with dependent
children*
Source: Patrick E. Murphy and William A Staples, “A Modernised Family Life Cycle”,
Journal of Consumer Research, 6th June 1979, 17 Picture Credit: 2003 McGraw-hill
Companies, Inc., McGraw-Hill/Irwin
Young, Married, with Child and Dual Income: Here both the husband
and the wife work, and get dual income for their household. The pace of
life is faster and there is less time for children and also for one another.
The consumption pattern therefore shows preference for convenience
goods like washing machines, grinder-mixers, rice cookers, roti maker, etc.
Women manage on two fronts – domestic chores and work. Husbands
share the responsibilities of running the house to some extent. Instant
foods, crèches, etc., appeal to such families. To compensate for the time
! !397
THE FAMILY
babies miss with parents, there is a tendency to buy costly garments for
kids, games for kids, prams, etc. as well as take them out during the
weekend.
Single Parent Families: The single parent family needs security and buys
all the products that offer physical, psychological and financial securities –
e.g., door video, toys, insurance, government schemes, etc. When the child
grows, he may be put in a boarding school/public school so single parent
can look after generating economic resource.
Divorced: They buy from places where money can be saved, stay in lease
or rental housing, childcare, time saving appliances, instant foods. They
are short of cash.
Older people, Married or Single: They are age-wise older, still single or
married, thus dependent on others, not with sufficient cash, and health-
conscious. They essentially need security. They also need recreation to
spend their time.
! !398
THE FAMILY
Table 11.1
Product Segment
i. Cosmetics Young single and young married women who are cash-rich are
a potential segment for beauty products like face creams,
moisturizers, compacts, foundation make up, etc.
ii. Vacations Middle-aged families need facials, sauna baths and such
related products. Newly married couples are sold vacations at
the time of marriage in the form of honeymoon packages.
Middle-aged couples with no responsibility of children are the
most attractive segment to sell vacations in the form of
packaged tours. They are cash-rich and free from
encumbrances.
iii. Housing Young, married with children need starter housing.
Middle-aged couples need housing – two bedroom flats, etc.
Bachelors need liberal and professional education. They are
career-minded. They can be sold courses like private secretary,
computers, etc.
iv. Education Middle-aged with children buy education for their children -
home tuitions, coaching classes, public schools, etc.
They buy education for self also to improve their career – e.g.,
distance education programmes of IGNOU
Activity C
Highlight segmentation for the electronic diary using the FLC concept.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
! !399
THE FAMILY
The emerging buying unit of a marketer is the new urban family which is
far more important than even an individual buyer. It is important to
understand the role of each individual and various responsibilities which
characterises them. Today’s individuals believe in balancing their own
individualism and the family traditions. New generation is fascinated by
age-old customs like the mehandi ceremony, elaborate sangeet evening,
vocational opportunities being available to them, fun at home and with
friend, social responsibilities and looking to make a difference to the
surroundings in which they live. Youth think that they are understood
better by their friends than their parents. As a result, marketers need to
localise their marketing mix including campaign and communications.
In the urban family, the mother plays a pivotal role, and is the most
admired member of the family. Women empowerment is enabling lots of
possibilities for marketers to tap into.
! !400
THE FAMILY
! !401
THE FAMILY
! !402
THE FAMILY
5. What role a new age woman can play in consumer buying decision?
! !403
THE FAMILY
a. Emotional support
b. Suitable family lifestyle
c. Economic well-being
d. Family member socialisation
a. sophistication
b. economisation
c. modernisation
d. socialisation
3. This family member as per the roles of the family members is known as
______________, who controls the flow of information about
consumption items into the family. Fill in the blank.
a. decision maker
b. gatekeeper
c. influencer
d. none of the above
! !404
THE FAMILY
5. There are six spouse influence strategies which we come across. In one
of the strategies, the decision is legitimized on the basis of position in
the family. Identify the strategy.
a. Emotional
b. Reward
c. Bargaining
d. Legitimacy
Answers:
1. (c)
2. (d)
3. (b)
4. (a)
5. (d)
! !405
THE FAMILY
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !406
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Chapter 12
Social Class and Consumer Behaviour
Objectives
Structure:
12.1 Introduction
12.2 Social Class Categories
12.3 The Measurement of Social Class
12.4 Consumer Survey – India’s Rich
12.5 What have you Learnt – A Summary
12.6 Self Assessment Questions
12.7 Multiple Choice Questions (MCQ)
! !407
SOCIAL CLASS AND CONSUMER BEHAVIOUR
12.1 INTRODUCTION
Social classes are open-ended, and people from one social class can aspire
to move to a higher social class. As opposed to this, the caste system
prevalent in India is closed-ended. A caste is an endogenous group. We are
born and we die in the same caste. We also marry within the same caste.
Caste system does not provide any opportunity to move upwards. Class
mobility is more on account of industrialization and urbanization.
Marketers can make use of social classes in segmenting the market. Each
social class has certain shared values and attitudes, and shows certain
characteristic preferences. This helps the marketers to understand
consumer behaviour. Each social class serves as a frame of reference. It
shapes the behaviour and attitudes of its members. A sense of belonging
stimulates the consumer to look up to the social class for behaviour norms.
Lower classes aspire to imitate the behavioural patterns of the higher
classes.
! !408
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Social classes are often measured in terms of social status – i.e., amount
of status the members of a specific class have in comparison with members
of other social classes. Status has evolved considering three factors like
wealth, power, and prestige.
! !409
SOCIAL CLASS AND CONSUMER BEHAVIOUR
! !410
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Table 12.1
3 Upper-Middle Larger than the above two classes. Well-off financially. Income
above average. Moderately successful professionals and
businessmen. Emulate the upper classes. Degree of success
puts a dividing line between them and the two upper classes.
Yet another way to classify could be top class, middle class and lower class
based on their income level.
! !411
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Systematic approaches for measuring social classes fall into the following
broad categories – subjective measures, reputational measures and
objective measures. We can briefly understand them, as covered in the
following paragraphs.
Subjective Measures
Reputational Measures
The reputational approach for measuring a social class takes the help of
informants to make judgements concerning the social class membership of
others within the community, rather than themselves.
Objective Measures
Objective measures of social classes get further divided into two basic
categories – Single variable indexes and Composite variable indexes.
! !412
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Single Variable Indexes: A single variable index uses just one socio-
economic variable to evaluate social-class membership. Some of the most
popular variables are Education, Income, Employment, Ownership, and Net
worth. Interestingly, when two individual variables are matched and plotted
differently, one composite matrix can emerge such as Occupation and
Income. When these two variables are combined, it can give an interesting
and powerful index.
Activity A
Define five variables each for single variable indexes and three
combinations of two variables each on which you can develop a composite
variable index.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
! !413
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Table 12.2
SEC Classification of India
Unskilled E2 E2 E2 E1 D D D D
Worker
Skilled E2 E1 E1 D C C B2 B2
Worker
Petty Trader E2 D D D C C B2 B2
Shop Owner D D D C B2 B1 A2 A2
Businessmen/ No D C C B2 B1 A2 A2 A1
Industrialist– ne
(No. of
employees) 1-9 C B1 B2 B2 B1 A2 A1 A1
10+ B1 B1 B1 A2 A2 A1 A1 A1
Self Employed D D D D B2 B1 A2 A1
Professional
Clerical/ D D D D C B2 B1 B1
Salesman
Supervisory D D D C C B2 B1 A2
Level
Officers/ C C C C B2 B1 A2 A2
Executives
Junior
Officers/ B1 B1 B1 B1 B1 A2 A1 A1
Executives –
Middle/Senior
! !414
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Table 12.3
SEC Classification of India - Rural
Graduate/Postgraduate (General) R1 R2 R3
Graduate/Postgraduate (Professional) R1 R2 R3
Note: Four Socio-economic Classes have been labeled as R1, R2, R3, and R4.
R1: Upper most Class.
R4: Lowest Class
! !415
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Table 12.4
! !416
SOCIAL CLASS AND CONSUMER BEHAVIOUR
higher class, higher middle, middle-middle, lower middle, lower class and
likewise.
As per one estimate, when India’s total population was 800 million, India’s
middle class number was at 250 million (urban and rural included). For
many years, companies considered this has a homogeneous class and
designed their marketing programs accordingly. Later, with more use of
consumer buyer behaviour, it was discovered that within this class,
consumer behaviour depended on their income level. Not only that, besides
income level, it is the purchasing propensity that is important – those
having same income may show a different propensity to buy and thus the
difference in their purchasing potential. Purchasing propensity also gets
driven by other factors like social, cultural and regional.
! !417
SOCIAL CLASS AND CONSUMER BEHAVIOUR
! !418
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Lower classes and lower middle classes provide 60% of the value of the
Indian market; whereas this figure is 10% for the upper income group.
About 60% of the value of the market lies in rural India and 40% in urban
India. Middle income growth was 18% in the eighties but has slowed down
to 3% in the nineties.
Activity B
Write your brief thoughts on how social class influences consumer buying
behaviour in India.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
! !419
SOCIAL CLASS AND CONSUMER BEHAVIOUR
The first category is that of The Rich having income greater than ` 5 lakh
per annum. Total households having such income are 10,58,961. Mostly,
these people are upwardly mobile. Some of these are DINK or ‘double
income no kids’ households. They spend more on leisure and
entertainment – activities, than on future-looking investments. Across the
category, backgrounds are distinctly middle class. They aspire, therefore,
to attain the super-rich status.
The super-rich have an income greater than ` 10 lakh per annum. Total
number of households is 3,20,900. There are less DINK families here than
in the rich category. Mostly, they are professionals. They are devoted to
consumerism. They buy many durables. They are first time purchasers of
foreign holidays. They are status-conscious.
The Ultra-rich category has an income greater than ` 20 lakh per annum.
The number of households is 98,289. There is no typical profile of the
ultra-rich. There are some DINK households of middle-level executives.
Some single earning households are of first-generation entrepreneurs.
Some rich farmers belong to this category. They have been rich for some
time.
! !420
SOCIAL CLASS AND CONSUMER BEHAVIOUR
The Obscenely-rich earns more than ` 1 crore per annum. There are hardly
6515 such households. They are first-generation entrepreneurs who have
made it big. A variety of people belong to this category. They are just
equivalent to the rich in the developed countries. They crave for exclusivity
in what they buy. Most premium brands are relevant to them.
Methodology
They are a profitable niche, which is expanding fast. These segments are
quicker to adopt consumer habits considered premium. Stereotypes are no
guide to marketing. Exotic perfumes have been sold to the stereotyped
South Indian who is quite traditional. If there is value, consumers do not
mind paying a premium. Rising income means less expenditure on
household products, and more spending on out-of-home activities. Social
acceptance and status are powerful drivers. Many offerings lose their
impact of being premium over a period of time. Some categories are
premium for different income groups. There are variations in the choice of
categories however, for different income groups at times. We cannot
generalise while marketing to the rich. We have to understand their need
for ‘specialist’ products, personal grooming, and concern for fitness.
Middle Class
! !421
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Table 12.5
Take Home Packet Per Annum
Low income households are poor, and high income households are very
rich. The other three categories are lower middle income, middle income
and upper middle income. They add up to 60.5 million households. The
following is their distribution in population.
Table 12.6
! !422
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Social classes are the strata in the society. It makes the society
hierarchical. Social classes group people status-wise. Each class has people
having more or less the same status. Social classes are open-ended and
people from one social class can aspire to move to a higher social class. As
opposed to this, the caste system prevalent in India is closed-ended. Each
social class has certain shared values and attitudes, and shows certain
characteristic preferences. This helps the marketers to understand
consumer behaviour. Each social class serves as a frame of reference. It
shapes the behaviour and attitudes of its members. This chapter on Social
Class and Consumer Behaviour deals with, among others: (i) Categories of
social classes, (ii) Status Symbols of Teenagers, and (iii) Classes (top class,
middle class and lower class) and purchasing (each class has its own
consumption pattern). The methodology and findings of the first ever
Consumer Survey of the rich conducted by NCAER in 2001 has been shared
in this chapter. Rich are a profitable niche which is expanding fast. Low
income households are poor and high income households are very rich. The
middle income categories (lower middle income, middle income and upper
middle income) constitute 60.5 million households. It is a useful surrogate
for middle class.
! !423
SOCIAL CLASS AND CONSUMER BEHAVIOUR
! !424
SOCIAL CLASS AND CONSUMER BEHAVIOUR
a. Class divide
b. Religion divide
c. Income divide
d. Social stratification
a. a taboo
b. the strata
c. not avoidable
d. the system
a. social classes
b. caste system
c. caste beliefs
d. none of the above
a. reliable measures
b. reference measures
c. relative measures
d. reputational measures
5. Overall spending habits are not driven by the income of households but
by the class to which they belong. Thus it became essential to develop a
composite variable index for India namely_______________ . Fill in the
blank.
! !425
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Answers:
1. (d)
2. (b)
3. (a)
4. (d)
5. (c)
! !426
SOCIAL CLASS AND CONSUMER BEHAVIOUR
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
! !427
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Chapter 13
The Influence of Culture on Consumer
Behaviour
Objectives
Structure:
13.1 Introduction
13.2 What is Culture?
13.3 Characteristics of Culture
13.4 Advertising and Cultural Values
13.5 Measuring Culture
13.6 India’s Core Cultural Values
13.7 Global Advertising
13.8 Internationalisation of Advertising
13.9 What have you Learnt – A Summary
13.10 Self Assessment Questions
13.11 Multiple Choice Questions (MCQ)
! !428
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
13.1 INTRODUCTION
! !429
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
The belief and value components covered in our definition refer to past
knowledge and experience led feelings and thus priorities that individuals
have about ‘things’. Belief refers to knowledge based conclusive realisation
either hidden in mind or expressed verbally (as I believe.....statements)
about something (person, a store, a product, a brand). Values are also
beliefs. What differentiate values vis-a-vis beliefs are criteria such as: 1.
they are limited in numbers, 2. they are enduring, 3. widely accepted, 4.
free from any bonding 5. and guide culturally appropriate behaviour.
From consumer buyer behaviour perspective, values and beliefs are mental
images that influence an individual’s specific attitudes, which determine the
way a person is likely to respond in a specific situation such as evaluating
two brands of cars like Scorpio and Duster. The person’s eventual decision
regarding these brands gets influenced by his values (e.g., what he knows
about the quality, workmanship) and specific beliefs (e.g., particular
perceptions about Mahindra’s quality, workmanship vis-a-vis Renault’s
quality and workmanship).
! !430
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Activity A
Select a caste of your choice and list the culture, beliefs, values, customs
and attitudes below.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Many times culture has so naturally impacted us that we are not even
aware. We just follow as we see others doing it that way. Often when such
! !431
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
behaviours are questioned, the answer would be ‘because it’s the right
thing to do and most others do it that way’. In certain cultures it is
essential to take a bath everyday but in other cultures it is not likewise.
Only when you know more about the other culture, you will come to know
what impacted your seemingly routine bahavior.
Culture is Learned
Our physical characteristics are the result of our biological DNA (skin
colour, eye colour, hair colour, intelligence, etc). However, culture is not,
and it is acquired through learning. Right from our birth we begin to
acquire our set of beliefs, values and customs that give us our culture.
! !432
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
to quickly take the i-pill as she informs her about the mistake she just
made. This advertisement provoked a shift in the minds of traditional
Indian mothers to be practical instead of considering it as a sin and do
nothing.
! !433
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Because the human mind can process symbols, it is possible for a person
to ‘experience’ an advertisement for a product and conclude the desired
meaning. Marketers have used this opportunity both positively as well as
negatively, such as for surrogate advertisement of liquor.
! !434
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Culture is Shared
A particular belief, value or practice must be shared by a significant portion
of the society to be considered as a cultural characteristic. What is
practised by a group as a custom provides for a cultural linkage. Common
language enables value, experience and custom sharing. Culture sharing
gets magnified when practised by family, school, colleges, places of
worship as well as mass media and it supports its transfer.
! !435
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Culture is Dynamic
Indian advertising has understood such aspects very well – the HDFC Life
‘Sar Utha Ke Jiyo’ advertisement in which it is shown that when you retire,
you will not have to be dependent on any one, diamonds are gifted by
parents to their children, emotional marriage cantered ads, Dabur
Chyavanprash ad ‘Saanth Saal ke Budhey Ya Saanth Saal ke Javaan’ are all
a reflection of strong cultural values we have regarding certain aspects of
our life.
! !436
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
On the other side, Indians have been lured by adventurous ads (Mountain
Dew), Healthy hair (Parachute Advance), Youthful bank (Deepika Padukone
in Axis bank ads).
Also, we feel changing ourselves when we see ads like Levi’s denim; Marks
& Spencer’s clothing line, etc.
Activity B
List how advertisements are linked to culture. List one advertisement which
has a strong cultural connotation and explain why you think it does.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Content Analysis
Using this approach, efforts are made to analyse the content presented in
verbal, written and pictorial messages either in print, audio or video
format, covering longer past period to derive conclusions about a society,
or specific aspects of a society. Lux soaps advertisements of yester years
using heroine were not as glamorous as today, thus symbolising the
changing importance of glamour in Indian culture. It can cover specific
! !437
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Consumer Fieldwork
However, such a survey just indicates trends but its relationship between
people’s values and their actions as consumers is still in its infancy. There
are various instruments within this approach available.
India has its own core cultural values which affect and reflect its character.
India encompasses a number of subcultures, each having its own cultural
values. Indian society is evolving to world environment and embracing
cultural transformation. Its transformational alignment creates
contradictions such as, in India nuclear family is now considered as normal
but at the heart of it family value is still strong. Indians want to adopt
! !438
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
foreign products and services but still want to retain their original choice as
it is.
Core values of any society can be selected based on three criteria like
value being pervasive, enduring and must be consumer-related.
Some of the core cultural values identified for Indians are – family virtues,
respect for family hierarchy, bonding, religion, faith, caste based
marriages, belief in karma (hard work), freedom seeking, being liberal,
belief in monogamy, joint gathering, open to transition, spirituality, caste
based culture, adoption of a wide array of products and services, tolerance
and patience, equal opportunities for all, philanthropic nature, freedom of
individuality, appreciation for skills, music and art.
There are certain cultural aspects that are taboo – like in nature, like
punctuality, lack of process centricity, casualness, lower tolerance to stress
level, low on gratification, inequality, poor discipline, social values and
more.
Subculture
India is such a country where there is unity in diversity. Within the same
society, we have different subsets of cultures which itself have their own
distinct cultural values, and beliefs and thus constitute what is known as a
subculture. These subcultures have been here since centuries and thus
shared values are transmitted from generations to generations. These
subculture sets conform to many norms of the dominant culture. When
these norms become incompatible, they deviate and form their own
subsets of values and beliefs.
! !439
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
regions in India have a clear divide of subculture like North Indians, South
Indians, East Indians. Caste continues to be the dominant criteria for
subcultures, such as Brahmins, Vaishya, etc. In India, even caste and
regions generate another subculture such as Vadnagar Brahmins,
Kokanastha Brahmins, so on and so forth. Other criteria for subculture
formations could be gender, age, social class, income disparity, etc.
Table 13.1
Subcultural Categories
! !440
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
MTV released its latest study in India called 'Tuning into the Indian Youth -
Sources of Cool' - it put a face to the young side of India.
The survey looks into the mind of a generation that is a peculiar mix of the
shy and the confident, the decisive and the uncertain. A generation who
thinks A. B. Vajpayee is the coolest politician (25% gave him the thumbs
up) but voted Laloo Yadav into a close second (12%) in the cool politician
category. It is a generation for whom, the coolest place to hang out is not a
pub, not a restaurant, not a theatre - but college. And the coolest sport is
still cricket - 51% of the respondents said so.
The MTV study, which was conducted by IMRB, covered respondents from 6
metros between the age of 15 to 24, had a sample size of 1619
respondents from SEC A1, A2, B and C households, with cable and satellite
availability and claimed viewership of music channels for at least 30
minutes a week. The study divided the young audience into five
psychographic segments: the homebodies, the two-faced, the wannabes,
the rebels, and of course, the cool guys.
The homebodies formed 16% of the total youth audience, though their
share has reduced. They are the largely traditional segment of the youth
who have duty and morality at the core of their values. They have very few
aspirations for themselves and are uneasy with the opposite sex. This
sixteen percent of the youth population is focused on education or a job,
but not on a career.
Then there are the two-faced, another 16% of the target segment, who are
inwardly traditional, outwardly modern. Here is where body tattoos co-exist
with Kyunki Saas bhi Kabhi Bahu Thi. Here is the guy or girl whose icons
may vary from Mother Theresa to Ricky Martin, Amitabh to Vajpayee. The
two-faced have a need to enjoy life to the fullest, but are ultimately willing
to settle down to a perfectly conservative lifestyle.
The study found that the largest cluster (25%) were the 'wannabes',
materialistic show offs, desperate to be part of the crowd, extremely
competitive, frenetic trend-followers whose icons range from Eminem to
Daler Mehendi. The rebels, at 23% form the second largest cluster. They
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THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
are the ones who look up to Bal Thakeray and Laloo Yadav, whose values
are all centred around two important words - breaking free.
Twenty per cent of the target segment were the Cool Guys, the influencers,
the work-hard, play hard, confident types who love everything that has a
label.
The MTV study showed that youth today are far more aggressive, far more
independent, have a positive attitude to life, hate losing even in
competitive matches and focus a great deal on personal care and
grooming.
Earning money while studying is in. Also, close to 43% believe that if you
choose a career that pays you well, it doesn't matter if you don't really
enjoy the work. They know problems exist, but don't want to hear of them
and would rather find a way around them.
It's life in the fast lane; pressures are good and even something to boast
about. But, 55% agreed that most of the time life should not be taken too
seriously. They are smart enough to say no to drugs, but alcohol
consumption is no longer taboo even among homebodies.
A majority of 39% of the sample agreed that couples should live together
before getting married, and 42% said that they believed that marriage
stifles.
Surfing the net and chatting is in. A fashion, a label or a trend is in until
'everyone is wearing it'. Revealing outfits are in when out with friends, and
it is always lenses over spectacles. For the Cool Guys there are some must
haves among which are - lots of cash, small and latest mobiles, a credit
card and a trendy sports watch.
According to the survey, Hritik is the coolest actor, Aishwarya, the coolest
actress and Sachin Tendulkar the coolest sportsperson with barely any
competition.
! !442
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Track him as he transits from tradition. The NUF Man is changing in three
ways as a result of family forces:
The stereotypical hunter-the provider for the family-is giving way to the
power-sharer, who is no longer the sole authority by virtue of being the
only earning member of the family. As Man P:SNAP, 1997, points out, the
proposition of the working woman as wife-with the rider that children do
not suffer-is acceptable to the man (score: 4 on a 5-point scale).
The veto power on purchases that flows from the status of the sole bread-
earner is being diluted. Since the woman and the children in the NUF are
able to finance many of their own purchase-decisions, what the man is
being compelled to provide is approval--not rejection. Claims Sonia Pal, 29,
Group Project Manager, MBL Research & Consultancy Group: "The extent to
which he exercises his traditional veto power is falling too." But, as Man
P:SNAP, 1997, points out; the transition is creating its own tensions as the
male tries to adjust to the new power equations within the family.
As his original source of authority gets eroded, the man is being forced to
raise himself in the esteem of his wife and children through other means,
such as his personal appearance. Agrees ORG-MARG's Gupta: "The man's
attitude towards his grooming is changing.”
Explains Asit Mehra, 39, International Client Director, APL: "Mr Mom as an
attitudinal entity was non-existent here, but things are changing." Most
importantly, the concerns of the woman are now being shared by the man.
So, when purchase-decisions include these concerns, it is both the husband
and wife who are involved. A classic example: the choice of washing-
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THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
machine, given its benefits, was always the woman's. But now, an
awareness of the needs served by the product is bringing men into the
decision-making process, a transition being used by NPL, whose storyline
for its washing machine ads presents the husband buying the product for
his wife.
Smart marketers are picking up these cues, and weaving them back into
their product as well as product-delivery vehicles. Companies like LG and
Samsung, for instance, are factoring in the male participation in the
purchase of durables like refrigerators and washing-machines. For, the
value of these appliances is increasingly being perceived by the NUF Man,
who uses them-for the benefit of his family-personally. Thus, although LG's
primary target-audience for the pitch for its refrigerators remains women in
the high-income households, it chose its media to communicate directly to
men too. Confirms Rajeev Karwal, 36, Vice President, LG Electronics India:
"We bought three spots per day on a wholly male-dominated TV channel
like CNBC for the entire period of the campaign.”
! !444
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
! !445
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
they got acceptance not only across India but other Asian countries as
well.
Thus the definition of global advertising comes from the original definition,
but slightly tweaked as ‘any paid form of non-personal presentation and
promotion of idea(s), good(s), or service(s) by an identified global sponsor
of a product to global customers’.
Degree of Standardisation
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THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Adaptations in the advertisement are needed to align the product with the
category, cultural diversity, competition, communication delivery need, and
budget constraints.
! !447
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
The local company will deal with the local office of the appointed agency to
develop a communication but the overall eye on what has been released
will be by the HQ of the agency and the company.
Advertising agencies thus face a dual challenge – they need to get the
client’s approval and later the target audience’s approval (i.e., they must
act as expected post watching the advertisement).
! !448
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
b. Market Share Position: A brand leader in the other part of the world,
when entering a new market, needs to communicate differently. Thus it
will need to develop a local advertisement, at least for the initial stage.
! !449
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
International Advertising
Advantages of Internationalisation
Disadvantages of Internationalisation
2. It also depends on the nature of media channel, their way of (ability of)
reproducing your creative – e.g., Earlier in India, in print advertising
rates were offered as column centimetres (c.c) and specific formats like
square, rectangular, etc., was allowed. Now they have shifted to
charging on square centimetres; as a result, an advertisement of any
shape is possible, thus you also see an ad running in between your
news copy.
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THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
In a country like India, there is lot of diversity. But beneath this diversity,
there is the definite behavioural pattern which cuts across cultures, castes,
creeds and religions. The essence is thus whether you understand this, and
can you create one big idea powerful enough to impact everyone – most of
Revlon cosmetic brand ads are standard internationalised ads, Mercedes
Benz ads are also international standardised ads.
We will again consider this as our learning ground. In the above example,
it was alright to presume that what worked in the international arena will
work for the urban Indian population. International appeal is perhaps
equivalent to an urban appeal. But India has over 70% of population living
in villages where demographic conditions itself are so diverse that what
naturally appeals to the urban Indian may not appeal to the rural Indian.
Language is another major barrier as there is no common language. All
aspects of ad standardisation or adoption may not work as required, the
! !451
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
same appeal may not work and the same copy may not get understood the
way it is expected to. Thus to win customers in India, companies may also
need to think on separate lines to win customers from rural India.
Activity C
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THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
The study of culture is the study of all aspects of a society that give it a
distinctive character and personality. Culture is defined as the sum total of
learned beliefs, values, customs, beliefs, and attitudes besides other
factors that serve to direct the consumer behaviour of members of a
particular society for generations. Beliefs and values are guides for
consumer behaviour; customs are usual and accepted ways of behaving.
Culture offers order, directions and guidance to all members in all phases
of human evolution. Culture is dynamic, and gradually and continuously
evolves to meet the needs of society. Culture is learnt as part of social
experience – children learn from their environments a set of beliefs, values
and customs that constitute culture. Culture can be acquired through
formal means or informal learning. Advertising also enhances formal
learning by reinforcing desired modes of behaviour and expectations; it
enhances informal learning by providing models for behaviour.
! !453
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
! !454
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
! !455
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
a. learned beliefs
b. learned predispositions
c. learned perceptions
d. learned liking
3. In a specific method of survey in which people are asked how they feel
about such basic personal and social concepts such as religion, caste
system, national security, politicians, unity, diversity, freedom of
expression, harmony, peace, it is known as _______________ survey
method. Fill in the blank.
a. content analysis
b. value measurement
c. customer filed work
d. perception
a. cross culture
b. society culture
c. subculture
d. socio-culture
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THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
a. budget available
b. beliefs
c. exposure
d. cultural connect
Answers:
1. (a)
2. (c)
3. (b)
4. (c)
5. (d)
! !457
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !458
OPINION LEADERS AND PERSONAL INFLUENCE
Chapter 14
Opinion Leaders and Personal Influence
Objectives
Structure:
14.1 Introduction
14.2 What is Opinion Leadership?
14.3 Dynamics of the Opinion Leadership Process
14.4 Measuring Opinion Leadership
14.5 A Profile of the Opinion Leader
14.6 Frequency and Overlap of Opinion Leadership
14.7 Situational Environment Triggers for Opinion Leadership
14.8 The Interpersonal Flow of Communication
14.9 Opinion Leadership and Promotion Strategy
14.10 What have you Learnt – A Summary
14.11 Self Assessment Questions
14.12 Multiple Choice Questions (MCQ)
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OPINION LEADERS AND PERSONAL INFLUENCE
14.1 INTRODUCTION
Earlier what was limited to few newly introduced items is today common,
i.e., asking someone about which are the good schools, good weekend
places to go, movies and more. Especially in this digital era, we have
become more reliant on the opinions expressed by people on respective
brands, products or a company. Some of us also want to be the first to
express an opinion about newly released films, products and likewise more
aspects touching an individual’s life.
Thus, our social interactions have so much impact on our buying behaviour
despite being an informal form of communication. It is therefore essential
for a marketer to understand the influence of friends, neighbours,
acquaintances, co-worker, and others on the individuals’ consumption
behaviour. We need to examine the nature and dynamics of this influence
called the opinion leadership process, and personality and motivations of
those who influence (opinion leaders) and those who are influenced
(opinion receivers).
! !460
OPINION LEADERS AND PERSONAL INFLUENCE
an opinion leader in the field of digital products but for fashion tips he may
need to consult another person who is an opinion leader in that field.
Consumer research dwells into knowing how opinion leaders influence the
consumption pattern of others. The understanding of personal influence
embraces the four areas of activity: 1. Fashion, 2. Movie-going, 3. Public
affairs (politics) and 4. Marketing, (which is basically related to brand
choice).
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OPINION LEADERS AND PERSONAL INFLUENCE
Opinion leaders belong to the same primary groups of families, friends and
co-workers. Opinion leaders are characterized by many interpersonal
contacts (gregariousness) and by an above normal exposure to media.
Activity A
Identify the opinion leaders in your life and why do you think you followed
them. Identify when did you play a role as an opinion leader?
…………………………………………………………………………………………………………………………
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OPINION LEADERS AND PERSONAL INFLUENCE
We have to consider what motivates both, the opinion leaders and opinion
receivers.
!
Fig. 14.1: An Opinion Leader
! !463
OPINION LEADERS AND PERSONAL INFLUENCE
Table 14.1
• Satisfaction of having
converted others
! !464
OPINION LEADERS AND PERSONAL INFLUENCE
Self-designating Method
Here, we ask others what role they have played in influencing the
consumption of others in recent past, (say six months). A straight question
could be:
In the past six months, have you been asked to advise or give your opinion
about ............... products? (Specify products in the blank).
The answer could be a ‘yes’ or ‘no’. It classifies them into leaders or non-
leaders. But such straightjacket compartmentalization does not reflect a
range of opinion leadership activity. The questions, therefore, can be
qualified by using time-denoting adverbs like ‘infrequently influencing
others’ or sometimes influencing or ‘frequently influencing’.
Illustration:
! !465
OPINION LEADERS AND PERSONAL INFLUENCE
4. I can count at least three people who have asked my opinion about
………. products.
……………… ……………. …………….. ………………… …………………
I buy fashion clothes only when I am sure my friends would approve them.
The agreement is taken on a 7-point scale: extremely agree, fairly agree,
agree, neither agree/disagree, not agree, fairly not agree and extremely
not agree.
Sociometric Research
Providing Information
1. In the society, did you tell anyone about the movie Lagaan in the past
one week?
Yes …………………. No …………………..
If yes, then proceed.
2. Whom did you tell about it first? ……………………… (Name the person)
! !466
OPINION LEADERS AND PERSONAL INFLUENCE
3. Who else from the society did you tell about it? ………………………. (Name
them)
Receiving Information
4. Is he a society resident?
Yes ……………… No ……………………..
6. Did you talk with this person prior to seeing Lagaan or after seeing it?
Prior ………… After ……………… Do not remember …………………….
7. Can you specify the other society residents who talked about Lagaan?
……………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………….
! !467
OPINION LEADERS AND PERSONAL INFLUENCE
Objective Method
Media Habits: An opinion leader reads the print media and listens to and
views the electronic media much more. He is more tuned to subject specific
magazines and techno-commercial programs.
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OPINION LEADERS AND PERSONAL INFLUENCE
irrespective of the risk involved in such a decision. They may not be brand
loyal and they are keen on any new products.
Opinion leaders tend to have certain similar personality traits, and other
personal characteristics such as social status and demographic
characteristics are often linked to the product in which they ‘specialise’.
Above profiling is more generalised in nature and one must bear in mind
that it can change with country, social strata, and demographic
characteristics across different continents and countries.
Activity B
Identify one opinion leader in your life and profile him using the above
traits. Can you see any similarity in what is expressed above?
…………………………………………………………………………………………………………………………
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! !469
OPINION LEADERS AND PERSONAL INFLUENCE
1 4 . 7 S I T UAT I O N A L E N V I R O N M E N T T R I G G E R S F O R
OPINION LEADERSHIP
It will be irrational to assume that as soon as two people meet, they start
playing the role of being an opinion leader and an opinion receiver. There
must be some trigger that starts the conversation – Two society members
meet in a compound and sit together to discuss. Their discussion generally
revolves around life, what’s happening in the family, in the neighbourhood,
policies of government, forthcoming festivals, etc. Suddenly, one
remembers that there is a wedding invitation from one of the members to
attend his daughter’s wedding. He checks up with the other whether he has
received any invite; post confirmation they dwell into the dress code
mentioned, then they discuss various issues related to it and during which
one raises the query regarding what’s in fashion today during the wedding
and that’s how now one person becomes the opinion receiver and the
other, the opinion leader.
! !470
OPINION LEADERS AND PERSONAL INFLUENCE
Also, it is interesting to note that opinion leaders and opinion receivers are
often people in close proximity, friends, neighbours, colleagues or
associates. Close proximity only triggers conversation. Various researches
have indicated that product-related conversations generally occur between
people in close proximity. Such proximity is of relevance to marketers using
direct selling, multi-level marketing and direct marketing.
Step 1 Step 2
Mass Opinion Opinion Receivers
Media Leaders (The Masses)
The above diagram illustrates this model. Its major contribution is its
emphasis on social interaction between people. It is a method of conveying
information, whereby attitudes are developed, and behaviour is stimulated.
! !471
OPINION LEADERS AND PERSONAL INFLUENCE
It rules out that mass media alone can influence the selling of products,
ideas or persons. Opinion leaders transmit the information, interpret it at
times and legitimize it.The receivers are friends, neighbours and
acquaintances, who comprise the ‘masses’.
The theory does not give a true picture of information and influence flow.
Mass media may affect both, the opinion leaders and the opinion receivers.
However, opinion receivers are more likely to be influenced by the opinion
leaders than by mass media. Opinion leaders do not initiate all
interpersonal communication directed at opinion receivers. Sometimes
opinion receivers may initiate communication. Opinion receivers are also
likely to offer advice to others, including opinion leaders. Opinion leaders
are more likely to receive and seek advice than those who are non-leaders.
! !472
OPINION LEADERS AND PERSONAL INFLUENCE
H L
Opinion H Social Social
Leadership Integration Independence
Scores
L Social Social
Dependence Isolation
! !473
OPINION LEADERS AND PERSONAL INFLUENCE
It puts consumers into four types rather than two types as opinion leaders
and opinion seekers.
! !474
OPINION LEADERS AND PERSONAL INFLUENCE
All products are not buzz-worthy however. To be so, they must have some
unique attribute. Secondly, they must be highly visible. Word-of-mouth
publicity does not just happen. It is increasingly the result of carefully
managed marketing programmes. It is necessary to put the products into
the hands of those people who have greater influence in shaping public
opinion. A limited supply of products is another strategy to make people
crave for what they cannot get easily. Celebrity endorsement also supports
buzz. A product can make to a list to become a guide to consumers to
focus their attention. A management institute can be 3rd or 4th in Business
Today’s list, and that guides the unknowing students to consider it. Product
loyalty must be cultivated widely across the whole community. Who starts
the word-of-mouth? Not always our own customers. There may be
unexpected vanguards, and identifying them is a matter of research. Often
a counter-culture has a greater ability to start word-of-mouth.
It is not correct to assume that trends are best exploited by the companies
who enter first. Even market followers benefit from trends if they can
correctly assess when to exploit the trend and when to not.It is not
advisable to use media and advertising too early to generate buzz. It may
provoke the opinion makers to reject a highly promoted product which they
would have otherwise adopted. Companies should concentrate on
consumer-to-consumer communication. This is the birth place of all buzz.
! !475
OPINION LEADERS AND PERSONAL INFLUENCE
Activity C
! !476
OPINION LEADERS AND PERSONAL INFLUENCE
! !477
OPINION LEADERS AND PERSONAL INFLUENCE
! !478
OPINION LEADERS AND PERSONAL INFLUENCE
a. an interactive
b. a gossip
c. an informal
d. a formal
a. market
b. product
c. group
d. receivers
a. personal experience
b. higher involvement
c. natural connect
d. none of the above
! !479
OPINION LEADERS AND PERSONAL INFLUENCE
Answers:
1. (c)
2. (d)
3. (b)
4. (b)
5. (a)
! !480
OPINION LEADERS AND PERSONAL INFLUENCE
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !481
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Chapter 15
DIFFUSION AND ADOPTION OF NEW
PRODUCTS
Objectives
Structure:
15.1 Introduction
15.2 The Diffusion Process
15.3 The Adoption Process
15.4 A Profile of the Consumer Innovator
15.5 What have You learnt – A Summary
15.6 Self Assessment Questions
15.7 Multiple Choice Questions (MCQ)
! !482
DIFFUSION AND ADOPTION OF NEW PRODUCTS
15.1 INTRODUCTION
Also, in every market there are enthusiastic consumers who are always
eager to grab any new products that enter the market and are known as
consumer innovators. It is essential for the marketer to know the profile of
such individuals as the success of new product introductions largely
depends on identifying them and reaching them.
! !483
DIFFUSION AND ADOPTION OF NEW PRODUCTS
! !484
DIFFUSION AND ADOPTION OF NEW PRODUCTS
The Innovation
The word innovation as such has no specific definition. However, there are
various approaches to classify a new product as firm-oriented, product-
oriented, market-oriented, and consumer-oriented.
! !485
DIFFUSION AND ADOPTION OF NEW PRODUCTS
provider and introduce the product. This is done to capture the growing
acceptance of the product in the market.
! !486
DIFFUSION AND ADOPTION OF NEW PRODUCTS
are two different definitions of product innovation that have been rendered
extensively in consumer research:
! !487
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Activity A
List your two examples each for the different innovation orientations listed
above.
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! !488
DIFFUSION AND ADOPTION OF NEW PRODUCTS
for consumer durables - You can try a new shampoo sachet but you can’t
try a refrigerator.
Resistance to Innovation
We have seen that some products become an instant success on launch
and some take long to establish. E.g., Mahindra Logan car was not
successful but XUV500 was an overnight success. Diffusion researchers
have developed a model of innovation resistance to provide further insights
into adoption and diffusion processes. The product characteristics of an
innovation help to determine the extent of resistance, which manifolds
with:
3. Low trainability
4. Low communicability
5. High complexity
! !489
DIFFUSION AND ADOPTION OF NEW PRODUCTS
! !490
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Marketers’ task doesn’t end at knowing the factors for resistance. They in
fact need to develop strategies to overcome known factors from known
sources of resistance.
! !491
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Table 15.1
A Classification of Marketing Strategies to Overcome Consumer
Resistance to Innovation
Functional Barriers
Psychological Barriers
! !492
DIFFUSION AND ADOPTION OF NEW PRODUCTS
The success of diffusion lies in its ability to spread through the entire
market, which in turn depends on the communication between the
marketers and consumers and also communication among consumers
especially in this digital age. Thus, in consumer buyer behaviour it is
essential to attend transmission of product-related information through
various communication channels, and to the impact of both, messages and
channels on the adoption or rejection of new products. Communication
sources are categorised as impersonal sources (e.g., advertisement,
publicity) and interpersonal sources (personal selling, opinion leaders).
! !493
DIFFUSION AND ADOPTION OF NEW PRODUCTS
The social system has its own orientation and special values which affect
the acceptance and rejection of new products. Traditional system does not
easily and immediately absorb innovation vis-a-vis the modern system.
Time
Time is the foundation of the diffusion process and covers three distinct but
interrelated ways: (1) purchase time (2) the identification of adopter
categories and (3) the rate of adoption.
1. Purchase time: It’s the amount of time that elapses between the
consumer’s initial awareness of a new product and the point at which he
or she purchases or rejects it. Purchase time is the result of being
aware, the depth of his involvement needed, and how complex it is for
him to get information, evaluate it and decide to adopt it or reject it.
Also, as the time lag increases, the innovator category products evolve into
a need for other consumers.
! !494
DIFFUSION AND ADOPTION OF NEW PRODUCTS
As we can see, the graph indicates that the adopter categories are
generally depicted as taking on the characteristics of a normal distribution
(a bell-shaped curve) that describes the total population that ultimately
adopts a product. Let us briefly understand the classification.
Innovators: They are the ones who take on the risk and venture into
adopting a new product. Profile wise they are generally younger, with a
broad and open outlook, high on social status, love to take on any new
idea with risk involved, and for them it’s like a venture worth the effort
when they buy a new product.
Early Adopters: They adopt new ideas early but post careful
consideration. People respect their view points and follow them. Thus they
are also ‘change agents’. Their opinion matters and thus this category have
the most opinion leaders.
Early majority: It’s not a group that takes unwarranted risk nor does it
have a followers’ base to be considered as opinion leaders. However, they
! !495
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Late majority: They adopt a new product out of necessity and their
adoption goes un-noticed. It is thus also considered as a sceptical group
that adopts a new product out of social pressure or necessity. Before they
adopt, so many others have owned this new product already.
Laggards: They are the last streams of population to adopt a new product.
They are believed to be always careful and not risk their investment in
trying a new product. They continue to use old products that either serves
their current needs or they do not have a strong urge to satisfy the current
needs differently. Thus this group is also considered as a tradition-bound
group. In many cases their acceptance cycle begins when the innovator
category has discarded the idea and they have moved on to another new
product. Profile wise they are relatively older, coming from the lower end of
social strata, or do not have an independent means of earning.
The above understanding not only helps marketers to use their marketing
mix appropriately but allows them to understand their media habits and
tap the same appropriately.
Activity B
a. List the various product categories (or products) in your daily life, that
you can relate yourself with, with different classification for adopters as
mentioned above.
…………………………………………………………………………………………………………………………
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! !496
DIFFUSION AND ADOPTION OF NEW PRODUCTS
3. Rate of adoption: This refers to the time it takes for a new product to
be adopted by members of a social system – that is, how quickly a new
product is accepted by those who will ultimately adopt it.
In India, when black and white TV was introduced, the rate of diffusion was
slower and remained more or less steady, but the moment it was
announced that ASIAD Games will be telecast in colour, its diffusion was
much faster. Thus, it suggests that instead of the time it takes to adopt a
new product, it is essential to track the extent of evaluation.
Thus, based on time and the extent of adoption, four different categories of
adopters are identified.
! !497
DIFFUSION AND ADOPTION OF NEW PRODUCTS
! !498
DIFFUSION AND ADOPTION OF NEW PRODUCTS
checking it out from someone who has it. It is essential to note that
their experience unravels that critical information they needed to decide
about adopting or rejecting a new product.
When the TAB was launched in India, it was touted as ‘Phone bhi, aur
Laptop bhi’. People were made aware about it through advertisements and
other communication channels. It generated interest and compelled many
to search for information on the net. On finding information that gave them
the perspective about its utility for them, many wanted to see the product,
thus they went to showrooms and enquired about it. Showrooms willingly
gave them live demonstrations and allowed them to touch and feel the
product and try for themselves, which led to final adoption by many
(although it was more from the perspective of handy-computer and not
necessarily as phone as well).
Regular research on adoption process indicated the need for adding two
additional stages between trial and adoption. The trial provides direct
experience and the consequences of that experience serve to confirm the
product evaluation, leading to subsequent rejection or adoption. Thus the
adoption process now will have seven steps – (1) Awareness (2) Interest
(3) Evaluation (4) Trial, and (5) Direct Product Experience (6) Product
Evaluation and (7) Adoption (or rejection).
! !499
DIFFUSION AND ADOPTION OF NEW PRODUCTS
• It does not adequately provide for the rejection of a product after its
trial.
! !500
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Questions come in our mind such as who is the consumer innovator? What
characteristics set the innovator apart? How can marketers reach and
influence them to shorten their time of adoption? Thus it is essential to
understand this aspect of consumer innovator, more elaborately.
! !501
DIFFUSION AND ADOPTION OF NEW PRODUCTS
may be decided that customer innovators are those who will buy an
innovation product within three months. In the second case, it will be
determined how many of the innovation products these consumers own –
e.g., before launching their own new innovation, marketers may find how
many innovation products were introduced, say eight. Then they profile
such customers who both own six out of eight such innovation products,
and later profile them to direct their marketing efforts towards them,
rather than chasing those who have only acquired say two innovation
products during the same period.
It is found that consumer innovators are also those who have significant
interest in specific product categories that makes them constantly look for
new innovation in that product category and wish to be the first users than
the early adopters.
He is an Opinion Leader
By virtue of their sheer ability to get all the required information, evaluate
it and be among the first few to adopt an innovation product, they also
have the tendency to become an opinion leader either by choice (they on
their own speak about the product) or by compulsion (as people often rely
on their opinion as they have already adopted the innovation). They
willingly provide other consumers with information and advice about new
products and people generally follow their advice. They can encourage
others to try it. They may also advise rejection if their own experience is
not in line with their expectation out of the innovation product.
Personality Traits
! !502
DIFFUSION AND ADOPTION OF NEW PRODUCTS
It is also true that consumer innovators have a very broad category view,
thus they can try new innovation products from a very wide product
category base. They are more tuned to adopt a really new innovation
rather than superficially changed products like adding just new features or
new flavours etc.
Perceived Risk
Venturesomeness
The word stands for personality seeking variable sources for recognition
and thus has high absorbing power to take a risk of purchasing a new
product. He also shows a definite intention to buy a new product.
Consumer innovators have distinct purchase and usage traits that set them
apart from non-innovators. They are found to be less brand loyal (as keen
on adopting any and every innovation) and vulnerable to promotional
offers. They are also found to be heavy users of the product category in
which they innovate when they get the desired confirmation.
Media Habits
! !503
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Social Characteristics
Demographic Characteristics
Marketers have often raised queries regarding their need to know whether
consumer innovators for one product category tend to be the same in other
product categories. Consumer researchers have given a guarded answer as
‘NO’. Innovativeness across different product categories seems to be
limited to product categories that are closely related to the same basic
interest area. One, who is a consumer innovator in say mobile phones,
may likely to be an innovator for mobile TABs, but not for automobile
category.
The following Table finally illustrates the difference between innovators and
non-innovators.
! !504
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Table 15.2
Distinction between Innovators and Non-innovators
Self-driven Others-driven
Product Interest More keen to know about the Less keen to know more about
products the products
! !505
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Activity C
Are you a consumer innovator? Identify the product (or product category)
in which you have played the role of a consumer innovator. List your
various traits as consumer innovator/non-innovator as the case may be.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
! !506
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Innovations have different orientations and thus they can be either firm-
oriented (product new to the firm), product-oriented (a continuous
innovation, a dynamically continuous innovation, or a discontinuous
innovation), market-oriented (by how long the product has been in the
market or by the % age of the potential target market that has purchased
it), and consumer-oriented (new to the consumer).
! !507
DIFFUSION AND ADOPTION OF NEW PRODUCTS
! !508
DIFFUSION AND ADOPTION OF NEW PRODUCTS
! !509
DIFFUSION AND ADOPTION OF NEW PRODUCTS
a. market development
b. market maturity
c. market diffusion
d. none of the above
a. confirmation
b. evaluation
c. contemplation
d. none of the above
a. innovator
b. early adopter
c. early majority
d. laggards
a. relative advantage
b. compatibility
c. complexity
d. trialability
! !510
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Answers:
1. (c)
2. (b)
3. (c)
4. (a)
5. (d)
! !511
DIFFUSION AND ADOPTION OF NEW PRODUCTS
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !512
CONSUMER DECISION MAKING
Chapter 16
CONSUMER DECISION MAKING
Objectives
Structure:
16.1 Introduction
16.2 Four Views of Consumer Decision Making
16.3 The Consumer Decision Making Process
16.4 Types of Purchase Decision Behaviours
16.5 Model of Buyer Behaviour
16.6 Post Purchase Behaviour
16.7 Relationship Marketing
16.8 What have You learnt – A Summary
16.9 Self Assessment Questions
16.10 Multiple Choice Questions (MCQ)
! !513
CONSUMER DECISION MAKING
16.1 INTRODUCTION
What is a Decision?
! !514
CONSUMER DECISION MAKING
Table 16.1
Decision
Alternative X Alternative Y
Category
Basic Purchase
Whether to purchase Or not to purchase
Decision
Or purchase another
Brand Purchase Purchase a specific brand
brand
Or Purchase another
Decisions Purchase your usual brand
brand
Purchase an established
Purchase a new brand
brand
Purchase something
Purchase a standard quantity more or less than this
quantity
Payment
Purchase cash Purchase on card
Purchase
! !515
CONSUMER DECISION MAKING
Economic Man
Passive Man
In contrast with the economic man who is rational about his choices, a
passive man is the one who is subject to high pressure selling, marketing
and promotional efforts of the organizations and yields to these passively.
He tends to be an irrational and impulsive purchaser. The conventional
attention-interest-desire-action (AIDA) model of selling presumes a passive
customer. It fails to recognize an important role any man plays in the
buying process. A man seeks information about product alternatives and
selects the product from which he derives maximum satisfaction. We know
that consumer as an individual shows his motivation, perception, learning,
attitudes, communication and opinion leadership. All these factors affect
his buying decision, and thus, to say that he is passive is far from the
truth.
! !516
CONSUMER DECISION MAKING
Cognitive Man
Emotional Man
Man is naturally born with emotions within him. Emotions such as love,
happiness, hope, fear, fantasy, sexuality and even some out-of-the-world
experiences like magic. These influence our product choices a great deal.
We get emotionally involved with the products satisfying our needs. We do
not gift handkerchiefs, we may feel certain colours are lucky for us; we like
certain brands deeply without really knowing why do we get attracted to
these brands – Old Spice, Raymond’s and more.
Certain products link us to the past, and give us a sense of nostalgia. They
comfort us while travelling to an unknown future. A photograph of a loved
person on the battlefront provides us the hope to have jolly good times
once again, indicative of normalcy post war.
! !517
CONSUMER DECISION MAKING
Activity A
List one product each that has being purchased by you while acting as an
economic man, passive man, cognitive man and an emotional man.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
! !518
CONSUMER DECISION MAKING
Evaluation Post-
Problem Information Buying
of purchase
Recognition Seeking Decision
Alternatives Evaluation
!
1. Problem recognition
2. Information seeking
3. Evaluation of alternatives
4. Buying decision
5. Post-purchase evaluation.
It should be noted that the process starts much before the actual
purchase, and continues beyond it.
! !519
CONSUMER DECISION MAKING
! !520
CONSUMER DECISION MAKING
The major external sources are family members, peers, friends, colleagues,
and relatives on whom we rely or consider them as our opinion leaders. In
addition, we get information from different marketing communications,
media, distribution channels and consumers’ own experience handling a
similar product category, company, brand, etc.
Each brand in the evoked set is evaluated against some chosen criteria. A
consumer buying an electric rice cooker, for example, considers the
following criteria:
• Brand name
• Price
• Functions performed
• Appearance
• Attachments like a juicer, a chutney jar
• Reputation of the company marketing it
• Warranty
• Technical specifications
• After-sales service available
! !521
CONSUMER DECISION MAKING
Each of the above criteria is assigned some weightage, which may differ
from consumer to consumer. After this, it is all a matter of perception. To
illustrate, the flavour of a soft drink may have equal importance for two
different consumers. But one feels Fanta orange has a very good flavour
whereas the other feels it is awful.
Buying Decision: After the alternative choices are evaluated, the brands
are ranked mentally. The top ranking brand may or may not be purchased
as it depends on how costumers look at value within each one of them. The
ultimate buying decision may undergo a change if the preferred brand is
not available. In such a situation, the second-ranked brand may be bought.
The ultimate buying occurs only when the consumer finds a suitable outlet
where the brand is available, and price negotiations are complete.
Activity B
List the stages you went through while purchasing the LED TV in your
house.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
! !522
CONSUMER DECISION MAKING
LPS occurs when the consumer knows the brands available, but still needs
additional information to make a correct choice, especially when a new or
unfamiliar brand or variant confronts him. Thus, new Dell or new HP
laptops must convince the customers that they are superior to conventional
laptops due to the presence of an upgraded Intel chip inside and so the
customer feels the necessity of searching additional information. The
marketer here has introduced a new brand in a well-known product
category. The promotion here should explain complete features of the new
brand, and build up consumers’ confidence to facilitate the purchase
decision.
! !523
CONSUMER DECISION MAKING
EPS occurs when a new product category comes on the scene. Here,
extensive information is needed on both, the product category and the
brand being made available, e.g., super hybrid car from Maruti needs to
first explain the concept of a hybrid car vis-a-vis conventional cars, and
then sell Maruti’s hybrid car brand. Colour TVs as a product category, a
particular brand of TV (say Onida or Videocon) and a particular model (say
PIP: Picture-in-Picture or Surround Sound System) do need information at
three levels. Promotion should satisfy the needs of information at these
three levels, and specially, how the advertised brand has a unique set of
positive attributes. This concept is most applicable to new products, ones
that may be new to consumers. For typical rural India customers, even the
purchase of soaps may involve EPS, whereas for us it is just RR.
Howard-Sheth Model
! !524
CONSUMER DECISION MAKING
! !525
CONSUMER DECISION MAKING
4. External Variables: These are not part of the decision process in the
model, but are improvements to the extent that they influence a buyer.
These differ from buyer to buyer and include status, relevance of the
product, social class, personality traits, etc.
! !526
CONSUMER DECISION MAKING
Formation of Satisfaction/Dissatisfaction
Post purchase and after experience with its use, a purchase may lead
either to satisfaction or dissatisfaction. Satisfaction is a result of the
expected outcome – when the product meets our expectations.
Dissatisfaction means it does not perform as per our expectations.
Dissatisfied customers may discontinue their association with the company,
may spread negative word-of-mouth, may send a formal complaint, or in
extreme cases, may sue the company. The communication strategy
depends upon the expectation performance disparity.
4. Assure the customers even when the purchase is over. State in your ads
the facts – many have used the product and are satisfied. Write thank
! !527
CONSUMER DECISION MAKING
you letters. Make the technical staff visit the customer’s residence to
assess his feelings.
The technical term for a very wide gap between expectations and actual
performance is post-purchase dissonance.
Marketing mix and the perception it creates largely affect the buyers. Apart
from this, the social class and culture affect a consumer’s evaluation, and
word-of mouth publicity affects the ultimate adoption of the products. The
input is processed by the consumer while he takes the decisions. The
decision making process is affected by the psychological factors. Here, we
have to understand two key concepts – perceived risk and evoked set.
While buying products, consumers cannot anticipate the consequences of
their decision, and this is precisely the perceived risk.
! !528
CONSUMER DECISION MAKING
The product may not function as expected (functional risk); the product
may harm us (physical risk); the product may embarrass us socially (social
risk); the product may affect ego adversely (psychological risk); the time
taken to buy may be wasted over a non-performing product (time risk).
Risk is perceived with respect to product categories, e.g., there is higher
risk while buying a LED TV than buying a book. Shopping situation also
contributes to the perception of risk, e.g., some may not like to buy by
mail order. This perception may change by positive feedback. Perception of
risk differs from people to people, and so consumer research regarding risk
behaviour of one country cannot be generalized.
! !529
CONSUMER DECISION MAKING
! !530
CONSUMER DECISION MAKING
The results depend on how we sort out the products or possibilities into
categories. The way this information is recorded in memory can influence
consumers’ preferences for brands and whether the brand will be
considered for purchase. According to Dannon and Yoplait, if yogurt is
arranged by brands first and then by flavour within the brand, consumers
tend to select their flavours from the same brand. On the other hand, if the
yogurts are classified flavour wise first, say all strawberry yogurts, and
then consumers would most likely choose which flavours they wanted first,
and then choose which brand name they would most like for that particular
flavour.
! !531
CONSUMER DECISION MAKING
! !532
CONSUMER DECISION MAKING
The emphasis these days is to retain the existing customers against the
onslaught of competition. Such customers who are loyal to a company and
its brands are in effect more profitable to marketers than new customers.
Relationship marketing is thus building of long-term relationship and trust
between an organization and its customers for mutual benefit. It enhances
the consumer retention index. Considering that it costs several times more
to acquire a new customer than retaining an existing one, companies are
taking all efforts to please the existing customers. This relationship extends
to the members of the distribution channel and suppliers. These
relationships are based on high quality products, fair pricing and effective
servicing.
! !533
CONSUMER DECISION MAKING
relationship values while shopping over and above the transactional values.
When most of the offerings are at par in terms of quality and performance,
a customer values the personal equation which becomes the deciding
factor in buying.
Building brands that establish a relationship between the customer and the
marketer is one of the key elements in relationship marketing, along with
other elements. Cadbury has an online group which interacts among them
by sharing new recipes using chocolate; the organisation provides new
ideas/recipes, creates competition, sharing and more to unify small group
of customers who believe so strongly in the Cadbury chocolate; thus they
stick to it no matter what competition has to offer.
! !534
CONSUMER DECISION MAKING
! !535
CONSUMER DECISION MAKING
Mattel Toys has built a 21,000 – strong database. The Club has 12,000
active members between the ages of 6 – 12. Every year, around 5,000 new
members join, though there is a subscription fee of ` 95/-. They have
been successful at developing a cult for Barbie. The Club members are
hardcore Barbie fans, and they correspond regularly with the company. The
relationship marketing exercise has helped the company sell 1.5 million
Barbie dolls so far.
Parle Agro has also formed Frooti Funtoon Club targeted at youngsters to
carry over the brand appeal to the second generation. These members will
be parents twenty years hence and will still have a fondness for the brand.
The club organizes plant visits; an animation film shows and quiz contests.
Birthday cards are sent. The scheme aims at building up a solid database
plus a consumer segment.
Companies may offer schemes to its regular customers during sales and
special offers.
Service industries like banks and hotels can also make effective use of
relationship marketing. Communication here is more focused and effective.
Relationship marketing opens a two-way communication channel with
consumers. It has the potential to win their loyalty.
! !536
CONSUMER DECISION MAKING
Activity C
! !537
CONSUMER DECISION MAKING
! !538
CONSUMER DECISION MAKING
3. What are the four views of consumers under consumer decision making?
6. What are the four major sets of variables as per the Howard-Sheth
Model? Explain them.
! !539
CONSUMER DECISION MAKING
a. An evaluation
b. A decision
c. Purchasing
d. Buying decision
2. I n p e r f e c t c o m p e t i t i o n e c o n o m i c s c e n a r i o , w e v i s u a l i z e
_______________ who behaves rationally and takes rational decisions.
Fill in the blank.
a. an emotional man
b. a cognitive man
c. a passive man
d. an economic man
a. Evaluating alternatives
b. Short-listing alternatives
c. Information Evaluation
d. None of the above
! !540
CONSUMER DECISION MAKING
a. Loyalty marketing
b. Response marketing
c. Reference marketing
d. Relationship marketing
Answers:
1. (b)
2. (d)
3. (a)
4. (c)
5. (d)
! !541
CONSUMER DECISION MAKING
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !542
CONSUMER PROTECTION IN INDIA
Chapter 17
CONSUMER PROTECTION IN INDIA
Objectives
Structure:
17.1 Introduction
17.2 Consumers Need Protection – Why?
17.3 Consumer Guidance Society of India (CGSI)
17.4 Rights of Consumers
17.5 Consumer Movement
17.6 Consumerism and Consumers’ Rights and Responsibilities
17.7 Business Malpractices
17.8 Legislative Regulations
17.9 Consumer Protection Councils and Consumer Education
17.10 What have you Learnt – A Summary
17.11 Self Assessment Questions
17.12 Multiple Choice Questions (MCQ)
! !543
CONSUMER PROTECTION IN INDIA
17.1 INTRODUCTION
As almost all the commercial organizations are well managed and well
versed with the market conditions, so certainly they are in the better
dominating position and use it to exploit the consumer. There are
numerous ways in which organisations exploit consumers – poor quality of
content, use of harmful chemicals, incorrect weights and measures
practices, price cartel, poor packaging, mixing, lack of information and in
more ways which are unimaginable.
! !544
CONSUMER PROTECTION IN INDIA
3. The laws are able to guarantee safety and quality of the products and
services the consumers use. A country can only experience a growth in
economic activities when consumers have trust in the producers, so the
producers must work to provide the assurance required to win the trust
of consumers.
! !545
CONSUMER PROTECTION IN INDIA
Activity A
List the occasions/ incidences/purchases post which you felt you should
have taken the manufacturers to task for indulging in malpractices with
you. List at least 5 such incidences.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
! !546
CONSUMER PROTECTION IN INDIA
The Consumer Guidance Society of India (CGSI) is the first and foremost
consumer body of the country. CGSI, which was founded in 1966, is
entering its Golden Jubilee Year in 2015.
CGSI has been actively championing the rights of consumers for more than
40 years. The Society was founded by women activists in the year 1966.
Their aim was to protect the rights of consumers, who found themselves
helpless whenever they were supplied with defective goods or services.
The efforts of CGSI and other Consumer Organisations of our country bore
fruit when the Consumer Protection Act was enacted in the year 1986 and
the Consumer Courts were set up thereafter.
CGSI has reached out to lakhs of consumers and conducted workshops and
seminars on consumer awareness topics like food adulteration, becoming a
smart investor and consumer protection.
Objective of CGSI
• Develop a resource centre at the State level which will be networked with
the National Resource Centre
! !547
CONSUMER PROTECTION IN INDIA
Role of CGSI
Consumer Awareness
! !548
CONSUMER PROTECTION IN INDIA
Consumer Protection
Laws are designed to ensure fair trade competition and a free flow
of truthful information in the marketplace. The laws are designed to
prevent businesses that engage in frauds or specified unfair practices from
gaining an advantage over competitors and may provide additional
protection for the weak and those unable to take care of themselves.
Consumer Protection laws are a form of government regulation which aim
to protect the consumers.
! !549
CONSUMER PROTECTION IN INDIA
5. Right to Redress means that the consumers have the right to seek
redressal regarding their complaint in the forums.
1. Right to Safety
2. Right to Information
! !550
CONSUMER PROTECTION IN INDIA
hidden costs, lack of suitability, quality problems and safety hazards can be
found only after the purchase of the product.
There are other aspects about information which covers labelling, safe
practices, pricing, unit of measurement, harmful/side effects, where
consumers can contact for grievance redressal if any.
3. Right to Choose
The definition of Right to Choose as per the Consumer Protection Act 1986
is ‘the right to be assured, wherever possible, to have access to a variety
of goods and services at competitive prices’. For regulating the market
place, there is just one factor required and that is competition. The
existence of cartels, oligopolies and monopolies prove to be
counterproductive to consumerism. The natural resources, liquor industry,
telecommunications, airlines etc all are being controlled by a mafia to some
or the other extent. Since the Indian consumers come from a socialistic
background, the tolerating of monopolistic market is found in their blood. It
is seldom seen that people want to switch the power company, in the times
when they have a blackout at home. It is interesting to know that even
micro markets like fish vendors in some cities are known to collude and
discourage consumers’ bargaining power. No matter what size or form, or
span, but collusion of various companies which sell a similar kind of
product is unethical or say less legal. It can be estimated that India has to
stride for about 20 more years for empowering its citizens fully in this
regard.
4. Right to be Heard
As stated in the Consumer Protection Act, 1986, ‘the right to be heard and
to be assured that the consumer's interests will receive due consideration
at appropriate forums is the definition of the right to be heard. This right
helps to empower the consumers of India for putting forward their
complaints and concerns fearlessly and raising their voice against products
or even companies and ensure that their issues are taken into
consideration as well as handled expeditiously. However, till date the Indian
government has not formed even one outlet for hearing the consumers or
their issues to be sorted out.
! !551
CONSUMER PROTECTION IN INDIA
Various attempts are made by the government for empowering the citizens
with this right, and it is believed that about 10-15 years more are required
for the accomplishment of this goal.
5. Right to Redress
The right to seek redressal against unfair trade practices or restrictive
trade practices or unscrupulous exploitation of consumers is referred to as
the right to redressal according to the Consumer Protection Act, 1986. The
government of India has been a bit more successful with regard to this
right. Consumer courts like District Consumer Disputes Redressal Forums
at district level, State Consumer Disputes Redressal Commissions and
National Consumer Disputes Redressal Commissions have been
incorporated with the help of the Consumer Protection Act. These
consumer grievance redressal agencies have fiduciary as well as
geographical jurisdictions which address consumer cases between
businesses and consumers.
Activity B
! !552
CONSUMER PROTECTION IN INDIA
Gandhi promoted the idea that businesses have the role of a trustee in
being responsible towards customers, workers, shareholders, and their
community. In particular, Gandhi said that "A customer is the most
important visitor on our premises. He is not dependent upon us. We are
dependent upon him. He is not an interruption in our work - he is the
purpose of it. We are not doing him a favour by serving him. He is doing us
a favour by giving us the opportunity to serve him". United States
consumer advocate Ralph Nader called Gandhi "the greatest consumer
advocate the world has seen" for advancing the concept that commercial
enterprise should serve the consumer and that the consumer should expect
to be served by businesses. Vinoba Bhave and Jayaprakash Narayan, two
great proponents of Gandhi's philosophy, and V. V. Giri and Lal Bahadur
Shastri, contemporary Indian president and prime minister, similarly
! !553
CONSUMER PROTECTION IN INDIA
! !554
CONSUMER PROTECTION IN INDIA
The basic reasons for the development of consumer movement in India are
different from those in the West. In western countries, consumer
movement was the result of post-industrialisation affluence - for more
information about the merits of competing products and to influence
producers especially for new and more sophisticated products. In India, the
basic reasons for the consumer movement have been:
2. Consumers feel protected and buy goods with trust of not being
cheated.
! !555
CONSUMER PROTECTION IN INDIA
6. It makes the government also answerable to its citizens when their trust
gets broken.
7. It’s a force to reckon with by business houses that makes them think
twice before indulging in any malpractices.
6. Consumers’ attitude has also been callous and indifferent towards their
rights and responsibilities.
! !556
CONSUMER PROTECTION IN INDIA
8. Poor and slow, dragging legal system of our country makes penalisation
next to impossible.
What is CONSUMERISM?
The term "consumerism" had been first used in the year 1915 and was
referred to as "advocacy of the rights and interests of consumers" defined
in the Oxford English Dictionary, but here in this article the term
"consumerism" means the sense which was first used in 1960, i.e.,
"emphasis on or preoccupation with the acquisition of consumer goods’.
! !557
CONSUMER PROTECTION IN INDIA
Consumer Rights
c. The Right to Choose and have easy access to different types of products
and services offered at competitive and fair prices.
Consumer Responsibilities
! !558
CONSUMER PROTECTION IN INDIA
!
Malpractice refers to Negligence or misconduct by an organisation in
order to gain, by means of unlawful actions, thus depriving the consumer
the full value for money paid and/or causing injury or health issues,
inconvenience, mental trauma and not offering support when needed.
! !559
CONSUMER PROTECTION IN INDIA
Usual Malpractices
❖ Adulteration
❖ Lack of Safety Measures and Quality Control
❖ Short Weights and Measures
❖ Misleading Ads
❖ Black Marketing and Profiteering
❖ Illegal Trading
Usual Malpractices
! !560
CONSUMER PROTECTION IN INDIA
! !561
CONSUMER PROTECTION IN INDIA
Regulations of Malpractices
! !562
CONSUMER PROTECTION IN INDIA
For such thoughtful reasons and for the overall gain of the country and
economy, every businessman must stop doing business malpractices.
2. The Prevention of Food Adulteration Act (PFA), 1954: This Act was
developed to protect the health of public by prohibiting adulteration of
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CONSUMER PROTECTION IN INDIA
Objectives:
• Any other article which the Central Government may have regarded to its
use, nature, substance or quality, and is declared by notification in the
official gazette as food for the purpose of this Act.
Concept of Adulteration
b. If the article contains any other substance which affects the substance
or quality thereof. If any inferior or cheaper substance has been
substituted wholly or in part for the article so as to affect the nature,
substance or quality of the product.
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CONSUMER PROTECTION IN INDIA
k. If the quality or purity of the article falls below the prescribed limits of
variability which renders it injurious to health.
l. If the quality or purity of the article falls below the prescribed standard
or its constituents are present in quantities not within the prescribed
limits of variability which renders it injurious to health.
a. Cream which has not been prepared exclusively from milk or which
contains less than 25% of milk fat
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CONSUMER PROTECTION IN INDIA
c. Ghee which contains any added matter not exclusively derived from
milk fat
g. Any article of food which contains any artificial sweetener beyond the
prescribed limit
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CONSUMER PROTECTION IN INDIA
e. increasing unreasonably-
7. ISI and AGMARK: ISI Certification Mark Act, 1952 is for ensuring
standards of products and AGMARK is standards for agricultural
products to help, guide and protect consumers. ISI is now known as
Bureau of Indian Standards (BIS).
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CONSUMER PROTECTION IN INDIA
8. The Indian Sale of Goods Act, 1930: The Sale of Goods Act is a kind
of Indian Contract Act. It is a contract whereby the seller transfers or
agrees to transfer the property in the goods to the buyer for a price.
This legislation governs the transactions of sales and purchases. It
clearly stipulates the formation of contract terms, effects of the
contract, performance of the contract, what is a breach of contract,
rights of unpaid sellers against the goods. Very important aspect of this
is that it divides the terms of sales into conditions and warranty.
Conditions means essential aspects needed to be complied with.
Warranty stipulates what is entitled as damages. The act proclaims the
principle of ‘Caveat Emptor’ (Buyer Beware), which puts the onus of
judicious selection on the buyer. Overall, this act lays down the rules for
performance of the contract of sale.
9. The Trade and Merchandise Marks Act, 1958: This act influences
the development of uniquely identifiable trademarks (logos, designs,
symbols) and defines what a deceptively similar trademark is. It thus
guides the product and advertising decisions of the company,
particularly with regard to the trade and merchandise marks.
Individuals/organisations need to register their trademark under this
Act. It allows its holder an exclusive right to use the trademark for a
maximum period of seven years. An infringement of the rights of the
trademark holder attracts injunctions, damages and more such
penalties. The holder can thus claim huge damages for a wrong use of
his trademark.
Over and above these, there are several other legislations formed to help
consumers by preventing malpractices.
An unfair trade practice means a trade practice, which, for the purpose of
promoting any sale, use or supply of any goods or services, adopts unfair
methods, or unfair or deceptive practices.
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CONSUMER PROTECTION IN INDIA
1. FALSE REPRESENTATION
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CONSUMER PROTECTION IN INDIA
ii. The price which any person coming across the advertisement would
believe to be better than the price at which such goods are ordinarily
sold.
i. Offering any gifts, prizes or other items along with the goods when the
real intention is different, or
ii. Creating impression that something is being offered free along with the
goods, when in fact the price is wholly or partly covered by the price of
the article sold, or
iii. Offering some prizes to the buyers by conducting any contest, lottery or
game of chance or skill, with the real intention to promote sales or
business.
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CONSUMER PROTECTION IN INDIA
necessary to prevent or reduce the risk of injury to the person using such
goods, shall amount to an unfair trade practice.
ii. Obstructs the flow of capital or resources into the stream of production;
or
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CONSUMER PROTECTION IN INDIA
The buyer has to forego his free choice between competing products. This
results in neutralizing healthy competition in the ‘tied’ market.
However, where there is no such precondition and the buyer is free to take
either product, no tying arrangement could be alleged even though the
seller may offer both the products as a single unit at a composite price.
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CONSUMER PROTECTION IN INDIA
When there is less competition, the players in the market will be able to
dominate it and fix high prices for their goods and services. It works to the
company's advantage that there is no or very little competition. Where
there is competition the companies may act to get rid of rivals. They may
work among themselves to fix prices or divide the market among
themselves to keep out competitors.
a. CARTELS
This is where two or more companies producing the same product get
together to regulate prices for their own benefit. With a cartel it will be
possible for the companies (as members of the cartel) to carry out the
following:
Fix prices
The cartel will fix a price at which all members will sell their products. The
move is to prevent price cutting, which is likely to happen when there is a
lack of demand and companies slash prices to get a slice of the market.
Collusive tendering
With collusive tendering, those who are bidding for a tender have already
agreed among themselves who amongst them will get the tender.
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CONSUMER PROTECTION IN INDIA
Market allocation
Boycotts
Group boycotts may be horizontal, that is, where cartel members agree to
among themselves not to sell to or buy from certain customers. Boycotts
may be vertical in nature, that is, involving agreements at different levels
of the production and distribution stages, refusing to deal with a third
party.
b. MARKET DOMINATION
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CONSUMER PROTECTION IN INDIA
Where there are already laws on competition, they are likely to specify the
percentage of market share which the company must hold in order to be
considered to be in a dominant or monopolistic position. For example, a
company with more than 30% share of the market may be considered to
be in a dominant market position.
A company dominating the market can be said to be carrying out acts that
are considered an abuse of its position when it does the following:
Predatory pricing
The aim is to drive the competitor out of business. The company sells
goods at below cost to attract customers away from its rival. Once the rival
is eliminated, it can raise its price.
Discriminatory pricing
Transfer pricing
Tied selling
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CONSUMER PROTECTION IN INDIA
Exclusive Dealing
With such a practice, the retailer is prevented from fixing his own profit
margin. Should he sell the goods at a discount, the manufacturer will
refuse to continue to supply him.
Market concentration
Whatever the method used, the end result is the same. Integration of
competitors into a single unit leads to growth of monopoly power. When it
happens between small companies, while it may not necessarily adversely
affect competition in the market, it may nonetheless create conditions
which can trigger further concentration of economic power and lead to
oligopoly.
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CONSUMER PROTECTION IN INDIA
Interlocking directorships
Activity C
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CONSUMER PROTECTION IN INDIA
The objectives of the Central Council are to promote and protect the rights
of consumers as we have learned earlier.
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CONSUMER PROTECTION IN INDIA
❖ Such number of other official or non-official members, not exceeding ten,
as may be nominated by the Central Government.
The State Council is required to meet as and when necessary but not less
than two meetings every year.
Legislation will be more useful if the common man knows about its
existence, norms, applicability, their rights and obligations and more such
aspects. Thus, it is very essential for the government to impart the
requisite knowledge to common masses. Educated consumers will certainly
fight malpractices being carried out with them. Our existing system does
not have any aspect of consumer protection being covered as part of any
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CONSUMER PROTECTION IN INDIA
Consumer Education
Activity D
As a consumer activist, suggest how will you spread the awareness about
the rights of consumers in India and how will you make them aware about
their responsibilities?
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
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CONSUMER PROTECTION IN INDIA
All the commercial organizations are well managed and well versed with
the market conditions so certainly that they are in the better dominating
position and use it to exploit the consumer. There are numerous ways in
which organisations exploit consumers – poor quality of content, use of
harmful chemicals, incorrect weights and measures practices, price cartel,
poor packaging, mixing, lack of information and in more ways which are
unimaginable.
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CONSUMER PROTECTION IN INDIA
2. What is the Consumer Guidance Society of India into? Give the objective
with which it has been formed and the role it plays.
7. List down the different consumer protection councils and highlight their
role in protecting consumers’ interest and consumer education.
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CONSUMER PROTECTION IN INDIA
3. As a consumer, when you consider buying any products and you wish to
know who manufactured it, the date of manufacturing, the contents
inside the pack, the price, the weight and specifications, you are
exercising your right to________________. Fill in the blank.
a. information
b. choose
c. be heard
d. none of the above
a. Manipulation
b. Restrictive practices
c. Unfair practices
d. Malpractice
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CONSUMER PROTECTION IN INDIA
Answers:
1. (b)
2. (c)
3. (a)
4. (d)
5. (c)
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CONSUMER PROTECTION IN INDIA
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
Chapter 18
CONSUMER BUYER BEHAVIOUR IN
DIFFERENT MARKETING DOMAINS
Objectives
Structure:
18.1 Introduction
18.2 Consumer Buyer Behaviour in Service Marketing
18.3 Consumer Buyer Behaviour in Business to Business Association
18.4 What have you Learnt – A Summary
18.5 Self Assessment Questions
18.6 Multiple Choice Questions (MCQ)
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
18.1 INTRODUCTION
In this chapter we will briefly touch base on the use of consumer buyer
behaviour knowledge in the above mentioned marketing domains.
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
The first aspect of a service product lies in one’s ability to tangibalise the
intangible product level and coves it with an augmented product level.
Tangibalisation is a result of unification of a basic product + expected
product as can be seen below in an example related to a mobile service
provider.
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
As you can see in the above chart, tangible products have high tangibility
but intangible products have low tangibility. Thus they need to do things
that will tangibalise their service package, e.g., a laundry can offer cloth
care lessons, an automobile company can install a concept of an angry
horn (to be pressed by the customer who is not happy about the services
given)/a happy horn (to be pressed to express happiness).
When a consumer first hears about your service package, his natural
reaction will be to evaluate it. As there are no tangible elements present,
on what parameters will he evaluate? For the consumer, there will be
something that will be easy to evaluate and something that is difficult to
evaluate, especially if it is not tangible in nature. He will resort to
information search. The more information he gets, the more clarity comes
forth, and he may become confident to use the product (but it is rare for
any service), e.g., cloth merchant, jeweller’s selection. However, there are
services about which you only know through self experience – e.g., meals,
hair cut.
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
Post
Need Information Evaluation of Purchase and
Purchase
Recognition Search Alternatives Consumption
Evaluation
!
! !592
CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
Also, this is the stage wherein he will come in contact with your
employee for the first time. Your employee can either make or break it.
It depends on how trained and seasoned your employees are, how much
do they understand a customer’s state of mind, can they determine what
will work and what will not work, whether he/she is able to help a
customer arrive at the right selection from the available alternatives, and
last but not the least, his/her relationship building skills will determine
whether the customer decides to procure goods from you or not.
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
This is also one of the crucial stages where his service encounter with
your employee will take place, may be telephonically or through a web
chat. How well your employee deals with him, determines whether the
customer decides to utilise your service. How well your employee is able
to build trust and empathy will build customer confidence and that may
tilt the deal in your favour.
It has been proved beyond doubt that in service marketing it is all the
more important to be focussed on post-purchase evaluation. Service
delivery being intangible is a continuous process. On one hand you want
your customers to keep coming back to you and also refer your service
to others and on the other hand, consumers expect not only the same
level of service but also expect you to make-up for the service delivery
deficiencies pointed by them, if any. This psychological perspective also
integrates post-purchase support.
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
This is more so in the case of service providers since they are selling
intangibles by creating customer expectations. Services are often
differentiated in the minds of the customer by promises of what is to come.
Managing these expectations constitutes a critical component of creating
favourable moments of truth which in turn are critical for business success.
Customer needs comprise the basic reason that makes it essential for a
customer to approach a service provider. For instance, a person visits a
specific car garage primarily for the quality of service it offers. That is the
customer’s need. However, the customer expects polite staff, attentive yet
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
Exceeding customer expectations is all about creating that extra value for
the customer. Once upon a time it was a prerogative of the hospitality
industry, specialized in creating customer delight. Jet airways brought
many new service initiatives for Indian fliers and thus despite tough
competition; they have still maintained their presence and stature.
One example that often gets mentioned is about one 5 star hotels chain
that used to maintain customer databases detailing room order choices of
their guests. So if a guest has asked for say orange juice to be kept in the
mini bar in his room, the next time that he makes a reservation at the
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
hotel, the staffs ensures that the juice is already kept in the room. Such
small gestures go a long way in making the customers feel important,
thereby creating customer delight.
Summarisation
Customer service and delight is the sure key for organisations in service
marketing. Customer service design needs a service provider to understand
the expressed, latent and unfulfilled needs of his customers for which
knowledge of customer psychographics is vital, understanding stimulus
that triggers the desired action is essential. Knowledge of learning theories
also helps largely. For any marketers including service marketers what
starts with need and motivations understanding, leads them to understand
different consumer personalities and their different buying behaviours, how
attitude determines him being favourably poised for the nature of service
being offered. Later it deals with the customer’s perception management,
which gets reflected in their satisfaction. All these things happen in a social
set up and their upbringing within a family, influenced by groups he deals
with, besides the impact of an opinion leader by their selecting your
services. Thus the knowledge of consumer buyer behaviour can equally
play a crucial role for any service marketer.
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
The idea here is not to completely expose the entire B2B association and
the specifics of consumer behaviour but to give you glimpses about the
relevance of consumer buyer behaviour in B2B association.
Consumer behaviour study looks into the way individuals decide, how
individuals make decisions to spend their available scarce resources like
money, time and energy on their chosen items for consumption.
3 What makes the customers buy Protection from fire and loss
them? minimisation
! !599
CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
Last but not the least, the entire perspective on diffusion and adoption of a
new product will enable you to introduce new products among your B2B
associates successfully. You will be able to leverage new product launch
initiatives by your principle to capitalise gain for you, smartly and
effectively.
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
! !602
CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
2. How does the knowledge of consumer buying behaviour help you in your
B2B association?
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
a. customer Satisfaction
b. customer Psychographic
c. customer Attitude
d. customer Needs
a. attitude
b. behaviour
c. learning
d. stimulus
3. For any marketers including service marketers, what starts with need
and motivations understanding, leads them to understand different
consumer _______________ and their different buying behaviours. Fill
in the blank.
a. profiles
b. wants
c. personalities
d. influences
a. perception management
b. gaps management
c. delivery management
d. attitude handling
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
a. image
b. issues
c. personality
d. value
Answers:
1. (b)
2. (d)
3. (c)
4. (a)
5. (c)
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CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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